Hilton Worldwide Holdings Inc. (NASDAQ:HLT) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

In connection with the previously announced separation of Park
Hotels Resorts Inc. (Park) and Hilton Grand Vacations Inc. (HGV)
from Hilton Worldwide Holdings Inc. (Hilton or the Company), on
January2, 2017, Hilton entered into several agreements with Park
and HGV that govern Hiltons relationship with the parties
following the Distribution (as defined below), including the
following:

Distribution Agreement. The Company entered into a
Distribution Agreement with Park and HGV regarding the principal
actions taken or to be taken in connection with the spin-offs (as
defined below). The Distribution Agreement provides for certain
transfers of assets and assumptions of liabilities by each of
Hilton, Park and HGV and the settlement or extinguishment of
certain liabilities and other obligations among Hilton, Park and
HGV. In particular, the Distribution Agreement provides that,
subject to the terms and conditions contained in the Distribution
Agreement:

In addition, notwithstanding the allocation described above,
Park, HGV 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.
The respective percentages for Shared Contingent Liabilities are
65%, 26%, and 9% for each of Hilton, Park and HGV, respectively.
The percentage of Shared Contingent Liabilities for which each
company is responsible was fixed in a manner that approximates
each companys estimated enterprise value on the Distribution Date
(as defined below) relative to the estimated enterprise values of
the other two companies. 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 Distribution Date, or
against current or former directors or officers of any of Hilton,
Park or HGV, or any of their respective subsidiaries, arising out
of, in connection with, or otherwise relating to, the spin-offs
and the Distribution, 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 shall 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 Park and HGV that governs the
respective rights, responsibilities and obligations of Hilton,
Park and HGV after the spin-offs 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 Park and HGV employees participated prior to the
spin-offs, and continued participation by Park and HGV employees
in certain of Hiltons compensation and benefit plans for a
specified period of time following the spin-offs. Generally,
other than with respect to certain specified compensation and
benefit plans and liabilities, each of Park and HGV 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-offs. After the spin-offs, Park and HGV employees will no
longer actively participate in Hiltons benefit plans or programs
(other than specified compensation and benefit plans), and each
of Park and HGV has established or will establish plans or
programs for its employees as described in the Employee Matters
Agreement. Each of Park and HGV also has 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 Park and HGV that governs the respective
rights, responsibilities and obligations of Hilton, Park and HGV
after the spin-offs 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 Park
and HGV 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 Park and HGV were part of that group. The Tax Matters
Agreement specifies the portion, if any, of this tax liability
for which Park and HGV 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-offs are 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-offs 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 Hiltons ability to issue equity and pursue
strategic or other transactions that otherwise could maximize the
value of Hiltons business, including, for two years after the
spin-offs:

These restrictions are generally inapplicable in the event that
the IRS has granted a favorable ruling to Hilton, Park or HGV or
in the event that Hilton, Park or HGV has received an opinion
from a tax advisor that it can take such actions without
adversely affecting the tax-free status of the spin-offs and
related transactions.

Transition Services Agreement. The Company entered into
a Transition Services Agreement with Park and HGV under which
Hilton or one of its affiliates will provide Park and HGV with
certain services for a limited time to help ensure an orderly
transition following the Distribution. 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. Park and HGV will pay Hilton for any such services at
agreed amounts as set forth in the Transition Services Agreement.
In addition, for a specified term, Park or HGV and Hilton may
mutually agree on additional services that were provided by
Hilton prior to the Distribution at pricing based on market rates
reasonably agreed to by the parties.

HGV License Agreement. The Company entered into a
license agreement with HGV granting HGV the exclusive right, for
an initial term of 100 years, to use certain Hilton marks and
intellectual property in its timeshare business.

License. Subject to the terms and conditions of
the license agreement, Hilton granted HGV the right to use the
trademarks Hilton Grand Vacations, HGV and Hilton Club
(collectively, the Hilton Marks) in connection with the current
and future operation of a Hilton-branded vacation ownership
business (the Licensed Business). HGV also received a license to
or right to use certain other Hilton-owned intellectual property,
including promotional content and access to Hiltons reservation
system and property management software (collectively with the
Hilton Marks, the Hilton IP). HGV also has the right to use
Hiltons loyalty program data and other customer information
(Hilton Data) to promote the Licensed Business and for other
internal business purposes, but may not disclose or sell such
information to third parties without Hiltons consent.

Exclusivity. Hilton agreed not to compete or use
the Hilton IP or Hilton Data in the vacation ownership business
(or license others to do so) for the first 30 years of the term
of the license agreement, and HGV may extend this exclusivity for
additional 10-year terms if it achieves certain revenue targets
in the last year of the initial 30-year term or any subsequent
renewal term, or makes a payment to cover any revenue shortfall,
for a maximum of five such payments during any 10-year renewal
term. If Hilton merges with or acquires a company that owns a
vacation ownership business and a hotel business, Hilton will use
commercially reasonable efforts to allow HGV to acquire or manage
the acquired vacation ownership business. If HGV does not do so,
then after such acquisition by Hilton, notwithstanding the
foregoing exclusivity, Hilton may use the Hilton IP, Hilton Data
and Loyalty Program (but not the licensed marks) to allow the
acquired vacation ownership business to compete with the Licensed
Business for the remainder of the term of the license agreement.

Term. The initial term of the license agreement
will expire on December31, 2116. After the initial term ends, HGV
may continue to use the Hilton IP and Hilton Data on a
non-exclusive basis for a tail period of 30 years in connection
with products and projects that were using the foregoing rights,
or were approved by Hilton for development, when the term ended,
provided that HGV continues to comply with the terms of the
license agreement, including payment of royalty and other fees.

