Exhibit 10.1

 

AMENDMENT TO EMPLOYEE MATTERS AGREEMENT

 

This Amendment (this “Amendment”) to the Employee Matters Agreement, dated as of
October 27, 2015, by and among Starwood Hotels & Resorts Worldwide, Inc., a
Maryland corporation and the sole stockholder of Vistana (“Starwood”), Vistana
Signature Experiences, Inc., a Delaware corporation and a wholly-owned
Subsidiary of Starwood (“Vistana”), and Interval Leisure Group, Inc., a Delaware
corporation (“ILG”) (the “Employee Matters Agreement”), is made as of April 18,
2016 (“Execution Date”).  Capitalized terms used but not defined in this
Amendment have the meanings ascribed to them in the Employee Matters Agreement.

 

RECITALS

 

WHEREAS, in connection with the Agreement and Plan of Merger, dated as of
October 27, 2015, entered into by and among Starwood, Vistana, ILG, and Iris
Merger Sub, Inc., a Delaware corporation and a wholly-owned Subsidiary of ILG
(the “Merger Agreement”), the Parties contemporaneously entered into the
Employee Matters Agreement; and

 

WHEREAS, the Parties desire to amend certain rights and obligations of the
Parties under the Employee Matters Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereof, and intending to be legally bound hereby, the Parties agree
as follows:

 

AGREEMENT

 

Section 1.01                             Business Transfer Date.  When used in
the Employee Matters Agreement, the term “Business Transfer Date” shall be
deemed to be a reference to “Distribution Date,” as such term is defined in the
Separation Agreement.

 

Section 1.02                             Retirement Plans.  Notwithstanding the
provisions of Section 2.01(e)(iv) of the Employee Matters Agreement to the
contrary, for the period from the Closing Date through December 31, 2016, the
ILG Retirement Plan shall provide the Vistana Employees with the opportunity to
receive the same rate of employer matching contributions and the same vesting
schedule as provided under the Starwood Retirement Plan to such employees as of
the date hereof; provided, however, that service may be credited for purposes of
vesting or eligibility under the ILG Retirement Plan using the methodology
currently provided by such ILG Retirement Plan.

 

Section 1.03                             Nonqualified Plans.  Notwithstanding
the first two sentences of Section 2.03(b) of the Employee Matters
Agreement, ILG shall amend its existing nonqualified deferred compensation plan
(the “ILG Deferred Compensation Plan”) as of the Closing Date to provide for
participation in the ILG Deferred Compensation Plan by Vistana Employees who
were participants in the Starwood Deferred Compensation Plan immediately prior
to the Closing Date

 

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

 

on terms and conditions (other than with respect to investment options) that are
substantially similar to what was provided to them under the Starwood Deferred
Compensation Plan and pursuant to the remainder of Section 2.03 of the Employee
Matters Agreement. Notwithstanding the foregoing, neither ILG nor Vistana shall
be under any obligation to offer any employees the opportunity to make future
deferral elections under the ILG Deferred Compensation Plan, and if any future
deferral elections are offered under the ILG Deferred Compensation Plan, neither
ILG nor Vistana shall be under any obligation to make deferral elections
available under the same terms as applied under the Starwood Deferred
Compensation Plan.  References in the Employee Matters Agreement to the “Vistana
Deferred Compensation Plan” shall be deemed to be references to the “ILG
Deferred Compensation Plan,” as amended.  References to the actions to be taken
“prior to the Closing Date” in the first sentence of each of Sections
2.03(c)(A) and 2.03(c)(B) of the Employee Matters Agreement shall be deemed to
mean “as of the Closing Date.”

 

Section 1.04                             Flexible Benefit Plan.  Notwithstanding
the provisions of Sections 2.05(a) and 2.05(b) of the Employee Matters Agreement
to the contrary, in the event that the Closing Date has not occurred as of
April 1, 2016, then effective as of such date Vistana Employees shall cease to
participate in the Starwood Flexible Benefit Plan, and Vistana shall establish a
new flexible benefit plan (the “Vistana Flexible Benefit Plan”) for the benefit
of Vistana Employees.  The Vistana Flexible Benefit Plan shall be similar to the
Starwood Flexible Benefit Plan, and shall be subject to the review and approval
of ILG prior to its adoption, which consent shall not be unreasonably withheld. 
In the event the foregoing applies, references in the Employee Matters Agreement
to the “ILG Flexible Benefits Plan” shall be deemed to be references to the new
Vistana Flexible Benefits Plan, and the Vistana Flexible Benefits Plan shall be
deemed a Vistana Benefit Plan for purposes of the Merger Agreement.  Starwood
will be responsible for all liabilities with respect to any Vistana Employee or
Former Vistana Employee and their dependents, regardless of when such claims are
filed and/or paid under the Starwood Flexible Benefits Plan with respect to all
claims incurred on or before March 31, 2016.  The amounts Starwood has
previously received for health and welfare coverage under the Starwood Flexible
Benefits Plan for Vistana Employees or Former Vistana Employees through
March 31, 2016 shall be considered full payment for such coverage and Vistana
shall not be obligated to make any further payments toward such coverage. 
Vistana will be responsible for all liabilities with respect to any Vistana
Employee or COBRA Participant and their dependents, regardless of when such
claims are filed and/or paid, under the Vistana Flexible Benefits Plan with
respect to all claims incurred on or after April 1, 2016 and Starwood shall not
be responsible for any “true up” payment with respect to such claims, including
for the period that Vistana remains part of the Starwood controlled group. 
Vistana shall not be required to pay Starwood a monthly amount for health and
welfare coverage for Vistana Employees or Former Vistana Employees beginning
with the month of April, 2016.

