Document:

zbh-ex104_244.htm

EXHIBIT 10.4

 

	
	
Change in Control Severance Agreement 

This Change in Control Severance Agreement ("Agreement") is made by and between Zimmer GmbH ("Employer" or "Company" as case may be) and Didier Deltort ("Executive").

Recitals

	
(A)
	
The Company considers it essential to the best interests of its ultimate shareholders to foster the continuous employment of key management personnel.
	
 

	
(B)
	
The Company and the Board recognize that, as is the case with many publicly held corporations, the possibility of a Change in Control in the Ultimate Parent Company exists and that such a possibility, and the uncertainty and questions that it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders.
	
 

	
(C)
	
The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control.  
	
 

	
(D)
	
The parties intend that no amount or benefit will be payable under this Agreement unless a termination of the Executive's employment with the Company occurs following a Change in Control, or is deemed to have occurred following a Change in Control, as provided in this Agreement.
	
 

Defined terms as used herein and not defined elsewhere in this Agreement, shall have the meaning ascribed to them in Annex 1 to this Agreement.

	
1.
	
Term of Agreement
	
 

This Agreement will commence on the date stated below and will continue in effect through December 31, 2018.  Beginning on January 1, 2019, and each subsequent January 1, the term of this Agreement will automatically be extended for one additional year, unless either party gives the other party written notice not to extend this Agreement at least 30 days before the extension would otherwise become effective or unless a Change in Control occurs.  If a Change in Control occurs during the term of this Agreement, this Agreement will continue in effect for a period of 24 months from the end of the month in which the Change in Control occurs.  Notwithstanding the foregoing provisions of this Article, this Agreement will terminate on the Executive's retirement date, as defined under Swiss law.

 

	
 
	
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Change in Control Severance Agreement 

 

	
2.
	
Compensation other than Severance Payments
	
 

	
2.1
	
Compensation Previously Earned
	
 

If the Executive's employment is terminated for any reason following a Change in Control and during the term of this Agreement, the Company will pay the Executive's salary accrued through the Date of Termination, at the rate in effect at the time the Notice of Termination is given, together with all other compensation and benefits payable to the Executive through the Date of Termination under the terms of any compensation or benefit plan, program, or arrangement maintained by the Company during that period.

	
2.2
	
Normal Post-Termination Compensation and Benefits.
	
 

Except as provided in Section 3.1, if the Executive's employment is terminated for any reason following a Change in Control and during the term of this Agreement, the Company will pay the Executive the normal compensation and benefits payable to the Executive under the terms of the Company's compensation or benefit plans, programs, and arrangements, as in effect immediately prior to the Change in Control, including but not limited to the Non-Competition Period Payments (if any). This provision does not restrict the Company's right to amend, modify, or terminate any plan, program, or arrangement prior to a Change in Control. 

	
2.3
	
No Duplication.
	
 

Notwithstanding any other provision of this Agreement to the contrary, the Executive will not be entitled to duplicate benefits or compensation under this Agreement and the terms of any other plan, program, or arrangement maintained by the Company or any affiliate.

	
3.
	
Severance Payments
	
 

	
3.1
	
Payment Triggers
	
 

In addition to the payments as set out in Section 2 above, but in lieu of any other severance compensation or benefits to which the Executive may otherwise be entitled under any plan, program, policy, or arrangement of the Company or by law in particular due to abusive termination under Art. 336a Swiss Code of Obligations (and which the Executive hereby expressly waives), the Company will pay the Executive the Severance Payments described in Section 3.2 upon termination of the Executive's employment following a Change in Control and during the term of this Agreement, unless the termination is (1) by the Company for Cause, (2) by reason of the Executive's death, or (3) by the Executive without Good Reason.

For purposes of this Section 3.1, the Executive's employment will be deemed to have been terminated following a Change in Control by the Company without 

 

	
 
	
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Change in Control Severance Agreement 

 

Cause or by the Executive with Good Reason if (1) the Executive's employment is terminated without Cause prior to a Change in Control at the direction of a Person who has entered into an agreement with the Ultimate Parent Company, the consummation of which will constitute a Change in Control; or (2) the Executive terminates his employment with Good Reason prior to a Change in Control (determined by treating a Potential Change in Control as a Change in Control in applying the definition of Good Reason), if the circumstance or event that constitutes Good Reason occurs at the direction of such a Person.

The Severance Payments described in this Article 3 are subject to the conditions stated in Section 4 below and shall be reduced in part or in their totality if and to the extent the Severance Payments were, at the time of their payment, to be deemed a golden parachute or similar arrangement prohibited under the laws where the Company is incorporated and has its registered office or the costs associated with the Severance Payments could no longer be booked as expenditures in the Company's profit and loss statement. 

	
3.2
	
Severance Payments. 
	
 

The following are the Severance Payments referenced in Section 3.1:

	
 
	
(a)
	
Lump Sum Severance Payment
	
 

In lieu of any further salary payments to the Executive for periods after the Date of Termination, and in lieu of any severance benefits otherwise payable to the Executive, the Company will pay to the Executive, in accordance with Section 3.3, a lump sum severance payment, in cash, equal to (a) two times the sum of (1) the higher of the Executive's annual base salary in effect immediately prior to the event or circumstance upon which the Notice of Termination is based or in effect immediately prior to the Change in Control, plus (2) the amount of the Executive's target annual bonus entitlement under the Cash Incentive Plan (or any other bonus plan of the Company then in effect) as in effect immediately prior to the event or circumstance giving rise to the Notice of Termination, less (b) the amount of any statutory payment to which the Executive is entitled related to any statutory notice period. If the Board determines that it is not workable to determine the amount that the Executive's target bonus would have been for the year in which the Notice of Termination was given, then, for purposes of this paragraph (a), the Executive's target annual bonus entitlement will be the average of annual bonus paid to the Executive with respect to the three years immediately prior to the year in which the Notice of Termination was given.

 

	
 
	
(b)
	
Options and Restricted Shares
	
 

All outstanding Options will become immediately vested and exercisable (to the extent not yet vested and exercisable as of the Date of Termination).  To the extent 

 

	
 
	
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Change in Control Severance Agreement 

 

not otherwise provided under the written agreement evidencing the grant of any restricted Shares to the Executive, all outstanding Shares that have been granted to the Executive subject to restrictions that, as of the Date of Termination, have not yet lapsed will lapse automatically upon the Date of Termination, and the Executive will own those Shares free and clear of all such restrictions.  Notwithstanding the foregoing, Options and restricted Shares remain subject to any forfeiture or clawback claims under the applicable option plan or award agreement.

	
3.3
	
Time of Payment
	
 

Except as otherwise expressly provided in Section 3.2, payments provided for in that Section will be made as follows:

No later than the fifth business day following the Date of Termination, the Company will pay to the Executive an estimate, as determined by the Company in good faith, of 90% of the payments under Section 3.2 (a) to which the Executive is clearly entitled.

The Company will pay to the Executive the remainder of the payments due to the Executive under Section 3.2 not later than 90 business days after the Date of Termination.

At the time that payment is made under this Section 3.3, the Company will provide the Executive with a written statement setting forth the manner in which all of the payments to him under this Agreement were calculated and the basis for the calculations. 

	
3.4
	
Outplacement Services
	
 

For a period not to exceed six (6) months following the Date of Termination, the Company will provide the Executive with reasonable outplacement services consistent with past practices of the Company prior to the Change in Control or, if no past practice has been established prior to the Change in Control, consistent with the prevailing practice in the medical device manufacturing industry.

	
4.
	
The Executive's Covenants
	
 

	
4.1
	
Confidentiality, Non-Competition and Non-Solicitation Agreement
	
 

The Executive herewith acknowledges and affirms his continuing obligations under the existing Confidentiality, Non-Competition and Non-Solicitation Agreement dated 28 June 2018 and re-affirms his agreement to honor the obligations as set forth therein.

