☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware |
27-4384691 | ||||||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
7930 Jones Branch Drive, Suite 1100, McLean, VA |
22102 | ||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, $0.01 par value per share | HLT | New York Stock Exchange |
Large accelerated filer | ☒ |
Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
Emerging growth company | ☐ |
Page No. | ||||||||
PART I | FINANCIAL INFORMATION | |||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | OTHER INFORMATION | |||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Current Assets: |
|||||||||||
Cash and cash equivalents |
$ | 1,346 | $ | 800 | |||||||
Restricted cash and cash equivalents |
74 | 75 | |||||||||
Accounts receivable, net of allowance for credit losses of $137 and $131 |
1,467 | 1,487 | |||||||||
Prepaid expenses | 193 | 131 | |||||||||
Other |
103 | 121 | |||||||||
Total current assets (variable interest entities – $66 and $65) |
3,183 | 2,614 | |||||||||
Intangibles and Other Assets: |
|||||||||||
Goodwill |
5,044 | 5,052 | |||||||||
Brands |
4,831 | 4,846 | |||||||||
Management and franchise contracts, net | 1,087 | 1,064 | |||||||||
Other intangible assets, net | 173 | 173 | |||||||||
Operating lease right-of-use assets |
594 | 618 | |||||||||
Property and equipment, net |
377 | 382 | |||||||||
Deferred income tax assets |
140 | 140 | |||||||||
Other |
503 | 512 | |||||||||
Total intangibles and other assets (variable interest entities – $102 and $112) |
12,749 | 12,787 | |||||||||
TOTAL ASSETS | $ | 15,932 | $ | 15,401 | |||||||
LIABILITIES AND EQUITY (DEFICIT) | |||||||||||
Current Liabilities: |
|||||||||||
Accounts payable, accrued expenses and other |
$ | 1,935 | $ | 1,979 | |||||||
Current maturities of long-term debt |
38 | 39 | |||||||||
Current portion of deferred revenues |
513 | 502 | |||||||||
Current portion of liability for guest loyalty program | 1,288 | 1,202 | |||||||||
Total current liabilities (variable interest entities – $46 and $50) |
3,774 | 3,722 | |||||||||
Long-term debt | 10,135 | 9,157 | |||||||||
Operating lease liabilities | 775 | 808 | |||||||||
Deferred revenues |
1,152 | 1,132 | |||||||||
Deferred income tax liabilities | 373 | 401 | |||||||||
Liability for guest loyalty program | 1,553 | 1,530 | |||||||||
Other | 987 | 998 | |||||||||
Total liabilities (variable interest entities – $122 and $137) |
18,749 | 17,748 | |||||||||
Commitments and contingencies – see Note 13 |
|||||||||||
Equity (Deficit): |
|||||||||||
Common stock, $0.01 par value; 10,000,000,000 authorized shares, 251,032,237 outstanding as of March 31, 2024 and 253,488,288 outstanding as of December 31, 2023 |
3 | 3 | |||||||||
Treasury stock, at cost; 84,184,078 shares as of March 31, 2024 and 80,807,049 shares as of December 31, 2023 |
(9,060) | (8,393) | |||||||||
Additional paid-in capital |
10,954 | 10,968 | |||||||||
Accumulated deficit | (3,981) | (4,207) | |||||||||
Accumulated other comprehensive loss |
(749) | (731) | |||||||||
Total Hilton stockholders' deficit |
(2,833) | (2,360) | |||||||||
Noncontrolling interests |
16 | 13 | |||||||||
Total deficit | (2,817) | (2,347) | |||||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 15,932 | $ | 15,401 |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenues | |||||||||||
Franchise and licensing fees | $ | 571 | $ | 508 | |||||||
Base and other management fees | 106 | 80 | |||||||||
Incentive management fees | 70 | 65 | |||||||||
Owned and leased hotels | 255 | 248 | |||||||||
Other revenues | 50 | 35 | |||||||||
1,052 | 936 | ||||||||||
Other revenues from managed and franchised properties |
1,521 | 1,357 | |||||||||
Total revenues | 2,573 | 2,293 | |||||||||
Expenses | |||||||||||
Owned and leased hotels |
247 | 251 | |||||||||
Depreciation and amortization | 36 | 37 | |||||||||
General and administrative | 104 | 91 | |||||||||
Other expenses | 30 | 21 | |||||||||
417 | 400 | ||||||||||
Other expenses from managed and franchised properties |
1,630 | 1,395 | |||||||||
Total expenses | 2,047 | 1,795 | |||||||||
Gain on sales of assets, net |
7 | — | |||||||||
Operating income | 533 | 498 | |||||||||
Interest expense | (131) | (116) | |||||||||
Loss on foreign currency transactions |
(1) | — | |||||||||
Loss on investments in unconsolidated affiliate | — | (92) | |||||||||
Other non-operating income (loss), net |
(36) | 12 | |||||||||
Income before income taxes | 365 | 302 | |||||||||
Income tax expense |
(97) | (93) | |||||||||
Net income | 268 | 209 | |||||||||
Net income attributable to noncontrolling interests |
(3) | (3) | |||||||||
Net income attributable to Hilton stockholders | $ | 265 | $ | 206 | |||||||
Earnings per share: | |||||||||||
Basic | $ | 1.05 | $ | 0.77 | |||||||
Diluted | $ | 1.04 | $ | 0.77 | |||||||
Cash dividends declared per share | $ | 0.15 | $ | 0.15 |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net income | $ | 268 | $ | 209 | |||||||
Other comprehensive income (loss), net of tax benefit (expense): | |||||||||||
Currency translation adjustment, net of tax of $4 and $(3) |
(27) | (6) | |||||||||
Pension liability adjustment, net of tax of $(1) and $(1) |
2 | 2 | |||||||||
Cash flow hedge adjustment, net of tax of $(2) and $4 |
7 | (14) | |||||||||
Total other comprehensive loss |
(18) | (18) | |||||||||
Comprehensive income | 250 | 191 | |||||||||
Comprehensive income attributable to noncontrolling interests |
(3) | (3) | |||||||||
Comprehensive income attributable to Hilton stockholders |
$ | 247 | $ | 188 |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Operating Activities: | |||||||||||
Net income | $ | 268 | $ | 209 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Amortization of contract acquisition costs | 12 | 10 | |||||||||
Depreciation and amortization expenses | 36 | 37 | |||||||||
Gain on sales of assets, net |
(7) | — | |||||||||
Loss on foreign currency transactions |
1 | — | |||||||||
Loss on investments in unconsolidated affiliate | — | 92 | |||||||||
Share-based compensation expense | 41 | 33 | |||||||||
Deferred income taxes | (30) | (20) | |||||||||
Contract acquisition costs, net of refunds | (37) | (105) | |||||||||
Working capital changes and other | 62 | 74 | |||||||||
Net cash provided by operating activities | 346 | 330 | |||||||||
Investing Activities: | |||||||||||
Capital expenditures for property and equipment |
(16) | (44) | |||||||||
Issuance of financing receivables | — | (8) | |||||||||
Proceeds from asset dispositions |
8 | — | |||||||||
Settlements of undesignated derivative financial instruments |
— | (12) | |||||||||
Capitalized software costs | (18) | (19) | |||||||||
Investments in unconsolidated affiliates | (1) | (2) | |||||||||
Net cash used in investing activities | (27) | (85) | |||||||||
Financing Activities: | |||||||||||
Borrowings | 1,200 | — | |||||||||
Repayment of debt | (209) | (12) | |||||||||
Debt issuance costs | (13) | (9) | |||||||||
Dividends paid | (39) | (41) | |||||||||
Repurchases of common stock | (666) | (450) | |||||||||
Share-based compensation tax withholdings | (69) | (51) | |||||||||
Proceeds from share-based compensation | 20 | 5 | |||||||||
Settlements of interest rate swap with financing component | 14 | 11 | |||||||||
Net cash provided by (used in) financing activities |
238 | (547) | |||||||||
Effect of exchange rate changes on cash, restricted cash and cash equivalents | (12) | (6) | |||||||||
Net increase (decrease) in cash, restricted cash and cash equivalents |
545 | (308) | |||||||||
Cash, restricted cash and cash equivalents, beginning of period | 875 | 1,286 | |||||||||
Cash, restricted cash and cash equivalents, end of period | $ | 1,420 | $ | 978 |
(in millions) | |||||
Balance as of December 31, 2023 |
$ | 1,521 | |||
Cash received in advance and not recognized as revenue |
185 | ||||
Revenue recognized(1) |
(66) | ||||
Other(2) |
(78) | ||||
Balance as of March 31, 2024 |
$ | 1,562 |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
(in millions) | |||||||||||
Cash and cash equivalents | $ | 48 | $ | 46 | |||||||
Accounts receivable, net | 15 | 17 | |||||||||
Property and equipment, net | 33 | 37 | |||||||||
Deferred income tax assets | 28 | 32 | |||||||||
Other non-current assets | 40 | 43 | |||||||||
Accounts payable, accrued expenses and other | 26 | 29 | |||||||||
Long-term debt(1)(2) |
86 | 95 |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
(in millions) | |||||||||||
Senior secured term loan facility with a rate of 7.18%, due 2028 |
$ | 1,000 | $ | 1,000 | |||||||
Senior secured term loan facility with a rate of 7.43%, due 2030 |
2,119 | 2,119 | |||||||||
Senior notes with a rate of 5.375%, due 2025(1) |
500 | 500 | |||||||||
Senior notes with a rate of 4.875%, due 2027(1) |
600 | 600 | |||||||||
Senior notes with a rate of 5.750%, due 2028(1) |
500 | 500 | |||||||||
Senior notes with a rate of 5.875%, due 2029(1) |
550 | — | |||||||||
Senior notes with a rate of 3.750%, due 2029(1) |
800 | 800 | |||||||||
Senior notes with a rate of 4.875%, due 2030(1) |
1,000 | 1,000 | |||||||||
Senior notes with a rate of 4.000%, due 2031(1) |
1,100 | 1,100 | |||||||||
Senior notes with a rate of 3.625%, due 2032(1) |
1,500 | 1,500 | |||||||||
Senior notes with a rate of 6.125%, due 2032(1) |
450 | — | |||||||||
Finance lease liabilities with a weighted average rate of 6.01%, due 2024 to 2030(2) |
129 | 139 | |||||||||
Other debt of consolidated VIEs with a weighted average rate of 1.32%, due 2024 to 2026(2) |
8 | 9 | |||||||||
10,256 | 9,267 | ||||||||||
Less: unamortized deferred financing costs and discounts |
(83) | (71) | |||||||||
Less: current maturities of long-term debt(3) |
(38) | (39) | |||||||||
$ | 10,135 | $ | 9,157 |
March 31, 2024 | |||||||||||||||||||||||
Hierarchy Level | |||||||||||||||||||||||
Carrying Value(1) |
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest rate swap | $ | 83 | $ | — | $ | 83 | $ | — | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Long-term debt(2) |
10,119 | 6,568 | — | 3,127 |
December 31, 2023 | |||||||||||||||||||||||
