Starwood 2009 Annual Report Download - page 23

Following the end of a fiscal year and prior to the payment of any bonus to a Participant for the fiscal year, the
Committee must certify in writing that the applicable performance targets and all other factors on which bonuses
were based were met for the fiscal year. The Committee may in its sole discretion, reduce or completely eliminate,
but not increase, the amount of the bonus payable to a Participant for a fiscal year. The Committee may exercise this
discretion by, among other actions, establishing additional conditions for the payment of bonuses, including setting
other financial, strategic or individual goals.
At least 75% of the bonus payable to a Participant for a fiscal year will be paid in cash during the two and one-
half month period following the end of the fiscal year. The Committee may authorize payment of up to 25% of a
Participant’s bonus to be paid in the form of deferred stock awards, which are deemed to be invested in whole and
fractional Shares, at a price equal to 75% of the fair market value of such Shares as of the date the first cash bonus
was paid to the Participant for the fiscal year. These deferred stock awards (as adjusted for deemed dividend and
distribution equivalents) vest ratably over the three-year period beginning at the end of the fiscal year for which the
bonus is paid, except in the case of the Participant’s death, disability (determined to be a total physical disability
which, in the Committee’s judgment, prevents the Participant from performing substantially his/her duties and
responsibilities for a continuous period of at least six months) or retirement (within the meaning of the Company’s
2004 Long-Term Incentive Compensation Plan), in which case such deferred stock becomes fully vested upon such
occurrence.
At the Participant’s election, any portion of a Participant’s bonus for a fiscal year in excess of $3 million may
also be paid in the form of deferred stock awards, in which case no discount from the fair market value of a unit will
be applied to such deferred stock awards. These deferred stock awards (as adjusted for deemed dividend and
distribution equivalents) vest ratably over the remaining term of any employment agreement applicable to the
Participant and shall vest in full upon the Participant’s termination of employment for any reason.
Vested deferred stock awards are paid in the form of whole Shares issuable under the Company’s 2004 Long-
Term Incentive Compensation Plan and cash equal to the fair market value, as determined by the Committee, for any
fractional Shares.
All determinations relating to the satisfaction of performance targets or any cancellation or forfeiture of
restricted stock or restricted stock awards upon a termination of employment with the Company of the holder of
such restricted stock or restricted stock awards shall be made by the Committee, in its sole discretion.
Since actual amounts will depend on actual performance and the Committee may award less than the
maximum bonus to each participant under the Executive Plan, the exact amount of the bonus that may be paid under
the Executive Plan cannot be determined at this time. In the event of a change in control of Starwood, the Committee
may adjust outstanding awards under the Executive Plan as appropriate, including, without limitation, causing
outstanding awards to vest and distribution of the award to be made or the award to be “cashed-out” by Starwood
(subject to certain payment restrictions set out in the Executive Plan in order to comply with Section 409A of the
Code).
The Board recommends a vote FOR reapproval of the Executive Plan.
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The table below shows the number of Shares beneficially owned by principal stockholders who beneficially
own more than five percent of our outstanding Shares as of March 17, 2010. The information in this table is based
upon the latest filings by each principal stockholder of either a Schedule 13D, Schedule 13G or Form 13F as filed by
the respective stockholder with the SEC as of the date stated in the below footnotes.
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