<PAGE> 1
As filed with the Securities and Exchange Commission on April 22, 1996
Registration Nos. _____ and _____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
<TABLE>
<S> <C>
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
(Exact name of registrant as specified (Exact name of registrant as specified
in its governing instruments) in its governing instruments)
MARYLAND MARYLAND
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
11835 WEST OLYMPIC BLVD., SUITE 695 11835 WEST OLYMPIC BLVD., SUITE 675
LOS ANGELES, CALIFORNIA 90064 LOS ANGELES, CALIFORNIA 90064
(310) 575-3900 (310) 575-3900
(Address of principal executive offices) (Address of principal executive offices)
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
1995 SHARE OPTION PLAN 1995 SHARE OPTION PLAN
(Full title of the plan) (Full title of the Plan)
JEFFREY C. LAPIN KEVIN E. MALLORY
PRESIDENT AND CHIEF OPERATING OFFICER EXECUTIVE VICE PRESIDENT
11835 WEST OLYMPIC BLVD, SUITE 695 11835 WEST OLYMPIC BLVD., SUITE 675
LOS ANGELES, CALIFORNIA 90064 LOS ANGELES, CALIFORNIA 90064
(310) 575-3900 (310) 575-3900
(Name, address and telephone number, (Name, address and telephone number,
including code, of agent for service) including area code, of agent for service)
</TABLE>
Copy to:
SHERWIN L. SAMUELS, ESQ.
SIDLEY & AUSTIN
555 WEST FIFTH STREET
LOS ANGELES, CALIFORNIA 90013
(213) 896-6000
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Proposed Proposed
securities to Amount to be maximum offering maximum aggregate Amount of
be registered registered price per share(1) offering price(1) registration fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of beneficial 1,573,000 paired $32.00 $50,336,000 $17,358
interest, $0.01 par shares
value, of Starwood
Lodging Trust, Paired
with Shares of common
stock, $0.01 par
value, of Starwood
Lodging Corporation
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
and, pursuant to Rules 457(h)(1) and 457(c) under the Securities Act
of 1933, based upon the exercise price for outstanding stock options
and the average of the high and low sale prices of the paired shares
on the New York Stock Exchange on April 19, 1996.
===============================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance with Rule
428 under the Securities Act of 1933, as amended (the "Securities Act"), and
the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Securities
and Exchange Commission (the "Commission") by Starwood Lodging Trust (the
"Trust") and Starwood Lodging Corporation (the "Corporation" and, together with
the Trust, the "Company") are incorporated herein by reference and shall be
deemed to be a part hereof:
(a) The description of the Company's Paired Shares
contained in the Registration Statement on Form 8-A filed by the Company with
the Commission on October 3, 1986, including any amendments or reports filed
for the purpose of updating such description.
(b) The Company's Annual Report on Form 10-K for the year
ended December 31, 1995.
(c) The Company's Current Reports on Form 8-K dated January
18, 1996 (as amended by Form 8-k/A filed on March 19, 1996) and February 5,
1996 (as amended by Form 8-k/A filed on February 12, 1996).
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, after
the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, are
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from the respective dates of filing of such documents (such
documents, and the documents
<PAGE> 3
enumerated above, being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Certain provisions of the MGCL provide that the Company may,
and in some circumstances must, indemnify the trustees, directors and officers
of the Company against liabilities and expenses incurred by such person by
reason of the fact that such person was serving in such capacity, subject to
certain limitations and conditions set forth in the statute. The Corporation's
Articles of Incorporation and the Trust's Declaration of Trust provide that the
Corporation and Trust shall indemnify its directors, trustees and officers to
the extent permitted by the MGCL.
The Company has entered into indemnification agreements with
its directors, trustees and executive officers providing for the maintenance of
directors, trustees and officers liability insurance, subject to certain
conditions, and the indemnification of and advance of expenses to such
directors, trustees and executive officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
-2-
<PAGE> 4
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description of Exhibit
- -------- ----------------------
<S> <C>
4.1 Amended and Restated Declaration of Trust of the Trust dated June 6, 1988, as amended (incorporated by
reference to Exhibit 3A to the Trust's and the Corporation's Joint Current Report on Form 8-K dated January
31, 1995 (the "January 1995 Form 8-K").
4.2 Amendment and Restatement of Articles of Incorporation of the Corporation, as amended (incorporated by
reference to Exhibit 3B to the January 31 Form 8-K).
4.3 Trustees' Regulations of the Trust, as amended (incorporated by reference to Exhibit 3.3 to the Trust's and
the Corporation's Joint Annual Report on Form 10-K for the year ended December 31, 1994 (the "1994 Form
10-K").
4.4 Bylaws of Starwood Lodging Corporation (incorporated by reference to Exhibit 3.4 to the 1994 10-K).
*4.5 Starwood Lodging Trust Share Option Plan.
*4.6 Starwood Lodging Corporation Share Option Plan.
*5 Opinion of Counsel.
*23.1 Consent of Counsel (included in Exhibit 5).
*23.2 Consent of Accountants.
*24 Powers of Attorney (contained in the signature pages hereto).
</TABLE>
_________________________
* Filed herewith.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
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<PAGE> 5
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if this Registration Statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the Common Stock being registered which remains unsold at the
termination of the offering.
-4-
<PAGE> 6
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
-5-
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California, on this 18th
day of April, 1996.
STARWOOD LODGING TRUST
By: /s/ Jeffrey C. Lapin
------------------------------
Jeffrey C. Lapin
President and Chief
Operating Officer
-6-
<PAGE> 8
POWER OF ATTORNEY
Each person whose signature to the Registration Statement
appears below hereby appoints Jeffrey C. Lapin and Ronald C. Brown, and each of
them, as his attorneys-in-fact, with full power and substitution and
resubstitution, to execute in the name and on behalf of such person,
individually and in the capacity stated below, and to file all amendments to
this Registration Statement, which amendments may make such changes in and
additions to this Registration Statement as such attorneys-in-fact may deem
necessary or appropriate.
<TABLE>
<CAPTION>
Name Capacity
- ---- --------
<S> <C> <C>
/s/ Barry S. Sternlicht Chairman, Chief April 18, 1996
- ----------------------- Executive Officer
Barry S. Sternlicht and Trustee
(Principal Execu-
tive Officer)
/s/ Jeffrey C. Lapin President, Chief April 18, 1996
- ----------------------- Operating Officer
Jeffrey C. Lapin and Trustee
/s/ Ronald C. Brown Vice President April 18, 1996
- ----------------------- (Principal
Ronald C. Brown Financial and
Accounting
Officer)
/s/ Bruce W. Duncan Trustee April 18, 1996
- -----------------------
Bruce W. Duncan
/s/ Madison F. Grose Trustee April 18, 1996
- -----------------------
Madison F. Grose
/s/ Stephen R. Quazzo Trustee April 18, 1996
- -----------------------
Stephen R. Quazzo
/s/ William E. Simms Trustee April 18, 1996
- -----------------------
William E. Simms
/s/ Daniel H. Stern Trustee April 18, 1996
- -----------------------
Daniel H. Stern
</TABLE>
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California, on this 18th
day of April, 1996.
STARWOOD LODGING CORPORATION
By: /s/ Kevin E. Mallory
--------------------------
Kevin E. Mallory
Executive Vice President
<PAGE> 10
POWER OF ATTORNEY
Each person whose signature to the Registration Statement
appears below hereby appoints Kevin E. Mallory and Earle F. Jones, and each of
them , as his attorneys-in-fact, with full power and substitution and
resubstitution, to execute in the name and on behalf of such person,
individually and in the capacity stated below, and to file all amendments to
this Registration Statement, which amendments may make such changes in and
additions to this Registration Statement as such attorneys-in-fact may deem
necessary or appropriate.
<TABLE>
<CAPTION>
Name Capacity
- ---- --------
<S> <C> <C>
/s/ Earle F. Jones Chairman of the April 18, 1996
- ----------------------- Board and Director
Earle F. Jones
/s/ Kevin E. Mallory Executive Vice April 18, 1996
- ----------------------- President (Principal
Executive,
Financial and
Accounting
Officer)
Kevin E. Mallory
/s/ Bruce M. Ford Director April 18, 1996
- -----------------------
Bruce M. Ford
/s/ Graeme W. Henderson Director April 18, 1996
- -----------------------
Graeme W. Henderson
</TABLE>
<PAGE> 11
INDEX TO EXHIBITS TO REGISTRATION STATEMENT ON FORM S-8
<TABLE>
<CAPTION>
Exhibit Description of Exhibit
- -------- ----------------------
<S> <C>
4.1 Amended and Restated Declaration of Trust of the Trust dated June 6, 1988, as amended (incorporated by
reference to Exhibit 3A to the Trust's and the Corporation's Joint Current Report on Form 8-K dated January
31, 1995 (the "January 1995 Form 8-K").
4.2 Amendment and Restatement of Articles of Incorporation of the Corporation, as amended (incorporated by
reference to Exhibit 3B to the January 31 Form 8-K).
4.3 Trustees' Regulations of the Trust, as amended (incorporated by reference to Exhibit 3.3 to the Trust's and
the Corporation's Joint Annual Report on Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-
K").
4.4 Bylaws of Starwood Lodging Corporation (incorporated by reference to Exhibit 3.4 to the 1994 10-K).
*4.5 Starwood Lodging Trust Share Option Plan.
*4.6 Starwood Lodging Corporation Share Option Plan.
*5 Opinion of Counsel.
*23.1 Consent of Counsel (included in Exhibit 5).
*23.2 Consent of Accountants.
*24 Powers of Attorney (contained in the signature pages hereto).
</TABLE>
* Filed herewith.