Hierarchy Level | |||||||||||||||||||||||
Carrying Value(1) |
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest rate swap | $ | 75 | $ | — | $ | 75 | $ | — | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Long-term debt(2) |
9,119 | 5,631 | — | 3,129 | |||||||||||||||||||
Expected volatility(1) |
27.95 | % | |||
Dividend yield(2) |
0.33 | % | |||
Risk-free rate(3) |
4.17 | % | |||
Expected term (in years)(4) |
6.0 |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
(in millions, except per share amounts) |
|||||||||||
Basic EPS: | |||||||||||
Numerator: | |||||||||||
Net income attributable to Hilton stockholders |
$ | 265 | $ | 206 | |||||||
Denominator: | |||||||||||
Weighted average shares outstanding | 252 | 266 | |||||||||
Basic EPS | $ | 1.05 | $ | 0.77 | |||||||
Diluted EPS: | |||||||||||
Numerator: | |||||||||||
Net income attributable to Hilton stockholders |
$ | 265 | $ | 206 | |||||||
Denominator: | |||||||||||
Weighted average shares outstanding(1) |
255 | 269 | |||||||||
Diluted EPS | $ | 1.04 | $ | 0.77 |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity (Deficit) Attributable to Hilton Stockholders | |||||||||||||||||||||||||||||||||||||||||||||||
Treasury Stock | Additional Paid-in Capital |
Accumulated Deficit | Accumulated Other Comprehensive Loss |
||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Noncontrolling Interests |
||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2023 | 253.5 | $ | 3 | $ | (8,393) | $ | 10,968 | $ | (4,207) | $ | (731) | $ | 13 | $ | (2,347) | ||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | 265 | — | 3 | 268 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | (18) | — | (18) | |||||||||||||||||||||||||||||||||||||||
Dividends |
— | — | — | — | (39) | — | — | (39) | |||||||||||||||||||||||||||||||||||||||
Repurchases of common stock |
(3.4) | — | (667) | — | — | — | — | (667) | |||||||||||||||||||||||||||||||||||||||
Share-based compensation |
0.9 | — | — | (14) | — | — | — | (14) | |||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2024 | 251.0 | $ | 3 | $ | (9,060) | $ | 10,954 | $ | (3,981) | $ | (749) | $ | 16 | $ | (2,817) |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity (Deficit) Attributable to Hilton Stockholders | |||||||||||||||||||||||||||||||||||||||||||||||
Treasury Stock | Additional Paid-in Capital |
Accumulated Deficit | Accumulated Other Comprehensive Loss |
||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Noncontrolling Interests |
||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2022 | 267.9 | $ | 3 | $ | (6,040) | $ | 10,831 | $ | (5,190) | $ | (706) | $ | 4 | $ | (1,098) | ||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | 206 | — | 3 | 209 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | (18) | — | (18) | |||||||||||||||||||||||||||||||||||||||
Dividends | — | — | — | — | (41) | — | — | (41) | |||||||||||||||||||||||||||||||||||||||
Repurchases of common stock |
(3.2) | — | (449) | — | — | — | — | (449) | |||||||||||||||||||||||||||||||||||||||
Share-based compensation |
0.7 | — | — | (16) | — | — | — | (16) | |||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2023 | 265.4 | $ | 3 | $ | (6,489) | $ | 10,815 | $ | (5,025) | $ | (724) | $ | 7 | $ | (1,413) |
Currency Translation Adjustment(1) |
Pension Liability Adjustment(2) |
Cash Flow Hedge Adjustment(3) |
Total | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Balance as of December 31, 2023 | $ | (539) | $ | (262) | $ | 70 | $ | (731) | |||||||||||||||
Other comprehensive income (loss) before reclassifications |
(27) | — | 20 | (7) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss |
— | 2 | (13) | (11) | |||||||||||||||||||
Net other comprehensive income (loss) |
(27) | 2 | 7 | (18) | |||||||||||||||||||
Balance as of March 31, 2024 | $ | (566) | $ | (260) | $ | 77 | $ | (749) |
Currency Translation Adjustment(1) |
Pension Liability Adjustment(2) |
Cash Flow Hedge Adjustment(3) |
Total | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Balance as of December 31, 2022 | $ | (548) | $ | (259) | $ | 101 | $ | (706) | |||||||||||||||
Other comprehensive loss before reclassifications |
(6) | — | (11) | (17) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss |
— | 2 | (3) | (1) | |||||||||||||||||||
Net other comprehensive income (loss) |
(6) | 2 | (14) | (18) | |||||||||||||||||||
Balance as of March 31, 2023 | $ | (554) | $ | (257) | $ | 87 | $ | (724) |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
(in millions) | |||||||||||
Franchise and licensing fees | $ | 576 | $ | 513 | |||||||
Base and other management fees(1) |
119 | 89 | |||||||||
Incentive management fees | 70 | 65 | |||||||||
Management and franchise | 765 | 667 | |||||||||
Ownership | 255 | 248 | |||||||||
Segment revenues | 1,020 | 915 | |||||||||
Amortization of contract acquisition costs | (12) | (10) | |||||||||
Other revenues | 50 | 35 | |||||||||
Other revenues from managed and franchised properties |
1,521 | 1,357 | |||||||||
Intersegment fees elimination(1) |
(6) | (4) | |||||||||
Total revenues | $ | 2,573 | $ | 2,293 |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
(in millions) | |||||||||||
Management and franchise(1) |
$ | 765 | $ | 667 | |||||||
Ownership(1) |
2 | (7) | |||||||||
Segment operating income | 767 | 660 | |||||||||
Amortization of contract acquisition costs | (12) | (10) | |||||||||
Other revenues, less other expenses | 20 | 14 | |||||||||
Net other expenses from managed and franchised properties |
(109) | (38) | |||||||||
Depreciation and amortization expenses | (36) | (37) | |||||||||
General and administrative expenses | (104) | (91) | |||||||||
Gain on sales of assets, net |
7 | — | |||||||||
Operating income | 533 | 498 | |||||||||
Interest expense | (131) | (116) | |||||||||
Loss on foreign currency transactions | (1) | — | |||||||||
Loss on investments in unconsolidated affiliate | — | (92) | |||||||||
Other non-operating income (loss), net | (36) | 12 | |||||||||
Income before income taxes | $ | 365 | $ | 302 |
As of or for the | |||||||||||
Three Months Ended | |||||||||||
March 31, 2024 | |||||||||||
Hotels | Rooms(1) |
||||||||||
Hotel system | |||||||||||
Openings |
106 | 16,800 | |||||||||
Net additions(2) |
94 | 14,200 | |||||||||
Development pipeline |
|||||||||||
Additions |
234 | 29,800 | |||||||||
Count as of period end(3)(4) |
3,375 | 472,300 |
Three Months Ended | Change | |||||||||||||
March 31, 2024 | 2024 vs. 2023 |
|||||||||||||
System-wide | ||||||||||||||
Occupancy | 67.2 | % | 0.2 | % | pts. | |||||||||
ADR | $ | 154.91 | 1.7 | % | ||||||||||
RevPAR | $ | 104.16 | 2.0 | % | ||||||||||
U.S. | ||||||||||||||
Occupancy | 67.7 | % | (0.6) | % | pts. | |||||||||
ADR | $ | 161.67 | 0.5 | % | ||||||||||
RevPAR | $ | 109.53 | (0.4) | % | ||||||||||
Americas (excluding U.S.) | ||||||||||||||
Occupancy | 65.8 | % | 1.4 | % | pts. | |||||||||
ADR | $ | 157.60 | 5.0 | % | ||||||||||
RevPAR | $ | 103.67 | 7.3 | % | ||||||||||
Europe | ||||||||||||||
Occupancy | 64.9 | % | 3.1 | % | pts. | |||||||||
ADR | $ | 141.99 | 4.5 | % | ||||||||||
RevPAR | $ | 92.14 | 9.7 | % | ||||||||||
MEA | ||||||||||||||
Occupancy | 73.6 | % | 2.4 | % | pts. | |||||||||
ADR | $ | 193.22 | 11.0 | % | ||||||||||
RevPAR | $ | 142.23 | 14.8 | % | ||||||||||
Asia Pacific | ||||||||||||||
Occupancy | 65.2 | % | 1.3 | % | pts. | |||||||||
ADR | $ | 114.90 | 5.7 | % | ||||||||||
RevPAR | $ | 74.95 | 7.9 | % |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
(in millions) | |||||||||||
Net income | $ | 268 | $ | 209 | |||||||
Interest expense | 131 | 116 | |||||||||
Income tax expense | 97 | 93 | |||||||||
Depreciation and amortization expenses | 36 | 37 | |||||||||
EBITDA | 532 | 455 | |||||||||
Gain on sales of assets, net |
(7) | — | |||||||||
Loss on foreign currency transactions |
1 | — | |||||||||
Loss on investments in unconsolidated affiliate(1) |
— | 92 | |||||||||
Loss on debt guarantees(2) |
47 | — | |||||||||
FF&E replacement reserves | 11 | 8 | |||||||||
Share-based compensation expense | 41 | 33 | |||||||||
Amortization of contract acquisition costs | 12 | 10 | |||||||||
Net other expenses from managed and franchised properties |
109 | 38 | |||||||||
Other adjustments(3) |
4 | 5 | |||||||||
Adjusted EBITDA | $ | 750 | $ | 641 |
Three Months Ended | Percent | ||||||||||||||||
March 31, | Change | ||||||||||||||||
2024 | 2023 | 2024 vs. 2023 |
|||||||||||||||
(in millions) | |||||||||||||||||
Franchise and licensing fees | $ | 571 | $ | 508 | 12.4 | ||||||||||||
Base and other management fees | $ | 106 | $ | 80 | 32.5 | ||||||||||||
Incentive management fees |
70 | 65 | 7.7 | ||||||||||||||
Total management fees | $ | 176 | $ | 145 | 21.4 |
Three Months Ended | Percent | ||||||||||||||||
March 31, | Change | ||||||||||||||||
2024 | 2023 | 2024 vs. 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
Owned and leased hotels revenues |
$ | 255 | $ | 248 | 2.8 |
Three Months Ended | Percent | ||||||||||||||||
March 31, | Change | ||||||||||||||||
2024 | 2023 | 2024 vs. 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
Other revenues | $ | 50 | $ | 35 | 42.9 |
Three Months Ended | Percent | ||||||||||||||||
March 31, | Change | ||||||||||||||||
2024 | 2023 | 2024 vs. 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
Owned and leased hotels expenses |
$ | 247 | $ | 251 | (1.6) |
Three Months Ended | Percent | ||||||||||||||||
March 31, | Change | ||||||||||||||||
2024 | 2023 | 2024 vs. 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
Depreciation and amortization expenses | $ | 36 | $ | 37 | (2.7) | ||||||||||||
General and administrative expenses | 104 | 91 | 14.3 | ||||||||||||||
Other expenses | 30 | 21 | 42.9 |
Three Months Ended | Percent | ||||||||||||||||
March 31, | Change | ||||||||||||||||
2024 | 2023 | 2024 vs. 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
Interest expense | $ | (131) | $ | (116) | 12.9 | ||||||||||||
Loss on foreign currency transactions |
(1) | — | NM(1) |
||||||||||||||
Loss on investments in unconsolidated affiliate | — | (92) | NM(1) |
||||||||||||||
Other non-operating income (loss), net |
