Hilton Grand Vacations Inc. (NASDAQ:HGV) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
Agreements with Hilton and Park Related to the
Spin-Off
On January2, 2017,
Hilton Grand Vacations Inc. (the Company or HGV) entered into
several agreements with Hilton Worldwide Holdings Inc. (Hilton)
and Park Hotels Resorts Inc. (Park) in connection with the
previously announced spin-off (the spin-off) of the Company and
Park from Hilton, including the following:
Distribution
Agreement. The Company entered into a Distribution Agreement
with Hilton and Park regarding the principal actions taken or to
be taken in connection with the spin-off. The Distribution
Agreement provides for certain transfers of assets and
assumptions of liabilities by each of Hilton, HGV and Park and
the settlement or extinguishment of certain liabilities and other
obligations among Hilton, HGV and Park. In particular, the
Distribution Agreement provides that, subject to the terms and
conditions contained in the Distribution Agreement:
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all of the assets and liabilities (including whether accrued, contingent or otherwise, and subject to certain exceptions) associated with the separated real estate business will be retained by or transferred to Park or its subsidiaries; |
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all of the assets and liabilities (including whether accrued, contingent or otherwise, and subject to certain exceptions) associated with the timeshare business will be retained by or transferred to HGV or its subsidiaries; |
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all other assets and liabilities (including whether accrued, contingent or otherwise, and subject to certain exceptions) of Hilton will be retained by or transferred to Hilton or its subsidiaries (other than the Company, Park and their respective subsidiaries); |
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liabilities (including whether accrued, contingent or otherwise) related to, arising out of or resulting from businesses of Hilton that were previously terminated or divested will be allocated among the parties to the extent formerly owned or managed by or associated with such parties or their respective businesses; |
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each of the Company and Park will assume or retain any liabilities (including under applicable federal and state securities laws) relating to, arising out of or resulting from the Form 10 registering its respective common stock distributed by Hilton in the spin-off and from any disclosure documents that offer for sale securities in transactions related to the spin-off, subject to exceptions for certain information for which Hilton will retain liability; and |
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except as otherwise provided in the Distribution Agreement or any ancillary agreement, Hilton will generally be responsible for any costs or expenses incurred by each of Hilton, HGV and Park in connection with the spin-offs and the transactions contemplated by the Distribution Agreement, including costs and expenses relating to legal counsel, financial advisors and accounting advisory work related to the spin-off. |
In addition,
notwithstanding the allocation described above, the Company, Park
and Hilton have agreed that losses related to certain contingent
liabilities (and related costs and expenses) that generally are
not specifically attributable to any of the separated real estate
business, the timeshare business or the retained business of
Hilton (Shared Contingent Liabilities) will be apportioned among
the parties according to fixed percentages of 65%, 26% and 9% for
Hilton, Park and HGV, respectively. Examples of Shared Contingent
Liabilities may include uninsured losses arising from actions
(including derivative actions) against current or former
directors or officers of Hilton or its subsidiaries in respect of
acts or omissions occurring prior to the completion of the
spin-off, or
against current or former directors or officers of any of Hilton,
HGV or Park, or any of their respective subsidiaries, arising out
of, in connection with, or otherwise relating to, the
spin-off, subject
to certain exceptions described in the Distribution Agreement. In
addition, costs and expenses of, and indemnification obligations
to, third party professional advisors arising out of the
foregoing actions also may be subject to these provisions.
Subject to certain limitations and exceptions, Hilton will
generally be vested with the exclusive management and control of
all matters pertaining to any such Shared Contingent Liabilities,
including the prosecution of any claim and the conduct of any
defense. The Distribution Agreement also provides for
cross-indemnities that, except as otherwise provided in the
Distribution Agreement, are principally designed to place
financial responsibility for the obligations and liabilities of
each business with the appropriate company.
