<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Hilton Hotels Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
<PAGE> 2
NOTICE OF MEETING OF STOCKHOLDERS
[LOGO]
WORLD HEADQUARTERS
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CALIFORNIA 90210
The annual meeting of stockholders of Hilton Hotels Corporation, a Delaware
corporation (the "Company"), will be held at the Beverly Hilton, 9876 Wilshire
Boulevard, Beverly Hills, California 90210, on Thursday, May 11, 1995, at 10:00
A.M., for the following purposes, namely:
(1) To elect four directors to the Board of Directors;
(2) To reapprove the Company's 1990 Stock Option and Stock
Appreciation Rights Plan, with an amendment (the "Plan") to limit to
150,000 the maximum number of shares for which an option may be granted to
any employee during any one fiscal year, and to approve certain options
previously awarded under the Plan;
(3) To ratify the appointment of Arthur Andersen LLP to serve as
auditors for the Company for fiscal 1995;
(4) To consider, if presented, a stockholder's proposal relating to
the Company's executive severance agreements; and
(5) To transact any other business which may properly come before the
meeting.
Stockholders are cordially invited to attend the meeting in person.
Stockholders who wish to have their stock voted and do not now intend to attend
the meeting should complete, date and sign the enclosed proxy and return it
promptly by mail in the envelope provided.
Only stockholders of record on the books of the Company at the close of
business on March 17, 1995 will be entitled to notice of and to vote at the
meeting or any adjournments thereof. The stock transfer books will not be
closed.
By Order of the Board of Directors,
CHERYL L. MARSH,
Vice President and Corporate Secretary
Beverly Hills, California
April 3, 1995
<PAGE> 3
HILTON HOTELS CORPORATION
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CALIFORNIA 90210
PROXY STATEMENT
INTRODUCTION
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Hilton Hotels Corporation (the "Company") to be used at the annual meeting of
stockholders to be held at the Beverly Hilton, 9876 Wilshire Boulevard, Beverly
Hills, California 90210, on May 11, 1995, and at any adjournments thereof. All
shares represented by proxies will be voted at the meeting in accordance with
the specifications marked thereon or, if no specifications are made, proxies
will be voted FOR Proposals 1, 2 and 3 and AGAINST Proposal 4 and in the
discretion of the proxy holder as to any other business which comes before the
meeting. Any stockholder giving a proxy may revoke the same at any time prior to
the voting of such proxy by giving written notice of revocation to the Corporate
Secretary of the Company, by submitting a later dated proxy or by attending the
meeting and voting in person. The Proxy Statement is first being mailed to
stockholders on or about April 3, 1995.
VOTING AT THE MEETING
The Board of Directors has fixed March 17, 1995 as the record date for the
determination of stockholders entitled to notice of and to vote at the meeting.
As of such date, there were 48,173,867 shares of common stock, $2.50 par value
(the "Common Stock"), outstanding, excluding 2,851,161 shares which were held in
the Company's treasury. The holders of outstanding shares are entitled to one
vote for each share on any matter voted on at the meeting. The shares held by
the Company will not be considered present or entitled to vote at the meeting.
The presence in person or by proxy of the holders of a majority of the
Company's outstanding shares of Common Stock will constitute a quorum. The
affirmative vote of the holders of a majority of the Company's outstanding
shares of Common Stock will be necessary for the reapproval of the Company's
1990 Stock Option and Stock Appreciation Rights Plan with an amendment thereto
and approval of certain options. The plurality of the shares represented at the
meeting, in person or by proxy, will be necessary for the election of directors,
ratification of the appointment of auditors, adoption of Proposal 4 and for the
taking of all other action at the meeting.
A stockholder who abstains from voting on any or all proposals will be
included in the number of stockholders present at the meeting for the purpose of
determining the presence of a quorum. However, an abstention with respect to the
election of the Company's directors will not be counted either in favor of or
against the election of the nominees. In the case of the other proposals which
are being submitted for stockholder approval, an abstention will effectively
count as a vote cast against such proposals.
Brokers who hold shares for the account of their clients may vote such
shares either as directed by their clients or in their own discretion if
permitted by the exchange or other organization of which they are members.
Members of the New York Stock Exchange are permitted to vote their clients'
proxies in their own
<PAGE> 4
discretion as to each of the Company's proposals, except as to the stockholder
proposal relating to the Company's executive severance agreements. Proxies which
are voted by brokers on some but not all of the proposals are referred to as
"broker non-votes." Broker non-votes will be included in determining the
presence of a quorum. However, a broker non-vote is not treated as present and
entitled to vote and will have the effect of neither a vote in favor of or
against the proposal.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), requires the Company's reporting officers and directors, and persons who
own more than ten percent of the Company's Common Stock, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the "Commission"), the New York Stock Exchange and the
Company. Based solely on the Company's review of the forms filed with the
Commission and written representations from reporting persons that they were not
required to file Form 5 for specified fiscal years, the Company believes that
all of its reporting officers, directors, and greater than ten percent
beneficial owners complied with all filing requirements applicable to them with
respect to transactions during fiscal 1994.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND EXECUTIVE OFFICERS
The following table sets forth the names and addresses of all persons who
owned, to the knowledge of the Company, beneficially more than 5% of the
outstanding shares of Common Stock on March 17, 1995. The following table also
sets forth as of March 17, 1995 beneficial ownership by each director and
nominee, the chief executive officer and the four other most highly compensated
executive officers (the "Named Officers") and all directors and executive
officers as a group (see Summary Compensation Table on page 9).
<TABLE>
<CAPTION>
APPROXIMATE
NAME AND ADDRESS AMOUNT PERCENT
OF OWNER OWNED OF CLASS
---------------- ---------- -----------
<S> <C> <C>
Barron Hilton........................................... 11,743,376(1)(2) 24.4
9336 Civic Center Drive
Beverly Hills, California 90210
Conrad N. Hilton Fund................................... 4,124,684(2) 8.6
100 West Liberty Street
Reno, Nevada 89501
Gabelli Funds, Inc. .................................... 2,401,783(3) 5.0
One Corporate Center
Rye, New York 10580
Jennison Associates Capital Corp. ...................... 2,484,100(4) 5.2
466 Lexington Avenue
New York, New York 10017
The Prudential Insurance Company of America............. 2,532,674(5) 5.3
Prudential Plaza
Newark, New Jersey 07102-3777
Raymond C. Avansino, Jr. ............................... 58,500(6) --
A. Steven Crown......................................... 753,540(7) 1.6
Gregory R. Dillon....................................... 23,540 --
Eric M. Hilton.......................................... 39,014(2)(6) --
Dieter H. Huckestein.................................... 22,000(6) --
Robert L. Johnson....................................... -- --
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
APPROXIMATE
NAME AND ADDRESS AMOUNT PERCENT
OF OWNER OWNED OF CLASS
---------------- ---------- -----------
<S> <C> <C>
Donald R. Knab.......................................... 2,000 --
Benjamin V. Lambert..................................... 50,000 --
William C. Lebo, Jr..................................... 14,625(6) --
Donna F. Tuttle......................................... 2,000 --
Sam D. Young, Jr. ...................................... 7,500 --
All Directors and Executive Officers
as a Group (15 persons)............................... 12,716,095(8) 26.4
</TABLE>
- ---------------
(1) Of the shares reflected in the above table, 6,000,000 shares are owned by
the Charitable Remainder Unitrust (the "Trust"), of which Mr. Barron Hilton
is sole trustee. As trustee, Mr. Barron Hilton has the sole voting power
with respect to, and is deemed to be the beneficial owner of, the 6,000,000
shares. The Trust will continue until the later of Mr. Barron Hilton's
death or May 8, 2009. By virtue of the foregoing and the other shares
beneficially owned by Mr. Hilton, Mr. Hilton may be deemed to be in
"control" of the Company as such term is defined in the rules and
regulations promulgated by the Commission.
(2) Messrs. Barron and Eric Hilton are two of the nine directors of the Conrad
N. Hilton Fund (the "Fund"). They disclaim beneficial ownership of the
4,124,684 shares owned by the Fund.
(3) The amount of the Company's Common Stock beneficially owned by various
Gabelli entities ("Gabelli") is reported on the basis of a Schedule 13D
filed with the Commission under the 1934 Act. Gabelli has advised the
Company that it has acquired the shares of the Company's Common Stock for
investment.
(4) The amount of the Company's Common Stock beneficially owned by Jennison
Associates Capital Corp. ("Jennison") is reported on the basis of a Schedule
13G filed with the Commission under the 1934 Act. Jennison has advised the
Company that it has acquired the shares of the Company's Common Stock for
investment.
(5) The amount of the Company's Common Stock beneficially owned by The
Prudential Insurance Company of America ("Prudential") is reported on the
basis of a Schedule 13G filed with the Commission under the 1934 Act.
Prudential has advised the Company that it: (i) holds 900 shares of the
Company's Common Stock for the benefit of its general account; (ii) may have
direct or indirect voting and/or investment discretion over 2,531,774 shares
which are held for the benefit of its clients by its separate accounts;
(iii) is reporting the combined holdings of these entities for the purpose
of administrative convenience; and (iv) has acquired the shares of the
Company's Common Stock for investment.
(6) Includes options to acquire 47,500, 25,814, 20,000 and 14,625 shares of
Common Stock, exercisable within the next 60 days, held by Messrs. Avansino,
Eric Hilton, Huckestein and Lebo, respectively.
(7) Of the 753,540 shares reflected in the above table, 543,568 shares are owned
by the Arie and Ida Crown Memorial (of which Mr. Crown is a director);
59,972 shares are owned by The Crown Fund, a partnership (of which Mr. Crown
is a partner); and 150,000 shares are owned by Pines Trailer Limited
Partnership (the partners of which are a corporation, of which Mr. Crown is
a director, officer and stockholder, and a partnership, of which Mr. Crown
is a partner). Mr. Crown disclaims beneficial ownership of the 753,540
shares reflected in the above table, except to the extent of his indirect
beneficial ownership therein.
(8) Includes 127,639 shares issuable upon exercise of employee stock options
granted to executive officers, exercisable within the next 60 days, but
excludes the shares owned by the Fund (see note 2 above).
3
<PAGE> 6
ELECTION OF DIRECTORS
The By-laws of the Company provide for the election of eleven directors to
constitute the Board and, under the terms of the Company's Restated Certificate
of Incorporation and By-laws, as amended, the Board has been divided into three
classes of directors, each of which is elected to serve a term of three years.
With respect to the directors to be elected at the Company's 1995 annual meeting
for the term expiring in 1998, the Company's By-laws provide that nominations
for directors shall be made by the Board of Directors (based on recommendations
made by the Nominating Committee) at a Board meeting, or by written consent in
lieu of a meeting, not less than 30 days prior to the date of the meeting at
which directors are scheduled to be elected and that each nominee shall, at the
request of the Company, provide the Company with certain information for
inclusion in the Company's proxy statement for such meeting. The By-laws further
provide that notice of proposed stockholder nominations for election of
directors must be given to the Corporate Secretary of the Company not less than
60 days prior to the meeting at which directors are to be elected and requires
that such notice must contain certain information about each proposed nominee,
including age, business and residence addresses, principal occupation, the
number of shares of capital stock of the Company beneficially owned and such
other information as would be required to be included in a proxy statement
soliciting proxies for the election of such proposed nominee. Provision is also
made for substitution of nominees by the Board of Directors or the proposing
stockholder, as the case may be, in the event that a designated nominee is
unable or unwilling to stand for election at the meeting. If the Chairman of the
meeting of stockholders determines that a nomination was not made in accordance
with the foregoing procedures, such nomination shall be void. The Board of
Directors, at its meeting on September 22, 1994, elected Dieter H. Huckestein to
the Board to fill a vacancy.
