Exhibit 10.42

EXECUTION VERSION

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between Sergio D.
Rivera (“Executive”) and ILG, Inc. (“ILG” or the “Company”), effective as of
November 7, 2016 (the “Effective Date”)  Executive and the Company may
hereinafter be referred to individually as a “Party” or collectively as the
“Parties”.

WHEREAS, the Company desires to establish its right to the services of
Executive, in the capacity described below, on the terms and conditions
hereinafter set forth, and Executive is willing to accept such employment on
such terms and conditions.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
Executive and the Company have agreed and do hereby agree as follows:

1A.EMPLOYMENT.  During the Term (as defined below), the Company shall employ
Executive, and Executive shall be employed as the President and Chief Executive
Officer of the Company’s Vacation Ownership Segment (the “VO Segment”) and, in
such capacity, Executive shall provide executive leadership to those businesses
currently comprising such segment, including, without limitation, Vistana
Signature Experiences, Inc., HV Global Group, Inc. and their associated
businesses as well as any other substantially similar businesses subsequently
included within the VO Segment. Notwithstanding the foregoing, Executive
acknowledges and agrees that, during the course of his employment with the
Company, the Company may undergo one or more segment restructurings, provided,
in each such instance, at a minimum, Executive shall remain responsible for
providing executive leadership to the Company regarding the development, sales,
marketing and financing of shared ownership interests as well as resort
operations of managed shared ownership resorts.  During such employment,
Executive shall do and perform all services and acts necessary or advisable to
fulfill the duties and responsibilities as are commensurate and consistent with
Executive’s position and shall render such services on the terms set forth
herein.  Executive shall report directly to the Chairman, President and Chief
Executive Officer of the Company (the “Reporting Officer”).  Executive shall
have such powers and duties, as may reasonably be assigned to Executive by the
Reporting Officer.  Executive agrees to devote all of Executive’s working time,
attention and efforts to the Company and to perform the duties of Executive’s
position in accordance with its policies as in effect from time to time. The
foregoing shall not be construed as preventing Executive from serving on the
board of Welltower, Inc. or continuing his ownership interest in the Caloosa
Cove Resort.  Executive’s primary location of employment shall be Orlando,
Florida, provided, he will be required to regularly perform services at the
Company’s headquarters in Miami, Florida and otherwise engage in periodic visits
to other locations as may be necessary to perform his duties and
responsibilities for the Company effectively.

2A.TERM.  The term of this Agreement shall begin on the Effective Date and shall
end on the second year anniversary of the Effective Date (the
“Term”).  Thereafter, the Term shall automatically continue, until and unless
either Party provides the other Party with not less than

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ninety (90) days’ written notice of their intent to terminate this Agreement,
subject to either Party’s right to terminate this Agreement in accordance with
Section 1 of the Standard Terms and Conditions, attached hereto and incorporated
herein. 

3A.COMPENSATION.

(a) BASE SALARY.  During the Term, the Company shall pay Executive an annual
base salary of five hundred fifty thousand U.S. dollars (US$550,000) (the “Base
Salary”), payable in equal biweekly installments (or, if different, in
accordance with the Company’s payroll practice as in effect from time to
time).  For all purposes under this Agreement, the term “Base Salary” shall
refer to the Base Salary as in effect from time to time.

(b) BONUS. 

(i) During the Term, Executive shall be eligible to receive a target annual
bonus of up to 100% of Base Salary, based upon the Company’s achievement of
certain financial performance targets, as such are established by the
Compensation and Human Resources Committee of ILG’s Board of Directors (the
“Committee”) annually, as well as Executive’s achievement of certain individual
performance goals established by Executive’s Reporting Officer.  Initially, such
annual bonus shall be earned as follows:  60% based on the VO Segment’s actual
Adjusted EBITDA performance against the VO Segment’s Adjusted EBITDA target,
determined based on the segment’s Board-approved budget for the applicable
calendar year, 10% based the VO Segment’s actual revenue performance against the
VO Segment’s revenue target, determined based on the segment’s Board-approved
budget for the applicable calendar year and 30% based on subjective individual
performance; provided,  from time to time, the Committee may modify the
performance criteria on which annual bonuses are earned by Executive and other
similarly situated executive management personnel, in its sole discretion.    

(ii) Any annual bonus shall be paid during the following the calendar year with
respect to which such annual bonus relates at such time as other similarly
situated executive management personnel are paid bonuses in accordance with the
policies of the Company (unless Executive has elected to defer receipt of such
bonus pursuant to an arrangement that meets the requirements of Section 409A (as
defined below); provided, in each instance, payment of Executive’s annual bonus
is conditioned upon the Committee certification of VO Segment’s actual
performance against the applicable financial performance targets.

(c)RESTRICTED STOCK UNITS. 

(i)(A)As promptly as practicable following the Effective Date, subject to
approval by the Committee, Executive shall be granted, under and subject to the
provisions of the 2013 ILG Stock and Annual Incentive Plan, an award of a number
of ILG RSUs determined by dividing US$2,000,000 by the average of the ILG’s
common stock closing prices for the 30 trading days ending on the trading day
prior to the Effective Date, rounded down to the nearest whole number of ILG
RSUs (the “Initial Equity Award”). 

(B)The Initial Equity Award shall be comprised of two components: (A) 60%
service-based RSUs valued at US$1,200,000; and (B) 40% performance RSUs valued
at US$800,000.   Both such components shall vest, assuming continued employment
with the Company, in equal

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tranches, on each of the initial three anniversaries of the Effective Date or,
as it relates to the performance RSUs, on or about the date on which the
Committee certifies the requisite performance.  Other terms for the Initial
Equity Award will be set forth in the Award Notices and related Terms and
Conditions accompanying such award, copies of which are attached hereto and
incorporated herein as composite Exhibit A.   

(C)In the event that there is a Change of Control (as defined in the Plan) with
regard to the Company any portion of the Initial Equity Award that would have
vested during the twenty-four (24) month period following such Change of Control
shall vest, as of the date of such Change of Control.  In the event any portion
of the Initial Equity Award remains unvested after application of the foregoing
sentence, the agreements effectuating the Change of Control shall provide for
the assumption of, or compensation for, the unvested portion of the Initial
Equity Award by the successor entity (unless the successor entity is ILG, in
which case the unvested portion of the Initial Equity Award shall remain
outstanding and vest in accordance with its terms). 

(D)In the event that (1) Executive is terminated by the Company without Cause,
or (2) Executive resigns with Good Reason, any portion of the Initial Equity
Award that would have vested during the twenty-four (24) month period following
such separation shall vest, as of the date of such separation.  Where such event
follows a Change of Control, any portion of the Initial Equity Award that
remains unvested shall vest as of the effective date of Executive’s separation
from the Company; provided, as it relates to any performance RSUs, vesting shall
be at 100% of the Target, unless, if at the time of the Change of Control, the
Committee believes, in its good faith and sole judgment, that it is
substantially likely that in the absence of the Change of Control a greater
portion of the performance RSUs would have vested than the Target, then at such
time the Committee shall make a determination to vest additional shares
accordingly.

(ii)Commencing with grants issued in calendar year 2017, based on calendar year
2016 performance, Executive shall be entitled to participate in ILG’s long-term
incentive program in accordance with ILG’s policies as in effect from time to
time; provided, Executive acknowledges and agrees that his eligibility to
participate in this program is subject to a number of factors, including,
without limitation, ILG’s continuation of a long-term incentive program, the
performance of ILG, Executive’s individual performance, the availability of RSUs
to effectuate such grant and the Committee’s approval of each such grant as well
as the performance criteria associated therewith.  Executive further
acknowledges and agrees that each such award is subject to the terms and
conditions of ILG’s 2013 Stock and Incentive Compensation Plan, as such may
amended or replaced, from time to time, and the Award Notice and related Terms
and Conditions accompanying such award.

(c) BENEFITS.  During the Term, Executive shall be entitled to participate in
any welfare, health and life insurance and pension benefit and incentive
programs as may be adopted from time to time by the Company on the same basis as
that provided to similarly situated executive management personnel of the
Company.  For purposes of determining Executive’s entitlement to any welfare,
health and life insurance benefit and incentive program available to similarly
situated executive personnel, Executive’s seniority with the Company shall be
calculated to include his years of service while employed at Starwood Hotels &
Resorts and Vistana Signature Experiences, Inc. and its predecessors prior to
the Effective Date. Without limiting the generality of the foregoing, Executive
shall be entitled to the following benefits:

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(i) Reimbursement for Business Expenses.  ILG shall reimburse Executive for all
reasonable, necessary and documented expenses incurred by Executive in
performing Executive’s duties for the Company, ILG or its Affiliates on the same
basis as similarly situated executive personnel and in accordance with ILG’s
policies as in effect from time to time.  With respect to air travel for
business purposes, Executive shall be eligible for reimbursement for Business
Class (or if Business Class is unavailable the next higher class), unless
otherwise agreed with Executive’s Reporting Officer; provided, such travel is
scheduled with the prior approval of his Reporting Officer and is otherwise in
accordance with the travel and entertainment policies of ILG and its Affiliates.