<PAGE> 1
EXHIBIT 4.5
STARWOOD LODGING TRUST
1995 SHARE OPTION PLAN
(AMENDED AND RESTATED AS OF AUGUST 17, 1995)
I. INTRODUCTION
1.1 PURPOSES AND GENERAL. The purposes of the 1995 Share Option Plan
(the "Plan") of Starwood Lodging Trust (the "Trust") are to align the interests
of the Trust's shareholders and the recipients of options under this Plan by
increasing the proprietary interest of such recipients in the Trust's growth
and success and to advance the interests of the Trust by attracting and
retaining officers, key employees, consultants and advisers, as well as
qualified persons for service as trustees of the Trust ("Trustees"). For
purposes of this Plan, references to employment by or service as a consultant,
adviser or Trustee of the Trust shall also mean employment by or service as a
consultant, adviser or Trustee of a subsidiary of the Trust.
This Plan seeks to accomplish the foregoing purposes by providing a
means whereby options to purchase from the Trust shares of beneficial interest,
par value $.01 per share, of the Trust ("Trust Shares") and options to purchase
from the Trust shares of the common stock, par value $.01 per share, of
Starwood Lodging Corporation ("Corporation Shares") may be granted, in
accordance with Section II, to eligible persons and shall be granted, in
accordance with Section III, to Trustees. Pursuant to an Agreement dated June
25, 1980, as amended, between the Trust and Starwood Lodging Corporation (the
"Corporation"), all outstanding Trust Shares and Corporation Shares are paired
on a one-for-one basis and trade as units consisting of one Trust Share and one
Corporation Share ("Paired Shares"). Accordingly, each option to purchase
Trust Shares (a "Trust Share Option") shall be paired with an option to
purchase an equal number of Corporation Shares (a "Corporation Share Option"
and each such paired Trust Share Option and Corporation Share Option is herein
referred to as a "Paired Option").
Each Paired Option may be exercised, terminated, cancelled, forfeited,
transferred or otherwise disposed of only in units consisting of Paired Shares.
Accordingly, a Trust Share Option, or portion thereof, may be exercised,
terminated, cancelled, forfeited, transferred or otherwise disposed of only in
connection with, and to the same extent as, the exercise, termination,
cancellation, forfeiture, transfer or other disposition of a Corporation Share
Option. Each Trust Share
<PAGE> 2
Option constituting part of a Paired Option may be either an incentive share
option or a non-qualified share option. An incentive share option shall mean a
Trust Share Option that meets the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor provision,
which is intended by the Committee (as defined below) to constitute an
incentive share option. Each Corporation Share Option constituting part of a
Paired Option shall be a non-qualified share option.
1.2 ADMINISTRATION. This Plan shall be administered by a committee (the
"Committee") designated by the Board of Trustees of the Trust (the "Board")
consisting of two or more members of the Board, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and an "outside
director" within the meaning of Section 162(m) of the Code, subject to any
transition rules applicable to the definition of outside director.
The Committee may, subject to the terms of this Plan, select eligible
persons to be granted Paired Options in accordance with Section II and shall
determine the number of Paired Shares subject to each such Paired Option. The
Committee shall, subject to the terms of this Plan, determine the exercise
price of each Paired Option granted hereunder, including the portion of the
exercise price of such Paired Option which is attributable to the Trust Share
Option and the Corporation Share Option, respectively, the time and conditions
of exercise of such Paired Option and all other terms and conditions of such
Paired Option, including, without limitation, the form of the Agreement
representing such Paired Option. The Committee may, in its sole discretion and
for any reason at any time, accelerate the exercisability of any Paired Option.
The Committee shall, subject to the terms of this Plan, interpret this Plan and
the application thereof, establish rules and regulations it deems necessary or
desirable for the administration of this Plan and may impose, incidental to the
grant of a Paired Option, conditions with respect to the grant, such as
limiting competitive employment or other activities. All such interpretations,
rules, regulations and conditions shall be conclusive and binding on all
parties. Each Paired Option shall be evidenced by a written Agreement (an
"Agreement") between the Trust and the optionee setting forth the terms and
conditions applicable to such Paired Option.
The Committee may delegate some or all of its power and authority
hereunder to the Chief Executive Officer or Chief Operating Officer or other
executive officer of the Trust as the Committee deems appropriate; provided,
however, that the
-2-
<PAGE> 3
Committee may not delegate its power and authority with regard to (i) the grant
of a Paired Option to any person who is a "covered employee" within the meaning
of Section 162(m) of the Code or who, in the Committee's judgment, is likely to
be a covered employee at any time during the period a Paired Option granted to
such employee would be outstanding or (ii) the selection for participation in
this Plan of an officer or other person subject to Section 16 of the Exchange
Act or decisions concerning the timing, pricing or amount of a grant of a
Paired Option to such an officer or other person.
A majority of the Committee shall constitute a quorum. The acts of
the Committee shall be either (i) acts of a majority of the members of the
Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by a majority of the members of the Committee without a
meeting.
1.3 ELIGIBILITY. Participants in this Plan shall consist of such
officers, key employees, consultants, advisers and Trustees of the Trust and
its subsidiaries as the Committee in its sole discretion may select from time
to time. The Committee's selection of a person to participate in this Plan at
any time shall not require the Committee to select such person to participate
in this Plan at any other time. Trustees shall also be eligible to participate
in this Plan in accordance with Section III.
1.4 SHARES AVAILABLE. The number of Paired Shares available for grants
of Paired Options under this Plan, other than a Paired Option that includes a
Trust Share Option that is designated as an incentive share option, shall be
1,573,000 (subject to adjustment as provided in Section 4.7) plus eight percent
(8%) of the sum of (i) the number of Paired Shares which may be issued upon the
exchange of limited partnership units ("Units") in SLT Realty Limited
Partnership, a Delaware limited partnership, and SLC Operating Limited
Partnership, a Delaware limited partnership to the extent such Units first
become outstanding after August 17, 1995 (without reduction for subsequent
repurchases, redemptions or similar events involving the Units), plus (ii) the
number of Paired Shares which first become outstanding (without reduction for
subsequent repurchases, redemptions or similar events involving Paired Shares)
after August 17, 1995 (other than by reason of (A) such exchange of Units, (B)
the issuance or delivery of Paired Shares pursuant to any employee benefit plan
of the Trust or the Corporation or (C) the issuance of Paired Shares which were
acquired and held by the Trust or the Corporation prior to their issuance),
reduced by (iii) the aggregate number of Paired Shares which become subject to
(A) outstanding Paired Options under this Plan, including each Paired Option
that includes a Trust Share Option that is designated as
-3-
<PAGE> 4
an incentive share option, or (B) outstanding options to purchase Paired Shares
under the Corporation's 1995 Share Option Plan (the "Corporation Plan").
Subject to adjustment as provided in Section 4.7, the number of Paired Shares
available for grants of Paired Options that include Trust Share Options that
are designated as incentive share options shall be 1,573,000, reduced by the
aggregate number of Paired Shares which become subject to (X) outstanding
Paired Options under this Plan, including each Paired Option that does not
include a Trust Share Option that is designated as an incentive share option,
or (Y) outstanding options to purchase Paired Shares under the Corporation
Plan. To the extent that Paired Shares subject to an outstanding Paired Option
or an outstanding option to purchase Paired Shares under the Corporation Plan
are not issued or delivered by reason of the termination, cancellation or
forfeiture of any such option or by reason of the delivery of Paired Shares to
pay all or a portion of the exercise price of any such option, or to satisfy
all or a portion of the tax withholding obligations relating to any such
option, then such Paired Shares shall again be available under this Plan.
Paired Shares to be delivered under this Plan shall be made available
(i) (A) by the Trust from authorized and unissued Trust Shares issued by the
Trust directly to the optionee and (B) by the Corporation from authorized and
unissued Corporation Shares issued by the Corporation directly to the Trust for
delivery to the optionee, (ii) from authorized and issued Paired Shares
acquired and held by the Trust or (iii) a combination thereof.
To the extent required by Section 162(m) of the Code and the rules and
regulations thereunder, the maximum number of Paired Shares with respect to
which Paired Options may be granted during any calendar year to any person
shall be 500,000, subject to adjustment as provided in Section 4.7.
II. PAIRED OPTIONS
2.1 GRANTS OF PAIRED OPTIONS. The Committee may, in its discretion,
grant Paired Options to such eligible persons as may be selected by the
Committee. Each Trust Share Option, or portion thereof, that is not an
incentive share option, shall be a non-qualified share option. Each Paired
Option that includes a Trust Share Option that is designated as an incentive
share option shall be granted within ten years of the effective date of this
Plan. To the extent that the aggregate fair market value (determined as of the
date of grant) of Trust Shares with respect to which Trust Share Options
designated as incentive share options are exercisable for the first time by a
participant during any calendar year (under this Plan or any other plan of
-4-
<PAGE> 5
the Trust, or any parent or subsidiary) exceeds the amount (currently $100,000)
established by the Code, such Trust Share Options shall constitute
non-qualified share options. The "fair market value" of a Trust Share shall be
that portion of the fair market value of a Paired Share which the Committee
determines to be attributable to the Trust Share by applying in good faith a
method of valuation permissible under Section 422 of the Code. The "fair
market value" of a Paired Share shall mean the closing transaction price of a
Paired Share as reported in the New York Stock Exchange Composite Transactions
on the date as of which such value is being determined or, if there shall be no
reported transaction on such date, on the next preceding date for which a
transaction was reported; provided that if the fair market value of a Paired
Share for any date cannot be determined as above provided, fair market value of
a Paired Share shall be determined by the Committee by whatever means or method
as the Committee, in the good faith exercise of its discretion, shall at such
time deem appropriate.
