Starwood 2009 Annual Report Download - page 65

Service”) with no change in meaning. Notwithstanding the preceding sentence, a Participant’s transfer to an entity
owned 50% or more by the Company will not constitute a Separation of Service to the extent permitted by Code
section 409A. The following principles shall generally apply in determining when a Separation from Service occurs:
(a) A Participant separates from service with the Company if the Employee dies, retires, or otherwise has
a termination of employment with the Company. Whether a termination of employment has occurred is
determined based on whether the facts and circumstance indicate that the Company and the Participant
reasonably anticipated that no further services would be performed after a certain date or that the level of bona
fide services the Participant would perform after such date (as an employee or independent contractor) would
permanently decrease to no more than 20 percent of the average level of bona fide services performed over the
immediately preceding 36-month period (or the full period in which the Participant provided services to the
Company if the Participant has been providing services for less than 36 months).
(b) A Participant will not be deemed to have experienced a Separation from Service if such Participant is
on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a
period of six months or, if longer, such longer period of time during which a right to re-employment is
protected by either statute or contract. If the period of leave exceeds six months and the individual does not
retain a right to re-employment under an applicable statute or by contract, the employment relationship is
deemed to terminate on the first date immediately following such six-month period.
(c) If a Participant provides services both an as employee and as a member of the Board of Directors of
the Company, the services provided as a Director are generally not taken into account in determining whether
the Participant has Separated from Service as a Participant for purposes of the Plan, in accordance with final
regulations under section 409A.
Specified Employee means an individual identified in accordance with the following principles:
(a) General. Any participant who at any time during the applicable year is:
(1) An officer of any member of the Starwood Organization having annual compensation greater
than $130,000 (as adjusted under section 416(i)(1) of the Code);
(2) A 5-percent owner of any member of the Starwood Organization; or
(3) A 1-percent owner of any member of the Starwood Organization having annual compensation of
more than $150,000.
No more than 50 employees identified in the order of their annual compensation shall be treated as officers. For
purposes of this definition, annual compensation means compensation as defined in Treas. Reg. § 1.415(c)-
2(a), without regard to Treas. Reg. §§ 1.415(c)-2(d), 1.415(c)-2(e), and 1.415(c)-2(g). The Committee or its
delegate shall determine who is a Specified Employee in accordance with section 416(i) of the Code and the
applicable regulations and other guidance of general applicability issued thereunder or in connection
therewith, and provided further that the applicable year shall be determined in accordance with section 409A
and that any modification of the foregoing definition that applies under section 409A shall be taken into
account.
(b) Applicable Year. Effective from and after December 31, 2007, the Committee or its delegate shall
determine Specified Employees effective as of the last day of each calendar year, based on compensation for
such year, and such designation shall be effective for purposes of the Plan for the twelve month period
commencing on April 1st of the next following calendar year (e.g., the Specified Employee determination by
the Committee as of December 31, 2008 shall apply to the period from April 1, 2009 to March 31, 2010).
Starwood Organization means the controlled group of organizations of which the Company is a part, as
defined by sections 414(b) and (c) of the Code and the regulations issued thereunder (but applying the 50% standard
for relatedness applicable under Treasury Regulation § 1.409A-1(h)(3) in lieu of the 80% standard that ordinarily
applies under Code section 414). An entity shall be considered a member of the Starwood Organization only during
the period it is one of the group of organizations described in the preceding sentence.
Share — shall mean one share of common stock, par value $.01 per share, of the Company.
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