Document:

exv4w6

 

EX - 4.6

Execution Copy

AMENDMENT NO. 1 TO

UNITS EXCHANGE RIGHTS AGREEMENT

     This Amendment No. 1 to Units Exchange Rights Agreement is made as of April 10, 2006 (this
“Amendment”) by and among Starwood Hotels & Resorts (formerly Starwood Lodging Trust), a
real estate investment trust organized under the laws of the State of Maryland (the
“Trust”), Starwood Hotels & Resorts Worldwide, Inc. (formerly Starwood Lodging
Corporation), a Maryland corporation (the “Corporation”), SLT Realty Limited Partnership, a
Delaware limited partnership (the “Realty Partnership”), and SLC Operating Limited
Partnership, a Delaware limited partnership (the “Operating Partnership”).

     WHEREAS, the Corporation, the Trust, the Realty Partnership, the Operating Partnership and
each of the limited partners of the Realty Partnership and the Operating Partnership listed on the
signature pages thereto (such limited partners, collectively, the “Starwood Partners”)
entered into that certain Units Exchange Rights Agreement (the “Agreement”) as of February
14, 1997 (unless otherwise indicated, capitalized terms used herein are used herein as defined in
the Agreement);

     WHEREAS, the Agreement provides for the rights of the Starwood Partners to tender Units (as
defined in the Limited Partnership Agreement of the Realty Partnership (the “Realty Partnership
Agreement”)) of the Realty Partnership (such Units issued by the Realty Partnership to the
Starwood Partners being hereinafter called the “Realty Units”) and Units (as defined in the
Limited Partnership Agreement of the Operating Partnership (as amended from time to time, the
“Operating Partnership Agreement”)) of the Operating Partnership (such Units issued by the
Operating Partnership to the Starwood Partners being hereinafter called the “Operating
Units”) in exchange for either Paired Shares (as defined therein), cash or a combination of
Paired Shares and cash, on the terms and conditions set forth therein;

     WHEREAS, the Corporation, the Trust and the Realty Partnership are parties to the Master
Agreement and Plan of Merger entered into as of November 14, 2005, as amended on March 24, 2006
(the “Master Agreement”), by and among Host Marriott Corporation, Host Marriott, L.P.
(“Host OP”), Horizon Supernova Merger Sub, L.L.C., Horizon SLT Merger Sub, L.P., the
Corporation, the Trust, Sheraton Holding Corporation and the Realty Partnership, pursuant to which
agreement Host OP would acquire all of the outstanding stock of the Trust (and, indirectly, the
interests in Realty Partnership) in a reverse subsidiary merger transaction, and the Trust and the
Realty Partnership would thereafter become wholly-owned direct or indirect subsidiaries of Host OP;

     WHEREAS, the Corporation and the Trust were parties to the Pairing Agreement dated June 25,
1980 between the Corporation and the Trust, as amended and restated pursuant to the Amended and
Restated Intercompany Agreement, dated as of January 6, 1999 (the “Intercompany
Agreement”), between the Corporation and the Trust, pursuant to which each Class B share of
beneficial interest, par value $.01 per share, of the Trust (“Class B Shares”), and each
share of common stock, par value $.01 per share, of the Corporation (“Corporation 

 

 

Shares”), were paired together as a unit such that Class B Shares are transferable
only with an equal number of Corporation Shares and vice versa;

     WHEREAS, on April 7, 2006, in connection with the transactions contemplated by the Master
Agreement, the Corporation and the Trust terminated the Intercompany Agreement, thereby de-pairing
the Class B Shares from the Corporation Shares; and

     WHEREAS, the parties hereto desire to amend the Agreement to reflect the transactions and
other matters described above and, pursuant to Sections 1(c) and 18 of the Agreement, the parties
hereto may amend the Agreement without the consent of the other parties to the Agreement;

     NOW, THEREFORE, in consideration of the covenants and conditions set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

     Section 1. Amendments.

     (a) Sections 1 through and including 9 of the Agreement are hereby amended by deleting all
such Sections in their entirety and adding in lieu thereof Sections 1 through and including 9 as
set forth on Schedule A hereto.

     (b) Section 10 of the Agreement is hereby amended by substituting the addresses for notices to
the Corporation or the Operating Partnership with the following:

“Starwood Hotels & Resort Worldwide, Inc.

1111 Westchester Avenue

White Plains, New York 10604

Attention: General Counsel

Telecopy No. (914) 640-8310

with a copy to:

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

Attention: Michael A. Gordon

Telecopy No. (312) 853-7036”

     (c) Section 11 of the Agreement is hereby amended by deleting such Section in its entirety and
adding in lieu thereof the following:

     “SECTION 11. Definitions. For purposes of this Agreement:

     “Business Day” means any day other than Saturday, Sunday and any day on which banks
are not open to do business in New York, New York.

