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                                                                   Exhibit 10.8

                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of June 18, 1999, is
made and entered into by and between Interstate Hotels Corporation, a Maryland
corporation (the "Company"), and J. William Richardson (the "Executive").

                                    RECITALS

         A. The Company desires to obtain the services of the Executive as a
senior executive of the Company;

         B. The Executive desires to provide his services to the Company on the
terms and conditions herein provided.

         NOW, THEREFORE, the parties agree as follows:

         1. DEFINITIONS. In addition to terms defined elsewhere herein, the
following terms have the following meanings when used in this Agreement with
initial capital letters:

                  (a) "BASE PAY" means the salary provided for in Section 4(a),
as such amount may be adjusted hereunder.

                  (b) "BOARD" means the Board of Directors of the Company or an
authorized committee thereof.

                  (c) "CAUSE" means that the Executive shall have committed:

                           (i) an intentional act of fraud, embezzlement or
                  theft in connection with his duties or in the course of his
                  employment with the Company or any Subsidiary;

                           (ii) intentional wrongful damage to property of the
                  Company or any Subsidiary;

                           (iii) intentional Unauthorized Disclosure, Use or
                  Solicitation; or

                           (iv) intentional wrongful engagement in any
                  Competitive Activity; and any such act shall have been
                  materially harmful to the Company. For purposes of this
                  Agreement, no act or failure to act on the part of the
                  Executive will be deemed "intentional" if it was due primarily
                  to an error in judgment or negligence, but will be deemed
                  "intentional" only if done or omitted to be done by the
                  Executive not in good faith and without reasonable belief that
                  his action or



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                  omission was in the best interest of the Company.
                  Notwithstanding the foregoing, the Executive will not be
                  deemed to have been terminated for "Cause" hereunder unless
                  and until there shall have been delivered to the Executive a
                  copy of a resolution duly adopted by the affirmative vote of
                  not less than three quarters of the full Board of Directors
                  then in office at a meeting of the Board of Directors called
                  and held for such purpose, after reasonable notice to the
                  Executive and an opportunity for the Executive, together with
                  his counsel (if the Executive chooses to have counsel present
                  at such meeting), to be heard before the Board, finding that,
                  in the good faith opinion of the Board, the Executive had
                  committed an act constituting "Cause" as herein defined and
                  specifying the particulars thereof in detail, provided,
                  however, that nothing herein will limit the right of the
                  Executive or his beneficiaries to contest the validity or
                  propriety of any such determination and such determination,
                  albeit a condition to any termination for "Cause" as
                  aforesaid, will not create any presumption that "Cause" in
                  fact exists.

                  (d) "CHANGE IN CONTROL" means an event which shall be deemed
to have occurred if (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; or (ii)
individuals who at the Commencement Date constitute the Board of the Company and
any new director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in clauses
(i) or (iii) of this paragraph) whose election by the Board of the Company or
nomination for election by the Company's stockholders was approved by a vote of
at least 80% of the directors then still in office who either were directors at
the Commencement Date or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board of the Company; or (iii) the stockholders of the Company approve a merger
or consolidation of the Company with or into any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 60% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.

                  (e) "COMPETITIVE ACTIVITY" means any act by the Executive that
is prohibited under Section 6.

                  (f) "DISABILITY" means the Executive's inability, as a result
of mental or physical illness, injury or disease, substantially to perform his
material duties and responsibilities under this Agreement for a period of 180
consecutive calendar days within any 12-month period.


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                  (g) "EMPLOYEE BENEFITS" means the perquisites, benefits and
service credit for benefits as provided under any and all employee welfare
benefit policies, plans, programs or arrangements in which Executive is entitled
to participate, including without limitation any group or other life, health,
medical/hospital or other insurance (whether funded by actual insurance or
self-insured by the Company), disability, salary continuation, expense
reimbursement and other employee benefit policies, plans, programs or
arrangements that may now exist or any equivalent successor policies, plans,
programs or arrangements that may be adopted hereafter by the Company.