 

	
 
	
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Change in Control Severance Agreement 

 

	
4.2
	
General Release
	
 

The Executive agrees that, notwithstanding any other provision of this Agreement, the Executive will not be eligible for any Severance Payments under this Agreement unless the Executive timely signs a General Release in substantially the form attached to this Agreement as Annex 2.  The Executive will be given 30 days to consider the terms of the General Release.  If the Executive does not return the executed General Release to the Company by the end of the 30 day period that failure will be deemed a refusal to sign, and the Executive will not be entitled to receive any Severance Payments under this Agreement.

	
5.
	
Notices
	
 

For the purpose of this Agreement, notices and all other communications provided for in the Agreement will be in writing and will be deemed to have been duly given when delivered or mailed by Swiss registered mail, return receipt requested, addressed to the respective addresses set forth below, or to such other address as either party may furnish to the other in writing in accordance with this Article 5, except that notice of change of address will be effective only upon actual receipt:

To the Company:

Zimmer GmbH.

Attention: Vice President EMEA Counsel

Sulzer-Allee 8

8404 Winterthur

 

To the Executive:

The Executive’s principal residence as reflected in the records of the Company.

	
6.
	
Miscellaneous
	
 

This Agreement constitutes and expresses the entire agreement between the Parties pertaining to the subject matter contained herein and supersedes all prior and contemporaneous oral or written agreements, representations, understandings and the like between the Parties.

This Agreement may not be modified, amended, altered or supplemented, in whole or in part, except by a written agreement signed by the Parties.

If any provision of this Agreement is found by any competent authority to be void, invalid or unenforceable, such provision shall be deemed to be deleted from this Agreement and the remaining provisions of this Agreement shall continue in full force. In this event, the Agreement shall be construed, and, if necessary, amended in a way to give effect to, or to approximate, or to achieve a result which is as close 

 

	
 
	
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Change in Control Severance Agreement 

 

as legally possible to the result intended by the provision hereof determined to be void, illegal or unenforceable.

	
7.
	
Governing Law and Jurisdiction
	
 

This Agreement shall be governed by, interpreted and construed in accordance with the substantive laws of Switzerland.

The ordinary courts and at the registered office of the Company shall have exclusive jurisdiction for all disputes arising out of or in connection with this Agreement.

This Agreement enters into force effective as of October 9, 2018.

 

Zimmer GmbH

 

		
	
/s/ Guillaume Génin                
	
/s/ Asif Hussain

	
Guillaume Génin
	
Asif Hussain

	
Vice President EMEA Counsel
	
Vice President Human Resources EMEA

 

 

Executive

 

	
	
/s/ Didier Deltort

	
Didier Deltort

 

 

	
 
	
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Change in Control Severance Agreement 

 

Annex 1: Definitions

"Beneficial Owner" has the meaning stated in Rule 13d‐3 under the Exchange Act.

"Board" means the Board of Directors of the Ultimate Parent Company.

"Cash Incentive Plan" means the Ultimate Parent Company’s Executive Performance Incentive Plan.

"Cause" for termination by the Company of the Executive's employment, after any Change in Control, means (1) any reason being deemed good reason in the sense of Art. 336d Swiss Code of Obligations; (2) the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive) for a period of at least 10 consecutive days after a written demand for substantial performance is delivered to the Executive by the Company, which demand specifically identifies the manner in which the Company believes that the Executive has not substantially performed the Executive's duties; or (3) the Executive willfully engages in conduct that is demonstrably and materially injurious to the Company, the Ultimate Parent Company or its subsidiaries, monetarily or otherwise.

A "Change in Control" will be deemed to have occurred if any of the following events occur:

	
 
	
(a)
	
any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Ultimate Parent Company (not including in the securities beneficially owned by that Person any securities acquired directly from the Ultimate Parent Company or its affiliates) representing 20% or more of the combined voting power of the Ultimate Parent Company's then outstanding securities; or
	
 

	
 
	
(b)
	
during any period of two consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of the period constitute the Board and any new director (other than a director designated by a Person who has entered into an agreement with the Ultimate Parent Company to effect a transaction described in clause (a), (c) or (d) of this paragraph whose election by the Board or nomination for election by the Ultimate Parent Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously approved), cease for any reason to constitute a majority of the Board; or
	
 

	
 
	
(c)
	
the shareholders of the Ultimate Parent Company approve a merger or consolidation of the Ultimate Parent Company with any other corporation, other 
	
 

 

	
 
	
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Change in Control Severance Agreement 

 

	
 
		
than (A) a merger or consolidation that would result in the voting securities of the Ultimate Parent Company outstanding immediately prior to the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Ultimate Parent Company, at least 75% of the combined voting power of the voting securities of the Ultimate Parent Company or the surviving entity outstanding immediately after the merger or consolidation; or (B) a merger or consolidation effected to implement a recapitalization of the Ultimate Parent Company (or similar transaction) in which no Person acquires more than 50% of the combined voting power of the Ultimate Parent Company's then outstanding securities; or
	
 

	
 
	
(d)
	
the shareholders of the Ultimate Parent Company approve a plan of complete liquidation of the Ultimate Parent Company or an agreement for the sale or disposition by the Ultimate Parent Company of all or substantially all the Ultimate Parent Company's assets.
	
 

Notwithstanding the foregoing, a Change in Control will not include any event, circumstance, or transaction occurring during the six-month period following a Potential Change in Control that results from the action of any entity or group that includes, is affiliated with, or is wholly or partly controlled by the Executive; provided, further, that such an action will not be taken into account for this purpose if it occurs within a six-month period following a Potential Change in Control resulting from the action of any entity or group that does not include the Executive.

"Date of Termination" means the date on which the Notice of Termination under the Employment Agreement has lapsed.

"Employment Agreement" means the employment agreement between the Executive and the Company dated 28 June 2018 as further modified.

"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended from time to time, and interpretive rules and regulations.

"Good Reason" for termination by the Executive of the Executive's employment means the occurrence (without the Executive's express written consent) of any one of the following acts by the Company, or failures by the Company to act following a Change in Control:

	
 
	
(a)
	
the assignment to the Executive of any duties inconsistent with the Executive's status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to a Change in Control;
	
 

	
 
	
(b)
	
the Company's failure, without the Executive's consent, to pay to the Executive any portion of the Executive's current compensation (which means, for 
	
 

 

	
 
	
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Change in Control Severance Agreement 

 

	
 
		
purposes of this paragraph (b), the Executive's annual base salary as in effect on the date of this Agreement, or as it may be increased from time to time, and the awards earned pursuant to the Cash Incentive Plan) or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within 30 days of the date the compensation is due;
	
 

	
 
	
(c)
	
the Company's failure to continue in effect any compensation plan in which the Executive participates immediately prior to a Change in Control, which plan is material to the Executive's total compensation, including, but not limited to, the Cash Incentive Plan and the Ultimate Parent Company’s 2009 Stock Incentive Plan as amended from time to time or any substitute plans adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to that plan, or the Company's failure to continue the Executive's participation in such a plan (or in a substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive's participation relative to other participants, as existed at the time of the Change in Control.
	
 

Notwithstanding the foregoing, the occurrence of an event that would otherwise constitute Good Reason will cease to be an event constituting Good Reason if the Executive does not timely provide a Notice of Termination to the Company within 120 days of the date on which the Executive first becomes aware (or reasonably should have become aware) of the occurrence of that event.

"Non-Competition Period Payments" has the meaning as defined in the Confidentiality, Non-Competition and Non-Solicitation Agreement dated 28 June 2018, between the Company and the Executive.

“Notice of Termination” has the meaning as defined in section 2.2 of the Employment Agreement (i.e., notice period of 6 months from the end of the month in which the notice is given). 

"Options" means options to purchase Shares awarded to the Executive during his employment with the Company.

