EXHIBIT 10.8
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VISTANA STOCK PLAN
1. Preamble.
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Vistana, Inc., a Florida corporation (the "Company"), hereby establishes
the Vistana Stock Plan (the "Plan") as a means whereby the Company may, through
awards of (i) incentive stock options within the meaning of Section 422 of the
Code (as herein defined), (ii) stock appreciation rights, (iii) non-qualified
stock options, (iv) restricted stock, and (v) phantom stock:
(a) provide employees of the Company and its Subsidiaries and
Affiliates with additional incentive to promote the success of the
businesses of the Company and its Subsidiaries and Affiliates;
(b) enable such employees to acquire proprietary interests in the
Company;
(c) encourage such employees to remain in the employ of the Company
and its Subsidiaries and Affiliates; and
(d) provide Officers and Directors of, and consultants to, the
Company and its Subsidiaries and Affiliates (who are not otherwise
employees) with additional incentive to promote the success of the
businesses of the Company and its Subsidiaries and Affiliates.
2. Definitions.
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1.021 "Affiliate" means any person or entity who or which, directly or
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indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, a specified person or entity (the term "control"
for these purposes meaning the ability, whether by ownership of shares or other
equity interests, by contract or otherwise, to elect a majority of the directors
of a corporation, to act as or select the managing or general partner of a
partnership or the managing member of a limited liability company, or otherwise
to select, or have the power to remove and then select, a majority of those
persons exercising governing authority over an entity).
1.022 "Board" or "Board of Directors" means the board of directors of the
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Company.
1.023 "Cause" shall mean (a) the commission by Participant of an act of
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fraud, embezzlement or willful breach of a fiduciary duty to the Company or a
Subsidiary or an Affiliate of the Company (including the unauthorized disclosure
of confidential or proprietary material information of the Company or a
Subsidiary or an Affiliate of the Company); (b) the commission by Participant of
a breach of any material covenant, provision, term, condition, understanding or
undertaking set forth in the Participant's employment agreement, if any, with
the Company or a Subsidiary or an Affiliate of the Company; (c) the commission
by Participant (other than in Participant's capacity as an agent of the Company
or a Subsidiary or an Affiliate of the Company) of a crime constituting a felony
under applicable law (or a plea of nolo contendere in lieu thereof); (d) the
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exposure of the Company or a Subsidiary or an Affiliate of the Company to any
criminal liability substantially caused by the conduct of Participant which
results in a material adverse effect upon the Company's business, operations,
financial condition or results of operations or the exposure of the Company to
any civil liability caused by Participant's unlawful harassment in employment;
(e) any habitual absenteeism, gross negligence, bad faith, or willful misconduct
by Participant in the performance of Participant's duties to the Company or a
Subsidiary or an Affiliate of the Company which such conduct results in a
material detriment to the Company or a Subsidiary or an Affiliate of the
Company; or (f) Participant's habitual abuse of alcohol or any controlled
substance or Participant's reporting to work under the influence of alcohol or a
controlled substance (other than those for which Participant is taking under a
current prescription).
1.024 "Change in Control" means the occurrence of any one of the following
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events:
(a) any (A) consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or which
contemplates that all or substantially all of the business and/ or assets
of the Company shall be controlled by another corporation or (B) a
recapitalization (including an exchange of Company equity securities by the
holders thereof), in either case, in which any "Person" (as
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such term is used in Sections 13(d) and (14(d)(2) of the Exchange Act),
other than the Controlling Shareholders, becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
securities of the Company representing more than 50% of the combined voting
power of the Company's then outstanding securities ordinarily having the
right to vote in the election of directors;
(b) any sale, lease, exchange or transfer (in one transaction or
series of related transactions) of all or substantially all of the assets
of the Company and its Subsidiaries or Affiliates;
(c) approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company, unless such
plan or proposal is abandoned within 60 days following such approval; or
(d) any "Person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Controlling Shareholders,
shall become the beneficial owner of securities of the Company representing
more than 50% of the combined voting power of the Company's then
outstanding securities ordinarily having the right to vote in the election
of directors.
1.025 "Code" means the Internal Revenue Code of 1986, as it exists now and
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as it may be amended from time to time.
