-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R7G/wiL5lSMgPMXBFmzr+SNswaRHjXTx4n6HakDGZtIbjV8kl87KDVJD2E4RO5Uk aL1ORaXfybIRiKFiuUvc7A== 0000950148-96-000628.txt : 19960423 0000950148-96-000628.hdr.sgml : 19960423 ACCESSION NUMBER: 0000950148-96-000628 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960422 EFFECTIVENESS DATE: 19960511 SROS: AMEX SROS: BSE SROS: CSX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD LODGING TRUST CENTRAL INDEX KEY: 0000048595 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 520901263 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-02721 FILM NUMBER: 96549248 BUSINESS ADDRESS: STREET 1: 11835 W OLYMPIC BLVD STREET 2: SUITE 550 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3105753900 MAIL ADDRESS: STREET 1: 11835 W OLYMPIC BLVD STREET 2: SUITE 550 CITY: LOS ANGELES STATE: CA ZIP: 90064 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS TRUST /MD/ DATE OF NAME CHANGE: 19930506 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS DATE OF NAME CHANGE: 19800720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD LODGING CORP CENTRAL INDEX KEY: 0000316206 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 521193298 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-02721-01 FILM NUMBER: 96549249 BUSINESS ADDRESS: STREET 1: 11845 W OLYMPIC BLVD STREET 2: SUITE 560 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3105753900 MAIL ADDRESS: STREET 1: 11845 W OLYMPIC BLVD STREET 2: SUITE 560 CITY: LOS ANGELES STATE: CA ZIP: 90064 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS CORP DATE OF NAME CHANGE: 19920703 S-8 1 FORM S-8 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 ------------------ 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)
Copy to: SHERWIN L. SAMUELS, ESQ. SIDLEY & AUSTIN 555 WEST FIFTH STREET LOS ANGELES, CALIFORNIA 90013 (213) 896-6000 CALCULATION OF REGISTRATION FEE - --------------------------------------------------------------------------------
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 - ------------------------------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------------------------------
(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. =============================================================================== 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 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- 4 ITEM 8. EXHIBITS
Exhibit Description of Exhibit - -------- ---------------------- 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).
_________________________ * Filed herewith. ITEM 9. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: -3- 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- 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- 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- 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.
Name Capacity - ---- -------- /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
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 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.
Name Capacity - ---- -------- /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
11 INDEX TO EXHIBITS TO REGISTRATION STATEMENT ON FORM S-8
Exhibit Description of Exhibit - -------- ---------------------- 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).
* Filed herewith. EX-4.5 2 STARWOOD LODGING TRUST SHARE OPTION PLAN 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 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- 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- 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- 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- 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. -6- 7 (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. -7- 8 (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 -8- 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 -9- 10 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 -10- 11 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 -11- 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 -12- 13 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 -13- 14 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 -14- 15 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. -15- EX-4.6 3 STARWOOD LODGING CORPORATION SHARE OPTION PLAN 1 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 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 -2- 3 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 -3- 4 (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 -4- 5 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 -5- 6 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 -6- 7 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 -7- 8 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. -8- 9 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. -9- 10 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 -10- 11 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 -11- 12 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. -12- 13 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 -13- 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 -14- 15 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 -15- 16 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. -16- EX-5 4 OPINION OF COUNSEL 1 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"); 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 3 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. 4 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 ----------------------------- EX-23.2 5 CONSENT OF ACCOUNTANTS 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 -----END PRIVACY-ENHANCED MESSAGE-----