Exhibit 10.10


 


INTERVAL LEISURE GROUP, INC.

2008 STOCK AND ANNUAL INCENTIVE PLAN


 


SECTION 1. 
Purpose; Definition


 


The
purpose of this Plan is (a) to give the Company a competitive advantage in
attracting, retaining and motivating officers, employees, directors and/or
consultants and to provide the Company and its Subsidiaries and Affiliates with
a stock and incentive plan providing incentives directly linked to stockholder
value and (b) to assume and govern other awards pursuant to the adjustment
of awards granted under any IAC Long Term Incentive Plan (as defined in the
Employee Matters Agreement) in accordance with the terms of the Employee
Matters Agreement (“Adjusted Awards”).
Certain terms used herein have definitions given to them in the first place in
which they are used. In addition, for purposes of this Plan, the following
terms are defined as set forth below:


 


(a) 
“Affiliate” means a corporation or other
entity controlled by, controlling or under common control with, the Company.


 


(b) 
“Applicable Exchange” means Nasdaq or
such other securities exchange as may at the applicable time be the principal
market for the Common Stock.


 


(c) 
“Award” means an Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, or other
stock-based award granted or assumed pursuant to the terms of this Plan,
including Adjusted Awards.


 


(d) 
“Award Agreement” means a written or
electronic document or agreement setting forth the terms and conditions of a
specific Award.


 


(e) 
“Beneficial Ownership” shall have the
meaning given in Rule 13d-3 promulgated under the Exchange Act.


 


(f) 
“Board” means the Board of Directors of
the Company.


 


(g) 
“Bonus Award” means a bonus award made
pursuant to Section 9.


 


(h) 
“Cause” means, unless otherwise provided
in an Award Agreement, (i) “Cause” as defined in any Individual Agreement
to which the applicable Participant is a party, or (ii) if there is no
such Individual Agreement or if it does not define Cause:  (A) the willful or gross neglect by a
Participant of his employment duties; (B) the plea of guilty or nolo contendere to, or conviction for, the commission of a
felony offense by a Participant; (C) a material breach by a Participant of
a fiduciary duty owed to the Company or any of its subsidiaries; (D) a
material breach by a Participant of any nondisclosure, non-solicitation or
non-competition obligation owed to the Company or any of its Affiliates; or (E) before
a Change in Control, such other events as shall be determined by the Committee
and set forth in a Participant’s Award Agreement. Notwithstanding the general rule of
Section 2(c), following a Change in Control, any determination by the
Committee as to whether “Cause” exists shall be subject to de novo
review.


 


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(i) 
“Change in Control” has the meaning set
forth in Section 10(c).


 


(j) 
“Code” means the Internal Revenue Code of
1986, as amended from time to time, and any successor thereto, the Treasury
Regulations thereunder and other relevant interpretive guidance issued by the
Internal Revenue Service or the Treasury Department.  Reference to any specific section of the Code
shall be deemed to include such regulations and guidance, as well as any
successor provision of the Code.


 


(k) 
“Commission” means the Securities and
Exchange Commission or any successor agency.


 


(l) 
“Committee” has the meaning set forth in Section 2(a).


 


(m) 
“Common Stock” means common stock, par
value $0.01 per share, of the Company.


 


(n) 
“Company” means Interval Leisure Group, Inc.,
a Delaware corporation, or its successor.


 


(o) 
“Disability” means (i) “Disability”
as defined in any Individual Agreement to which the Participant is a party, or (ii) if
there is no such Individual Agreement or it does not define “Disability,” (A) permanent
and total disability as determined under the Company’s long-term disability
plan applicable to the Participant, or (B) if there is no such plan
applicable to the Participant or the Committee determines otherwise in an
applicable Award Agreement, “Disability” as determined by the Committee.  Notwithstanding the above, with respect to an
Incentive Stock Option, Disability shall mean Permanent and Total Disability as
defined in Section 22(e)(3) of the Code and, with respect to all
Awards, to the extent required by Section 409A of the Code, “disability”
within the meaning of Section 409A of the Code.


 


(p) 
“Disaffiliation” means a Subsidiary’s or
Affiliate’s ceasing to be a Subsidiary or Affiliate for any reason (including,
without limitation, as a result of a public offering, or a spinoff or sale by
the Company, of the stock of the Subsidiary or Affiliate) or a sale of a
division of the Company and its Affiliates.


 


(q) 
“EBITA” means for any period, operating
profit (loss) plus (i) amortization, including goodwill impairment, (ii) amortization
of non-cash distribution and marketing expense and non-cash compensation
expense, (iii) restructuring charges, (iv) non-cash write-downs of
assets or goodwill, (v) charges relating to disposal of lines of business,
(vi) litigation settlement amounts and (vii) costs incurred for
proposed and completed acquisitions.


 


(r) 
“EBITDA” means for any period, operating
profit (loss) plus (i) depreciation and amortization, including goodwill
impairment, (ii) amortization of non-cash distribution and marketing
expense and non-cash compensation expense, (iii) restructuring charges, (iv) non-cash
write-downs of assets or goodwill, (v) charges relating to disposal of
lines of business, (vi) litigation settlement amounts and (vii) costs
incurred for proposed and completed acquisitions.


 


(s) 
“Eligible Individuals” means directors,
officers, employees and consultants of the Company or any of its Subsidiaries
or Affiliates, and prospective employees and consultants who


 


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have accepted
offers of employment or consultancy from the Company or its Subsidiaries or
Affiliates.


 


(t) 
“Employee Matters Agreement” means the
Employee Matters Agreement by and among IAC, Ticketmaster, Interval Leisure
Group, Inc., HSN, Inc. and Tree.com, Inc.


 


(u) 
“Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, and any successor thereto.


 


(v) 
“Fair Market Value” means, unless
otherwise determined by the Committee, the closing price of a share of Common
Stock on the Applicable Exchange on the date of measurement, or if Shares were
not traded on the Applicable Exchange on such measurement date, then on the
next preceding date on which Shares were traded, all as reported by such source
as the Committee may select. If the Common Stock is not listed on a national
securities exchange, Fair Market Value shall be determined by the Committee in
its good faith discretion, taking into account, to the extent appropriate, the
requirements of Section 409A of the Code.


 


(w) 
“Free-Standing SAR” has the meaning set
forth in Section 5(b).


 


(x) 
“Grant Date” means (i) the date on
which the Committee by resolution selects an Eligible Individual to receive a
grant of an Award and determines the number of Shares to be subject to such
Award or the formula for earning a number of shares or cash amount, (ii) such
later date as the Committee shall provide in such resolution or (iii) the
initial date on which an Adjusted Award was granted under the IAC Long Term Incentive
Plan.


 


(y) 
“Group” shall have the meaning given in Section 13(d)(3) and
14(d)(2) of the Exchange Act.


 


(z) 
“IAC” means
IAC/InterActiveCorp, a Delaware corporation.


