Starwood 2012 Annual Report Download - page 89

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy Statement A-12
Article 6 - Stock Appreciation Rights
6.1 Grant of SARs. Subject to the terms and provisions of the
Plan, SARs may be granted to Eligible Participants in such
amounts and upon such terms, and at any time and from time
to time, as shall be determined by the Committee. A Stock
Appreciation Right may be granted to an Eligible Participant
in connection with an Option granted under Article 5 of this
Plan or may be granted independently of any Option. A Stock
Appreciation Right shall entitle the holder, within the specifi ed
period, to exercise the SAR and receive in exchange therefor
a payment having an aggregate value equal to the amount by
which the Fair Market Value of a Share exceeds the SAR Price,
times the number of Shares with respect to which the SAR
is exercised. A SAR granted in connection with an Option (a
“Tandem SAR”) shall entitle the holder of the related Option,
within the period specifi ed for the exercise of the Option, to
surrender the unexercised Option, or a portion thereof, and to
receive in exchange therefore a payment having an aggregate
value equal to the amount by which the Fair Market Value of a
Share exceeds the Option Price, times the number of Shares
under the Option, or portion thereof, which is surrendered.
Notwithstanding anything in this Article 6 to the contrary, except
for SARs that are specifi cally designated as intended to be
subject to Code section 409A, SARs may only be granted to
individuals who provide direct services on the date of grant
of the SAR to the Company or another entity in a chain of
entities in which the Company or another such entity has a
controlling interest (within the meaning of Treasury Regulation
§ 1.409A-1(b)(5)(iii)(E)) in each entity in the chain.
6.2 Agreement. Each SAR grant shall be evidenced by an Agreement
that shall specify the SAR Price, the duration of the SAR, the
number of Shares with respect to which the SAR pertains,
the conditions upon which the SAR shall become vested and
exercisable and such other provisions as the Committee shall
determine.
6.3 Tandem SARs. Each Tandem SAR shall be subject to the
same terms and conditions as the related Option, including
limitations on transferability, and shall be exercisable only to
the extent such Option is exercisable and shall terminate or
lapse and cease to be exercisable when the related Option
terminates or lapses. The grant of a Tandem SAR must be
concurrent with the grant of the Option.
6.4 Payment. The Committee shall have sole discretion to determine
in each Agreement whether the payment with respect to the
exercise of a SAR will be in the form of all cash, all Shares, or
any combination thereof. If payment is to be made in Shares,
the number of Shares shall be determined based on the Fair
Market Value of a Share on the date of exercise.
6.5 SAR Price. The SAR Price for each grant of a SAR shall be
determined by the Committee and shall not be less than one
hundred percent (100%) of the Fair Market Value of a Share
on the date the SAR is granted. Notwithstanding the prior
sentence, a SAR may be granted with a SAR Price that is
less than one hundred percent (100%) of the Fair Market
Value of a Share on the date the SAR is granted if such SAR
is granted in replacement for an award previously granted
by an entity that is assumed by the Company in a business
combination, provided that the Committee determines that
such SAR Price is appropriate to preserve the economic
benefi t of the replaced award and will not impair the exemption
of the SAR from Code section 409A (unless the Committee
clearly and expressly foregoes such exemption at the time
the SAR is granted).
6.6 Duration of SARs. Each SAR shall expire at such time as the
Committee shall determine at the time of grant; provided,
however, that the Committee may extend the term of any SAR
that would otherwise expire at a time when the Participant
is not permitted by applicable law or Company policy to
exercise such SAR; and provided, further, that no SAR shall
be exercisable later than the tenth (10th) anniversary of its
grant date. Notwithstanding the foregoing, for SARs granted
to Participants outside the United States, the Committee has
the authority to grant SARs that have a term that extends past
the tenth (10th) anniversary of the Option grant date.
6.7 Exercise of SARs. SARs granted under the Plan shall be
exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance
approve, including conditions related to the employment of
or provision of services by the Participant with the Company
or any Employer, which need not be the same for each grant
or for each Participant. The Committee may provide in the
Agreement for automatic accelerated vesting and other rights
upon the occurrence of a Change in Control of the Company
or upon the occurrence of other events as specifi ed in the
Agreement. Upon exercise of a Tandem SAR, the number
of Shares subject to exercise under the related Option shall
automatically be reduced by the number of Shares represented
by the Option or portion thereof which is surrendered. SARs shall
be exercised by the delivery of an oral, written or electronic notice
of exercise to the Company or its designated representative,
setting forth the number of Shares with respect to which the
SAR is to be exercised and satisfying any requirements that
the Committee may apply from time to time.
6.8 Nontransferability of SARs. Except as otherwise provided in
a Participant’s Agreement or otherwise determined at any
time by the Committee consistent with securities and other
applicable laws, rules and regulations, no SAR granted under
this Article 6 may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further, except as
otherwise provided in a Participant’s Agreement or otherwise
determined at any time by the Committee, all SARs granted
to a Participant under this Article 6 shall be exercisable during
his or her lifetime only by such Participant or the Participant’s
legal representative. In no event may a SAR be transferred
for value or consideration.
ANNEX A