2.2 TERMS OF PAIRED OPTIONS. Paired Options shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable:
(a) Number of Paired Shares and Purchase Price. The number of
Paired Shares subject to a Paired Option and the purchase price per Paired
Share purchasable upon exercise of the Paired Option, including the portions of
the purchase price of a Paired Share which are attributable to a Trust Share
and a Corporation Share, respectively, shall be determined by the Committee;
provided, however, that (i) the purchase price per Paired Share shall not be
less than 100% of the fair market value of a Paired Share on the date of grant
of such Paired Option, (ii) the portion of the purchase price of a Paired Share
which the Committee determines to be attributable to a Trust Share shall not be
less than 100% of the fair market value of a Trust Share on the date of grant
of such Paired Option and (iii) the portion of the purchase price of a Paired
Share which the Committee determines to be attributable to a Corporation Share
shall not be less than 100% of the fair market value of a Corporation Share on
the date of grant of such Paired Option; provided further, that if a Trust
Share Option designated as an incentive share option shall be granted to any
person who, at the time such incentive share option is granted, owns capital
stock possessing more than ten percent of the total combined voting power of
all classes of capital stock of the Trust (or of any parent or subsidiary) (a
"Ten Percent Holder"), the purchase price per Trust Share shall be the price
(currently 110% of fair market value of a Trust Share) required by the Code in
order to constitute an incentive share option. The "fair market value" of a
Corporation Share
-5-
<PAGE> 6
shall be that portion of the fair market value of a Paired Share which the
Committee determines to be attributable to the Corporation Share.
(b) Option Period and Exercisability. The period during which a
Paired Option may be exercised shall be determined by the Committee; provided,
however, that no Paired Option which includes a Trust Share Option designated
as an incentive share option shall be exercised later than ten years after its
date of grant; provided further, that if a Paired Option which includes a Trust
Share Option designated as an incentive share option shall be granted to a Ten
Percent Holder, such Paired Option shall not be exercised later than five years
after its date of grant. The Committee shall determine whether a Paired Option
shall become exercisable in cumulative or non-cumulative installments and in
part or in full at any time. An exercisable Paired Option, or portion thereof,
may be exercised only with respect to whole Paired Shares.
(c) Method of Exercise. A Paired Option may be exercised (i) by
giving written notice to the Trust specifying the number of whole Paired Shares
to be purchased and accompanied by payment therefor in full (or arrangement
made for such payment to the Trust's satisfaction) either (A) in cash, (B) by
delivery of previously owned whole Paired Shares (which the optionee has held
for at least six months prior to the delivery of such Paired Shares or which
the optionee purchased on the open market and for which the optionee has good
title, free and clear of all liens and encumbrances) having a fair market
value, determined as of the date of exercise, equal to the aggregate purchase
price payable by reason of such exercise, (C) in cash by a broker-dealer
acceptable to the Trust to whom the optionee has submitted an irrevocable
notice of exercise or (D) a combination of (A) and (B), in each case to the
extent set forth in the Agreement relating to the Paired Option and (ii) by
executing such documents as the Trust may reasonably request. The Committee
shall have sole discretion to disapprove of an election pursuant to either
clause (B) or (C) and in the case of an optionee who is subject to Section 16
of the Exchange Act, the Trust may require that the method of making such
payment be in compliance with Section 16 and the rules and regulations
thereunder. Any fraction of a Paired Share which would be required to pay such
purchase price shall be disregarded and the remaining amount due shall be paid
in cash by the optionee. No certificate representing a Paired Share shall be
delivered until the full purchase price therefor has been paid.
2.3 TERMINATION OF EMPLOYMENT OR SERVICE.
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(a) Disability and Death. Subject to paragraph (e) below and unless
otherwise specified in the Agreement relating to a Paired Option, if an
optionee's employment with the Trust or service as a consultant, adviser or
Trustee terminates by reason of Disability or death, each Paired Option held by
such optionee shall be fully exercisable and may thereafter be exercised by
such optionee (or such optionee's executor, administrator, legal
representative, beneficiary or similar person, as the case may be) until and
including the earliest to occur of (i) the date which is one year (or such
other period as set forth in the Agreement relating to such Paired Option)
after the effective date of such optionee's termination of employment or
service or date of death, as the case may be, and (ii) the expiration date of
the term of such Paired Option. For purposes of this Plan, "Disability" shall
mean the inability of an optionee substantially to perform such optionee's
duties and responsibilities for a continuous period of at least six months.
(b) Termination for Cause. Subject to paragraph (e) below and unless
otherwise specified in the Agreement relating to a Paired Option, if an
optionee's employment with the Trust or service as a consultant, adviser or
Trustee terminates for Cause, each Paired Option held by such optionee, whether
or not then exercisable, shall terminate automatically on the effective date of
such optionee's termination of employment or service. For purposes of this
Plan, "Cause" shall mean embezzlement or misappropriation of funds or other
assets, other act of dishonesty, significant activities harmful to the
reputation of the Trust or the Corporation, willful refusal to perform or
substantial disregard of the duties properly assigned to the optionee (other
than as a result of Disability), significant violation of any statutory or
common law duty of loyalty to the Trust or the Corporation or a material breach
by the optionee of the optionee's employment Agreement with the Trust, if any.
(c) Other Termination. Subject to paragraph (e) below and unless
otherwise specified in the Agreement relating to a Paired Option, if an
optionee's employment with the Trust or service as a consultant, adviser or
Trustee terminates for any reason other than Disability, death or Cause, each
Paired Option held by such optionee shall be exercisable only to the extent
that such Paired Option is exercisable on the effective date of such optionee's
termination of employment or service and may thereafter be exercised by such
optionee (or such optionee's legal representative or similar person) until and
including the earliest to occur of (i) the date which is three months (or such
other period as set forth in the Agreement relating to such Paired Option)
after the effective date of such optionee's termination of employment or
service and (ii) the expiration date of the term of such Paired Option.
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(d) Death Following Termination of Employment or Service. Subject to
paragraph (e) below and unless otherwise specified in the Agreement relating to
a Paired Option, if an optionee dies during the one-year period following
termination of employment or service by reason of Disability, or if an optionee
dies during the three-month period following termination of employment or
service for any other reason other than Disability or Cause (or, in each case,
such other period as the Committee may specify in the Agreement relating to a
Paired Option), each Paired Option held by such optionee shall be exercisable
only to the extent that such Paired Option is exercisable on the date of such
optionee's death and may thereafter be exercised by such optionee's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be, until and including the earliest to occur of (i) the date which is
three months (or such other period as set forth in the Agreement relating to
such Paired Option) after the date of death and (ii) the expiration date of the
term of such Paired Option.
(e) Termination of Employment - Incentive Share Options. Unless
otherwise specified in the Agreement relating to a Paired Option which includes
a Trust Share Option designated as an incentive share option, if the employment
with the Trust of a holder of such a Paired Option terminates by reason of
Permanent and Total Disability (as defined in Section 22(e)(3) of the Code) or
death, each such Paired Option shall be fully exercisable and may thereafter be
exercised by such optionee (or such optionee's executor, administrator, legal
representative, beneficiary or similar person, as the case may be) until and
including the earliest to occur of (i) the date which is one year (or such
shorter period as set forth in the Agreement relating to such Paired Option)
after the effective date of such optionee's termination of employment by reason
of Permanent and Total Disability or date of death, as the case may be, and
(ii) the expiration date of the term of such Paired Option.
Unless otherwise specified in the Agreement relating to a
Paired Option which includes a Trust Share Option designated as an incentive
share option, if the employment with the Trust of a holder of such a Paired
Option terminates for Cause, each such Paired Option, whether or not then
exercisable, shall terminate automatically on the effective date of such
optionee's termination of employment.
If the employment with the Trust of a holder of a Paired
Option which includes a Trust Share Option designated as an incentive share
option terminates for any reason other than Permanent and Total Disability,
death or Cause, each such Paired Option shall be exercisable only to the extent
such Paired Option is exercisable on the effective date of such optionee's
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<PAGE> 9
termination of employment and may thereafter be exercised by such holder (or
such holder's legal representative or similar person) until and including the
earliest to occur of (i) the date which is three months after the effective
date of such optionee's termination of employment and (ii) the expiration date
of the term of such Paired Option.
If the holder of a Paired Option which includes a Trust Share
Option designated as an incentive share option dies during the one-year period
following termination of employment by reason of Permanent and Total Disability
(or such shorter period as set forth in the Agreement relating to such Paired
Option), or if the holder of such a Paired Option dies during the three-month
period following termination of employment for any reason other than Permanent
and Total Disability or Cause, each such Paired Option held by such optionee
shall be exercisable only to the extent such Paired Option is exercisable on
the date of the optionee's death and may thereafter be exercised by the
optionee's executor, administrator, legal representative, beneficiary or
similar person until and including the earliest to occur of (i) the date which
is three months after the date of death and (ii) the expiration date of the
term of such Paired Option.
III. CERTAIN PROVISIONS RELATING TO TRUSTEES
3.1 ELIGIBILITY. Each Trustee shall be granted Paired Options in accordance
with this Section III. All Trust Share Options and Corporation Share Options
included in the Paired Options granted under this Section III shall constitute
non-qualified share options.
3.2 GRANTS OF PAIRED OPTIONS. Each Trustee shall be granted Paired Options
as follows:
(a) Time of Grant. On the date of the effectiveness of the Trust's
first public offering of Trust Shares which occurs subsequent to the adoption
of this Plan by the Board and prior to June 30, 1996, and on June 30 of each
calendar year beginning in 1996 (or, if later, on the date on which a person is
first elected to serve as a Trustee), each person who is a Trustee on such
date, including each person who has been elected a Trustee as of such date but
who will not begin to serve as a Trustee until a later date, shall be granted a
Paired Option to purchase 6,000 Paired Shares (which amount shall be pro-rated
if such person is first elected to serve as a Trustee on a date other than such
effective date or June 30 of a calendar year, as the case may be) at a purchase
price per Paired Share equal to 100% of the fair market value of a Paired Share
on the date of grant of such Paired Option; provided, however, that the portion
of the
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purchase price of a Paired Share which is attributable to a Trust Share shall
be 100% of the fair market value of a Trust Share on the date of grant of such
Paired Option and the portion of the purchase price of a Paired Share which is
attributable to a Corporation Share shall be 100% of the fair market value of a
Corporation Share on the date of grant of such Paired Option.