The Board of Directors has nominated, and it is the intention of the
persons named in the enclosed proxy to vote for the election of, the four
nominees named below, each of whom has consented to serve as a director if
elected. The terms of the remaining directors expire as indicated in the
following table. All of the nominees have previously been elected by the
stockholders of the Company.
The information set forth below is submitted with respect to the persons
nominated for election to the Board and the remaining directors. Unless
otherwise indicated in the table or a footnote thereto, each such person has
engaged in his or her principal occupation since at least January 1990. Only
directorships of issuers with a class of securities registered pursuant to
Section 12 of the 1934 Act or subject to the requirements of Section 15(d)
thereof and directorships of issuers registered as investment companies under
the Investment Company Act of 1940 are listed in the table below.
<TABLE>
<CAPTION>
TERM TO
EXPIRE
AT
ANNUAL YEAR
NAME, PRINCIPAL OCCUPATION MEETING SERVICE
AND OTHER DIRECTORSHIPS AGE IN COMMENCED
-------------------------- ---- -------- ----------
<S> <C> <C> <C>
NOMINEES:
RAYMOND C. AVANSINO, JR. 51 1998 1986
Partner, Avansino, Melarkey, Knobel &
McMullen, attorneys-at-law, until February
1993 and, thereafter, President and Chief
Operating Officer, Hilton Hotels Corporation.
He is Chairman of the Board of the E.L.
Wiegand Foundation, a private charitable
trust.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
TERM TO
EXPIRE
AT
ANNUAL YEAR
NAME, PRINCIPAL OCCUPATION MEETING SERVICE
AND OTHER DIRECTORSHIPS AGE IN COMMENCED
-------------------------- ---- -------- ----------
<S> <C> <C> <C>
A. STEVEN CROWN 43 1998 1992
General Partner, Henry Crown and Company, a
holding company which includes diversified
manufacturing operations, marine operations
and real estate ventures.
ERIC M. HILTON 61 1998 1989
Senior Vice President-Real Estate
Development, International, Hilton Hotels
Corporation, until May 1992, President,
Conrad International Hotels Corporation from
January 1990 until May 1993, Executive Vice
President-International Operations, Hilton
Hotels Corporation from May 1992 until May
1993 and, since May 1993, Vice Chairman of
the Board, Hilton Hotels Corporation.
DONNA F. TUTTLE 47 1998 1992
U.S. Undersecretary of Commerce for Travel
and Tourism until 1988 and U.S. Deputy
Secretary of Commerce from 1988-1989 and,
thereafter, Chairman and Chief Executive
Officer, Ayer Tuttle, the western division of
NW Ayer Incorporated, an international
advertising firm, until February 1992 and,
since 1989, President,
Donna F. Tuttle, Inc., a travel and tourism
consulting and public relations firm, and,
since 1992, President, Korn Tuttle Capital
Group,
a financial consulting firm, and a director
of Duff & Phelps, Inc., a financial services
firm.
PRESENT DIRECTORS:
GREGORY R. DILLON 72 1996 1977
Executive Vice President-Corporate
Properties, Hilton Hotels Corporation, until
May 1989, Executive Vice
President-International, Hilton Hotels
Corporation, and President, Conrad
International Hotels Corporation, until
January 1990, Vice Chairman of the Board,
Hilton Hotels Corporation and Vice Chairman
of the Board, Conrad International Hotels
Corporation, until September 1993 and,
thereafter, Vice Chairman Emeritus of Hilton
Hotels Corporation.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
TERM TO
EXPIRE
AT
ANNUAL YEAR
NAME, PRINCIPAL OCCUPATION MEETING SERVICE
AND OTHER DIRECTORSHIPS AGE IN COMMENCED
-------------------------- ---- -------- ----------
<S> <C> <C> <C>
BARRON HILTON 67 1997 1965
Chairman of the Board, President and Chief
Executive Officer, Hilton Hotels Corporation,
until February 1993 and, thereafter, Chairman
of the Board and Chief Executive Officer,
Hilton Hotels Corporation.
DIETER H. HUCKESTEIN 51 1996 1995
Senior Vice President-Hawaiian Region, Hilton
Hotels Corporation, until May 1991, Senior
Vice President-Hawaii/California/Arizona
Region, Hilton Hotels Corporation, until May
1994 and, thereafter, Executive Vice
President, Hilton Hotels Corporation and
President-Hotel Operations.
ROBERT L. JOHNSON 48 1997 1994
President and Chief Executive Officer of
Black Entertainment Television, Inc., a cable
programming service, since October 1979 and
Chairman, President and Chief Executive
Officer of BET Holdings, Inc., a diversified
media holding company, since August 1991, and
Chairman and Chief Executive Officer of
District Cablevision, cable operator in the
District of Columbia since January 1980.
DONALD R. KNAB 72 1996 1989
Chairman and Chief Executive Officer, BPT
Properties, L.P., a commercial real estate
development company, until January 1992 and,
until December 1992, Senior Consultant
thereto and, since January 1988, President,
Donald R. Knab Associates, Inc., an
investment advisory firm, and, since October
1994, Vice Chairman, Deansbank Investments,
Inc.-property investments.
BENJAMIN V. LAMBERT 56 1996 1976
Chairman and Chief Executive Officer, Eastdil
Realty, Inc., real estate investment bankers.
SAM D. YOUNG, JR. 65 1997 1975
Chairman, Trans West Enterprises, Inc., an
investment company, and director, Texas
Commerce Bank-El Paso.
</TABLE>
6
<PAGE> 9
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES THEREOF
Among the committees created by the Board of Directors are an Audit
Committee, a Personnel and Compensation Committee and a Nominating Committee.
Presently, the members of the Audit Committee are A. Steven Crown, Robert L.
Johnson, Donald R. Knab (Chair), Benjamin V. Lambert, Donna F. Tuttle and Sam D.
Young, Jr.; the members of the Personnel and Compensation Committee are A.
Steven Crown, Robert L. Johnson, Donald R. Knab, Benjamin V. Lambert (Chair),
Donna F. Tuttle and Sam D. Young, Jr.; and the members of the Nominating
Committee are Raymond C. Avansino, Jr., Barron Hilton, Donald R. Knab, Benjamin
V. Lambert and Donna F. Tuttle (Chair).
The functions of the Audit Committee include reviewing the independence of
the independent auditors, recommending to the Board of Directors the engagement
and discharge of independent auditors, reviewing with the independent auditors
the plan and results of auditing engagements, approving or ratifying each
professional service provided by independent auditors which is estimated by
management to cost more than 10% of the previous year's audit fee, considering
the range of audit and nonaudit fees, reviewing the scope and results of the
Company's procedures for internal auditing and the adequacy of internal
accounting controls and directing and supervising special investigations. The
Personnel and Compensation Committee reviews and establishes the general
employment and compensation practices and policies of the Company and approves
procedures for the administration thereof, including such matters as the total
salary and fringe benefit programs. However, the Stock Option Committees, the
memberships of which are identical to that of the Personnel and Compensation
Committee, administer the Company's 1984 and 1990 Stock Option and Stock
Appreciation Rights Plans and the Committees of the 1984 Plan and the 1990 Plan
recommend to the Board of Directors the granting of options and stock
appreciation rights under the respective Plans (see "Executive Compensation" on
page 9). The functions of the Nominating Committee include recommending nominees
to the Board of Directors to fill vacancies on the Board, reviewing on a
continuing basis, and at least once a year, the structure of the Board to assure
its continuity and to assure that the proper skills and experience are
represented on the Board, and reviewing any potential conflicts of Board members
individually whenever a Board member is being considered for election to the
Board. See "Election of Directors" for the procedures to be followed by
stockholders in submitting recommendations to the Nominating Committee for
nominees to the Board of Directors.
The Board of Directors, Audit Committee, Personnel and Compensation
Committee and Nominating Committee held a total of nine, three, five and two
meetings during 1994, respectively. Each director attended more than 75% of the
aggregate number of meetings of the Board and the Committees on which each
director served.
7
<PAGE> 10
Each director who is not also an officer was paid an annual retainer of
$25,000. In addition, each director received $900 for each meeting of the Board
of Directors attended and $750 (except the Chair of a Committee received $1,000)
for each meeting of a Committee attended. Such directors also receive, with
certain exceptions, complimentary rooms and a 25% discount on food and beverage
when traveling on non-business travel to Company owned or managed properties.
The Company also maintains an unfunded Directors' Retirement Benefit Plan,
which provides retirement benefits to nonemployee directors of the Company who
retire at or after age 65 with ten years of service as a director. The annual
retirement benefit is equal to 100% of the director's highest average annual
fees during any period of 36 consecutive months, and is payable for ten years or
until the retired director's death, whichever occurs first. The plan also
provides a surviving spouse's benefit equal to one-half of the benefit otherwise
payable to the director.
CERTAIN RELATIONSHIPS AND INTERESTS IN CERTAIN TRANSACTIONS
Except as disclosed in the column entitled "Name, Principal Occupation and
Other Directorships" in the table above, none of the nominees' or directors'
principal occupations have been as an employee of the Company or its
subsidiaries and affiliates. Barron Hilton and Eric M. Hilton are brothers.
Except for such family relationship, none of the nominees and directors are
related to executive officers of the Company.
The Company or its subsidiaries has had since January 1, 1994, or presently
contemplates having, the transactions described below (in addition to certain
other transactions described elsewhere herein), with nominees and directors or
with firms, corporations or entities in which such nominees and directors are
affiliated. The Company uses, in the ordinary course of business, products and
services of organizations in which Barron Hilton has an interest. The amounts
involved have in no case been material in relation to the business of the
Company, of any such organizations, or Mr. Hilton.
In addition, Barron Hilton has agreed to invest, and has invested,
$2,277,900, in the Earthwinds Hilton Project, pursuant to a written agreement
with the Company. This agreement also provides that the Company and Mr. Hilton
will share certain revenues generated by the Earthwinds Hilton Project. No such
revenues were shared during 1994. The Earthwinds Hilton Project is a manned
helium balloon system designed for a non-stop circumnavigation of the earth with
attendant publicity benefitting the various sponsors, including the Company.
Further, the Company's casinos in Las Vegas and Reno, Nevada, regularly
send and pay for their guests to visit certain conference facilities in
Yerington, Nevada, which are owned by Barron Hilton. In this regard, in 1994,
Mr. Hilton received payments approximating $100,000.
8
<PAGE> 11
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1994, 1993 and 1992 of the Named Officers at December 31,
1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION STOCK
-------------------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS(1) (SHARES)(2) COMPENSATION(3)
- ---------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Barron Hilton............................ 1994 $650,000 $350,000 -- $ 3,000
Chairman and Chief Executive Officer 1993 665,128 340,000 -- 4,717
1992 700,000 400,000 -- 4,577
Raymond C. Avansino, Jr.................. 1994 567,477 375,000 90,000 3,000
President and Chief Operating Officer 1993 427,669 350,000 50,000 --
1992 -- -- -- --
Eric M. Hilton........................... 1994 268,750 175,000 12,000 3,000
Vice Chairman 1993 250,250 175,000 -- 4,717
1992 234,000 125,000 -- 4,577
Dieter H. Huckestein(4).................. 1994 278,167 165,000 25,000 3,000
Executive Vice President, Hilton Hotels 1993 179,583 86,000 -- 4,717
Corporation, and President-Hotel
Operations 1992 174,417 80,000 -- 4,577
William C. Lebo, Jr. .................... 1994 273,583 115,000 4,500 --
Senior Vice President and 1993 268,333 100,000 -- --
General Counsel 1992 256,500 100,000 -- --
</TABLE>
- ---------------
(1) The Personnel and Compensation Committee approved the payment of such
bonuses. Of such bonus amounts, $325,000, $275,000, $121,500, $112,438 and
$95,900 were accrued by the Company in 1994 for Messrs. Barron Hilton,
Avansino, Eric Hilton, Huckestein and Lebo, respectively, pursuant to the
Company's Incentive Compensation Plan; the remainder of such bonuses was
paid pursuant to the Personnel and Compensation Committee's discretionary
authority (see the Personnel and Compensation Committee Report on Executive
Compensation on page 11).