1.026 "Committee" means the committee comprised of two or more Directors
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appointed by the Board to administer the Plan. Each member of the Committee
shall (a) be a "Non-Employee Director" as determined under Rule 16b-3(b)(3)(i)
of the Exchange Act; and (b) once the reliance period expires under Treasury
Regulation 26 CFR (S) 1.162-27(f), be an outside Director as determined under
Treasury Regulation 26 CFR (S)1.162-27(e)(3) or any successor regulation
thereto. Once appointed, the Committee shall continue to serve until otherwise
directed by the Board of Directors.
1.027 "Common Stock" means the common stock of the Company, $0.01 par
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value, or, if the various series of common stock are eliminated by amendment to,
or restatement of, the Company's Articles of Incorporation, the resulting class
of equity securities
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ordinarily (and apart from rights accruing under special circumstances) having
the right to vote for the election of directors.
1.028 "Company" means Vistana, Inc., a Florida corporation, and any
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successor thereto.
1.029 "Controlling Shareholders" means Raymond L. Gellein, Jr., Jeffrey A.
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Adler and JGG Holdings Trust, in each case together with their respective
Affiliates, family members, former spouses (if applicable) and trusts for the
benefit of any of the foregoing.
2.10 "Director" means a member of the Board.
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2.11 "Exchange Act" shall mean the Securities Exchange Act of 1934, as it
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exists now or from time to time may hereafter be amended.
2.12 "Fair Market Value" means for the relevant day: (i) the closing
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price of a share of Common Stock on the principal exchange on which the Common
Stock is then trading, if any, on such date, or, if shares were not traded on
such date, then on the next preceding trading day during which a sale occurred;
(ii) if the Common Stock is not traded on an exchange but is quoted on Nasdaq or
a successor quotation system, (1) the closing price (if the Common Stock is then
listed as a National Market Issue under the NASD National Market System) or (2)
the mean between the closing representative bid and asked prices (in all other
cases) for a share of the Common Stock on such date, or, if shares were not
traded on such date, then on the next preceding trading day during which a sale
occurred, as reported by Nasdaq or such successor quotation system; (iii) if the
Common Stock is not publicly traded on an exchange and not quoted on Nasdaq or a
successor quotation system, the mean between the closing bid and asked prices
for a share of Common Stock on such date, or, if shares were not traded on such
date, then on the next preceding trading day during which a sale occurred, as
determined in good faith by the Committee; or (iv) if the Common Stock is not
publicly traded, the fair market value of a share of Common Stock established by
the Committee acting in good faith.
2.13 "IPO" is defined at Section 11 of the Plan.
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2.14 "ISO" means incentive stock options within the meaning of Section 422
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of the Code.
2.15 "Naked SAR" means a SAR issued not in connection with an ISO or NSO.
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2.16 "NSO" means non-qualified stock options, which are not intended to
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qualify under Section 422 of the Code.
2.17 "Officer" means a corporate officer of the Company or any Subsidiary
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or Affiliate of the Company.
2.18 "Option" means the right of a Participant, whether granted as an ISO
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or an NSO, to purchase a specified number of shares of Common Stock, subject to
the terms and conditions of the Plan.
2.19 "Option Date" means the date upon which an Option, SAR, Restricted
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Stock or Phantom Stock is awarded to a Participant under the Plan.
2.20 "Option Price" means the price per share at which an Option may be
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exercised.
2.21 "Participant" means an individual to whom an Option, SAR, Phantom
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Stock or Restricted Stock has been granted under the Plan.
2.22 "Phantom Stock" means a hypothetical share of Common Stock issued as
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phantom stock under the Plan.
2.23 "Plan" means the Vistana Stock Plan, as set forth herein and as from
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time to time amended.
2.24 "Restricted Stock" means Common Stock awarded to a Participant
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pursuant to this Plan and subject to the restrictions contained in Section 9.
2.25 "SAR" means a stock appreciation right. A SAR may be a Naked SAR or
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a Tandem SAR.
2.26 "Securities Act" means the Securities Act of 1933, as it exists now
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or from time to time may hereinafter be amended.
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2.27 "Subsidiary" shall mean (i) any corporation (whether now existing or
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hereafter organized) of which at least a majority of the voting stock having
ordinary voting power for the election of directors is, at the time as of which
any determination is being made, directly or indirectly owned or controlled by
the Company and (ii) any partnership, joint venture, association or other
business entity (either now existing or hereafter organized) of which more than
50% of the equity interest is, at the time any such determination is being made,
directly or indirectly controlled by the Company.