Employee Matters
Agreement. The Company entered into an Employee Matters
Agreement with Hilton and Park that governs the respective
rights, responsibilities and obligations of Hilton, HGV and Park
after the spin-off with respect to transferred employees, defined
benefit pension plans, defined contribution plans, non-qualified
retirement plans, employee health and welfare benefit plans,
incentive plans, equity-based awards, collective bargaining
agreements and other employment, compensation and
benefits-related matters. The Employee Matters Agreement provides
for, among other things, the allocation and treatment of assets
and liabilities arising out of incentive plans, retirement plans
and employee health and welfare benefit plans in which HGV and
Park employees participated prior to the spin-off, and continued
participation by HGV and Park employees in certain of Hiltons
compensation and benefit plans for a specified period of time
following the spin-off. Generally, other than with respect to
certain specified compensation and benefit plans and liabilities,
each of HGV and Park will assume or retain sponsorship of, and
the liabilities relating to, compensation and benefit plans and
employee-related liabilities relating to its current and former
employees. The Employee Matters Agreement also provides that
outstanding Hilton equity-based awards will be equitably adjusted
or converted into Park or HGV awards, as applicable, in
connection with the spin-off. After the spin-off, HGV and Park
employees will no longer actively participate in Hiltons benefit
plans or programs (other than specified compensation and benefit
plans), and each of HGV and Park has established or will
establish plans or programs for its employees as described in the
Employee Matters Agreement. HGV and Park also have established or
will establish or maintain plans and programs outside of the
United States as may be required under applicable law or to the
Employee Matters Agreement.
Tax Matters
Agreement. The Company entered into a Tax Matters Agreement
with Hilton and Park that governs the respective rights,
responsibilities and obligations of Hilton, HGV and Park after
the spin-off with respect to tax liabilities and benefits, tax
attributes, tax contests and other tax sharing regarding U.S.
federal, state, local and foreign income taxes, other tax matters
and related tax returns. Although binding between the parties,
the Tax Matters Agreement is not binding on the IRS. Each of HGV
and Park will continue to have several liability with Hilton to
the IRS for the consolidated U.S. federal income taxes of the
Hilton consolidated group relating to the taxable periods in
which HGV and Park were part of that group. The Tax Matters
Agreement specifies the portion, if any, of this tax liability
for which HGV and Park will bear responsibility, and each party
has agreed to indemnify the other two against any amounts for
which they are not responsible. The Tax Matters Agreement also
provides special rules for allocating tax liabilities in the
event that the spin-off is not tax-free. In general, under the
Tax Matters Agreement, each party is expected to be responsible
for any taxes imposed on Hilton that arise from the failure of
the spin-off and certain related transactions to qualify as a
tax-free transaction for U.S. federal income tax purposes under
Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of
1986, as amended (the Code), as applicable, and certain other
relevant provisions of the Code, to the extent that the failure
to qualify is attributable to actions taken by such party (or
with respect to such partys stock). The parties will share
responsibility in accordance with sharing percentages of 65% for
Hilton, 26% for Park, and 9% for HGV for any such taxes imposed
on Hilton that are not attributable to actions taken by a
particular party.
The Tax Matters Agreement also
provides for certain covenants that may restrict the Companys
ability to issue equity and pursue strategic or other
transactions that otherwise could maximize the value of its
business, including, for two years after the
spin-off:
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engaging in any transaction involving the acquisition of shares of HGV stock or certain issuances of shares of HGV stock (other than with respect to the purging distribution described in the Companys Information Statement (the Information Statement) included in the Companys Registration Statement on Form 10, as amended, which was filed on November30, 2016 (the Registration Statement)); |
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merging or consolidating with any other person or dissolving or liquidating in whole or in part; |
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selling or otherwise disposing of, or allowing the sale or other disposition of, more than 35% of the Companys consolidated gross or net assets; or |
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repurchasing shares of HGV stock, except in certain circumstances. |
These restrictions are
generally inapplicable in the event that the IRS has granted a
favorable ruling to Hilton, HGV or Park or in the event that
Hilton, HGV or Park has received an opinion from a tax advisor,
in either case to the effect that it can take such actions
without adversely affecting the tax-free status of the spin-off
and related transactions.
Transition Services
Agreement. The Company entered into a Transition Services
Agreement with Hilton and Park under which Hilton or one of its
affiliates will provide HGV and Park with certain services for a
limited time to help ensure an orderly transition following the
spin-off. The services that Hilton agreed to provide under the
Transition Services Agreement may include certain finance,
information technology, human resources and compensation,
facilities, legal and compliance and other services. HGV and Park
will pay Hilton for any such services utilized at agreed amounts
as set forth in the Transition Services Agreement. In addition,
for a specified term, HGV or Park and Hilton may mutually agree
on additional services that were provided by Hilton prior to the
completion of the spin-off at pricing based on market rates that
are reasonably agreed to by the parties.
License Agreement.
The Company entered into a License Agreement with Hilton, in
which Hilton has granted the Company the right to use certain
Hilton trademarks and other intellectual property in its
timeshare business. for an initial term of 100
years.