(b) Option Period and Exercisability. Each Paired Option granted
under this Article III shall be fully exercisable on and after its date of
grant, shall expire ten years after its date of grant (notwithstanding
termination of service as a Trustee for any reason prior to such ten-year
anniversary date) and may be exercised in whole or in part only with respect to
whole Paired Shares. Paired Options granted under this Article III shall be
exercisable in accordance with Section 2.2(c).
(c) Death. If a Trustee dies while a Paired Option is outstanding,
such Paired Option may thereafter be exercised by such Trustee's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be, until and including the expiration date of the term of such Paired
Option.
IV. GENERAL
4.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
shareholders of the Trust for approval within one year after the date of
approval by the Board and, if approved by a majority of all the votes cast at a
meeting of shareholders at which a quorum is present, shall become effective as
of the date of approval by the Board. No Paired Option may be exercised prior
to the date of such shareholder approval. This Plan shall terminate ten years
after its effective date unless terminated earlier by the Board. Termination
of this Plan shall not affect the terms or conditions of any Paired Option
granted prior to termination.
Paired Options may be granted hereunder at any time prior to
the termination of this Plan, provided that no Paired Option may be granted
later than ten years after the effective date of this Plan. In the event that
this Plan is not approved by the shareholders of the Trust within one year
after the date of approval by the Board, this Plan and any Paired Options
granted hereunder shall be null and void.
4.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of shareholder approval required by applicable law,
rule or regulation including Rule 16b-3 under the Exchange Act and Sections
162(m) and 422 of the Code; provided, however, that the number of Paired Shares
subject
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to a Paired Option granted to Trustees pursuant to Article III, the purchase
price therefor, the date of grant of any such Paired Option and the category of
persons eligible to be granted such Paired Options shall not be amended more
than once every six months, other than to comply with changes in the Code and
the Employee Retirement Income Security Act of 1974, as amended, or the rules
and regulations thereunder; and provided further, that any amendment with
respect to the persons eligible to participate in this Plan or the number of
Paired Shares available for grants of Paired Options under this Plan shall not
be effective without shareholder approval of such amendment within 12 months
before or after the date such amendment is approved by the Board. No amendment
may impair the rights of a holder of an outstanding Paired Option without the
consent of such holder.
4.3 AGREEMENT. No Paired Option may be exercised until an Agreement is
executed by the Trust and the optionee and, upon execution by the Trust and the
optionee and delivery of the Agreement to the Trust, such Paired Option shall
be effective as of the effective date set forth in the Agreement.
4.4 NON-TRANSFERABILITY. No Paired Option hereunder shall be
transferable other than (i) by will or the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Trust or (ii) in
the case of a Paired Option which does not include a Trust Share Option
designated as an incentive share option, as otherwise permitted under Rule
16b-3 under the Exchange Act as set forth in the Agreement relating to such
Paired Option. Except to the extent permitted by the foregoing sentence, each
Paired Option may be exercised during the optionee's lifetime only by the
optionee or the optionee's legal representative or similar person. Except as
permitted by the second preceding sentence, no Paired Option shall be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any Paired Option such
Paired Option and all rights thereunder shall immediately become null and void.
4.5 TAX WITHHOLDING. The Trust shall have the right to require, prior to
the delivery of any Paired Shares, payment by the optionee of any Federal,
state, local or other taxes which may be required to be withheld or paid in
connection with a Paired Option hereunder. An Agreement may provide that the
optionee may satisfy any such obligation by any of the following means: (A) a
cash payment to the Trust, (B) delivery to the Trust of previously owned whole
Paired Shares (which the optionee has held for at least six months prior to the
delivery of such
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<PAGE> 12
Paired Shares or which the optionee purchased on the open market and for which
the optionee has good title, free and clear of all liens and encumbrances)
having an aggregate fair market value, determined as of the date the obligation
to withhold or pay taxes arises in connection with the Paired Option (the "Tax
Date"), equal to the amount necessary to satisfy any such obligation, (C) a
cash payment by a broker-dealer acceptable to the Trust to whom the optionee
has submitted an irrevocable notice of exercise or (D) any combination of (A)
and (B), in each case to the extent set forth in the Agreement relating to the
Paired Option; provided, however, that the Committee shall have sole discretion
to disapprove of an election pursuant to any of clauses (B)-(D) and that in the
case of an optionee who is subject to Section 16 of the Exchange Act, the Trust
may require that the method of satisfying any such obligation be in compliance
with Section 16 and the rules and regulations thereunder. An Agreement may
provide for Paired Shares to be delivered having a fair market value in excess
of the minimum amount required to be withheld, but not in excess of the amount
determined by applying the optionee's maximum marginal tax rate. Any fraction
of a Paired Share which would be required to satisfy such an obligation shall
be disregarded and the remaining amount due shall be paid in cash by the
optionee.
4.6 RESTRICTIONS ON PAIRED SHARES. Each Paired Option hereunder shall be
subject to the requirement that if at any time the Trust determines that the
listing, registration or qualification of the Paired Shares subject to such
Paired Option upon any securities exchange or under any law, or the consent or
approval of any governmental body, or the taking of any other action is
necessary or desirable as a condition of, or in connection with, the delivery
of Paired Shares thereunder, such Paired Shares shall not be delivered unless
such listing, registration, qualification, consent, approval or other action
shall have been effected or obtained, free of any conditions not acceptable to
the Trust. The Trust may require that certificates evidencing Paired Shares
delivered pursuant to any Paired Option bear a legend indicating that the sale,
transfer or other disposition thereof by the holder is prohibited except in
compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
Notwithstanding any other provision hereunder, no Paired Option
hereunder shall be exercisable if, as a result of either the ability to
exercise or the exercise of such Paired Option, the Trust would not satisfy the
REIT Requirements in any respect. For purposes of the preceding sentence,
"REIT Requirements" shall mean the requirements for the Trust to (i) qualify as
a real estate investment trust under the Code and the rules and regulations
promulgated thereunder, (ii) retain its status as
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grandfathered pursuant to Section 132(c)(3) of the Deficit Reduction Act of
1984 and (iii) retain the benefits of that certain private letter ruling issued
by the Internal Revenue Service to the Trust dated as of January 4, 1980.
4.7 ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Paired Shares other than a regular
cash dividend, the number and class of securities available under this Plan,
the number and class of securities subject to each outstanding Paired Option,
the purchase price per security, and the number of securities subject to each
Paired Option to be granted to Trustees pursuant to Article III shall be
appropriately adjusted by the Committee, such adjustments to be made in the
case of outstanding Paired Options without an increase in the aggregate
purchase price. The decision of the Committee regarding any such adjustment
shall be final, binding and conclusive. If any adjustment would result in a
fractional security being (i) available under this Plan, such fractional
security shall be disregarded, or (ii) subject to a Paired Option under this
Plan, the Company shall pay the optionee, in connection with the first exercise
of the Paired Option in whole or in part, occurring after such adjustment, an
amount in cash determined by multiplying (A) the fraction of such security
(rounded to the nearest hundredth) by (B) the excess, if any, of (x) the fair
market value of a Paired Share on the exercise date over (y) the exercise price
of the Paired Option.
With respect to any optionee who is subject to Section 16 of the
Exchange Act and notwithstanding the exercise periods set forth in paragraphs
(a), (c) and (d) of Section 2.3, paragraph (b) of Section 3.2 or as set forth
pursuant to such paragraphs in any Agreement to which such optionee is a party
(or as may be set forth pursuant to paragraph (b) of Section 2.3), in the event
(i) the Trust is involved in a business combination which is intended to be
treated as a pooling of interests for financial accounting purposes (a "Pooling
Transaction") or pursuant to which such optionee receives a substitute option
to purchase securities of any entity, including any entity directly or
indirectly acquiring the Trust, and (ii) such optionee's employment with the
Trust or service as a Trustee is terminated during the nine-month period
beginning three months prior to the consummation of such business combination,
then each Paired Option (or option in substitution thereof) held by such
optionee shall be exercisable to the extent set forth in such paragraphs until
and including the latest of (x) the date set forth pursuant to the then
applicable paragraph of Section 2.3 or 3.2, as the case may be, (y) the date
which is six months and one day after the consummation of such business
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combination and (z) the date which is ten business days after the date of
expiration of any period during which such optionee may not dispose of a
security issued in the Pooling Transaction in order for the Pooling Transaction
to be accounted for as a pooling of interests.
4.8 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any right
to participate in this Plan. Neither this Plan nor any Paired Option granted
hereunder shall confer upon any person any right to continued employment by the
Trust, any subsidiary or any affiliate of the Trust or affect in any manner the
right of the Trust, any subsidiary or any affiliate of the Trust to terminate
the employment of any person at any time without liability hereunder.
4.9 RIGHTS AS SHAREHOLDER. No person shall have any rights as a shareholder
of the Trust with respect to any Trust Shares or Corporation Shares which are
subject to a Paired Option hereunder until such person becomes a shareholder of
record with respect to such Trust Shares and Corporation Shares.
4.10 DESIGNATION OF BENEFICIARY. If permitted by the Trust, an optionee may
file with the Committee a written designation of one or more persons as such
optionee's beneficiary or beneficiaries (both primary and contingent) in the
event of the optionee's death. To the extent an outstanding Paired Option
granted hereunder is exercisable, such beneficiary or beneficiaries shall be
entitled to exercise such Paired Option.