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     “Corporation Share Closing Price” shall mean, with respect to a particular date, the
last reported sales price regular way on such date or, in case no such reported sale takes place on
such date, the average of the reported closing bid and asked prices regular way on such date, in
either case on the New York Stock Exchange, or if the Corporation Shares are not then listed or
admitted to trading on such Exchange, on the principal national securities exchange on which the
Corporation Shares are then listed or admitted to trading or, if not then listed or admitted to
trading on any national securities exchange, the closing sale price on such date of the Corporation
Shares or, in case no reported sale takes place on such date then, the average of the closing bid
and asked prices on such date, on NASDAQ or any comparable system. If the Corporation Shares are
not then quoted on NASDAQ or any comparable system, the Board of Directors of the Corporation shall
in good faith determine the Corporation Share Closing Price.

     “Disinterested Members” has the meaning set forth in the By-Laws of the
Corporation, as amended from time to time.

     “Ownership Limit” has the meaning set forth in the Restated Articles, as amended from
time to time.

     “Restated Articles” means the Restated Articles of Incorporation of the Corporation,
as amended from time to time after the date of this Agreement.”

     (d) Section 12 of the Agreement is hereby amended by deleting such Section in its entirety and
adding in lieu thereof the following: “SECTION 12. Determinations and Interpretation. All
interpretations of the terms of this Agreement shall be resolved on behalf of the Corporation by
its Disinterested Members.”

     (e) Section 14 of the Agreement is hereby amended by deleting the words “the Trust” and “the
Realty Partnership” in the second sentence of such Section.

     (f) Section 18 of the Agreement is hereby amended by deleting the words “each of the Trust
and” immediately prior to the words “the Corporation” in the second sentence of such Section.

     (g) Section 20 of the Agreement is hereby amended by deleting such Section in its entirety and
adding in lieu thereof the following: “SECTION 20. Reserved.”

     (h) Exhibit A to the Agreement is hereby amended by deleting such Exhibit in its
entirety and adding in lieu thereof a new Exhibit A as set forth on Schedule B
hereto.

     Section 2. No Other Amendment or Waiver. Except as expressly set forth in this
Amendment, all of the terms and provisions of the Agreement shall remain in full force and effect,
and the parties hereto make no other amendment, alteration or modification of the Agreement nor do
they, nor does any of them, by executing this Amendment, waive any provision of the Agreement or
any right that they or it may have thereunder.

     Section 3. Governing Law. Except to the extent that Maryland law is mandatorily
applicable to the rights and obligations of the stockholders of the Corporation, this Amendment,
and the application or interpretation thereof, shall be governed exclusively by its

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terms and by the internal laws of the State of New York, without regard to principles of
conflicts of laws as applied in the State of New York or any other jurisdiction which, if applied,
would result in the application of any laws other than the internal laws of the State of New York.

     Section 4. Execution in Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be considered an original counterpart, and shall become a binding
agreement when the Trust, the Corporation, the Realty Partnership, the Operating Partnership shall
have each executed a counterpart of this Amendment.

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     IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the parties hereto
or by their duly authorized officers, all as of the date first above written.

	 	 	 	 	 	 	 
	 	 	STARWOOD HOTELS & RESORTS	 	 
	 	 	a Maryland real estate investment trust	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jared Finkelstein
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jared Finkelstein	 	 
	 

	 	 	 	Title: Assistant Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	STARWOOD HOTELS & RESORTS WORLDWIDE, INC.	 	 
	 	 	a Maryland corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jeff S. Drew
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jeff S. Drew	 	 
	 

	 	 	 	Title: Senior Vice President & Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	SLT REALTY LIMITED PARTNERSHIP	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Starwood Hotels & Resorts,	 	 
	 

	 	 	 	its general partner	 	 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Jared Finkelstein
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Jared Finkelstein	 	 
	 

	 	 	 	 	 	Title: Assistant Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	SLC OPERATING LIMITED PARTNERSHIP	 	 
	 	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	By: Starwood Hotels & Resorts Worldwide, Inc.,
its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Jeff S. Drew
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Jeff S. Drew	 	 
	 

	 	 	 	 	 	Title: Senior Vice President & Treasurer	 	 

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SCHEDULE A

     SECTION 1. Right to Tender Operating Units. (a) Upon the terms and subject to the
conditions of this Agreement, each holder of Operating Units shall have the right to tender to the
Corporation outstanding Operating Units.

          (b) Notwithstanding any other provision of this Agreement, no Corporation Shares or cash shall
be issued or paid in respect of any tender of Operating Units (i) if, with respect to all Starwood
Partners other than Prudential Property Investment Separate Account II, the tender pursuant to
Section 1(a) is prior to the first anniversary of the date of this Agreement, (ii) prior to the
expiration or termination of the waiting period applicable to such exchange and issuance, if any,
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as it may be amended from time to
time, or (iii) prior to the receipt of all governmental and regulatory approvals which are required
to be obtained prior to such tender and issuance or payment.

          (c) The rights to exchange Operating Units pursuant to this Agreement constitute a continuous
offer and may not be withdrawn, amended or modified by the Corporation without the prior written
consent of each holder of outstanding Operating Units adversely affected by such withdrawal,
amendment or modification; provided that any withdrawal, amendment or modification that
does not adversely affect any holder of outstanding Operating Units may be effected without the
consent of such holder.