2.28 "Tandem SAR" means a SAR associated with and issued in connection
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with an ISO or NSO.
2.29 Rules of Construction.
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(a) Governing Law. The construction and operation of this Plan are
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governed by the laws of the State of Florida.
(b) Undefined Terms. Unless the context requires another meaning,
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any term not specifically defined in this Plan has the meaning given to it
by the Code.
(c) Headings. All headings in this Plan are for reference only and
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are not to be utilized in construing the Plan.
(d) Gender. Unless clearly appropriate, all nouns of whatever gender
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refer indifferently to persons of any gender.
(e) Singular and Plural. Unless clearly inappropriate, singular
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terms refer also to the plural and vice versa.
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(f) Severability. If any provision of this Plan is determined to be
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illegal or invalid for any reason, the remaining provisions shall continue
in full force and effect and shall be construed and enforced as if the
illegal or invalid provision did not exist, unless the continuance of the
Plan in such circumstances is not consistent with its purposes.
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3. Stock Subject to the Plan.
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Except as otherwise provided in Section 15, the aggregate number of shares
of Common Stock that may be issued under Options or as Restricted Stock, under
this Plan may not exceed 1,900,000 shares. Reserved shares may be either
authorized but unissued shares or treasury shares, in the Board's discretion. If
any awards hereunder shall terminate or expire, as to any number of shares, new
ISOs, NSOs, and Restricted Stock may thereafter be awarded with respect to such
shares. Except as otherwise provided in Section 15, the aggregate number of
shares of Common Stock that may be issued under Options, as Restricted Stock or
upon which SARs or Phantom Stock may be awarded for any Participant may not
exceed 1,000,000.
4. Administration.
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The Plan shall be administered by the Committee. In addition to any other
powers set forth in this Plan, the Committee has the exclusive authority:
(a) to construe and interpret the Plan, and to remedy any ambiguities
or inconsistencies therein;
(b) to establish, amend and rescind appropriate rules and regulations
relating to the Plan;
(c) subject to the express provisions of the Plan, to determine the
individuals who will receive awards of Options, Restricted Stock, Phantom
Stock and/or SARs, the times when they will receive them, the number of
shares to be subject to each award and the Option Price, payment terms,
payment method, and expiration date applicable to each award;
(d) to contest on behalf of the Company or Participants, at the
expense of the Company, any ruling or decision on any matter relating to
the Plan or to any awards of ISOs, NSOs, Restricted Stock, Phantom Stock
and/or SARs;
(e) generally, to administer the Plan, and to take all such steps and
make all such determinations in connection with the Plan and the awards of
ISOs, NSOs, Restricted Stock,
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Phantom Stock and/or SARs granted thereunder as it may deem necessary or
advisable;
(f) to determine the form in which payment of a SAR or a Phantom
Stock award granted hereunder will be made (i.e., cash, Common Stock or a
combination thereof) or to approve a Participant's election to receive cash
in whole or in part in settlement of the SAR or Phantom Stock award; and
(g) to determine the form in which tax withholding under Section 18
of this Plan will be made.
All expenses and liabilities incurred by members of the Committee in connection
with the administration of the Plan shall be borne by the Company. The Committee
may, with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and its
officers and directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Participants, the Company and all other interested persons. No member
of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination, or interpretation.
5. Eligible Employees.
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Subject to the provisions of the Plan, the Committee shall determine from
time to time those employees, Directors and Officers of, and consultants to, the
Company, a Subsidiary or an Affiliate of the Company who shall be designated as
Participants and the number, if any, of Options, SARs, Restricted Stock, and
Phantom Stock, or any combination thereof, to be awarded to each such
Participant; provided, however, that no ISOs or Tandem SARs granted with respect
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to ISOs, shall be awarded under the Plan after the expiration of the period of
ten years from the date this Plan is adopted by the Board. In addition, no ISOs
may be awarded to a Director, Officer or consultant who is not an employee of
the Company or of a "subsidiary corporation" (within the meaning of Section
424(f) of the Code).
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6. Terms and Conditions of Incentive Stock Options.