The foregoing summaries do not
purport to be complete and are qualified in their entirety by
reference to the full text of the Distribution Agreement,
Employee Matters Agreement, Tax Matters Agreement, Transition
Services Agreement and License Agreement, which are filed
herewith as Exhibits 2.1, 10.1, 10.2, 10.3 and 10.4,
respectively, to this Current Report on Form 8-K and are incorporated by
reference into this Item 1.01.
Stockholders
Agreement and Tax Stockholders
Agreement
In addition, in connection
with the spin-off, on January2, 2017, the Company entered into a
Stockholders Agreement with certain stockholders, including
certain affiliates of The Blackstone Group L.P. (collectively,
Blackstone), and a tax Stockholders Agreement with Hilton and
certain stockholders, including
Blackstone.
Under the Stockholders
Agreement, Blackstone may designate a number of directors equal
to: (i)if Blackstone and the other owners of Hilton prior to its
December 2013 initial public offering (collectively, pre-IPO
owners) beneficially own at least 50% of HGVs outstanding common
stock, 50% of the total number of directors comprising the board
of directors, rounded down to the nearest whole number; (ii)if
the pre-IPO owners beneficially own at least 40% (but less than
50%) of HGVs outstanding common stock, 40% of the total number of
directors comprising the board of directors, rounded down to the
nearest whole number; (iii)if the pre-IPO owners beneficially own
at least 30% (but less than 40%) of HGVs outstanding common
stock, 30% of the total number of directors comprising the board
of directors, rounded down to the nearest whole number; (iv)if
the pre-IPO owners beneficially own at least 20% (but less than
30%) of HGVs outstanding common stock, either (x) 20% of the
total number of directors comprising the board of directors,
rounded down to the nearest whole number, if the total number of
directors is 10 or more or (y)the lowest whole number that is
greater than 20% of the total number of directors comprising the
board of directors if the total number of directors is less than
10; and (v)if the pre-IPO owners beneficially own at least 5%
(but less than 20%) of HGVs outstanding common stock, the lowest
whole number that is greater than 10% of the total number of
directors comprising the board of directors. The above-described
provisions of the Stockholders Agreement will remain in effect
until Blackstone is no longer entitled to nominate a director to
the Stockholders Agreement, unless Blackstone requests that they
terminate at an earlier date.
Descriptions of the material
terms of the Stockholders Agreement and the Tax Stockholders
Agreement are set forth in the section entitled Certain
Relationships and Related Party TransactionsStockholders
Agreements in the Information Statement included in the Companys
Registration Statement, which section excerpts the Company is
filing as Exhibit 99.1 to this Current Report on Form 8-K and
incorporating herein by reference into this Item 1.01. The
descriptions of the agreements contained therein and herein do
not purport to be complete and are qualified in their entirety by
reference to the full text of the Stockholders Agreement and the
Tax Stockholders Agreement, which are filed herewith as Exhibit
10.6 and Exhibit 10.7, respectively, to this Current Report on
Form 8-K and incorporated by reference into this Item
1.01.
Senior Secured
Credit Facilities
On December28, 2016, Hilton,
the Company, Hilton Grand Vacations Parent LLC, a subsidiary of
the Company (HGV Intermediate Parent) and Hilton Grand Vacations
Borrower LLC, an indirect subsidiary of the Company, as borrower
(in such capacity, the Borrower), entered into senior secured
credit facilities (the Senior Secured Credit Facilities) with
Deutsche Bank AG New York Branch, as administrative agent (the
Agent) collateral agent, swing line lender and L/C issuer, other
financial institutions as lenders from time to time party thereto
and the other parties thereto.
The Senior Secured Credit
Facilities consist of (1)a $200million term loan facility (the
Term Loans), which will mature on December28, 2021, and (2)a
revolving credit facility in an aggregate principal amount of up
to $200million (the Revolving Facility), which will mature on
December28, 2021. Simultaneous with the closing of the Senior
Secured Credit Facilities, the Company drew down the entire
$200million of the Term Loans, the proceeds of which will be used
to finance the spin-off and pay transaction expenses. If
transaction expenses exceed $200million, the Company may draw
additional amounts under the Revolving Facility after the
spin-off.
