VISTANA, INC
0000 XXXXXXX XXXXXX XXXXX
XXXXXXX, XXXXXXX 00000
May 28, 1998
Xx. Xxxxxxx X. Xxxxxx
Vice Chairman and Chief Financial Officer
Vistana, Inc.
Re: Corrections to Employment Agreement Schedule
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Dear Xxxxxxx:
As we have discussed, Schedule B to the Employment Agreement dated December
27, 1996 between Vistana, Inc. and you contains a typographical error relating
to the period during which you are entitled to receive severance payments in the
event you cease to be employed by Vistana for certain reasons specified in your
Employment Agreement. In the section entitled "Monthly Severance Amount," the
denominator was incorrectly shown as 12 when it should have been 24 to
correspond to a 24 month severance period. Enclosed is a new Schedule B to your
Employment Agreement which corrects this error and incorporates the adjustment
to your Base Salary for the 1998 fiscal year approved by the Compensation
Committee at its January meeting.
Please carefully review the enclosed Schedule B to confirm the accuracy
thereof. If the enclosed Schedule B is accurate, please execute the enclosed
copy of this letter in the space provided below and return it to the
undersigned, whereupon the enclosed Schedule B will be substituted for the
existing Schedule B. Please keep your copy of this letter and revised Schedule
B with your own copy of your Employment Agreement.
Very truly yours,
VISTANA, INC.
/s/ Xxxxxxx X. Xxxxx
By:_________________________
Name: Xxxxxxx X. Xxxxx
Title: President
Enclosure
ACKNOWLEDGED AND CONFIRMED:
/s/ Xxxxxxx X. Xxxxxx
____________________________
Name: Xxxxxxx X. Xxxxxx
SCHEDULE B
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Employee Compensation
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(Revised Effective January 1, 1998)
1. Employee Name: Xxxxxxx X. Xxxxxx
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2. Base Salary: $380,000
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3. Formula Salary: Ninety-five percent (95%) of the annual salary payable for
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the applicable calendar year to the Chief Executive Officer of the Company
or, if the Company then has more than one Chief Executive Officer, the
Chief Executive Officer having the highest annual salary.
4. Annual Bonus Amount: Up to 60% of Adjusted Base Salary; Formula to
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approximate that of other senior executive officers; provided, however,
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that for each of the calendar years 1998 and 1999, the aggregate of
Employee's Adjusted Base Salary and Annual Bonus Amount shall not be less
than $500,000.
5. Severance Amount: The product of (i) the greater of (x) 120% of Employee's
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Adjusted Base Salary as of the Termination Date and (y) $500,00, multiplied
by (ii) two.
6. Monthly Severance Payment: The quotient of (i) the Severance Amount
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determined in accordance with Item No. 5 above, divided by (ii) 24.
7. Transition Payment: The greater of (i) Employee's Adjusted Base Salary as
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of the Termination Date and (ii) $500,000.
8. Change in Control Amount: The product of (i) three, multiplied by (ii) the
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sum of (x) Employee's Adjusted Base Salary as of the effective date of the
Change in Control and (y) the Annual Bonus Amount paid or payable to
Employee for the calendar year immediately preceding the year in which the
Change in Control occurs (or, if such amount is higher, the Annual Bonus
Amount paid or payable to Employee for the calendar year in which the
Change in Control occurs); plus, with respect to any portion of the Change
in Control Amount, and any other amount which constitutes an "excess
parachute payment" within the meaning of Section 280G(b) of the Internal
Revenue Code of 1986 (or any other amended or successor
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provision thereto) (including, without limitation, any amounts attributable
to the value of stock options granted to Employee by the Company or by the
Controlling Shareholders that became accelarated or vested as a result of
such Change in Control), that is subject to the tax imposed pursuant to
Section 4999 of the Internal Revenue Code of 1986 (or any other amended or
successor provision thereto) (the "Excise Tax"), an amount (the "Gross-Up
Amount") that, after reduction of the amount of such Gross-Up Amount for
all federal, state and local tax to which the Gross-Up Amount is subject
(including the Excise Tax to which the Gross-Up Amount is subject), is
equal to the amount of the Excise Tax to which such Change in Control
Amount, or other amount constituting an "excess parachute payment," is
subject. For purposes of determining the amount of any Gross-Up Amount,
Employee shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Amount is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of residence of
Employee on the Termination Date, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.
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