Starwood 2010 Annual Report Download - page 155

there was approximately $21 million of unrecognized compensation cost, net of estimated forfeitures, related to
nonvested options, which is expected to be recognized over a weighted-average period of 1.17 years on a straight-
line basis.
The aggregate intrinsic value of outstanding options as of December 31, 2010 was $272 million. The aggregate
intrinsic value of exercisable options as of December 31, 2010 was $77 million. The weighted-average contractual
life was 4.50 years for outstanding options and 2.67 years for exercisable option as of December 31, 2010.
The Company recognizes compensation expense equal to the fair market value of the stock on the date of grant
for restricted stock and unit grants over the service period. The weighted-average fair value per stock or unit granted
during 2010, 2009 and 2008 was $37.33, $11.15 and $46.49, respectively. The service period is typically three or
four years except in the case of restricted stock and units issued in lieu of a portion of an annual cash bonus where
the restriction lapse period is typically in equal installments over a two year period, or in equal installments on the
first, second and third fiscal year ends following grant date with distribution on the third fiscal year end.
At December 31, 2010, there was approximately $68 million (net of estimated forfeitures) in unamortized
compensation cost related to restricted stock and units. The weighted average remaining term was 1.08 years for
restricted stock and units outstanding at December 31, 2010. The fair value of restricted stock and units for which
the restrictions lapsed during 2010, 2009 and 2008 was approximately $62 million, $33 million and $85 million,
respectively.
The following table summarizes the Company’s restricted stock and units activity during 2010:
Number of
Restricted
Stock and Units
Weighted Average
Grant Date Value
Per Share
(In millions)
Outstanding at December 31, 2009 ........................ 8.0 $28.48
Granted .......................................... 2.0 37.33
Lapse of restrictions ................................. (1.4) 43.00
Forfeited or Canceled ................................ (0.1) 27.82
Outstanding at December 31, 2010 ........................ 8.5 $28.11
2002 Employee Stock Purchase Plan
In April 2002, the Board of Directors adopted (and in May 2002 the shareholders approved) the Company’s
2002 Employee Stock Purchase Plan (the “ESPP”) to provide employees of the Company with an opportunity to
purchase shares through payroll deductions and reserved 11,988,793 shares for issuance under the ESPP. The ESPP
commenced in October 2002.
All full-time employees who have completed 30 days of continuous service and who are employed by the
Company on U.S. payrolls are eligible to participate in the ESPP. Eligible employees may contribute up to 20% of
their total cash compensation to the ESPP. Amounts withheld are applied at the end of every three month
accumulation period to purchase shares. The value of the shares (determined as of the beginning of the offering
period) that may be purchased by any participant in a calendar year is limited to $25,000. The purchase price to
employees is equal to 95% of the fair market value of shares at the end of each period. Participants may withdraw
their contributions at any time before shares are purchased.
Approximately 117,000 shares were issued under the ESPP during the year ended December 31, 2010 at
purchase prices ranging from $36.77 to $54.00. Approximately 265,000 shares were issued under the ESPP during
the year ended December 31, 2009 at purchase prices ranging from $11.01 to $30.42.
F-39
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)