(ii) Paid Time Off.  It is agreed that Executive shall be entitled to earn paid
time-off at a rate of 18.66 hours per month, subject to a maximum paid time-off
accrual of 408 hours, at which point additional accruals will be suspended until
such time as a portion of the Executive’s accrued paid time-off has been
used.  Company acknowledges that Executive plans to take vacation during the
period of December 14 – 31, 2016.   Any paid time-off accrued with the Company
shall be applied to such vacation and, if such accrued time is insufficient to
cover such period, Executive shall be allowed to borrow against accruals to be
earned in 2017 or take such time as unpaid leave at his election.

4A.NOTICES.  All notices and other communications under this Agreement shall be
in writing and shall be given by first-class mail, certified or registered with
return receipt requested, by hand delivery, or by overnight delivery by a
nationally recognized carrier, and any such notice is deemed effectively given
when received by the recipient (or if receipt is refused by the recipient, when
so refused) to the address set forth below:

 

 

If to the Company:

ILG, Inc.

 

6262 Sunset Drive

 

Miami, Florida 33143

 

Attention:  General Counsel

 

 

If to Executive:

Sergio D. Rivera

 

At the last address indicated in the Company’s records.

 

Either Party may change such Party’s address for notices by notice duly given
pursuant hereto.

5A.GOVERNING LAW; JURISDICTION.  This Agreement and the legal relations thus
created between the Parties (including, without limitation, any dispute arising
out of or related to this Agreement) shall be governed by and construed under
and in accordance with the internal laws of the State of Florida without
reference to its principles of conflicts of laws. Any dispute between the
Parties arising out of or related to this Agreement will be heard and determined
before an appropriate federal court located in the State of Florida in
Miami-Dade County, or, if not maintainable therein, then in an appropriate
Florida state court located in Miami-Dade County, and each Party submits itself
and its property to the exclusive jurisdiction of the foregoing courts with
respect to such disputes. 

Each Party (i) agrees that service of process may be made by mailing a copy of
any relevant document to the address of the Party set forth above, (ii) waives
to the fullest extent permitted by law any objection which it may now or
hereafter have to the courts referred to above on the grounds

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of inconvenient forum or otherwise as regards any dispute between the Parties
arising out of or related to this Agreement, (iii) waives to the fullest extent
permitted by law any objection which it may now or hereafter have to the laying
of venue in the courts referred to above as regards any dispute between the
Parties arising out of or related to this Agreement and (iv) agrees that,
subject to a Party’s right of appeal, a judgment or order of any court referred
to above in connection with any dispute between the Parties arising out of or
related to this Agreement is conclusive and binding on it and may be enforced
against it in the courts of any other jurisdiction. 

6A.COUNTERPARTS.  This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument. 

7A.STANDARD TERMS AND CONDITIONS.  Executive expressly understands and
acknowledges that the Standard Terms and Conditions and Exhibit A, both attached
hereto, are incorporated herein by reference, deemed a part of this Agreement
and are binding and enforceable provisions of this Agreement.  References to
“this Agreement” or the use of the term “hereof” shall refer to this Agreement,
the Standard Terms and Conditions and Exhibit A, taken as a whole.

8A.SECTION 409A OF THE INTERNAL REVENUE CODE. 

(a)This Agreement is not intended to constitute a “nonqualified deferred
compensation plan” within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended, and the rules and regulations issued thereunder
(“Section 409A”).  It is intended that any amounts payable under this Agreement
and ILG’s and Executive’s exercise of authority or discretion hereunder shall
comply with and avoid the imputation of any tax, penalty or interest under
Section 409A of the Code.  This Agreement shall be construed and interpreted
consistent with that intent.

(b)To the extent that any reimbursement pursuant to this Agreement is taxable to
Executive, Executive shall provide ILG with documentation of the related
expenses promptly so as to facilitate the timing of the reimbursement payment
contemplated by this section, and any reimbursement payment due to Executive
pursuant to such provision shall be paid to Executive on or before the last day
of Executive’s taxable year following the taxable year in which the related
expense was incurred.  Such reimbursement obligations pursuant to this Agreement
are not subject to liquidation or exchange for another benefit and the amount of
such benefits that Executive receives in one taxable year shall not affect the
amount of such benefits that Executive receives in any other taxable year.

9A.Notwithstanding anything to the contrary herein, this Agreement shall become
effective upon, and subject to the occurrence of, the Effective Date. 

[Signature appear on the following page]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and
delivered by its duly authorized officer and Executive has executed and
delivered this Agreement on November 7, 2016.

 

 

 

 

ILG, INC.

 

 

 

By:

/s/ Craig M. Nash

 

Name:

Craig M. Nash

 

Title:

Chairman, President and Chief Executive Officer

 

 

 

 

 

 

 

/s/ Sergio D. Rivera

 

Sergio D. Rivera

 

 

 

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STANDARD TERMS AND CONDITIONS

1. SEPARATION OF EXECUTIVE’S EMPLOYMENT.

(a) DEATH.  In the event Executive’s employment hereunder is terminated by
reason of Executive’s death, the Company shall pay Executive’s designated
beneficiary or beneficiaries, within thirty (30) days of Executive’s death in a
lump sum in cash, (i) Executive’s Base Salary through the end of the month in
which death occurs,  and (ii) any other Accrued Obligations (as defined in
Section 1(f) below).

(b) DISABILITY.  If, as a result of Executive’s incapacity due to physical or
mental illness (“Disability”), Executive shall have been absent from the
full-time performance of Executive’s duties with the Company for a period of
twelve (12) consecutive weeks, or for shorter periods aggregating to twelve (12)
weeks, during any twelve (12) consecutive months and, within thirty (30) days
after written notice is provided to Executive by the Company (in accordance with
Section 4A hereof), Executive shall not have returned to the full-time
performance of Executive’s duties, Executive’s employment under this Agreement
may be terminated by the Company for Disability.  Upon separation of Executive’s
employment due to Disability, the Company shall pay Executive within thirty (30)
days of such separation (i) Executive’s Base Salary through the end of the month
in which separation occurs in a lump sum in cash, offset by any amounts payable
to Executive under any disability insurance plan or policy provided by the
Company; and (ii) any other Accrued Obligations.

(c) TERMINATION FOR CAUSE.  The Company may terminate Executive’s employment
under this Agreement for Cause at any time prior to the expiration of the
Term.   Upon the termination of Executive’s employment by the Company for Cause
(as defined below), the Company and its Affiliates shall have no further
obligation hereunder, except for the payment of any Accrued Obligations.  As
used herein, “Cause” shall mean: (i) any material breach by Executive of any of
the duties, responsibilities or obligations of his employment, or any policies
or practices of the Company; (ii)  Executive’s failure or refusal either to
perform, to the Company’s satisfaction, the duties or obligations of his
employment, or to follow any lawful order or direction by the Company; or (iii)
any acts or omissions by Executive that constitute fraud, dishonesty, breach of
trust, gross negligence, civil or criminal illegality, or any other conduct or
behavior that could otherwise subject the Company or any of its Affiliates to
civil or criminal liability or otherwise adversely affect its or their business,
interests or reputation.  Executive may not be terminated for Cause hereunder
unless and until Executive shall have been given written notice specifying the
grounds for such termination and not less than 30 days to correct such acts or
omissions, if correctable; provided, the Company may relieve Executive of his
duties during this cure period, if it deems necessary.

(d) RESIGNATION BY EXECUTIVE FOR GOOD REASON.  Executive may terminate his
employment for Good Reason.  "Good Reason" shall mean any action or inaction by
the Company that results in the occurrence of any of the following, without
Executive's prior written consent: (i) a material diminution in Executive's
authority, duties,

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or responsibilities with the Company; (ii) Executive is required to report to a
corporate officer or employee of the Company instead of reporting directly to
his Reporting Officer, as of the date hereof, or the Board of Directors of the
Company; (iii) a material diminution of Executive’s Base Salary; or (iv) the
Company’s requiring Executive to be based anywhere more than fifty (50) miles
from where Executive’s principal place of employment is located as of the
Effective Date, or such other location as the Parties may mutually agree;
provided, however, Executive shall have Good Reason to resign his employment
only if (x) he provides notice to the Company (in accordance with Section 4A
hereof) of the existence of the event or circumstances which Executive claims to
constitute Good Reason within ninety (90) days of Executive’s knowledge of such
event or circumstances, (y) the Company does not remedy such event or
circumstances within thirty (30) days following receipt such notice (the “Cure
Period”), and (z) Executive’s last day of employment occurs within thirty (30)
days following the expiration of such Cure Period.

(e) TERMINATION OF EMPLOYMENT BY THE COMPANY, OTHER THAN FOR DEATH, DISABILITY
OR CAUSE, OR BY EXECUTIVE FOR GOOD REASON. 