Each beneficiary designation shall become effective only when filed in
writing with the Committee during the optionee's lifetime on a form prescribed
by the Committee. The spouse of a married optionee domiciled in a community
property jurisdiction shall join in any designation of a beneficiary other than
such spouse. The filing with the Committee of a new beneficiary designation
shall cancel all previously filed beneficiary designations.
If an optionee fails to designate a beneficiary, or if all designated
beneficiaries of an optionee predecease the optionee, then each outstanding
Paired Option hereunder held by such optionee, to the extent exercisable, may
be exercised by such optionee's executor, administrator, legal representative
or similar person.
4.11 GOVERNING LAW. This Plan, each Paired Option hereunder and the related
Agreement, and all determinations made and actions taken pursuant thereto, to
the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of California and construed in
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accordance therewith without giving effect to principles of conflicts of laws.
4.12 TERMINATION OF PAIRING AGREEMENT. Notwithstanding anything in this Plan
to the contrary, if at any time the Agreement dated June 25, 1980, by and
between the Trust and the Corporation, pursuant to which Trust Shares and
Corporation Shares are paired on a share-for-share basis, is terminated for any
reason and as a result of such termination Trust Shares and Corporation Shares
no longer are required to be transferred together, then concurrently with such
termination (i) Paired Options will no longer be granted hereunder; (ii) only
Trust Share Options may thereafter be granted hereunder; (iii) each then
outstanding Paired Option shall constitute a wholly separate and independent
Trust Share Option and Corporation Share Option and the Trust, in its
discretion, may require that each Agreement evidencing a Paired Option be
returned to the Trust for cancellation in exchange for separate agreements
evidencing the Trust Share Option and Corporation Share Option subject to such
Paired Option; (iv) Trust Share Options and Corporation Share Options shall no
longer be required to be exercised, terminated, cancelled, forfeited,
transferred or otherwise disposed of together; and (v) the "fair market value"
and the "closing price" of the Trust Shares and Corporation Shares as used
herein shall thereafter be deemed to refer, respectively, to the fair market
value and the closing price of a Trust Share and a Corporation Share.
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EXHIBIT 4.6
STARWOOD LODGING CORPORATION
1995 SHARE OPTION PLAN
(AMENDED AND RESTATED AS OF AUGUST 17, 1995)
I. INTRODUCTION
1.1 PURPOSES AND GENERAL. The purposes of the 1995 Share Option Plan
(the "Plan") of Starwood Lodging Corporation (the "Corporation") are to align
the interests of the Corporation's shareholders and the recipients of options
under this Plan by increasing the proprietary interest of such recipients in
the Corporation's growth and success and to advance the interests of the
Corporation by attracting and retaining officers, key employees, consultants
and advisers, as well as qualified persons for service as directors of the
Corporation ("Directors"). For purposes of this Plan, references to employment
by or service as a consultant, adviser or director of the Corporation shall
also mean employment by or service as a consultant, advisor or director of a
subsidiary of the Corporation.
This Plan seeks to accomplish the foregoing purposes by providing a
means whereby options to purchase from the Corporation shares of common stock,
par value $.01 per share, of the Corporation ("Corporation Shares") and options
to purchase from the Corporation shares of beneficial interest, par value $.01
per share, of Starwood Lodging Trust ("Trust Shares") may be granted in
accordance with Section II to eligible persons and shall be granted, in
accordance with Section III, to Directors. Pursuant to an Agreement dated June
25, 1980, as amended, between the Corporation and Starwood Lodging Trust (the
"Trust"), all outstanding Corporation Shares and Trust Shares are paired on a
one-for-one basis and trade as units consisting of one Corporation Share and
one Trust Share ("Paired Shares"). Accordingly, each option to purchase
Corporation Shares (a "Corporation Share Option") shall be paired with an
option to purchase an equal number of Trust Shares (a "Trust Share Option" and
each such paired Corporation Share Option and Trust Share Option is herein
referred to as a "Paired Option").
Each Paired Option may be exercised, terminated, cancelled, forfeited,
transferred or otherwise disposed of only in units consisting of Paired Shares.
Accordingly, a Corporation Share Option, or portion thereof, may be exercised,
terminated, cancelled, forfeited, transferred or otherwise disposed of only in
connection with, and to the same extent as, the exercise, termination,
cancellation, forfeiture, transfer or other disposition of a Trust Share
Option. Each Corporation Share Option constituting part of a Paired Option may
be either an
<PAGE> 2
incentive share option or a non-qualified share option. An incentive share
option shall mean a Corporation Share Option that meets the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
any successor provision, which is intended by the Committee (as defined below)
to constitute an incentive share option. Each Trust Share Option constituting
part of a Paired Option shall be a non-qualified share option.
1.2 ADMINISTRATION. This Plan shall be administered by a committee (the
"Committee") designated by the Board of Directors of the Corporation (the
"Board") consisting of two or more members of the Board, each of whom shall be
a "disinterested person" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and an "outside
director" within the meaning of Section 162(m) of the Code, subject to any
transition rules applicable to the definition of outside director.
The Committee may, subject to the terms of this Plan, select eligible
persons to be granted Paired Options in accordance with Section II and shall
determine the number of Paired Shares subject to each such Paired Option. The
Committee shall, subject to the terms of this Plan, determine the exercise
price of each Paired Option granted hereunder, including the portion of the
exercise price of such Paired Option which is attributable to the Corporation
Share Option and the Trust Share Option, respectively, the time and conditions
of exercise of such Paired Option and all other terms and conditions of such
Paired Option, including, without limitation, the form of the Agreement
representing such Paired Option. The Committee may, in its sole discretion and
for any reason at any time, accelerate the exercisability of any Paired Option.
The Committee shall, subject to the terms of this Plan, interpret this Plan and
the application thereof, establish rules and regulations it deems necessary or
desirable for the administration of this Plan and may impose, incidental to the
grant of a Paired Option, conditions with respect to the grant, such as
limiting competitive employment or other activities. All such interpretations,
rules, regulations and conditions shall be conclusive and binding on all
parties. Each Paired Option shall be evidenced by a written Agreement (an
"Agreement") between the Corporation and the optionee setting forth the terms
and conditions applicable to such Paired Option.
The Committee may delegate some or all of its power and authority
hereunder to the Chief Executive Officer or Chief Operating Officer or other
executive officer of the Corporation
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as the Committee deems appropriate; provided, however, that the Committee may
not delegate its power and authority with regard to (i) the grant of a Paired
Option to any person who is a "covered employee" within the meaning of Section
162(m) of the Code or who, in the Committee's judgment, is likely to be a
covered employee at any time during the period a Paired Option granted to such
employee would be outstanding or (ii) the selection for participation in this
Plan of an officer or other person subject to Section 16 of the Exchange Act or
decisions concerning the timing, pricing or amount of a grant of a Paired
Option to such an officer or other person.
A majority of the Committee shall constitute a quorum. The acts of
the Committee shall be either (i) acts of a majority of the members of the
Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by a majority of the members of the Committee without a
meeting.
1.3 ELIGIBILITY. Participants in this Plan shall consist of such
officers, key employees, consultants, advisers and Directors of the Corporation
and its subsidiaries as the Committee in its sole discretion may select from
time to time. The Committee's selection of a person to participate in this
Plan at any time shall not require the Committee to select such person to
participate in this Plan at any other time. Directors shall be also eligible
to participate in this Plan in accordance with Section III.
1.4 SHARES AVAILABLE. The number of Paired Shares available for grants
of Paired Options under this Plan, other than a Paired Option that includes a
Corporation Share Option that is designated as an incentive share option, shall
be 1,573,000 (subject to adjustment as provided in Section 4.7) plus eight
percent (8%) of the sum of (i) the number of Paired Shares which may be issued
upon the exchange of limited partnership units ("Units") in SLT Realty Limited
Partnership, a Delaware limited partnership, and SLC Operating Limited
Partnership, a Delaware limited partnership to the extent such Units first
become outstanding after August 17, 1995 (without reduction for subsequent
repurchases, redemptions or similar events involving the Units), plus (ii) the
number of Paired Shares which first become outstanding (without reduction for
subsequent repurchases, redemptions or similar events involving Paired Shares)
after August 17, 1995 (other than by reason of (A) such exchange of Units, (B)
the issuance or delivery of Paired Shares pursuant to any employee benefit plan
of the Corporation or the Trust or (C) the issuance of Paired Shares which were
acquired and held by the Corporation or the Trust prior to their issuance),
reduced by
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(iii) the aggregate number of Paired Shares which become subject to (A)
outstanding Paired Options under this Plan, including each Paired Option that
includes a Corporation Share Option that is designated as an incentive share
option, or (B) outstanding options to purchase Paired Shares under the Trust's
1995 Share Option Plan (the "Trust Plan"). Subject to adjustment as provided
in Section 4.7, the number of Paired Shares available for grants of Paired
Options that include Corporation Share Options that are designated as incentive
share options shall be 1,573,000, reduced by the aggregate number of Paired
Shares which become subject to (X) outstanding Paired Options under this Plan,
including each Paired Option that does not include a Corporation Share Option
that is designated as an incentive share option, or (Y) outstanding options to
purchase Paired Shares under the Trust Plan. To the extent that Paired Shares
subject to an outstanding Paired Option or an outstanding option to purchase
Paired Shares under the Trust Plan are not issued or delivered by reason of the
termination, cancellation or forfeiture of any such option or by reason of the
delivery of Paired Shares to pay all or a portion of the exercise price of any
such option, or to satisfy all or a portion of the tax withholding obligations
relating to any such option, then such Paired Shares shall again be available
under this Plan.
Paired Shares to be delivered under this Plan shall be made available
(i) (A) by the Corporation from authorized and unissued Corporation Shares
issued by the Corporation directly to the optionee and (B) by the Trust from
authorized and unissued Trust Shares issued by the Trust directly to the
Corporation for delivery to the optionee, (ii) from authorized and issued
Paired Shares acquired and held by the Corporation or (iii) a combination
thereof.
