exv10w1



 






Exhibit 10.1




STARWOOD HOTELS & RESORTS WORLDWIDE, INC.




ANNUAL INCENTIVE PLAN




Amended as of November 3, 2005



1. Definitions. When the following terms are used herein with initial capital letters, they shall
have the following meanings:





AIP - shall mean the Starwood Hotels & Resorts Worldwide, Inc. Annual Incentive Plan as set
forth herein and as from time to time amended.




Company - Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation.




Fair Market Value - shall mean the fair market value of a Unit, as determined by the
Company, which, unless otherwise specified, shall be the average of the high and low sales
price for a Unit as reported in the New York Stock Exchange Composite Transactions on such
date (or, if no sales of Units were made on such exchange on such date, on the preceding day
on which sales were made on such exchange), all as reported in The Wall Street Journal or
such other source as the Committee deems reliable.




Financial Performance Measures — The Financial Performance Measures shall be directly and
specifically tied to one or more of the following business criteria, determined with respect
to the Company as a whole or with respect to an operating division of the Company: earnings
before interest, taxes, depreciation and amortization (“EBITDA”), consolidated pre-tax
earnings, net revenues, net earnings, operating income, earnings before interest and taxes,
cash flow, return on equity, return on net assets employed, profit contribution, or earnings
per share for the applicable Performance Period, all as computed in accordance with
generally accepted accounting principles as in effect from time to time and as applied by
the Company in the preparation of its financial statements and subject to such other special
rules and conditions as the Company may establish.




Individual Objectives – The Individual Objectives applicable to a Participant for a
Performance Period shall be key individual objectives that link individual contributions to
Corporate/Division/functional objectives and major financial/operating goals for such
Performance Period. The Individual Objectives applicable to a Participant for a Performance
Period will be developed by the Participant and discussed and jointly agreed to by the
Participant and the Participant’s manager.




Participant - shall mean an employee of the Company or an affiliate of the Company who is
designated by the Company at any time before the end of the ninth month of each Performance
Period as a Participant in the AIP for such Performance Period. Company associates
participating in other incentive plans or Corporate Human Resources-approved



 









 





Exhibit 10.1





formal retention plans will not be eligible to participate in the AIP, unless an exception
is approved by Corporate Human Resources.




Performance Period - shall mean the twelve consecutive month period which coincides with the
Company’s fiscal year.




Retirement - shall mean termination of employment with the Company and all affiliates of the
Company with a combined age plus years of service of not less than 65, with a minimum age
requirement of 55 and a minimum service requirement of 5 years (full-time or
full-time-equivalent).




Unit - shall mean a Unit consisting of one share of common stock, par value $.01 per share,
of the Company and one Class B share of beneficial interest, par value $.01 per share, of
Starwood Hotels & Resorts.



2. Administration.





2.1 Company. The AIP shall be administered by the Company.




2.2 Determinations Made for Each Performance Period. For each Performance Period the
Company shall:




	 	(a)	 	Designate Participants for that Performance Period and their
incentive award opportunities;
	 
	 	(b)	 	Determine the amount or formula for determining each
Participant’s bonus payment for the Performance Period;
	 
	 	(c)	 	Establish the Financial Performance Measures and Individual
Objectives for the Performance Period; and
	 
	 	(d)	 	Establish the Financial Performance Measures and Individual
Objectives targets for the Performance Period.






The Company reserves the right, exercisable in its sole discretion, to change any of the
above determinations with respect to a Performance Period at any time before, during or
after such Performance Period.



3. Bonus Payments.





3.1 Amount. Each Participant shall be eligible to receive a bonus payment for a Performance
Period in an amount determined by the Company based on the attainment of the Financial
Performance Measure targets and Individual Objectives applicable to the Participant for the
Performance Period. The aggregate amount of the bonus payments for a Performance Period
shall be subject to the approval of the Compensation and Option Committee of the Board of
Directors of the Company.




3.2 Time and Form of Payments.



 









 





Exhibit 10.1





	 	(a)	 	Cash Payments. Not less than 75% of a Participant’s bonus
payment for a Performance Period shall be paid to the Participant in cash. The
cash portion of a Participant’s bonus payment for a Performance Period shall be
paid to the Participant as soon as practicable after the amount of the
Participant’s bonus payment for the Performance Period has been determined by
the Company. Absent an election to otherwise defer the payment to a later date
under the Starwood Deferred Compensation Plan or other deferral plan in effect
for AIP participants, payment will be made not later than (i) the
15th day of the third month after the end of the annual Performance
Period, or (ii) in any case where the annual Performance Period is not a
calendar year, the last date that payment could be made while still permitting
the bonus to be excepted from coverage under Section 409A as a short-term
deferral. (“Section 409A” refers to Section 409A of the Internal Revenue Code
of 1986, as amended.)
	 