(i) If Executive’s employment hereunder is terminated by the Company for any
reason, other than Executive’s death, Disability or Cause, or by the Executive
for Good Reason (in each instance, a “Qualifying Termination”), then the Company
shall pay Executive (A) his Accrued Obligations (as defined in Section 1(f)
below), within thirty (30) days of such Qualifying Termination,  (B) (1) an
amount equal to his Base Salary for a twenty-four (24) month period from the
date of such Qualifying Termination (the “Severance Period”) and (2) an amount
equal to twenty-four (24) times the monthly COBRA premium and administrative fee
in effect on the payment date for the type of Company-provided group health plan
coverage in effect for Executive (e.g., family coverage) on the effective date
of such termination, less the active employee portion of such monthly insurance
premium for such coverage in effect on the effective date of the Qualifying
Termination, which severance and COBRA amounts shall be payable in equal,
biweekly installments (or, if different, in accordance with  ILG’s payroll
practice as in effect from time to time) during the Severance Period  following
Executive’s separation from the Company, and (C) any bonus that would have been
earned by Executive during such year if such Qualifying Termination had not
occurred, which bonus, if any, shall be based on actual achievement of
pre-established performance criteria, as established by the Committee, pro-rated
based on the number of full months which Executive worked during the calendar
year in which such termination occurs (but which shall not include any bonus
amount earned if the Committee retained discretion to reduce the award and the
Committee so elects to apply such discretion to reduce bonuses on the same basis
for all employees eligible to participate in the bonus plan for such year),
which bonus amount shall be paid at such time as other similarly situated
executive management personnel are paid bonuses in accordance with the policies
of the Company (unless Executive has elected to defer receipt of such bonus
pursuant to an arrangement that meets the requirements of Section 409A (as
defined below).  The amounts payable pursuant to Sections 1(e)(i)(B) and (C)
shall be referenced collectively as the “Cash Severance Payment”.

(ii) Notwithstanding the preceding provisions of this Section 1(e), in the event
that Executive is a “specified employee” (within the meaning of Section 409A) on
the effective

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date of the Qualifying Termination and the amount of the Cash Severance Payment
to be paid within the first six months following such date (the “Initial Payment
Period”) exceeds the amount referenced in Treas. Regs. Section
1.409A-1(b)(9)(iii)(A) (the “Limit”), then (A) any portion of the Cash Severance
Payment that is payable during the Initial Payment Period that does not exceed
the Limit shall be paid as set forth in this Section 1(e), and (B) any portion
of the Cash Severance Payment that exceeds the Limit (and would have been
payable during the Initial Payment Period but for the Limit) shall be paid, with
Interest, on the first business day of the first calendar month that begins
after the six-month anniversary of Executive’s “separation from service” (within
the meaning of Section 409A).  For purposes of this section, Interest shall mean
interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of
the Code, from the date on which payment would otherwise have been made but for
any required delay through the date of payment.

(iii) The payment to Executive pursuant to this Section 1(a), (b) or (e) of any
amounts, other than Accrued Obligations, shall be subject to Executive’s payment
in full of any outstanding balance, including any and all charges, interest
and/or delinquency fees, arising from Executive’s use of any corporate credit
card issued to him and, as it relates to payments received pursuant to Section
1(b) or 1(e), other than Accrued Obligations, (A)  Executive’s continued
compliance with the obligations set forth in Section 2 of these Standard Terms
and Conditions and (B) Executive’s execution and non-revocation of a Separation
Agreement with the Company, in a form substantially similar to that used for
similarly situated executive management personnel of the Company and/or its
Affiliates, which will include, among other provisions, a general release of all
claims against the Company and its Affiliates.  Executive acknowledges and
agrees that the amounts, other than the Accrued Obligations, described in
Section 1(b) or (e) constitute good and valuable consideration for such release
and, where applicable, affirmation of his compliance with the restrictive
covenants set forth in Section 2.   For the purposes of the Agreement, the term
“Affiliate” shall mean shall mean any company controlled by, controlling or
under common control with the Company.

(iv)(A)Notwithstanding any other provision of this Agreement or any other plan,
arrangement or agreement to the contrary, if any of the payments or benefits
provided or to be provided by the Company or its affiliates to the Executive or
for the Executive's benefit pursuant to the terms of this Agreement or otherwise
("Covered Payments") constitute parachute payments ("Parachute Payments") within
the meaning of Section 280G of the Code and would, but for this Section 1(e)(iv)
be subject to the excise tax imposed under Section 4999 of the Code (or any
successor provision thereto) or any similar tax imposed by state or local law or
any interest or penalties with respect to such taxes (collectively, the "Excise
Tax"), then the Covered Payments shall be payable either (1) in full (“Full
Payment”) or (2) reduced to the minimum extent necessary (“Reduced Payment”) to
ensure that no portion of the Covered Payments is subject to the Excise Tax,
whichever of the Full Payment or Reduced Payment results in the Employee's
receipt on an after-tax basis of the greatest amount of benefits after taking
into account the applicable federal, state, local and foreign income, employment
and excise taxes (including the Excise Tax).  Any such reduction shall be made
in accordance with Section 409A of the Code and the following: (aa) the Covered
Payments which do not constitute nonqualified deferred

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compensation subject to Section 409A of the Code shall be reduced first; and
(bb) Covered Payments shall then be reduced as follows: (x) cash payments shall
be reduced before non-cash payments; and (y) payments to be made on a later
payment date shall be reduced before payments to be made on an earlier payment
date.

(B)Any determination required under this Section 1(e)(iv) shall be made in
writing in good faith by an independent accounting firm selected by the Company
(the “Accounting Firm”), which shall provide detailed supporting calculations to
Company  and the Employee as requested by the Company or the Employee.  The
Company and the Employee shall provide the Accounting Firm with such information
and documents as the Accounting Firm may reasonably request in order to make a
determination under this Section 1(e)(iv). 

(f)ACCRUED OBLIGATIONS.  As used in this Agreement, “Accrued Obligations” shall
mean the sum of (i) any portion of Executive’s accrued but unpaid Base Salary
through the date of death or separation of employment for any reason, as the
case may be; and (ii) any compensation previously earned but deferred by
Executive (together with any interest or earnings thereon) that has not yet been
paid, is not considered “deferred compensation” subject to Section 409A and has
not otherwise been deferred to a later date pursuant to any deferred
compensation arrangement of the Company to which Executive is a party, if any.

2.

CONFIDENTIAL INFORMATION; NON-COMPETITION; NON-SOLICITATION; PROPRIETARY RIGHTS;
AND OTHER POST-SEPARATION OBLIGATIONS.

(a) CONFIDENTIALITY.  Executive acknowledges that while employed by ILG or any
of its Affiliates, Executive will occupy a position of trust and
confidence.  Executive shall not, except as may be required to perform
Executive’s duties hereunder or as required by applicable law, without
limitation in time or until such information shall have become public other than
by Executive’s unauthorized disclosure, disclose to others or use, whether
directly or indirectly, any Confidential Information regarding ILG or any of its
Affiliates.  “Confidential Information” shall mean information about ILG or any
of its Affiliates, and their clients and customers that is not disclosed by ILG
or any of its Affiliates for financial reporting purposes and that was learned
by Executive in the course of employment by ILG or any of its Affiliates,
including (without limitation) any proprietary knowledge, trade secrets, data,
formulae, information and client and customer lists and all papers, resumes, and
records (including computer records) of the documents containing such
Confidential Information.  Executive acknowledges that such Confidential
Information is specialized, unique in nature and of great value to ILG and its
Affiliates, and that such information gives ILG and its Affiliates a competitive
advantage.  Executive agrees to deliver or return to ILG, at ILG’s request at
any time or upon separation of Executive’s employment or as soon thereafter as
possible, all documents, computer tapes and disks, records, lists, data,
drawings, prints, notes and written information (and all copies thereof)
furnished by ILG and its Affiliates or prepared by Executive in the course of
Executive’s employment by ILG and its Affiliates.

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(b) NON-COMPETITION.  In consideration of this Agreement, and other good and
valuable consideration provided hereunder, the receipt and sufficiency of which
are hereby acknowledged by Executive, Executive hereby agrees and covenants
that, during Executive’s employment hereunder and for a period of twenty-four
(24) months, Executive shall not, without the prior written consent of ILG,
directly or indirectly, engage in or become associated with a Competitive
Activity. 

(i) For purposes of this Section 2(b), (A) a “Competitive Activity” means any
corporation, partnership or other entity that (1) engages in the timeshare
business; or (2) then derives 33% or more of its total earnings before interest,
taxes, depreciation and amortization (determined in accordance with generally
accepted accounting principles consistently applied) from the timeshare
business, and (B) Executive shall be considered to have become “associated with
a Competitive Activity” if Executive becomes directly or indirectly involved as
an owner, principal, employee, officer, director, independent contractor,
representative, stockholder, financial backer, agent, partner, member, advisor,
lender, consultant or in any other individual or representative capacity with
any individual, partnership, corporation or other organization that is engaged
in a Competitive Activity.  

(ii) Notwithstanding the foregoing, Executive may make and retain, for
investment purposes only, less than one percent (1%) of the outstanding capital
stock of any publicly-traded corporation engaged in a Competitive Activity if
the stock of such corporation is either listed on a national stock exchange or
on the NASDAQ National Market System if Executive is not otherwise affiliated
with such corporation. 