The Revolving Facility has
borrowing capacity available in an amount of up to $30million for
letters of credit and $10million for short-term borrowings (swing
line borrowings). The Senior Secured Credit Facilities provide
the option to increase the amount available under the Term Loans
and/or the Revolving Credit Facility by an aggregate of up to
$300million plus an unlimited amount subject to pro forma
compliance with a first lien net leverage ratio not to exceed
0.25:1.00.
Interest Rates and
Fees
Borrowings under each of the
Senior Secured Credit Facilities bear interest, at the Borrowers
option, at a rate equal to a margin over either (a)a base rate
determined by reference to the highest of (1)the administrative
agents prime lending rate, (2)the federal funds effective rate
plus 0.50% and (3)the LIBOR rate for a one-month interest period
plus 1.00% or (b)a LIBOR rate determined by reference to the
Reuters LIBOR rate for the interest period relevant to such
borrowing. The initial margins for the Senior Secured Credit
Facilities is 2.25% for LIBOR rate loans and 1.25% for base rate
loans, subject to step downs or step ups upon the achievement of
specified total net leverage ratios. Following delivery by the
Borrower of financial statements for the first full fiscal
quarter ending after December28, 2016, the margins for the Senior
Secured Credit Facilities will be determined based on a total net
leverage ratio and will range from 1.00% to 1.75%, in the case of
base rate loans, and 2.00% to 2.75%, in the case of LIBOR rate
loans. The Senior Secured Credit Facilities are subject to a
LIBOR floor of 0%.
In addition to paying interest
on outstanding principal under the Senior Secured Credit
Facilities, the Borrower is required to pay a commitment fee to
the lenders under the Revolving Credit Facility in respect of the
unutilized commitments thereunder. The initial commitment fee
rate is 0.35%, subject to step downs and step ups upon the
achievement of specified total net leverage ratios. The Borrower
is also required to pay customary letter of credit
fees.
Prepayments
The Senior Secured Credit
Facilities require us to prepay outstanding Term Loans, subject
to certain exceptions, with:
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50% of the net cash proceeds (including insurance and condemnation proceeds) of all non-ordinary course asset sales or other dispositions of property by the Borrower and its restricted subsidiaries, subject to de minimis thresholds, if those net cash proceeds are not reinvested in assets to be used in the Borrowers business or to make certain other permitted investments (a)within 12 months of the receipt of such net cash proceeds or (b)if the Borrower commits to reinvest such net cash proceeds within 12 months of the receipt thereof, within 180 days of the date of such commitment (although in connection with any such prepayment, the Borrower may also repay other first lien debt to the extent it is so required); and |
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50% of the net proceeds of any incurrence of debt by the Borrower or any of its restricted subsidiaries, other than debt permitted to be incurred or issued under the Senior Secured Credit Facilities. |
Notwithstanding any of the
foregoing, each lender of the Term Loans has the right to reject
its pro rata share of mandatory prepayments described above, in
which case HGV may retain the amounts so
rejected.
The foregoing mandatory
prepayments will be applied pro rata to installments of the Term
Loans as directed by the Borrower.
The Borrower may voluntarily
prepay the Revolving Facility (which prepayments may be
reborrowed), and outstanding Term Loans at any time without
premium or penalty, other than customary breakage costs with
respect to LIBOR loans. Voluntary prepayments on the Term Loans
may be made on a discounted basis if the discounted prepayments
are agreed to by the lenders.
Amortization
The Borrower is required to
repay the Term Loans on the last business day of each fiscal
quarter, commencing with the first full fiscal quarter following
December28, 2016 and continuing until the fiscal quarter ending
immediately prior to the maturity date, in quarterly installments
in an aggregate principal amount equal to 1.25% of the original
principal amount of the Term Loans. The remaining amount of the
Term Loans will be payable on the applicable maturity date with
respect to the Term Loans.
Guarantees and
Collateral
The obligations under the
Senior Secured Credit Facilities are unconditionally and
irrevocably guaranteed by each of Hilton (which guarantee was
released upon consummation of the spin-off), the Company, HGV
Intermediate Parent, any subsidiary of the Company that directly
or indirectly owns 50% of the issued and outstanding equity
interests of the Borrower, and, subject to certain exceptions,
each of the Borrowers existing and future material restricted
domestic wholly owned subsidiaries (each, a Subsidiary Guarantor
and collectively with Hilton, the Company, HGV Intermediate
Parent and the Borrower (other than in respect of its own
obligations), the Guarantors). In addition, the Senior Secured
Credit Facilities are collateralized by first priority or
equivalent security interests in (i)all the capital stock of, or
other equity interests in, the Borrower and each of the Borrowers
and the Subsidiary Guarantors material direct or indirect wholly
owned restricted domestic subsidiaries and 65% of the capital
stock of, or other equity interests in, each of the Borrowers or
any Subsidiary Guarantors direct wholly owned first-tier
restricted foreign subsidiaries, and (ii)certain tangible and
intangible assets of the Borrower and those of the Subsidiary
Guarantors (subject to certain exceptions and
qualifications).