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The Committee may in its discretion, grant ISOs to any Participant under
the Plan; provided, however, that no ISOs may be granted to a Participant who is
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not an employee of the Company or a "subsidiary corporation" (within the meaning
of Section 424(f) of the Code). Each ISO shall be evidenced by an agreement
between the Company and the Participant. Each ISO agreement, in such form as is
approved by the Committee, shall be subject to the following express terms and
conditions and to such other terms and conditions, not inconsistent with the
Plan, as the Committee may deem appropriate;
(a) Option Period. Each ISO will expire as of the earliest of:
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(i) the date on which it is forfeited under the provisions of
Section 13;
(ii) ten years (or five years as specified in Section 6(e))
from the Option Date;
(iii) the date which is three months after the Participant's
termination of employment for any reason other than Cause,
death or "disability" (within the meaning of Section
22(e)(3) of the Code);
(iv) the date on which the Participant's employment is
terminated for Cause; or
(v) the date which is twelve months after the Participant's
death or termination of Participant's employment due to a
"disability" (within the meaning of Section 22(e)(3) of
the Code).
(b) Option Price. Subject to the provisions of Section 6(e), the
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Option Price per share shall be determined by the Committee at the time any
ISO is granted, and shall not be less than the Fair Market Value of the
Common Stock subject to the ISO on the Option Date.
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(c) Other Option Provisions. The form of ISO authorized by the Plan
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may contain such other provisions as the Committee may, from time to time,
determine; provided, however, that such other provisions may not be
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inconsistent with any requirements imposed on qualified stock options under
Section 422 of the Code.
(d) Limitations on Awards. The aggregate Fair Market Value,
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determined as of the Option Date, of Common Stock with respect to which
ISOs are exercisable by a Participant for the first time during any
calendar year under all ISO plans of the Company and any Subsidiary shall
not exceed $100,000.
(e) Awards to Certain Shareholders. Notwithstanding Sections 6(a) and
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6(b) hereof, if an ISO is granted to a Participant who owns stock
representing more than 10 percent of the voting power of all classes of
stock of the Company or a Subsidiary (as determined under the Code), the
exercise period specified in the ISO agreement for which the ISO thereunder
is granted shall not exceed five years from the Option Date, and the Option
Price shall be at least 110% of the Fair Market Value (as of the Option
Date) of the Common Stock subject to the ISO.
7. Terms and Conditions of Non-Qualified Stock Option.
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The Committee may, in its discretion, grant NSOs to any Participant under
the Plan. Each NSO shall be evidenced by an agreement between the Company and
the Participant. Each NSO agreement, in such form as is approved by the
Committee, shall be subject to the following express terms and conditions and to
such other terms and conditions, not inconsistent with the Plan as the Committee
may deem appropriate:
(a) Option Period. Each NSO will expire as of the earliest of:
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(i) the date on which it is forfeited under the provisions of
Section 13;
(ii) ten years from the Option Date;
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(iii) the date which is three months after the Participant's
termination of employment, retention as a consultant or
membership on the Board, as applicable, for any reason
other than Cause, death or "disability" (within the
meaning of Section 22(e)(3) of the Code);
(iv) the date on which the Participant's employment, retention
as a consultant or membership on the Board, as applicable,
is terminated for Cause; or
(v) the date which is twelve months after the Participant's
death or termination of employment, consultancy or
membership on the Board due to a "disability" (within the
meaning of Section 22(e)(3) of the Code).
(b) Option Price. At the time when the NSO is granted, the Committee
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will fix the Option Price. The Option Price may be greater than, less than,
or equal to Fair Market Value on the Option Date, as determined in the sole
discretion of the Committee.
(c) Other Option Provisions. The form of NSO authorized by the Plan
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may contain such other provisions as the Committee may from time to time
determine.