(iii) Executive acknowledges that Executive’s covenants under this Section 2(b)
are a material inducement to ILG entering into this Agreement.

(c) NON-SOLICITATION OF EMPLOYEES/CUSTOMERS. 

(i)Executive recognizes that he will possess confidential information about
other employees of ILG and its Affiliates relating to their education,
experience, skills, abilities, compensation and benefits, and interpersonal
relationships with suppliers to and customers of ILG and its
Affiliates.  Executive recognizes that the information he will possess about
these other employees is not generally known, is of substantial value to ILG and
its Affiliates in developing their respective businesses and in securing and
retaining customers, and will be acquired by Executive because of Executive’s
business position with ILG or its Affiliates.

(ii)Executive agrees that, during the Term (and for a period of twenty-four (24)
months after  the separation of his employment, irrespective of the cause,
manner or time of such separation), Executive will not, directly or indirectly,
solicit or recruit any employee of ILG or any of its Affiliates for the purpose
of being employed by Executive or by any business, individual, partnership,
firm, corporation or other entity on whose behalf Executive is acting as an
agent, representative or employee and that Executive will not convey any such
confidential information or trade secrets about other employees of ILG or any of
its Affiliates to any other person except within the scope of Executive’s duties
hereunder.

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(iii)Executive agrees that, during the Term (and for a period of twenty-four
(24) months after the separation of his employment, irrespective of the cause,
manner or time of such separation), Executive will not make any statement or
perform any act intended to advance the interest of any competitor of ILG or any
of its Affiliates in any way that will injure the interests of ILG or any of its
Affiliates.  Executive also agrees that during such period, he shall not solicit
or attempt to take away or to sever from ILG or any of its Affiliates the
business or goodwill of any individuals or entities who are customers or clients
of ILG or any of its Affiliates.

(d) PROPRIETARY RIGHTS; ASSIGNMENT.  All Developments shall be made for hire by
the Executive for ILG or any of its Affiliates.  “Developments” means any idea,
discovery, invention, design, method, technique, improvement, enhancement,
development, computer program, machine, algorithm or other work or authorship
that (i) relates to the business or operations of ILG or any of its Affiliates,
or (ii) results from or is suggested by any undertaking assigned to the
Executive or work performed by the Executive for or on behalf of ILG or any of
its Affiliates, whether created alone or with others, during or after working
hours.  All Confidential Information and all Developments shall remain the sole
property of ILG or any of its Affiliates.  The Executive shall acquire no
proprietary interest in any Confidential Information or Developments developed
or acquired during the Term.  To the extent the Executive may, by operation of
law or otherwise, acquire any right, title or interest in or to any Confidential
Information or Development, the Executive hereby assigns to ILG all such
proprietary rights.  The Executive shall, both during and after the Term, upon
ILG’s request, promptly execute and deliver to ILG all such assignments,
certificates and instruments, and shall promptly perform such other acts, as ILG
may from time to time in its discretion deem necessary or desirable to evidence,
establish, maintain, perfect, enforce or defend ILG’s rights in Confidential
Information and Developments.

(e) COMPLIANCE WITH POLICIES AND PROCEDURES.  During the Term, Executive shall
adhere to the policies and standards of professionalism set forth in the
Company’s Policies and Procedures, as they may exist from time to time.

(f) REMEDIES FOR BREACH.  Executive agrees and understands that the remedy at
law for any breach by Executive of this Section 2 will be inadequate and that
damages flowing from such breach are not usually susceptible to being measured
in monetary terms.  Accordingly, it is acknowledged that upon Executive’s
violation of any provision of this Section 2, ILG shall be entitled to obtain
from any court of competent jurisdiction immediate injunctive relief and obtain
a temporary order restraining any threatened or further breach as well as an
equitable accounting of all profits or benefits arising out of such
violation.  Nothing in this Section 2 shall be deemed to limit ILG’s remedies at
law or in equity for any breach by Executive of any of the provisions of this
Section 2, which may be pursued by or available to ILG.

(g) POST-SEPARATION COOPERATION.  Following the expiration or termination of the
Executive’s employment for any reason, Executive agrees to make himself
reasonably available to the Company and/or its Affiliates to respond to requests
for documents and information concerning matters involving facts or events
relating to the

--------------------------------------------------------------------------------

 

Company or any of its Affiliates that may be within his knowledge, and further
agrees to provide truthful information to the Company, its Affiliates, or any of
their respective representatives as reasonably requested with respect to any
pending and future litigation, arbitration, other dispute resolution,
investigation or request for information.  Executive also agrees to make himself
reasonably available to assist the Company  and its Affiliates in connection
with any administrative, civil or criminal matter or proceeding brought by or
brought against the Company  and/or any of its Affiliates, in which and to the
extent the Company, its Affiliates or any of their respective representatives
reasonably deem Executive’s cooperation necessary. Executive shall be reimbursed
for his reasonable out-of-pocket expenses incurred as a result of such
cooperation.

(h)SURVIVAL OF PROVISIONS.  The obligations contained in this Section 2 survive
the termination or expiration of Executive’s employment with the Company and, as
applicable, shall be fully enforceable thereafter in accordance with the terms
of this Agreement.  If it is determined by a court of competent jurisdiction in
any state that any restriction in this Section 2 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the Parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.

3.TERMINATION OF PRIOR AGREEMENTS.  The Agreement, these Standard Terms and
Conditions, and Exhibit A constitute the entire agreement between the Parties
and, as of the Effective Date, terminate and supersede any and all prior
agreements and understandings (whether written or oral) between the Parties with
respect to the subject matter of this Agreement.  Executive acknowledges and
agrees that neither the Company nor anyone acting on its behalf has made, and is
not making, and in executing this Agreement, Executive has not relied upon, any
representations, promises or inducements except to the extent the same is
expressly set forth in this Agreement.

4. ASSIGNMENT; SUCCESSORS.  This Agreement is personal in its nature and none of
the Parties shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; provided that in the event of
the merger, consolidation, transfer, or sale of all or substantially all of the
assets of the Company (a “Transaction”) with or to any other individual or
entity, this Agreement shall, subject to the provisions hereof, be binding upon
and inure to the benefit of such successor and such successor shall discharge
and perform all the promises, covenants, duties, and obligations of the Company
hereunder, and in the event of any such assignment or Transaction, all
references herein to the “Company” or “ILG” shall refer to such entity’s
assignees or successors hereunder. 

5. WITHHOLDING. The Company shall make such deductions and withhold such amounts
from each payment and benefit made or provided to Executive hereunder, as may be
required from time to time by applicable law, governmental regulation or order.

 

 

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6. SECTION 409A.

(a)For purposes of this Agreement, a “Separation from Service” occurs when
Executive dies, retires or otherwise has a separation of employment with the
Company that constitutes a “separation from service” within the meaning of
Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional
alternative definitions available thereunder.

(b)It is intended that any amounts payable under this Agreement and ILG’s and
Executive’s exercise of authority or discretion hereunder shall comply with and
avoid the imputation of any tax, penalty or interest under Section 409A of the
Code.  This Agreement shall be construed and interpreted consistent with that
intent.

7. HEADING REFERENCES.  Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.  References to “this Agreement” or the use of
the term “hereof” shall refer to these Standard Terms and Conditions and the
Employment Agreement attached hereto and Exhibit A, taken as a whole.

8. WAIVER; MODIFICATION.  Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.  This Agreement shall not be modified in any
respect except by a writing executed by each Party.  Notwithstanding anything to
the contrary herein, subject to Section 1(d), none of (i) a change in
Executive’s title, duties and/or level of responsibilities including by way of
assignment of Executive to another position with the Company or any of its
Affiliates that does not result in a material reduction in Executive’s title,
duties and/or level of responsibilities, (ii) the assignment of Executive to a
different Reporting Officer for any reason nor (iii) a change in the title of
the Reporting Officer shall constitute a modification or a breach of this
Agreement.

9. SEVERABILITY.  In the event that a court of competent jurisdiction determines
that any portion of this Agreement is in violation of any law or public policy,
only the portions of this Agreement that violate such law or public policy shall
be stricken.  All portions of this Agreement that do not violate any statute or
public policy shall continue in full force and effect.  Further, any court order
striking any portion of this Agreement shall modify the stricken terms as
narrowly as possible to give as much effect as possible to the intentions of the
Parties under this Agreement.