     SECTION 2. Acceptance of Tender; Election of Method of Payment for Tendered Operating
Units. (a) Upon the terms and subject to the conditions of this Agreement, the Corporation
shall accept Operating Units validly tendered in proper form and meeting all of the requirements of
this Agreement. In order for Operating Units to be validly tendered pursuant to this Agreement,
the registered holder thereof shall deliver to the Corporation, at the address provided pursuant to
Section 10, a completed and duly executed Letter of Transmittal in the form attached hereto as
Exhibit A (the “Letter of Transmittal”) and any other documents required by the
Letter of Transmittal. The Corporation shall make all determinations as to the validity and form
of any tender of Operating Units in accordance with the provisions of this Agreement and upon
rejection of a tender shall give the tendering holder written notice of such rejection, which shall
include the reasons therefor.

          (b) Unless otherwise determined by the Corporation, tenders of Operating Units pursuant to
this Agreement shall be irrevocable and shall not be subject to withdrawal or modification;
provided that if the Corporation makes the Share Election (as defined below) with respect
to a tender, then within five days after such Election the tendering holder may elect to revoke
such tender so long as (i) no public disclosure of such tender has been made prior to such
revocation and (ii) such tendering holder reimburses the Corporation for all reasonable costs and
expenses incurred in connection with such tender.

          (c) Within fifteen days after the valid tender pursuant to this Agreement of Operating Units,
the Corporation shall make an election to pay for such Operating Units by delivering either (i)
Corporation Shares (the “Share Election”), (ii) cash (the “Cash Election”) or (iii)
a combination of Corporation Shares and cash (the “Combined Election”).

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     SECTION 3. Share Election. (a) If with respect to any tender of Operating Units
pursuant to this Agreement the Corporation makes the Share Election, then, except as provided in
Section 2(b), within fifteen days after the expiration of the five-day period referred to in
Section 2(b), the Corporation shall deliver to the tendering holder one Corporation Share for each
Operating Unit validly tendered pursuant to the provisions of this Agreement.

          (b) No fractional Corporation Shares or scrip representing fractional Corporation Shares shall
be issued upon exchange of Operating Units pursuant to this Agreement. If more than one Letter of
Transmittal shall be delivered at one time by the same holder, the number of full Corporation
Shares which shall be issuable upon exchange of the Operating Units tendered thereby shall be
computed on the basis of the aggregate number of Operating Units so tendered. Instead of any
fractional Corporation Shares which would otherwise be issuable upon exchange of any Operating
Units, the Corporation shall pay a cash adjustment in respect of such fraction in an amount equal
to the same fraction of the Corporation Share Closing Price on the last Business Day preceding the
date of exchange.

          (c) If a holder exchanges Operating Units pursuant to this Agreement, the Corporation shall
pay any documentary, stamp or similar issue or transfer tax due on any issue of Corporation Shares
upon such exchange. Such holder, however, shall (i) pay to the Corporation the amount of any
additional documentary, stamp or similar issue or transfer tax which is due (or shall establish to
the satisfaction of the Corporation the payment thereof) as a result of Corporation Shares being
issued in a name other than the name of such holder and (ii) be responsible for all income or other
taxes as a result of such exchange.

     SECTION 4. Cash Election. If with respect to any tender of Operating Units pursuant
to this Agreement the Corporation makes or is deemed to have made the Cash Election, then within
twenty days after such tender the Corporation shall pay to the tendering holder an aggregate amount
of cash (the “Aggregate Cash Payment”) equal to the product of (i) the number of
Corporation Shares which would have been delivered to such holder if the Corporation had made the
Share Election with respect to such tender and (ii) the average Corporation Share Closing Price for
the ten trading day period ending one day prior to the date of such tender.

     SECTION 5. Combined Election. (a) If with respect to any tender of Operating Units
pursuant to this Agreement the Corporation shall make the Combined Election, then, except as
provided in Section 2(b), within fifteen days after the expiration of the five-day period referred
to in Section 2(b), the Corporation shall (i) notify the tendering holder of the number of such
tendered Units which will be exchanged for cash (the “Cash Units”) and the number of such
tendered Operating Units which will be exchanged for Corporation Shares (the “Corporation Share
Units”), (ii) pay to the tendering holder, in respect of each Cash Unit validly tendered
pursuant to the provisions of this Agreement, an amount of cash equal to the average Corporation
Share Closing Price for the ten trading day period ending one day prior to the date of such tender
and (iii) deliver to the tendering holder one Corporation Share for each Corporation Share Unit
validly tendered pursuant to the provisions of this Agreement.

          (b) The provisions of Sections 3(b) and 3(c) of this Agreement shall apply to the issuance of
Corporation Shares pursuant to Section 5(a).

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     SECTION 6. Registration Rights. If at any time after six months from the date of this
Agreement, (a) a Starwood Partner validly tenders Operating Units pursuant to the provisions of
this Agreement, (b) the Corporation make the Share Election or the Combined Election with respect
to such tender, or (c) as a result of the Ownership Limit such Starwood Partner cannot receive the
full number of Corporation Shares otherwise issuable to such Starwood Partner pursuant to such
tender and such Election (without giving effect to the Ownership Limit) (the event described in
clauses (a), (b) and (c) being referred to as a “Corporation Share Tender Reduction”; the
number of such Corporation Shares which such Starwood Partner cannot receive pursuant to such
tender as a result of the Ownership Limit being referred to as the “Unissued Corporation
Shares”; and the Operating Units tendered in respect of such Unissued Corporation Shares being
referred to as the “Delayed Payment Units”), then subject to the other terms and conditions
of this Agreement, such Starwood Partner shall be entitled to receive the number of Corporation
Shares which it can receive pursuant to such tender, such Election and the Ownership Limit.

