Starwood 2012 Annual Report Download - page 33

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy Statement 27
APPROVAL OF THE COMPANY’S 2013 LONG-TERM INCENTIVE COMPENSATION PLAN
Performance Measures
For awards under the 2013 Plan that are intended to qualify under
the performance-based compensation provisions of Section162(m),
the performance measure or measures to be used for purposes of
such awards must be chosen from among the following: earnings,
earnings per share (“EPS”), consolidated pre-tax earnings, net
earnings, net income, operating income, earnings before interest
and taxes (“EBIT”), earnings before interest, taxes, depreciation
and amortization (“EBITDA“), gross margin, operating margin,
profi t margin, revenues, revenue growth, market value added,
market share, economic value added, return measures (including
but not limited to return on equity, return on investment, return
on assets, return on net assets, and return on capital employed),
total stockholder return, profi t, operating profi t, economic profi t,
capitalized economic profi t, after-tax profi t, pre-tax profi t, cash,
cash fl ow measures (including but not limited to operating cash
fl ow, free cash fl ow, cash fl ow return, and cash fl ow per share),
sales, sales volume, sales growth, assets, inventory turnover
ratio, productivity ratios, share price, cost, unit cost, expense
targets or ratios, charge-off levels, operating effi ciency, operating
expenses, customer satisfaction, improvement in or attainment of
expense levels, working capital, improvement in or attainment of
working capital levels, debt, debt to equity ratio, debt reduction,
capital targets and/or consummation of acquisitions, dispositions,
projects or other specifi c events or transactions. Any performance
measure may be applied to the Company and certain affi liates in
the aggregate, to a selection of or one or more of these entities,
to each as a whole or alternatively, or to any business unit of the
Company or any other entity included in the term “Employer”, either
individually, alternatively or in any combination and measured either
annually or cumulatively over a period of years, on an absolute basis
or relative to a pre-established target, to results for previous years
or to a designated comparison group of entities or to a published
or stock market or other index, in each case as specifi ed by the
Committee. The Committee will specify the period over which
the performance goals for a particular award will be measured.
The Committee may also establish other performance measures for
awards granted to participants that are not intended to qualify for the
performance-based compensation exception from Section162(m).
The Committee will determine whether the applicable performance
goals have been met with respect to a particular award and, if they
have, the Committee must so certify in writing and ascertain the
amount payable under the award. The Committee is authorized
to make adjustments in performance-based criteria or in the
terms and conditions of other awards in recognition of unusual
or nonrecurring events affecting the Company or its fi nancial
statements (including, but not limited to, asset write-downs;
litigation or claim judgments or settlements; reorganizations or
restructuring programs; extraordinary, unusual, or nonrecurring
items of gain or loss as defi ned under U.S. generally accepted
accounting principles; mergers, acquisitions or divestitures; and
foreign exchange gains and losses) or changes in applicable laws,
regulations or accounting principles. In the case of awards to
Covered Employees (as defi ned for purposes of Section 162(m)) that
are intended to qualify under the performance-based compensation
exception from the deductibility limitations of Section162(m),
the adjustments must be made in accordance with guidelines
established by the Committee at the time the performance-based
award is granted (or within such period thereafter as may be
permissible under Section162(m)). In addition, in the event that
the Committee determines that it is advisable to grant awards
which are not intended to qualify for the performance-based
compensation exception from the deductibility limitations of
Section162(m), the Committee may make such grants without
satisfying the requirements of Section162(m).
Non-Employee Director Awards
On each date that the Company makes its regular, annual grant
of awards to employees, each non-employee director will be
granted an award in an amount determined by the Committee
(prorated awards will be granted to directors who are fi rst elected
to serve as directors after such date as described in the 2013
Plan). In addition, on the last day of March, June, September, and
December of each calendar year, each non-employee director
will be awarded, on a current or deferred basis, a number of
shares equal to one-quarter of the dollar amount specifi ed by
the Committee for that calendar year divided by the fair market
value of a share. However, the applicable dollar amount will be
reduced to the extent the director makes an advance election
to receive cash in lieu of shares. For this purpose, “fair market
value” means the NYSE closing price of a share on the last
trading day of the calendar quarter immediately preceding the
grant date for such shares. For example, for purposes of shares
awarded on September30, 2013, fair market value will be the
NYSE closing price for a share on June28, 2013. On or before
each December31, a director may elect to defer any or all of the
shares or cash to be granted to the director that would be earned
for service performed after that date