10. INDEMNIFICATION.  If Executive was or is made a party or is threatened to be
made a party to or is otherwise involved (including involvement as a witness) in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he is or was an
officer or employee of the Company or any of its Affiliates, Executive shall be
indemnified and held harmless by the Company  to the fullest extent authorized
by the Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only

--------------------------------------------------------------------------------

 

to the extent that such amendment permits the Company to provide broader
indemnification rights than permitted prior thereto), against all expense,
liability and loss (including attorneys’ fees, judgments, fines, excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by
Executive in connection therewith and such indemnification shall continue as to
Executive if he ceases to be an officer or employee and shall inure to the
benefit of Executive’s heirs, executors and administrators; provided, however,
that the Company shall indemnify Executive in connection with a proceeding (or
part thereof) initiated by Executive only if such Proceeding (or part thereof)
was authorized by the Board of Directors of ILG and provided further that
neither the Company, nor any of its Affiliates shall indemnify Executive for any
losses incurred by Executive to the extent such result from any acts described
in Section 1(c) of this Agreement.  The right to indemnification conferred in
this section shall include the obligation of the Company to pay the expenses
incurred in defending any such proceeding in advance of its final disposition
(an "Advance of Expenses"); provided, however, any Advance of Expenses incurred
by Executive in his capacity as an officer or employee shall be made only upon
delivery to the Company of an undertaking, by or on behalf of Executive, to
repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal that Executive
is not entitled to be indemnified for such expenses under this section or
otherwise.

[Signatures appear on the following page]

 

--------------------------------------------------------------------------------

 

ACKNOWLEDGED AND AGREED:

Date: November 7, 2016

 

 

 

 

ILG, INC.

 

 

 

By:

/s/ Craig M. Nash

 

Name:

Craig M. Nash

 

Title:

Chairman, President and Chief Executive Officer

 

 

 

 

 

 

 

/s/ Sergio D. Rivera

 

Sergio D. Rivera

 

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EXHIBIT A

 

RESTRICTED STOCK UNIT AWARD NOTICES

AND AWARD TERMS AND CONDITIONS

 

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Notice of 2016 Restricted Stock Unit Award Granted Under the
Interval Leisure Group, Inc. 2013 Stock and Incentive Compensation Plan

 

 

Award Recipient:

Sergio D. Rivera

2013 RSU Awards:

XXXX1 restricted stock units (“RSUs”) under the Interval Leisure Group, Inc.
2013 Stock and Annual Incentive Plan (the “Plan”).  Capitalized terms used (but
not defined) in this Award Notice shall have the meanings set forth in the
Plan.  

Award Date:

_________________, 2016

Vesting Schedule: 

Subject to your continued service with ILG, Inc. (the “Company”) and provided
the performance set forth in Schedule A to the Terms and Conditions is met in
calendar year 2017, your RSUs shall, subject to the provisions of the Plan, vest
and no longer be subject to any restriction in three equal tranches on the
first, second and third year anniversaries of the Effective Date of employment.

Impact of a Termination of Service

Subject to and in accordance with the provisions of your Employment Agreement
and the Plan, in the event of a termination, any unvested RSUs will be
forfeited.

Adjustments

The RSUs may be adjusted by the Compensation and Human Resources Committee or
the Board of Directors in connection with (1) a stock dividend, stock split,
reverse stock split, share combination, recapitalization or similar event or (2)
a merger, consolidation, acquisition, separation, spin-off reorganization,
liquidation or similar event affecting ILG or its Affiliates.

Terms and Conditions:

Your RSUs are subject to your Employment Agreement, the Terms and Conditions
(attached hereto) and the Plan (posted on www.stockplanconnect.com) and which
are incorporated herein by reference; provided that to the extent there is a
conflict, the provisions of your Employment Agreement shall control. 

Without a complete review of these documents, you will not have a full
understanding of all the material terms of your RSUs.  In addition, you are
required to acknowledge and accept the Terms and Conditions applicable to your
2016 ILG equity awards. Your failure to do so upon request will result in these
awards being null and void.

1Number of RSUs to be established by dividing the award value, $1,200,000,  by
the average of the ILG’s common stock closing prices for the 30 trading days
ending on the trading day prior to the Effective Date of employment, rounded
down to the nearest whole number of ILG RSUs.

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Terms and Conditions for
Service-Based Restricted Stock Unit Awards

These Terms and Conditions apply to the grant awarded to you by ILG, Inc. (“ILG”
or the “Company”) pursuant to Section 12 of the Interval Leisure Group 2013
Stock and Incentive Compensation Plan (the “Plan”) of Restricted Stock Units
(the “Award”). You were notified of your Award by way of an award notice (the
“Award Notice”).

ALL CAPITALIZED TERMS USED HEREIN, TO THE EXTENT NOT

DEFINED, SHALL HAVE THE MEANINGS SET FORTH IN THE PLAN.

Continuous Service

In order for your Award to vest, you must be continuously employed by ILG or any
of its Affiliates during the Restriction Period (as defined below).  Nothing in
your Award Notice, these Terms and Conditions, or the Plan, shall confer upon
you any right to continue in the employ or service of ILG or any of its
Affiliates or interfere in any way with their rights to terminate your
employment or service at any time.

Vesting

Subject to the Award Notice, these Terms and Conditions and the provisions of
the Plan, the Restricted Stock Units (“RSUs”) in respect to your Award, shall
vest and no longer be subject to any restriction (such period during which
restrictions apply is the “Restriction Period”), provided the performance set
forth on Schedule A, attached hereto, is met for calendar year 2017:

 

 

 

Vesting Date

Portion of Total Award Vesting

On the first year anniversary of the Effective Date of Employment

1/3

On the second year anniversary of the Effective Date of Employment

1/3

On the third year anniversary of the Effective Date of Employment

1/3

 

Termination of Employment

Subject to the provisions of your employment agreement and these terms and
conditions, upon your Termination of Employment during the Restriction Period
for any reason, any unvested RSUs shall be forfeited and canceled in their
entirety effective immediately upon such Termination of Employment, provided,
however, where such Termination of Employment occurs following the applicable
vesting date, but before the actual settlement of such RSUs, you shall remain
eligible to receive such shares.  For the avoidance of doubt, transfers of
employment among the Company and its Subsidiaries or other Affiliates, without
any break in service, is not a Termination of Employment.  

If you have a Termination of Employment due to death, any unvested portion of
the Award shall vest in full.  If you have a Termination of Employment as a
result of a Disability, the Award shall continue to vest for up to four years
after the effective date of such termination of your employment provided you
continue to comply with any applicable confidentiality and non-competition
obligations you have to the Company and its Affiliates. 

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Upon your Termination of Employment by ILG or any of its Affiliates without
Cause or your resignation for Good Reason (as such is defined in your employment
agreement), any portion of the Award that would have vested during the
twenty-four (24) month period following such separation shall vest, as of the
date of such separation.  Where such event follows a Change of Control (as such
defined in the Plan), 100% of the RSUs set forth in your Award Notice shall
automatically vest upon such termination of employment.

If your Termination of Employment is a Termination for Cause, or if following a
Termination of Employment for any reason, ILG determines that during the two
years prior to such termination there was an event or circumstance that would
have been grounds for Termination for Cause, your Award shall be forfeited and
canceled in its entirety upon such termination (or the determination of the
basis for a Termination for Cause, if later) and ILG may cause you, immediately
upon notice, either to return the shares issued upon the settlement of RSUs that
vested during the two-year period after the events or circumstances giving rise
to or constituting grounds for Termination for Cause or to pay ILG an amount
equal to the aggregate amount, if any, that you had previously realized in
respect of any and all shares issued upon settlement of RSUs that vested during
the two-year period after the events or circumstances giving rise to or
constituting grounds for such Termination for Cause (i.e., the value of the RSUs
upon vesting), in each case, including any dividend equivalents or other
distributions received in respect of any such RSUs. This remedy shall be without
prejudice to, or waiver of, any other remedies ILG or its Affiliates may have in
such event.

Settlement

Subject to your satisfaction of the tax obligations described immediately below
under “Taxes and Withholding,” as soon as practicable after any RSUs have vested
and are no longer subject to the Restriction Period, such RSUs shall be settled.
In no event shall settlement occur later than two and one half months after the
end of the fiscal year in which the RSUs vest.  For each RSU settled, ILG shall
issue one share of Common Stock for each RSU vesting. Notwithstanding the
foregoing, ILG shall be entitled to hold the shares issuable to you upon
settlement of all RSUs that have vested until ILG or the agent selected by ILG
to administer the Plan (the “Agent”) has received from you (i) a duly executed
Form W-9 or W-8 and (ii) payment for any federal, state, local or foreign taxes
of any kind required by law to be withheld with respect to such RSUs.

Taxes and Withholding

No later than the date as of which an amount in respect of any RSUs first
becomes includible in your gross income for federal, state, local or foreign
income or employment or other tax purposes, ILG or its Affiliates shall, unless
prohibited by law, have the right to deduct any federal, state, local or foreign
taxes of any kind required by law to be withheld with respect to such amount due
to you, including deducting such amount from the delivery of shares issued upon
settlement of the RSUs that gives rise to the withholding requirement. In the
event shares are deducted to cover tax withholdings, the number of shares
withheld shall generally have a Fair Market Value equal to the aggregate amount
of ILG’s withholding obligation. In the event that any such deduction and/or
withholding is prohibited by law, you shall, prior to or contemporaneously with
the vesting of your RSUs, pay to the Company, or make arrangements satisfactory
to the Company regarding the payment of, any federal, state, local or foreign
taxes of any kind required by law to be withheld with respect to such amount.