To the extent required by Section 162(m) of the Code and the rules and
regulations thereunder, the maximum number of Paired Shares with respect to
which Paired Options may be granted during any calendar year to any person
shall be 500,000, subject to adjustment as provided in Section 4.7.
II. PAIRED OPTIONS
2.1 GRANTS OF PAIRED OPTIONS. The Committee may, in its discretion,
grant Paired Options to such eligible persons as may be selected by the
Committee. Each Corporation Share Option, or portion thereof, that is not an
incentive share option, shall be a non-qualified share option. Each Paired
Option that includes a Corporation Share Option that is designated as an
incentive share
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option shall be granted within ten years of the effective date of this Plan.
To the extent that the aggregate fair market value (determined as of the date
of grant) of Corporation Shares with respect to which Corporation Share Options
designated as incentive share options are exercisable for the first time by a
participant during any calendar year (under this Plan or any other plan of the
Corporation, or any parent or subsidiary) exceeds the amount (currently
$100,000) established by the Code, such Corporation Share Options shall
constitute non-qualified share options. The "fair market value" of a
Corporation Share shall be that portion of the fair market value of a Paired
Share which the Committee determines to be attributable to the Corporation
Share by applying in good faith a method of valuation permissible under Section
422 of the Code. The "fair market value" of a Paired Share shall mean the
closing transaction price of a Paired Share as reported in the New York Stock
Exchange Composite Transactions on the date as of which such value is being
determined or, if there shall be no reported transaction on such date, on the
next preceding date for which a transaction was reported; provided that if the
fair market value of a Paired Share for any date cannot be determined as above
provided, fair market value of a Paired Share shall be determined by the
Committee by whatever means or method as the Committee, in the good faith
exercise of its discretion, shall at such time deem appropriate.
2.2 TERMS OF PAIRED OPTIONS. Paired Options shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable:
(a) Number of Paired Shares and Purchase Price. The number of
Paired Shares subject to a Paired Option and the purchase price per Paired
Share purchasable upon exercise of the Paired Option, including the portions of
the purchase price of a Paired Share which are attributable to a Corporation
Share and a Trust Share, respectively, shall be determined by the Committee;
provided, however, that (i) the purchase price per Paired Share shall not be
less than 100% of the fair market value of a Paired Share on the date of grant
of such Paired Option, (ii) the portion of the purchase price of a Paired Share
which the Committee determines to be attributable to a Corporation Share shall
not be less than 100% of the fair market value of a Corporation Share on the
date of grant of such Paired Option and (iii) the portion of the purchase price
of a Paired Share which the Committee determines to be attributable to a Trust
Share shall not be less than 100% of the fair market value of a Trust Share on
the date of grant of such Paired Option; provided
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further, that if a Corporation Share Option designated as an incentive share
option shall be granted to any person who, at the time such incentive share
option is granted, owns capital stock possessing more than ten percent of the
total combined voting power of all classes of capital stock of the Corporation
(or of any parent or subsidiary) (a "Ten Percent Holder"), the purchase price
per Corporation Share shall be the price (currently 110% of fair market value
of a Corporation Share) required by the Code in order to constitute an
incentive share option. The "fair market value" of a Trust Share shall be that
portion of the fair market value of a Paired Share which the Committee
determines to be attributable to the Trust Share.
(b) Option Period and Exercisability. The period during which a
Paired Option may be exercised shall be determined by the Committee; provided,
however, that no Paired Option which includes a Corporation Share Option
designated as an incentive share option shall be exercised later than ten years
after its date of grant; provided further, that if a Paired Option which
includes a Corporation Share Option designated as an incentive share option
shall be granted to a Ten Percent Holder, such Paired Option shall not be
exercised later than five years after its date of grant. The Committee shall
determine whether a Paired Option shall become exercisable in cumulative or
non-cumulative installments and in part or in full at any time. An exercisable
Paired Option, or portion thereof, may be exercised only with respect to whole
Paired Shares.
(c) Method of Exercise. A Paired Option may be exercised (i) by
giving written notice to the Corporation specifying the number of whole Paired
Shares to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Corporation's satisfaction) either (A)
in cash, (B) by delivery of previously owned whole Paired Shares (which the
optionee has held for at least six months prior to the delivery of such Paired
Shares or which the optionee purchased on the open market and for which the
optionee has good title, free and clear of all liens and encumbrances) having a
fair market value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, (C) in cash by a
broker-dealer acceptable to the Corporation to whom the optionee has submitted
an irrevocable notice of exercise or (D) a combination of (A) and (B), in each
case to the extent set forth in the Agreement relating to the Paired Option and
(ii) by executing such documents as the Corporation may reasonably request.
The Committee shall have sole discretion to disapprove of an election pursuant
to either clause (B) or (C) and in the case of an optionee who is subject to
Section 16 of the Exchange
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Act, the Corporation may require that the method of making such payment be in
compliance with Section 16 and the rules and regulations thereunder. Any
fraction of a Paired Share which would be required to pay such purchase price
shall be disregarded and the remaining amount due shall be paid in cash by the
optionee. No certificate representing a Paired Share shall be delivered until
the full purchase price therefor has been paid.
2.3 TERMINATION OF EMPLOYMENT OR SERVICE.
(a) Disability and Death. Subject to paragraph (e) below and unless
otherwise specified in the Agreement relating to a Paired Option, if an
optionee's employment with the Corporation or service as a consultant, adviser
or Director terminates by reason of Disability or death, each Paired Option
held by such optionee shall be fully exercisable and may thereafter be
exercised by such optionee (or such optionee's executor, administrator, legal
representative, beneficiary or similar person, as the case may be) until and
including the earliest to occur of (i) the date which is one year (or such
other period as set forth in the Agreement relating to such Paired Option)
after the effective date of such optionee's termination of employment or
service or date of death, as the case may be, and (ii) the expiration date of
the term of such Paired Option. For purposes of this Plan, "Disability" shall
mean the inability of an optionee substantially to perform such optionee's
duties and responsibilities for a continuous period of at least six months.
(b) Termination for Cause. Subject to paragraph (e) below and unless
otherwise specified in the Agreement relating to a Paired Option, if an
optionee's employment with the Corporation or service as a consultant, adviser
or Director terminates for Cause, each Paired Option held by such optionee,
whether or not then exercisable, shall terminate automatically on the effective
date of such optionee's termination of employment or service. For purposes of
this Plan, "Cause" shall mean embezzlement or misappropriation of funds or
other assets, other act of dishonesty, significant activities harmful to the
reputation of the Corporation or the Trust, willful refusal to perform or
substantial disregard of the duties properly assigned to the optionee (other
than as a result of Disability), significant violation of any statutory or
common law duty of loyalty to the Corporation or the Trust or a material breach
by the optionee of the optionee's employment Agreement with the Corporation, if
any.
(c) Other Termination. Subject to paragraph (e) below and unless
otherwise specified in the Agreement relating to a Paired Option, if an
optionee's employment with the Corporation or
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service as a consultant, adviser or Director terminates for any reason other
than Disability, death or Cause, each Paired Option held by such optionee shall
be exercisable only to the extent that such Paired Option is exercisable on the
effective date of such optionee's termination of employment or service and may
thereafter be exercised by such optionee (or such optionee's legal
representative or similar person) until and including the earliest to occur of
(i) the date which is three months (or such other period as set forth in the
Agreement relating to such Paired Option) after the effective date of such
optionee's termination of employment or service and (ii) the expiration date of
the term of such Paired Option.
(d) Death Following Termination of Employment or Service. Subject to
paragraph (e) below and unless otherwise specified in the Agreement relating to
a Paired Option, if an optionee dies during the one-year period following
termination of employment or service by reason of Disability, or if an optionee
dies during the three-month period following termination of employment or
service for any other reason other than Disability or Cause (or, in each case,
such other period as the Committee may specify in the Agreement relating to a
Paired Option), each Paired Option held by such optionee shall be exercisable
only to the extent that such Paired Option is exercisable on the date of such
optionee's death and may thereafter be exercised by such optionee's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be, until and including the earliest to occur of (i) the date which is
three months (or such other period as set forth in the Agreement relating to
such Paired Option) after the date of death and (ii) the expiration date of the
term of such Paired Option.
(e) Termination of Employment - Incentive Share Options. Unless
otherwise specified in the Agreement relating to a Paired Option which includes
a Corporation Share Option designated as an incentive share option, if the
employment with the Corporation of a holder of such a Paired Option terminates
by reason of Permanent and Total Disability (as defined in Section 22(e)(3) of
the Code) or death, each such Paired Option shall be fully exercisable and may
thereafter be exercised by such optionee (or such optionee's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be) until and including the earliest to occur of (i) the date which is one
year (or such shorter period as set forth in the Agreement relating to such
Paired Option) after the effective date of such optionee's termination of
employment by reason of Permanent and Total Disability or date of death, as the
case may be, and (ii) the expiration date of the term of such Paired Option.
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Unless otherwise specified in the Agreement relating to a
Paired Option which includes a Corporation Share Option designated as an
incentive share option, if the employment with the Corporation of a holder of
such a Paired Option terminates for Cause, each such Paired Option, whether or
not then exercisable, shall terminate automatically on the effective date of
such optionee's termination of employment.
If the employment with the Corporation of a holder of a Paired
Option which includes a Corporation Share Option designated as an incentive
share option terminates for any reason other than Permanent and Total
Disability, death or Cause, each such Paired Option shall be exercisable only
to the extent such Paired Option is exercisable on the effective date of such
optionee's termination of employment and may thereafter be exercised by such
holder (or such holder's legal representative or similar person) until and
including the earliest to occur of (i) the date which is three months after the
effective date of such optionee's termination of employment and (ii) the
expiration date of the term of such Paired Option.