 


(aa)  “Incentive Stock Option”
means any Option that is designated in the applicable Award Agreement as an “incentive
stock option” within the meaning of Section 422 of the Code, and that in
fact so qualifies.


 


(bb)  “Individual Agreement”
means an employment, consulting or similar agreement between a Participant and
the Company or one of its Subsidiaries or Affiliates.


 


(cc)  “Nasdaq” means
the National Association of Securities Dealers Inc. Automated Quotation System.


 


(dd)  “Nonqualified Option”
means any Option that is not an Incentive Stock Option.


 


(ee)  “Option” means
an Award granted under Section 5.


 


(ff)  “Participant”
means an Eligible Individual to whom an Award is or has been granted.


 


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(gg)  “Performance Goals”
means the performance goals established by the Committee in connection with the
grant of Restricted Stock, Restricted Stock Units or Bonus Awards or other
stock-based awards. In the case of Qualified-Performance Based Awards, (i) such
goals shall be based on the attainment of one or any combination of the
following: specified levels of earnings per share from continuing operations,
net profit after tax, EBITDA, EBITA, gross profit, cash generation, unit
volume, market share, sales, asset quality, earnings per share, operating
income, revenues, return on assets, return on operating assets, return on
equity, profits, total stockholder return (measured in terms of stock price
appreciation and/or dividend growth), cost saving levels, marketing-spending
efficiency, core non-interest income, change in working capital, return on
capital, and/or stock price, with respect to the Company or any Subsidiary,
Affiliate, division or department of the Company and (ii) such Performance
Goals shall be set by the Committee within the time period prescribed by Section 162(m) of
the Code and related regulations. Such Performance Goals also may be based upon
the attaining of specified levels of Company, Subsidiary, Affiliate or
divisional performance under one or more of the measures described above
relative to the performance of other entities, divisions or subsidiaries.


 


(hh)  “Plan” means
this Ticket 2008 Stock and Annual Incentive Plan, as set forth herein and as
hereafter amended from time to time.


 


(ii) 
“Plan Year” means the calendar year or,
with respect to Bonus Awards, the Company’s fiscal year if different.


 


(jj)  “Qualified
Performance-Based Award” means an Award intended to qualify for the Section 162(m) Exemption,
as provided in Section 11.


 


(kk)  “Restricted Stock”
means an Award granted under Section 6.


 


(ll)  “Restricted Stock Units”
means an Award granted under Section 7.


 


(mm)  “Resulting Voting Power”
shall mean the outstanding combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors (or
equivalent governing body, if applicable) of the entity resulting from a
Business Combination (including, without limitation, an entity which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries).


 


(nn)  “Retirement”
means retirement from active employment with the Company, a Subsidiary or
Affiliate at or after the Participant’s attainment of age 65.


 


(oo)  “Section 162(m) Exemption”
means the exemption from the limitation on deductibility imposed by Section 162(m) of
the Code that is set forth in Section 162(m)(4)(C) of the Code.


 


(pp)  “Separation” has
the meaning set forth in the Employee Matters Agreement.


 


(qq)  “Share” means a
share of Common Stock.


 


(rr)  “Stock Appreciation Right”
has the meaning set forth in Section 5(b).


 


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(ss)  “Subsidiary”
means any corporation, partnership, joint venture, limited liability company or
other entity during any period in which at least a 50% voting or profits
interest is owned, directly or indirectly, by the Company or any successor to
the Company.


 


(tt)  “Tandem SAR” has
the meaning set forth in Section 5(b).


 


(uu)  “Term” means the
maximum period during which an Option or Stock Appreciation Right may remain
outstanding, subject to earlier termination upon Termination of Employment or
otherwise, as specified in the applicable Award Agreement.


 


(vv)  “Termination of Employment”
means the termination of the applicable Participant’s employment with, or
performance of services for, the Company and any of its Subsidiaries or
Affiliates. Unless otherwise determined by the Committee, if a Participant’s
employment with, or membership on a board of directors of the Company and its
Affiliates terminates but such Participant continues to provide services to the
Company and its Affiliates in a non-employee director capacity or as an
employee, as applicable, such change in status shall not be deemed a
Termination of Employment. A Participant employed by, or performing services
for, a Subsidiary or an Affiliate or a division of the Company and its
Affiliates shall be deemed to incur a Termination of Employment if, as a result
of a Disaffiliation, such Subsidiary, Affiliate, or division ceases to be a
Subsidiary, Affiliate or division, as the case may be, and the Participant does
not immediately thereafter become an employee of (or service provider for), or
member of the board of directors of, the Company or another Subsidiary or
Affiliate. Temporary absences from employment because of illness, vacation or
leave of absence and transfers among the Company and its Subsidiaries and
Affiliates shall not be considered Terminations of Employment.  Notwithstanding the foregoing, with respect
to any Award that constitutes “nonqualified deferred compensation” within the
meaning of Section 409A of the Code, “Termination of Employment” shall
mean a “separation from service” as defined under Section 409A of the
Code.  For the avoidance of doubt, the
Separation shall not constitute a Termination of Employment for purposes of any
Adjusted Award.


 


SECTION 2. 
Administration


 


(a) 
Committee.  The Plan shall be administered by the
Compensation Committee of the Board or such other committee of the Board as the
Board may from time to time designate (the “Committee”), which shall be
composed of not less than two directors, and shall be appointed by and serve at
the pleasure of the Board. The Committee shall, subject to Section 11,
have plenary authority to grant Awards pursuant to the terms of the Plan to
Eligible Individuals. Among other things, the Committee shall have the
authority, subject to the terms and conditions of the Plan and the Employee
Matters Agreement (including the original terms of the grant of the Adjusted
Award):


 


(i)  to select the Eligible Individuals to whom Awards may from
time to time be granted;


 


(ii)  to determine whether and to what extent Incentive Stock
Options, Nonqualified Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, other stock-based awards, or any combination thereof,
are to be granted hereunder;


 


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(iii)  to determine the number of Shares to be covered by each
Award granted hereunder;


 


(iv)  to determine the terms and conditions of each Award granted
hereunder, based on such factors as the Committee shall determine;


 


(v)  subject to Section 12, to modify, amend or adjust the
terms and conditions of any Award;


 


(vi)  to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to time deem
advisable;


 


(vii)  subject to Section 11, to accelerate the vesting or
lapse of restrictions of any outstanding Award, based in each case on such
considerations as the Committee in its sole discretion determines;


 


(viii)  to interpret the terms and provisions of the Plan and any
Award issued under the Plan (and any agreement relating thereto);


 


(ix)  to establish any “blackout” period that the Committee in its
sole discretion deems necessary or advisable;


 


(x)  to determine whether, to what extent, and under what
circumstances cash, Shares, and other property and other amounts payable with
respect to an Award under this Plan shall be deferred either automatically or
at the election of the Participant;


 


(xi)  to decide all other matters
that must be determined in connection with an Award; and


 


(xii)  to otherwise administer
the Plan.


 


(b) 
Procedures.