Covenants and Events of
Default
The credit agreement governing
the Senior Secured Credit Facilities (the Senior Secured Credit
Agreement) contains a number of significant affirmative and
negative covenants and customary events of default. Such
covenants, among other things, limit or restrict, subject to
certain exceptions, the ability of the Borrower and its
restricted subsidiaries to:
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incur additional indebtedness, make guarantees and enter into hedging arrangements; |
| create liens on assets; |
| enter into sale and leaseback transactions; |
| engage in mergers or consolidations; |
| sell assets; |
| make fundamental changes; |
| pay dividends and distributions or repurchase capital stock; |
| make investments, loans and advances, including acquisitions; |
| engage in certain transactions with affiliates; |
| make changes in the nature of their business; and |
| make prepayments of subordinated debt. |
The Borrower and its
restricted subsidiaries will also be required to maintain a
maximum first lien net leverage ratio not to exceed 2.00:1.00 and
a minimum interest coverage ratio of not less than
2.00:1.00.
If the loans under the Senior
Secured Credit Facilities receive both a rating equal to or
higher than Baa3 (or the equivalent) according to Moodys
Investors Service, Inc. and BBB- (or the equivalent) according to
Standard Poors, a division of The McGraw-Hill Companies, Inc.,
and no event of default has occurred and is continuing, the
restrictions in the Senior Secured Credit Facilities regarding
incurring additional indebtedness, dividends and distributions or
repurchases of capital stock and transactions with affiliates
will not apply to the Borrower and its restricted subsidiaries
during the period in which such ratings are
maintained.
If an event of default occurs
under the Senior Secured Credit Agreement, the lenders under the
Senior Secured Credit Facilities will be entitled to take various
actions, including the acceleration of amounts due under the
Senior Secured Credit Facilities and all actions permitted to be
taken by a secured creditor.
This summary is qualified in
its entirety by reference to the full text of the Senior Secured
Credit Agreement, filed as Exhibit 10.5 to this Current Report on
Form8-K and incorporated herein by reference, and other Loan
Documents (as defined in the Senior Secured Credit
Agreement).
Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth
under Senior Secured Credit Facilities of Item 1.01 of this
Current Report on Form 8-K is incorporated by
reference into this Item 2.03.
Item3.03 |
Material Modification to Rights of Security Holders. |
The information set forth
under Item5.03 below is incorporated by reference into this
Item3.03.
Item5.01 |
Changes in Control of Registrant. |
The spin-off described in the
Information Statement was consummated on January3,
2017.
Item5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointments of
Principal Accounting
Officer
In connection with the
spin-off, effective January3, 2017, Mr.AllenJ. Klingsick, age 39,
was appointed as the Companys Senior Vice President and Chief
Accounting Officer. Since February 2013, Mr.Klingsick served in a
variety of roles at Hilton and HGV, including most recently as
Vice President Accounting, HGV, and Senior Director of Accounting
Research and Policy. His responsibilities at Hilton and HGV
included oversight of timeshare accounting operations and global
technical accounting matters. From 2011 through 2013, he served
as Director of Accounting and Domestic Controller for
LivingSocial, where he oversaw domestic accounting operations.
From 2001 through 2011, Mr.Klingsick was employed in various
capacities with KPMG LLP in Kansas City, Missouri and McLean,
Virginia, where he performed public company audits, managed
global audit engagement teams and provided training for KPMG
associates nationally and internationally. Mr.Klingsick is a
Certified Public Accountant, and earned a bachelors degree in
accounting in 2000 and a Masters in Professional Accountancy in
2001, both from University of NebraskaLincoln. Mr.Klingsick will
act as the Companys principal accounting
officer.