Royalty Fees. HGV will pay a royalty fee of 5% of
gross revenues to Hilton quarterly in arrears, as well as
specified additional fees. Gross revenues include HGVs gross
sales for the initial sale or re-sale of interests in the
Licensed Business (subject to certain HGV Club exceptions),
property operations revenue, transient rental revenue and other
certain revenues earned. HGV also will pay Hilton an annual
transition fee of $5.0 million for each of the first five years
of the term and certain other fees and reimbursements. The
license agreement contains customary requirements with respect to
HGVs record-keeping and Hiltons audit rights.

During the term of the license agreement, HGV will participate in
Hiltons loyalty program, currently known as the Hilton HHonors
program. HGV can purchase Hilton loyalty program points at cost
for the first 20 years of the term, and thereafter at the market
rate (with a most favored nation provision, to which such market
rate is no higher than the price paid by strategic partners that
purchase a comparable volume of points annually on comparable
business terms). All members of Hiltons loyalty program will have
the right to redeem loyalty program points at HGV properties in
the Licensed Business, consistent with the tiers and rules of
Hiltons current loyalty program. HGV can convert points
associated with its own point-based reservations and exchange
system into Hilton loyalty program points through an exchange
program at a conversion rate to be determined by HGV. HGV may not
participate in a loyalty program of a Hilton competitor in
connection with the Licensed Business.

Unless HGV obtains Hiltons prior written consent, HGV may not:
(i)merge with or acquire a Hilton competitor or a vacation
ownership business that has entered into an operating agreement
with a Hilton competitor; (ii)merge with or acquire a vacation
ownership business together with a lodging business; or (iii)be
acquired or combined with any entity other than an affiliate. HGV
may acquire control of a business that is not a vacation
ownership business or a lodging business without Hiltons consent,
but will be required to operate such business as a separate
operation that does not use the Hilton IP or Hilton Data unless
Hilton consents to such use. Without Hiltons prior consent, HGV
may not assign its rights under the license agreement, except to
one of its affiliates as part of an internal reorganization for
tax or administrative purposes.

Tax Stockholders Agreement. The Company entered into a
stockholders agreement with HGV and certain entities affiliated
with The Blackstone Group L.P. (Blackstone) intended to preserve
the tax-free status of the Distribution. The Tax Stockholders
Agreement provides for certain covenants that may limit issuances
or repurchases of Hilton or HGV stock in excess of specified
percentages, dispositions of Hilton or HGV common stock by
Blackstone, and transfers of interests in certain Blackstone
entities that directly or indirectly own Hilton, Park or HGV
common stock. Additionally, the tax stockholders agreement may
limit issuances or repurchases of stock by Hilton in excess of
specified percentages.

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, HGV License Agreement
and Tax Stockholders Agreement, which are attached hereto as
Exhibits 2.1, 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to
this Current Report on Form 8-K and are incorporated herein by
reference.

Effective as of 5:00 p.m. Eastern time on January3, 2017 (the
Distribution Date), the Company completed the previously
announced separation of its business into three independent,
publicly traded companies (the spin-offs), which was accomplished
by the distribution of the outstanding shares of common stock of
Park and HGV to the Companys stockholders of record as of the
close of business on December15, 2016 (the Record Date). On the
Distribution Date, Hilton stockholders received one share of Park
common stock for every five shares of Hilton common stock held at
the close of business on the Record Date and one share of HGV
common stock for every ten shares of Hilton common stock held at
the close of business on the Record Date (the Distribution).

As a result of the Distribution:

A copy of the press release issued by the Company on January4,
2017 announcing completion of the Distribution is filed as
Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.

To the extent responsive, the information included under Item5.03
is incorporated herein by reference.

In connection with the spin-offs, on January3, 2017, Mark D. Wang
resigned from his position as an Executive Vice President of
Hilton. Mr.Wang will continue to serve as President of HGV and
will also serve as Chief Executive Officer and a director of HGV.

In connection with the Companys previously announced 1-for-3
reverse stock split (the Reverse Stock Split) of its shares of
common stock, par value $0.01 per share (the Common Stock), the
Company has filed an amendment to its certificate of
incorporation with the Delaware Secretary of State (the
Amendment). The Amendment, effective as of 5:01 PM Eastern time
on January3, 2017 (the Effective Time), converted every three
shares of the Companys issued and outstanding Common Stock or
shares held in treasury into one share of Common Stock, par value
$0.01 per share. to the Amendment, any fraction of a share of
Common Stock that would otherwise have resulted from the Reverse
Stock Split will be settled by cash payment, calculated according
to the per share closing price of the Companys Common Stock as
reported on the NYSE on January3, 2017.

The Reverse Stock Split affected all record holders of Common
Stock uniformly and did not affect any record holders percentage
ownership interest in the Company, except for de minimis changes
as a result of the elimination of fractional shares. The Reverse
Stock Split reduced the aggregate number of shares of Common
Stock outstanding and held in treasury from approximately
988,054,743 shares to approximately 329,351,581 shares. The
authorized number of shares of Common Stock was reduced from
30,000,000,000 to 10,000,000,000, and the authorized number of
shares of preferred stock remains 3,000,000,000.

The Common Stock began trading on a reverse split-adjusted basis
on the NYSE at the opening of trading on January4, 2017. The
Common Stock will continue trading on the NYSE under the symbol
HLT with a new CUSIP number (43300A 203).

On January4, 2017, Hilton issued a press release announcing the
completion of the spin-offs. A copy of the press release is
attached hereto as Exhibit 99.1.

(b) Pro Forma Financial Information.

Hiltons unaudited pro forma condensed consolidated financial
statements and the related notes thereto, giving effect to the
spin-offs and the Reverse Stock Split, are attached hereto as
Exhibit 99.2.

(d) Exhibits.