 


(i)  The Committee may act only by a majority of its members then
in office, except that the Committee may, except to the extent prohibited by
applicable law or the listing standards of the Applicable Exchange and subject
to Section 11, allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of
its responsibilities and powers to any person or persons selected by it.


 


(ii)  Subject to Section 11(c), any authority granted to the
Committee may also be exercised by the full Board. To the extent that any
permitted action taken by the Board conflicts with action taken by the
Committee, the Board action shall control.


 


(c) 
Discretion of Committee.  Subject to Section 1(h), any
determination made by the Committee or by an appropriately delegated officer
pursuant to delegated authority under the provisions of the Plan with respect
to any Award shall be made in the sole discretion of the Committee or such
delegate at the time of the grant of the Award or, unless in contravention of
any express term of the Plan, at any time thereafter. All decisions made by the
Committee or any


 


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appropriately
delegated officer pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company, Participants, and Eligible
Individuals.


 


(d) 
Award Agreements.  The terms and conditions of each Award, as
determined by the Committee, shall be set forth in an Award Agreement, which
shall be delivered to the Participant receiving such Award upon, or as promptly
as is reasonably practicable following, the grant of such Award. The
effectiveness of an Award shall not be subject to the Award Agreement’s being
signed by the Company and/or the Participant receiving the Award unless
specifically so provided in the Award Agreement. Award Agreements may be
amended only in accordance with Section 12 hereof.


 


SECTION 3. 
Common Stock Subject to Plan


 


(a) 
Plan Maximums.  The maximum number of Shares that may be
delivered pursuant to Awards under the Plan shall be the sum of (a) the
number of Shares that may be issuable upon exercise or vesting of the Adjusted
Awards and (b) 5,000,000. The maximum number of Shares that may be granted
pursuant to Options intended to be Incentive Stock Options shall be 3,333,333
Shares.  Shares subject to an Award under
the Plan may be authorized and unissued Shares or may be treasury Shares.


 


(b) 
Individual Limits.  No Participant may be granted Awards covering
in excess of 1,466,666 Shares during the term of the Plan; provided
that Adjusted Awards shall not be subject to this limitation.


 


(c) 
Rules for Calculating Shares Delivered.


 


(i)  With respect to Awards other than Adjusted Awards, to the
extent that any Award is forfeited, or any Option and the related Tandem SAR
(if any) or Free-Standing SAR terminates, expires or lapses without being exercised,
or any Award is settled for cash, the Shares subject to such Awards not
delivered as a result thereof shall again be available for Awards under the
Plan.


 


(ii)  With respect to Awards other than Adjusted Awards, if the
exercise price of any Option and/or the tax withholding obligations relating to
any Award are satisfied by delivering Shares to the Company (by either actual
delivery or by attestation), only the number of Shares issued net of the Shares
delivered or attested to shall be deemed delivered for purposes of the limits
set forth in Section 3(a). To the extent any Shares subject to an Award
are withheld to satisfy the exercise price (in the case of an Option) and/or
the tax withholding obligations relating to such Award, such Shares shall not
be deemed to have been delivered for purposes of the limits set forth in Section 3(a).


 


(d) 
Adjustment Provision.  In the event of a merger, consolidation,
acquisition of property or shares, stock rights offering, liquidation,
Disaffiliation, or similar event affecting the Company or any of its
Subsidiaries (each, a “Corporate Transaction”), the Committee or the Board may
in its discretion make such substitutions or adjustments as it deems
appropriate and equitable to (i) the aggregate number and kind of Shares
or other securities reserved for issuance and delivery under the Plan, (ii) the
various maximum limitations set forth in Sections 3(a) and 3(b) upon
certain types of Awards and upon the grants to individuals of certain types of
Awards,


 


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(iii) the number and
kind of Shares or other securities subject to outstanding Awards; and (iv) the
exercise price of outstanding Options and Stock Appreciation Rights. In the
event of a stock dividend, stock split, reverse stock split, separation, spinoff,
reorganization, extraordinary dividend of cash or other property, share
combination, or recapitalization or similar event affecting the capital
structure of the Company (each, a “Share Change”), the Committee or the Board
shall make such substitutions or adjustments as it deems appropriate and
equitable to (i) the aggregate number and kind of Shares or other
securities reserved for issuance and delivery under the Plan, (ii) the
various maximum limitations set forth in Sections 3(a) and 3(b) upon
certain types of Awards and upon the grants to individuals of certain types of
Awards, (iii) the number and kind of Shares or other securities subject to
outstanding Awards; and (iv) the exercise price of outstanding Options and
Stock Appreciation Rights. In the case of Corporate Transactions, such
adjustments may include, without limitation, (1) the cancellation of
outstanding Awards in exchange for payments of cash, property or a combination
thereof having an aggregate value equal to the value of such Awards, as determined
by the Committee or the Board in its sole discretion (it being understood that
in the case of a Corporate Transaction with respect to which stockholders of
Common Stock receive consideration other than publicly traded equity securities
of the ultimate surviving entity, any such determination by the Committee that
the value of an Option or Stock Appreciation Right shall for this purpose be
deemed to equal the excess, if any, of the value of the consideration being
paid for each Share pursuant to such Corporate Transaction over the exercise
price of such Option or Stock Appreciation Right shall conclusively be deemed
valid); (2) the substitution of other property (including, without
limitation, cash or other securities of the Company and securities of entities
other than the Company) for the Shares subject to outstanding Awards; and (3) in
connection with any Disaffiliation, arranging for the assumption of Awards, or
replacement of Awards with new awards based on other property or other
securities (including, without limitation, other securities of the Company and
securities of entities other than the Company), by the affected Subsidiary,
Affiliate, or division or by the entity that controls such Subsidiary,
Affiliate, or division following such Disaffiliation (as well as any
corresponding adjustments to Awards that remain based upon Company securities).
The Committee may adjust in its sole discretion the Performance Goals
applicable to any Awards to reflect any Share Change and any Corporate Transaction
and any unusual or non-recurring events and other extraordinary items, impact
of charges for restructurings, discontinued operations, and the cumulative
effects of accounting or tax changes, each as defined by generally accepted
accounting principles or as identified in the Company’s financial statements,
notes to the financial statements, management’s discussion and analysis or the
Company’s other SEC filings,  provided that in the case of Performance Goals applicable to
any Qualified Performance-Based Awards, such adjustment does not violate Section 162(m) of
the Code.  Any adjustment under this Section 3(d) need
not be the same for all Participants.


 


(e)  Section 409A. 
Notwithstanding the foregoing: (i) any adjustments made pursuant to
Section 3(d) to Awards that are considered “deferred compensation”
within the meaning of Section 409A of the Code shall be made in compliance
with the requirements of Section 409A of the Code; (ii) any
adjustments made pursuant to Section 3(d) to Awards that are not considered
“deferred compensation” subject to Section 409A of the Code shall be made
in such a manner as to ensure that after such adjustment, the Awards either (A) continue
not to be subject to Section 409A of the Code or (B) comply with the
requirements of Section 409A of the Code; and (iii) in any event,
neither the Committee nor the Board shall have the authority to make any
adjustments 


 


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pursuant to Section 3(d) to
the extent the existence of such authority would cause an Award that is not
intended to be subject to Section 409A of the Code at the Grant Date to be
subject thereto as of the Grant Date.