"Person" has the meaning stated in section 3(a)(9) of the Exchange Act, as modified and used in sections 13(d) and 14(d) of the Exchange Act; however, a Person will not include (1) the Ultimate Parent Company or any of its subsidiaries, (2) a trustee or other fiduciary holding securities under an employee benefit plan of the Ultimate Parent Company or any of its subsidiaries, (3) an underwriter temporarily holding securities pursuant to an offering of those securities, or (4) a corporation owned, directly or indirectly, by the stockholders of the Ultimate Parent Company in substantially the same proportions as their ownership of stock of the Ultimate Parent Company.

 

	
 
	
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Change in Control Severance Agreement 

 

"Potential Change in Control" will be deemed to have occurred if any one of the following events occurs:

	
 
	
(a)
	
the Ultimate Parent Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;
	
 

	
 
	
(b)
	
the Ultimate Parent Company or any Person publicly announces an intention to take or to consider taking actions that, if consummated, would constitute a Change in Control;
	
 

	
 
	
(c)
	
any Person who is or becomes the Beneficial Owner, directly or indirectly, of securities of the Ultimate Parent Company representing 10% or more of the combined voting power of the Ultimate Parent Company's then outstanding securities, increases that Person's beneficial ownership of those securities by 5% or more over the percentage so owned by that Person on the date of this Agreement; or
	
 

	
 
	
(d)
	
the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.
	
 

"Shares" means shares of the common stock, $0.01 par value, of the Ultimate Parent Company.

"Severance Payments" means the payments described in Section 3.2.

"Ultimate Parent Company" means Zimmer Biomet Holdings, Inc., a Delaware corporation, and any successor to its business and/or assets.

 

	
 
	
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Change in Control Severance Agreement 

 

Annex 2

GENERAL RELEASE

 

Name: __________________________          Notification Date:  ____________

 

Zimmer GmbH. (the "Company") has offered me certain severance benefits (the "Severance Benefits") pursuant to a Change in Control Severance Agreement ("Agreement") between the Company and me.  I will only be able to receive the Severance Benefits in consideration for my signing this General Release. 

 

The Company has advised me of, and I acknowledge the following:

 

I have 30 days from the date I receive this General Release to consider and sign it.  If I do not return this signed General Release in 30 days (INSERT DATE), the Company will consider this my refusal to sign, and I will not receive the Severance Benefits.  If I do sign this General Release, it will become immediately effective. 

 

By signing this General Release I am giving up my right to sue the Company, and any affiliates, parent companies and subsidiaries, and their past, present and future officers, directors, employees, and agents (collectively, the "Released Parties") based upon any act or event occurring prior to my signing this General Release, to the fullest extent permitted by law.  Without limitation, and again to the fullest extent permitted by law, I specifically release the Company from any and all claims arising out of my employment and termination, including claims based on the Swiss Code of Obligations, the Labour Act and all applicable federal, cantonal and local laws.  

 

For the sake of clarification, I acknowledge that this General Release shall not affect my legal obligation to protect the confidentiality of the Company's information or any of my existing obligations under the Confidentiality, Non-Competition and Non-Solicitation Agreement that I executed during my employment with the Company (the "Non-Competition Agreement"), and I hereby reaffirm my covenants and obligations under the Non-Competition Agreement.

 

By signing this General Release, none of my benefits will be affected to which I am entitled under the Agreement or any claim arising out of the enforcement of the Agreement.

 

My signature below acknowledges that I have read the above, understand what I am signing, and am acting of my own free will.  The Company has advised me to consult with an attorney and any other advisors of my choice prior to signing this General Release.  

 

	
SIGNATURE
	
 
	
             DATE
	
 

	
PRINT NAMEhgv-ex103_141.htm

Exhibit 10.3

WBD (US) 41989445v3

 
HILTON RESORTS CORPORATION
2017 EXECUTIVE DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of September 1, 2018)

 

 

 

HILTON RESORTS CORPORATION

EXECUTIVE DEFERRED COMPENSATION PLAN

Table of Contents

 

	
ARTICLE I TITLE AND DEFINITIONS
	
1
	
 

	
 
	
Section 1.1
	
Title.1
	
 

	
 
	
Section 1.2
	
Definitions.1
	
 

	
ARTICLE II PARTICIPATION
	
5
	
 

	
ARTICLE III DEFERRAL ELECTIONS
	
5
	
 

	
 
	
Section 3.1
	
Elections to Defer Compensation.5
	
 

	
 
	
Section 3.2
	
Distribution Elections.7
	
 

	
 
	
Section 3.3
	
Investment Elections.8
	
 

	
 
	
Section 3.4
	
Subsequent Elections.9
	
 

	
ARTICLE IV DISTRIBUTION OPTION ACCOUNTS
	
9
	
 

	
 
	
Section 4.1
	
Compensation Deferrals.9
	
 

	
 
	
Section 4.2
	
Company Contribution.10
	
 

	
 
	
Section 4.3
	
Investment Return.10
	
 

	
ARTICLE V VESTING
	
11
	
 

	
 
	
Section 5.1
	
Compensation Deferral.11
	
 

	
 
	
Section 5.2
	
Company Contribution.11
	
 

	
ARTICLE VI DISTRIBUTIONS
	
11
	
 

	
 
	
Section 6.1
	
Form and Timing of Distributions - Generally.11
	
 

	
 
	
Section 6.2
	
Small Benefit Cashout.12
	
 

	
 
	
Section 6.3
	
In–Service Distribution Account Payouts.12
	
 

	
 
	
Section 6.4
	
Financial Hardship of Participant.13
	
 

	
 
	
Section 6.5
	
Permissible Distribution Event.13
	
 

	
 
	
Section 6.6
	
Payment by Trust.13
	
 

	
 
	
Section 6.7
	
Inability to Locate Participant.14
	
 

	
ARTICLE VII CHANGE IN CONTROL
	
14
	
 

	
ARTICLE VIII DEATH BENEFITS
	
14
	
 

	
ARTICLE IX CLAIMS PROCEDURES
	
14
	
 

	
 
	
Section 9.1
	
Claims.14
	
 

	
 
	
Section 9.2
	
Appeal.15
	
 

i

 

 

	
 
	
Section 9.3
	
Authority.15
	
 

	
ARTICLE X ADMINISTRATION
	
15
	
 

	
 
	
Section 10.1
	
Administrator.15
	
 

	
 
	
Section 10.2
	
Administrator Action.16
	
 

	
 
	
Section 10.3
	
Powers and Duties of the Administrator.16
	
 

	
 
	
Section 10.4
	
Construction and Interpretation.17
	
 

	
 
	
Section 10.5
	
Information.17
	
 

	
 
	
Section 10.6
	
Compensation, Expenses and Indemnity.17
	
 

	
ARTICLE XI MISCELLANEOUS
	
17
	
 

	
 
	
Section 11.1
	
Unsecured General Creditor.17
	
 

	
 
	
Section 11.2
	
Restriction Against Assignment.18
	
 

	
 
	
Section 11.3
	
Withholding.18
	
 

	
 
	
Section 11.4
	
Amendment, Modification, Suspension or Termination.18
	
 

	
 
	
Section 11.5
	
Governing Law.18
	
 

	
 
	
Section 11.6
	
Receipt or Release.19
	
 

	
 
	
Section 11.7
	
Payments on Behalf of Persons Under Incapacity.19
	
 

	
 
	
Section 11.8
	
Headings.19
	
 

 

 

ii

 

 

HILTON RESORTS CORPORATION

2017 EXECUTIVE DEFERRED COMPENSATION PLAN

 

WHEREAS, Hilton Resorts Corporation hereby establishes a deferred compensation plan (the “Plan”), effective as of the Effective Date, for deferrals with respect to Compensation to be earned or to be otherwise paid on or after the Effective Date, to provide supplemental retirement income benefits for a select group of management and highly compensated employees through deferrals of base salary and bonus compensation and, to the extent applicable, Company contributions; and

WHEREAS, as of the Effective Date, the account balances of certain participants in the Prior Plan were transferred to an Account under this Plan (the “Transferred Balances”). The Transferred Balances are balances deferred by “HGV Employees” under the Prior Plan, and the time and form of payment of the Transferred Balances shall be the same under this Plan as under the Prior Plan; and

WHEREAS, the Company wishes to amend and restate the Plan in its entirety effective as of September 1, 2018 to update the Plan for Section 409A (as defined below) best practices, and to make various other changes as set forth herein. 