	 	(b)	 	Restricted Stock. For Participants at organizational levels
designated by the Company, up to 25% of a Participant’s bonus payment for a
Performance Period may be paid to the Participant in the form of Units pursuant
to an award of restricted stock under the Starwood Hotels & Resorts, Inc.
Long-Term Incentive Compensation Plan (the “LTIP”) then in effect. The portion
of a Participant’s bonus payment for a Performance Period to be so paid as a
restricted stock award under the LTIP shall be determined by the Company, or as
elected by the Participant in accordance with procedures established by the
Company, and shall be subject to such restrictions as determined in accordance
with the LTIP by the committee that administers the LTIP. The number of Units
representing the restricted stock portion of a Participant’s bonus payment for
a Performance Period shall be calculated by increasing the dollar amount of
such portion by one-third and then converting such amount into Units based on
the Fair Market Value of a Unit on the date on which the bonus payment is paid
to the Participant and shall be issued to the Participant at the time the cash
portion of the Participant’s bonus payment for the Performance Period is paid.






3.3 Employment on Payment Date Required. A Participant’s entitlement to a bonus payment for
a Performance Period is conditioned upon the Participant’s active employment with the
Company or an affiliate of the Company on the date on which the bonus payment is to be paid
to the Participant, unless an exception is approved by Corporate Human Resources. Pro-rata
awards may be paid in the event of a Participant’s death, disability (as defined in the
applicable long-term disability plan, or, if no such plan exists, as determined by the
Company) or Retirement. Otherwise, no bonus payment shall be earned by or payable to any
Participant until the date on which the bonus payment is paid to the Participant. If a
Participant is terminated or resigns from the Company before the date on which a bonus
payment is to be paid to the Participant, such bonus payment is forfeited, unless an
exception is approved by Corporate Human Resources.



 









 





Exhibit 10.1





3.4 Nontransferability. Participants shall not have the right to assign, encumber or
otherwise anticipate the payments to be made under the AIP, and the benefits provided
hereunder shall not be subject to seizure for payment of any debts or judgments against any
Participant.



3.5 Tax Withholding. In order to comply with all applicable federal or state income tax
laws or regulations, the Company may take such action as it deems appropriate to ensure that
all applicable federal or state payroll, withholding, income or other taxes, which are the
sole and absolute responsibility of a Participant, are withheld or collected from such
Participant.


4. Amendment and Termination. The Company may amend the AIP at any time and for any reason deemed
sufficient by it without notice to any person affected by the AIP and may likewise terminate or
curtail the benefits of the AIP both with regard to persons expecting to receive benefits hereunder
in the future and to persons already receiving benefits at the time of such action.



5. Miscellaneous.





5.1 Headings. Headings are given to the Sections and subsections of the AIP solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of the AIP or any provision thereof.




5.2 Applicability to Successors. The AIP shall be binding upon and inure to the benefit of
the Company and each Participant, the successors and assigns of the Company, and the
personal representatives and heirs of each Participant.




5.3 Employment Rights and Other Benefits Programs. The provisions of the AIP shall not give
any Participant any right to be retained in the employment of the Company. In the absence
of any specific agreement to the contrary, the AIP shall not affect any right of the
Company, or of any affiliate of the Company, to terminate, with or without cause, any
Participant’s employment at any time. The AIP shall not replace any contract of employment,
whether oral or written, between the Company and any Participant, but shall be considered a
supplement thereto. The AIP is in addition to, and not in lieu of, any other employee
benefit plan or program in which any Participant may be or become eligible to participate by
reason of employment with the Company. Receipt of benefits hereunder shall have such effect
on contributions to and benefits under such other plans or programs as the provisions of
each such other plan or program may specify.




5.4 No Trust Fund Created. The AIP shall not create or be construed to create a trust or
separate fund of any kind or fiduciary relationship between the Company or any affiliate and
a Participant or any other person. To the extent that any person acquires a right to
receive payments from the Company or any affiliate pursuant to the AIP, such right shall be
no greater than the right of any unsecured general creditor of the Company or of any
affiliate.



 









 





Exhibit 10.1





5.5 Governing Law. The place of administration of the AIP shall be in the State of New
York. The corporate law of the State of Maryland shall govern issues relating to the
validity and issuance of Units. Otherwise, the AIP shall be construed and administered in
accordance with the laws of the State of New York, without giving effect to principles
relating to conflict of laws.




5.6 Severability. If any provision of the AIP is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Company, materially altering the purpose or intent of
the AIP, such provision shall be stricken as to such jurisdiction, and the remainder of the
AIP shall remain in full force and effect.



Date Amended: November 3, 2005