                  (h) "SUBSIDIARY" means an entity in which the Company directly
or indirectly beneficially owns 50% or more of the outstanding Voting Stock or,
if a partnership, limited liability company or similar entity, at least 50% of
the equity capital interests thereof.

                  (i) "TERM OF EMPLOYMENT" means the period specified in Section
2.

                  (j) "UNAUTHORIZED DISCLOSURE, USE OR SOLICITATION" means any
violation or breach by the Executive of any provision of Section 7.

         2. TERM OF EMPLOYMENT. The Company hereby employs the Executive and the
Executive hereby accepts such employment, effective as of June 18, 1999 (the
"Commencement Date") and ending at the close of business on June 17, 2002;
provided, however, that commencing June 17, 2001 and each June 17th thereafter
the Term of Employment will automatically be extended for successive one-year
periods unless either party gives written notice to the other, not less than 90
calendar days prior to the otherwise scheduled expiration of the Term of
Employment, that it or he does not want the Term of Employment so to extend. The
Executive will devote substantially all of his business time to the business and
affairs of the Company and its Subsidiaries (excluding reasonable amounts of
time devoted to charitable purposes, passive investments and directorships and
periods in which he is physically or mentally ill, injured or otherwise
disabled).

         3. DUTIES, RESPONSIBILITIES AND OFFICE LOCATION. During the Term of
Employment, the Executive will have and perform the duties and responsibilities
set forth in Exhibit A, provided, however, that the Board may from time to time
change those duties and responsibilities (in which event the parties may, but
will not be required to, substitute a new Exhibit A) and no such change will
give rise to any liability on the part of the Company so long as such change
does not result in a change in the primary reporting relationship set forth on
Exhibit A.

         4 COMPENSATION AND BENEFITS. (a) BASE PAY. During the Term of
Employment, the Executive will receive Base Pay of $325,000 per year subject to
review by the Board for increase (but not decrease) at the end of each fiscal
year during the Term of Employment. Such Base Pay will be payable by the Company
in accordance with its regular compensation practices and policies applicable to
senior executives of the Company.


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                  (b) ANNUAL PERFORMANCE BONUS. For each fiscal year of the
Company during the Term of Employment, the Executive will be eligible for an
annual performance bonus under the Company's Management Bonus Plan ("Bonus
Plan"), that can vary from a minimum of $200,000 to a maximum of 200% of the
Executive's base salary. The Bonus will be subject to the rules issued each year
by the Board. During 1999 the Bonus will be based on Hotel Profits and Corporate
Profits and shall be calculated and paid consistent with other Executives of the
Company. In future years these categories may be revised or deleted and new
categories could be added. The Executive must be employed by the Company at the
time the Bonus is scheduled to be paid to be eligible to receive the Bonus.


                  (c) EMPLOYEE BENEFITS. During the Term of Employment, the
Executive will be entitled to (i) participate in all employee benefit plans,
programs, policies and arrangements sponsored, maintained or contributed to by
the Company, subject to and in accordance with the terms and conditions of such
plans, programs, policies and arrangements as they relate to similarly situated
senior executives of the Company, (ii) participate in all equity and long-term
incentive plans sponsored or maintained by the Company at a level commensurate
with his position, subject to and in accordance with the terms and conditions of
such plans as they relate to senior executives of the Company, and (iii) receive
all other benefits and perquisites provided or made available by the Company to
its senior executives, subject to and in accordance with the terms and
conditions of such benefits and perquisites as they relate to senior executives
of the Company.

                  (d) EXPENSES. During the Term of Employment, the Executive
will be entitled to reimbursement of all documented reasonable travel and
entertainment expenses incurred by him on behalf of the Company in the course of
the performance of his duties hereunder, subject to and in accordance with the
terms and conditions of the Company's expense reimbursement policies as they
relate to senior executives of the Company.

