Starwood 2012 Annual Report Download - page 87

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.-2013Proxy Statement A-10
affecting the application of these provisions with respect to
Awards that are intended to comply with them), the following
rules shall apply to Awards under the Plan:
(a) Options and SARs. The maximum number of Options and
Stock Appreciation Rights that, in the aggregate, may be
granted in any one fi scal year to any one Participant shall
be three million (3,000,000).
(b) Restricted Stock and Restricted Stock Units. The maximum
number of Shares of Restricted Stock and Restricted
Stock Units that, in the aggregate, may be granted in any
one fi scal year to any one Participant shall be one million
(1,000,000) Shares and Units.
(c) Performance Shares and Performance Units. The maximum
number of Performance Shares and Performance Units
(valued as of the grant date) that, in the aggregate, may
be granted in any one fi scal year to any one Participant
shall equal the value of two million (2,000,000) Shares.
This limitation shall be applied based on the maximum
amount that could be paid under each Performance Share
and Performance Unit.
(d) Other Awards. The maximum number of Other Awards
(valued as of the grant date) that, in the aggregate, may
be granted in any one fi scal year to any one Participant
shall equal the value of fi ve hundred thousand (500,000)
Shares. This limitation shall be applied based on the
maximum amount that could be paid under each Other
Award.
The multipliers specifi ed in subsections (a) through (d) of Section
4.1 shall not apply for purposes of applying the foregoing limitations
of this Section 4.2.
4.3 Adjustment of Shares. If any change in corporate capitalization,
such as a stock split, reverse stock split, or stock dividend;
or any corporate transaction such as a reorganization,
reclassifi cation, merger or consolidation or separation, including
a spin-off, of the Company or sale or other disposition by the
Company of all or a portion of its assets, any other change
in the Company’s corporate structure, or any distribution to
stockholders (other than an ordinary cash dividend) results in the
outstanding Shares, or any securities exchanged therefore or
received in their place, being exchanged for a different number
or class of shares or other securities of the Company, or for
shares of stock or other securities of any other corporation;
or new, different or additional shares or other securities of
the Company or of any other corporation being received by
the holders of outstanding Shares; then the Committee shall
make equitable adjustments, as it determines are necessary
and appropriate, in:
(a) the number and class of stock or other securities that
comprise the Award Pool as set forth in Section 4.1;
(b) the limitations on the aggregate number of Awards that
may be granted in any one fi scal year to any one Participant
as set forth in Section 4.2;
(c) the number and class of stock or other securities subject
to outstanding Awards, and which have not been issued
or transferred under outstanding Awards;
(d) the Option Price under outstanding Options, the SAR
Price under outstanding Stock Appreciation Rights and
the number of Shares to be transferred in settlement of
outstanding Options and Stock Appreciation Rights; and
(e) the terms, conditions or restrictions of any Award and
Agreement, including the price payable for the acquisition
of Shares.
It is intended that, if possible, any adjustments contemplated
above shall be made in a manner that satisfi es applicable legal
requirements, as well as applicable requirements with respect
to taxation (including, without limitation and as applicable in the
circumstances, Code section 424, Code section 409A, and Code
section 162(m)) and accounting (so as to not trigger any charge to
earnings with respect to such adjustment).
Without limiting the generality of the above, any good faith
determination by the Committee as to whether an adjustment is
required in the circumstances and the extent and nature of any such
adjustment shall be fi nal, conclusive and binding on all persons.
Article 5 - Stock Options
5.1 Grant of Options. Subject to the terms and provisions of
the Plan, Options 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.
The Committee shall have sole discretion in determining
the number of Shares subject to Options granted to each
Participant. The Committee may grant a Participant ISOs,
NQSOs or a combination thereof, and may vary such Awards
among Participants; provided that only Participants who are
common law employees of the Employer may be granted ISOs.
Notwithstanding anything in this Article 5 to the contrary, except
for Options that are specifi cally designated as intended to be
subject to Code section 409A, Options may only be granted
to individuals who provide direct services on the date of grant
of the Option 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.
5.2 Agreement. Each Option grant shall be evidenced by an
Agreement that shall specify the Option Price, the duration of
the Option, the number of Shares to which the Option pertains,
the conditions upon which the Option shall become vested
and exercisable and such other provisions as the Committee
shall determine. The Option Agreement shall further specify
whether the Award is intended to be an ISO or an NQSO.
Any portion of an Option that is not designated as an ISO or
otherwise fails or is not qualifi ed as an ISO (even if designated
as an ISO) shall be an NQSO.
ANNEX A