(2) Although the Company's 1984 and 1990 Stock Option and Stock Appreciation
Rights Plans permit grants of stock appreciation rights (SARs), no grants of
SARs have been made.
(3) Represents amounts contributed or accrued for fiscal 1994, 1993 and 1992 for
the Named Officers under the Company's Investment Plan, which provides
benefits to eligible employees, including the Named Officers. Each dollar
contributed by an eligible employee through payroll deductions, up to 4% of
such employee's annual earnings, is matched by a Company contribution,
subject to certain government limitations.
(4) Mr. Huckestein was elected to this office on May 12, 1994.
9
<PAGE> 12
OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information on option grants in
fiscal 1994 to the Named Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION FOR
GRANTED OPTION TERM(2)
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION -----------------------
GRANTED(1) IN FISCAL YEAR PRICE DATE 5% 10%
---------- --------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Barron Hilton................. -- -- -- -- -- --
Raymond C. Avansino, Jr....... 90,000 11.9% $64.81 1/20/04 $3,668,420 $9,296,498
Eric M. Hilton................ 12,000 1.6 69.63 3/18/04 525,441 1,331,572
Dieter H. Huckestein.......... 6,500 .9 69.63 3/18/04 284,614 721,268
18,500 2.5 55.44 5/02/04 644,990 1,634,532
William C. Lebo, Jr........... 4,500 .6 69.63 3/18/04 197,040 499,339
</TABLE>
- ---------------
(1) The options listed were granted pursuant to the 1990 Stock Option and Stock
Appreciation Rights Plan. Option exercise prices are at fair market value
when granted; the options have a ten year term and generally vest over 48
months.
(2) Potential realizable values are based upon assumed annual rates of return
specified by the Commission.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to the exercised options and the
unexercised options to purchase the Company's Common Stock granted under the
Company's 1984 and 1990 Stock Option and Stock Appreciation Rights Plans to the
Named Officers and held by them at December 31, 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ON EXERCISE REALIZED DECEMBER 31, 1994 DECEMBER 30, 1994(1)
--------------- -------- ---------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Barron Hilton............ -- -- -- -- -- --
Raymond C. Avansino,
Jr..................... -- -- 12,500 127,500 $246,094 $957,656
Eric M. Hilton........... -- -- 22,814 12,000 590,250 -0-
Dieter H. Huckestein..... -- -- 13,750 25,000 326,719 218,531
William C. Lebo, Jr...... 3,200 $ 87,263 13,500 4,500 293,688 -0-
</TABLE>
- ---------------
(1) Based on the fair market value of $67.25, which represents the mean between
the highest and lowest prices at which the Company's Common Stock was traded
on that date on the New York Stock Exchange.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the 1934 Act,
that might incorporate future filings, including this Proxy Statement, in whole
or in part, the following Personnel and Compensation Committee Report on
Executive
10
<PAGE> 13
Compensation and the Stockholder Return Performance Graph on page 14 shall not
be incorporated by reference into any such filings.
PERSONNEL AND COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION PROGRAMS
The Company's Personnel and Compensation Committee (the "Committee") and
the Stock Option Committee establish and monitor policies and procedures and
approve actions associated with the compensation and stock option programs
affecting the Named Officers and other senior officers of the Company (the
"Executive Group").
The Company's executive compensation program is designed to closely link
the compensation received by participants to the achievement of specific
earnings goals for the Company and its business units, appreciation in the price
of the Company's Common Stock, and in certain instances, the achievement of
individual goals. Through this direct link between pay and Company and
individual performance, it is the intent of the program to focus participants on
factors that drive the Company's financial success and the creation of
incremental stockholder value.
The key components of the Company's executive compensation program include
annual compensation consisting of base salaries and annual performance bonuses,
and long-term incentive compensation consisting exclusively of stock options. It
is the Committee's policy to provide the Executive Group with a target total
compensation package (i.e., the sum of base salary, target annual performance
bonus, stock option grants and other benefits) approximately equal to the median
(50th percentile) of a "competitive market" consisting of a combination of
large, publicly-traded hotel/gaming companies (publicly-held companies that
primarily operate land-based casinos) and a randomly selected sample of Fortune
500 Service firms comparable in size to the Company. The same hotel/gaming
companies used to competitively assess the Company's executive compensation
levels are the companies used in the total Stockholder Return Performance Graph.
Actual total compensation paid to the Executive Group may exceed or fall
below target total compensation both annually and over time based on the
Company's financial performance and the performance of the Company's Common
Stock. Also, the Committee's policy regarding executive compensation may vary
slightly by individual executive based on the executive's experience in his or
her role, the executive's length of service with the Company and the Committee's
assessment of the executive's individual performance over time. The Committee
believes that providing a performance-sensitive target total compensation
opportunity approximately equal to the median of the "competitive market" is
required to motivate and retain quality management talent.
The Committee currently does not use competitive financial and stockholder
value performance comparisons to determine the compensation of the Company's
Executive Group, due primarily to the lack of other publicly-traded firms with a
mix of business (i.e., hotels and gaming) similar to the Company. Also, it is
the Committee's opinion that because the Company's financial and stockholder
value performance is influenced to a meaningful degree by a unique set of
external economic factors (i.e., gaming regulations and global economic
conditions which influence travel trends), comparing the Company's financial or
stock price performance across different industries is problematic.
In establishing target levels of the Executive Group compensation, the
Committee periodically reviews data on market compensation practices prepared by
independent, outside compensation consultants. Based on a 1994 analysis of the
"competitive market," it is the Committee's belief that the actual 1994 total
11
<PAGE> 14
compensation provided to the Company's Executive Group is consistent with the
Committee's policy of providing total compensation at approximately the median
of the "competitive market" as described above.
BASE SALARY
During fiscal 1994, the Named Officers, excluding Messrs. Barron Hilton and
Dieter Huckestein, received salary adjustments of approximately 3%, reflecting
the approximate annual increase in the Consumer Price Index. As discussed more
thoroughly below, Mr. Hilton's salary was not adjusted. A salary adjustment for
Mr. Huckestein also reflects his promotion to Executive Vice President during
the year and his competitive pay positioning relative to the "competitive
market." Base salaries are determined based on an assessment of the "competitive
market" by a nationally-recognized compensation consulting firm.
ANNUAL BONUS PLAN
Each participant in the Company's executive annual bonus plan is assigned a
formula-based award opportunity expressed as a percentage of the participant's
base salary. The maximum formula-based award opportunity for the participants in
the program ranges from 20% to 50% of base salary. A target formula-based award
opportunity is not established.
The amount of the formula-based award earned under the program depends upon
the Company's level of achievement relative to an objective established by the
Committee for the Company's earnings per share (EPS). In addition to
formula-based awards, the Company may pay discretionary awards based upon the
Committee's judgment regarding the Company's EPS performance compared to the
formula objective; the Company's and business unit's earnings before interest
and tax (EBIT) performance, market share growth and cost containment; the
Company's stock price performance; and individual performance relevant to each
individual's key area of responsibility.
During fiscal 1994, the Company met the EPS objective established by the
Committee for the formula-based award under the annual bonus plan triggering a
maximum formula-based award payout. In addition, the Committee paid
discretionary bonuses to recognize the Company's above-average 1994 EPS
performance relative to 1993 EPS performance, and to recognize the superior
individual contributions made during the year.
Total bonus awards, including the formula-based and discretionary
components, to the Named Officers for performance during 1994 primarily reflect
the level of EPS achievement.
LONG-TERM INCENTIVE PROGRAMS
The Company's long-term incentive program consists exclusively of periodic
grants of stock options at the discretion of the Stock Option Committee, with an
exercise price equal to the fair market value of the Company's Common Stock on
the date of grant. At the annual meeting, stockholders will be requested to
approve an amendment to limit to 150,000 the maximum annual grant of stock
option shares to any employee during any one fiscal year under the 1990 Stock
Option and Stock Appreciation Rights Plan. The approval of this amendment
assures the continued deductibility to the Company of compensation from the
exercise of stock options to the Named Officers.
To encourage retention, the ability to exercise options granted under the
program is subject to vesting restrictions. Decisions made by the Committee
regarding the timing and size of option grants take into consideration Company
and individual performance, "competitive market" practices and the size and term
of option grants made in prior years. The Committee does not consider current
option holdings when granting options.
12
<PAGE> 15
During 1994, option grants to the Named Officers and to Executive Officers
totalled 180,500 shares. The size of the 1994 grants was based on data provided
by a nationally-recognized compensation consulting firm and is consistent with
typical long-term incentive grant practices within the hotel/gaming industry and
among comparable-size Fortune 500 Service companies. In addition, the size of
the 1994 grant to Mr. Huckestein recognizes his promotion to Executive Vice
President during the year.
CHIEF EXECUTIVE OFFICER COMPENSATION
In making decisions concerning the compensation of the Company's Chief
Executive Officer (Barron Hilton), the Committee takes into consideration the
financial and strategic performance of the Company as well as data provided by
independent, outside consultants concerning the total compensation package
provided to Chief Executive Officers among large, publicly-traded hotel/gaming
companies and comparably-sized Fortune 500 Service firms.
Effective February 1994, after considering Mr. Hilton's request not to
adjust his salary, the Committee elected to make no adjustment to his salary.
At its January 1995 meeting, the Committee approved a bonus of $350,000 for
Mr. Hilton for fiscal 1994 performance. Of this amount, $325,000 is based upon a
formula which generates a bonus for the Chief Executive Officer equal to 50% of
base salary if the Company meets or exceeds its EPS objective for the year,
which it did. The remaining $25,000 represents a discretionary award made by the
Committee in recognition of the important strategic contributions made by Mr.
Hilton during 1994 in other areas. Such contributions include directing the
Company's gaming expansion strategy, e.g., the Sky Villas at the Las Vegas
Hilton and river casinos, and leading the Company's international expansion
effort into the Pacific Rim, e.g., Conrad Jakarta (opening 1998) and Conrad
Bangkok (opening 1999).
Like the Company's other executives, Mr. Hilton is eligible to receive
stock options under the Company's stock option program. However, up to this
time, Mr. Hilton has advised the Committee that he does not desire to be granted
any options.
COMMITTEE POLICY REGARDING COMPLIANCE WITH SECTION 162(M) OF THE INTERNAL
REVENUE CODE
The 1993 Omnibus Budget Reconciliation Act ("OBRA") became law in August
1993. Under the law, Federal income tax deductions of publicly-traded companies
may be limited to the extent total compensation (including base salary, annual
bonus, restricted stock awards, stock option exercises, and non-qualified
benefits) for certain executive officers exceeds $1,000,000 in any one year.
Under OBRA, the deduction limit does not apply to payments which qualify as
"performance-based." To qualify as "performance-based," compensation payments
must be made from a plan that is administered by a committee of outside
directors and be based on achieving objective performance goals. In addition,
the material terms of the plan must be disclosed to and approved by
stockholders, and the committee must certify that the performance goals were
achieved before payments can be awarded.