     SECTION 7. Representations of Tendering Holder. Each tender of Operating Units shall
constitute a representation and warranty by the tendering holder of each of the representations and
warranties set forth in the form of Letter of Transmittal. Without limiting the generality of the
foregoing, unless, at the time of a tender for exchange of Operating Units pursuant to this
Agreement, a registration statement relating to any Corporation Shares to be delivered upon such
tender is effective under the Securities Act of 1933, as amended (the “Securities Act”),
such tender shall constitute a representation and warranty by the tendering holder to the
Corporation that such tendering holder (i) is an “accredited investor” within the meaning of Rule
501 under the Securities Act; (ii) has sufficient knowledge and experience in financial and
business matters and in investing in entities similar to the Operating Partnership and the
Corporation so as to be able to evaluate the risks and merits of its investment in the Operating
Partnership and the Corporation, and it is able financially to bear the risks thereof; (iii) has
had an opportunity to discuss the business, management and financial affairs of the Operating
Partnership and the Corporation with the management of the Operating Partnership and the
Corporation; and (iv) understands that the Corporation Shares have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 505 or 506 promulgated
under the Securities Act and such Corporation Shares must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act and applicable state securities laws or
is exempt from such registration.

     SECTION 8. Status of Tendering Holder. Until the holder of Operating Units tendered
pursuant to this Agreement becomes a holder of record of the Corporation Shares issued in exchange
therefor (in the case of a Share Election or a Combined Election) or until such holder has received
cash in exchange therefor (in the case of a Cash Election or a Combined Election), such holder
shall continue to hold and own such Operating Units for all purposes of the Operating Partnership
Agreement. In the case of a Share Election or a Combined Election, no such holder shall have any
rights as a stockholder of the Corporation in respect of such Corporation Shares until such holder
becomes a holder of record of such Corporation Shares.

     SECTION 9. Reservation of Shares; Closing of Transfer Books. The Corporation shall
reserve and shall at all times have reserved out of its authorized but unissued

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Corporation Shares, solely for the purpose of effecting the exchange of Operating Units
pursuant to this Agreement, enough Corporation Shares to permit the exchange of the then
outstanding Operating Units. All Corporation Shares which may be issued upon exchange of Operating
Units shall be validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof other than income taxes resulting from such exchange.

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SCHEDULE B

EXHIBIT A TO

UNITS EXCHANGE RIGHTS AGREEMENT

LETTER OF TRANSMITTAL

To Tender Operating Units

Pursuant to the Units Exchange Rights Agreement

Dated as of February 14, 1997, as amended

	 	 	 
	TO:

	Starwood Hotels & Resorts Worldwide, Inc.
	 

	1111 Westchester Avenue
	 

	White Plains, New York 10604

Description of Operating Units

 

	 	 	 
	Name(s) and Address(es)

	 	Units Tendered (Attach
	of Registered Owners

	 	additional list if necessary)
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Total

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NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

     The undersigned hereby tenders to Starwood Hotels & Resorts Worldwide, Inc. (the
“Corporation”) the above-described Operating Units (as defined in the Units Exchange Rights
Agreement dated as of February 14, 1997, as amended (the “Units Exchange Rights
Agreement”)) in accordance with the terms and conditions of the Units Exchange Rights Agreement
and this Letter of Transmittal (which together constitute the “Offer”), receipt of which is
hereby acknowledged. All terms used herein but not defined herein are used as defined in the Units
Exchange Rights Agreement.

     Subject to, and effective upon the issuance of Corporation Shares and/or the payment of cash,
as the case may be, for the Operating Units tendered hereby, the undersigned hereby assigns and
transfers to the Corporation all right, title and interest in and to all the Operating Units that
are being tendered hereby and irrevocably constitutes and appoints the Corporation (the
“Agent”), with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (i) transfer such Operating Units on the books of
the Operating Partnership and (ii) receive all rights, privileges and benefits, and any and all
obligations and liabilities appertaining thereto and otherwise exercise all rights of beneficial
ownership of such Operating Units, all in accordance with the terms of the Offer.

     The undersigned hereby represents and warrants to the Corporation (i) that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered Operating Units and that
upon payment therefor, the Corporation will acquire unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse
claim, and (ii) that the tender complies with each and every provision of Section 1 of the Units
Exchange Rights Agreement. The undersigned will, upon request, execute any additional documents
deemed by the Corporation to be reasonably necessary or desirable to complete the sale, assignment
and transfer of the tendered Operating Units.

