Exhibit 10.3

 

Terms and Conditions for TSR-based Performance RSU Awards

 

Overview

 

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

 

Subject to the exceptions discussed under “Termination of Employment” (below),
in order for your TSR-based Performance RSU Award to vest, you must be
continuously employed by Interval Leisure Group, Inc. (“ILG”) or any of its
Subsidiaries through the third anniversary of the relevant award date (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 Subsidiaries or interfere in any way with
their rights to terminate your employment or service at any time.

 

Total Shareholder Return Performance Hurdles

 

Assuming satisfaction of the Continuous Service Requirement, the actual number
of RSUs covered by your TSR-based Performance RSU Award that will vest is
dependent upon the total shareholder return (“TSR”) of ILG Common Stock relative
to the total shareholder return of the two Peer Groups, described below, with
the actual number of RSUs vesting ranging from 0 to 200% of the Target RSU
number specified in your Award Notice. Schedule A to these Terms and Conditions
defines TSR and the two Peer Groups as well as explains how the achievement of
various levels of TSR of ILG Common Stock relative to the TSR of the Peer Groups
impacts the number of RSUs that you will ultimately receive (the “Performance
Hurdles”).

 

Vesting

 

The vesting date for TSR-based Performance RSU Awards (the “TSR-based
Performance RSU Award Vesting Date”) will be the later of (i) the third
anniversary of the relevant award date (the “Third Anniversary”) and (ii) the
date on which ILG’s Compensation and Human Resources Committee (the “Committee”)
certifies the percentile rank of ILG’s TSR relative to the two Peer Groups for
the relevant period specified in the relevant Award Notice (the “Measurement
Period”), which certification shall occur as soon as reasonably practicable
following the last day of the Measurement Period at the next regularly scheduled
meeting of the Committee.

 

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If the Continuous Service Requirement is satisfied prior to the TSR-based
Performance RSU Award Vesting Date, no subsequent termination of employment for
any reason (other than by ILG or its Subsidiaries for Cause, as defined in the
Plan) shall affect the ultimate vesting of your TSR-based Performance RSU Award.

 

Termination of Employment

 

Subject to the provisions of your employment agreement, if any, and these terms
and conditions, upon your termination of your employment during the Restriction
Period for any reason, any RSUs still subject to restriction shall vest or be
forfeited and canceled in accordance with the terms of the Plan and this Award. 
For the avoidance of doubt, a transfer of employment among the Company and its
Subsidiaries or other Affiliates, without any break in service, is not a
termination of your employment.

 

If you have a termination of your 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 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.  If you have a termination of your employment due to
Retirement on or after the first anniversary of the relevant award date but
prior to the Third Anniversary, upon the approval of the Committee, the Award
shall continue to vest for up to three years after the effective date of such
Retirement provided you continue to comply with any applicable confidentiality
and non-competition obligations you have to the Company and its Affiliates.

 

Subject to the provisions of your employment agreement, if any, upon the
termination of your employment by ILG or any of its Subsidiaries after the first
anniversary of the relevant award date but prior to the Third Anniversary (i) by
ILG or any of its Subsidiaries without Cause, (ii) by you for Good Reason (as
defined below) or (iii) as a result of the sale, other disposition or other
Disaffiliation of the ILG business or division by which you are employed
(collectively, a “Qualifying Termination”), you shall retain eligibility to
receive, for each completed twelve-month period (measured successively) of
continued employment following the relevant award date, one-third of your
TSR-based Performance RSU Award. The remaining RSUs covered by your TSR-based
Performance RSU Award shall be forfeited and canceled in their entirety on the
date of your termination of employment.  On the TSR-based Performance RSU Award
Vesting Date, such portion of the RSUs that remain outstanding shall vest in
accordance with Schedule A.

 

By way of example, assume that you are granted a TSR-based Performance RSU Award
of 1,500 Target RSUs and are terminated without Cause by ILG fourteen (14)
months after the relevant award date. At that time, your new Target RSU number
shall be 500 (one-third of your original number) and you shall continue to be
eligible to receive 1,000 RSUs if the maximum performance is achieved. The
target number will be reflected on Smith Barney’s website,
www.benefitaccess.com. If on the TSR Certification Date (as defined below) the
Committee determines that the target level of TSR for the Measurement Period has
been achieved, you would vest at that time in 500 RSUs.