The Committee intends to design the Company's compensation programs to
conform with the OBRA legislation and related regulations so that the total
compensation paid to any employee will not exceed $1,000,000 in any one year,
except for compensation payments in excess of $1,000,000 which qualify as
"performance-based" or which are exempt for other reasons. However, the Company
may pay compensation which is not deductible in limited circumstances if sound
management of the Company so requires.
In order to qualify the Company's 1990 Stock Option and Stock Appreciation
Rights Plan as "performance-based," the Company is proposing an amendment in
this Proxy Statement which establishes 150,000 as the maximum annual grant of
option shares to any employee during any one fiscal year under the Plan (see
"Reapproval of the 1990 Stock Option and Stock Appreciation Rights Plan, with an
Amendment and Approval of Grants" below).
13
<PAGE> 16
The foregoing report has been approved by all of the members of the
Committee:
Benjamin V. Lambert, Chair
A. Steven Crown
Robert L. Johnson
Donald R. Knab
Donna F. Tuttle
Sam D. Young, Jr.
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's Common Stock against
the cumulative total return of the S&P Composite-500 Stock Index and a
hotel/gaming peer group for the five fiscal years ending December 31, 1994.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG HILTON HOTELS CORPORATION, S&P 500 AND HOTEL/GAMING PEER GROUP
<TABLE>
<CAPTION>
PEER GROUP
MEASUREMENT PERIOD HILTON HOTELS (WEIGHTED
(FISCAL YEAR COVERED) CORPORATION S&P 500 AVERAGE)
--------------------- ------------- ------- ----------
<S> <C> <C> <C>
1989 100 100 100
1990 46 97 81
1991 52 126 109
1992 57 136 150
1993 82 150 219
1994 93 152 211
</TABLE>
Assumes $100 invested on December 31, 1989 in the Common Stock of Hilton
Hotels Corporation, the S&P 500 Index, and Peer Companies (Weighted by
Market Capitalization). Total return assumes reinvestment of dividends.
(1) The Company-constructed hotel/gaming peer group is weighted annually by
market capitalization and consists of major publicly-traded companies, five
in the gaming industry and three in the hotel industry. The composition of
the blended, Company-constructed hotel/gaming peer group produces a
composite
14
<PAGE> 17
representative of the major publicly-traded competitors of the Company.
However, it must be recognized that the number of publicly-traded companies
with significant hotel operations is extremely limited. Hence, the
performance of the Company-constructed hotel/gaming peer group is driven
heavily by gaming companies which, as a group, outperformed the hotel
industry by a significant margin over the period represented by the graph.
The hotel/gaming peer group includes Bally Manufacturing Corporation,
Caesars World, Circus Circus Enterprises, Inc., Host Marriott Corporation,
ITT Corporation, Marriott International, Inc., Mirage Resorts, Inc. and
Promus Companies, Inc.
(2) The run-up of the Company's stock in 1989, its subsequent decline in 1990
and consequent cumulative total return, are due largely to the anticipated
sale of the Company which did not materialize.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Lambert, a director of the Company and Chairman of the Personnel and
Compensation Committee of the Board of Directors of the Company, is Chairman and
Chief Executive Officer of Eastdil Realty, Inc. ("Eastdil"). The Company, its
subsidiaries and affiliates have, from time to time, entered into agreements
with Eastdil, providing for the payment of a specified fee, pursuant to which
Eastdil has, among other things, assisted in negotiations for the acquisition,
disposition, financing and refinancing of hotel properties. In 1994, no fees
were paid to Eastdil.
REAPPROVAL OF THE 1990 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN, WITH AN
AMENDMENT AND APPROVAL OF GRANTS
GENERAL
At the meeting, the stockholders will be requested to reapprove the
Company's 1990 Stock Option and Stock Appreciation Rights Plan, with an
amendment (the "Plan"). While the Plan, as originally approved and amended by
stockholders, provides that the aggregate number of shares for which an option
may be granted to any employee during any one fiscal year shall not exceed ten
percent of the total number of shares permitted to be issued under the Plan
(effectively 150,000), there is no specific numerical limitation. The change to
the plan is to limit to 150,000 the maximum number of shares for which an option
may be granted to any employee during any one fiscal year.
The 1993 Omnibus Budget Reconciliation Act ("OBRA") became law in August
1993. Under the law, publicly-held companies may be limited as to Federal income
tax deductions to the extent total remuneration (including stock option
exercises) for certain executive officers exceeds $1,000,000 in any one year.
However, OBRA provides an exception for "performance-based" remuneration,
including stock options. The law requires that certain actions must be taken by
a compensation committee of two or more outside directors and that the material
terms of such remuneration must be approved by a majority vote of the
stockholders in order for stock options to qualify as "performance-based"
remuneration.
Although the Plan was previously approved by the stockholders in May 1991,
and an amendment thereto was approved by stockholders in May 1994 to provide for
a time period limitation for individual stock option grants, the Plan must now
set forth a numerical limitation for the maximum number of options that may be
awarded to any employee in any one fiscal year in order to comply with the new
OBRA requirements. At its regular meeting on January 19, 1995, the Board
authorized an amendment to the Plan to limit to 150,000 the maximum number of
shares for which an option may be granted to any employee during any one fiscal
year, subject to stockholders' approval at the annual meeting. The Plan, as
amended, has been approved by the Stock Option Committee (comprised of all
outside directors) (the "Committee") and by the Board of Directors. In addition,
the Committee has recommended that the issuance of all options which may be
15
<PAGE> 18
affected by the retroactive restrictions of OBRA be approved by the stockholders
to avoid the possible loss of deductions by the Company for Federal income tax
purposes.
DESCRIPTION OF THE PLAN
The Plan was approved by stockholders in May 1991 and an amendment thereto
was approved by stockholders in May 1994. The Plan, as recommended to be
amended, is attached as Exhibit A.
The Plan has reserved 1,500,000 shares of the Company's Common Stock for
issuance pursuant to stock options to be granted under the Plan and
approximately 27,000 shares presently remain available for future grants.
Purpose. The purpose of the Plan is to provide additional incentives to
officers and key employees through investment in the Company's Common Stock.
Under the Plan, either incentive options or nonqualified options (with or
without stock appreciation rights in tandem therewith) are available for grant.
No general stock appreciation rights are presently outstanding, and the Board of
Directors has no present intention of issuing such rights.
Administration. The Plan is administered by the Committee and the Committee
makes recommendations to the Board of Directors as to the granting of stock
options to key employees of the Company. Subject to orders or resolutions
consistent with the provisions of the Plan issued or adopted from time to time
by the Board of Directors, the Committee has the power to administer, construe
and interpret the Plan and to make rules to implement the provisions thereof.
Eligibility. Officers and key employees of the Company and its subsidiaries
(whether or not directors), are eligible to receive options under the Plan. The
Board of Directors grants to such officers and employees such number of options
as shall be recommended by the Committee. Directors who are not salaried
officers or key employees are ineligible to receive options under the Plan.
Shares Subject to the Plan. A maximum of 1,500,000 shares of Common Stock
(subject to adjustment) are subject to the Plan. The aggregate number of shares
for which an option or stock appreciation right may be granted to any employee
during any one fiscal year shall not exceed 150,000 shares. In the event of any
merger, consolidation, reorganization, recapitalization, split-up, stock right
distribution, stock dividend, a Control Purchase, Board Change (see "Changes in
Common Stock; Changes in Control" below) or other change in corporate structure
or capitalization affecting the Company's Common Stock, the number, exercise
price and kind of shares that are subject to outstanding options will be
adjusted in such manner and to such extent, if any, as the Board of Directors in
its absolute discretion may deem appropriate in the circumstances. If an option
expires or terminates for any reason during the term of the Plan and prior to
the exercise thereof in full, the shares of Common Stock subject to, but not
delivered under such option, shall be available for options thereafter granted
under the Plan.
Purchase Price. The purchase price of the stock subject to an option shall
be not less than 100% of the fair market value of such stock at the time the
option is granted. Fair market value shall be deemed to be the mean between the
highest and lowest prices at which the Common Stock is traded on the New York
Stock Exchange. Shares purchased upon exercise of an option are to be paid for
in full (and any required tax withholding payment) (i) in cash or cash
equivalent payment (or by delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price) or (ii)
with previously acquired shares of Common Stock or a combination of cash or cash
equivalent and Common Stock having an aggregate fair market value equal to the
option exercise price or (iii) by any other method acceptable to the Company's
Board of Directors.
16
<PAGE> 19
Term and Exercise of Options. All options expire ten years after the grant
thereof, except that such term may be reduced with respect to any option in the
event of termination of employment, retirement or death of an optionee. All
options granted under the Plan are exercisable by the holders thereof in such
installments as the Committee shall determine; provided, however, that no option
may be exercised prior to six months from the date of grant thereof, regardless
of any other provision of the Plan. Neither stock options nor stock appreciation
rights are transferable otherwise than by will or by the laws of descent and
distribution. During the lifetime of an optionee, a stock option and/or stock
appreciation right is exercisable only by the optionee.
General Stock Appreciation Rights. General stock appreciation rights
("SARs") may be granted, in the sole discretion of the Committee, in connection
with options granted under the Plan. Each SAR relates to the same shares of
Common Stock covered by the companion option and is subject to the same terms
and conditions contained in the option. Each SAR entitles an optionee to
surrender to the Company the unexercised related option, or any portion thereof,
and to receive in exchange cash or shares of the Company's Common Stock, or a
combination thereof with a value equal to the fair market value on the exercise
date of the Company's Common Stock over the option exercise price for the number
of shares covered by the option which is surrendered. SARs may be exercised from
time to time, commencing on the third business day following the release to
stockholders of the Company's annual and quarterly reports and ending on the
twelfth business day thereafter. Notwithstanding any other provision of the
Plan, no SAR may be exercised within a period of six months after the date of
grant of the SAR.
Limited Stock Appreciation Rights. The Plan provides for, and the Board of
Directors has granted, limited stock appreciation rights ("Limited Rights"). A
Limited Right may be exercised only during the period (a) beginning on the first
day following either (i) the date of an Approved Transaction, (ii) the date of a
Control Purchase, or (iii) the date of a Board Change, and (b) ending on the
thirtieth day following such date (see "Changes in Common Stock; Changes in
Control"). Each Limited Right may be exercised only to the extent an option is
exercisable (including as exercisable by virtue of any event of acceleration),
and in no event after the termination of the related option. Notwithstanding any
other provision of the Plan, no Limited Right may be exercised within a period
of six months after the date of grant thereof.
Changes in Common Stock; Changes in Control.
(a) In the event of any recapitalization, merger, reorganization,
consolidation, split-up, stock dividend or stock right distribution ("Common
Stock Change"), the number, exercise price and kind of shares, etc., that are
subject to outstanding options will be adjusted in a fair and equitable manner
by the Board of Directors of the Company. In the event that provision is not
made, in connection with any such Common Stock Change, for the continuation of
the Plan and the assumption of the options theretofore granted (or the
substitution of substantially identical options of the surviving corporation or
successor employer or a parent thereof), then each holder of an option shall be
entitled, prior to the effective date of any such transaction, to exercise the
option for the full number of shares covered thereby which the holder would
otherwise have been entitled to acquire during the remaining term of such
option.