     Unless a registration statement relating to any Corporation Shares to be delivered to the
undersigned is effective under the Securities Act of 1933, as amended (the “Securities
Act”), the undersigned hereby represents and warrants to the Corporation that the undersigned
(A) is an “accredited investor” within the meaning of Rule 501 under the Securities Act, or (B) has
sufficient knowledge and experience in financial and business matters and in investing in entities
similar to the Operating Partnership and the Corporation so as to be able to evaluate the risks and
merits of its investment in the Operating Partnership and the Corporation and it is able
financially to bear the risks thereof, and in either case, (i) has had an opportunity to discuss
the business, management and financial affairs of the Operating Partnership and the Corporation
with the management of the Operating Partnership and the Corporation, and (ii) understands that any
such Corporation Shares have not been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements of the Securities Act pursuant
to Section 4(2) thereof or Rule 505 or 506 promulgated under the Securities Act, and any such
Corporation Shares must be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act and applicable state securities laws or is exempt from such

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registration. If not sold pursuant to an effective registration statement, any such
Corporation Shares will bear an appropriate legend indicating that such Corporation Shares have not
been registered under the Securities Act and resale of such Corporation Shares is restricted under
applicable securities laws.

     All authority conferred or agreed to be conferred in this Letter of Transmittal shall not be
affected by, and shall survive, the death or incapacity of the undersigned, and any obligation of
the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned.

     The undersigned understands that, except as provided in Section 2(b) of the Units Exchange
Rights Agreement, a tender of Operating Units pursuant to the Units Exchange Rights Agreement is
irrevocable and constitutes a binding agreement between the undersigned and the Corporation upon
the terms and subject to the conditions of the Units Exchange Rights Agreement.

     Unless otherwise indicated under “Special Delivery Instructions”, please mail any Corporation
Shares issuable upon exchange of the Operating Units tendered hereby (or, if the Cash Election or
the Combined Election is made, the cash payment payable pursuant thereto) to the address(es) of the
registered holder(s) appearing under “Description of Units.” In the event that the Special Delivery
Instructions are completed, please issue the Corporation Shares (or, if the Cash Election or the
Combined Election is made, the cash payment payable pursuant thereto) in the name of the registered
holder(s) and transmit the same to the person or persons so indicated.

     The Corporation and the undersigned agree that they will cooperate with each other and will
make, execute, acknowledge, deliver, record and file, or cause to be made, executed, acknowledged,
delivered, recorded and filed, at such times and places as the other may reasonably deem necessary,
all other and further documents and instruments, and will take all other and further actions, as
the other may reasonably request from time to time in order to effectuate the purposes and
provisions of the tender made pursuant to this Letter of Transmittal.

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SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 4 and 5)

          To be completed ONLY if Corporation Shares or the cash payment are to be sent to someone other
than the undersigned or to the undersigned at an address other than that above.

Mail certificate(s) for Corporation Shares or cash payment to:

	 	 	 
	Name

	 	 
	 

	 	 
	 

	 	         (please print)

	 	 	 
	Address

	 	 
	 

	 	 
	 
	 	 
	 
	 

	 	(include Zip Code)
	 
	 

	 	
	 
	 

	 	(Tax Identification or Social Security Number)

SIGN HERE

Complete Substitute Form W-9 included

 

 

(Signature(s) of holder of Operating Units)

(Must be signed by registered holder(s) as name(s) appear(s) on books and records of the
Operating Partnership. If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative
capacity, please set forth full title and see Instruction 4.)

	 	 	 
	Dated

	 	 
	 

	 	 

	 	 	 
	Name(s)

	 	 
	 

	 	 
	 

	 	 
 
 
 
 
 
 
 
 
 
 
(please print)

	 	 	 
	Capacity (Full Title)
	 	 
	 

	 	 

	 	 	 
	Address

	 	 
	 

	 	 
	 

	 	 
 
 
 
 
 
 
 
 
 
 
 
(include Zip Code)

	 	 	 
	Area Code and Tel. No.

	 	 
	 

	 	 

	 	 	 
	Tax Identification or
 Social Security No.

	 	 
	 

	 	 

(Complete Substitute Form W-9)

Guarantee of Signature(s)

(See Instruction 1)

	 	 	 
	Authorized Signature

	 	 
	 

	 	 

	 	 	 
	Name of Firm

	 	 
	 

	 	 

	 	 	 
	Dated

	 	 
	 

	 	 

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INSTRUCTIONS

Forming Part of the Terms and Conditions of the

Units Exchange Rights Agreement

     1. Guarantee of Signature. No signature guarantee on this Letter of Transmittal is
required unless the registered holder of the Operating Units has completed the box entitled
“Special Delivery Instructions”. In such case all signatures on this Letter of Transmittal must be
guaranteed by a member firm of any registered national securities exchange in the United States or
of the National Association of Securities Dealers, Inc. or by a commercial bank or trust company
(not a savings bank or a savings and loan association) having an office, branch or agency in the
United States.

     2. Delivery of Letter of Transmittal. This Letter of Transmittal is to be completed
by the holder of Operating Units. A properly completed and duly executed Letter of Transmittal and
any other documents required by this Letter of Transmittal must be received by the Agent.

     No alternative, conditional or contingent tenders will be accepted, except as permitted
pursuant to the Units Exchange Rights Agreement.

