Starwood 2009 Annual Report Download - page 15

The Board has a policy under which Directors who are not employees of the Company or any of its subsidiaries
may not stand for re-election after reaching the age of 72. In addition, under this policy, Directors who are
employees of the Company must retire from the Board upon their retirement from the Company. Pursuant to the
Guidelines, the Board also has a policy that Directors who change their principal occupation (including through
retirement) should voluntarily tender their resignation to the Board.
The Company expects all Directors to attend the Annual Meeting and believes that attendance at the Annual
Meeting is as important as attendance at meetings of the Board of Directors and its committees. In fact, the
Company typically schedules Board of Directors’ and committee meetings to coincide with the dates of its Annual
Meetings. However, from time to time, other commitments prevent all Directors from attending each meeting. All
Directors who were Board members at the time attended the most recent annual meeting of stockholders, which was
held on May 6, 2009.
The Company indemnifies its Directors and officers to the fullest extent permitted by law so that they will be
free from undue concern about personal liability in connection with their service to the Company. This is required
under the Company’s charter, and the Company has also signed agreements with each of those individuals
contractually obligating it to provide this indemnification to them.
Director Independence
In accordance with New York Stock Exchange (the “NYSE”) rules, the Board makes an annual determination as
to the independence of the Directors and nominees for election as a Director. No Director will be deemed to be
independent unless the Board affirmatively determines that the Director has no material relationship with the
Company, directly or as an officer, stockholder or partner of an organization that has a relationship with the Company.
A material relationship is one that impairs or inhibits — or has the potential to impair or inhibit — a director’s exercise
of critical and disinterested judgment on behalf of the Company and its stockholders. The Board observes all criteria
for independence established by the NYSE listing standards and other governing laws and regulations. In its annual
review of Director independence, the Board considers any commercial, banking, consulting, legal, accounting,
charitable or other business relationships each Director may have with the Company. In addition, the Board consults
with the Company’s counsel to ensure that the Board’s determinations are consistent with all relevant securities and
other laws and regulations regarding the definition of “independent director,” including but not limited to those set
forth in pertinent listing standards of the NYSE in effect from time to time. As a result of its annual review, the Board
has determined that all of the Directors, with the exception of Mr. van Paasschen, are independent directors. Mr. van
Paasschen is not independent because he is serving as the Chief Executive Officer and President of the Company.
In making this determination, the Board took into account that three of the non-employee Directors,
Messrs. Aron and Daley and Ms. Galbreath, have no relationship with the Company except as a Director and
stockholder of the Company and that the remaining seven non-employee Directors have relationships with
companies that do business with the Company that are consistent with the NYSE independence standards. With
respect to Mr. Duncan, the Board considered the fact that Mr. Duncan served as Chief Executive Officer on an
interim basis from April 1, 2007 to September 24, 2007 and received a salary and other benefits for his services.
Prior to serving as Chief Executive Officer on an interim basis, the Board determined that Mr. Duncan was an
independent director.
Yahoo! Inc., Amazon.com, Inc., Burger King Holdings, Inc., The Gap, Inc., American Express Company, and
Intel Corporation are the only companies to transact business with the Company over the past three years in which
any of the Company’s independent directors served as a director, executive officer or is a partner, principal or greater
than 10% stockholder. Mr. Hippeau is a director of Yahoo! Inc.; Mr. Ryder is a director of Amazon.com, Inc.;
Mr. Youngblood is a director of Burger King Holdings, Inc. and The Gap, Inc.; and Ambassador Barshefsky is a
director of American Express Company and Intel Corporation. In the case of each company other than American
Express Company, the combined annual payments from the Company to each such entity and from each such entity
to the Company has been less than .05% of the Company’s and/or each such other entity’s annual consolidated
revenues for each of the past three years. In the case of American Express Company, with which the Company co-
brands the American Express Starwood Preferred Guest credit card, the combined annual payments from the
Company to American Express Company and from American Express Company to the Company has been less than
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