(b) The Plan provides that each outstanding option granted thereunder shall
become exercisable in full for the aggregate number of shares covered thereby,
in the event:
(i) of (a) any consolidation or merger of the Company in which the
Company is not the surviving corporation or pursuant to which shares of
Common Stock would be converted into cash, securities or other property,
other than a merger or consolidation of the Company in which the holders of
Common Stock immediately prior to the merger or consolidation have the same
proportionate ownership of common stock of the surviving or newly-formed
corporation immediately after the merger or consolidation and provision is
made in connection with any such merger or consolidation for the
continuation of the
17
<PAGE> 20
Plan and assumption of options theretofore granted, or (b) any sale, lease,
exchange, or other transfer of all, or substantially all, of the assets of
the Company, or (c) the adoption of any plan or proposal for the
liquidation or dissolution of the Company ("Approved Transaction"); or
(ii) (a) any person, corporation or other entity shall purchase any
Common Stock of the Company for cash, securities or any other consideration
pursuant to a tender offer or exchange offer, or (b) any person,
corporation or other entity shall after the date options are first issued
under the Plan become the "beneficial owner" (as such term is defined in
Rule 13d-3 under the 1934 Act, as amended), directly or indirectly, of
securities of the Company representing in either case 20% or more of the
combined voting power of the then outstanding securities of the Company
ordinarily having the right to vote in the election of directors ("Control
Purchase"); or
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the entire Board shall cease for
any reason to constitute a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each new director
was approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of the period ("Board
Change").
Rights as a Stockholder. No person has any rights of a stockholder as to
shares under a stock option and/or covered by a stock appreciation right until
such option is exercised.
Amendment and Discontinuance. The Board of Directors may alter, suspend or
discontinue the Plan, but it may not, without the approval of a majority of the
holders of Common Stock, make any alteration or amendment to the Plan which
operates to (a) abolish the Committee, change the qualifications of its members,
or withdraw the administration of the Plan from the supervision of the
Committee; (b) make any material change in the class of eligible employees; (c)
increase the maximum number of shares reserved for purposes of the Plan; (d)
extend the period of the Plan or the maximum option and stock appreciation right
periods provided under the Plan; (e) decrease the minimum option price provided
under the Plan; (f) change the definition of fair market value specified in the
Plan; or (g) materially increase the benefits accruing to employees
participating in the Plan.
Termination. The term during which options and stock appreciation rights
may be granted under the Plan expires on July 11, 2000, unless sooner terminated
by the Board of Directors. Such termination would have no effect on options or
stock appreciation rights then in effect.
TAX CONSEQUENCES
The Federal income tax consequences of an employee's participation in the
Plan are complex and subject to change. The following discussion is only a
summary of the general rules applicable to remuneration-related options.
Employees should consult their own tax advisors since a taxpayer's particular
situation may be such that some variation of the rules described below will
apply.
Incentive Stock Options. If an option granted under the Plan is treated as
an incentive stock option, the optionee will not recognize any income upon
either the grant or the exercise of the option and the Company will not be
allowed a deduction for Federal income tax purposes. Upon a sale of the shares,
the tax treatment to the optionee and the Company will depend primarily upon
whether the optionee has met certain holding period requirements at the time he
or she sells the shares. In addition, as discussed below, the exercise of an
incentive stock option may subject the optionee to alternative minimum tax
liability.
If an optionee exercises an incentive stock option and does not dispose of
the shares received within two years after the date of the grant of such option
or within one year after transfer of the shares to the optionee,
18
<PAGE> 21
any gain realized upon disposition will be characterized as long-term capital
gain and, in such case, the Company will not be entitled to a Federal income tax
deduction.
If the optionee disposes of the shares either within two years after the
date the option is granted or within one year after the transfer of the shares
to the optionee, such disposition will be treated as a disqualifying disposition
and an amount equal to the lesser of (i) the fair market value of the shares on
the date of exercise minus the purchase price, or (ii) the amount realized on
the disposition minus the purchase price, will be taxed as ordinary income to
the optionee in the taxable year in which the disposition occurs. The excess, if
any, of the amount realized upon disposition over the fair market value at the
time of the exercise of the option will be treated as long-term capital gain if
the shares have been held for more than one year following the exercise of the
option. In the event of a disqualifying disposition, the Company may withhold
income taxes from the optionee's compensation with respect to the ordinary
income realized by the optionee as a result of the disqualifying disposition.
The exercise of an incentive stock option may subject an optionee to
alternative minimum tax liability because the excess of the fair market value of
the shares at the time an incentive stock option is exercised over the purchase
price of the shares is included in income for purposes of the alternative
minimum tax. Consequently, an optionee may be obligated to pay alternative
minimum tax in the year he or she exercises an incentive stock option.
In general, there will be no Federal income tax consequences to the Company
upon the grant, exercise or termination of an incentive stock option. However,
in the event an optionee sells or disposes of stock received upon the exercise
of an incentive stock option in a disqualifying disposition, the Company will be
entitled to a deduction for Federal income tax purposes in an amount equal to
the ordinary income, if any, recognized by the optionee upon disposition of the
shares.
Nonqualified Stock Options. Nonqualified stock options granted under the
Plan do not qualify as "incentive stock options" and will not qualify for any
special tax benefits to the optionee. An optionee generally will not recognize
any taxable income at the time he or she is granted a nonqualified option.
However, upon exercise, the optionee will recognize ordinary income for Federal
income tax purposes measured by the excess of the then fair market value of the
shares over the option price. The income realized by the optionee will be
subject to income tax withholding.
The optionee's basis for determination of gain or loss upon the subsequent
disposition of shares acquired upon the exercise of a nonqualified stock option
will be the amount paid for such shares plus any ordinary income recognized as a
result of the exercise of such option. Upon disposition of any shares acquired
pursuant to the exercise of a nonqualified stock option, the difference between
the sale price and the optionee's basis in the shares will be treated as a
capital gain or loss and will be characterized as long-term capital gain or loss
if the shares have been held for more than one year at the date of their
disposition.
In general, there will be no Federal income tax consequences to the Company
upon the grant or termination of a nonqualified stock option or a sale or
disposition of the shares acquired upon the exercise of a nonqualified stock
option. However, upon the exercise of a nonqualified stock option, the Company
will be entitled to a deduction for Federal income tax purposes equal to the
amount of ordinary income that an optionee is required to recognize as a result
of the exercise.
APPROVAL OF STOCK OPTION GRANTS
The Stock Option Committee is requesting that the stockholders approve all
stock options granted after May 12, 1994 and prior to the Annual Meeting which
may be subject to OBRA restrictions. These restrictions potentially limit the
deductions related to stock option exercises by Named Officers in future
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<PAGE> 22
taxable years. Therefore, the Committee is requesting that the stockholders
ratify grants aggregating 241,700 to all employees during such period (the Named
Officers received no grants during such period). All options were granted in
accordance with the terms of the Plan, as amended, including the term which
establishes the individual 150,000 share maximum limitation in any one fiscal
year.
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of holders of a majority of the Company's outstanding
shares of Common Stock is required to approve the Plan, as amended, and the
option grants discussed above. If the Plan, as amended, is not approved by the
stockholders, the Plan, as previously approved, will continue in effect. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
RETIREMENT PLANS
Set forth below is a table with respect to the estimated annual amounts
payable to the Named Officers upon retirement at age 65 from the Company's
Retirement Plan and the Company's two supplementary plans associated with the
Retirement Plan, the Benefit Replacement Plan and the Supplemental Executive
Retirement Plan (collectively, the "Plans").
ESTIMATED ANNUAL RETIREMENT BENEFIT
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
----------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 350,000................. $210,000 $210,000 $210,000 $210,000 $210,000
400,000................. 240,000 240,000 240,000 240,000 240,000
450,000................. 270,000 270,000 270,000 270,000 270,000
500,000................. 300,000 300,000 300,000 300,000 300,000
600,000................. 360,000 360,000 360,000 360,000 360,000
800,000................. 480,000 480,000 480,000 480,000 480,000
1,000,000................. 600,000 600,000 600,000 600,000 600,000
1,200,000................. 720,000 720,000 720,000 720,000 720,000
1,400,000................. 840,000 840,000 840,000 840,000 840,000
</TABLE>
The compensation covered by the Plans includes a participant's salary,
bonus (if any) and living allowance (if any). Compensation covered under the
Plans includes salary and bonus reported on the Summary Compensation Table.
Benefits under the Retirement Plan and the Benefit Replacement Plan are
determined according to the highest five consecutive years of compensation, and
benefits under the Supplemental Executive Retirement Plan are based upon the
highest three years of compensation including compensation in the year
immediately prior to retirement. Compensation above $800,000 paid in any year
after 1993 is disregarded, but this limitation is not applied to any year before
1994. On December 31, 1994, Messrs. Barron Hilton, Avansino, Eric Hilton,
Huckestein and Lebo had 43, 2, 43, 9 and 9 years of service, respectively, under
the Plans. The benefits set forth on the table assume receipt of a benefit on a
straight life annuity basis and are reduced by 50% of the primary social
security benefit to which a participant is entitled. Until April 1, 1994, the
Supplemental Executive Retirement Plan and the Benefit Replacement Plan provided
that the present value of a Named Officer's benefit be transferred from
time-to-time to a grantor trust established by such officer, along with
additional amounts needed to equalize the trust account to the after-tax
benefits which would have been provided in the absence of the trust. Such
transfers will resume if a change in control occurs.
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<PAGE> 23
CHANGE OF CONTROL ARRANGEMENTS
The Company's Board of Directors has adopted a Change of Control Agreement
("Agreement") and, pursuant thereto, Agreements have been entered into with each
of the Company's Named Officers. Under the terms of the Agreement, each Named
Officer will receive an amount equal to up to three times annual salary and
bonus if, following a Change of Control (as hereinafter defined), such Named
Officer is terminated without cause or if a Named Officer terminates for good
reason (including, but not limited to, the assignment to such officer of duties
inconsistent with such officer's position at the time of the Change of Control).
The Agreement continues for renewable three-year terms or until normal
retirement date, if earlier. Under the Agreement, a Change of Control with
respect to the Company and the Agreement means (i) the acquisition (other than
from the Company) by any person, entity or group, within the meaning of Section
13(d)(3) or 14(d)(2) of the 1934 Act (excluding, for this purpose, (A) the
Company or its subsidiaries, (B) any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting securities of the
Company or (C) Barron Hilton or the Foundation, collectively, the "Hilton
Interests"), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 20% or more of either the then outstanding
shares of Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors; or (ii) a majority of the membership of the present incumbent Board
of Directors changes other than in the ordinary course; or (iii) there is a
dissolution or liquidation of the Company, a sale of substantially all of its
assets, or a merger that forces out a majority of the pre-merger stockholders.
If any payment, whether pursuant to the Agreement or otherwise (i.e., under
Retirement or Stock Option Plans), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended, then the Named
Officer shall be entitled to receive an additional payment in an amount such
that after payment by the Named Officer of all taxes (including any interest or
penalties imposed with respect to such taxes), including any excise tax, imposed
upon the additional payment, the Named Officer receives the same amount of
compensation pursuant to the Agreement which such officer would have received in
the absence of any such taxes.
In the event of a Change of Control, full vesting and immediate payment of
benefits is provided in the Company's Supplemental Executive Retirement Plan
regardless of age or years of credited service.
STOCKHOLDER PROPOSAL
The Company has been advised that a stockholder of the Company proposes to
introduce the following resolution and statement in support thereof at the 1995
Annual Meeting of Stockholders. (The name and address of, and the number of
shares held by, the proponent can be obtained upon request from the Office of
the Corporate Secretary of the Company.)
"BE IT RESOLVED: That the shareholders of Hilton Hotels Corporation
Incorporated ("Company") urge the board of directors to seek
shareholder approval for all present and future severance agreements
with executive officers."