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Adjustment in the Event of Change in Stock; Disaffiliation; Change of Control

Adjustment in the Event of Change in Stock.  In the event of (i) a stock
dividend, stock split, reverse stock split, share combination, or
recapitalization or similar event affecting the capital structure of ILG (each,
a “Share Change”), or (ii) a merger, consolidation, acquisition of property or
shares, separation, spin-off, reorganization, significant non-recurring cash
dividend, stock rights offering, liquidation, Disaffiliation, or similar event
affecting the Company or any of its Affiliates (each, a “Corporate
Transaction”), ILG’s Compensation and Human Resources Committee (the
“Committee”) or the Board may make such substitutions or adjustments as it, in
its sole discretion, deems appropriate and equitable to the number of RSUs and
the number and kind of shares of Common Stock underlying the RSUs.  The
determination of the Committee regarding any such adjustment will be final and
conclusive and need not be the same for all RSU award recipients.

Disaffiliation.  The Disaffiliation of the Affiliate of ILG by which you are
employed or for which you are performing services at the time of its sale or
other disposition by ILG shall be considered a Termination of Employment (not a
Change of Control).  Any unvested RSUs covered by your Award shall be forfeited
and canceled in their entirety on the date of such Disaffiliation; provided,
however, that the Committee or the Board may deem it appropriate to make an
equitable adjustment to the number of RSUs and the number and kind of shares of
Common Stock underlying the RSUs underlying your Award.

Change of Control.  In the event there is a Change of Control (as defined in the
Plan), any portion of your RSU Award that is outstanding and unvested at the
time that would have vested during the twenty-four (24) month period following
such occurrences shall vest as of the date of such Change of Control.  In the
event any portion of the RSU Award remains unvested after application of the
foregoing sentence, the agreements effectuating the Change of Control shall
provide for the assumption of, or compensation for, the unvested portion of the
RSU Award by the successor entity (unless the successor entity is ILG, in which
case the unvested portion of the RSU Award shall remain outstanding and vest in
accordance with its terms).  For the avoidance of doubt, the Change of Control
provision shall only apply in the case of a Change in Control of ILG and in no
event shall apply to a Subsidiary of ILG.

Non-Transferability of the RSUs

Until such time as your RSUs are ultimately settled, they shall not be
transferable by you by means of sale, assignment, exchange, encumbrance, pledge,
hedge or otherwise.

No Rights as a Stockholder

Except as otherwise specifically provided in the Plan, unless and until your
RSUs are settled, you shall not be entitled to any rights of a stockholder with
respect to the RSUs (including the right to vote the underlying shares) under
this Award. Notwithstanding the foregoing, if ILG declares and pays dividends on
the Common Stock during the Restriction Period for particular RSUs in respect of
your Award, you will be credited with additional amounts for each RSU underlying
such Award equal to the dividend that would have been paid with respect to such
RSU as if it had been an actual share of Common Stock, which amount shall remain
subject to restrictions (and as determined by the Committee may be reinvested in
RSUs or may be held in kind as restricted property) and shall vest concurrently
with the vesting of the RSUs upon which such dividend equivalent amounts were
paid. Notwithstanding the foregoing, dividends and distributions other

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than regular quarterly cash dividends, if any, may result in an adjustment
pursuant to the “Adjustment in the Event of Change in Stock; Disaffiliation”
section above.

Other Restrictions

The RSUs shall be subject to the requirement that, if at any time the Committee
shall determine that (i) the listing, registration or qualification of the
shares of Common Stock subject or related thereto upon any securities exchange
or under any state or federal law, or (ii) the consent or approval of any
government regulatory body is necessary or desirable as a condition of, or in
connection with, the delivery of shares, then in any such event, the award of
RSUs shall not be effective unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee.

Conflicts and Interpretation

In the event of any conflict between these Terms and Conditions and the Plan,
the Plan shall control; provided, that an action or provision that is permissive
under the terms of the Plan, and required under these Terms and Conditions,
shall not be deemed a conflict and these Terms and Conditions shall control.  In
the event of any ambiguity in these Terms and Conditions, or any matters as to
which these Terms and Conditions are silent, the Plan shall govern. In the event
of any conflict between the Award Notice (or any other information posted on
ILG’s extranet or given to you directly or indirectly through the Agent
(including information posted on www.stockplanconnect.com) and ILG’s books and
records, or (ii) ambiguity in the Award Notice (or any other information posted
on ILG’s extranet or given to you directly or indirectly through the Agent
(including information posted on www.stockplanconnect.com)), ILG’s books and
records shall control.

Amendment

ILG may modify, amend or waive the terms of your RSUs, prospectively or
retroactively, but no such modification, amendment or waiver shall materially
impair your rights without your consent, except as required by applicable law,
NASDAQ or stock exchange rules, tax rules or accounting rules.

Data Protection

The acceptance of your RSUs constitutes your authorization of the release from
time to time to ILG or any of its Affiliates and to the Agent (together, the
“Relevant Companies”) of any and all personal or professional data that is
necessary or desirable for the administration of your RSUs and/or the Plan (the
“Relevant Information”). Without limiting the above, this authorization permits
your employing company to collect, process, register and transfer to the
Relevant Companies all Relevant Information (including any professional and
personal data that may be useful or necessary for the purposes of the
administration of your RSUs and/or the Plan and/or to implement or structure any
further grants of equity awards (if any)). The acceptance of your RSUs also
constitutes your authorization of the transfer of the Relevant Information to
any jurisdiction in which ILG, your employing company or the Agent considers
appropriate. You shall have access to, and the right to change, the Relevant
Information, which will only be used in accordance with applicable law.

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Section 409A of the Code

Your Award is not intended to constitute “nonqualified deferred compensation”
within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended, and the rules and regulations issued there under (“Section 409A”).   In
no event shall ILG be required to pay you any “gross-up” or other payment with
respect to any taxes or penalties imposed under Section 409A with respect to any
amounts or benefits paid to you in respect of your Award.

Notification of Changes

Any changes to these Terms and Conditions shall either be posted on ILG’s
intranet and www.stockplanconnect.com or communicated (either directly by ILG or
indirectly through any of its Affiliates or the Agent) to you electronically via
e-mail (or otherwise in writing) promptly after such change becomes effective.

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Notice of 2016 Adjusted EBITDA Performance RSU Award Granted Under the
Interval Leisure Group, Inc. 2013 Stock and Incentive Compensation Plan

 

 

Award Recipient:

Sergio D. Rivera

Award Date:

_____________________, 2016

Vesting Schedule: 

Subject to your continued service with ILG, Inc. (the “Company”), your
performance restricted stock units (“PRSUs”) shall, subject to the provisions of
the Interval Leisure Group, Inc. 2013 Stock and Annual Incentive Plan (the
“Plan”) and their associated Terms and Conditions, vest and no longer be subject
to any restriction  in three equal tranches on or about on or about the date on
which ILG’s Compensation and Human Resources Committee (the “Committee”)
certifies the level of Adjusted EBITDA that ILG’s Vacation Ownership Segment
(“VO Segment”) actually achieved during calendar year 2017, 2018 and 2019, as
applicable, which certification shall occur as soon as reasonably practicable
following the date on which ILG releases its earnings for the applicable
calendar year.

Adjusted EBITDA Performance RSU Awards:

XXXX1 Target for PRSU.

The actual number of PRSUs that will vest will be from 0% to 200% of your Target
PRSUs, depending on your continued employment with the Company and upon the VO
Segment’s achievement of Adjusted EBITDA for the applicable calendar year
against its annual Adjusted EBITDA target, determined based on the VO Segment’s
Board-approved budget for each of calendar year.

The Adjusted EBITDA performance hurdles applicable to these PRSUs are described
in Schedule A to the Terms and Conditions for PRSU Awards and are subject to
possible changes, as described therein.

Terms and Conditions:

Your PRSUs are subject to the Terms and Conditions (attached hereto) and the
Plan (posted on www.stockplanconnect.com and on the company portal) and which
are incorporated herein by reference.  Capitalized terms used (but not defined)
in this Award Notice shall have the meanings set forth in the Plan.  Without a
complete review of these documents, you will not have a full understanding of
all the material terms of your PRSUs.  In addition, you are required to
acknowledge and accept the Terms and Conditions applicable to your ILG equity
award. Your failure to do so upon request will result in this award being null
and void.

1Number of PRSUs to be established by dividing the award value, $800,000, by the
average of the ILG’s common stock closing prices for the 30 trading days ending
on the trading day prior to the Effective Date, rounded down to the nearest
whole number of ILG PRSUs.

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Terms and Conditions for Adjusted EBITDA Performance RSU Awards

Overview

These Terms and Conditions apply to Performance RSU Awards, which are grants of
performance-based restricted stock units (“PRSUs”) made pursuant to Section 12
of the Interval Leisure Group, Inc. 2013 Stock and Incentive Compensation Plan
(the “Plan”).  You were notified of your PRSU Award by way of an award notice
(the “Award Notice”).