                  (e) VACATION. During the Term of Employment, the Executive
will be entitled to not less than four weeks of vacation, in addition to paid
public holidays as observed by the Company from year to year, subject to and in
accordance with the terms and conditions of the Company's regular compensation
practices and policies as they relate to senior executives of the Company

                  (f) LOANS. The Company has loaned the Executive $357,317, the
repayment of which shall be forgiven by the Company so long as the Executive's
employment is not terminated by the Company for Cause or voluntarily by the
Executive prior to September 16, 1999. At the Executive's request, the Company
will amortize such loan forgiveness on terms and conditions mutually agreed upon
between Company and Executive.


                     (g) EQUITY. No later than the fifth business day after the
Commencement Date (the "Date of Grant"), Executive shall receive a grant of
150,000 shares of restricted stock of the


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Company ("Restricted Stock Grant"). The Restricted Stock Grant shall vest
with respect to 33-1/3% of the underlying shares on June 17, 2000, June 17, 2001
and June 17, 2002; provided, however, upon the occurrence of a Change in Control
of the Company all amounts of the unvested Restricted Stock Grant shall
automatically vest.

         5. TERMINATION OF EMPLOYMENT. (a) TERMINATION BY NOTICE. Subject to the
provisions of Section 2 and this Section 5, the Executive's employment hereunder
will be for the Term of Employment specified in Section 2.

                  (b) VOLUNTARY TERMINATION OR TERMINATION FOR CAUSE. The
Company may, with or without notice, terminate the Executive's employment
hereunder for Cause. If the Executive's employment is terminated by the Company
effective during the Term of Employment for Cause, or is terminated by the
Executive, the Executive will not be entitled to any compensation or benefits
provided herein, and nothing herein will limit the Company's rights against the
Executive or the rights and obligations of the parties under Sections 6 and 7.

                  (c) TERMINATION FOR ANY REASON OTHER THAN CAUSE OR DISABILITY.
If the Executive's employment is terminated by the Company during the Term of
Employment for any reason other than Cause or Disability:

                      (i) The Executive will be entitled to receive the greater
         of (A) the sum of his Base Pay and annual performance bonus for one (1)
         year immediately preceding the effective date of his termination of
         employment and (B) his Base Pay (at the rate in effect on the effective
         date of his termination of employment) and annual performance bonus
         based upon the highest annual performance bonus received by the
         Executive during the Term of this Agreement for the remainder of the
         Term of Employment, in either case payable in accordance with the
         Company's regular compensation practices and policies applicable to
         senior executives; and

                     (ii) For one (1) year following the effective date of the
         Executive's termination of employment or, if longer, the remainder of
         the Term of Employment (the "Continuation Period"), the Company will
         arrange to provide the Executive and his eligible dependents with
         Employee Benefits (excluding retirement, deferred compensation and
         stock option, stock purchase, stock appreciation or similar
         compensatory benefits) that are substantially similar to those that the
         Executive and such dependents were receiving or entitled to receive
         immediately prior to the effective date of the Executive's termination
         of employment, except that the level of any such Employee Benefits to
         be provided to the Executive and such dependents may be reduced in the
         event of a corresponding reduction generally applicable to all senior
         executives. If and to the extent that any benefit described in this
         Section 5(c)(ii) is not or cannot be paid or provided under any policy,
         plan, program or arrangement of the Company or any Subsidiary, as the
         case may be, then the Company will itself pay or provide for the
         payment of such Employee Benefits to the Executive, his dependents and
         his beneficiaries. Employee Benefits otherwise receivable by the
         Executive pursuant to this


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         Section 5(c)(ii) will be reduced to the extent comparable welfare
         benefits are actually received by the Executive from another employer
         during the Continuation Period following the effective date of the
         Executive's termination of employment, and any such benefits actually
         received by the Executive must be reported by the Executive to the
         Company.

