Starwood 2012 Annual Report Download - page 83

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy Statement A-6
subcommittee of the Committee, consisting of at least two
Directors, to grant Awards to Covered Employees and to
offi cers and Directors who are subject to Section 16 of the
Act; each member of such subcommittee shall satisfy the
requirements of (i) and (ii) above. References to the Committee
in the Plan shall include and, as appropriate, apply to any
such subcommittee.
2.10 “Company” means Starwood Hotels & Resorts Worldwide,
Inc., a Maryland corporation, and its successors and assigns.
2.11 “Covered Employee” means a Participant whom the Committee
determines is or may be subject to the limitations of Code
section 162(m).
2.12 “Director” means any individual who is a member of the Board;
provided, however, that any individual who is both a member of
the Board and employed by the Company or any other entity
constituting the Employer shall not be considered a Director
for purposes of the Plan.
2.13 “Disability” means, with respect to any Incentive Stock Option,
a disability as determined under Code section 22(e)(3), and
with respect to any other Award, (i) with respect to a Participant
who is eligible to participate in the Employer’s program of
long-term disability insurance, if any, a condition with respect
to which the Participant is entitled to commence benefi ts
under such program, and (ii) with respect to any Participant
(including a Participant who is eligible to participate in the
Employer’s program of long-term disability insurance, if any), a
disability as determined under procedures established by the
Committee or in any Agreement. Notwithstanding the preceding
provisions of this Section 2.13 or anything in any Agreement
to the contrary, to the extent any provision of this Plan or an
Agreement would cause a payment of a 409A Award to be
made because of the Participant’s Disability, then there shall
not be a Disability that triggers payment until the date (if any)
that the Participant is disabled within the meaning of Code
section 409A(a)(2)(C). Any payment that would have been
made except for the application of the preceding sentence
shall be made in accordance with the payment schedule that
would have applied in the absence of a Disability (and other
Participant rights that are tied to a Disability, such as vesting,
shall not be affected by the prior sentence).
2.14 “Effective Date” shall have the meaning ascribed to such term
in Section 1.4 above.
2.15 “Eligible Participant” means an employee of the Employer
(including an offi cer) as well as any other natural person,
including a Director or a consultant or advisor who provides
bona fi de services to the Employer not in connection with the
offer or sale of securities in a capital-raising transaction, subject
to limitations as may be provided by the Code, the Act or the
Committee, as shall be determined by the Committee.
2.16 “Employer” means the Company and any entity during any period
that it is a “parent corporation” or a “subsidiary corporation”
with respect to the Company within the meaning of Code
sections 424(e) and 424(f). With respect to all purposes of
the Plan, including but not limited to, the establishment,
amendment, termination, operation and administration of the
Plan, the Company shall be authorized to act on behalf of all
other entities included within the defi nition of “Employer.”
2.17 “Fair Market Value” means, on any given date:
(a) if the Shares are listed on the NYSE on the given date,
Fair Market Value on such date shall be the closing price
for a Share on the NYSE on the immediately preceding
day on which sales were made on the NYSE;
(b) if the Shares are listed on a national or regional securities
exchange other than the NYSE on the given date, Fair
Market Value on such date shall be the closing price for
a Share on the securities exchange on the immediately
preceding day on which sales were made on such
exchange; or
(c) if neither (a) nor (b) applies on the given date, the fair
market value of a Share on that date shall be determined
in good faith by the Committee.
For purposes of subsection (b) above, if Shares are not traded
on the NYSE but they are traded on more than one securities
exchange on the given date, then the following exchange
shall be referenced to determine Fair Market Value: (i) the
NASDAQ, or (ii) if shares are not traded on the NASDAQ, the
largest exchange on which Shares are traded.
Subject to the next two paragraphs of this Section 2.17, for
purposes of any Shares awarded to Directors under Section
11.2 of this Plan, each reference in subsections (a) and (b)
above to the closing price of a Share on the trading day
immediately preceding the grant date for such Shares shall
instead be a reference to the closing price of a Share on the
last trading day of the calendar quarter immediately preceding
the grant date for such Shares as specifi ed in Section 11.2
(e.g., for purposes of any Shares awarded on September 30,
2013, under Section 11.2, “Fair Market Value” shall be the
NYSE closing price for a Share on June 28, 2013).
Notwithstanding the foregoing but subject to the next
paragraph, if the Committee determines in its discretion that
an alternative defi nition of Fair Market Value should be used
in connection with the grant, exercise, vesting, settlement or
payout of any Award, it may specify such alternative defi nition
in the Agreement applicable to the Award. Such alternative
defi nition may include a price that is based on the opening,
actual, high, low, or average selling prices of a Share on the
NYSE or other securities exchange on the given date, the
trading date preceding the given date, the trading date next
succeeding the given date, or an average of trading days.
Notwithstanding the foregoing, (i) in the case of an Option or
SAR, Fair Market Value shall be determined in accordance
with a defi nition of fair market value that permits the Award
to be exempt from Code section 409A; and (ii) in the case
of an Option that is intended to qualify as an ISO under
Code section 422 or an Award that is intended to qualify as
performance-based compensation under Code section 162(m),
Fair Market Value shall be determined by the Committee in
accordance with the requirements of Code section 422 or
Code section 162(m), as applicable.
2.18 “409A Award” means each Award that is not exempt from
Code section 409A.
ANNEX A