     3. Inadequate Space. If the space provided herein is inadequate, the Operating Units
tendered and/or other information required should be listed on a separate schedule attached hereto.

     4. Signatures on Letter Of Transmittal. The signature must correspond with the name
as shown on the books and records of the Operating Partnership without any change whatsoever.

     If any of the Operating Units tendered hereby are owned of record by two or more joint owners,
all such owners must sign the Letter of Transmittal.

     If any tendered Operating Units are registered in different names, it will be necessary to
complete, sign and submit as many separate Letters of Transmittal as there are different
registrations.

     If this Letter of Transmittal is signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative
capacity, each person should so indicate when signing, and proper evidence satisfactory to the
Agent of their authority so to act must be submitted.

     5. Special Delivery Instructions. If a certificate for Corporation Shares or the cash
payment is to be sent to someone other than the signer of this Letter of Transmittal or to an
address other than that shown above, the appropriate boxes on this Letter of Transmittal should be
completed.

     6. Waiver of Conditions. The Corporation reserves the right to waive in its sole
discretion any of the specified conditions of the Offer in the case of the Operating Units

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tendered; provided that any such waiver shall not adversely affect any holder of
outstanding Operating Units without the consent of such holder.

     7. Back-Up Withholding. Under the Federal income tax law, a person surrendering
Operating Units must provide the Agent with his correct taxpayer identification number
(“TIN”) on Substitute Form W-9 below unless an exemption applies. If the correct TIN is
not provided, a $50 penalty may be imposed by the Internal Revenue Service and payments made in
exchange for the surrendered Operating Units may be subject to back-up withholding of that rate
provided by the Federal income tax law (such rate being at the date of the last amendment of the
Units Exchange Rights Agreement, 28%).

     The TIN that must be provided is that of the registered holder of the Operating Units. The
TIN for an individual is his social security number.

     8. Requests for Assistance or Additional Copies. Questions and requests for
assistance or additional copies of the Units Exchange Rights Agreement and the Letter of
Transmittal may be directed to the Agent at the address set forth above.

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IMPORTANT TAX INFORMATION

     Under Federal income tax laws, a holder whose tendered Operating Units are accepted for
payment is required by law to provide the Agent (as payer) with his correct taxpayer identification
number on Substitute Form W-9 below. If such holder is an individual, the taxpayer identification
number is his social security number. If the Agent is not provided with the correct taxpayer
identification number, the holder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such holder with respect to Operating Units
purchased pursuant to the Offer may be subject to back-up withholding.

     If back-up withholding applies, the Agent is required to withhold, at that rate provided by
the Federal income tax law (such rate being at the date of the last amendment of the Units Exchange
Rights Agreement 28%), of any such payments made to the holder of Operating Units. Corporation
Shares otherwise deliverable hereunder may, at the expense (and with all risk of loss for the
account) of the undersigned, be sold to pay such amounts. Back-up withholding is not an additional
tax. Rather, the tax liability of persons subject to back-up withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.

PURPOSE OF SUBSTITUTE FORM W-9

     To prevent back-up withholding on payments that are made to a holder of Operating Units
purchased pursuant to the Offer, the holder is required to notify the Agent of his correct taxpayer
identification number by completing the form below certifying that the taxpayer identification
number provided on Substitute Form W-9 is correct.

WHAT NUMBER TO GIVE THE AGENT

     The holder is required to give the Agent the social security number or employer identification
number of the record owner of the Operating Units.

B-7

 

PAYER’S NAME: Starwood Hotels & Resort Worldwide, Inc.

	 	 	 	 	 
	Substitute Form W-9

	 	Part 1 — Please
provide your TIN in
the box at right and
certify by signing and
dating below
	 	Social Security

Number/Employer

Identification Number
	 
	 	 	 	 
	Department of the
Treasury/Internal Revenue
Service

	 	Certification — Under
the penalties of
perjury, (i) I certify
that the information
provided on this form
is true, correct and
complete and (ii) I am
not subject to backup
withholding because:
(a) I am exempt from
backup withholding, or
(b) I have not been
notified by the
Internal Revenue
Service (IRS) that I
am subject to backup
withholding as a
result of a failure to
report all interest or
dividends, or (c) the
IRS has notified me
that I am no longer
 subject to backup
withholding.	 	 
	 
	 	 	 	 
	 

	 	Signature
	 	Date

	 	 	 
	NOTE:

	 	FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACK-UP
WITHHOLDING, AT THAT RATE PROVIDED BY THE FEDERAL INCOME TAX LAW
(SUCH RATE BEING AT THE DATE OF THE LAST AMENDMENT OF THE UNITS
EXCHANGE RIGHTS AGREEMENT 28%), OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFER.

B-8<PAGE>

                                                                    EXHIBIT 10.1

                         PERFORMANCE FOOD GROUP COMPANY
                      NON-QUALIFIED STOCK OPTION AGREEMENT

      THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into on _________ (the "Grant Date"), by and between Performance Food
Group Company, a Tennessee corporation (together with its Subsidiaries and
Affiliates, the "Company"), and ________________ (the "Optionee"). Capitalized
terms not otherwise defined herein shall have the meaning ascribed to such terms
in the Performance Food Group Company 2003 Equity Incentive Plan (the "Plan").