(36) | 12 | NM(1) |
||||||||||||||
Income tax expense |
(97) | (93) | 4.3 |
Three Months Ended | Percent | ||||||||||||||||
March 31, | Change | ||||||||||||||||
2024 | 2023 | 2024 vs. 2023 | |||||||||||||||
(in millions) | |||||||||||||||||
Net cash provided by operating activities | $ | 346 | $ | 330 | 4.8 | ||||||||||||
Net cash used in investing activities | (27) | (85) | (68.2) | ||||||||||||||
Net cash provided by (used in) financing activities | 238 | (547) | NM(1) |
Total Number of Shares Purchased | Average Price Paid per Share(1) |
Total Number of Shares Purchased as Part of Publicly Announced Program(2) |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(2)
(in millions)
|
||||||||||||||||||||
January 1, 2024 to January 31, 2024 |
1,281,038 | $ | 185.26 | 1,281,038 | $ | 3,545 | |||||||||||||||||
February 1, 2024 to February 29, 2024 |
988,846 | 197.32 | 988,846 | 3,350 | |||||||||||||||||||
March 1, 2024 to March 31, 2024 |
1,107,145 | 207.76 | 1,107,145 | 3,120 | |||||||||||||||||||
Total | 3,377,029 | 196.17 | 3,377,029 |
Exhibit Number | Exhibit Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
4.1 |
Indenture, with respect to the 5.875% Senior Notes and 6.125% Senior Notes, dated as of March 26, 2024, by and among Hilton Domestic Operating Company Inc., the guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 27, 2024).
|
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4.2 |
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4.3 |
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10.1 |
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10.2 |
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10.3 |
||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS |
Inline XBRL Instance Document - this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
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101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
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101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
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101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|||||||
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
HILTON WORLDWIDE HOLDINGS INC. | ||||||||
By: | /s/ Christopher J. Nassetta |
|||||||
Name: | Christopher J. Nassetta | |||||||
Title: | President and Chief Executive Officer | |||||||
By: | /s/ Kevin J. Jacobs |
|||||||
Name: | Kevin J. Jacobs | |||||||
Title: | Chief Financial Officer and President, Global Development |
Performance Component (each weighted at 25%) |
Threshold (Achievement Percentage of 50%) |
Target (Achievement Percentage of 100%) |
Maximum (Achievement Percentage of 200%) |
Performance Period |
||||||||||
2026 Adjusted EBITDA |
$ | $ | $ |
January 1, 2026
to December 31,
2026
|
||||||||||
2026
FCF/Share
|
$ | $ | $ |
January 1, 2026
to December 31,
2026
|
||||||||||
2024 – 2026
NUG CAGR
|
% | % | % |
January 1, 2024
to December 31,
2026
|
||||||||||
2026 RevPAR
Index (Growth over Prior Year)
|
pts | pts | pts |
January 1, 2026
to December 31,
2026
|
CALIFORNIA
If the Participant is primarily a resident of, or primarily provides services in, California on (i) the Date of Grant or (ii) the Termination Date:
(a) Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply after the Termination Date,
(b) During the portion of the Restricted Period which follows the Termination Date, Section 1(a)(iv) of Appendix A shall be amended to delete the words “or hire any employee who was employed by the Company Group as of the Termination Date”,
(c) The following sentence shall be added to Section 2(d) of Appendix A:
“Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
(d) The following sentence shall be added as Section 2(c)(v) of Appendix A:
“Notwithstanding any other provision of Appendix A to the contrary, this Section 2(c) of Appendix A is subject to the provisions of California Labor Code Sections 2870, 2871 and 2872. In accordance with Section 2870 of the California Labor Code, the Participant’s obligation to assign to the Company Group the Participant’s right, title and interest throughout the world in and to all Works does not apply to any Works the Participant developed entirely on the Participant’s own time without using the Company Group’s equipment, supplies, facilities, or Confidential Information except for such Works that relate to either (i) the business of the Company Group at the time of conception or reduction to practice of the Works, or actual or demonstrably anticipated research or development of the Company Group or (ii) result from any work performed by the Participant for the Company Group. A copy of California Labor Code Sections 2870, 2871 and 2872 is attached to the State Restrictive Covenant Annex as Exhibit 1. The Participant agrees to disclose all Works to the Company Group, even if the Participant does not believe that the Participant is required under Section 2(c) of Appendix A, or pursuant to California Labor Code Section 2870, to assign the Participant’s interest in such Works to the Company Group or its nominee.”
(e) To the extent the Participant is a party to any other agreement or arrangement with the Company Group which contains restrictive covenants still in effect which conflict with the terms of this California supplement, such restrictive covenants shall to that extent be superseded and replaced by the terms stated herein.
(f) Notwithstanding anything in the Agreement to the contrary, Appendix A shall be governed by California law, without regard to principles of conflicts of law.
|
COLORADO
If the Participant is primarily a resident of, or primarily provides services in, Colorado on (i) the Date of Grant or (ii) the Termination Date:
(a) Sections 1(a)(i) and 1(a)(iv) of Appendix A shall not apply after the Termination Date unless the Participant earns, as of the Date of Grant and the date on which enforcement is sought, an amount of annualized cash compensation equivalent or greater than $74,250 (which is the threshold amount for 2024 and represents 60% of Colorado’s “threshold amount for highly compensated workers,” which is subject to annual adjustments pursuant to Colorado law); and
(b) Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns, as of the Date of Grant and the date on which enforcement is sought, an amount of annualized cash compensation equivalent to or greater than $123,750 (which is the threshold amount for 2024 and represents 100% of Colorado’s “threshold amount for highly compensated workers,” which is subject to annual adjustments pursuant to Colorado law).
The Participant acknowledges that the Participant was provided a separate notice of the terms of the above-referenced restrictions at least 14 days before the earlier of (1) the effective date of the Restrictive Covenants or (2) the Date of Grant.
| ||
DISTRICT OF COLUMBIA
If the Participant is a “covered employee,” as defined by the District of Columbia’s Ban on Non-Compete Agreements Amendment Act of 2020 (as amended):
(a) Section 1(a)(ii) of Appendix A shall not apply after the Termination Date; and
(b) During the Employment Term, Section 1(a)(ii) of Appendix A shall apply only to the extent permitted by District of Columbia law.
A “covered employee” is an individual who performs work for pay in the District of Columbia for an employer and who is not a “highly compensated employee,” and (i) spends (or, for new hires, is reasonably anticipated to spend) more than 50% of his or her work time for the employer working in the District of Columbia, or (ii) whose employment for the employer is or will be based in the District of Columbia and the employee regularly spends (or, for new hires, is reasonably anticipated to spend) a substantial amount of his or her work time for the employer in the District of Columbia and no more than 50% of his or her work time for such employer in another jurisdiction. The term “covered employee” does not include partners in a partnership.
A “highly compensated employee” is an employee who earns or is reasonably expected to earn from his or her employer compensation greater than or equal to $150,000 in a consecutive 12-month period (which is the threshold amount for 2023 and will be adjusted annually for inflation beginning on January 1, 2024 based on adjustments to the Consumer Price Index for All Urban Consumers, in the Washington Metropolitan Statistical Area, as published by the Bureau of Labor Statistics Urban Consumers, in the Washington Metropolitan Statistical Area, as published by the Bureau of Labor Statistics of the US Department of Labor).
If the Participant is a “highly compensated employee”:
(a) As applied to Section 1(a)(ii) of Appendix A, the Restricted Period shall not exceed 365 days from the Termination Date; and
(b) The Participant is provided with the following notice, at least 14 days prior to the execution of the Agreement:
The District of Columbia’s Ban on Non-Compete Agreements Amendment Act of 2020 limits the use of non-compete agreements. It allows employers to request non-compete agreements from highly compensated employees, as that term is defined in the Ban on Non-Compete Agreements Amendment Act of 2020, under certain conditions. The Company has determined that you are a highly compensated employee. For more information about the Ban on Non-Compete Agreements Amendment Act of 2020, contact the District of Columbia Department of Employment Services (DOES).
|
GEORGIA
If the Participant is primarily a resident of, or primarily provides services in, Georgia on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant (1) customarily and regularly solicits customers or prospective customers for his or her employer; (2) customarily and regularly engages in making sales or obtaining orders or contracts for products or services to be performed by others; (3) has the authority to hire or fire other employees or particular weight is given to the Participant’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees; or (4) performs the duties of a “key employee” or professional.