STATEMENT BY STOCKHOLDER IN SUPPORT OF THE RESOLUTION
"Golden parachutes are one of the lucrative executive benefits which have
contributed to the public perception that many senior executive officers of
major, publicly-traded companies are more concerned with cashing in on a system
designed to their advantage than the effective operation of companies.
"Our Company currently has lucrative severance agreements, commonly
referred to as golden parachutes, with Messrs. B. Hilton, Avansino, E. Hilton,
and Lebo which provide for compensation payments equal to up to THREE TIMES
annual salary and bonus as well as accelerated vesting and immediate
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<PAGE> 24
payment of benefits as provided in the Company's Supplemental Executive
Retirement Plan in the event employment is terminated after a change in control
of the Company. Under the agreements, a change in control means: (i) a
shareholder acquiring 20% of the voting securities; or (ii) replacement of a
majority of the Company's directors 'other than in the ordinary course;' or
(iii) shareholder approval of a merger, consolidation or liquidation.
"We believe golden parachutes are not in the best interest of shareholders
because they reduce shareholder value and financially reward mismanagement. Our
concerns over shareholder value are based on a 1990 study by the United
Shareholders Association of 1,000 major U.S. corporations which found that the
average annualized two-year return was 20 percent higher for the 559 companies
whose management did not hold golden parachutes.
"Our concerns regarding rewarding mismanagement is based on the following
logic. We believe a change in control of the Company will most likely occur if
the Company is not managed in a way that realizes the full value of its assets.
If this type of mismanagement occurs and shareholders seek to protect the value
of their investment by voting in a new Board of Directors or tendering their
shares for an above market price, the very managers who failed to maximize
shareholder value will receive a lucrative financial reward of THREE TIMES
average annual compensation.
"We cannot justify policies that we believe diminish accountability to
shareholders. We believe that the issue of whether the company should, in the
future, provide management with golden parachutes is of such importance that
shareholders should be given the opportunity to approve or reject these
lucrative severance agreements."
STATEMENT BY THE BOARD OF DIRECTORS AGAINST THE RESOLUTION
In past years, the press has attacked so-called "golden parachutes" under
which top executives receive large amounts of money following a takeover. The
severance agreements currently used by the Company, however, do not allow any of
the covered executives to claim an automatic payment upon a change of control.
Instead, an executive will receive payments under the agreement only if there is
both a change in control of the Company and, following the change in control, a
termination of the executive's employment. If the person who acquires control of
the Company does not adversely change the terms or circumstances of the
executive's employment, the executive is not entitled to a severance payment
unless the executive terminates employment during the 30-day period after
serving for twelve months following the change in control. Thus, it is the
purchaser -- not the executive -- who controls whether termination benefits will
be owed during the critical transition to new ownership. As a result, executives
do not have any financial or other incentive to act detrimentally to stockholder
interests.
The Board strongly believes that severance agreements of this type are in
the stockholders' interests because the agreements help ensure not only that key
senior executives will not be distracted by the personal uncertainties which
arise during a threatened change in control, but also that the purchaser can
count on the executives remaining available to assist with the post-change
requirements. The agreements, which have no current cost to the Company (and
under which no payments have ever been made), are designed to keep key
executives' undivided attention focused on their duties at precisely the time
when such attention is needed most. Without a severance agreement, executives
could be tempted to leave the Company for another position which offers greater
security. The severance agreements encourage the executives to remain in the
employ of the Company during the pendency of any potential change in control and
for at least one year after the occurrence of any actual change in control -- an
agreement which is of substantial benefit to the Company if the purchaser
desires that the executives continue. In short, the agreements help motivate key
senior
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<PAGE> 25
executives to act objectively and in the stockholders' best interests, even when
their jobs and financial well-being may be threatened by a potential acquiror of
the Company.
The proponent presents no reasoned challenge to the Board of Directors'
firm belief that the Company's severance agreements are in the best interests of
the stockholders. The Board of Directors believes that the adoption of the
proposal is not only unnecessary, but would be detrimental to the best interests
of the Company and its stockholders in that it would adversely affect the
Company's ability to attract and retain top executives.
VOTE REQUIRED AND BOARD RECOMMENDATION
The plurality of the shares represented at the meeting, in person or by
proxy, will be necessary for the adoption of Proposal 4. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST PROPOSAL 4.
RATIFICATION OF SELECTION OF AUDITORS
Arthur Andersen LLP ("Andersen")were the Company's auditors for the year
ended December 31, 1994. A representative of Andersen is expected to attend the
annual meeting where he will have the opportunity to make a statement if he so
desires and will be available to respond to appropriate questions. Although the
Board is not required to submit its selection of auditors for stockholder
approval, the Board has elected to seek ratification by stockholders at the
annual meeting of its appointment of Andersen to serve as the Company's auditors
for fiscal 1995.
1996 ANNUAL MEETING OF STOCKHOLDERS
The 1996 Annual Meeting of Stockholders is presently scheduled to be held
on May 9, 1996. Any proposals of stockholders intended to be personally
presented at such meeting must be received by the Corporate Secretary of the
Company for inclusion in the Company's proxy statement and form of proxy no
later than December 1, 1995.
GENERAL
The cost of preparing and mailing the notice of meeting, Proxy Statement
and forms of proxy will be paid by the Company. In addition to mailing copies of
this material to all stockholders, the Company has retained D.F. King & Co.,
Inc. to request banks and brokers to forward copies of such material to persons
for whom they hold stock of the Company and to request authority for execution
of the proxies. The Company will pay D.F. King & Co., Inc. a fee of $8,000 plus
out-of-pocket expenses and disbursements.
The only other business to be presented to the meeting, of which the
directors and executive officers have knowledge, will be the approval of the
minutes of the last meeting of stockholders, but it is not intended that action
taken under the proxies will constitute approval of the matters referred to in
such minutes. Although all nominees have indicated their readiness to serve if
elected, if at the time of the meeting any of said nominees should be unable to
serve as directors, the persons named in the proxies or their substitute(s)
will, in their discretion, vote for other nominees, and if matters other than
those for which authority is herein sought should arise at the meeting, it is
intended that the shares represented by the proxies will be voted in the
discretion of the persons named therein.
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<PAGE> 26
EXHIBIT 1
HILTON HOTELS CORPORATION
1990 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
1. Purpose. The purpose of the Hilton Hotels Corporation 1990 Stock
Option and Stock Appreciation Rights Plan (the "Plan") is to aid Hilton Hotels
Corporation and its subsidiaries (collectively, the "Corporation") in securing
and retaining key employees and motivating such employees to exert their best
efforts on behalf of the Corporation. In addition, the Corporation expects that
it will benefit from the added interest which the respective optionees will have
in the welfare of the Corporation as a result of their proprietary interest in
the Corporation's success.
2. Administration.
(a) A Stock Option and Stock Appreciation Rights Committee (the
"Committee") of three or more "disinterested persons," as that term is defined
in Rule 16b-3(d)(3) promulgated under the Securities Exchange Act of 1934, as
amended (or any successor provision thereto) (the "Exchange Act"), shall be
appointed by the Board of Directors from those of its members not eligible to
receive options or stock appreciation rights hereunder, shall have full power
and authority, subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be issued or adopted by the
Board of Directors, to interpret the provisions and supervise the administration
of the Plan.
(b) In accordance with the provisions of the Plan and subject to Board
approval, the Committee shall select the key employees to whom options and/or
stock appreciation rights shall be granted, shall determine whether such options
shall be incentive stock options granted pursuant to Section 422A of the
Internal Revenue Code of 1986, as amended (or any successor provision thereto)
(the "Code") (sometimes referred to herein as "Incentive Options") or
non-incentive stock options ("Non-incentive Options") and related stock
appreciation rights, and shall determine the number of shares to be embraced in
each stock option and stock appreciation right and the time at which the stock
option and stock appreciation right is or are to be granted. Subject to the
express provisions of the Plan, the Committee shall have authority to adopt
administrative regulations and procedures which are consistent with the terms of
the Plan; to adopt and amend stock option and stock appreciation rights
agreements as the Committee deems advisable; to determine, upon Board approval,
the terms and provisions of such option agreements (including the option period,
the option price, and the manner in which options become exercisable, subject to
the provisions of paragraph 6 hereof), and to construe and interpret such option
and stock appreciation rights agreements; to impose such limitations and
restrictions as are deemed necessary or advisable by counsel for the Corporation
so that compliance with the Federal securities and tax laws and with the gaming
and securities laws of the various states may be assured; and to make all other
determinations necessary or advisable for administering the Plan. The Committee
may designate any officers or employees of the Corporation to assist the
Committee in the administration of the Plan and to execute documents on its
behalf, and the Committee may delegate to them such other ministerial and
limited discretionary duties as it sees fit. All determinations and selections
made by the Committee shall be by the affirmative vote of a majority of its
members, but any determination reduced to writing and signed by a majority of
the members shall be fully as effective as if it had been made by a majority
vote at a meeting duly called and held. No director eligible to receive options
shall vote upon the granting of an option to himself or participate in any
decision of the Board of Directors relating to the Plan.
(c) Each option shall be evidenced by a written instrument duly executed by
the Corporation and the optionee which shall contain such terms and conditions
not inconsistent with the Plan as the Committee with the approval of counsel for
the Corporation shall determine. Each stock appreciation right shall be
evidenced in writing either in the stock option and stock appreciation rights
agreement between the Corporation and the
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<PAGE> 27
optionee, if such right is included at the time of the grant of the option, or
in an amended stock option and stock appreciation rights agreement between the
Corporation and the optionee, if such right is included in the option by
amendment.
(d) All decisions made by the Board of Directors pursuant to the provisions
of the Plan and all determinations and selections made by the Committee pursuant
to such provisions and related orders or resolutions of the Board of Directors
shall be final and conclusive.
3. Eligibility and Participation. The group of persons eligible to
receive stock options and stock appreciation rights shall consist of salaried
officers and other key employees of the Corporation (whether or not such persons
are directors of the Corporation), including general managers, managers, sales
managers and supervisory personnel of hotels, hotel-casinos and casinos operated
by the Corporation. Each option and stock appreciation right and the number of
shares subject thereto shall be determined by the Board of Directors based upon
the recommendation of the Committee. No Incentive Option may be granted to an
officer or employee of the Corporation who, immediately after such grant, owns
directly or indirectly stock possessing more than 10% of the total combined
voting power or value of all classes of stock of the Corporation or any
subsidiary, unless the option exercise price is at least 110% of the fair market
value (as of the date of the grant) of the Common Stock subject thereto and the
term of the option is limited to five years from the date of grant.
4. Shares Subject to the Plan. The stock subject to the Plan shall be
shares of the Corporation's authorized Common Stock and may be unissued shares
or treasury shares, as the Board of Directors may from time to time determine in
its sole discretion. Subject to adjustment as provided in paragraph 9 hereof,
the aggregate number of shares to be delivered upon exercise of all stock
options and stock appreciation rights shall not exceed 1,500,000 shares and,
subject to like adjustment, the aggregate number of shares for which an option
or stock appreciation right or rights may be granted to any employee during any
one fiscal year shall not exceed 150,000 shares. If an option expires or
terminates for any reason during the term of the Plan and prior to the exercise
thereof in full, the shares subject to, but not delivered under, such option
shall, except as hereinafter provided, be available for options thereafter
granted. The reduction of the number of shares of Common Stock subject to an
option by reason of the exercise of a related stock appreciation right shall
reduce the number of shares available under the Plan.