 


SECTION 4.  Eligibility


 


Awards may be
granted under the Plan to Eligible Individuals and, with respect to Adjusted
Awards, in accordance with the terms of the Employee Matters Agreement; provided, however, that
Incentive Stock Options may be granted only to employees of the Company and its
subsidiaries or parent corporation (within the meaning of Section 424(f) of
the Code) and, with respect to Adjusted Awards that are intended to qualify as
incentive stock options within the meaning of Section 421 of the Code, in
accordance with the terms of the Employee Matters Agreement.


 


SECTION 5. 
Options and Stock Appreciation Rights


 


With respect to
Adjusted Awards, the provisions below will be applicable only to the extent
that they are not inconsistent with the Employee Matters Agreement and the
terms of the Adjusted Award assumed under the Employee Matters Agreement:


 


(a) 
Types of Options.  Options may be of two types: Incentive Stock
Options and Nonqualified Options. The Award Agreement for an Option shall
indicate whether the Option is intended to be an Incentive Stock Option or a
Nonqualified Option.


 


(b)  Types and Nature of Stock Appreciation Rights.  Stock Appreciation Rights may be “Tandem
SARs,” which are granted in conjunction with an Option, or “Free-Standing SARs,”
which are not granted in conjunction with an Option. Upon the exercise of a
Stock Appreciation Right, the Participant shall be entitled to receive an
amount in cash, Shares, or both, in value equal to the product of (i) the
excess of the Fair Market Value of one Share over the exercise price of the
applicable Stock Appreciation Right, multiplied by (ii) the number of
Shares in respect of which the Stock Appreciation Right has been exercised. The
applicable Award Agreement shall specify whether such payment is to be made in
cash or Common Stock or both, or shall reserve to the Committee or the Participant
the right to make that determination prior to or upon the exercise of the Stock
Appreciation Right.


 


(c)  Tandem SARs.  A Tandem
SAR may be granted at the Grant Date of the related Option. A Tandem SAR shall
be exercisable only at such time or times and to the extent that the related
Option is exercisable in accordance with the provisions of this Section 5,
and shall have the same exercise price as the related Option. A Tandem SAR
shall terminate or be forfeited upon the exercise or forfeiture of the related
Option, and the related Option shall terminate or be forfeited upon the
exercise or forfeiture of the Tandem SAR.


 


(d)  Exercise Price.  The
exercise price per Share subject to an Option or Free-Standing SAR shall be
determined by the Committee and set forth in the applicable Award Agreement,
and shall not be less than the Fair Market Value of a share of the Common Stock
on the applicable Grant Date. In no event may any Option or Free-Standing SAR
granted under this Plan be amended, other than pursuant to Section 3(d),
to decrease the exercise price thereof, be cancelled in conjunction with the
grant of any new Option or Free-Standing SAR with a lower 


 


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exercise price or
otherwise be subject to any action that would be treated, for accounting
purposes, as a “repricing” of such Option or Free-Standing SAR, unless such
amendment, cancellation, or action is approved by the Company’s stockholders.


 


(e)  Term.  The Term of
each Option and each Free-Standing SAR shall be fixed by the Committee, but
shall not exceed ten years from the Grant Date.


 


(f)  Vesting and Exercisability. 
Except as otherwise provided herein, Options and Free-Standing SARs
shall be exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee. If the Committee provides that any
Option or Free-Standing SAR will become exercisable only in installments, the
Committee may at any time waive such installment exercise provisions, in whole
or in part, based on such factors as the Committee may determine. In addition,
the Committee may at any time accelerate the exercisability of any Option or
Free-Standing SAR.


 


(g)  Method of Exercise. 
Subject to the provisions of this Section 5, Options and
Free-Standing SARs may be exercised, in whole or in part, at any time during
the applicable Term by giving written notice of exercise to the Company or
through the procedures established with the Company’s appointed third-party
Option administrator specifying the number of Shares as to which the Option or
Free-Standing SAR is being exercised; provided, however, that, unless otherwise permitted by the Committee,
any such exercise must be with respect to a portion of the applicable Option or
Free-Standing SAR relating to no less than the lesser of the number of Shares
then subject to such Option or Free-Standing SAR or 100 Shares. In the case of
the exercise of an Option, such notice shall be accompanied by payment in full
of the purchase price (which shall equal the product of such number of Shares
multiplied by the applicable exercise price) by certified or bank check or such
other instrument as the Company may accept. If approved by the Committee,
payment, in full or in part, may also be made as follows:


 


(i)  Payments
may be made in the form of unrestricted Shares (by delivery of such Shares or
by attestation) of the same class as the Common Stock subject to the Option
already owned by the Participant (based on the Fair Market Value of the Common
Stock on the date the Option is exercised); provided, however, that, in the case of an Incentive Stock Option, the
right to make a payment in the form of already owned Shares of the same class
as the Common Stock subject to the Option may be authorized only at the time
the Option is granted.


 


(ii)  To the
extent permitted by applicable law, payment may be made by delivering a
properly executed exercise notice to the Company, together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the purchase price, and, if
requested, the amount of any federal, state, local or foreign withholding
taxes. To facilitate the foregoing, the Company may, to the extent permitted by
applicable law, enter into agreements for coordinated procedures with one or
more brokerage firms. To the extent permitted by applicable law, the Committee
may also provide for Company loans to be made for purposes of the exercise of
Options.


 


(iii) 
Payment may be made by instructing the Company to withhold a number of Shares
having a Fair Market Value (based on the Fair Market Value of the Common Stock
on the 


 


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date the applicable
Option is exercised) equal to the product of (A) the exercise price
multiplied by (B) the number of Shares in respect of which the Option
shall have been exercised.


 


(h)  Delivery; Rights of Stockholders.  No Shares shall be delivered pursuant to the
exercise of an Option until the exercise price therefor has been fully paid and
applicable taxes have been withheld. The applicable Participant shall have all
of the rights of a stockholder of the Company holding the class or series of Common
Stock that is subject to the Option or Stock Appreciation Right (including, if
applicable, the right to vote the applicable Shares and the right to receive
dividends), when the Participant (i) has given written notice of exercise,
(ii) if requested, has given the representation described in Section 14(a),
and (iii) in the case of an Option, has paid in full for such Shares.