                  (d) DEATH OR DISABILITY. If the Executive's employment is
terminated effective during the Term of Employment as a result of his death or
by the Company as a result of his Disability, the Executive (or, in the event of
his death, his designated beneficiary) will be entitled to receive his Base Pay
(at the rate in effect on the effective date of his termination of employment)
for a period of 12 months following such effective date, payable in accordance
with the Company's regular compensation practices and policies applicable to
senior executives but less any amounts paid to the Executive under any long-term
disability plan, program, policy or arrangement of the Company or any
Subsidiary.

                  (e) CHANGE IN CONTROL.

                  (i) In the event of the occurrence of a Change in Control
         during the Term of Employment, if within 36 months of such Change of
         Control, Executive's employment is terminated by the Company without
         Cause, or by the Executive as set forth below, Executive shall be
         entitled to receive (i) a lump sum payment equal to One Million Five
         Hundred Thousand Dollars ($1,500,000) and (ii) the benefits
         continuation as provided under Section 5(c)(ii). Notwithstanding the
         foregoing, in the event of a Change in Control, Executive may terminate
         employment with the Company for any reason, or without reason, during
         the first 12 months immediately following the first occurrence of a
         Change in Control with the right to severance compensation as provided
         in this Section 5(e).

                  (ii) If Executive incurs the tax (the "Excise Tax") imposed by
         Section 4999 of the Internal Revenue Code of 1986 (the "Code") on
         "excess parachute payments" within the meaning of Section 280G(b)(1) of
         the Code, the Company will pay to Executive an amount (the "Gross Up
         Payment") such that the net amount retained by Executive, after
         deduction of any Excise Tax on the excess parachute payment and any
         federal, state and local taxes (together with penalties and interest)
         and Excise Tax upon the payment provided for by this Section 6(e)(ii),
         will be equal to the Parachute Amount.

                  (iii) For purposes of determining the amount of the Gross Up
         Payment, Executive will be deemed to pay federal income taxes at the
         highest marginal rate of federal taxation in the calendar year in which
         the Gross Up Payment is to be made and state and local income taxes at
         the highest marginal rates of taxation in the state and locality of
         Executive's residence on the date of Executive's termination, net of
         the maximum reduction in federal income taxes that could be obtained
         from deduction of such state and local taxes. The determination of
         whether the Excise Tax is payable and


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         the amount thereof will be determined by a firm of independent
         certified public accountants jointly selected by the Company and the
         Executive.

                  (iv) The Company will pay the estimated amount of the Gross Up
         Payment to the Federal tax authorities as withholding taxes. The
         Executive and the Company agree to reasonably cooperate in the
         determination of the actual amount of the Gross Up Payment. Further,
         Executive and the Company agree to make such adjustments to the
         estimated amount of the Gross Up Payment as may be necessary to equal
         the actual amount of the Gross Up Payment, which in the case of
         Executive will refer to refunds of prior overpayments and in the case
         of the Company will refer to makeup of prior underpayments.

                  (f) COMPENSATION AND BENEFITS ON TERMINATION. Except as
         otherwise provided in Section 5(c), (d) or (e):

                       (i) All compensation and benefits payable to the
         Executive pursuant to Section 4 (other than compensation and benefits
         previously earned and, if applicable, vested under the terms of this
         Agreement or any other applicable employee benefit plan, program,
         policy, arrangement or agreement) will terminate as of the effective
         date of the Executive's termination of employment; and

                      (ii) The Executive will not be entitled to, and hereby
         waives, any claims for compensation or benefits (other than
         compensation and benefits previously earned and, if applicable, vested
         under the terms of this Agreement or any other applicable employee
         benefit plan, program, policy, arrangement or agreement) payable after
         such effective date and for damages arising in connection with his
         termination of employment pursuant to this Agreement.

                  (g) NO MITIGATION OBLIGATION. The Company hereby acknowledges
that it will be difficult and may be impossible for the Executive to find
reasonably comparable employment following the Termination Date and that the
non-competition covenant contained in Section 6 will further limit the
employment opportunities for the Executive. Accordingly, the payment of the
compensation by the Company to the Executive in accordance with the terms of
this Agreement is hereby acknowledged by the Company to be reasonable, and the
Executive will not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, nor will any
profits, income, earnings or other benefits from any source whatsoever create
any mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise, except as expressly provided in the last
sentence of Section 5(c)(ii).