If the holder of a Paired Option which includes a Corporation
Share Option designated as an incentive share option dies during the one-year
period following termination of employment by reason of Permanent and Total
Disability (or such shorter period as set forth in the Agreement relating to
such Paired Option), or if the holder of such a Paired Option dies during the
three-month period following termination of employment for any reason other
than Permanent and Total Disability or Cause, each such Paired Option held by
such optionee shall be exercisable only to the extent such Paired Option is
exercisable on the date of the optionee's death and may thereafter be exercised
by the optionee's executor, administrator, legal representative, beneficiary or
similar person until and including the earliest to occur of (i) the date which
is three months after the date of death and (ii) the expiration date of the
term of such Paired Option.
III. CERTAIN PROVISIONS RELATING TO DIRECTORS
3.1 ELIGIBILITY. Each Director shall be granted Paired Options in accordance
with this Section III. All Corporation Share Options and Trust Share Options
included in the Paired Options granted under this Section III shall constitute
non-qualified share options.
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3.2 GRANTS OF PAIRED OPTIONS. Each Director shall be granted Paired Options
as follows:
(a) Time of Grant. On the date of the effectiveness of the
Corporation's first public offering of Corporation Shares which occurs
subsequent to the adoption of this Plan by the Board and prior to June 30,
1996, and on June 30 of each calendar year beginning in 1996 (or, if later, on
the date on which a person is first elected to serve as a Director), each
person who is a Director on such date, including each person who has been
elected a Director as of such date but who will not begin to serve as a
Director until a later date, shall be granted a Paired Option to purchase 6,000
Paired Shares (which amount shall be pro-rated if such person is first elected
to serve as a Director on a date other than such effective date or June 30 of a
calendar year, as the case may be) at a purchase price per Paired Share equal
to 100% of the fair market value of a Paired Share on the date of grant of such
Paired Option; provided, however, that the portion of the purchase price of a
Paired Share which is attributable to a Corporation Share shall be 100% of the
fair market value of a Corporation Share on the date of grant of such Paired
Option and the portion of the purchase price of a Paired Share which is
attributable to a Trust Share shall be 100% of the fair market value of a Trust
Share on the date of grant of such Paired Option.
(b) Option Period and Exercisability. Each Paired Option granted
under this Article III shall be fully exercisable on and after its date of
grant, shall expire ten years after its date of grant (notwithstanding
termination of service as a Director for any reason prior to such ten-year
anniversary date) and may be exercised in whole or in part only with respect to
whole Paired Shares. Paired Options granted under this Article III shall be
exercisable in accordance with Section 2.2(c).
(c) Death. If a Director dies while a Paired Option is outstanding,
such Paired Option may thereafter be exercised by such Director's executor,
administrator, legal representative, beneficiary or similar person, as the case
may be, until and including the expiration date of the term of such Paired
Option.
IV. GENERAL
4.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
shareholders of the Corporation for approval within one year after the date of
approval by the Board and, if approved by a majority of all the votes cast at a
meeting of
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shareholders at which a quorum is present, shall become effective as of the
date of approval by the Board. No Paired Option may be exercised prior to the
date of such shareholder approval. This Plan shall terminate ten years after
its effective date unless terminated earlier by the Board. Termination of this
Plan shall not affect the terms or conditions of any Paired Option granted
prior to termination.
Paired Options may be granted hereunder at any time prior to the
termination of this Plan, provided that no Paired Option may be granted later
than ten years after the effective date of this Plan. In the event that this
Plan is not approved by the shareholders of the Corporation within one year
after the date of approval by the Board, this Plan and any Paired Options
granted hereunder shall be null and void.
4.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of shareholder approval required by applicable law,
rule or regulation including Rule 16b-3 under the Exchange Act and Sections
162(m) and 422 of the Code; provided, however, that the number of Paired Shares
subject to a Paired Option granted to Directors pursuant to Article III, the
purchase price therefor, the date of grant of any such Paired Option, and the
category of persons eligible to be granted such Paired Options shall not be
amended more than once every six months, other than to comply with changes in
the Code and the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations thereunder; and provided further, that any
amendment with respect to the persons eligible to participate in this Plan or
the number of Paired Shares available for grants of Paired Options under this
Plan shall not be effective without shareholder approval of such amendment
within 12 months before or after the date such amendment is approved by the
Board. No amendment may impair the rights of a holder of an outstanding Paired
Option without the consent of such holder.
4.3 AGREEMENT. No Paired Option may be exercised until an Agreement is
executed by the Corporation and the optionee and, upon execution by the
Corporation and the optionee and delivery of the Agreement to the Corporation,
such Paired Option shall be effective as of the effective date set forth in the
Agreement.
4.4 NON-TRANSFERABILITY. No Paired Option hereunder shall be
transferable other than (i) by will or the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Corporation or
(ii) in the case of a Paired Option which does not include a Corporation Share
Option designated as an incentive share option, as otherwise permitted
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under Rule 16b-3 under the Exchange Act as set forth in the Agreement relating
to such Paired Option. Except to the extent permitted by the foregoing
sentence, each Paired Option may be exercised during the optionee's lifetime
only by the optionee or the optionee's legal representative or similar person.
Except as permitted by the second preceding sentence, no Paired Option shall be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
Paired Option such Paired Option and all rights thereunder shall immediately
become null and void.
4.5 TAX WITHHOLDING. The Corporation shall have the right to require,
prior to the delivery of any Paired Shares, payment by the optionee of any
Federal, state, local or other taxes which may be required to be withheld or
paid in connection with a Paired Option hereunder. An Agreement may provide
that the optionee may satisfy any such obligation by any of the following
means: (A) a cash payment to the Corporation, (B) delivery to the Corporation
of previously owned whole Paired Shares (which the optionee has held for at
least six months prior to the delivery of such Paired Shares or which the
optionee purchased on the open market and for which the optionee has good
title, free and clear of all liens and encumbrances) having an aggregate fair
market value, determined as of the date the obligation to withhold or pay taxes
arises in connection with the Paired Option (the "Tax Date"), equal to the
amount necessary to satisfy any such obligation, (C) a cash payment by a
broker-dealer acceptable to the Corporation to whom the optionee has submitted
an irrevocable notice of exercise or (D) any combination of (A) and (B), in
each case to the extent set forth in the Agreement relating to the Paired
Option; provided, however, that the Committee shall have sole discretion to
disapprove of an election pursuant to any of clauses (B)-(D) and that in the
case of an optionee who is subject to Section 16 of the Exchange Act, the
Corporation may require that the method of satisfying any such obligation be in
compliance with Section 16 and the rules and regulations thereunder. An
Agreement may provide for Paired Shares to be delivered having a fair market
value in excess of the minimum amount required to be withheld, but not in
excess of the amount determined by applying the optionee's maximum marginal tax
rate. Any fraction of a Paired Share which would be required to satisfy such
an obligation shall be disregarded and the remaining amount due shall be paid
in cash by the optionee.
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4.6 RESTRICTIONS ON PAIRED SHARES. Each Paired Option hereunder shall be
subject to the requirement that if at any time the Corporation determines that
the listing, registration or qualification of the Paired Shares subject to such
Paired Option upon any securities exchange or under any law, or the consent or
approval of any governmental body, or the taking of any other action is
necessary or desirable as a condition of, or in connection with, the delivery
of Paired Shares thereunder, such Paired Shares shall not be delivered unless
such listing, registration, qualification, consent, approval or other action
shall have been effected or obtained, free of any conditions not acceptable to
the Corporation. The Corporation may require that certificates evidencing
Paired Shares delivered pursuant to any Paired Option bear a legend indicating
that the sale, transfer or other disposition thereof by the holder is
prohibited except in compliance with the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
Notwithstanding any other provision hereunder, no Paired Option
hereunder shall be exercisable if, as a result of either the ability to
exercise or the exercise of such Paired Option, the Trust would not satisfy the
REIT Requirements in any respect. For purposes of the preceding sentence,
"REIT Requirements" shall mean the requirements for the Trust to (i) qualify as
a real estate investment trust under the Code and the rules and regulations
promulgated thereunder, (ii) retain its status as grandfathered pursuant to
Section 132(c)(3) of the Deficit Reduction Act of 1984 and (iii) retain the
benefits of that certain private letter ruling issued by the Internal Revenue
Service to the Trust dated as of January 4, 1980.
4.7 ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Paired Shares other than a regular
cash dividend, the number and class of securities available under this Plan,
the number and class of securities subject to each outstanding Paired Option,
the purchase price per security, and the number of securities subject to each
Paired Option to be granted to Directors pursuant to Article III shall be
appropriately adjusted by the Committee, such adjustments to be made in the
case of outstanding Paired Options without an increase in the aggregate
purchase price. The decision of the Committee regarding any such adjustment
shall be final, binding and conclusive. If any adjustment would result in a
fractional security being (i) available under this Plan, such fractional
security shall be disregarded, or (ii) subject to a Paired Option
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<PAGE> 14
under this Plan, the Company shall pay the optionee, in connection with the
first exercise of the Paired Option in whole or in part, occurring after such
adjustment, an amount in cash determined by multiplying (A) the fraction of
such security (rounded to the nearest hundredth) by (B) the excess, if any, of
(x) the fair market value of a Paired Share on the exercise date over (y) the
exercise price of the Paired Option.