 


(i)  Terminations of Employment. 
Subject to Section 10, a Participant’s Options and Stock
Appreciation Rights shall be forfeited upon such Participant’s Termination of
Employment, except as set forth below:


 


(i)  Upon a
Participant’s Termination of Employment by reason of death, any Option or Stock
Appreciation Right held by the Participant that was exercisable immediately
before the Termination of Employment may be exercised at any time until the
earlier of (A) the first anniversary of the date of such death and (B) the
expiration of the Term thereof;


 


(ii)  Upon a
Participant’s Termination of Employment by reason of Disability or Retirement,
any Option or Stock Appreciation Right held by the Participant that was exercisable
immediately before the Termination of Employment may be exercised at any time
until the earlier of (A) the first anniversary of such Termination of
Employment and (B) the expiration of the Term thereof;


 


(iii)  Upon a
Participant’s Termination of Employment for Cause, any Option or Stock
Appreciation Right held by the Participant shall be forfeited, effective as of
such Termination of Employment;


 


(iv)  Upon a
Participant’s Termination of Employment for any reason other than death, Disability,
Retirement or for Cause, any Option or Stock Appreciation Right held by the
Participant that was exercisable immediately before the Termination of
Employment may be exercised at any time until the earlier of (A) the 90th
day following such Termination of Employment and (B) expiration of the
Term thereof; and


 


(v) 
Notwithstanding the above provisions of this Section 5(i), if a
Participant dies after such Participant’s Termination of Employment but while
any Option or Stock Appreciation Right remains exercisable as set forth above,
such Option or Stock Appreciation Right may be exercised at any time until the
later of (A) the earlier of (1) the first anniversary of the date of
such death and (2) expiration of the Term thereof and (B) the last
date on which such Option or Stock Appreciation Right would have been
exercisable, absent this Section 5(i)(v).


 


Notwithstanding
the foregoing, the Committee shall have the power, in its discretion, to apply
different rules concerning the consequences of a Termination of
Employment; provided, however,
that if such rules are less favorable to the Participant than those set
forth above, such rules are set forth in the applicable Award Agreement.
If an Incentive Stock Option is exercised 


 


11

















 


after the
expiration of the exercise periods that apply for purposes of Section 422
of the Code, such Option will thereafter be treated as a Nonqualified Option.


 


(j) 
Nontransferability of Options and Stock Appreciation
Rights.  No Option or
Free-Standing SAR shall be transferable by a Participant other than (i) by
will or by the laws of descent and distribution, or (ii) in the case of a
Nonqualified Option or Free-Standing SAR, pursuant to a qualified domestic
relations order or as otherwise expressly permitted by the Committee including,
if so permitted, pursuant to a transfer to the Participant’s family members or
to a charitable organization, whether directly or indirectly or by means of a
trust or partnership or otherwise. For purposes of this Plan, unless otherwise
determined by the Committee, “family member” shall have the meaning given to
such term in General Instructions A.1(a)(5) to Form S-8 under the
Securities Act of 1933, as amended, and any successor thereto. A Tandem SAR
shall be transferable only with the related Option as permitted by the
preceding sentence. Any Option or Stock Appreciation Right shall be exercisable,
subject to the terms of this Plan, only by the applicable Participant, the
guardian or legal representative of such Participant, or any person to whom
such Option or Stock Appreciation Right is permissibly transferred pursuant to
this Section 5(j), it being understood that the term “Participant”
includes such guardian, legal representative and other transferee; provided, however, that
the term “Termination of Employment” shall continue to refer to the Termination
of Employment of the original Participant.


 


SECTION 6.  Restricted Stock


 


With respect to
Adjusted Awards, the provisions below will be applicable only to the extent
that they are not inconsistent with the Employee Matters Agreement and the
terms of the Adjusted Award assumed under the Employee Matters Agreement:


 


(a)  Nature of Awards and Certificates.  Shares of Restricted Stock are actual Shares
issued to a Participant, and shall be evidenced in such manner as the Committee
may deem appropriate, including book-entry registration or issuance of one or
more stock certificates. Any certificate issued in respect of Shares of
Restricted Stock shall be registered in the name of the applicable Participant
and, in the case of Restricted Stock, shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:


 


“The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) of the Interval
Leisure Group, Inc. 2008 Stock and Annual Incentive Plan and an Award
Agreement. Copies of such Plan and Agreement are on file at the offices of
Interval Leisure Group, Inc., 6262 Sunset Drive, Miami FL, 33143.”


 


The Committee may
require that the certificates evidencing such shares be held in custody by the
Company until the restrictions thereon shall have lapsed and that, as a
condition of any Award of Restricted Stock, the applicable Participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.


 


(b)  Terms and Conditions. 
Shares of Restricted Stock shall be subject to the following terms and
conditions:


 


12

















 


(i)  The
Committee shall, prior to or at the time of grant, condition the vesting or
transferability of an Award of Restricted Stock upon the continued service of
the applicable Participant or the attainment of Performance Goals, or the
attainment of Performance Goals and the continued service of the applicable
Participant. In the event that the Committee conditions the grant or vesting of
an Award of Restricted Stock upon the attainment of Performance Goals or the
attainment of Performance Goals and the continued service of the applicable
Participant, the Committee may, prior to or at the time of grant, designate
such an Award as a Qualified Performance-Based Award. The conditions for grant,
vesting, or transferability and the other provisions of Restricted Stock Awards
(including without limitation any Performance Goals) need not be the same with
respect to each Participant.


 


(ii)  Subject
to the provisions of the Plan and the applicable Award Agreement, during the
period, if any, set by the Committee, commencing with the date of such
Restricted Stock Award for which such vesting restrictions apply and until the
expiration of such vesting restrictions (the “Restriction Period”), the
Participant shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber Shares of Restricted Stock.


 


(iii)  Except
as provided in this Section 6 and in the applicable Award Agreement, the applicable
Participant shall have, with respect to the Shares of Restricted Stock, all of
the rights of a stockholder of the Company holding the class or series of
Common Stock that is the subject of the Restricted Stock, including, if
applicable, the right to vote the Shares and the right to receive any cash
dividends. If so determined by the Committee in the applicable Award Agreement
and subject to Section 14(e), (A) cash dividends on the class or
series of Common Stock that is the subject of the Restricted Stock Award shall
be automatically deferred and reinvested in additional Restricted Stock, held
subject to the vesting of the underlying Restricted Stock, and (B) subject
to any adjustment pursuant to Section 3(d), dividends payable in Common
Stock shall be paid in the form of Restricted Stock of the same class as the
Common Stock with which such dividend was paid, held subject to the vesting of
the underlying Restricted Stock.


 


(iv)  Except
as otherwise set forth in the applicable Award Agreement, upon a Participant’s
Termination of Employment for any reason during the Restriction Period, all
Shares of Restricted Stock still subject to restriction shall be forfeited by
such Participant; provided, however,
that subject to Section 11(b), the Committee shall have the discretion to
waive, in whole or in part, any or all remaining restrictions with respect to
any or all of such Participant’s Shares of Restricted Stock.


 


(v)  If and
when any applicable Performance Goals are satisfied and the Restriction Period
expires without a prior forfeiture of the Shares of Restricted Stock for which
legended certificates have been issued, unlegended certificates for such Shares
shall be delivered to the Participant upon surrender of the legended
certificates.