8. Terms and Conditions of Stock Appreciation Rights.
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The Committee may, in its discretion, grant a SAR to any Participant under
the Plan. Each SAR shall be evidenced by an agreement between the Company and
the Participant, and may be a Naked SAR or a Tandem SAR. Each SAR awarded to
Participants under the Plan shall be subject to the following express terms and
conditions and to such other terms and conditions, not inconsistent with the
Plan, as the Committee shall deem appropriate:
(a) Tandem SARs. Tandem SARs shall terminate on the same date as the
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related ISO or NSO. A Tandem SAR shall be exercisable only if the Fair
Market Value of a share of Common Stock on the date of surrender exceeds
either the Option Price for the related ISO or the Fair Market Value of the
Common
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Stock on the Option Date, if related to an NSO, and then shall be
exercisable to the extent, and only to the extent, that the related ISO or
NSO is exercisable. A Tandem SAR shall entitle the Participant to whom it
is granted the right to elect, so long as such Tandem SAR is exercisable
and subject to such limitations as the Committee shall have imposed, to
surrender any then exercisable portion of his related ISO or NSO, in whole
or in part, and receive from the Company in exchange, without any payment
of cash (except for applicable employee withholding taxes), that number of
shares of Common Stock having an aggregate Fair Market Value on the date of
surrender equal to the product of (i) the excess of the Fair Market Value
of a share of Common Stock on the date of surrender over the per share
Option Price under such ISO or the Fair Market Value of the Common Stock on
the Option Date, if such SAR is related to an NSO and (ii) the number of
shares of Common Stock subject to such ISO or NSO or portion thereof which
is surrendered. Any ISO or NSO or portion thereof which is surrendered
shall no longer be exercisable. The Committee, in its sole discretion, may
allow the Company to settle all or part of the Company's obligation arising
out of the exercise of a Tandem SAR by the payment of cash equal to the
aggregate Fair Market Value of the shares of Common Stock which the Company
would otherwise be obligated to deliver.
(b) Naked SARs. Naked SARs shall terminate as provided in the
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Participant's SAR agreement. The Committee may at the time of granting any
Naked SAR add such conditions and limitations to the Naked SAR as it shall
deem advisable, including but not limited to, limitations on the period
within which the Naked SAR shall be exercisable and the maximum amount of
appreciation to be recognized with regard to such Naked SAR.
(c) Other Conditions. If a Participant is subject to Section 16(a)
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and Section 16(b) of the Exchange Act, the Committee may at any time add
such additional conditions and limitations to such SAR which the Committee,
in its discretion, deems necessary or desirable in order to comply with
Section 16(a) or Section 16(b) of the Exchange Act and the rules and
regulations issued thereunder, or in order to obtain any exemption
therefrom.
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9. Terms and Conditions of Restricted Stock Awards.
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The Committee, in its discretion, may grant Restricted Stock to any
Participant under the Plan. Each grant of Restricted Stock shall be evidenced
by an agreement between the Company and the Participant. All shares of Common
Stock awarded to Participants under the Plan as Restricted Stock shall be
subject to the following express terms and conditions and to such other terms
and conditions, not inconsistent with the Plan, as the Committee shall deem
appropriate:
(a) Restricted Period. Shares of Restricted Stock awarded to
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Participants may not be sold, transferred, pledged or otherwise encumbered
before they vest. Subject to the provisions of subparagraphs (b) and (c)
below and any other restrictions imposed by law, any shares of Restricted
Stock that vest will be transferred to the Participant or, in the event of
his death, to the beneficiary or beneficiaries designated by writing filed
by the Participant with the Committee for such purpose or, if none, to his
estate. Delivery of shares in accordance with the preceding sentence shall
be made within the 30-day period after they vest.
(b) Forfeitures. A Participant shall forfeit all unpaid accumulated
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dividends and all shares of Restricted Stock which have not vested prior to
the date that his employment with the Company, or if a Director, his
membership on the Board, is terminated for any reason.
(c) Certificates Deposited With Company. Each certificate issued in
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respect of shares of Restricted Stock awarded under the Plan shall be
registered in the name of the Participant and deposited with the Company.
Each such certificate shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) relating to Restricted Stock contained in the Vistana
Stock Plan and an agreement entered into between the registered owner
and Vistana, Inc. Copies of such Plan
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and agreement are on file at the principal office of Vistana, Inc."
(d) Shareholder Rights. Subject to the foregoing restrictions, each
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Participant shall have all the rights of a shareholder with respect to his
shares of Restricted Stock including, but not limited to, the right to vote
such shares.
(e) Dividends. On each Common Stock dividend payment date, each
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Participant shall receive an amount equal to the dividend paid on that date
on a share of Common Stock, multiplied by his number of shares of
Restricted Stock.
