Starwood 2011 Annual Report Download - page 55

• a majority of the directors cease to serve on the Company’s Board in connection with a successful hostile
proxy contest;
Oa merger or consolidation of the Company or any direct or indirect subsidiary of the Company with
any other corporation, other than:
Oa merger or consolidation in which securities of the Company would represent at least 70% of the
voting power of the surviving entity; or
• a merger or consolidation effected to implement a recapitalization of the Company in which no person
becomes the beneficial owner of 25% or more of the voting power of the Company; or
• approval of a plan of liquidation or dissolution by the stockholders or the consummation of a sale of all or
substantially all of the Company’s assets, other than a sale to an entity in which the Company’s
stockholders would hold at least 70% of the voting power in substantially the same proportions as their
ownership of the Company immediately prior to such sale. However, a “Change in Control” does not
include a transaction in which Company stockholders continue to hold substantially the same
proportionate ownership in the entity which would own all or substantially all of the Company’s assets
following such transaction.
Each of Messrs. Avril and Turner entered into similar change in control agreements in connection with their
employment with the Company, provided that no tax gross-up is provided if such payments become subject to
the excise tax. If such payments are subject to the excise tax, the benefits under the agreement will be reduced
until the point where the executive is better off paying the excise tax rather than reducing the benefits.
Mr. van Paasschen’s employment agreement provides that he would be entitled to the following benefits if
his employment were terminated without cause or he resigned with good reason following a Change in Control:
• two times the sum of his base salary and target annual bonus;
• a lump sum payment, in cash, equal to the unpaid incentive compensation then subject to performance
conditions, payable at the maximum level of performance;
• immediate vesting of stock options, restricted stock and restricted stock units held under any stock option
or incentive plan maintained by the Company;
• a lump sum payment of his nonqualified deferred compensation paid in accordance with Section 409A
distribution rules; and
• immediate vesting of all unvested 401(k) contributions in his 401(k) account or payment by the Company
of an amount equal to any such unvested amounts that are forfeited by reason of his termination of
employment.
In addition, to the extent that Mr. van Paasschen becomes subject to the “golden parachute” excise tax
imposed under Section 4999 of the Code, he would receive a gross-up payment in an amount sufficient to offset
the effects of such excise tax.
C. Estimated Payments Upon Termination
The tables below reflect the estimated amounts payable to the Named Executive Officers in the event their
employment with the Company had terminated as of December 30, 2011 under various circumstances, and
includes amounts earned through that date. The actual amounts that would become payable in the event of an
actual employment termination can only be determined at the time of such termination.
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