5. Option Price; Fair Market Value.
(a) All options granted hereunder shall have a per share exercise price of
not less than 100% of the "fair market value" of a share of Common Stock on the
effective date of the grant of such option; provided, however, that if a
participant owns (including constructive ownership pursuant to Section 425(d) of
the Code) on the effective date of grant of an Incentive Option more than 10% of
the total combined voting power of all classes of outstanding shares of stock of
the Corporation or any of its subsidiaries (within the meaning of Section 425(e)
of the Code), then the option exercise price per share of Common Stock subject
to such Incentive Option shall be not less than 110% of the fair market value of
a share of Common Stock on the effective date of the grant of such option;
provided, further, that in all such cases the exercise price per share of Common
Stock shall in no event be less than the par value thereof. Subject to the
foregoing, the option price shall be determined by the Committee and shall be
approved by the Board.
(b) For purposes of the Plan, "fair market value" of a share of Common
Stock shall mean: (i) if the Common Stock is traded on a national stock exchange
on the effective date of the grant of such option, the mean between the highest
and lowest prices at which the Common Stock is traded on such exchange on such
date or, if not traded on such date, the mean between the closing bid-and-asked
prices thereof on such exchange as reported for such date; (ii) if the Common
Stock is traded over-the-counter and is classified as a national market issue on
the date of the grant of such option, the last reported transaction price quoted
by the
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<PAGE> 28
NASDAQ on that day; (iii) if the Common Stock is traded over-the-counter and is
not classified as a national market issue on the date of the grant of such
option, the mean between the last representative bid-and-asked prices quoted by
the NASDAQ on that day; or (iv) if none of the foregoing provisions is
applicable, fair market value shall be determined by the Committee in good faith
on such basis as it deems appropriate. In all cases, the determination of fair
market value shall be binding and conclusive on all persons.
6. Term and Exercise of Options.
(a) Options shall be exercisable as provided in subparagraph (b) below, but
no option shall be exercisable after the expiration of ten years from the date
of grant of such option and, in the case of an individual who, immediately after
the grant of an Incentive Option, owns directly or indirectly (including
constructive ownership under Section 425(d) of the Code) stock possessing more
than 10% of the total combined voting power or value of all classes of stock of
the Corporation or any subsidiary, after the expiration of five years from the
date of grant of such option.
(b) Each option granted hereunder shall be exercisable in such installments
during the period prior to its expiration date as the Committee shall determine;
provided, however, that all such rights to exercise options granted under the
Plan shall terminate upon any earlier expiration date of any such option, and in
no event shall any options be exercisable prior to six months from the date of
grant thereof, regardless of any other provision of the Plan.
(c) No shares shall be delivered pursuant to the exercise of any option, in
whole or in part, until qualified for delivery under such securities laws and
regulations as may be deemed by the Committee to be applicable thereto and until
payment in full of the option price therefor (and any required tax withholding
payment relative to stock appreciation rights and Non-incentive Options) is
received by the Corporation (i) in cash or cash equivalent payment (or by
delivery of a properly executed exercise notice, together with irrevocable
instructions to a broker to promptly deliver to the Corporation the amount of
sale or loan proceeds to pay the exercise price) and/or (ii) with previously
acquired shares of Common Stock or a combination of cash or cash equivalent and
Common Stock having an aggregate fair market value equal to the purchase price
(and any required tax withholding payment) or (iii) by any other method
acceptable to the Corporation's Board of Directors. Purchase of the shares shall
be accompanied by a written request for the shares purchased and such payment
and written request shall be made to the Secretary of the Corporation. No
optionee or legal representative, legatee, or distributee of an optionee shall
be or be deemed to be a holder of any shares subject to such option unless and
until receipt of a certificate or certificates therefor has occurred.
(d) The proceeds received by the Corporation from the sale of stock subject
to an option are to be added to the general funds of the Corporation and used
for general business purposes as the Board of Directors shall, in its sole
discretion, determine.
(e) Each stock option agreement evidencing options granted under the Plan
shall contain an explicit reference as to whether any or all of the options
granted thereunder are intended to be Incentive Options.
7. Transferability of Options. Options granted under the Plan may not be
transferred except by will or the laws of descent and distribution and, during
the lifetime of the holder, may be exercised only by the holder.
8. Death, Disability, Retirement and Termination of Employment. Any option,
the exercise period of which has not theretofore expired, shall terminate at the
time of an optionee's death, the optionee's disability or termination of an
optionee's employment with the Corporation, and no shares of Common Stock may
thereafter be delivered pursuant to such option except as set forth below:
(a) In the case of any optionee who has been employed by the Corporation
continuously from the date of grant to the date of termination of employment,
and whose employment is terminated due to disability (as
26
<PAGE> 29
defined in Section 22(e)(3) of the Code), such optionee may, within six months
(or such shorter period of time as is specified in the Stock Option Agreement)
after the date of termination of employment but before expiration of the
original exercise period, purchase some or all of the shares subject to option,
to the extent the optionee was entitled to exercise such option as of the date
of termination of employment.
(b) Upon the death of any optionee while in active service, or of any
disabled optionee within six months from the date of termination of employment
(or such shorter period of time as is specified in the Stock Option Agreement),
the person or persons to whom his rights under the option are transferred by
will or the laws of descent and distribution may within twelve months after the
date of the optionee's death, but before the expiration of the original exercise
period, purchase some or all of the shares subject to option, to the extent the
optionee was entitled to exercise such option as of the date of termination of
employment.
(c) In the case of any optionee who has been employed by the Corporation
continuously from the date of grant to the date of termination of employment,
and whose employment is terminated by retirement, such optionee may, within two
years (or such shorter period of time as is specified in the Stock Option
Agreement) after the date of any retirement, but before the expiration of the
original exercise period, purchase some or all of the shares subject to option
which the optionee was entitled to exercise as of the date of retirement.
(d) In the case of any optionee who has been employed by the Corporation
continuously from the date of grant to the date of any termination of employment
due to resignation or discharge, such optionee may, with the written consent of
the Corporation, within three months from the date of termination, but before
the expiration of the original exercise period, purchase some or all of the
shares subject to option, to the extent the optionee was then entitled to
exercise such option as of the date of termination of employment immediately
prior thereto.
(e) Leaves of absence for those periods and purposes conforming to the
personnel policies of the Corporation and as may be approved by the Committee,
shall not be deemed terminations or interruptions of employment.
(f) Stock appreciation rights shall terminate concurrently with termination
of employment for any reason whatsoever.
9. Changes in Common Stock. In the event that, prior to the delivery by the
Corporation of all of the shares of Common Stock which may be delivered
hereunder, there shall be any change in the outstanding Common Stock of the
Corporation by reason of the recapitalization, merger, reorganization,
consolidation, split-up, stock dividend or stock right distribution, the number
and kind of shares deliverable hereunder and the option price, etc. shall be
adjusted (but without regard to fractions) in a fair and equitable manner by the
Board of Directors of the Corporation, whose determination in each case shall be
conclusive and binding on the Corporation and the optionee and his legal
representatives.
10. Merger, Consolidation, or Sale of Assets; Changes in Control.
(a) Notwithstanding any contrary waiting period or installment period in
the Plan, each outstanding option granted under the Plan shall, except as
otherwise provided in the option agreement, become exercisable in full for the
aggregate number of shares covered thereby, in the event
(i) of (a) any consolidation or merger of the Corporation in which the
Corporation is not the continuing or surviving corporation or pursuant to
which shares of Common Stock would be converted into cash, securities or
other property, other than a merger or consolidation of the Corporation in
which the holders of Common Stock immediately prior to the merger or
consolidation have the same proportionate ownership of common stock of the
surviving or newly formed corporation immediately after the merger or
consolidation and provision is made in connection with any such merger or
consolidation
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<PAGE> 30
for the continuation of the Plan and assumption of the stock options and
stock appreciation rights theretofore granted (or substitution of
substantially identical options and stock appreciation rights of the
successor corporation or a parent thereof), or (b) any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the
Corporation, or (c) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(ii) (a) any person (as such term is defined in Sections 13(d)(3) and
14(d)(2) of the Exchange Act), corporation or other entity (other than the
Corporation or any benefit plan sponsored by the Corporation) shall
purchase any Common Stock of the Corporation (or securities convertible
into the Corporation's Common Stock) for cash, securities or any other
consideration pursuant to a tender offer or exchange offer, or (b) any
person, corporation or other entity (other than (y) the Corporation or any
benefit plan sponsored by the Corporation or (z) any transferee acting as
executor or trustee by will or the laws of descent and distribution) shall
after the date options are first issued under the Plan become the
"beneficial owner" (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing 20 percent or more of the combined voting power of the then
outstanding securities of the Corporation ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the
election of directors (calculated as provided in paragraph (d) of such Rule
13d-3 in the case of rights to acquire the Corporation's securities), or
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the entire Board shall cease for
any reason to constitute a majority thereof unless the election, or the
nomination for election by the Corporation's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
(b) Any purchase pursuant to a tender offer or exchange offer or otherwise
as described in the foregoing subparagraph (a)(ii) is hereinafter called a
"Control Purchase" and the cessation of individuals constituting a majority of
the Board as described in the foregoing subparagraph (a)(iii) is hereinafter
called a "Board Change." The stock option agreement evidencing an option granted
under the Plan may contain such provisions limiting the acceleration of the
exercise of options as the Board deems appropriate to ensure that the penalty
provisions of Section 4999 of the Code, or any successor thereto in effect at
the time of such acceleration, will not apply to any stock or cash received by
the holder from the Corporation.
11. General Stock Appreciation Rights.
(a) The Board may (but shall not be obligated to) grant general stock
appreciation rights (hereinafter called "SARs") pursuant to the provisions of
this paragraph to the holder of any option granted under the Plan (hereinafter
in this paragraph 11 called a "Related Option") with respect to all or a portion
of the shares subject to the Related Option. An SAR may only be granted
concurrently with the grant of the Related Option. Subject to the terms and
provisions of this paragraph 11, each SAR shall be exercisable only at the same
time and to the same extent the Related Option is exercisable, and in no event
after the termination or exercise of the Related Option. Notwithstanding the
foregoing, no SAR may be exercised within a period of six months after the date
of grant of the SAR. SARs shall be exercisable only when the fair market value
(determined as of the date of exercise of the SARs) of each share of Common
Stock with respect to which the SARs are to be exercised shall exceed the option
price per share of Common Stock subject to the Related Option. SARs granted
under the Plan shall be exercisable in whole or in part by notice to the
Corporation addressed to its Secretary. Such notice shall state that the holder
of the SARs elects to exercise the SARs and the number of shares in respect of
which the SARs are being exercised.
(b) Subject to the terms and provisions of this paragraph 11, upon the
exercise of SARs the holder thereof shall be entitled to receive from the
Corporation consideration (in the form hereinafter provided)
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<PAGE> 31
equal in value to the excess of the fair market value (determined as of the date
of exercise of the SARs) of each share of Common Stock with respect to which
such SARs have been exercised over the option price per share of Common Stock
subject to the Related Option; provided, however, that fair market value per
share of Common Stock for the purpose of the aforesaid calculation shall never
exceed 250% of the option price per share. Upon the exercise of an SAR, the
holder may specify the form of consideration to be received by such holder,
which shall be in shares of Common Stock (valued at fair market value on the
date of exercise of the SAR), or in cash, or partly in cash and partly in shares
of Common Stock as the holder shall request; provided, however, that the Board
in its sole discretion may disapprove the form of consideration requested and
instead authorize the payment of such consideration in shares of Common Stock
(valued as aforesaid), or in cash, or partly in cash and partly in shares of
Common Stock. Notwithstanding the foregoing, any election by the holder of an
SAR to receive cash in full or partial settlement of the SAR, as well as any
exercise of an SAR for such cash, shall be made only during the period beginning
on the third business day following the date of release of the financial data
specified in paragraph (e)(l)(ii) of Rule 16b-3 under the Exchange Act and
ending on the twelfth business day following such date (the "Exercise Period").