 


SECTION 7.  Restricted Stock Units


 


With respect to
Adjusted Awards, the provisions below will be applicable only to the extent
that they are not inconsistent with the Employee Matters Agreement and the
terms of the Adjusted Award assumed under the Employee Matters Agreement:


 


13

















 


(a)  Nature of Awards. 
Restricted Stock Units are Awards denominated in Shares that will be
settled, subject to the terms and conditions of the Restricted Stock Units, in
an amount in cash, Shares or both, based upon the Fair Market Value of a specified
number of Shares.


 


(b)  Terms and Conditions. 
Restricted Stock Units shall be subject to the following terms and
conditions:


 


(i)  The
Committee shall, prior to or at the time of grant, condition the grant,
vesting, or transferability of Restricted Stock Units upon the continued
service of the applicable Participant or the attainment of Performance Goals,
or the attainment of Performance Goals and the continued service of the
applicable Participant. In the event that the Committee conditions the grant or
vesting of Restricted Stock Units upon the attainment of Performance Goals or
the attainment of Performance Goals and the continued service of the applicable
Participant, the Committee may, prior to or at the time of grant, designate
such Awards as Qualified Performance-Based Awards. The conditions for grant,
vesting or transferability and the other provisions of Restricted Stock Units
(including without limitation any Performance Goals) need not be the same with
respect to each Participant. An Award of Restricted Stock Units shall be
settled as and when the Restricted Stock Units vest or at a later time
specified by the Committee or in accordance with an election of the
Participant, if the Committee so permits.


 


(ii)  Subject
to the provisions of the Plan and the applicable Award Agreement, during the
period, if any, set by the Committee, commencing with the date of such
Restricted Stock Units for which such vesting restrictions apply and until the
expiration of such vesting restrictions (the “Restriction Period”), the
Participant shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber Restricted Stock Units.


 


(iii)  The
Award Agreement for Restricted Stock Units shall specify whether, to what
extent and on what terms and conditions the applicable Participant shall be
entitled to receive current or deferred payments of cash, Common Stock or other
property corresponding to the dividends payable on the Common Stock (subject to
Section 14(e) below).


 


(iv)  Except
as otherwise set forth in the applicable Award Agreement, upon a Participant’s
Termination of Employment for any reason during the Restriction Period, all
Restricted Stock Units still subject to restriction shall be forfeited by such
Participant; provided, however,
that subject to Section 11(b), the Committee shall have the discretion to
waive, in whole or in part, any or all remaining restrictions with respect to
any or all of such Participant’s Restricted Stock Units.


 


SECTION 8.  Other Stock-Based Awards


 


Other Awards of
Common Stock and other Awards that are valued in whole or in part by reference
to, or are otherwise based upon or settled in, Common Stock, including (without
limitation), unrestricted stock, performance units, dividend equivalents, and
convertible debentures, may be granted under the Plan.


 


14














 


SECTION 9. 
Bonus Awards


 


(a) 
Determination of Awards.  The Committee shall determine the total
amount of Bonus Awards for each Plan Year or such shorter performance period as
the Committee may establish in its sole discretion. Prior to the beginning of the
Plan Year or such shorter performance period as the Committee may establish in
its sole discretion (or such later date as may be prescribed by the Internal
Revenue Service under Section 162(m) of the Code), the Committee
shall establish Performance Goals for Bonus Awards for the Plan Year or such
shorter period; provided, that such Performance
Goals may be established at a later date for Participants who are not “covered
employees” (within the meaning of Section 162(m)(3) of the Code).
Bonus amounts payable to any individual Participant with respect to a Plan Year
will be limited to a maximum of $10 million. For performance periods that are
shorter than a Plan Year, such $10 million maximum may be pro-rated if so
determined by the Committee.


 


(b) 
Payment of Awards.  Bonus Awards under the Plan shall be paid in
cash or in shares of Common Stock (valued at Fair Market Value as of the date
of payment) as determined by the Committee, as soon as practicable following
the close of the Plan Year or such shorter performance period as the Committee
may establish. It is intended that a Bonus Award will be paid no later than the
fifteenth (15th) day of the third month following the later of: (i) the
end of the Participant’s taxable year in which the requirements for such Bonus
Award have been satisfied by the Participant or (ii) the end of the
Company’s fiscal year in which the requirements for such Bonus Award have been
satisfied by the Participant.  The
Committee may at its option establish procedures pursuant to which Participants
are permitted to defer the receipt of Bonus Awards payable hereunder. The Bonus
Award for any Plan Year or such shorter performance period to any Participant
may be reduced or eliminated by the Committee in its discretion.


 


SECTION 10. 
Change in Control Provisions


 


(a) 
Adjusted Awards.  With respect to all Adjusted Awards, subject
to paragraph (e) of this Section 10, unless otherwise provided in the
applicable Award Agreement, notwithstanding any other provision of this Plan to
the contrary, upon a Participant’s Termination of Employment, during the
two-year period following a Change in Control, by the Company other than for
Cause or Disability or by the Participant for Good Reason (as defined below):


 


(i)  any Options outstanding as of such Termination of Employment
which were outstanding as of the date of such Change in Control shall be fully
exercisable and vested and shall remain exercisable until the later of (i) the
last date on which such Option would be exercisable in the absence of this Section 10(a) and
(ii) the earlier of (A) the first anniversary of such Change in
Control and (B) expiration of the Term of such Option;


 


(ii)  the restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock outstanding as of such
Termination of Employment which were outstanding as of the date of such Change
in Control shall become free of all restrictions and become fully vested and
transferable; and


 


(iii)  all Restricted Stock Units outstanding as of such
Termination of Employment which were outstanding as of the date of such Change
in Control shall be considered to be earned and payable in full, and any
restrictions shall lapse and such Restricted Stock Units shall be 


 


15

















 


settled as
promptly as is practicable in (subject to Section 3(d)) the form set forth
in the applicable Award Agreement.


 


(b) 
Impact of Event on Awards other than Adjusted
Awards.   Subject to paragraph (e) of this Section 10,
and paragraph (d) of Section 12, unless otherwise provided in any
applicable Award Agreement and except as otherwise provided in paragraph (a) of
this Section 10, in connection with a Change of Control, the Committee may
make such adjustments and/or settlements of outstanding Awards as it deems
appropriate and consistent with the Plan’s purposes, including, without
limitation, the acceleration of vesting of Awards either upon a Change of
Control or upon various terminations of employment following a Change of
Control.  The Committee may provide for
such adjustments as a term of the Award or may make such adjustments following
the granting of the Award.


