Starwood 2008 Annual Report Download - page 49

restricted stock and options. The Company entered into a letter agreement on August 14, 2007 confirming the terms
of the agreement as it relates to the acceleration of 50% of Mr. Prabhu’s unvested restricted stock and options.
Pursuant to Mr. Siegel’s employment agreement, in the event Mr. Siegel’s employment is terminated by the
Company without cause, Mr. Siegel will receive severance benefits of twelve months of base salary plus 100% of his
target annual incentive and the Company will continue to provide medical benefits coverage for up to twelve months
after the date of termination. Pursuant to a letter agreement entered into on August 14, 2007, Mr. Siegel will also be
entitled to acceleration of 50% of his then unvested restricted stock and options if he is terminated without cause
prior to September 24, 2009.
Pursuant to Mr. McAveety’s employment agreement, if Mr. McAveety’s employment is terminated by the
Company other than for cause, he will receive severance benefits of twelve months base salary and the Company
will continue to provide medical benefits coverage for up to twelve months after the date of termination. In addition,
the Company will pay the reasonable costs of relocation costs should Mr. McAveety relocate to Europe within one
year of the termination of his employment
Pursuant to Mr. Turner’s employment agreement, if Mr. Turner’s employment is terminated by the Company
other than for cause or by Mr. Turner for good reason, he will receive severance benefits of twelve months base
salary and the Company will continue to provide medical benefits coverage for up to twelve months after the date of
termination.
B. Termination in the Event of Change in Control
On August 2, 2006, the Company and each of Messrs. Prabhu and Siegel entered into severance agreements.
Each severance agreement provides for a term of three years, with an automatic one-year extension until either the
executive or the Company notifies the other that such party does not wish to extend the agreement. If a Change in
Control (as described below) occurs, the agreement will continue for at least 24 months following the date of such
Change in Control.
Each agreement provides that if, following a Change in Control, the executive’s employment is terminated
without Cause (as defined in the agreement) or with Good Reason (as defined in the agreement), the executive
would receive the following in addition to the items described in A. above:
• two times the sum of his base salary plus the average of the annual bonuses earned by the executive in the
three fiscal years ending immediately prior to the fiscal year in which the termination occurs;
• continued medical benefits for two years, reduced to the extent benefits of the same type are received by or
made available to the executive from another employer;
• a lump sum amount, in cash, equal to the sum of (A) any unpaid incentive compensation which had been
allocated or awarded to the executive for any measuring period preceding termination under any annual or
long-term incentive plan and which, as of the date of termination, is contingent only upon the continued
employment of the executive until a subsequent date, and (B) the aggregate value of all contingent incentive
compensation awards allocated or awarded to the executive for all then uncompleted periods under any
such plan that the executive would have earned on the last day of the performance award period, assuming
the achievement, at the target level, of the individual and corporate performance goals established with
respect to such award;
• immediate vesting of stock options and restricted stock held by the executive under any stock option or
incentive plan maintained by the Company;
• outplacement services suitable to the executive’s position for a period of two years or, if earlier, until the
first acceptance by the executive of an offer of employment, the cost of which will not exceed 20% of the
executive’s base salary;
• a lump sum payment of the executive’s deferred compensation paid in accordance with Section 409A
distribution rules; and
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