Notwithstanding the foregoing, the number of SARs which may be exercised for
cash, or partly for cash and partly for shares of Common Stock, during any
Exercise Period may not exceed 50% of the aggregate number of shares of Common
Stock originally subject to the Related Option (as such original number, without
giving effect to the exercise of any portion of the Related Option, shall have
been retroactively adjusted by application of the adjustment(s), if any,
determined in accordance with paragraph 9 hereof or the corresponding provisions
of any outstanding option agreement), but such SARs shall be exercisable only to
the extent the Related Option is exercisable. For purposes of this paragraph 11,
the date of exercise of an SAR shall mean the date on which the Corporation
shall have received notice from the holder of the SAR of the exercise of such
SAR. Notwithstanding the foregoing, upon the exercise during the Exercise Period
of an SAR granted in tandem with a Non-incentive Option, the date of exercise of
such SAR shall be deemed to be the date during the Exercise Period on which the
fair market value of Common Stock was the highest as determined in accordance
with the definition set forth in paragraph 5(b) above.
(c) Upon the exercise of SARs, the Related Option shall be considered to
have been exercised to the extent of the number of shares of Common Stock with
respect to which such SARs are exercised, and shall be considered to have been
exercised to that extent for purposes of determining the number of shares of
Common Stock available for the grant of options under the Plan. Upon the
exercise or termination of the Related Option, the SARs with respect to such
Related Option shall be considered to have been exercised or terminated to the
extent of the number of shares of Common Stock with respect to which the Related
Option was so exercised or terminated.
(d) The provisions of the Plan (to the extent such provisions are
applicable to options granted under the Plan) shall also be applicable to SARs
unless the context otherwise requires. The effective date of the grant of an SAR
shall be the date on which the Board approves the grant of such SAR. Each
grantee of an SAR shall be notified promptly of the grant of an SAR in such
manner as the Board shall prescribe.
12. Limited Stock Appreciation Rights.
(a) The Board may (but shall not be obligated to) grant limited stock
appreciation rights ("Limited Rights") pursuant to the provisions of this
paragraph to the holder of any option granted under the Plan (hereinafter in
this paragraph 12 called a "Related Option") with respect to all or a portion of
the shares subject to the Related Option. A Limited Right may only be granted
concurrently with the grant of the Related Option. A Limited Right may be
exercised only during the period (a) beginning on the first day following either
(i) the date of approval by the stockholders of the Corporation of a transaction
referred to in clause (i) of paragraph 10(a) hereof (an "Approved Transaction"),
(ii) the date of a Control Purchase, or (iii) the date of a Board Change, and
(b) ending on the thirtieth day following such date. Each Limited Right
29
<PAGE> 32
shall be exercisable only to the extent the Related Option is exercisable
(including as exercisable by virtue of any event of acceleration as provided in
paragraph 10 hereof), and in no event after the termination of the Related
Option. Notwithstanding the provisions of the two immediately preceding
sentences, no Limited Right may be exercised within a period of six months after
the date of grant of the Limited Right. Limited Rights shall be exercisable only
when the fair market value (determined as of the date of exercise of the Limited
Rights) of each share of Common Stock with respect to which the Limited Rights
are to be exercised shall exceed the option price per share of Common Stock
subject to the Related Option.
(b) Upon the exercise of Limited Rights, the Related Option shall be
considered to have been exercised to the extent of the number of shares of
Common Stock with respect to which such Limited Rights are exercised, and shall
be considered to have been exercised to that extent for purposes of determining
the number of shares of Common Stock available for the grant of options under
the Plan. Upon the exercise or termination of the Related Option, the Limited
Rights with respect to such Related Option shall be considered to have been
exercised or terminated to the extent of the number of shares of Common Stock
with respect to which the Related Option was so exercised or terminated.
(c) The provisions of the Plan (to the extent that such provisions are
applicable to options granted under the Plan) shall also be applicable to
Limited Rights unless the context otherwise requires. The effective date of the
grant of a Limited Right shall be the date on which the Board approves the grant
of such Limited Right. Each grantee of a Limited Right shall be notified
promptly of the grant of the Limited Right in such manner as the Board shall
prescribe.
(d) Limited Rights granted under the Plan shall be exercisable in whole or
in part by notice to the Corporation addressed to the Secretary. Such notice
shall state that the holder of the Limited Rights elects to exercise the Limited
Rights and the number of shares in respect of which the Limited Rights are being
exercised. The effective date of exercise of a Limited Right shall be deemed to
be the date on which the Corporation shall have received such notice. Upon the
exercise of Limited Rights granted in tandem with an Incentive Stock Option,
except as otherwise provided in the option agreement, the holder thereof shall
receive in cash an amount equal to the excess of the fair market value
(determined as of the date of exercise of such Limited Rights) of each share of
Common Stock with respect to which such Limited Right shall have been exercised
over the option price per share of Common Stock subject to the related Incentive
Stock Option.
(e) Upon the exercise of Limited Rights granted in tandem with a
Non-incentive Option, except as otherwise provided in the option agreement, the
holder thereof shall receive in cash an amount equal to the product computed by
multiplying (i) the excess of (a) the higher of (x) the Minimum Price Per Share
(as hereinafter defined), or (y) the highest mean between the highest and lowest
prices at which the Common Stock is traded on a national stock exchange or, if
not so traded, the highest mean between the highest and lowest bid-and-asked
prices as quoted on NASDAQ, in either case for any trading day during the period
beginning on the sixtieth day prior to the date on which such Limited Rights are
exercised and ending on the date on which such Limited Rights are exercised,
over (b) the option price per share of Common Stock subject to the related
Non-incentive Option, by (ii) the number of shares of Common Stock with respect
to which such Limited Rights are being exercised.
(f) For purposes of this paragraph 12, the term "Minimum Price Per Share"
shall mean the highest gross price (before charges) paid or to be paid for any
share of Common Stock (whether by way of exchange, conversion, distribution,
liquidation or otherwise) in, or in connection with, any Approved Transaction or
Control Purchase which occurs at any time during the period beginning on the
sixtieth day prior to the date on which such Limited Rights are exercised and
ending on the date on which such Limited Rights are exercised. For purposes of
this definition, if the consideration paid or to be paid in any such Approved
Transaction or Control Purchase shall consist, in whole or in part, of
consideration other than cash, the Board shall take such
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<PAGE> 33
action, as in its judgment it deems appropriate, to establish the cash value of
such consideration, but such valuation shall not be less than the value, if any,
attributed to such consideration by any other party to such Approved Transaction
or Control Purchase.
(g) Notwithstanding anything to the contrary contained in this paragraph
12, the stock option agreement evidencing an option granted under the Plan may
contain such provisions limiting the exercise of Limited Rights as the Board
deems appropriate to ensure that the penalty provisions of Section 4999 of the
Code, or any successor thereto in effect at the time of such exercise, will not
apply to any stock or cash received by the holder from the Corporation.
13. Rights as a Stockholder. No person participating in the Plan shall have
any rights of a stockholder of the Corporation as to shares subject to an option
until such option is exercised.
14. Implied Consent of Participants. Every optionee, by acceptance of an
option under this Plan, shall be deemed to have consented to be bound, on such
holder's own behalf and on behalf of such person's heirs, assigns and legal
representatives, by all of the terms and conditions of this Plan.
15. The Corporation's Responsibility. All expenses of this Plan, including
the cost of maintaining records hereunder, shall be borne by the Corporation.
The Corporation shall have no responsibility or liability (other than under
applicable securities laws) for any act or thing done or left undone with
respect to the price, time, quantity, or other conditions and circumstances of
the purchase of shares under the terms of the Plan, so long as the Corporation
acts in good faith.
16. Amendment and Discontinuance. The Board of Directors may alter,
suspend, or discontinue the Plan at any time and from time to time, without
obtaining the approval of the Corporation's stockholders, but may not, without
the approval of the holders of a majority of the Corporation's outstanding
capital stock, make any alteration or amendment thereof which operates to (a)
abolish the Committee, change the qualification of its members, or withdraw the
administration of the Plan from its supervision; (b) make any material change in
the class of eligible optionees as defined in paragraph 3 hereof; (c) increase
the total number of shares reserved for purposes of this Plan except as provided
in paragraph 9 hereof; (d) extend the term of the Plan or the maximum option
exercise periods provided in paragraph 6 hereof; (e) decrease the minimum option
price provided in paragraph 5 hereof except as provided in paragraph 9 hereof;
(f) change the definition of fair market value specified in paragraph 5 hereof;
or (g) materially increase the benefits accruing to employees participating
under this Plan. No amendment to or termination of this Plan shall affect
outstanding options theretofore granted under this Plan, and such options shall
remain in full force and effect as if this Plan had not been amended or
terminated.
17. Effective Date. This Plan shall be effective as of July 12, 1990;
provided that it is approved and adopted by majority vote of the Corporation's
stockholders within 12 months after such date.
18. Termination. The period during which options may be granted under this
Plan expires on July 11, 2000, unless the Plan is terminated by the Board of
Directors prior to such date.
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HILTON HOTELS CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
P
R Barron Hilton and William C. Lebo, Jr., or either of them, are hereby
constituted and appointed the lawful attorneys and proxies of the
0 undersigned, with full power of substitution, to vote and act as proxy with
respect to all shares of Common Stock of Hilton Hotels Corporation standing
X in the name of the undersigned on the books of the Company at the close of
business on March 17, 1995, at the Annual Stockholders' Meeting to be held
Y at 10:00 A.M., on May 11, 1995, at the Beverly Hilton, 9876 Wilshire
Boulevard, Beverly Hills, California 90210, or at any adjournment thereof.
The powers hereby granted may be exercised by both of said attorneys
or proxies or their substitutes present and acting at the Annual
Stockholders' Meeting or any adjournments thereof or, if only one be
present and acting, then by that one. The undersigned hereby revokes any
and all proxies heretofore given by the undersigned to vote at said
meeting.
(Continued and to be signed on other side)
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
<PAGE> 35
/X/ PLEASE MARK
YOUR VOTES
AS THIS
--------------
COMMON
- --------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND
3, AND AGAINST PROPOSAL 4.
- --------------------------------------------------------------------------------
1. Election of the following nominees as Directors: Raymond C. Avansino, Jr.,
A. Steven Crown, Eric M. Hilton and Donna F. Tuttle.
FOR WITHHELD
ALL FOR ALL
/ / / /
Withheld for the following only: (Write the name of the nominee(s) in the
space below).
2. PROPOSAL to reapprove the Company's 1990 Stock Option and Stock
Appreciation Rights Plan, with an amendment (the "Plan"), to limit to
150,000 the maximum number of shares for which an option may be granted to
any employee during any one fiscal year, and to approve certain options
previously awarded under the Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. PROPOSAL to ratify the appointment of Arthur Andersen LLP as auditors for
the Company for fiscal 1995.
FOR AGAINST ABSTAIN
/ / / / / /
4. STOCKHOLDER PROPOSAL relating to the Company's executive severance
agreements.
FOR AGAINST ABSTAIN
/ / / / / /
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or at any adjournment
thereof.
I plan to attend meeting. / /
COMMENTS/ADDRESS CHANGE / /
Please mark this box if you have
written comments/address change
on the reverse side.
DATED 1995
----------------------------------------
- --------------------------------------------------
Signature
- --------------------------------------------------
Signature if held jointly
IMPORTANT: Please sign proxy as name appears. Joint owners should each sign
personally. Trustees and others signing in a representative capacity should
indicate the capacity in which they sign.