ALL CAPITALIZED TERMS USED HEREIN, TO THE EXTENT NOT DEFINED, SHALL HAVE THE
MEANINGS SET FORTH IN THE PLAN.

Continuous Service

In order for your Award to vest, you must be continuously employed by ILG or any
of its Affiliates during the Restriction Period (as defined below) (the
“Continuous Service Requirement”).  Nothing in your Award Notice, these Terms
and Conditions, or the Plan shall confer upon you any right to continue in the
employ or service of ILG or any of its Affiliates or interfere in any way with
their rights to terminate your employment or service at any time.

Vesting

Subject to the Award Notice, these Terms and Conditions and the provisions of
the Plan, the PRSUs in respect to your Award, shall vest and no longer be
subject to any restriction (such period during which restrictions apply is the
“Restriction Period”):

 

 

Vesting Schedule

Portion of Total Award Vesting

On or about the Adjusted EBITDA Certification Date for 2017 Performance
(defined below)

1/3

On or about the Adjusted EBITDA Certification Date for 2018 Performance

1/3

On or about the Adjusted EBITDA Certification Date for 2019 Performance

1/3

 

Adjusted EBITDA Performance Hurdles

Assuming satisfaction of the Continuous Service Requirement, the actual number
of PRSUs covered by your Performance RSU Award that will vest is dependent upon
the actual achievement by ILG’s Vacation Ownership Segment (the “VO Segment”) of
Adjusted EBITDA for calendar years 2017, 2018 and 2019 against the VO Segment’s
Adjusted EBITDA target for the applicable calendar, determined based on the
segment’s Board-approved budget for such years, with the actual number of PRSUs
vesting ranging from 0 to 200% of the target number of PRSUs.  Schedule A to
these Terms and Conditions defines Adjusted EBITDA and explains how the
achievement by the Company of various levels of Adjusted EBITDA performance
impacts the number of PRSUs that you will ultimately receive (the “Performance
Hurdles”).

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Vesting Date

The actual vesting of your PRSUs will occur on the date on which ILG’s
Compensation and Human Resources Committee (the “Committee”) certifies the level
of Adjusted EBITDA that the Company actually achieved for calendar years 2017,
2018 and 2019, which certification shall occur as soon as reasonably practicable
following the date on which ILG releases its earnings for the prior calendar
year (the “Adjusted EBITDA Certification Date”).

Termination of Employment

Subject to the provisions of your employment agreement and these Terms and
Conditions, upon your Termination of Employment during the Restriction Period
for any reason, any unvested PRSUs shall be forfeited and canceled in their
entirety effective immediately upon such Termination of Employment, provided,
however, where such Termination of Employment occurs following the Committee’s
certification of the Company’s actual Adjusted EBITDA for the measurement
period, but before the actual settlement of such PRSUs, you shall remain
eligible to receive such shares.  For the avoidance of doubt, transfers of
employment among the Company and its Affiliates, without any break in service,
is not a Termination of Employment.  

If you have a Termination of Employment due to death, any unvested portion of
the Award shall vest in full at the Target RSU number.  If you have a
termination of your employment as a result of a Disability, the Award shall
continue to vest for up to three years after the effective date of such
termination of your employment provided you continue to comply with any
applicable confidentiality and non-competition obligations you have to the
Company and its Affiliates

Upon your Termination of Employment by ILG or any of its Affiliates without
Cause or your resignation for Good Reason (as such is defined in your employment
agreement), any portion of the Award that would have vested during the
twenty-four (24) month period following such separation shall vest at Target, as
of the date of such separation.  Where such event follows a Change of Control
(as such defined in the Plan), 100% of the Target RSUs set forth in your Award
Notice shall automatically vest upon such termination of employment.
 Notwithstanding the foregoing, if at the time of the Change in Control, the
Committee believes, in its good faith and sole judgment, that it is
substantially likely that in the absence of the Change in Control a greater
portion of the RSUs would have vested than the Target RSUs, then at such time
the Committee shall make a determination to vest additional shares accordingly.

Notwithstanding the foregoing, if your Termination of Employment is a
Termination for Cause, or if following your Termination of Employment for any
reason ILG determines that during the two years prior to such termination there
was an event or circumstance that would have been grounds for Termination for
Cause, all outstanding Performance RSU Awards held by you shall be forfeited and
canceled in their entirety upon such termination (or the determination of the
basis for a Termination for Cause, if later), and ILG may cause you, immediately
upon notice, either to return the shares issued upon the settlement of PRSUs
that vested during the two-year period after the events or circumstances giving
rise to or constituting grounds for Termination for Cause or to pay ILG an
amount equal to the

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aggregate amount, if any, that you had previously realized in respect of any and
all shares issued upon settlement of PRSUs that vested during the two-year
period after the events or circumstances giving rise to or constituting grounds
for such Termination for Cause (i.e., the value of the PRSUs upon vesting), in
each case, including any dividend equivalents or other distributions received in
respect of any such PRSUs.  This remedy shall be without prejudice to, or waiver
of, any other remedies ILG or its Affiliates may have in such event.

Determination of Adjusted EBITDA Performance

As soon as reasonably practicable following the date on which ILG releases its
earnings for the applicable calendar year, the Committee shall certify as to the
level of Adjusted EBITDA that the Company achieved for the measurement period,
and the resulting percentage of Target PRSUs that will vest on the applicable
vesting date (the “Adjusted EBITDA Certification Date”).

Committee Discretion to Adjust Adjusted EBITDA Performance Hurdles

Decrease of Performance Hurdles. Through the Adjusted EBITDA Certification Date,
the Committee shall retain discretion to decrease Performance Hurdles (or
otherwise make adjustments that increase the likelihood of Performance Hurdles
being achieved) at any time.  Furthermore, the Committee shall, within 90 days
of the discovery of all relevant material facts relating to a Material Reduction
Event (as defined below) by the Committee, decrease Performance Hurdles (or
otherwise make adjustments that increase the likelihood of Performance Hurdles
being achieved), such that, in the Committee’s good faith and sole judgment, the
likelihood of achievement of the various Performance Hurdles as adjusted is no
less likely than prior to the Material Reduction Event.

A “Material Reduction Event” means a discrete event which is likely to
materially decrease Adjusted EBITDA during the period in a manner the Committee
determines, in its good faith and sole judgment, is not properly reflective of
growth in the Company’s performance in the applicable period. For purposes of a
Material Reduction Event, materiality shall be judged by the Committee without
regard to the likelihood of achievement of any particular Performance Hurdles.

Increase of Performance Hurdles.  Through the Adjusted EBITDA Certification
Date, the Committee may, within 90 days of the discovery of all relevant
material facts relating to a Material Accretion Event (as defined below) by the
Committee, increase Performance Hurdles (or otherwise make adjustments that
decrease the likelihood of Performance Hurdles being achieved). Any such
adjustment shall be made such that, in the Committee’s good faith and sole
judgment, the likelihood of achievement of the various Performance Hurdles is no
less likely than prior to the Material Accretion Event.

A “Material Accretion Event” means a discrete event which is likely to
materially increase Adjusted EBITDA during the Measurement Period in a manner
the Committee determines, in its good faith and sole judgment, is not properly
reflective of growth in the Company’s performance in the applicable period.  For
purposes of a Material Accretion Event, materiality shall be judged by the
Committee without regard to the likelihood of achievement of any particular
Performance Hurdles.

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Determinations of the Committee regarding any adjustment (downward or upward) to
Performance Hurdles through the Adjusted EBITDA Certification Date will be final
and conclusive. Discretion, both positive and negative, need not be applied
uniformly by the Committee to all outstanding Performance RSU Awards, but no
Performance RSU Awards can be treated less favorably than the majority of
Performance RSU Awards subject to the same set of Performance Hurdles.

Settlement

Subject to your satisfaction of the tax obligations described immediately below
under “Taxes and Withholding,” as soon as practicable after the Performance RSU
Award Vesting Date your PRSUs shall be settled.  In no event shall settlement
occur later than two and one half months after the end of the fiscal year in
which the PRSUs vest.  For each PRSU settled, ILG shall issue one share of
Common Stock for each RSU vesting.  Notwithstanding the foregoing, ILG shall be
entitled to hold the shares issuable to you upon settlement of all PRSUs that
have vested until ILG or the agent selected by ILG to administer the Plan (the
“Agent”) has received from you (i) a duly executed Form W-9 or W-8, as
applicable or (ii) payment for any federal, state, local or foreign taxes of any
kind required by law to be withheld with respect to such PRSU.

Taxes and Withholding

No later than the date as of which an amount in respect of any PRSUs first
becomes includible in your gross income for federal, state, local or foreign
income or employment or other tax purposes, ILG or its Subsidiaries shall,
unless prohibited by law, have the right to deduct any federal, state, local or
foreign taxes of any kind required by law to be withheld with respect to such
amount due to you, including deducting such amount from the delivery of shares
issued upon settlement of the PRSUs that gives rise to the withholding
requirement.  In the event shares are deducted to cover tax withholdings, the
number of shares withheld shall generally have a Fair Market Value equal to the
aggregate amount of ILG’s withholding obligation. In the event that any such
deduction and/or withholding is prohibited by law, you shall, prior to or
contemporaneously with the vesting or your PRSUs, pay to ILG, or make
arrangements satisfactory to ILG regarding the payment of, any federal, state,
local or foreign taxes of any kind required by law to be withheld with respect
to such amount.