A “key employee” is someone with “a high level of notoriety, fame, reputation, or public persona as the employer’s representative or spokesperson or has gained a high level of influence or credibility with the employer’s customers, vendors, or other business relationships or is intimately involved in the planning for or direction of the business of the employer or a defined unit of the business of the employer. Such term also means an employee in possession of selective or specialized skills, learning, or abilities or customer contacts or customer information who has obtained such skills, learning, abilities, contacts, or information by reason of having worked for the employer.”
| ||
IDAHO
If the Participant is primarily a resident of, or primarily provides services in, Idaho on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant is a “key employee” or “key independent contractor”; and
(b) Section 1(a)(ii) of Appendix A shall be limited after the Termination Date to direct competition.
A “key employee” and “key independent contractor” is someone who, by reason of the employer’s investment of time, money, trust, exposure to the public, or exposure to technologies, intellectual property, business plans, business processes and methods of operation, customers, vendors or other business relationships during the course of employment, have gained a high level of inside knowledge, influence, credibility, notoriety, fame, reputation or public persona as a representative or spokesperson of the employer and, as a result, have the ability to harm or threaten an employer’s legitimate business interests.
| ||
ILLINOIS
If the Participant is primarily a resident of, or primarily provides services in, Illinois on (i) the Date of Grant or (ii) the Termination Date:
(a) Sections 1(a)(i) and 1(a)(iv) of Appendix A shall not apply after the Termination Date unless the Participant’s actual or expected annual rate of “earnings” (as defined by Illinois law) exceeds $45,000 per year (which is the threshold amount through the end of 2026, after which this amount will increase in $2,500 increments in each of 2027, 2032, and 2037, with $52,500 as the minimum threshold amount in 2037); and
(b) Section 1(a)(ii) of the Appendix A shall not apply after the Termination Date unless the Participant’s actual or expected annual rate of “earnings” (as defined by Illinois law) exceeds $75,000 per year (which is the threshold amount through the end of 2026, after which this amount will increase in $5,000 increments in each of 2027, 2032, and 2037, with $90,000 as the minimum threshold amount in 2037).
|
LOUISIANA
If the Participant is primarily a resident of, or primarily provides services in, Louisiana on (i) the Date of Grant or (ii) the Termination Date, then Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply for more than two years after the Termination Date.
Within the State of Louisiana, Sections 1(a)(i) and 1(a)(ii) of Appendix A shall apply in, and the definition of “Restricted Area” shall apply to, the following parishes municipalities, or parts thereof, so long as the Company Group continues to carry on business therein, and outside of Louisiana shall not be limited except as provided in Appendix A:
Acadia Parish, Allen Parish, Ascension Parish, Assumption Parish, Avoyelles Parish, Beauregard Parish, Bienville Parish, Bossier Parish, Caddo Parish, Calcasieu Parish, Caldwell Parish, Cameron Parish, Catahoula Parish, Claiborne Parish, Concordia Parish, DeSoto Parish, East Baton Rouge Parish, East Carroll Parish, East Feliciana Parish, Evangeline Parish, Franklin Parish, Grant Parish, Iberia Parish, Iberville Parish, Jackson Parish, Jefferson Parish, Jefferson Davis Parish, Lafayette Parish, Lafourche Parish, LaSalle Parish, Lincoln Parish, Livingston Parish, Madison Parish, Morehouse Parish, Natchitoches Parish, Orleans Parish, Ouachita Parish, Plaquemines Parish, Pointe Coupee Parish, Rapides Parish, Red River Parish, Richland Parish, Sabine Parish, St. Bernard Parish, St. Charles Parish, St. Helena Parish, St. James Parish, St. John the Baptist Parish, St. Landry Parish, St. Martin Parish, St. Mary Parish, St. Tammany Parish, Tangipahoa Parish, Tensas Parish, Terrebonne Parish, Union Parish, Vermilion Parish, Vernon Parish, Washington Parish, Webster Parish, West Baton Rouge Parish, West Carroll Parish, West Feliciana Parish, and Winn Parish.
|
MAINE
If the Participant is primarily a resident of, or primarily provides services in, Maine on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns wages equal to, or greater than, 400% of the federal poverty level; and
(b) The terms of Section 1(a)(ii) of Appendix A, with respect to the post-employment portion of the Restricted Period, shall not take effect until the later of (i) one year after the commencement of the Participant’s employment or (ii) 6 months after the Participant executes the Agreement.
| ||
MARYLAND
If the Participant is primarily a resident of, or primarily provides services in, Maryland on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns wages equal to, or greater than, 150% of the state minimum wage.
| ||
MASSACHUSETTS
If the Participant is, and has been for at least 30 days immediately preceding the Termination Date, a resident of, or primarily providing services in, the Commonwealth of Massachusetts:
(a) Section 1(a)(ii) of Appendix A shall not apply after the Termination Date, if the Participant is Terminated without Cause (as modified by this Massachusetts supplement);
(c) With respect to Section 1(a)(ii) of Appendix A, the Restricted Period shall not exceed 12 months from the Termination Date, unless the Participant has breached his or her fiduciary duty to the Company Group or the Participant has unlawfully taken, physically or electronically, property belonging to the Company Group, in which case the Restricted Period may not exceed 2 years from the Termination Date;
(d) The Company Group, at its discretion, including based on a determination by the Company Group, in its discretion, that additional consideration is required by Massachusetts law to render Section 1(a)(ii) of Appendix A enforceable, may elect to enforce such covenant by making garden leave payments to the Participant during the post-termination portion of the Restricted Period (but for no more than 12 months following the Termination Date) at a rate of up to 50% of the highest annualized base salary or service fees, as applicable, paid to the Participant by the Company Group within the 2-year period preceding the Termination Date (“Garden Leave Payments”). Any Garden Leave Payments paid to the Participant pursuant to this Massachusetts supplement may be reduced based on consideration of the Fair Market Value of the incentive compensation provided pursuant to the Agreement and determined in good faith by the Company Group as of the Termination Date or by (or may reduce and not be in addition to) any severance or separation pay that the Participant is otherwise entitled to receive from any member of the Company Group pursuant to an agreement, plan, or otherwise;
(e) The Company Group, in its sole discretion, may elect at any time prior to the Termination Date, or on such later date to the extent permitted by applicable law, to waive the restrictions set forth in Section 1(a)(ii) of Appendix A, upon which such waiver shall automatically terminate the Company Group’s obligations to compensate the Participant under Section (c) of this Massachusetts supplement. In such event, the Participant shall have no further obligations under Section 1(a)(ii) of Appendix A. Such waiver shall be in writing, and shall have no effect on the Participant’s obligations under the remainder of Appendix A, which shall continue in full force and effect in all respects. The Participant acknowledges and agrees that nothing in this Section (d) gives the Participant an election as to compliance with Section 1(a)(ii) of Appendix A;
(f) For purposes of enforcement of Section 1(a)(ii) of Appendix A (and no other provision of the Agreement or the Plan), “Cause” shall include any good faith determination by the Company Group that the Participant has significantly underperformed in providing services to the Company Group or engaged in conduct or behavior that violates any policy of the Company Group or is detrimental to the Company or any member of the Company Group or its reputation;
(g) The Participant acknowledges and agrees that the benefits provided by the Agreement and the Garden Leave Payments (where applicable) constitute sufficient mutually agreed-upon consideration for Section 1(a)(ii) of Appendix A; and
(h) The Participant’s agreement to the non-competition covenant in Section 1(a)(ii) of Appendix A shall be effective upon the later of the Participant’s acceptance of the Award or the date that is 10 business days after the Participant was provided with notice of the non-competition agreement.
|
MINNESOTA
If the Participant is primarily a resident of, or primarily provides services in, Minnesota on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period.
| ||
NEVADA
If the Participant is primarily a resident of, or primarily provides services in, Nevada on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period:
(i) in territories in which the Company Group has not established customer contracts or goodwill or undertaken concrete steps to establish operations; or
(ii) to prevent the Participant from providing services to a former customer or client of Company Group so long as (1) the Participant did not solicit the former customer or client, (2) the customer or client voluntarily left and sought the Participant’s services and (3) the Participant has otherwise complied with the provisions of Section 1(a)(ii) of Appendix A with respect to time, geographic area and scope of restrained activity.
(b) During the post-employment portion of the Restricted Period, if the Participant’s Termination was part of a reduction of force, reorganization or similar restructuring of the Company Group, Section 1(a)(ii) of Appendix A shall only apply during the period of time which the Company Group pays the Participant’s salary, benefits or equivalent compensation, including severance pay, if any.
| ||
NEW HAMPSHIRE
If the Participant is primarily a resident of, or primarily provides services in, New Hampshire on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period, if the Participant earns an hourly rate that is less than or equal to (i) 200% of the federal minimum wage or (ii) 200% of the tipped minimum wage pursuant to New Hampshire law.
|
NORTH DAKOTA
If the Participant is primarily a resident of, or primarily provides services in, North Dakota on (i) the Date of Grant or (ii) the Termination Date:
(a) Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period; and
(b) Section 1(a)(iv) of Appendix A shall only apply during the post-employment portion of the Restricted Period to the extent permitted by applicable North Dakota law.
| ||
OKLAHOMA
If the Participant is primarily a resident of, or primarily provides services in, on Oklahoma (i) the Date of Grant or (ii) the Termination Date:
(a) During the post-employment portion of the Restricted Period, Section 1(a)(i) of Appendix A shall be limited to restricting direct solicitation of established customers or clients of the Company Group; and
(b) Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period.
| ||
OREGON
If the Participant is primarily a resident of, or primarily provides services in, Oregon on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period, unless:
(i) the Award was granted in connection with either (A) a written employment offer that provided, at least two (2) weeks’ notice before the first day of employment, that a non-competition agreement was required or (B) the Participant’s subsequent bona fide advancement; and
(ii) the Participant’s total annual compensation, including commissions, as of the Termination Date, exceeds $108,576 (which is the threshold amount for 2023 and subject to annual adjustments for inflation based on adjustments to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the US Department of Labor), unless the Company Group provides the Participant compensation during the post-employment portion of the Restricted Period, in which Section 1(a)(ii) of Appendix A applies, in an amount equal to the greater of 50% of the Participant’s annual gross base salary and commissions as of the Termination Date or 50% of $108,576 (which is the threshold amount for 2023 and subject to annual adjustments pursuant to Oregon law as described in this provision) during the post-employment portion of the Restricted Period.
(c) The Company shall provide the Participant a signed copy of Appendix A within 30 days following the Termination Date.