 


(c) 
Definition
of Change in Control.  For
purposes of the Plan, unless otherwise provided in an option agreement
or other agreement relating to an Award, a “Change in Control” shall mean the
happening of any of the following events:


 


(i)  The acquisition by any individual, entity or Group (a “Person”),
other than the Company, of Beneficial Ownership of equity securities of the
Company representing more than 50% of the voting power of the then outstanding
equity securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided,
however, that any acquisition that would
constitute a Change in Control under this subsection (i) that is also a
Business Combination shall be determined exclusively under subsection (iii) below;
or


 


(ii)  Individuals who, as of the Effective Date, constitute the Board
(the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director subsequent
to the Effective Date, whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
Incumbent Directors at such time shall become an Incumbent Director, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or


 


(iii)  Consummation of a reorganization, merger, consolidation,
sale or other disposition of all or substantially all of the assets of the
Company, the purchase of assets or stock of another entity, or other similar
corporate transaction (a “Business Combination”), in each case, unless
immediately following such Business Combination, (A) more than 50% of the
Resulting Voting Power shall reside in Outstanding Company Voting Securities
retained by the Company’s stockholders in the Business Combination and/or
voting securities received by such stockholders in the Business Combination on
account of Outstanding Company Voting Securities, and (B) at least a
majority of the members of the board of directors (or equivalent governing
body, if applicable) of the entity resulting from such Business Combination
were Incumbent Directors at the time of the initial agreement, or action of the
Board, providing for such Business Combination; or


 


16

















 


(iv)  Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.


 


Notwithstanding the foregoing, the Separation shall not constitute a
Change in Control.  For the avoidance of
doubt, with respect to Adjusted Awards, any reference in an Award Agreement or
the applicable IAC Long Term Incentive Plan to a “change in control,” “change
of control” or similar definition shall be deemed to refer to a Change of
Control hereunder.


 


(d) 
For purposes of this Section 10, “Good Reason” means (i) “Good Reason”
as defined in any Individual Agreement or Award Agreement to which the
applicable Participant is a party, or (ii) if there is no such Individual
Agreement or if it does not define Good Reason, without the Participant’s prior
written consent: (A) a material reduction in the Participant’s rate of
annual base salary from the rate of annual base salary in effect for such
Participant immediately prior to the Change in Control, (B) a relocation
of the Participant’s principal place of business more than 35 miles from the
city in which such Participant’s principal place of business was located
immediately prior to the Change in Control or (C) a material and
demonstrable adverse change in the nature and scope of the Participant’s duties
from those in effect immediately prior to the Change in Control.  In order to invoke a Termination of
Employment for Good Reason, a Participant shall provide written notice to the
Company of the existence of one or more of the conditions described in clauses (A) through
(C) within 90 days following the Participant’s knowledge of the initial
existence of such condition or conditions, and the Company shall have 30 days
following receipt of such written notice (the “Cure Period”) during which it
may remedy the condition.  In the event
that the Company fails to remedy the condition constituting Good Reason during
the Cure Period, the Participant must terminate employment, if at all, within
90 days following the Cure Period in order for such Termination of Employment
to constitute a Termination of Employment for Good Reason.


 


(e) 
Notwithstanding the foregoing, if any Award is subject to Section 409A of
the Code, this Section 10 shall be applicable only to the extent
specifically provided in the Award Agreement and as permitted pursuant to Section 14(k).


 


SECTION 11. 
Qualified Performance-Based Awards; Section 16(b)


 


(a) 
The provisions of this Plan are intended to ensure that all Options and Stock
Appreciation Rights granted hereunder to any Participant who is or may be a “covered
employee” (within the meaning of Section 162(m)(3) of the Code) in
the tax year in which such Option or Stock Appreciation Right is expected to be
deductible to the Company qualify for the Section 162(m) Exemption,
and all such Awards shall therefore be considered Qualified Performance-Based
Awards and this Plan shall be interpreted and operated consistent with that intention
(including, without limitation, to require that all such Awards be granted by a
committee composed solely of members who satisfy the requirements for being “outside
directors” for purposes of the Section 162(m) Exemption (“Outside
Directors”)). When granting any Award other than an Option or Stock
Appreciation Right, the Committee may designate such Award as a Qualified
Performance-Based Award, based upon a determination that (i) the recipient
is or may be a “covered employee” (within the meaning of Section 162(m)(3) of
the Code) with respect to such Award, and (ii) the Committee wishes such
Award to qualify for the Section 162(m) Exemption, and the terms of
any such Award (and of the grant thereof) shall be 


 


17

















 


consistent with
such designation (including, without limitation, that all such Awards be
granted by a committee composed solely of Outside Directors).


 


(b) 
Each Qualified Performance-Based Award (other than an Option or Stock
Appreciation Right) shall be earned, vested and payable (as applicable) only
upon the achievement of one or more Performance Goals (as certified in writing
by the Committee, except if compensation is attributable solely to the increase
in the value of the Common Stock), together with the satisfaction of any other
conditions, such as continued employment, as the Committee may determine to be
appropriate, and no Qualified Performance-Based Award may be amended, nor may the
Committee exercise any discretionary authority it may otherwise have under this
Plan with respect to a Qualified Performance-Based Award under this Plan, in
any manner that would cause the Qualified Performance-Based Award to cease to
qualify for the Section 162(m) Exemption; provided,
however, that (i) the Committee may
provide, either in connection with the grant of the applicable Award or by
amendment thereafter, that achievement of such Performance Goals will be waived
upon the death or Disability of the Participant or under any other circumstance
with respect to which the existence of such possible waiver will not cause the
Award to fail to qualify for the Section 162(m) Exemption as of the
Grant Date, and (ii) the provisions of Section 10 shall apply notwithstanding
this Section 11(b).


 


(c) 
The full Board shall not be permitted to exercise authority granted to the Committee
to the extent that the grant or exercise of such authority would cause an Award
designated as a Qualified Performance-Based Award not to qualify for, or to
cease to qualify for, the Section 162(m) Exemption.


 


(d) 
The provisions of this Plan are intended to ensure that no transaction under
the Plan is subject to (and not exempt from) the short-swing recovery rules of
Section 16(b) of the Exchange Act (“Section 16(b)”).
Accordingly, the composition of the Committee shall be subject to such
limitations as the Board deems appropriate to permit transactions pursuant to
this Plan to be exempt (pursuant to Rule 16b-3 promulgated under the Exchange
Act) from Section 16(b), and no delegation of authority by the Committee
shall be permitted if such delegation would cause any such transaction to be
subject to (and not exempt from) Section 16(b).


 


SECTION 12. 
Term, Amendment and Termination


 


(a) 
Effectiveness.  The Plan shall be effective as of the date
(the “Effective Date”) it is adopted by the Board, subject to the approval by
the holders of at least a majority of the voting power represented by
outstanding capital stock of the Company that is entitled generally to vote in
the election of directors.


 


(b) 
Termination.  The Plan will terminate on the tenth
anniversary of the Effective Date. Awards outstanding as of such date shall not
be affected or impaired by the termination of the Plan.


 


(c) 
Amendment of Plan.  The Board may amend, alter, or discontinue
the Plan, but no amendment, alteration or discontinuation shall be made which
would materially impair the rights of the Participant with respect to a
previously granted Award without such Participant’s consent, except such an
amendment made to comply with applicable law, including without limitation 


 


18

















 


Section 409A
of the Code, stock exchange rules or accounting rules. In addition, no
such amendment shall be made without the approval of the Company’s stockholders
to the extent such approval is required by applicable law or the listing standards
of the Applicable Exchange.