Mr.Klingsick did not enter
into any material contract, plan or arrangement, no material
amendments were made to any material contract, plan or
arrangement to which Mr.Klingsick is a party or participates, and
no compensatory grants or awards were made to Mr.Klingsick, in
each case, in connection with his appointment. There are no
arrangements or understandings between Mr.Klingsick and any other
person to which he was appointed. Mr.Klingsick has no family
relationships with any director, executive officer or person
nominated or chosen by the Company to become a director or
executive officer of the Company. Mr.Klingsick is not a party to
any transaction required to be disclosed to Item 404(a) of
Regulation S-K.
A copy of the press release
announcing Mr.Klingsicks appointment is attached hereto as
Exhibit 99.2.
Certain Benefit
Plans
On January3, 2017, the Hilton
Grand Vacations Inc. 2017 Omnibus Incentive Plan (the Omnibus
Incentive Plan) and the Hilton Grand Vacations Inc. 2017 Stock
Plan for Non-Employee Directors (the Stock Plan for Non-Employee
Directors) became effective following their approval and adoption
by the Companys board of directors and sole stockholder, and the
Hilton Resorts Corporation 2017 Executive Deferred Compensation
Plan (the Executive Deferred Compensation Plan) became effective
following its approval and adoption by the board of directors of
Hilton Resorts Corporation (a wholly-owned subsidiary of the
Company). The material terms of the Omnibus Incentive Plan, the
Stock Plan for Non-Employee Directors and the Executive Deferred
Compensation Plan are described in the Information Statement
under the section entitled Executive and Director Compensation
Hilton Grand Vacations Inc. 2017 Omnibus Incentive Plan,
Executive and Director Compensation Hilton Grand Vacations Inc.
2017 Stock Plan for Non-Employee Directors and Executive and
Director CompensationNon-Qualified Deferred Compensation,
respectively, which sections the Company is filing as Exhibit
99.1 to this Current Report on Form 8-K and which are
incorporated by reference into this Item 5.02. The foregoing
summaries and incorporated descriptions of the Omnibus Incentive
Plan, the Stock Plan for Non-Employee Directors and the Executive
Deferred Compensation Plan are qualified in their entirety by
reference to the full text of the Omnibus Incentive Plan, the
Stock Plan for Non-Employee Directors and the
Executive Deferred Compensation Plan, which are filed herewith as
Exhibits 10.8, 10.9 and 10.10, respectively, and are incorporated
by reference into this Item
5.02.
Item5.03 |
Amendments to Articles of Incorporation or By-Laws; Change in Fiscal Year. |
On January3, 2017, the
Companys Amended and Restated Certificate of Incorporation (the
Amended and Restated Certificate of Incorporation), in
substantially the same form previously filed as Exhibit 3.1 to
the Registration Statement, became effective following its
approval and adoption by the Companys board of directors and sole
stockholder, and the Companys Amended and Restated By-laws (the
Amended and Restated By-laws), in substantially the same form
previously filed as Exhibit3.2 to the Registration Statement,
became effective following its approval and adoption by the
Companys board of directors. Upon effectiveness of the Amended
and Restated Certificate of Incorporation, the Companys issued
and outstanding shares of common stock were reclassified into an
aggregate of 98,802,597 shares, all of which were distributed by
Hilton to its stockholders in the spin-off. A description of the
material terms of each of the Amended and Restated Certificate of
Incorporation and Amended and Restated By-laws is included in the
Information Statement under the section entitled Description of
Capital Stock which section the Company is filing as Exhibit 99.1
to this Current Report on Form 8-K and which is incorporated
herein by reference into this Item
5.03.
The Companys corporate
governance includes the following notable
features:
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the Companys board of directors is not classified, each of the Companys directors is subject to re-election annually and the Company will not classify its board of directors in the future without the approval of its stockholders; |
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under the Amended and Restated By-laws and the Companys Corporate Governance Guidelines, directors (other than any person nominated or designated to any agreement or arrangement to which the Company is party) who fail to receive a majority of the votes cast in uncontested elections are required to submit their resignation to the Companys board of directors; |
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the Companys independent directors will meet regularly in executive sessions; |
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the Company does not have a stockholder rights plan, and if its board of directors were ever to adopt a stockholder rights plan in the future without prior stockholder approval, the board of directors would either submit the plan to stockholders for ratification or cause the rights plan to expire within one year; and |
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the Company has implemented or will implement a range of other corporate governance best practices, including placing limits on the number of directorships held by its directors to prevent overboarding and implementing a director education program. |
The foregoing summaries and
incorporated descriptions do not purport to be complete and are
qualified in their entirety by reference to the full text of each
of the Amended and Restated Certificate of Incorporation and the
Amended and Restated By-laws, which are filed herewith as Exhibit
3.1 and Exhibit 3.2, respectively, and are incorporated by
reference into this Item
5.03.