With respect to any optionee who is subject to Section 16 of the
Exchange Act and notwithstanding the exercise periods set forth in paragraphs
(a), (c) and (d) of Section 2.3, paragraph (b) of Section 3.2 or as set forth
pursuant to such paragraphs in any Agreement to which such optionee is a party
(or as may be set forth in any Agreement pursuant to paragraph (b) of Section
2.3), in the event (i) the Corporation is involved in a business combination
which is intended to be treated as a pooling of interests for financial
accounting purposes (a "Pooling Transaction") or pursuant to which such
optionee receives a substitute option to purchase securities of any entity,
including an entity directly or indirectly acquiring the Corporation, and (ii)
such optionee's employment with the Corporation or service as a Director is
terminated during the nine-month period beginning three months prior to the
consummation of such business combination, then each Paired Option (or option
in substitution thereof) held by such optionee shall be exercisable to the
extent set forth in such paragraphs until and including the latest of (x) the
date set forth pursuant to the then applicable paragraph of Section 2.3 or 3.2,
as the case may be, (y) the date which is six months and one day after the
consummation of such business combination and (z) the date which is ten
business days after the date of expiration of any period during which such
optionee may not dispose of a security issued in the Pooling Transaction in
order for the Pooling Transaction to be accounted for as a pooling of
interests.
4.8 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any right
to participate in this Plan. Neither this Plan nor any Paired Option granted
hereunder shall confer upon any person any right to continued employment by the
Corporation, any subsidiary or any affiliate of the Corporation or affect in
any manner the right of the Corporation, any subsidiary or any affiliate of the
Corporation to terminate the employment of any person at any time without
liability hereunder.
4.9 RIGHTS AS SHAREHOLDER. No person shall have any rights as a shareholder
of the Corporation with respect to any Corporation Shares or Trust Shares which
are subject to a Paired Option
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hereunder until such person becomes a shareholder of record with respect to
such Corporation Shares and Trust Shares.
4.10 DESIGNATION OF BENEFICIARY. If permitted by the Corporation, an optionee
may file with the Committee a written designation of one or more persons as
such optionee's beneficiary or beneficiaries (both primary and contingent) in
the event of the optionee's death. To the extent an outstanding Paired Option
granted hereunder is exercisable, such beneficiary or beneficiaries shall be
entitled to exercise such Paired Option.
Each beneficiary designation shall become effective only when filed in
writing with the Committee during the optionee's lifetime on a form prescribed
by the Committee. The spouse of a married optionee domiciled in a community
property jurisdiction shall join in any designation of a beneficiary other than
such spouse. The filing with the Committee of a new beneficiary designation
shall cancel all previously filed beneficiary designations.
If an optionee fails to designate a beneficiary, or if all designated
beneficiaries of an optionee predecease the optionee, then each outstanding
Paired Option hereunder held by such optionee, to the extent exercisable, may
be exercised by such optionee's executor, administrator, legal representative
or similar person.
4.11 GOVERNING LAW. This Plan, each Paired Option hereunder and the related
Agreement, and all determinations made and actions taken pursuant thereto, to
the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of California and construed in
accordance therewith without giving effect to principles of conflicts of laws.
4.12 TERMINATION OF PAIRING AGREEMENT. Notwithstanding anything in this Plan
to the contrary, if at any time the Agreement dated June 25, 1980, by and
between the Corporation and the Trust, pursuant to which Corporation Shares and
Trust Shares are paired on a share-for-share basis, is terminated for any
reason and as a result of such termination Corporation Shares and Trust Shares
no longer are required to be transferred together, then concurrently with such
termination (i) Paired Options will no longer be granted hereunder; (ii) only
Corporation Share Options may thereafter be granted hereunder; (iii) each then
outstanding Paired Option shall constitute a wholly separate and independent
Corporation Share Option and Trust Share Option and the Corporation, in its
discretion, may require that each
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Agreement evidencing a Paired Option be returned to the Corporation for
cancellation in exchange for separate agreements evidencing the Corporation
Share Option and Trust Share Option subject to such Paired Option; (iv)
Corporation Share Options and Trust Share Options shall no longer be required
to be exercised, terminated, cancelled, forfeited, transferred or otherwise
disposed of together; and (v) the "fair market value" and the "closing price"
of the Corporation Shares and Trust Shares as used herein shall thereafter be
deemed to refer, respectively, to the fair market value and the closing price
of a Corporation Share and a Trust Share.
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EXHIBIT 5
[PIPER & MARBURY LLP LETTERHEAD]
April 18, 1996
Starwood Lodging Trust
11835 West Olympic Boulevard
Suite 695
Los Angeles, California 90064
Starwood Lodging Corporation
11835 West Olympic Boulevard
Suite 675
Los Angeles, California 90064
Ladies and Gentlemen:
We have acted as special Maryland counsel in connection with the joint
registration statement on Form S-8 (the "Registration Statement") being filed
on April 18, 1996 by Starwood Lodging Trust, a Maryland real estate investment
trust (the "Trust"), and Starwood Lodging Corporation, a Maryland corporation
(the "Corporation"), relating to the registration of an aggregate of 1,537,000
shares of beneficial interest, $.01 par value, of the Trust (the "Trust
Shares") and 1,573,000 shares of common stock, $.01 par value, of the
Corporation (the "Corporation Shares") which are "paired" and traded as units
consisting of one Trust Share and one Corporation Share (the "Paired Common
Shares"), to be issued under the 1995 Trust Share Option Plan of the Trust (the
"Trust Plan") and the 1995 Corporation Share Option Plan of the Corporation
(the "Corporation Plan" and, together with the Trust Plan, the "Plans").
In our capacity as special Maryland counsel, we have reviewed the
following:
(a) The Declaration of Trust of the Trust, as amended to date, certified
by an officer of the Trust (the "Declaration of Trust");
(b) The Charter of the Corporation, as amended to date, certified by an
officer of the Corporation (the "Charter");
<PAGE> 2
Piper & Marbury LLP
Starwood Lodging Trust
Starwood Lodging Corporation
April 18, 1996
Page 2
(c) A copy of the Trustees Regulations of the Trust as in effect on the
date hereof (the "Trust Regulations");
(d) A copy of the By-laws of the Corporation as in effect on the date
hereof (the "Corporation By-laws");
(e) The Registration Statement on Form S-8, relating to the Trust Shares
and the Corporation Shares, filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933,
on April 18, 1996 (together with all exhibits thereto, the
"Registration Statement");
(f) The Trust Plan;
(g) The Corporation Plan;
(h) A specimen certificate evidencing the Trust Shares;
(i) A specimen certificate evidencing the Corporation Shares;
(j) Certified resolutions of the Board of Trustees of the Trust
relating to the filing of the Registration Statement;
(k) Certified resolutions of the Board of Directors of the Corporation
relating to the filing of the Registration Statement;
(l) A good standing certificate for the Trust, dated April 17, 1996
issued by the Maryland State Department of Assessments and Taxation
(the "Department");
(m) A good standing certificate for the Corporation, dated April 17, 1996,
issued by the Department;
(n) An Officer's Certificate of the Trust dated as of the date hereof as
to certain factual matters (the "Trust Officers' Certificate");
(o) An Officer's Certificate of the Corporation dated as of the date
hereof as to certain factual matters (the "Corporation Officers'
Certificate"); and
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Piper & Marbury LLP
Starwood Lodging Trust
Starwood Lodging Corporation
April 18, 1996
Page 3
(p) Such other documents as we have considered necessary to the
rendering of the opinions expressed below.
In such examination, we have assumed, without independent
investigation, the genuineness of all signatures, the legal capacity of all
individuals who have executed any of the aforesaid documents, the authenticity
of all documents submitted to us as originals, the conformity with originals of
all documents submitted to us as copies and all public records received are
accurate and complete. As to any facts material to this opinion which we did
not independently establish or verify, we have relied solely upon the Trust
Officer's Certificate and the Corporation Officer's Certificate and have not
independently verified the matters stated therein.
We assume also that the issuance, sale and amount of the Trust Shares
and the Corporation Shares to be offered from time to time will be authorized
and determined by proper action of the Board of Trustees of the Trust and the
Board of Directors of the Corporation, as the case may be, in accordance with
the parameters described in the Registration Statement (each, a "Board Action")
and in accordance with the Declaration of Trust and the Charter, respectively,
and applicable Maryland law. We further assume that prior to the issuance of
any Corporation Shares and Trust Shares there will exist, under the Declaration
of Trust or the Charter, as the case may be, the requisite number of authorized
but unissued Corporation Shares or Trust Shares, as the case may be.
Based upon the foregoing, we are of the opinion that
(i) The Trust has been duly formed and is validly existing in good
standing as a real estate investment trust under the laws of the State of
Maryland.
(ii) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland.
(iii) (A) When specifically authorized for issuance by the
Corporation's Board of Directors in an amount not exceeding the authorized but
unissued capital stock of the Corporation and (B) when issued as described in
the Registration Statement and in accordance with the Corporation Plan, the
Corporation Shares will be legally issued, fully paid and nonassessable.
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Piper & Marbury LLP
Starwood Lodging Trust
Starwood Lodging Corporation
April 18, 1996
Page 4
(iv) (A) When specifically authorized for issuance by the Trust's
Board of Trustees in an amount not exceeding the authorized but unissued
capital stock of the Trust and (B) when issued as described in the Registration
Statement and in accordance with the Trust Plan, the Trust Shares will be
legally issued, fully paid and nonassessable.
The opinions expressed above are limited to the law of Maryland,
exclusive of the securities or "blue sky" laws of the State of Maryland. We
hereby consent to the filing of this opinion as Exhibit 5 to the Registration
Statement and to the reference to our firm in the Registration Statement. In
giving our consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act or the Rules and
Regulations of the Commission thereunder.
Very truly yours,
/s/ Piper & Marbury LLP
-----------------------------
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Starwood Lodging Trust and Starwood Lodging Corporation on Form S-8 (File Nos.
33- and 33- ) of our report dated January 31, 1996, appearing in the
Annual Report on Form 10-K of Starwood Lodging Trust and Starwood Lodging
Corporation for the year ended December 31, 1995.
Coopers & Lybrand L.L.P.
San Francisco, California
April 22, 1996