NOW, THEREFORE, the Plan is hereby amended and restated in its entirety, on the terms and conditions hereinafter set forth:

ARTICLE I
TITLE AND DEFINITIONS

Section 1.1Title.

This Plan shall be known as the Hilton Resorts Corporation 2017 Executive Deferred Compensation Plan.

Section 1.2Definitions.

Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.

“Administrator” shall mean the Person or Persons appointed by the Committee to administer the Plan in accordance with Article X, or such Person or Person’s delegate.

“Base Salary Deferral” shall mean that portion of Base Salary as to which an Eligible Employee has made an irrevocable election to defer receipt of until the date specified under the In-Service Distribution Option, the Separation Distribution Option, and/or as otherwise specified under this Plan.

“Beneficiary” or “Beneficiaries” shall mean the Person or Persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Administrator to receive all of the benefits specified hereunder in the event of the Participant’s death.  No Beneficiary designation shall become effective until it 

1

 

 

is filed with the Administrator.  If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary.  If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the Participant’s estate (which shall include either the Participant’s probate estate or living trust) shall be the Beneficiary.  In any case where there is no such personal representative of the Participant’s estate duly appointed and acting in that capacity within 90 days after the Participant’s death (or such extended period as the Administrator determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the Participant’s death), then Beneficiary shall mean the Person or Persons who can verify by affidavit or court order to the satisfaction of the Administrator that they are legally entitled to receive the benefits specified hereunder.  In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid (i) to that Person’s living parent(s) to act as custodian, (ii) if that Person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that Person is then living, to a custodian selected by the Administrator to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides.  If no parent is living and the Administrator decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.

 “Bonus Compensation Deferral” shall mean that portion of Bonus Compensation as to which an Eligible Employee has made an irrevocable election to defer receipt of until the date specified under the In-Service Distribution Option and/or as otherwise specified under this Plan.

“Change in Control” shall mean a “Change in Control” under the Company’s 2017 Omnibus Incentive Plan, as amended from time to time, which also constitutes a “change in control event” under Section 409A.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Compensation Committee of the Board of Directors of the Company, or if no such committee exists, the full Board of Directors of the Company. 

“Company” shall mean Hilton Resorts Corporation, any successor corporation and each corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) or (c) of the Code) of which Hilton Resorts Corporation is a component member.

“Company Contribution” shall equal the amount described in Section 4.2, if any.

“Compensation” shall mean the total salary paid to the Eligible Employee, including cash bonuses, in a Plan Year.  An Eligible Employee’s “Compensation” shall consist of the Eligible Employee’s “Base Salary” as in effect from time to time during a Plan Year and the Eligible Employee’s “Bonus Compensation” which shall equal the amount of any cash incentive to be paid to an Eligible Employee under an incentive plan maintained by the Company and any other cash bonus of any kind.

2

 

 

“Compensation Deferral” means that portion of Compensation as to which a Participant has made an irrevocable election to defer receipt until the date specified under the In-Service Distribution Option, the Separation Distribution Option, and/or as otherwise specified under this Plan.

“Disabled” or “Disability” shall mean that a Participant is disabled due to sickness or injury which qualifies the Participant for disability payments under the Company’s long term disability plan.  A Participant shall be considered totally and permanently disabled on the date the Participant qualifies for such long term disability payments.

“Distribution Option” shall mean the two distribution options which are available under the Plan, consisting of the Separation Distribution Option and the In-Service Distribution Option.

“Distribution Option Account” or “Accounts” shall mean, with respect to a Participant, the Separation Distribution Account and/or the In-Service Distribution Account(s) established on the books of account of the Company, pursuant to Article IV, for each Participant.

“Effective Date” shall mean the “Distribution Date” as defined in the Distribution Agreement by and among Hilton Worldwide Holdings Inc., Park Hotels & Resorts Inc., and the Company, dated as of January 3, 2017.  

“Eligible Employee” shall mean (i) officers of the Company at the Vice President level or higher, or (ii) Highly Compensated Employees who are selected by the Administrator to participate in the Plan pursuant to Article II.

“Enrollment Agreement” shall mean the authorization form which an Eligible Employee files with the Administrator to participate in the Plan and, with respect to the Plan Year in which the Effective Date occurs, the authorization form as in effect under the Prior Plan.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“Fund” or “Funds” shall mean one or more of the investments selected by the Administrator pursuant to Section 3.3(a).

“HGV Employees” shall mean (i) any individual designated as an “HGV Employee” in the Employee Matters Agreement by and between Hilton Worldwide Holdings Inc., Park Hotels & Resorts Inc., and the Company, dated as of January 3, 2017, and (ii) any individual who is an Eligible Employee and who commences employment with the Company upon or following the date hereof.

“Highly Compensated Employee” shall mean an employee of the Company who the Administrator, in its discretion, anticipates will receive Compensation in excess of the salary limitation contained in Section 401(a)(17) of the Code for the applicable Plan Year or who the Administrator otherwise determines to be a highly compensated employee or member of a select group of management within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

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“In-Service Distribution Account” or “Accounts” shall mean the Account(s) maintained for a Participant to which Compensation Deferrals and Company Contributions are credited pursuant to the In-Service Distribution Option.

“In-Service Distribution Option” shall mean the Distribution Option pursuant to which benefits are payable in accordance with Article VI.

“Investment Return” shall mean, for each Fund, an amount equal to the net investment performance of such Fund on a given day, as determined by the Administrator.

“Participant” shall mean any Eligible Employee who elects to defer Compensation in accordance with Section 3.1.

“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (charitable or non-charitable), unincorporated organization, or other form of business entity.

 “Plan” shall mean the Hilton Resorts Corporation 2017 Executive Deferred Compensation Plan set forth herein, in effect as of the Effective Date, or as amended from time to time.

“Plan Year” shall mean the 12 consecutive month period beginning on a January 1.

“Prior Plan” shall mean the Hilton Hotels 2005 Executive Deferred Compensation Plan, as amended. 

“Retirement” shall mean a Participant’s Separation from Service (for reasons other than death) on or after the combination of the Participant’s age and Years of Vesting Service equals at least 55. 

“Section 409A” means Section 409A of the Code and the treasury regulations promulgated thereunder. 

“Separation Date” shall mean the date a Participant incurs a Separation from Service.

“Separation Distribution Account” shall mean the Account maintained for a Participant to which Compensation Deferrals and Company Contributions are credited pursuant to the Separation Distribution Option.

“Separation Distribution Option” shall mean the Distribution Option pursuant to which benefits are payable in accordance with Article VI. 

“Separation from Service” shall mean a Participant’s separation from service with the Company within the meaning of Section 409A.

“Unforeseeable Financial Emergency” shall mean: (i) a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, beneficiary, or a dependent (as defined in Code Section 152(a)) of the Participant, loss of the Participant’s property due to casualty, the imminent foreclosure of or eviction from the 

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Participant’s primary residence, the need to pay medical expenses (including nonrefundable deductibles) or prescription drug medications, the need to pay for funeral expenses of a spouse, beneficiary, or dependent, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant; or (ii) such other definition of “unforeseeable emergency” within the meaning of Code Section 409A(a)(2)(B)(ii). 

“Year of Vesting Service” shall mean a “Year of Vesting Service” as determined for purposes of the 401(k) defined contribution savings plan in which such Participant participates or most recently participated. 