10. Terms and Conditions of Phantom Stock.
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The Committee may, in its discretion, award Phantom Stock to any
Participant under the Plan. Each award of Phantom Stock shall be evidenced by an
agreement between the Company and the Participant. The Committee may at the time
of awarding any Phantom Stock add such additional conditions and limitations to
the Phantom Stock as it shall deem advisable, including, but not limited to, the
right for Participants to receive dividends equivalent to those paid on Common
Stock, limitations on the period or periods within which the Phantom Stock may
be surrendered, and the maximum amount of appreciation to be recognized with
regard to such Phantom Stock. If a Participant is subject to Section 16(a) and
Section 16(b) of the Exchange Act, the Committee may at any time add such
additional conditions and limitations to such Phantom Stock which, in its
discretion, the Committee deems necessary or desirable in order to comply with
Section 16(a) or Section 16(b) of the Exchange Act and the rules and regulations
issued thereunder, or in order to obtain any exemption therefrom. An award of
Phantom Stock shall entitle the Participant to whom it is awarded the right to
elect, so long as such Phantom Stock is vested and subject to such limitations
as the Committee shall have imposed, to surrender any then vested portion of the
Phantom Stock, in whole or in part, and receive from the Company in exchange
therefor the Fair Market Value on the date of surrender of the Common Stock to
which the surrendered Phantom Stock relates in cash or in shares of Common Stock
as the Committee may determine.
11. Director Stock Options.
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(a) Each Director who is not otherwise an employee of the Company or
the beneficial owner of 5% or more of the outstanding Common Stock and who
is a Director upon completion of the Company's initial public offering of
Common Stock on a firm-commitment underwritten basis (the "IPO"), shall
automatically be granted as of that date NSOs to purchase 45,000 shares of
Common Stock having an exercise price per share equal to the price to the
public in the IPO. The NSOs granted pursuant to this Section 11(a) shall,
notwithstanding the provisions of Section 13, vest as follows:
(i) one-third (15,000 shares) on the Option Date;
(ii) one-third (15,000 shares) immediately following the date
of the 1998 annual meeting of the Company's shareholders,
provided that such Director continues to be a Director
following such annual meeting; and
(iii) one-third (15,000 shares) immediately following the date
of the 1999 annual meeting of the Company's shareholders,
provided that such Director continues to be a Director
following such annual meeting.
For purposes of this Section, if there is no annual meeting of the
Company's shareholders in any year, the applicable date will be the
scheduled date for such annual meeting as set forth in the Company's by-
laws.
(b) Commencing with the date of the annual meeting of the shareholders of the
Company scheduled to be held in 2000, or, if no annual meeting of the
shareholders of the Company occurs on the scheduled date for such meeting as
specified in the Company's by-laws, and annually thereafter each Director who is
not otherwise an employee of the Company or the beneficial owner of 5% or more
of the outstanding Common Stock shall automatically be granted NSOs to purchase
5,000 shares of Common Stock having an exercise price per share equal to 100% of
the Fair Market Value of the Common Stock at the Option Date.
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(c) A Director NSO shall be granted hereunder only if as of each
Option Date the Director (i) is not otherwise an employee of the Company or
any Subsidiary or Affiliate of the Company and (ii) has not been an
employee of the Company or any Subsidiary or Affiliate of the Company for
any part of the preceding fiscal year.
(d) Each NSO granted pursuant to Section 11 (b) shall notwithstanding
the provisions of Section 13, be 100% vested as of the Option Date.
(e) NSOs granted pursuant to this Section 11 shall expire as of the
earliest of:
(i) ten years from the Option Date;
(ii) the date three months after the Participant's termination
of membership on the Board, for any reason other than
Cause, death or "disability" (within the meaning of
Section 22(e)(3) of the Code);
(iii) the date on which the Participant's membership on the
Board is terminated for Cause; or
(iv) the date twelve months after the Participant's death or
termination of Board membership due to a "disability"
(within the meaning of Section 22(e)(3) of the Code).
The provisions of Section 7(a) shall not apply to any NSO granted pursuant
to this Section 11.
(f) In the event that the number of shares of Common Stock available
for future grant under the Plan is insufficient to make all automatic
grants required to be made on such date, then all non-employee Directors
entitled to a grant on such date shall share ratably in the number of NSOs
shares available for grant under the Plan.
(g) Except as expressly provided in this Section 11, any NSO granted
hereunder shall be subject to the terms and
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conditions of the Plan if the grant were made pursuant to Section 7 hereof.