 


(d) 
Amendment of Awards.  Subject to Section 5(d), the Committee
may unilaterally amend the terms of any Award theretofore granted, but no such
amendment shall cause a Qualified Performance-Based Award to cease to qualify
for the Section 162(m) Exemption or without the Participant’s consent
materially impair the rights of any Participant with respect to an Award,
except such an amendment made to cause the Plan or Award to comply with
applicable law, stock exchange rules or accounting rules.


 


SECTION 13. 
Unfunded Status of Plan


 


It is
presently intended that the Plan constitute an “unfunded” plan for incentive
and deferred compensation. The Committee may authorize the creation of trusts
or other arrangements to meet the obligations created under the Plan to deliver
Common Stock or make payments; provided, however, that unless the Committee otherwise determines, the
existence of such trusts or other arrangements is consistent with the “unfunded”
status of the Plan.


 


SECTION 14. 
General Provisions


 


(a) 
Conditions for Issuance.  The Committee may require each person
purchasing or receiving Shares pursuant to an Award to represent to and agree
with the Company in writing that such person is acquiring the Shares without a
view to the distribution thereof. The certificates for such Shares may include
any legend which the Committee deems appropriate to reflect any restrictions on
transfer. Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to fulfillment of
all of the following conditions: (i) listing or approval for listing upon
notice of issuance, of such Shares on the Applicable Exchange; (ii) any
registration or other qualification of such Shares of the Company under any
state or federal law or regulation, or the maintaining in effect of any such
registration or other qualification which the Committee shall, in its absolute
discretion upon the advice of counsel, deem necessary or advisable; and (iii) obtaining
any other consent, approval, or permit from any state or federal governmental
agency which the Committee shall, in its absolute discretion after receiving
the advice of counsel, determine to be necessary or advisable.


 


(b) 
Additional Compensation Arrangements.  Nothing contained in the Plan shall prevent
the Company or any Subsidiary or Affiliate from adopting other or additional
compensation arrangements for its employees.


 


(c) 
No Contract of Employment.  The Plan shall not constitute a contract of employment,
and adoption of the Plan shall not confer upon any employee any right to
continued employment, nor shall it interfere in any way with the right of the
Company or any Subsidiary or Affiliate to terminate the employment of any
employee at any time.


 


(d) 
Required Taxes.  No later than the date as of which an amount
first becomes includible in the gross income of a Participant for federal,
state, local or foreign income or employment or other tax purposes with respect
to any Award under the Plan, such Participant 


 


19

















 


shall 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. If determined by the Company,
withholding obligations may be settled with Common Stock, including Common
Stock that is part of the Award that gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to such Participant. The Committee may establish such procedures
as it deems appropriate, including making irrevocable elections, for the
settlement of withholding obligations with Common Stock.


 


(e) 
Limitation on Dividend Reinvestment and Dividend
Equivalents.  Reinvestment of
dividends in additional Restricted Stock at the time of any dividend payment,
and the payment of Shares with respect to dividends to Participants holding
Awards of Restricted Stock Units, shall only be permissible if sufficient
Shares are available under Section 3 for such reinvestment or payment
(taking into account then outstanding Awards). In the event that sufficient
Shares are not available for such reinvestment or payment, such reinvestment or
payment shall be made in the form of a grant of Restricted Stock Units equal in
number to the Shares that would have been obtained by such payment or
reinvestment, the terms of which Restricted Stock Units shall provide for
settlement in cash and for dividend equivalent reinvestment in further Restricted
Stock Units on the terms contemplated by this Section 14(e).


 


(f) 
Designation of Death Beneficiary.  The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a beneficiary to whom
any amounts payable in the event of such Participant’s death are to be paid or
by whom any rights of such eligible Individual, after such Participant’s death,
may be exercised.


 


(g) 
Subsidiary Employees.  In the case of a grant of an Award to any
employee of a Subsidiary of the Company, the Company may, if the Committee so
directs, issue or transfer the Shares, if any, covered by the Award to the
Subsidiary, for such lawful consideration as the Committee may specify, upon
the condition or understanding that the Subsidiary will transfer the Shares to
the employee in accordance with the terms of the Award specified by the
Committee pursuant to the provisions of the Plan. All Shares underlying Awards
that are forfeited or canceled should revert to the Company.


 


(h) 
Governing Law and Interpretation.  The Plan and all Awards made and actions
taken thereunder shall be governed by and construed in accordance with the laws
of the State of Delaware, without reference to principles of conflict of laws.
The captions of this Plan are not part of the provisions hereof and shall have
no force or effect.


 


(i) 
Non-Transferability.  Except as otherwise provided in Section 5(j) or
by the Committee, Awards under the Plan are not transferable except by will or
by laws of descent and distribution.


 


(j) 
Foreign Employees and Foreign Law Considerations.  The Committee may grant Awards to Eligible
Individuals who are foreign nationals, who are located outside the United
States or who are not compensated from a payroll maintained in the United
States, or who are 


 


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otherwise subject
to (or could cause the Company to be subject to) legal or regulatory provisions
of countries or jurisdictions outside the United States, on such terms and
conditions different from those specified in the Plan as may, in the judgment
of the Committee, be necessary or desirable to foster and promote achievement
of the purposes of the Plan, and, in furtherance of such purposes, the
Committee may make such modifications, amendments, procedures, or subplans as
may be necessary or advisable to comply with such legal or regulatory
provisions.


 


(k)  Section 409A of the
Code.  It is the intention of
the Company that no Award shall be “deferred compensation” subject to Section 409A
of the Code, unless and to the extent that the Committee specifically determines
otherwise as provided in the immediately following sentence, and the Plan and
the terms and conditions of all Awards shall be interpreted accordingly. The
terms and conditions governing any Awards that the Committee determines will be
subject to Section 409A of the Code, including any rules for elective
or mandatory deferral of the delivery of cash or Shares pursuant thereto and
any rules regarding treatment of such Awards in the event of a Change in
Control, shall be set forth in the applicable Award Agreement, and shall comply
in all respects with Section 409A of the Code.  Notwithstanding
any other provision of the Plan to the contrary, with respect to any Award that
constitutes a “nonqualified deferred compensation plan” subject to Section 409A
of the Code, any payments (whether in cash, Shares or other property) to be
made with respect to the Award upon the Participant’s Termination of Employment
shall be delayed until the first day of the seventh month following the
Participant’s Termination of Employment if the Participant is a “specified
employee” within the meaning of Section 409A of the Code.


 


(l) 
Employee Matters Agreement.  Notwithstanding anything in this Plan to the
contrary, to the extent that the terms of this Plan are inconsistent with the
terms of an Adjusted Award, the terms of the Adjusted Award shall be governed
by the Employee Matters Agreement, the applicable IAC Long-Term Incentive Plan
and the award agreement entered into thereunder.


 


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