 

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“Good Reason” shall mean, without your prior written consent: (A) a reduction in
your rate of annual base salary or (B) a relocation of your principal place of
business more than 35 miles from the city in which your principal place of
business was located immediately prior to the relocation. Notwithstanding the
foregoing, if you have a valid and effective employment agreement at the time of
your termination that defines “Good Reason,” the definition in such agreement
shall apply to your TSR-based Performance RSU Award. In order for any
termination of employment to be for Good Reason, you must provide notice of the
circumstances giving rise to a Good Reason termination to your supervisor and
then, if such circumstances are not remedied within thirty (30) days of such
notice, you must resign your employment within sixty (60) days of such notice.

 

Upon the termination of your employment by ILG or any of its Subsidiaries prior
to the Third Anniversary for any reason other than a Qualifying Termination,
your TSR-based Performance RSU Award shall be forfeited and canceled in its
entirety effective immediately upon such termination of employment.

 

If your employment is terminated by ILG or any of its Subsidiaries for Cause at
any time prior to the actual settlement of your RSUs, or if following any
termination of employment between you and ILG or any of its Subsidiaries 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 TSR-based Performance RSU Awards held by you shall be
forfeited and canceled in their entirety upon such termination, even if
otherwise vested, 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 Subsidiaries may have in such event.

 

Determination of TSR Performance

 

ILG’s Compensation and Human Resources Committee (the “Committee”) shall certify
the percentile rank of ILG’s TSR relative to the two Peer Groups for the
relevant period specified in the relevant Award Notice (the “Measurement
Period”), which certification shall occur as soon as reasonably practicable
following the last day of the Measurement Period at the next regularly scheduled
meeting of the Committee.   The Committee shall also then certify the resulting
percentage of Target RSUs earned (the “TSR Certification Date”).

 

Settlement

 

Subject to your satisfaction of the tax obligations described immediately below
under “Taxes and Withholding,” as soon as practicable after the TSR-based
Performance RSU Award Vesting Date your RSUs shall be settled.  In no event
shall settlement occur later than

 

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two and one half months after the end of the fiscal year in which the RSUs
vest.  For each RSU vested and settled, ILG shall issue one share of Common
Stock.  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, 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 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 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 RSUs that gives rise to the withholding
requirement.  In the event Shares are deducted to cover tax withholdings, the
number of Shares withheld shall not exceed the legally required minimum
withholding based on the.Fair Market Value of such Shares. 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 RSUs, 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 Event of Change in Stock; Change in Control

 

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, stock
rights offering, liquidation, Disaffiliation, or similar event affecting ILG or
any of its Subsidiaries (each, a “Corporate Transaction”), the Committee or the
Board will make such substitutions or adjustments, if any, as it, in its good
faith and 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 (including, but
not limited to, recipients of TSR-based Performance RSU Awards).

 

Subject to the terms of your employment agreement, if any, with ILG, in the
event you cease to be employed by either ILG or any of its Subsidiaries within
the one year period following a Change in Control as a result of (i) a
termination by ILG or any of its Subsidiaries without Cause, or (ii) a
resignation by you for Good Reason, 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
upon any such future terminations of employment. Any such determination by the
Committee shall be final and conclusive and shall be the same for all
Performance RSU Awards. For the avoidance of doubt, the Change in Control
provision shall

 

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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.  Notwithstanding the foregoing, if ILG declares and pays
dividends on the Common Stock prior to the TSR-based Performance RSU Award
Vesting Date for a particular Performance RSU Award, you will be credited with
additional amounts for each RSU underlying such TSR-based 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 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 than regular
quarterly cash dividends, if any, may result in an adjustment pursuant to the
“Adjustment in the Event of Change in Stock; Change in Control” 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.  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.benefitaccess.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.benefitaccess.com), ILG’s books and records shall control.

 

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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 or reduce the amount of your Award 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 Subsidiaries 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.

 

Section 409A of the Code

 

TSR-based 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.

 

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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