Adjustment in the Event of Change in Stock or Disaffiliation; Change of Control

Adjustment in the Event of Change in Stock.  In the event of (i) a stock
dividend, stock split, reverse stock split, share combination, or
recapitalization or similar event affecting the capital structure of ILG (each,
a “Share Change”), or (ii) a merger, consolidation, acquisition of property or
shares, separation, spin-off, reorganization, significant non-recurring cash
dividend, stock rights offering, liquidation, Disaffiliation, or similar event
affecting ILG or any of its Affiliates (each, a “Corporate Transaction”), the
Committee or the Board may make such substitutions or adjustments as it, in its
sole discretion, deems appropriate and equitable to the number of PRSUs and the
number and kind of shares of Common Stock underlying the PRSUs.  The
determination of the Committee regarding any such adjustment will be final and
conclusive and need not be the same for all RSU award recipients.

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Disaffiliation.  The Disaffiliation of the Affiliate of ILG by which you are
employed or for which you are performing services at the time of its sale or
other disposition by ILG shall be considered a Termination of Employment (not a
Change of Control). Any unvested PRSUs covered by your Award shall be forfeited
and canceled in their entirety on the date of such Disaffiliation; provided,
however, that the Committee or the Board may deem it appropriate to make an
equitable adjustment to the number of RSUs and the number and kind of shares of
Common Stock underlying the RSUs underlying your Award.

Change of Control.  In the event there is a Change of Control (as defined in the
Plan), any portion of your Performance RSU Award that is outstanding and
unvested at the time that would have vested during the twenty-four (24) month
period following such occurrences shall vest at Target as of the date of such
Change of Control.  In the event any portion of the Performance RSU Award
remains unvested after application of the foregoing sentence, the agreements
effectuating the Change of Control shall provide for the assumption of, or
compensation for, the unvested portion of the Performance RSU Award by the
successor entity (unless the successor entity is ILG, in which case the unvested
portion of the Performance RSU Award shall remain outstanding and vest in
accordance with its terms).  For the avoidance of doubt, the Change of Control
provision shall only apply in the case of a Change in Control of ILG and in no
event shall apply to a Subsidiary of ILG.

Non-Transferability of the PRSUs

Until such time as your PRSUs are ultimately settled, they shall not be
transferable by you by means of sale, assignment, exchange, encumbrance, pledge,
hedge or otherwise.

No Rights as a Stockholder

Except as otherwise specifically provided in the Plan, unless and until your
PRSUs are settled, you shall not be entitled to any rights of a stockholder with
respect to the PRSUs under this Award.  Notwithstanding the foregoing, if ILG
declares and pays dividends on the Common Stock prior to the Performance RSU
Award Vesting Date for a particular Performance RSU Award, you will be credited
with additional amounts for each PRSU underlying such Performance RSU Award
equal to the dividend that would have been paid with respect to such RSU as if
it had been an actual share of Common Stock, which amount shall remain subject
to restrictions (and as determined by the Committee may be reinvested in PRSUs
or may be held in kind as restricted property) and shall vest concurrently with
the vesting of the PRSUs upon which such dividend equivalent amounts were paid.
Notwithstanding the foregoing, dividends and distributions other than regular
quarterly cash dividends, if any, may result in an adjustment pursuant to the
“Adjustment in the Event of Change in Stock; Disaffiliation” section above.

Other Restrictions

The PRSUs shall be subject to the requirement that, if at any time the Committee
shall determine that (i) the listing, registration or qualification of the
shares of Common Stock subject or related thereto upon any securities exchange
or under any state or federal law, or (ii) the consent or approval of any
government regulatory body is necessary or desirable as a condition of, or in
connection with, the delivery of shares, then in any such event, the award of
PRSUs shall not be effective unless such listing, registration, qualification,
consent

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or approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.

Conflicts and Interpretation

In the event of any conflict between these Terms and Conditions and the Plan,
the Plan shall control.  In the event of any ambiguity in these Terms and
Conditions, or any matters as to which these Terms and Conditions are silent,
the Plan shall govern.  In the event of any conflict between the Award Notice
(or any other information posted on ILG’s extranet or given to you directly or
indirectly through the Agent (including information posted on
www.stockplanconnect.com) and ILG’s books and records, or (ii) ambiguity in the
Award Notice (or any other information posted on ILG’s intranet or given to you
directly or indirectly through the Agent (including information posted on
www.stockplanconnect.com), ILG’s books and records shall control.

Amendment

ILG may modify, amend or waive the terms of your PRSUs, prospectively or
retroactively, but no such modification, amendment or waiver shall materially
impair your rights without your consent, except as required by applicable law,
NASDAQ or stock exchange rules, tax rules or accounting rules.

Data Protection

The acceptance of your PRSUs constitutes your authorization of the release from
time to time to ILG or any of its Affiliates and to the Agent (together, the
“Relevant Companies”) of any and all personal or professional data that is
necessary or desirable for the administration of your PRSUs and/or the Plan (the
“Relevant Information”).  Without limiting the above, this authorization permits
your employing company to collect, process, register and transfer to the
Relevant Companies all Relevant Information (including any professional and
personal data that may be useful or necessary for the purposes of the
administration of your PRSUs and/or the Plan and/or to implement or structure
any further grants of equity awards (if any)). The acceptance of your PRSUs also
constitutes your authorization of the transfer of the Relevant Information to
any jurisdiction in which ILG, your employing company or the Agent considers
appropriate.  You shall have access to, and the right to change, the Relevant
Information, which will only be used in accordance with applicable law.

Section 409A of the Code

Performance RSU Awards are not intended to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended, and the rules and regulations issued thereunder (“Section
409A”).  In no event shall ILG be required to pay you any “gross-up” or other
payment with respect to any taxes or penalties imposed under Section 409A with
respect to any amounts or benefits paid to you in respect of your Performance
RSU Award.

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Notification of Changes

Any changes to these Terms and Conditions, including Schedule A (or any
additional schedules) hereto, shall either be posted on ILG’s intranet and
www.benefitaccess.com or communicated (either directly by ILG or indirectly
through any of its Subsidiaries or the Agent) to you electronically via e-mail
(or otherwise in writing) promptly after such change becomes effective. You are
therefore urged to periodically check these Terms and Conditions, especially any
schedules, to determine whether any changes have been made.

 

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SCHEDULE A

Adjusted EBITDA Performance Hurdle for Performance RSU Awards

This award of PRSUs will vest on the date on which the Committee certifies the
level of Adjusted EBITDA that the VO Segment1 has achieved during calendar year
2017, 2018 and 2019, respectively.

The number of shares to vest shall be based on the VO Segment’s actual Adjusted
EBITDA achieved for calendar year 2017, 2018 and 2019, respectively, against the
segment’s annual Adjusted EBITDA target for such period, determined based on
ILG’s Board-approved budgets for calendar year 2017, 2018 and 2019,  pursuant to
the following performance schedule:

 

 

ACTUAL VO SEGMENT ADJUSTED EBITDA PERFORMANCE (Millions)

PAYOUT AS A % OF MAXIMUM NUMBER OF SHARES AVAILABLE TO BE EARNED ASSUMING
TARGETED PERFORMANCE IN THE MEASUREMENT PERIOD

 

 

Less than T – 20%

0%

T – 20%

50%

Adjusted EBITDA Target (T)2

100%

T + 20%

150%

T + 30% and Above

200%

Payouts for Adjusted EBITDA amounts between the reference points will be
interpolated.

 

 

 

For purposes of this Schedule A, Adjusted EBITDA is defined as the operating
income generated by the VO Segment in the aggregate, excluding, if applicable:
(A) non-cash compensation expense, (B) depreciation expense, (C) amortization
expense of intangibles, (D) acquisition related and restructuring costs,
including the effect of purchase accounting, (E) goodwill and asset impairments,
and (F) other non-operating income and expense.

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1The term, VO Segment, shall mean those businesses currently comprising such
segment, including, without limitation, Vistana Signature Experiences, Inc., HV
Global Group, Inc., their associated businesses as well as any other
substantially similar businesses subsequently included within the VO
Segment.  If ILG engages in one or more segment restructurings during the
measurement period, for the purposes of this Schedule A, the term, VO Segment,
shall be deemed to apply to those businesses which then engage in the
development, sales, marketing and financing of shared ownership interests as
well as resort operations of managed shared ownership resorts and, under such
circumstances, the Committee may adjust the applicable Adjusted EBITDA target as
it deems appropriate in its sole discretion.

2T equals the VO Segment’s annual Adjusted EBITDA target for calendar year 2017,
2018 or 2019, respectively, with the target amount for each calendar year being
established by the Committee, within the initial 90-days of the applicable
calendar year, based on the VO Segment’s Board-approved budget for such year.

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