(d) Section 1(a)(ii) of Appendix A shall not apply for more than 12 months after the Termination Date.
|
PUERTO RICO
If the Participant is primarily a resident of, or primarily provides services in, Puerto Rico on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date.
| ||
RHODE ISLAND
If the Participant is primarily a resident of, or primarily provides services in, Rhode Island on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date, if the Participant’s average annual earnings (as defined by Rhode Island law) are less than, or equal to, 250% of the federal poverty level for individuals as established by the United States Department of Health and Human Services federal poverty guidelines.
| ||
SOUTH DAKOTA
If the Participant is primarily a resident of, or primarily provides services in, South Dakota on (i) the Date of Grant or (ii) the Termination Date, Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply for more than two years after the Termination Date.
| ||
UTAH
If the Participant is primarily a resident of, or primarily provides services in, Utah on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date.
|
VIRGINIA
If the Participant is primarily a resident of, or primarily provides services in, Virginia on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply during the post-employment period of the Restricted Period, if the Participant is considered a “low-wage employee”, which is defined as anyone earning, over a rolling 52-week period preceding the Termination Date, less than Virginia’s average weekly wage, which for the first quarter of 2023 was equivalent to approximately $77,000. A low-wage employee does not include an employee whose earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses; and
(b) Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not prohibit the Participant from providing services to the Company Group’s customers or clients during the post-employment period of the Restricted Period, if the Participant does not initiate contact with or solicit such customer or client, to the extent required by Virginia law.
|
WASHINGTON
If the Participant is primarily a resident of, or primarily provides services in, Washington on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant’s annualized “earnings” (as defined by Washington law) from the Company Group exceed $120,560 per year (which is the threshold amount for 2024 and subject to annual adjustments pursuant to Washington law);
(b) If the Participant’s Termination is a result of a layoff, should any member of the Company Group choose to enforce the provisions of Section 1(a)(ii) of Appendix A, then during the post-employment portion of the Restricted Period, the Company (or other member of the Company Group, as applicable) shall pay the Participant compensation equivalent to the Participant’s base salary as of the Termination Date, minus any severance or other compensation paid by the Company Group and any compensation the Participant earns through subsequent non-competitive employment during the post-termination portion of the Restricted Period; and
(c) Section 1(a)(ii) of Appendix A shall not apply for more than eighteen months after the Termination Date.
| ||
WISCONSIN
If the Participant is primarily a resident of, or primarily provides services in, Wisconsin on (i) the Date of Grant or (ii) the Termination Date:
(a) For the post-employment portion of the Restricted Period, Section 1(a)(i) of Appendix A shall be amended to delete the words “or prospective”;
(b) Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date; and
(c) Section 2(a) of Appendix A shall remain in effect until three years following the Termination Date with respect to Confidential Information that is not a trade secret, and, with respect to trade secrets, for as long as the information is a trade secret.
|
Participant Name
|
Number of Restricted Stock Units Granted |
Vesting Schedule
|
Date of Grant
|
||||||||
#ParticipantName# | #QuantityGranted# RSUs |
50% vests on March 3 of 2025 and 2026 (each, a “vesting date”) | #GrantDate# |
HILTON WORLDWIDE HOLDINGS INC. | |||||
By:
|
/s/ Christopher J. Nassetta
|
||||
Christopher J. Nassetta | |||||
President and Chief Executive Officer | |||||
By:
|
/s/ Laura Fuentes
|
||||
Laura Fuentes | |||||
Executive Vice President and Chief Human Resources Officer |
CALIFORNIA
If the Participant is primarily a resident of, or primarily provides services in, California on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply after the Termination Date,
(b)During the portion of the Restricted Period which follows the Termination Date, Section 1(a)(iv) of Appendix A shall be amended to delete the words “or hire any employee who was employed by the Company Group as of the Termination Date”,
(c)The following sentence shall be added to Section 2(d) of Appendix A:
“Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
(d)The following sentence shall be added as Section 2(c)(v) of Appendix A:
“Notwithstanding any other provision of Appendix A to the contrary, this Section 2(c) of Appendix A is subject to the provisions of California Labor Code Sections 2870, 2871 and 2872. In accordance with Section 2870 of the California Labor Code, the Participant’s obligation to assign to the Company Group the Participant’s right, title and interest throughout the world in and to all Works does not apply to any Works the Participant developed entirely on the Participant’s own time without using the Company Group’s equipment, supplies, facilities, or Confidential Information except for such Works that relate to either (i) the business of the Company Group at the time of conception or reduction to practice of the Works, or actual or demonstrably anticipated research or development of the Company Group or (ii) result from any work performed by the Participant for the Company Group. A copy of California Labor Code Sections 2870, 2871 and 2872 is attached to the State Restrictive Covenant Annex as Exhibit 1. The Participant agrees to disclose all Works to the Company Group, even if the Participant does not believe that the Participant is required under Section 2(c) of Appendix A, or pursuant to California Labor Code Section 2870, to assign the Participant’s interest in such Works to the Company Group or its nominee.”
(e)To the extent the Participant is a party to any other agreement or arrangement with the Company Group which contains restrictive covenants still in effect which conflict with the terms of this California supplement, such restrictive covenants shall to that extent be superseded and replaced by the terms stated herein.
(f)Notwithstanding anything in the Agreement to the contrary, Appendix A shall be governed by California law, without regard to principles of conflicts of law.
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COLORADO
If the Participant is primarily a resident of, or primarily provides services in, Colorado on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(iv) of Appendix A shall not apply after the Termination Date unless the Participant earns, as of the Date of Grant and the date on which enforcement is sought, an amount of annualized cash compensation equivalent or greater than $74,250 (which is the threshold amount for 2024 and represents 60% of Colorado’s “threshold amount for highly compensated workers,” which is subject to annual adjustments pursuant to Colorado law); and
(b)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns, as of the Date of Grant and the date on which enforcement is sought, an amount of annualized cash compensation equivalent to or greater than $123,750 (which is the threshold amount for 2024 and represents 100% of Colorado’s “threshold amount for highly compensated workers,” which is subject to annual adjustments pursuant to Colorado law).
The Participant acknowledges that the Participant was provided a separate notice of the terms of the above-referenced restrictions at least 14 days before the earlier of (1) the effective date of the Restrictive Covenants or (2) the Date of Grant.
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DISTRICT OF COLUMBIA
If the Participant is a “covered employee,” as defined by the District of Columbia’s Ban on Non-Compete Agreements Amendment Act of 2020 (as amended):
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date; and
(b)During the Employment Term, Section 1(a)(ii) of Appendix A shall apply only to the extent permitted by District of Columbia law.
A “covered employee” is an individual who performs work for pay in the District of Columbia for an employer and who is not a “highly compensated employee,” and (i) spends (or, for new hires, is reasonably anticipated to spend) more than 50% of his or her work time for the employer working in the District of Columbia, or (ii) whose employment for the employer is or will be based in the District of Columbia and the employee regularly spends (or, for new hires, is reasonably anticipated to spend) a substantial amount of his or her work time for the employer in the District of Columbia and no more than 50% of his or her work time for such employer in another jurisdiction. The term “covered employee” does not include partners in a partnership.
A “highly compensated employee” is an employee who earns or is reasonably expected to earn from his or her employer compensation greater than or equal to $150,000 in a consecutive 12-month period (which is the threshold amount for 2023 and will be adjusted annually for inflation beginning on January 1, 2024 based on adjustments to the Consumer Price Index for All Urban Consumers, in the Washington Metropolitan Statistical Area, as published by the Bureau of Labor Statistics Urban Consumers, in the Washington Metropolitan Statistical Area, as published by the Bureau of Labor Statistics of the US Department of Labor).
If the Participant is a “highly compensated employee”:
(a)As applied to Section 1(a)(ii) of Appendix A, the Restricted Period shall not exceed 365 days from the Termination Date; and
(b)The Participant is provided with the following notice, at least 14 days prior to the execution of the Agreement:
The District of Columbia’s Ban on Non-Compete Agreements Amendment Act of 2020 limits the use of non-compete agreements. It allows employers to request non-compete agreements from highly compensated employees, as that term is defined in the Ban on Non-Compete Agreements Amendment Act of 2020, under certain conditions. The Company has determined that you are a highly compensated employee. For more information about the Ban on Non-Compete Agreements Amendment Act of 2020, contact the District of Columbia Department of Employment Services (DOES).
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GEORGIA
If the Participant is primarily a resident of, or primarily provides services in, Georgia on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant (1) customarily and regularly solicits customers or prospective customers for his or her employer; (2) customarily and regularly engages in making sales or obtaining orders or contracts for products or services to be performed by others; (3) has the authority to hire or fire other employees or particular weight is given to the Participant’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees; or (4) performs the duties of a “key employee” or professional.
A “key employee” is someone with “a high level of notoriety, fame, reputation, or public persona as the employer’s representative or spokesperson or has gained a high level of influence or credibility with the employer’s customers, vendors, or other business relationships or is intimately involved in the planning for or direction of the business of the employer or a defined unit of the business of the employer. Such term also means an employee in possession of selective or specialized skills, learning, or abilities or customer contacts or customer information who has obtained such skills, learning, abilities, contacts, or information by reason of having worked for the employer.”
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IDAHO
If the Participant is primarily a resident of, or primarily provides services in, Idaho on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant is a “key employee” or “key independent contractor”; and
(b)Section 1(a)(ii) of Appendix A shall be limited after the Termination Date to direct competition.
A “key employee” and “key independent contractor” is someone who, by reason of the employer’s investment of time, money, trust, exposure to the public, or exposure to technologies, intellectual property, business plans, business processes and methods of operation, customers, vendors or other business relationships during the course of employment, have gained a high level of inside knowledge, influence, credibility, notoriety, fame, reputation or public persona as a representative or spokesperson of the employer and, as a result, have the ability to harm or threaten an employer’s legitimate business interests.
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ILLINOIS
If the Participant is primarily a resident of, or primarily provides services in, Illinois on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(iv) of Appendix A shall not apply after the Termination Date unless the Participant’s actual or expected annual rate of “earnings” (as defined by Illinois law) exceeds $45,000 per year (which is the threshold amount through the end of 2026, after which this amount will increase in $2,500 increments in each of 2027, 2032, and 2037, with $52,500 as the minimum threshold amount in 2037); and
(b)Section 1(a)(ii) of the Appendix A shall not apply after the Termination Date unless the Participant’s actual or expected annual rate of “earnings” (as defined by Illinois law) exceeds $75,000 per year (which is the threshold amount through the end of 2026, after which this amount will increase in $5,000 increments in each of 2027, 2032, and 2037, with $90,000 as the minimum threshold amount in 2037).