      WHEREAS, the Company has adopted the Plan, which permits the issuance of
stock options for the purchase of shares of the common stock, par value $.01 per
share, of the Company (the "Shares"); and

      WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase Shares as hereinafter provided in accordance with the provisions of the
Plan;

      NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, agree as follows:

      1. Grant of Option.

            (a) The Company grants as of the date of this Agreement the right
and option (the "Option") to purchase _________ Shares, in whole or in part (the
"Option Stock"), at an exercise price of $_____ per Share, on the terms and
conditions set forth in this Agreement and subject to all provisions of the
Plan. The Optionee, holder or beneficiary of the Option shall not have any of
the rights of a shareholder with respect to the Option Stock until such person
has become a holder of such Shares by the due exercise of the Option and payment
of the Option Payment (as defined in Section 3 below) in accordance with this
Agreement.

            (b) The Option shall be a non-qualified stock option. In order to
provide the Company with the opportunity to claim the benefit of any income tax
deduction which may be available to it upon the exercise of the Option, and in
order to comply with all applicable federal or state tax laws or regulations,
the Company may take such action as it deems appropriate to insure that, if
necessary, all applicable federal, state or other taxes are withheld or
collected from the Optionee.

      2. Exercise of Option. The Optionee may exercise the Option beginning on
the fourth anniversary of the date of this Agreement provided that Optionee has
been an employee of the Company at all times from the Grant Date to such fourth
anniversary (such four-year period being referred to as the "Vesting Period").
Notwithstanding the above, each outstanding Option shall vest and become
exercisable upon the occurrence of a Change in Control or Potential Change in
Control and shall be governed by the provisions of Section 13 of the Plan. In
the event that the Optionee dies, is Disabled or elects Normal Retirement (as
defined below) before the expiration of the Vesting Period, the Option shall
vest as of the date of such death, disability

<PAGE>

or Normal Retirement, as the case may be, on a pro rata basis with respect to
the amount of the Vesting Period that has elapsed, rounded to the nearest whole
share. If Optionee elects Early Retirement (as defined below) prior to the
expiration of the Vesting Period, this Option shall vest as though Optionee had
elected Normal Retirement, provided that the Optionee's Early Retirement is with
the consent of the Committee. "Early Retirement" means retirement, for purposes
of the Plan with the express consent of the Company at or before the time of
such retirement, from active employment with the Company prior to age 65, in
accordance with any applicable early retirement policy of the Company then in
effect. "Normal Retirement" means retirement from active employment with the
Company on or after age 65. For purposes of this Agreement, "Disabled" means
that the Optionee is permanently unable to perform the essential duties of the
Optionee's occupation.

      3. Manner of Exercise. The Option may be exercised in whole or in part at
any time within the period permitted hereunder for the exercise of the Option,
with respect to whole Shares only, by serving written notice of intent to
exercise the Option delivered to the Company at its principal office (or to the
Company's designated agent), stating the number of Shares to be purchased, the
person or persons in whose name the Shares are to be registered and each such
person's address and social security number. Such notice shall not be effective
unless accompanied by payment in full of the Option Price for the number of
Shares with respect to which the Option is then being exercised (the "Option
Payment") and cash equal to the required withholding taxes as set forth by
Internal Revenue Service and applicable State tax guidelines for the employer's
minimum statutory withholding. The Option Payment shall be made in cash or cash
equivalents or in whole Shares that have been held by the Optionee for at least
six months prior to the date of exercise valued at the Shares' Fair Market Value
on the date of exercise (or next succeeding trading date if the date of exercise
is not a trading date) or the actual sales price of such Shares, together with
any applicable withholding taxes, or by a combination of such cash (or cash
equivalents) and Shares. The Optionee shall not be entitled to tender Shares
pursuant to successive, substantially simultaneous exercises of the Option or
any other stock option of the Company. Subject to applicable securities laws,
the Optionee may also exercise the Option by delivering a notice of exercise of
the Option and by simultaneously selling the Shares of Option Stock thereby
acquired pursuant to a brokerage or similar agreement approved in advance by
proper officers of the Company, using the proceeds of such sale as payment of
the Option Payment, together with any applicable withholding taxes. For purposes
of this Agreement, "Fair Market Value" means the closing sales price of the
Shares on the Nasdaq Stock Market's National Market System or the actual sales
price of such Shares.

      4. Termination of Option. The Option will expire ten years from the date
of grant of the Option (the "Term") with respect to any then unexercised portion
thereof, unless terminated earlier as set forth below:

            (a) Termination by Death. If the Optionee's employment by the
Company terminates by reason of death, or if the Optionee dies within three
months after termination of such employment for any reason other than Cause,
this Option may thereafter be exercised by the legal representative of the
estate or by the legatee of the Optionee under the will of the Optionee, for a
period of one year from the date of death or until the expiration of the Term of
the Option, whichever period is the shorter.

                                      -2-
<PAGE>

            (b) Termination by Reason of Disability. If the Optionee's
employment by the Company terminates by reason of Disability, this Option may
thereafter be exercised by the Optionee or personal representative or guardian
of the Optionee, as applicable, for a period of three years from the date of
such termination of employment or until the expiration of the Term of the
Option, whichever period is the shorter.

