Starwood 2009 Annual Report Download - page 67

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5. Deferred Share Accounts.
5.1 Deferrals to Accounts.
(a) An amount equal to 25%, unless the Committee determines to defer a smaller portion of a Participant’s
bonus payment, determined in the sole discretion of the Committee, of the gross bonus payment payable to a
Participant under the Plan for a Performance Period may be credited to the Participant’s Deferred Share Account as
of the date on which the first cash bonus payment for the Performance Period is paid to the Participant pursuant to
subsection 4.1. The Committee shall make any determination to apply a smaller percentage for a Performance
Period no later than six months prior to the end of the Performance Period. However, for any Participant who is hired
during a Performance Period and receives a bonus opportunity under this Plan for such Performance Period, the
deferral percentage shall be 25% with no opportunity for the Committee to specify a lower percentage.
(b) An amount equal to no more than the amount of the bonus payment payable to a Participant for a
Performance Period in excess of $3 million may be credited to the Participant’s Deferred Share Account at the
election of the Participant. Any election by a Participant to defer such a portion of his bonus payment shall be made
no later than six months prior to the end of the Performance Period and in a form prescribed by the Committee. An
amount so deferred shall be credited to the Participant’s Deferred Share Account as of the date on which the first
cash bonus payment for the Performance Period is paid to the Participant pursuant to subsection 4.1.
5.2 Deemed Investment of Deferred Share Accounts. Amounts credited to a Participant’s Deferred Share
Account pursuant to subsection 5.1(a) shall be deemed to be invested in whole and fractional Shares at a price equal
to 75% of the Fair Market Value thereof on the date as of which the amount is credited to the Deferred Share
Account. Amounts credited to a Participant’s Deferred Share Account pursuant to subsection 5.1(b) shall be deemed
to be invested in whole and factional Shares at a price equal to 100% of the Fair Market Value thereof on the date as
of which the amount is credited to the Deferred Share Account. If any dividends are paid or other distributions are
made on the Company’s Shares, dividend equivalents and other distribution equivalents shall be paid in the same
proportion on the Shares concurrently to the Participant and shall be paid to the Participant within the same calendar
year that the dividend is paid or other distributions are made to the Company’s shareholders.
5.3 Vesting of Deferred Share Account.
(a) The amount credited to a Participant’s Deferred Share Account under subsection 5.1(a) (as adjusted for
deemed investment returns under subsection 5.2) shall become vested ratably over the three-year period beginning
at the end of the Performance Period, provided, however, that such credited amounts shall become fully vested on
the first to occur of the following:
(1) The date of the Participant’s death;
(2) The date of the Participant’s disability; or
(3) The date of the Participant’s retirement.
For purposes of this subsection 5.3, “disability” shall mean a total physical disability which, in the Company’s
judgment, prevents the Participant from performing substantially his/her employment duties and responsibilities for
a continuous period of at least six months, and “retirement” shall mean retirement as then defined in the Company’s
2004 Long-Term Incentive Compensation Plan (or any successor thereto) (the “Company’s LTIP”).
(b) The amount credited to a Participant’s Deferred Share Account under subsection 5.1(b) (as adjusted for
deemed investment returns under subsection 5.2) shall become vested ratably over the remaining term of any
applicable employment agreement and shall vest in full upon the Participant’s termination of employment for any
reason.
5.4 Distribution of Deferred Share Accounts.
(a) Non-409A Covered Amounts. On the earlier of (1) the third anniversary of the end of the applicable
Performance Period, or (2) the day following the date the Participant’s employment is terminated for any reason
(such earlier date being referred to as the “Distribution Date”), the Company shall compute and pay the
“Distributable Balance” in a Participant’s Deferred Share Account on such date. In the event that the Participant
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