ARTICLE II
PARTICIPATION

Except as otherwise expressly provided for herein, prior to December 31 of each Plan Year, the Administrator shall designate which Highly Compensated Employees shall become Eligible Employees for the following Plan Year.  An Eligible Employee designated as a Participant shall thereafter, unless otherwise determined by the Administrator, be eligible to make a Compensation Deferral for each Plan Year.  Participation in the Plan shall be made conditional upon an Eligible Employee’s acknowledgement, in writing or by making a deferral election under the Plan, that all decisions and determinations of the Administrator shall be final and binding on the Participant, the Participant’s beneficiaries and any other Person having or claiming an interest under the Plan.

As of the Effective Date, each HGV Employee with respect to whom a Transferred Balance is transferred to the Plan shall become a Participant in the Plan. 

ARTICLE III
DEFERRAL ELECTIONS

Section 3.1Elections to Defer Compensation.

(a)Each Eligible Employee may elect to make a Compensation Deferral by filing with the Administrator an election that conforms to the requirements set forth in this Article III, on an Enrollment Agreement provided by the Administrator, no later than December 31 of the Plan Year preceding the Plan Year for which the Compensation is to be earned and specifying whether the Participant elects a Base Salary Deferral or a Bonus Compensation Deferral or a combination, the Distribution Option Accounts to which such amounts will be credited, the form and timing of distribution and such other information as the Administrator shall require; provided, however, that for the Plan Year in which the Effective Date occurs, a deferral election under the Prior Plan shall be treated as a deferral election under this Section 3.1(a) and be given continuing effect under this Plan after the Effective Date for the remainder of such Plan Year. 

(i)Notwithstanding (a) above, if an Eligible Employee’s Bonus Compensation is “performance-based compensation” as contemplated by Section 409A, the Administrator may allow the Eligible Employee to elect to defer all or a portion of such Eligible Employee’s Bonus Compensation for a Plan Year at a time determined by the Administrator, which may be no less than six months before the end of the applicable Plan Year in which such Bonus Compensation is to be earned.  

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(ii)The Eligible Employee shall elect to allocate such Eligible Employee’s Compensation Deferrals (and any Company Contributions that may be credited with respect thereto) between the Distribution Options in whole percentage increments; provided that one hundred percent (100%) of such Deferrals (and Company Contributions) may be allocated to one or the other of the Distribution Options.  

(iii)The Administrator may establish minimum or maximum amounts that may be deferred under this Section and may change such standards from time to time; provided, however, in no event may an Eligible Employee’s Base Salary Deferrals exceed eighty percent (80%) of Base Salary.  Any such limits shall be communicated by the Administrator to the Participants prior to the commencement of a Plan Year.  No Participant may have more than one Separation Distribution Account.

(b)Notwithstanding anything herein to the contrary, no Eligible Employee shall be permitted to defer Compensation which the Administrator reasonably determines is required to pay the Eligible Employee’s portion of payroll and other taxes and contributions towards benefits (including, but not limited to, medical, life, dental and disability) provided to the Eligible Employee and such Eligible Employee’s dependents.

(c)Any Compensation Deferral made under Section 3.1(a) above shall remain in effect and be irrevocable, notwithstanding any change in a Participant’s Compensation, for the entire Plan Year for which it is effective.  A new Compensation Deferral election must be made for each Plan Year during which a Participant wishes to defer Compensation. If a Participant elects to allocate all or a portion of such Participant’s Compensation Deferrals to an In-Service Distribution Account, that election will remain effective only for the Plan Year to which the Enrollment Agreement relates.  If the Participant does not elect an in-service distribution date for deferrals to the In-Service Distribution Account in a subsequent Plan Year, such deferrals shall automatically be allocated to the Participant’s Separation Distribution Account.  Compensation Deferral elections shall be made on an Enrollment Agreement filed with the Administrator by December 31 of a Plan Year (or such earlier date as may be designated by the Administrator) to make a Compensation Deferral for Compensation to be earned on or after January 1 of the immediately following Plan Year. 

(d)The Administrator may, in its discretion, permit individuals who first become Eligible Employees after the beginning of a Plan Year, including individuals who become Eligible Employees because they are promoted or hired by the Company on or after January 1 of a Plan Year to a position which has been designated by the Administrator as an Eligible Employee, to enroll in the Plan for that Plan Year by filing a completed and fully executed Enrollment Agreement as soon as practicable following the date the Eligible Employee is notified of such Eligible Employee’s eligibility but, in any event, within 30 days after such date.  Notwithstanding the foregoing, however, any Enrollment Agreement executed by an Eligible Employee, pursuant to this Section, to make a Compensation Deferral shall apply only to Compensation earned by the Eligible Employee after the date on which such Enrollment Agreement is filed.

(e)All deferral elections under the Plan shall be made in accordance with Section 409A.

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Section 3.2Distribution Elections.

Subject to Section 3.4, in the Enrollment Agreement, each Eligible Employee shall select the form and the timing of payment with respect to the Eligible Employee’s Compensation Deferral.  An Eligible Employee’s deferral election under this Article III shall not be effective unless and until the Eligible Employee makes the required distribution elections under this Section 3.2.  Each Eligible Employee shall make the following form and timing of payment elections:

(a)Retirement.  An Eligible Employee shall elect the form of payment in which amounts credited to the Eligible Employee’s Distribution Option Accounts shall be paid where (i) the Eligible Employee’s Separation Date occurs on or after eligibility for Retirement and (ii) the aggregate amount of the Eligible Employee’s Distribution Option Accounts as of the last business day of the month following the month in which the Separation Date occurs exceeds the applicable small benefit cashout amount described under Section 6.2(a).  The Eligible Employee may elect a lump sum, or quarterly, semi-annual or annual installments payable over 5, 10, 15 or 20 years. This form of payment election shall apply to all Compensation Deferrals credited on behalf of the Eligible Employee to such Eligible Employee’s Separation Distribution Account in any Plan Year in which the Eligible Employee makes Compensation Deferrals under this Plan, subject to change only in accordance with Section 3.4 below.  In the event that an Eligible Employee fails to elect a form of payment for Distribution Option Accounts upon a Separation from Service after eligibility for Retirement, all Compensation Deferrals shall be paid as a lump sum in accordance with Section 6.1.  In the event the amount to be distributed from a Participant’s Distribution Option Accounts upon a Separation from Service after eligibility for Retirement does not exceed the applicable small benefit cashout amount described under Section 6.2(a), the Participant’s Distribution Option Accounts shall be paid in a lump sum in accordance with Section 6.2(a) without regard to the Participant’s actual form of payment election.

(b)In-Service Distribution.  An Eligible Employee shall elect (i) the form of payment in which amounts credited to the Eligible Employee’s In-Service Distribution Account, if applicable, shall be paid where the amount to be distributed exceeds the applicable small benefit cashout amount described under Section 6.2(b) and (ii) the Plan Year in which such payment shall commence; provided that the Plan Year selected in (ii) may not be prior to either of (A) the third Plan Year following the Plan Year in which the Compensation Deferral is made or (B) the Plan Year in which any such amount will become vested.  The Eligible Employee may elect a lump sum, or quarterly, semi-annual or annual installments payable over 2, 3, 4 or 5 years.  This election shall apply only to the Compensation Deferrals credited on behalf of the Eligible Employee to the In-Service Distribution Account created pursuant to the Enrollment Form to which such Compensation Deferrals relate, except to the extent changed pursuant to a subsequent election in accordance with Section 3.4 below.  In the event the amount to be distributed from a Participant’s In-Service Distribution Account does not exceed the applicable small benefit cashout amount described under Section 6.2(b), the Participant’s In-Service Distribution Account shall be paid in a lump sum in accordance with Section 6.2(b) without regard to the Participant’s actual form of payment election(s).  If a Participant incurs a Separation from Service prior to the in-service distribution date elected by the Participant with respect to the Participant’s In-Service Distribution Account, the Participant’s distribution election with respect to such In-Service Distribution Account shall become invalid and distribution shall instead be made in accordance with the Participant’s elections under Section 3.2(a), 3.2(c) or 3.4, as applicable.