12. Manner of Exercise of Options.
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To exercise an Option in whole or in part, a Participant (or, after the
Participant's death, the Participant's executor or administrator) must give
written notice to the Committee, stating the number of shares to which he or she
intends to exercise the Option. The Company will issue the shares with respect
to which the Option is exercised upon payment in full of the Option Price. The
Option Price may be paid in (i) cash, (ii) shares of Common Stock having an
aggregate Fair Market Value, as determined on the date of delivery, equal to the
Option Price, (iii) by delivery of irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds necessary to
pay for all Common Stock acquired through such exercise and any tax withholding
obligations resulting from such exercise, or (iv) through a cashless exercise.
The number of shares of Common Stock to be issued by the Company pursuant to a
cashless exercise equals the result of dividing (1) the product of (a) the
number of shares of Common Stock for which the Option may be exercised and (b)
the difference between the Fair Market Value of a share of the Common Stock on
the date of exercise and the Option Price, by (ii) the Fair Market Value of a
share of Common Stock on the date of exercise. The Option Price may be paid in
shares of Common Stock which were received by the Participant upon the exercise
of one or more Options. The Option Price may be paid in shares of Common Stock
which were received by the Participant as an award of Restricted Stock under the
Plan. The Option Price may be paid by surrender of Tandem SARs equals to the
Option Price. The Company shall not issue fractional shares of Common Stock and
shall round any fractional shares to the nearest whole share.
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13. Vesting.
-------
A Participant may not exercise an Option or surrender a SAR or Phantom
Stock until it has become vested. The portion of an Option, SAR or Phantom Stock
award that is vested depends upon the period that has elapsed since the Option
Date. Except with respect to Options granted under Section 11, unless the
Committee establishes a different vesting schedule at the time when an Option is
granted or the Restricted Stock, SAR or Phantom Stock is awarded, all Options
granted under this Plan, Restricted Stock, SARs, and Phantom Stock awarded under
this Plan shall become 25% vested 12 months after the Option Date and shall vest
pro rata in arrears on a monthly basis over a period of 36 months beginning on
the first day of the month which is 12 months after the Option Date. Except as
provided below or in Section 14, if a Participant terminates his employment with
the Company or its Subsidiaries or Affiliates if an employee, his membership on
the Board if a Director, or his retention as a consultant, for any reason, he
forfeits any Options, Restricted Stock, SARs and/or Phantom Stock that are not
yet vested. A transfer of employment from the Company to a Subsidiary or an
Affiliate of the Company, or vice versa (or from a Subsidiary to an Affiliate
---- -----
of the Company, or vice versa) is not a termination-of employment for purposes
---- -----
of this Plan.
14. Change of Control.
-----------------
Notwithstanding the provisions of Section 13 or anything contained in a
Participant's agreement to the contrary, upon a Change in Control all Options,
Restricted Stock, SARs and/or Phantom Stock shall become 100% vested and
immediately exercisable.
15. Adjustments to Reflect Changes in Capital Structure.
---------------------------------------------------
If there is any change in the corporate structure or shares of the Company,
the Board of Directors shall, in its discretion, make any adjustments necessary
to prevent accretion, or to protect against dilution, in the number and kind of
shares authorized by the Plan and, with respect to outstanding Options,
Restricted Stock, Phantom Stock and/or SARs, in the number and kind of shares
covered thereby and in the applicable Option Price. For the purpose of this
Section 15, a change in the corporate structure or shares of the Company
includes, without limitation, any change resulting from a recapitalization,
stock split, stock dividend,
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consolidation, rights offering, spin-off, reorganization, or liquidation and any
transaction in which shares of Common Stock are changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or another corporation; provided, however, that a change in corporate structure
-------- -------
or shares of the Company does not include the issuance of Common Stock for a
negotiated or determined issuance price.
16. Non-Transferability of Options, SARs and Phantom Stock.
------------------------------------------------------
The Options and SARs granted or Phantom Stock awarded under the Plan are
not transferable, voluntarily or involuntarily, other than by will or the laws
of descent and distribution, or pursuant to a qualified domestic relations order
as defined in Section 414(p) of the Code; provided, however, that ISOs (to the
-------- -------
extent permissible by Section 422 of the Code), NSOs, SARs and Phantom Stock may
be transferred to (i) any members of the immediate family of such Participant,
and (ii) a trust which has as its exclusive beneficiaries such Participant or
members of the immediate family of such Participant. For purposes of this
Section, "immediate family" means children, stepchildren and grandchildren,
including relationships arising from legal adoption.