 

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

 

Section 1.05                             Dependent Care Flexible Spending
Account.  Notwithstanding the provisions of Section 2.05(c) of the Employee
Matters Agreement to the contrary, ILG shall not be required to establish nor
cause to be established an ILG FSA effective as of or following the Closing
Date.  Starwood shall remain liable for all claims and liabilities under the
Starwood FSA with respect to any Vistana Employee or Former Vistana Employee. 
Furthermore, Vistana Employees shall not be eligible to participate in a
dependent care spending account program on or after April 1, 2016; provided,
however, that in its sole discretion, ILG may establish a flexible spending
account for the benefit of Vistana Employees on or after April 1, 2016.

 

Section 1.06                             Continuation Coverage.  Notwithstanding
the provisions of Section 2.05(d) of the Employee Matters Agreement to the
contrary, in the event that the Closing Date has not occurred as of April 1,
2016, the Vistana Flexible Benefits Plan shall be solely responsible for
providing and meeting the COBRA continuation coverage requirements for all
Vistana Employees and all Former Vistana Employees, as well as their “qualified
beneficiaries” (as defined in COBRA), with respect to all claims incurred on or
after April 1, 2016.  Furthermore, all COBRA premiums for coverage for such
individuals beginning on April 1, 2016 shall be paid to Vistana or the Vistana
Flexible Benefits Plan.

 

Section 1.07                             Health Reimbursement Account. 
Notwithstanding the provisions of Section 2.05(e) of the Employee Matters
Agreement to the contrary, in the event that the Closing Date has not occurred
as of April 1, 2016, Vistana Employees will cease to participate in the Starwood
HRA as of such date, and Vistana shall establish a new health reimbursement
account (the “Vistana HRA”) for the benefit of Vistana Employees.  The Vistana
HRA shall have similar terms and provide the same level of benefits as the
Starwood HRA, and shall be subject to the review and approval of ILG prior to
its adoption which consent shall not be unreasonably withheld.  In connection
with providing the same level of benefits, to the extent permitted by applicable
Law, the Vistana HRA shall provide that the account balances for each Vistana
Employee who is a participant under the Vistana HRA shall be increased by any
balance that still remains under the Starwood HRA for such participant after the
end of the run out period under the Starwood HRA for paying claims incurred in
the 2015-2016 plan year to the same extent as such amount would have remained
available for such participant’s use under the Starwood HRA during the 2016-2017
plan year.  In the event the foregoing applies, references in the Employee
Matters Agreement to the “ILG HRA” shall be deemed to be references to the new
Vistana HRA, and the Vistana HRA shall be deemed a Vistana Benefit Plan for
purposes of the Merger Agreement.  In the event the Vistana HRA is established
pursuant to this Section 1.07, (i) Starwood shall be responsible for all
liabilities with respect to any Vistana Employee or Former Vistana Employee and
their dependents, regardless of when such claims are filed and/or paid under the
Starwood HRA, and (ii) Vistana shall be responsible for all liabilities with
respect to any Vistana Employee or Former Vistana Employee and their dependents,
regardless of when such claims are filed, under the Vistana HRA with respect to
all claims incurred on or after April 1, 2016.

 

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

 

Section 1.08                             Vacation and Sick Pay Liabilities. 
Notwithstanding the provisions of Section 2.07 of the Employee Matters Agreement
to the contrary, on and after the Closing Date, accrual of vacation and sick
leave in respect of each Vistana Employee working in California, shall be
according to an accrual schedule that is substantially similar to Starwood’s
accrual schedule as in effect immediately prior to the Closing Date, rather than
one which is identical.

 

Section 1.09                             Full Force and Effect.  Except as
expressly set forth in this Amendment, this Amendment does not, by implication
or otherwise, alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Merger
Agreement or the Employee Matters Agreement, which are hereby incorporated by
reference and shall remain in full force and effect.

 

Section 1.10                             Counterparts.  This Amendment may be
executed in two or more counterparts (including by electronic or .pdf
transmission), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Delivery of any
signature page by facsimile, electronic or .pdf transmission shall be binding to
the same extent as an original signature page.

 

Section 1.11                             Updates to Vistana Disclosure
Schedule.  If the Vistana Flexible Benefit Plan and Vistana HRA are established
pursuant to Sections 1.04 and 1.07 hereof, they will be deemed to be listed as a
Vistana Benefit Plan on Section 5.13(a) of the Vistana Disclosure Schedule.

 

Section 1.12                             Governing Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the conflicts of laws principles thereof.

 

[Signature page follows]

 

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

 

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Execution
Date.

 

 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas B. Mangas

 

Name:

Thomas B. Mangas

 

Title:

Chief Executive Officer

 

[Signature Page to Amendment to Employee Matters Agreement]

 

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

 

 

VISTANA SIGNATURE EXPERIENCES, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas B. Mangas

 

Name:

Thomas B. Mangas

 

Title:

Authorized Signatory

 

[Signature Page to Amendment to Employee Matters Agreement]

 

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

 

 

INTERVAL LEISURE GROUP, INC.

 

 

 

 

 

 

By:

/s/ Jeanette E. Marbert

 

Name:

Jeanette E. Marbert

 

Title:

Executive Vice President and Chief Operating Officer

 

[Signature Page to Amendment to Employee Matters Agreement]

 

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