Starwood 2012 Annual Report Download - page 92

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy StatementA-15
an award previously granted by an entity that is assumed by the
Company in a business combination, provided that the Committee
determines that the Other Award preserves the economic benefi t
of the replaced award and is either exempt from or in compliance
with the requirements of Code section 409A.
Article 10 - Performance Measures
10.1 In General. The Committee may, in its discretion, include
performance conditions in any Award.
10.2 Section 162(m) Performance Measures. Unless and until the
Committee proposes for stockholder vote and stockholders
approve a change in the general performance measures set
forth in this Article 10, the attainment of which may determine
the degree of payout and/or vesting with respect to Covered
Employees’ Awards that are intended to qualify under the
performance-based compensation provisions of Code section
162(m), the performance measure(s) to be used for purposes
of such Awards shall be chosen from among the following:
earnings, earnings per share, consolidated pre-tax earnings,
net earnings, net income, operating income, EBIT (earnings
before interest and taxes), EBITDA (earnings before interest,
taxes, depreciation and amortization), 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 any other entity included in the term “Employer” in the
aggregate, to a selection of these, 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 shall specify
the period over which the performance goals for a particular
Award shall be measured.
10.3 Other Performance Measures. The Committee may
establish other performance measures for Awards granted
to Eligible Participants that are not intended to qualify under
the performance-based compensation exception from the
deductibility limitations of Code section 162(m).
10.4 Committee Determination of Achievement of Performance
Goals; Adjustments. The Committee shall determine whether
the applicable performance goals have been met with respect
to a particular Award and, if they have, the Committee shall
so certify in writing and ascertain the amount payable under
the applicable 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 US 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 that are intended to qualify under
the performance-based compensation exception from the
deductibility limitations of Code section 162(m), such adjustments
shall 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 Code section 162(m)). The Committee shall also have
the discretion to adjust downward the determinations of the
degree of attainment of the pre-established performance goals;
Awards may not be adjusted upward.
If applicable tax and/or securities laws permit Committee
discretion to alter the governing performance measures
without obtaining stockholder approval of such changes, the
Committee shall have sole discretion to make such changes
without obtaining stockholder approval. In addition, in the event
that the Committee determines that it is advisable to grant
Awards which shall not qualify for the performance-based
compensation exception from the deductibility limitations of
Code section 162(m), the Committee may make such grants
without satisfying the requirements of Code section 162(m).
ANNEX A