17. Rights as Shareholder.
---------------------
No Common Stock may be delivered upon the exercise of any Option until full
payment has been made. A Participant has no rights whatsoever as a shareholder
with respect to any shares covered by an Option until the date of the issuance
of a stock certificate for the shares. A Participant who has been granted SARs
or Phantom Stock shall have no rights whatsoever as a shareholder with respect
to such SARs or Phantom Stock.
18. Withholding Tax.
---------------
The Company shall have the right to withhold in cash or shares of Common
Stock with respect to any payments made to Participants under the Plan any taxes
required by law to be withheld because of such payments. Notwithstanding the
foregoing, with respect to a Participant subject to Section 16(a) or 16(b) of
the Exchange Act, all amounts required to be withheld upon either (i) the
vesting of Restricted Stock or (ii) the exercise of a SAR or surrender of
Phantom Stock which had a set duration and for which payment is
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made in Common Stock, shall automatically be withheld in Common Stock otherwise
deliverable to the Participant and having a Fair Market Value determined on the
date the income is includable in the Participant's income equal to the amount of
taxes required to be withheld.
19. No Right To Employment.
----------------------
Participation in the Plan will not give any Participant a right to be
retained as an employee of the Company or any Subsidiary or Affiliate, or any
right or claim to any benefit under the Plan, unless the right or claim has
specifically accrued under the Plan.
20. Amendment of the Plan.
---------------------
The Committee may from time to time amend or revise the terms of this Plan
in whole or in part and may without limitation, adopt any amendment deemed
necessary; provided, however, that (a) no change in any award previously granted
-------- -------
to a Participant may be made that would impair the rights of the Participant
without the Participant's consent and (b) no amendment may extend the period
during which a Participant may exercise an ISO beyond the period set forth in
Section 6(a)(ii) or 6(e).
21. Shareholder Approval.
--------------------
Continuance of the Plan shall be subject to approval by the shareholders of
the Company within 12 months before or after the date the Plan is adopted by the
Committee.
22. Conditions Upon Issuance of Shares.
----------------------------------
An Option shall not be exercisable, a share of Common Stock shall not be
issued pursuant to the exercise of an Option, and Restricted Stock shall not be
awarded until such time as the Plan has been approved by the shareholders of the
Company and unless the award of Restricted Stock, exercise of such Option and
the issuance and delivery of such share pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act,
the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares of Common stock may
then be listed, and shall
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be further subject to the approval of counsel for the Company with respect to
such compliance. As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Common Stock is being purchased only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law.
23. Participation Rights.
--------------------
In the event of a sale of equity securities by or on behalf of one or more
of the Company's shareholders (in one transaction or series of transactions)
resulting in a Change in Control, Participants shall be given timely notice
thereof and shall have the right to surrender Options, Phantom Stock or SARs in
such sale and receive, on a pro rata basis, the amount as to which the Option,
Phantom Stock or SARs could be converted if such Option Phantom Stock or SAR was
exercised immediately prior to such transaction, less the Option Price.
24. Effective Date and Termination of Plan.
--------------------------------------
24.1 Effective Date. This Plan is effective as of the later of the date of
--------------
its adoption by the Committee, or the date it is approved by the shareholders of
the Company, pursuant to Section 21.
24.2 Termination of the Plan. The Committee may terminate the Plan at any
-----------------------
time with respect to any shares that are not then subject to Options or
Restricted Stock. Termination of the Plan will not affect the rights and
obligations of any Participant with respect to Options, SARs, Phantom Stock or
Restricted Stock awarded before termination.
* * * * *
I hereby certify that the foregoing Plan was adopted by the Board of
Directors of Vistana, Inc. on December 27, 1996.
Executed as of December 27, 1996.
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/s/ Jeffrey A. Adler
-------------------------------------------
Jeffrey A. Adler
Director, President and Co-Chief Executive Officer
I hereby certify that the foregoing Plan was approved by the shareholders
of Vistana, Inc. December 27, 1996.
Executed at Orlando, Florida as of December 27, 1996.
/s/ Jeffrey A. Adler
-------------------------------------------
Jeffrey A. Adler
Director, President and Co-Chief Executive Officer
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