            (c) Termination by Retirement. If Optionee's employment by the
Company terminates by reason of Early Retirement or Normal Retirement, this
Option may thereafter be exercised by the Optionee until the expiration of the
Term of the Option.

            (d) Termination for Cause or Voluntary Termination. If the
Optionee's employment by the Company is voluntarily terminated or terminated for
Cause, this Option shall terminate immediately and become void and of no effect.

            (e) Other Termination. If the Optionee's employment by the Company
is involuntarily terminated for any reason other than for Cause, death,
Disability or Normal Retirement or Early Retirement, this Option may be
exercised, to the extent the Option was exercisable at the time of such
termination, by the Optionee for a period of three months from the date of such
termination of employment or the expiration of the Term of the Option, whichever
period is the shorter.

      5. No Right to Continued Employment. The grant of the Option shall not be
construed as giving Optionee the right to be retained in the employ of the
Company, and the Company may at any time dismiss Optionee from employment, free
from any liability or any claim under the Plan.

      6. Adjustment to Option Stock. The Committee may make adjustments in the
terms and conditions of, and the criteria included in, this Option in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.2 of the Plan) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.

      7. Amendments to Option. Subject to the restrictions contained in Sections
6.2 and 14 of the Plan, the Committee may waive any conditions or rights under,
amend any terms of, or alter, suspend, discontinue, cancel or terminate, the
Option, prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination
that would adversely affect the rights of the Optionee or any holder or
beneficiary of the Option shall not to that extent be effective without the
consent of the Optionee, holder or beneficiary affected.

      8. Limited Transferability. During the Optionee's lifetime this Option can
be exercised only by the Optionee, except as otherwise provided in Section 4(a)
above or in this Section 8. This Option may not be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by Optionee other than (i)
to a Permitted Transferee or (ii) by will or the laws of descent and
distribution. Any attempt to otherwise transfer this Option shall be void.

                                      -3-
<PAGE>

No transfer of this Option by the Optionee by will or by laws of descent and
distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and an authenticated copy of the
will and/or such other evidence as the Committee may deem necessary or
appropriate to establish the validity of the transfer. Any transfer of this
Option by the Optionee to a Permitted Transferee must be for no consideration
and, after the transfer, the Permitted Transferee shall have the sole
responsibility for determining whether and when to exercise the Option. A
Permitted Transferee may not transfer any such Option other than by will or the
laws of descent and distribution. For purposes of this Agreement, "Permitted
Transferee" means the Optionee's Immediate Family, a Permitted Trust or a
partnership of which the only partners are members of the Optionee's Immediate
Family. For purposes of this Agreement, "Immediate Family" means the Optionee's
children and grandchildren, including adopted children and grandchildren,
stepchildren, parents, stepparents, grandparents, spouse, siblings (including
half brothers and sisters), father-in-law, mother-in-law, daughters-in-law and
sons-in-law. For purposes of this Agreement, a "Permitted Trust" means a trust
solely for the benefit of the Optionee or Optionee's Immediate Family.

      9. Reservation of Shares. At all times during the term of this Option, the
Company shall use its best efforts to reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of this Agreement.

      10. Plan Governs. The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions thereof. The
terms of this Agreement are governed by the terms of the Plan, and in the case
of any inconsistency between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall govern.

      11. Severability. If any provision of this Agreement is, or becomes, or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
Person or the Award, or would disqualify the Plan or Award under any laws deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award, and the remainder of the Plan and Award shall
remain in full force and effect.

      12. Notices. All notices required to be given under this Option shall be
deemed to be received if delivered or mailed as provided for herein to the
parties at the following addresses, or to such other address as either party may
provide in writing from time to time.

   To the Company:                    Performance Food Group Company
                                      12500 West Creek Parkway
                                      Richmond, Virginia 23238
                                      Attn: Chief Financial Officer

   To the Optionee:
                                      ____________________________

                                      ____________________________

                                      ____________________________

                                      -4-
<PAGE>

      13. Governing Law. The validity, construction and effect of this
Agreement shall be determined in accordance with the laws of the State of
Tennessee without giving effect to conflicts of laws principles.

      14. Resolution of Disputes. Any dispute or disagreement which may
arise under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined by the
Committee. Any determination made hereunder shall be final, binding and
conclusive on the Optionee and the Company for all purposes.

      15. Successors in Interest. This Agreement shall inure to the
benefit of and be binding upon any successor to the Company. This Agreement
shall inure to the benefit of the Optionee's legal representative and assignees.
All obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be binding upon the Optionee's heirs, executors,
administrators, successors and assignees.

                  (remainder of page left blank intentionally)

                                      -5-
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Non-Qualified Stock
Option Agreement to be duly executed effective as of the day and year first
above written.

                                       PERFORMANCE FOOD GROUP COMPANY

                                       By: __________________________________

                                       Optionee:

                                       ______________________________________
                                       Please Print

                                       Optionee:

                                       ______________________________________
                                       Signature

                                      -6-

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