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(c)Separation from Service. An Eligible Employee shall elect the form of payment in which amounts credited to the Eligible Employee’s Separation Distribution Account, if applicable, shall be paid where (i) the Eligible Employee’s Separation Date occurs prior to eligibility for Retirement, and (ii) the aggregate amount of the Eligible Employee’s Distribution Option Accounts as of the last business day of the month following the month in which the Separation Date occurs exceeds the applicable small benefit cashout amount described under Section 6.2(a).  The Eligible Employee may elect a lump sum or annual installments payable over 5 years.  This election shall apply to all Compensation Deferrals credited on behalf of the Eligible Employee to such Eligible Employee’s Separation Distribution Account in any Plan Year in which Compensation Deferrals are made under this Plan, subject to change only in accordance with Section 3.4 below.  In the event that an Eligible Employee fails to elect a form of payment for Distribution Option Accounts upon Separation from Service before eligibility for Retirement, all Compensation Deferrals shall be paid as a lump sum in accordance with Section 6.1.  In the event the amount to be distributed from a Participant’s Distribution Option Accounts upon a Separation from Service before eligibility for Retirement does not exceed the applicable small benefit cashout amount described under Section 6.2(a), the Participant’s Distribution Option Accounts shall be paid in a lump sum in accordance with Section 6.2(a) without regard to the Participant’s actual form of payment election.

Section 3.3Investment Elections.

(a)At the time of making the deferral elections described in Section 3.1 and the distribution elections described in Section 3.2, the Participant shall designate, in a manner prescribed by the Administrator, which Funds the Participant’s Accounts will be deemed to be invested in for purposes of determining the Investment Return to be credited to those Accounts.  The Funds shall be as selected by the Administrator from time to time and the Administrator may add, change, or delete Funds at any time. In making the designation pursuant to this Section 3.3, the Participant may specify that all or any whole percentage of the Participant’s Accounts be deemed to be invested in one or more of the Funds.  A Participant may change the designation made under this Section 3.3, in a manner prescribed by the Administrator, on any business day.  Such change shall be effective as soon as administratively feasible after it is received.

(b)If a Participant fails to elect a type of Fund under this Section 3.3, he or she shall be deemed to have elected the Fund designated by the Administrator.

(c)Although the Participant may designate the Funds according to Section 3.3(a) above, the Administrator shall select, from time to time, in its sole discretion, for each of the Funds described in Section 3.3(a) above, a commercially available mutual fund or contract or an investment fund established with and administered by an investment manager selected by the Administrator.  The Investment Return of each such commercially available mutual fund, contract or investment fund shall be used to determine the amount of earnings to be credited to Participants’ Accounts under Article IV although nothing set forth in this Plan shall require an actual investment of monies in any such mutual fund or in any other Fund designated as a deemed investment vehicle for Compensation Deferrals.

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Section 3.4Subsequent Elections.

The Administrator may establish rules allowing a Participant to make a subsequent election to postpone payment of Compensation Deferrals under the Participant’s In-Service Distribution Account(s) and/or such Participant’s Separation Distribution Account, in accordance with the rules in this Section 3.4; provided that any such subsequent election shall be made in accordance with the requirements of Section 409A and that no subsequent election may result in an impermissible acceleration of payment as described in Section 409A.  The following rules shall apply to subsequent elections under the Plan:

(a)With respect to Compensation Deferrals under an In-Service Distribution Account, a Participant may make a subsequent election to defer the payment to a later Plan Year or to change the form of payment applicable to such In-Service Distribution Account; provided that (i) the subsequent election must be made at least 12 months prior to the January in which the first scheduled payment was to occur, (ii) the subsequent election may not take effect until at least 12 months after the date on which the election is made, and (iii) except with respect to an election related to payment upon an Unforeseeable Financial Emergency, the first payment with respect to which such election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been made.

(b)A Participant may make a subsequent election to change the form or time at which Compensation Deferrals credited to a Participant’s Separation Distribution Account will be paid; provided that (i) the subsequent election may not take effect until at least 12 months after the date on which the election is made, and (ii) except with respect to an election related to payment upon an Unforeseeable Financial Emergency or death, the first payment with respect to which such election is made must be deferred for a period of five years from the date such payment would have otherwise have been made.  Participants shall be permitted to make only one subsequent election to change the form or time of payment of their Separation Distribution Account.  

ARTICLE IV
DISTRIBUTION OPTION ACCOUNTS

Section 4.1Compensation Deferrals.

(a)The Administrator shall establish and maintain separate Distribution Option Accounts with respect to a Participant.  A Participant’s Distribution Option Accounts may consist of a Separation Distribution Account and/or one or more In-Service Distribution Account(s), as elected by the Participant.  Each Participant’s Distribution Option Accounts shall be further divided into separate subaccounts (“subaccounts”), each of which corresponds to a Fund elected by the Participant pursuant to Section 3.3(a).  

(b)Unless otherwise specified by the Committee, as soon as practicable after the end of each regular Company payroll period, the Administrator shall credit the subaccounts of the Participant’s Distribution Option Account with an amount equal to the Base Salary and/or Bonus Compensation that would otherwise have been earned for such payroll period in accordance with the Distribution Option irrevocably elected by the Participant in the Enrollment Agreement and in accordance with the Participant’s investment elections under Section 3.3(a).  Any amount 

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once taken into account as Base Salary and/or Bonus Compensation for purposes of this Plan shall not be taken into account thereafter.  The Participant’s Distribution Option Accounts shall be reduced by the amount of payments made by the Company to the Participant or the Participant’s Beneficiary pursuant to this Plan.

(c)As of the Effective Date, a Participant’s account balances, if any, under the Prior Plan shall be transferred to this Plan as follows:

(i)A Transferred Balance attributable to amounts credited to the Participant under the Prior Plan shall be transferred to the Participant’s Account under this Plan, and credited to a Separation Distribution Account and/or In-Service Distribution Account (or other subaccount), as previously credited under the Prior Plan. Following the transfer of a Transferred Balance, the Company shall be responsible under this Plan for the payment of all Transferred Balances.

(ii)The Participant’s investment elections with respect to any Transferred Balance shall be mapped to the available investment options as directed by the Administrator.

Section 4.2Company Contribution. 

From time-to-time and in its sole discretion, the Committee may provide that Company Contributions be credited to some or all Participants, according to the terms and conditions determined by the Committee.

Section 4.3Investment Return.

Each subaccount of a Participant’s Distribution Option Account shall, as of each business day, be credited with earnings and debited with losses in an amount equal to that determined by multiplying the balance credited to such subaccount as of the previous day by the Investment Return for the corresponding Fund pursuant to Section 3.3(a).

ARTICLE V
VESTING

Section 5.1Compensation Deferral.

A Participant’s Compensation Deferral credited to the Participant’s Distribution Option Account shall be 100% vested at all times.

Section 5.2Company Contribution.

(a)Unless otherwise specified by the Committee, Company Contributions credited to a Participant’s Distribution Option Account, if any, shall be 100% vested at all times.  To be clear, the Committee shall at all times retain the discretion to apply a vesting schedule to Company Contributions at the time credited to a Participant’s Distribution Option Account. 

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(b)In the event Company Contributions are subject to a vesting schedule pursuant to the discretion granted to the Committee in Section 5.2(a), then notwithstanding such vesting schedule, a Participant’s Distribution Option Account balance shall be fully vested and nonforfeitable in its entirety should:  (i) the Participant die while providing service to the Company, (ii) the Participant become Disabled while providing service to the Company, or (iii) there occur a Change in Control.

(c)When a Participant incurs a Separation Date, the portion of the Company Contribution credited to such Participant’s Distribution Option Account which is not vested, if any, shall immediately be forever forfeited to the Company, and the Company shall have no obligation to the Participant (or Beneficiary) with respect to such forfeited amount.