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LOUISIANA
If the Participant is primarily a resident of, or primarily provides services in, Louisiana on (i) the Date of Grant or (ii) the Termination Date, then Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply for more than two years after the Termination Date.
Within the State of Louisiana, Sections 1(a)(i) and 1(a)(ii) of Appendix A shall apply in, and the definition of “Restricted Area” shall apply to, the following parishes municipalities, or parts thereof, so long as the Company Group continues to carry on business therein, and outside of Louisiana shall not be limited except as provided in Appendix A:
•Acadia Parish, Allen Parish, Ascension Parish, Assumption Parish, Avoyelles Parish, Beauregard Parish, Bienville Parish, Bossier Parish, Caddo Parish, Calcasieu Parish, Caldwell Parish, Cameron Parish, Catahoula Parish, Claiborne Parish, Concordia Parish, DeSoto Parish, East Baton Rouge Parish, East Carroll Parish, East Feliciana Parish, Evangeline Parish, Franklin Parish, Grant Parish, Iberia Parish, Iberville Parish, Jackson Parish, Jefferson Parish, Jefferson Davis Parish, Lafayette Parish, Lafourche Parish, LaSalle Parish, Lincoln Parish, Livingston Parish, Madison Parish, Morehouse Parish, Natchitoches Parish, Orleans Parish, Ouachita Parish, Plaquemines Parish, Pointe Coupee Parish, Rapides Parish, Red River Parish, Richland Parish, Sabine Parish, St. Bernard Parish, St. Charles Parish, St. Helena Parish, St. James Parish, St. John the Baptist Parish, St. Landry Parish, St. Martin Parish, St. Mary Parish, St. Tammany Parish, Tangipahoa Parish, Tensas Parish, Terrebonne Parish, Union Parish, Vermilion Parish, Vernon Parish, Washington Parish, Webster Parish, West Baton Rouge Parish, West Carroll Parish, West Feliciana Parish, and Winn Parish.
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MAINE
If the Participant is primarily a resident of, or primarily provides services in, Maine on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns wages equal to, or greater than, 400% of the federal poverty level; and
(b)The terms of Section 1(a)(ii) of Appendix A, with respect to the post-employment portion of the Restricted Period, shall not take effect until the later of (i) one year after the commencement of the Participant’s employment or (ii) 6 months after the Participant executes the Agreement.
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MARYLAND
If the Participant is primarily a resident of, or primarily provides services in, Maryland on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns wages equal to, or greater than, 150% of the state minimum wage.
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MASSACHUSETTS
If the Participant is, and has been for at least 30 days immediately preceding the Termination Date, a resident of, or primarily providing services in, the Commonwealth of Massachusetts:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date, if the Participant is Terminated without Cause (as modified by this Massachusetts supplement);
(a)With respect to Section 1(a)(ii) of Appendix A, the Restricted Period shall not exceed 12 months from the Termination Date, unless the Participant has breached his or her fiduciary duty to the Company Group or the Participant has unlawfully taken, physically or electronically, property belonging to the Company Group, in which case the Restricted Period may not exceed 2 years from the Termination Date;
(b)The Company Group, at its discretion, including based on a determination by the Company Group, in its discretion, that additional consideration is required by Massachusetts law to render Section 1(a)(ii) of Appendix A enforceable, may elect to enforce such covenant by making garden leave payments to the Participant during the post-termination portion of the Restricted Period (but for no more than 12 months following the Termination Date) at a rate of up to 50% of the highest annualized base salary or service fees, as applicable, paid to the Participant by the Company Group within the 2-year period preceding the Termination Date (“Garden Leave Payments”). Any Garden Leave Payments paid to the Participant pursuant to this Massachusetts supplement may be reduced based on consideration of the Fair Market Value of the incentive compensation provided pursuant to the Agreement and determined in good faith by the Company Group as of the Termination Date or by (or may reduce and not be in addition to) any severance or separation pay that the Participant is otherwise entitled to receive from any member of the Company Group pursuant to an agreement, plan, or otherwise;
(c)The Company Group, in its sole discretion, may elect at any time prior to the Termination Date, or on such later date to the extent permitted by applicable law, to waive the restrictions set forth in Section 1(a)(ii) of Appendix A, upon which such waiver shall automatically terminate the Company Group’s obligations to compensate the Participant under Section (c) of this Massachusetts supplement. In such event, the Participant shall have no further obligations under Section 1(a)(ii) of Appendix A. Such waiver shall be in writing, and shall have no effect on the Participant’s obligations under the remainder of Appendix A, which shall continue in full force and effect in all respects. The Participant acknowledges and agrees that nothing in this Section (d) gives the Participant an election as to compliance with Section 1(a)(ii) of Appendix A;
(d)For purposes of enforcement of Section 1(a)(ii) of Appendix A (and no other provision of the Agreement or the Plan), “Cause” shall include any good faith determination by the Company Group that the Participant has significantly underperformed in providing services to the Company Group or engaged in conduct or behavior that violates any policy of the Company Group or is detrimental to the Company or any member of the Company Group or its reputation;
(e)The Participant acknowledges and agrees that the benefits provided by the Agreement and the Garden Leave Payments (where applicable) constitute sufficient mutually agreed-upon consideration for Section 1(a)(ii) of Appendix A; and
(f)The Participant’s agreement to the non-competition covenant in Section 1(a)(ii) of Appendix A shall be effective upon the later of the Participant’s acceptance of the Award or the date that is 10 business days after the Participant was provided with notice of the non-competition agreement.
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MINNESOTA
If the Participant is primarily a resident of, or primarily provides services in, Minnesota on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period.
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NEVADA
If the Participant is primarily a resident of, or primarily provides services in, Nevada on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period:
(i)in territories in which the Company Group has not established customer contracts or goodwill or undertaken concrete steps to establish operations; or
(ii)to prevent the Participant from providing services to a former customer or client of Company Group so long as (1) the Participant did not solicit the former customer or client, (2) the customer or client voluntarily left and sought the Participant’s services and (3) the Participant has otherwise complied with the provisions of Section 1(a)(ii) of Appendix A with respect to time, geographic area and scope of restrained activity.
(b)During the post-employment portion of the Restricted Period, if the Participant’s Termination was part of a reduction of force, reorganization or similar restructuring of the Company Group, Section 1(a)(ii) of Appendix A shall only apply during the period of time which the Company Group pays the Participant’s salary, benefits or equivalent compensation, including severance pay, if any.
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NEW HAMPSHIRE
If the Participant is primarily a resident of, or primarily provides services in, New Hampshire on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period, if the Participant earns an hourly rate that is less than or equal to (i) 200% of the federal minimum wage or (ii) 200% of the tipped minimum wage pursuant to New Hampshire law.
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NORTH DAKOTA
If the Participant is primarily a resident of, or primarily provides services in, North Dakota on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period; and
(b)Section 1(a)(iv) of Appendix A shall only apply during the post-employment portion of the Restricted Period to the extent permitted by applicable North Dakota law.
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OKLAHOMA
If the Participant is primarily a resident of, or primarily provides services in, on Oklahoma (i) the Date of Grant or (ii) the Termination Date:
(a)During the post-employment portion of the Restricted Period, Section 1(a)(i) of Appendix A shall be limited to restricting direct solicitation of established customers or clients of the Company Group; and
(b)Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period.
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OREGON
If the Participant is primarily a resident of, or primarily provides services in, Oregon on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period, unless:
(i)the Award was granted in connection with either (A) a written employment offer that provided, at least two (2) weeks’ notice before the first day of employment, that a non-competition agreement was required or (B) the Participant’s subsequent bona fide advancement; and
(ii)the Participant’s total annual compensation, including commissions, as of the Termination Date, exceeds $108,576 (which is the threshold amount for 2023 and subject to annual adjustments for inflation based on adjustments to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the US Department of Labor), unless the Company Group provides the Participant compensation during the post-employment portion of the Restricted Period, in which Section 1(a)(ii) of Appendix A applies, in an amount equal to the greater of 50% of the Participant’s annual gross base salary and commissions as of the Termination Date or 50% of $108,576 (which is the threshold amount for 2023 and subject to annual adjustments pursuant to Oregon law as described in this provision) during the post-employment portion of the Restricted Period.
(b)The Company shall provide the Participant a signed copy of Appendix A within 30 days following the Termination Date.
(c)Section 1(a)(ii) of Appendix A shall not apply for more than 12 months after the Termination Date.
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PUERTO RICO
If the Participant is primarily a resident of, or primarily provides services in, Puerto Rico on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date.
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RHODE ISLAND
If the Participant is primarily a resident of, or primarily provides services in, Rhode Island on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date, if the Participant’s average annual earnings (as defined by Rhode Island law) are less than, or equal to, 250% of the federal poverty level for individuals as established by the United States Department of Health and Human Services federal poverty guidelines.
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SOUTH DAKOTA
If the Participant is primarily a resident of, or primarily provides services in, South Dakota on (i) the Date of Grant or (ii) the Termination Date, Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply for more than two years after the Termination Date.
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UTAH
If the Participant is primarily a resident of, or primarily provides services in, Utah on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date.
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VIRGINIA
If the Participant is primarily a resident of, or primarily provides services in, Virginia on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply during the post-employment period of the Restricted Period, if the Participant is considered a “low-wage employee”, which is defined as anyone earning, over a rolling 52-week period preceding the Termination Date, less than Virginia’s average weekly wage, which for the first quarter of 2023 was equivalent to approximately $77,000. A low-wage employee does not include an employee whose earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses; and
(b)Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not prohibit the Participant from providing services to the Company Group’s customers or clients during the post-employment period of the Restricted Period, if the Participant does not initiate contact with or solicit such customer or client, to the extent required by Virginia law.
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WASHINGTON
If the Participant is primarily a resident of, or primarily provides services in, Washington on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant’s annualized “earnings” (as defined by Washington law) from the Company Group exceed $120,560 per year (which is the threshold amount for 2024 and subject to annual adjustments pursuant to Washington law);
(b)If the Participant’s Termination is a result of a layoff, should any member of the Company Group choose to enforce the provisions of Section 1(a)(ii) of Appendix A, then during the post-employment portion of the Restricted Period, the Company (or other member of the Company Group, as applicable) shall pay the Participant compensation equivalent to the Participant’s base salary as of the Termination Date, minus any severance or other compensation paid by the Company Group and any compensation the Participant earns through subsequent non-competitive employment during the post-termination portion of the Restricted Period; and
(c)Section 1(a)(ii) of Appendix A shall not apply for more than eighteen months after the Termination Date.