Item8.01 |
Other Events |
On January4, 2017, Hilton, HGV
and Park issued a joint press release announcing the consummation
of the spin-off. The press release is attached hereto as Exhibit
99.2.
Safe Harbor
Statement
This report contains
forward-looking statements intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
the information concerning the Companys possible or assumed
future results of operations, business strategies, financing
plans, competitive position, potential growth opportunities,
potential operating performance improvements, benefits resulting
from its separation from Hilton, the effects of competition and
the effects of future legislation or regulations. Forward-looking
statements include all statements that are not historical facts
and can be identified by the use of forward-looking terminology
such as the words believe, expect, plan, intend, anticipate,
estimate, predict, potential, continue, may, might, should, could
or the negative of these terms or similar
expressions.
Forward-looking statements
involve risks, uncertainties and assumptions. Actual results may
differ materially from those expressed in such forward-looking
statements. You should not put undue reliance on any
forward-looking statements contained herein. The Company does not
have any intention or obligation to update forward-looking
statements.
The risk factors discussed
under the section entitled Risk Factors in the Information
Statement, as well as the Companys other filings with the
Securities and Exchange Commission, could cause the Companys
results to differ materially from those expressed in
forward-looking statements. There may be other risks and
uncertainties that the Company is unable to predict at this time
or that it currently does not expect to have a material adverse
effect on its business. Any such risks could cause the Companys
results to differ materially from those expressed in
forward-looking
statements.
Item9.01 |
Financial Statements and Exhibits. |
(d)
Exhibits.
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| Exhibit2.1 |
Distribution Agreement among Hilton Worldwide Holdings Inc., Hilton Domestic Operating Company, Inc., Park Hotels Resorts Inc. and Hilton Grand Vacations Inc., dated as of January2, 2017. |
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| Exhibit3.1 |
Amended and Restated Certificate of Incorporation of Hilton Grand Vacations Inc. |
| Exhibit3.2 | Amended and Restated Bylaws of Hilton Grand Vacations Inc. | |
| Exhibit10.1 |
Employee Matters Agreement among Hilton Worldwide Holdings Inc., Hilton Domestic Operating Company Inc., Park Hotels Resorts Inc. and Hilton Grand Vacations Inc., dated as of January2, 2017. |
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| Exhibit10.2 |
Tax Matters Agreement among Hilton Worldwide Holdings Inc., Hilton Domestic Operating Company Inc., Park Hotels Resorts Inc. and Hilton Grand Vacations Inc., dated as of January2, 2017. |
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| Exhibit10.3 |
Transition Services Agreement between Hilton Worldwide Holdings Inc. and Hilton Grand Vacations Inc., dated as of January2, 2017. |
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| Exhibit10.4 |
License Agreement between Hilton Worldwide Holdings Inc. and Hilton Grand Vacations Inc., dated as of January2, 2017. |
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| Exhibit10.5 |
Credit Agreement by and among Hilton Grand Vacations Parent LLC, Hilton Grand Vacations Borrower LLC, as borrower, Deutsche Bank AG New York Branch, as administrative agent collateral agent, swing line lender and L/C issuer, other financial institutions as lenders from time to time party thereto and the other parties thereto, dated as of December28, 2016. |
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| Exhibit10.6 |
Stockholders Agreement among Hilton Grand Vacations Inc. and the other parties thereto, dated as of January2, 2017. |
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| Exhibit10.7 |
Tax Stockholders Agreement among Hilton Worldwide Holdings Inc., Hilton Grand Vacations Inc. and the other parties thereto, dated as of January2, 2017. |
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| Exhibit10.8 |
Hilton Grand Vacations Inc. 2017 Omnibus Incentive Plan, dated as of January3, 2017. |
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| Exhibit10.9 |
Hilton Grand Vacations Inc. 2017 Stock Plan for Non-Employee Directors, dated as of January3, 2017. |
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| Exhibit10.10 |
Hilton Resorts Corporation 2017 Executive Deferred Compensation Plan, dated as of January3, 2017. |
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| Exhibit99.1 |
Excerpts from Hilton Grand Vacations Inc.s Information Statement, dated as of November30, 2016. |
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| Exhibit99.2 | Press Release dated as of January4, 2017. |