ARTICLE VI
DISTRIBUTIONS

Section 6.1Form and Timing of Distributions - Generally.

(a)Subject to Section 6.2(a), in the case of a Participant whose Separation Date occurs on or after eligibility for Retirement, the Participant’s Separation Distribution Account shall be distributed in the form elected by the Participant, or the default form provided in the event a Participant fails to make an election, pursuant to Sections 3.2 and 3.4, as applicable, and shall be paid, or commence to be paid, within 30 days following the end of the twelfth full calendar month after the Participant has a Separation from Service, unless payment is deferred pursuant to Section 3.4.  Any unvested portion of any Distribution Option Account shall be forfeited in accordance with Section 5.2.

(b)Subject to Section 6.2(b), if a Participant has not incurred a Separation from Service as of the date an In-Service Distribution Account is to be distributed pursuant to the applicable election made under Section 3.2 or 3.4, the Participant’s In-Service Distribution Account shall be paid to the Participant, or commence to be paid, as described under Section 6.3.  

(c)If the Participant incurs a Separation from Service after distribution has commenced in accordance with this Section 6.1(c) but prior to the date on which the Participant’s In-Service Distribution Account(s) is fully distributed, distribution of the remaining amounts held in the Participant’s In-Service Distribution Account(s) shall continue to be distributed in accordance with the Participant’s election for such Participant’s In-Service Distribution Account.

(d)Subject to Section 6.2, in the case of a Participant whose Separation Date occurs prior to the earliest date on which the Participant is eligible for Retirement, other than by reason of death, the vested portion of a Participant’s Distribution Option Accounts shall be distributed in the form elected by the Participant, or the default form provided in the event a Participant fails to make an election, pursuant to Sections 3.2 and 3.4, as applicable, and shall be paid or commence to be paid within 30 days following the end of the twelfth full calendar month after the Participant has a Separation from Service, unless payment is deferred pursuant to Section 3.4.  Any unvested portion of any Distribution Option Account shall be forfeited in accordance with Section 5.2.

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Section 6.2Small Benefit Cashout.

(a)Notwithstanding any provision of the Plan or election by a Participant to the contrary, in the event the value of the vested portion of a Participant’s Separation Distribution Account does not exceed $100,000 (taking into account all deferrals made to the Eligible Employee’s Separation Distribution Account) as of the last business day of the month following the month in which the Participant’s Separation Date occurs, then the total vested portion of the Participant’s Account shall be paid in a single lump sum within 30 days following the end of the twelfth full calendar month after the Participant has a Separation from Service.  

(b)Notwithstanding any provision of the Plan or election by a Participant to the contrary, in the event the value of the vested portion of a Participant’s In-Service Distribution Account does not exceed $25,000 (applied on an Account by Account basis) as of the date the first installment under such Account would become distributable, then the total vested portion of such Account shall be paid in a single lump sum as set forth under Section 6.3(a).

Section 6.3In–Service Distribution Account Payouts.

(a)Unless otherwise specified in Section 6.1 or Section 6.2 hereof, any lump sum benefit payable under this Article VI shall be paid in January of the Plan Year elected by the Participant pursuant to Sections 3.2(b) and 3.4, as applicable, in an amount equal to the vested value of the portion of such Distribution Option Account being distributed as of the business day the Funds are deemed to be liquidated to make the payment.  

(b)Subject to Section 6.2(b), installment payments, if any, payable under this Section 6.3(b) shall commence in January of the Plan Year elected by the Participant pursuant to Sections 3.2(b) and 3.4, as applicable, in an amount equal to (i) the vested value of such portion of such Distribution Option Account being distributed as of the business day the Funds are deemed to be liquidated to make the payment, divided by (ii) the number of installment payments elected by the Participant in the applicable Enrollment Agreement with respect to an In-Service Distribution Account or in the distribution election form filed pursuant to Section 3.2(b).  The remaining installments shall be paid in an amount equal to (x) the vested value of such portion of the Distribution Option Account being distributed as of the business day the Funds are deemed to be liquidated to make the payment divided by (y) the number of installments remaining.

Section 6.4Financial Hardship of Participant.

(a)At any time prior to commencement of payment pursuant to this Article VI, a Participant may request payment to the Participant of all or a portion of the amounts that the Participant has deferred under the Plan.  The decision to approve or deny such a request shall be in the absolute discretion of the Administrator.  However, such a request shall be approved only upon a finding that the Participant has suffered an Unforeseeable Financial Emergency, and then only in an amount necessary to eliminate such Unforeseeable Financial Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).  In the event such a request is 

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approved, payment of all or a portion of the amounts previously deferred by the Participant, with credited interest, to the extent approved by the Administrator, shall be made as soon as practicable to the Participant.  Amounts otherwise payable to a Participant hereunder shall be adjusted (as determined by the Administrator in its absolute discretion) to take into account such Unforeseeable Financial Emergency payment.  The Administrator shall administer hardship distribution requests consistently with Section 409A.

(b)If a Participant elects to take an Unforeseeable Financial Emergency distribution prior to June 30 of any Plan Year, the Participant’s deferral election shall be cancelled for the Plan Year in which the distribution occurs with respect to all Base Salary and Bonus Compensation not yet earned.  If a Participant elects to take an Unforeseeable Financial Emergency distribution on or after June 30 of any Plan Year, the Participant’s deferral election shall be cancelled for the Plan Year in which such distribution occurs with respect to all salary and bonuses not yet earned, and the Participant shall be suspended from participation in the Plan for the following Plan Year.  If the Participant wishes to commence making a Compensation Deferral after the period during which the Participant’s deferral election is cancelled pursuant to this Section 6.4(b), the Participant may make a new deferral election in accordance with the requirements of Section 3.1.

Section 6.5Permissible Distribution Event.

Notwithstanding any provision of the Plan to the contrary, no distributions shall be made except upon a specified date or event as permitted pursuant to Section 409A.

Section 6.6Payment by Trust.

The Company may cause the payment of benefits under this Plan to be made in whole or in part by the trustee of a trust designated by the Committee (the “Trust”).  The Administrator may direct the Trustee to pay the Participant’s or Beneficiary’s benefit at the time and in the amount described herein.  In the event the amounts allocated to the Participant under the Trust are not sufficient to provide the full amount of benefit payable to the Participant, the Company shall pay the remainder of such benefit.

Section 6.7Inability to Locate Participant.

In the event that the Administrator is unable to locate a Participant or Beneficiary within two years following the date the Participant was to commence receiving payment, the entire amount allocated to the Participant’s Deferral Account and Company Contribution Account shall be forfeited.  If, after such forfeiture, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or earnings from the date payment was to commence pursuant to the Participant’s elections under Sections 3.2 and 3.4, as applicable.

ARTICLE VII
CHANGE IN CONTROL

In the event of a Change in Control, all Participants shall receive a distribution of 100% of the Participant’s Distribution Option Accounts at the time of the distribution.  Such distribution shall be made in a lump sum within 30 days following the date the Change in Control is 

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consummated, in an amount equal to the value of such Distribution Option Accounts as of the business day the Funds are deemed to be liquidated to make the payment. 

ARTICLE VIII
DEATH BENEFITS

Upon the death of a Participant before the Participant’s Distribution Option Account(s) has been paid in full (either in a lump sum or installment payments), the Participant’s Beneficiary shall receive the balance of the Participant’s vested Account as of the date of death, as adjusted by subsequent gains or losses prior to distribution, in the form of a lump sum payment as soon as reasonably practicable following the date of the Participant’s death (but in no event after December 31 of the calendar year following the calendar year in which death occurs).

ARTICLE IX
CLAIMS PROCEDURES

Section 9.1Claims.