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WISCONSIN
If the Participant is primarily a resident of, or primarily provides services in, Wisconsin on (i) the Date of Grant or (ii) the Termination Date:
(a)For the post-employment portion of the Restricted Period, Section 1(a)(i) of Appendix A shall be amended to delete the words “or prospective”;
(b)Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date; and
(c)Section 2(a) of Appendix A shall remain in effect until three years following the Termination Date with respect to Confidential Information that is not a trade secret, and, with respect to trade secrets, for as long as the information is a trade secret.
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Participant Name | Number of Shares Subject to Option | Exercise Price | Vesting Schedule | Date of Grant | ||||||||||
#ParticipantName# | #QuantityGranted# Shares |
$#GrantPrice# | 33.33% vests on March 3 of 2025, 2026 and 2027 (each, a “vesting date”) | #GrantDate# |
CALIFORNIA
If the Participant is primarily a resident of, or primarily provides services in, California on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply after the Termination Date,
(b)During the portion of the Restricted Period which follows the Termination Date, Section 1(a)(iv) of Appendix A shall be amended to delete the words “or hire any employee who was employed by the Company Group as of the Termination Date”,
(c)The following sentence shall be added to Section 2(d) of Appendix A:
“Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
(d)The following sentence shall be added as Section 2(c)(v) of Appendix A:
“Notwithstanding any other provision of Appendix A to the contrary, this Section 2(c) of Appendix A is subject to the provisions of California Labor Code Sections 2870, 2871 and 2872. In accordance with Section 2870 of the California Labor Code, the Participant’s obligation to assign to the Company Group the Participant’s right, title and interest throughout the world in and to all Works does not apply to any Works the Participant developed entirely on the Participant’s own time without using the Company Group’s equipment, supplies, facilities, or Confidential Information except for such Works that relate to either (i) the business of the Company Group at the time of conception or reduction to practice of the Works, or actual or demonstrably anticipated research or development of the Company Group or (ii) result from any work performed by the Participant for the Company Group. A copy of California Labor Code Sections 2870, 2871 and 2872 is attached to the State Restrictive Covenant Annex as Exhibit 1. The Participant agrees to disclose all Works to the Company Group, even if the Participant does not believe that the Participant is required under Section 2(c) of Appendix A, or pursuant to California Labor Code Section 2870, to assign the Participant’s interest in such Works to the Company Group or its nominee.”
(e)To the extent the Participant is a party to any other agreement or arrangement with the Company Group which contains restrictive covenants still in effect which conflict with the terms of this California supplement, such restrictive covenants shall to that extent be superseded and replaced by the terms stated herein.
(f)Notwithstanding anything in the Agreement to the contrary, Appendix A shall be governed by California law, without regard to principles of conflicts of law.
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COLORADO
If the Participant is primarily a resident of, or primarily provides services in, Colorado on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(iv) of Appendix A shall not apply after the Termination Date unless the Participant earns, as of the Date of Grant and the date on which enforcement is sought, an amount of annualized cash compensation equivalent or greater than $74,250 (which is the threshold amount for 2024 and represents 60% of Colorado’s “threshold amount for highly compensated workers,” which is subject to annual adjustments pursuant to Colorado law); and
(b)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns, as of the Date of Grant and the date on which enforcement is sought, an amount of annualized cash compensation equivalent to or greater than $123,750 (which is the threshold amount for 2024 and represents 100% of Colorado’s “threshold amount for highly compensated workers,” which is subject to annual adjustments pursuant to Colorado law).
The Participant acknowledges that the Participant was provided a separate notice of the terms of the above-referenced restrictions at least 14 days before the earlier of (1) the effective date of the Restrictive Covenants or (2) the Date of Grant.
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DISTRICT OF COLUMBIA
If the Participant is a “covered employee,” as defined by the District of Columbia’s Ban on Non-Compete Agreements Amendment Act of 2020 (as amended):
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date; and
(b)During the Employment Term, Section 1(a)(ii) of Appendix A shall apply only to the extent permitted by District of Columbia law.
A “covered employee” is an individual who performs work for pay in the District of Columbia for an employer and who is not a “highly compensated employee,” and (i) spends (or, for new hires, is reasonably anticipated to spend) more than 50% of his or her work time for the employer working in the District of Columbia, or (ii) whose employment for the employer is or will be based in the District of Columbia and the employee regularly spends (or, for new hires, is reasonably anticipated to spend) a substantial amount of his or her work time for the employer in the District of Columbia and no more than 50% of his or her work time for such employer in another jurisdiction. The term “covered employee” does not include partners in a partnership.
A “highly compensated employee” is an employee who earns or is reasonably expected to earn from his or her employer compensation greater than or equal to $150,000 in a consecutive 12-month period (which is the threshold amount for 2023 and will be adjusted annually for inflation beginning on January 1, 2024 based on adjustments to the Consumer Price Index for All Urban Consumers, in the Washington Metropolitan Statistical Area, as published by the Bureau of Labor Statistics Urban Consumers, in the Washington Metropolitan Statistical Area, as published by the Bureau of Labor Statistics of the US Department of Labor).
If the Participant is a “highly compensated employee”:
(a)As applied to Section 1(a)(ii) of Appendix A, the Restricted Period shall not exceed 365 days from the Termination Date; and
(b)The Participant is provided with the following notice, at least 14 days prior to the execution of the Agreement:
The District of Columbia’s Ban on Non-Compete Agreements Amendment Act of 2020 limits the use of non-compete agreements. It allows employers to request non-compete agreements from highly compensated employees, as that term is defined in the Ban on Non-Compete Agreements Amendment Act of 2020, under certain conditions. The Company has determined that you are a highly compensated employee. For more information about the Ban on Non-Compete Agreements Amendment Act of 2020, contact the District of Columbia Department of Employment Services (DOES).
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GEORGIA
If the Participant is primarily a resident of, or primarily provides services in, Georgia on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant (1) customarily and regularly solicits customers or prospective customers for his or her employer; (2) customarily and regularly engages in making sales or obtaining orders or contracts for products or services to be performed by others; (3) has the authority to hire or fire other employees or particular weight is given to the Participant’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees; or (4) performs the duties of a “key employee” or professional.
A “key employee” is someone with “a high level of notoriety, fame, reputation, or public persona as the employer’s representative or spokesperson or has gained a high level of influence or credibility with the employer’s customers, vendors, or other business relationships or is intimately involved in the planning for or direction of the business of the employer or a defined unit of the business of the employer. Such term also means an employee in possession of selective or specialized skills, learning, or abilities or customer contacts or customer information who has obtained such skills, learning, abilities, contacts, or information by reason of having worked for the employer.”
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IDAHO
If the Participant is primarily a resident of, or primarily provides services in, Idaho on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant is a “key employee” or “key independent contractor”; and
(b)Section 1(a)(ii) of Appendix A shall be limited after the Termination Date to direct competition.
A “key employee” and “key independent contractor” is someone who, by reason of the employer’s investment of time, money, trust, exposure to the public, or exposure to technologies, intellectual property, business plans, business processes and methods of operation, customers, vendors or other business relationships during the course of employment, have gained a high level of inside knowledge, influence, credibility, notoriety, fame, reputation or public persona as a representative or spokesperson of the employer and, as a result, have the ability to harm or threaten an employer’s legitimate business interests.
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ILLINOIS
If the Participant is primarily a resident of, or primarily provides services in, Illinois on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(iv) of Appendix A shall not apply after the Termination Date unless the Participant’s actual or expected annual rate of “earnings” (as defined by Illinois law) exceeds $45,000 per year (which is the threshold amount through the end of 2026, after which this amount will increase in $2,500 increments in each of 2027, 2032, and 2037, with $52,500 as the minimum threshold amount in 2037); and
(b)Section 1(a)(ii) of the Appendix A shall not apply after the Termination Date unless the Participant’s actual or expected annual rate of “earnings” (as defined by Illinois law) exceeds $75,000 per year (which is the threshold amount through the end of 2026, after which this amount will increase in $5,000 increments in each of 2027, 2032, and 2037, with $90,000 as the minimum threshold amount in 2037).
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LOUISIANA
If the Participant is primarily a resident of, or primarily provides services in, Louisiana on (i) the Date of Grant or (ii) the Termination Date, then Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply for more than two years after the Termination Date.
Within the State of Louisiana, Sections 1(a)(i) and 1(a)(ii) of Appendix A shall apply in, and the definition of “Restricted Area” shall apply to, the following parishes municipalities, or parts thereof, so long as the Company Group continues to carry on business therein, and outside of Louisiana shall not be limited except as provided in Appendix A:
•Acadia Parish, Allen Parish, Ascension Parish, Assumption Parish, Avoyelles Parish, Beauregard Parish, Bienville Parish, Bossier Parish, Caddo Parish, Calcasieu Parish, Caldwell Parish, Cameron Parish, Catahoula Parish, Claiborne Parish, Concordia Parish, DeSoto Parish, East Baton Rouge Parish, East Carroll Parish, East Feliciana Parish, Evangeline Parish, Franklin Parish, Grant Parish, Iberia Parish, Iberville Parish, Jackson Parish, Jefferson Parish, Jefferson Davis Parish, Lafayette Parish, Lafourche Parish, LaSalle Parish, Lincoln Parish, Livingston Parish, Madison Parish, Morehouse Parish, Natchitoches Parish, Orleans Parish, Ouachita Parish, Plaquemines Parish, Pointe Coupee Parish, Rapides Parish, Red River Parish, Richland Parish, Sabine Parish, St. Bernard Parish, St. Charles Parish, St. Helena Parish, St. James Parish, St. John the Baptist Parish, St. Landry Parish, St. Martin Parish, St. Mary Parish, St. Tammany Parish, Tangipahoa Parish, Tensas Parish, Terrebonne Parish, Union Parish, Vermilion Parish, Vernon Parish, Washington Parish, Webster Parish, West Baton Rouge Parish, West Carroll Parish, West Feliciana Parish, and Winn Parish.
