Starwood 2012 Annual Report Download - page 95

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy Statement A-18
15.4 Assumption or Cancellation of Awards. This Section 15.4
applies with respect to the disposition of an outstanding
Award in a Corporate Event (as defi ned below) only to the
extent that such Corporate Event is not also a Change in
Control covered by Article 16. In the event of a sale of all or
substantially all of the assets or stock of the Company, the
merger of the Company with or into another corporation such
that stockholders of the Company immediately prior to the
merger exchange their shares of stock in the Company for
cash and/or shares of another entity or any other corporate
transaction to which the Committee deems this provision
applicable (a “Corporate Event”), each Award outstanding at the
time of the Corporate Event shall be assumed or an equivalent
Award shall be substituted by the successor corporation or
a parent or subsidiary of such successor corporation (and
adjusted as appropriate), unless such successor corporation
does not agree to assume the Award or to substitute an
equivalent award, in which case the Committee may, in lieu
of such assumption or substitution, provide for the Participant
to have the right to exercise the Option or other SAR as to all
Shares covered by the Award, including Shares as to which
the Option or SAR would not otherwise be exercisable or
provide that all restrictions applicable to any Restricted Stock,
Restricted Stock Units, Performance Shares or Performance
Units shall lapse). If the Committee makes an Option or SAR
fully exercisable in lieu of assumption or substitution in the
event of a Corporate Event, the Committee shall notify the
Participant that, subject to rescission if the Corporate Event
is not successfully completed within a certain period, the
Option or SAR shall be fully exercisable for a period of fi fteen
(15) days from the date of such notice (or such other period as
provided by the Committee), and, to the extent not exercised,
the Option or other Award will terminate upon the expiration of
such period. Alternatively, the Committee may make provision
for a cash payment in settlement of any or all outstanding
Awards or the cash, securities or property deliverable to the
holder of any or all outstanding Awards, based upon, to the
extent relevant under the circumstances, the distribution or
consideration payable to holders of Shares upon or in respect
of the Corporate Event. The Committee may adopt such
valuation methodologies for outstanding Awards as it deems
reasonable in the event of a cash settlement and, in the case
of Options, SARs or similar rights, but without limitation on
other methodologies, may base such settlement solely upon
the excess (if any) of the per share amount payable upon or
in respect of such event over the Option Price or SAR Price,
as applicable, of the Award and may cancel each Option
or SAR with an Option Price or SAR Price greater than the
per share amount payable upon or in respect of such event
without any payment to the person holding such Option or
SAR. Any actions taken under this Section 15.4 shall be valid
with respect to a 409A Award only to the extent that such
action complies with Code section 409A.
Article 16 - Change in Control
16.1 Single Trigger Treatment. Upon a C hange in Control, each
outstanding Award granted under this Plan (an “Outstanding
Award”) will, except to the extent that the Outstanding Award
is continued, assumed, replaced or adjusted in the form of a
“Replacement Award,” vest or become immediately exercisable
and/or nonforfeitable (a) if the Change in Control occurs less
than two years after the date of grant for such Outstanding
Award, on a pro-rata basis (i) based on actual service during
the vesting period with respect to any time-based Outstanding
Award and (ii) based on actual service during the performance
period with respect to the greater of the target opportunity or
actual results for any performance-based Outstanding Award,
and (b) if the Change in Control occurs two years or more after
the date of grant for such Outstanding Award, (i) on a pro-rata
basis based on actual service during the vesting period with
respect to any time-based Outstanding Award and (ii) with
respect to 100% of the greater of the target opportunity or
actual results for any performance-based Outstanding Award.
16.2 Double Trigger Treatment. If, subsequent to receiving a
Replacement Award in accordance with Section 16.1, the
Participant’s employment with the Company or any of its
subsidiaries (or their successors in the Change in Control) is
terminated within a period of two years after the Change in
Control either (a) by the Participant for “Good Reason” or (b) by
the Company, such subsidiary or such successor (as applicable)
other than for “Cause,” then the Replacement Award will vest
or become immediately exercisable and/or nonforfeitable with
respect to 100% of any time-based Replacement Award and
with respect to 100% of the greater of the target opportunity
or actual results for any performance-based Replacement
Award (an “Accelerated Replacement Award”). For purposes
of Article 16, “Replacement Award,” “Good Reason” and
“Cause” will be used as defi ned in the applicable Agreement.
Outstanding Awards and Accelerated Replacement Awards shall
become payable at such time as specifi ed under the terms and
conditions of the applicable Agreement (or agreement for such
Accelerated Replacement Awards) except that, to the extent
that such Outstanding Awards or Accelerated Replacement
Awards are exempt from Section 409A of the Code under
the “short-term deferral rule,” payment for such Outstanding
Awards or Accelerated Replacement Awards shall be made
not later than 2-1/2 months after the year in which they are
no longer subject to substantial risk of forfeiture.
ANNEX A