A Participant or, following the Participant’s death, a Beneficiary (collectively referred to in this section as “Claimant”) may submit a claim for benefits under the Plan.  Any claim for benefits under this Plan shall be made in writing to the Administrator.  If such claim for benefits is wholly or partially denied, the Administrator shall, within 90 days after receipt of the claim, notify the Claimant of the denial of the claim unless special circumstances require an extension of time for processing the claim, which extension shall not exceed 180 days from receipt of the claim.  If such extension is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period and shall indicate the special circumstances requiring an extension of time and the date by which the Administrator expects to render a final decision.  A notice of denial shall be in writing, shall be written in a manner calculated to be understood by the Claimant, and shall contain the specific reason or reasons for denial of the claim, a specific reference to the pertinent Plan provisions upon which the denial is based, a description of the additional material or information (if any) necessary to perfect the claim, together with an explanation of why such material or information is necessary, and an explanation of the claims review procedure set forth below, including a statement of the Claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review.

Section 9.2Appeal.

Within 60 days after the receipt by a Claimant of a written notice of denial of a claim, the Claimant may file a written request with the Administrator that it conduct a full and fair review of the denial of the claim for benefits.  The Claimant, or duly authorized representative, shall receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant’s claim for benefits.  The Claimant, or duly authorized representative may also submit written comments, documents, records and other information relating to the claim for benefits, and the review will take into account such items whether or not they were considered in the initial benefit determination. 

The Administrator shall deliver to the Claimant, or authorized representative, a written decision on the claim within 60 days after the receipt of the request for review, except that if there 

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are special circumstances that require an extension of time, the 60-day period may be extended to 120 days.  If such extension is required, written notice shall be furnished to the Claimant, or authorized representative, prior to the termination of the initial 60-day period and shall indicate the special circumstances requiring an extension of time and the date by which the final decision will be rendered.  The decision shall be written in a manner calculated to be understood by the Claimant, include the specific reason or reasons for the decision, include a statement that the Claimant is entitled to receive upon request and free of charge, access to and copies of all documents and other information relevant to the claim, contain a specific reference to the pertinent Plan provisions upon which the decision is based, and include a statement describing any voluntary appeal procedures offered by the Plan and a statement of the Claimant’s right to bring an action under section 502(a) of ERISA.

Section 9.3Authority.

The Administrator, in determining claims for benefits, shall have the complete discretion to review and determine related factual questions, to construe the terms of the Plan, and to bind the Company with respect to the Plan.

ARTICLE X
ADMINISTRATION

Section 10.1Administrator.

The Plan shall be administered by the Administrator. The Administrator shall be appointed by, and serve at the pleasure of, the Committee, provided that if no Administrator is designated, the Plan shall be administered by the Committee.  The number of members comprising the Administrator shall be determined by the Committee which may from time to time vary the number of members.  A member of the Administrator may resign by delivering a written notice of resignation to the Committee.  The Committee may remove any member by delivering a certified copy of its resolution of removal to such member.  Vacancies in the membership of the Administrator shall be filled promptly by the Committee.

Section 10.2Administrator Action.

The Administrator shall act at meetings by affirmative vote of a majority of the members of the Administrator.  Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Administrator and such written consent is filed with the minutes of the proceedings of the Administrator.  A member of the Administrator shall not vote or act upon any matter which relates solely to such member as a Participant.  Any member or members of the Administrator may execute any certificate or other written direction on behalf of the Administrator.

Section 10.3Powers and Duties of the Administrator.

(a)The Administrator, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:

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(i)To select the mutual funds, contracts or investment funds to be the Funds in accordance with Section 3.3(a) and (b) hereof;

(ii)To construe and interpret the terms and provisions of this Plan; reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan; and to make factual determinations;

(iii)To compute and certify to the amount and kinds of benefits payable to Participants and their Beneficiaries;

(iv)To maintain all records that may be necessary for the administration of the Plan;

(v)To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law;

(vi)To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof; and 

(vii)To appoint a plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Administrator may from time to time prescribe.

(viii)On behalf of the Company, to select those Highly Compensated Employees who shall be Eligible Employees.

Section 10.4Construction and Interpretation.

(a)The Administrator shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretation or construction shall be final and binding on all parties, including but not limited to, the Company and any Participant or Beneficiary.  The Administrator shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan.

(b) Nothing contained in the Plan shall be construed to prevent the Company from taking any action which is deemed by it to be appropriate or in its best interest.  No Participant, Beneficiary, or other Person shall have any claim against the Company as a result of such action.  Any decisions, actions or interpretations to be made under the Plan by the Company or the Committee, or the Administrator acting on behalf of the Company, shall be made in its respective sole discretion, not as a fiduciary, need not be uniformly applied to similarly situated individuals and shall be final, binding and conclusive on all Persons interested in the Plan.

Section 10.5Information.

To enable the Administrator to perform its functions, the Company shall supply full and timely information to the Administrator on all matters relating to the Compensation of all 

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Participants, their death, Disability, or other cause of termination, and such other pertinent facts as the Administrator may require.

Section 10.6Compensation, Expenses and Indemnity.

(a)The Administrator is authorized at the expense of the Company to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder.  Expenses and fees in connection with the administration of the Plan shall be paid by the Company.

(b)To the extent permitted by applicable state law, the Company shall indemnify and save harmless the Administrator and each member thereof, the Committee and any delegate of the Administrator who is an employee of the Company against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct.  This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.

ARTICLE XI
MISCELLANEOUS

Section 11.1Unsecured General Creditor.

Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company.  No assets of the Company shall be held under any trust, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan.  Any and all of the Company’s assets shall be, and remain, the general unpledged, unrestricted assets of the Company.  The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors.

Section 11.2Restriction Against Assignment.

The Company shall pay all amounts payable hereunder only to the Persons designated by the Plan and not to any other Persons.  No part of a Participant’s Accounts shall be liable for the debts, contracts, or engagements of any Participant, the Participant’s Beneficiary, or successors in interest, nor shall a Participant’s Accounts be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such Person have any right to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever.  If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the Administrator, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such mariner as the Administrator shall direct.

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Section 11.3Withholding.

There shall be deducted from each payment made under the Plan or any other compensation payable to the Participant (or Beneficiary) all taxes which are required to be withheld by the Company in respect to such payment or this Plan.  The Company shall have the right to reduce any payment (or compensation) by the amount of cash sufficient to provide the amount of said taxes.

Section 11.4Amendment, Modification, Suspension or Termination.

The Committee or the Board of Directors of the Company may at any time, or from time to time, in its sole discretion amend or terminate the Plan in any manner that the Committee or the Board of Directors of the Company deems appropriate, including amending or terminating outstanding deferral elections, if necessary or appropriate to comply with changes to applicable law, without the consent of any Participant; provided, however, that no amendment shall reduce any benefits accrued under the terms of the Plan as of the date of amendment.  In the event the Committee or the Board of Directors of the Company acts to terminate and liquidate the Plan in accordance with Treasury regulations Section 1.409A-3(j)(4)(ix), distribution to Participant shall be made in accordance with Article 6, unless otherwise required in order to comply with Section 409A.

Section 11.5Governing Law.

This Plan shall be construed, governed and administered in accordance with the laws of the State of Delaware (including its statute of limitations and all substantive and procedural law, and without regard to its conflict of laws provisions), except as to matters of federal law.

Section 11.6Receipt or Release.

Any payment to a Participant or the Participant’s Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Administrator, the Company and the Trustee.  The Administrator may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.

Section 11.7Payments on Behalf of Persons Under Incapacity.

In the event that any amount becomes payable under the Plan to a Person who, in the sole judgement of the Administrator, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Administrator may direct that such payment be made to any Person found by the Administrator, in its sole judgement, to have assumed the care of such Person.  Any payment made pursuant to such determination shall constitute a full release and discharge of the Administrator and the Company.

Section 11.8Headings.

Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.

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[signature page to follow]

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IN WITNESS WHEREOF, the Company has caused this document to be executed by its duly authorized officer to be effective on this September 1, 2018.

 

HILTON RESORTS CORPORATION

 

By:/s/ Mark Wang

Name: Mark Wang

Its: President

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