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MAINE
If the Participant is primarily a resident of, or primarily provides services in, Maine on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns wages equal to, or greater than, 400% of the federal poverty level; and
(b)The terms of Section 1(a)(ii) of Appendix A, with respect to the post-employment portion of the Restricted Period, shall not take effect until the later of (i) one year after the commencement of the Participant’s employment or (ii) 6 months after the Participant executes the Agreement.
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MARYLAND
If the Participant is primarily a resident of, or primarily provides services in, Maryland on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant earns wages equal to, or greater than, 150% of the state minimum wage.
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MASSACHUSETTS
If the Participant is, and has been for at least 30 days immediately preceding the Termination Date, a resident of, or primarily providing services in, the Commonwealth of Massachusetts:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date, if the Participant is Terminated without Cause (as modified by this Massachusetts supplement);
(a)With respect to Section 1(a)(ii) of Appendix A, the Restricted Period shall not exceed 12 months from the Termination Date, unless the Participant has breached his or her fiduciary duty to the Company Group or the Participant has unlawfully taken, physically or electronically, property belonging to the Company Group, in which case the Restricted Period may not exceed 2 years from the Termination Date;
(b)The Company Group, at its discretion, including based on a determination by the Company Group, in its discretion, that additional consideration is required by Massachusetts law to render Section 1(a)(ii) of Appendix A enforceable, may elect to enforce such covenant by making garden leave payments to the Participant during the post-termination portion of the Restricted Period (but for no more than 12 months following the Termination Date) at a rate of up to 50% of the highest annualized base salary or service fees, as applicable, paid to the Participant by the Company Group within the 2-year period preceding the Termination Date (“Garden Leave Payments”). Any Garden Leave Payments paid to the Participant pursuant to this Massachusetts supplement may be reduced based on consideration of the Fair Market Value of the incentive compensation provided pursuant to the Agreement and determined in good faith by the Company Group as of the Termination Date or by (or may reduce and not be in addition to) any severance or separation pay that the Participant is otherwise entitled to receive from any member of the Company Group pursuant to an agreement, plan, or otherwise;
(c)The Company Group, in its sole discretion, may elect at any time prior to the Termination Date, or on such later date to the extent permitted by applicable law, to waive the restrictions set forth in Section 1(a)(ii) of Appendix A, upon which such waiver shall automatically terminate the Company Group’s obligations to compensate the Participant under Section (c) of this Massachusetts supplement. In such event, the Participant shall have no further obligations under Section 1(a)(ii) of Appendix A. Such waiver shall be in writing, and shall have no effect on the Participant’s obligations under the remainder of Appendix A, which shall continue in full force and effect in all respects. The Participant acknowledges and agrees that nothing in this Section (d) gives the Participant an election as to compliance with Section 1(a)(ii) of Appendix A;
(d)For purposes of enforcement of Section 1(a)(ii) of Appendix A (and no other provision of the Agreement or the Plan), “Cause” shall include any good faith determination by the Company Group that the Participant has significantly underperformed in providing services to the Company Group or engaged in conduct or behavior that violates any policy of the Company Group or is detrimental to the Company or any member of the Company Group or its reputation;
(e)The Participant acknowledges and agrees that the benefits provided by the Agreement and the Garden Leave Payments (where applicable) constitute sufficient mutually agreed-upon consideration for Section 1(a)(ii) of Appendix A; and
(f)The Participant’s agreement to the non-competition covenant in Section 1(a)(ii) of Appendix A shall be effective upon the later of the Participant’s acceptance of the Award or the date that is 10 business days after the Participant was provided with notice of the non-competition agreement.
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MINNESOTA
If the Participant is primarily a resident of, or primarily provides services in, Minnesota on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period.
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NEVADA
If the Participant is primarily a resident of, or primarily provides services in, Nevada on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period:
(i)in territories in which the Company Group has not established customer contracts or goodwill or undertaken concrete steps to establish operations; or
(ii)to prevent the Participant from providing services to a former customer or client of Company Group so long as (1) the Participant did not solicit the former customer or client, (2) the customer or client voluntarily left and sought the Participant’s services and (3) the Participant has otherwise complied with the provisions of Section 1(a)(ii) of Appendix A with respect to time, geographic area and scope of restrained activity.
(b)During the post-employment portion of the Restricted Period, if the Participant’s Termination was part of a reduction of force, reorganization or similar restructuring of the Company Group, Section 1(a)(ii) of Appendix A shall only apply during the period of time which the Company Group pays the Participant’s salary, benefits or equivalent compensation, including severance pay, if any.
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NEW HAMPSHIRE
If the Participant is primarily a resident of, or primarily provides services in, New Hampshire on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period, if the Participant earns an hourly rate that is less than or equal to (i) 200% of the federal minimum wage or (ii) 200% of the tipped minimum wage pursuant to New Hampshire law.
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NORTH DAKOTA
If the Participant is primarily a resident of, or primarily provides services in, North Dakota on (i) the Date of Grant or (ii) the Termination Date:
(a)Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period; and
(b)Section 1(a)(iv) of Appendix A shall only apply during the post-employment portion of the Restricted Period to the extent permitted by applicable North Dakota law.
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OKLAHOMA
If the Participant is primarily a resident of, or primarily provides services in, on Oklahoma (i) the Date of Grant or (ii) the Termination Date:
(a)During the post-employment portion of the Restricted Period, Section 1(a)(i) of Appendix A shall be limited to restricting direct solicitation of established customers or clients of the Company Group; and
(b)Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period.
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OREGON
If the Participant is primarily a resident of, or primarily provides services in, Oregon on (i) the Date of Grant or (ii) the Termination Date:
(a) Section 1(a)(ii) of Appendix A shall not apply during the post-employment portion of the Restricted Period, unless:
(i)the Award was granted in connection with either (A) a written employment offer that provided, at least two (2) weeks’ notice before the first day of employment, that a non-competition agreement was required or (B) the Participant’s subsequent bona fide advancement; and
(ii)the Participant’s total annual compensation, including commissions, as of the Termination Date, exceeds $108,576 (which is the threshold amount for 2023 and subject to annual adjustments for inflation based on adjustments to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the US Department of Labor), unless the Company Group provides the Participant compensation during the post-employment portion of the Restricted Period, in which Section 1(a)(ii) of Appendix A applies, in an amount equal to the greater of 50% of the Participant’s annual gross base salary and commissions as of the Termination Date or 50% of $108,576 (which is the threshold amount for 2023 and subject to annual adjustments pursuant to Oregon law as described in this provision) during the post-employment portion of the Restricted Period.
(b)The Company shall provide the Participant a signed copy of Appendix A within 30 days following the Termination Date.
(c)Section 1(a)(ii) of Appendix A shall not apply for more than 12 months after the Termination Date.
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PUERTO RICO
If the Participant is primarily a resident of, or primarily provides services in, Puerto Rico on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date.
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RHODE ISLAND
If the Participant is primarily a resident of, or primarily provides services in, Rhode Island on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply after the Termination Date, if the Participant’s average annual earnings (as defined by Rhode Island law) are less than, or equal to, 250% of the federal poverty level for individuals as established by the United States Department of Health and Human Services federal poverty guidelines.
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SOUTH DAKOTA
If the Participant is primarily a resident of, or primarily provides services in, South Dakota on (i) the Date of Grant or (ii) the Termination Date, Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not apply for more than two years after the Termination Date.
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UTAH
If the Participant is primarily a resident of, or primarily provides services in, Utah on (i) the Date of Grant or (ii) the Termination Date, Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date.
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VIRGINIA
If the Participant is primarily a resident of, or primarily provides services in, Virginia on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply during the post-employment period of the Restricted Period, if the Participant is considered a “low-wage employee”, which is defined as anyone earning, over a rolling 52-week period preceding the Termination Date, less than Virginia’s average weekly wage, which for the first quarter of 2023 was equivalent to approximately $77,000. A low-wage employee does not include an employee whose earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses; and
(b)Sections 1(a)(i) and 1(a)(ii) of Appendix A shall not prohibit the Participant from providing services to the Company Group’s customers or clients during the post-employment period of the Restricted Period, if the Participant does not initiate contact with or solicit such customer or client, to the extent required by Virginia law.
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WASHINGTON
If the Participant is primarily a resident of, or primarily provides services in, Washington on (i) the Date of Grant or (ii) the Termination Date:
(a)Section 1(a)(ii) of Appendix A shall not apply after the Termination Date unless the Participant’s annualized “earnings” (as defined by Washington law) from the Company Group exceed $120,560 per year (which is the threshold amount for 2024 and subject to annual adjustments pursuant to Washington law);
(b)If the Participant’s Termination is a result of a layoff, should any member of the Company Group choose to enforce the provisions of Section 1(a)(ii) of Appendix A, then during the post-employment portion of the Restricted Period, the Company (or other member of the Company Group, as applicable) shall pay the Participant compensation equivalent to the Participant’s base salary as of the Termination Date, minus any severance or other compensation paid by the Company Group and any compensation the Participant earns through subsequent non-competitive employment during the post-termination portion of the Restricted Period; and
(c)Section 1(a)(ii) of Appendix A shall not apply for more than eighteen months after the Termination Date.
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WISCONSIN
If the Participant is primarily a resident of, or primarily provides services in, Wisconsin on (i) the Date of Grant or (ii) the Termination Date:
(a)For the post-employment portion of the Restricted Period, Section 1(a)(i) of Appendix A shall be amended to delete the words “or prospective”;
(b)Section 1(a)(ii) of Appendix A shall not apply for more than one year after the Termination Date; and
(c)Section 2(a) of Appendix A shall remain in effect until three years following the Termination Date with respect to Confidential Information that is not a trade secret, and, with respect to trade secrets, for as long as the information is a trade secret.
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By: | /s/ Christopher J. Nassetta | ||||
Christopher J. Nassetta | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
April 24, 2024 |
By: | /s/ Kevin J. Jacobs | ||||
Kevin J. Jacobs | |||||
Chief Financial Officer and President, Global Development | |||||
(Principal Financial Officer) | |||||
April 24, 2024 |
By: | /s/ Christopher J. Nassetta | ||||
Christopher J. Nassetta | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) |
By: | /s/ Kevin J. Jacobs | ||||
Kevin J. Jacobs | |||||
Chief Financial Officer and President, Global Development | |||||
(Principal Financial Officer) |