         6. COMPETITIVE ACTIVITY. During the Term of Employment and the period
ending one year following the effective date of the Executive's termination of
employment, the Executive will not:


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         (a)      enter into or engage in any business which competes with the
                  Company's business or promote or assist, financially or
                  otherwise, any firm, person, association, partnership,
                  corporation or other entity engaged in any business which
                  competes with the Company's business; provided that this
                  clause (i) shall cease to apply after the Executive's
                  termination of employment, or

         (b)      solicit or endeavor, directly or indirectly (including through
                  third parties), to cause any employee of the Company or any
                  Subsidiary to leave his employment or induce or attempt to
                  induce any such employee to breach any employment agreement
                  with the Company or any Subsidiary or otherwise interfere with
                  the employment of any such employee; or

         (c)      solicit, endeavor to cause, induce or attempt to induce any
                  agent who engages in the business of marketing the services of
                  the Company or any Subsidiary to terminate, reduce or modify
                  its agency relationship with the Company or any Subsidiary.

         7. UNAUTHORIZED DISCLOSURE, USE OR SOLICITATION. (a) Executive will
keep in strict confidence, and will not, directly or indirectly, at any time
during or after his employment with the Company, disclose, furnish, disseminate,
make available or, except in the course of performing his duties of employment
hereunder, use any trade secrets or confidential business and technical
information of the Company or its customers, vendors or property owners or
managers, without limitation as to when or how Executive may have acquired such
information. Such confidential information will include, without limitation, the
Company's unique selling methods and trade techniques, management, training,
marketing and selling manuals, promotional materials, training courses and other
training and instructional materials, vendor, owner, manager and product
information, customer lists, other customer information and other trade
information. Executive specifically acknowledges that all such confidential
information including, without limitation, customer lists, other customer
information and other trade information, whether reduced to writing, maintained
on any form of electronic media, or maintained in the mind or memory of
Executive and whether compiled by the Company, and/or Executive, derives
independent economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from its disclosure or use,
that reasonable efforts have been made by the Company to maintain the secrecy of
such information, that such information is the sole property of the Company and
that any retention and use of such information by Executive during his
employment with the Company (except in the course of performing his duties and
obligations hereunder) or after the termination of his employment will
constitute a misappropriation of the Company's trade secrets.

                  (b) Executive agrees that upon termination of Executive's
employment with the Company, for any reason, Executive will return to the
Company, in good condition, all property of the Company, including without
limitation, the originals and all copies of all management, training, marketing
and selling manuals, promotional materials, other training and instructional
materials, vendor, owner, manager and product information, customer lists, other


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customer information and all other selling, service and trade information and
equipment. In the event that such items are not so returned, the Company will
have the right to charge Executive for all reasonable damages, costs, attorneys'
fees and other expenses incurred in searching for, taking, removing and/or
recovering such property.

                  (c) Executive acknowledges that to the extent permitted by
law, all work papers, reports, documentation, drawing, photographs, negatives,
tapes and masters therefor, prototypes and other materials (hereinafter,
"items"), including, without limitation, any and all such items generated and
maintained on any form of electronic media, generated by Executive during his
employment with the Company will be considered a "work made for hire" and that
ownership of any and all copyrights in any and all such items will belong to the
Company. The item will recognize the Company as the copyright owner, will
contain all proper copyright notices, e.g., "(year of creation" Interstate
Hotels Corporation. All rights reserved," and will be in condition to be
registered or otherwise placed in compliance with registration or other
statutory requirements throughout the world.

                  (d) Executive hereby assigns and agrees to assign to the
Company, its successors, assigns or nominees, all of his rights to any
discoveries, inventions and improvements, whether patentable or note, made,
conceived or suggested, either solely or jointly with others, by Executive while
in the Company's employ, whether in the course of his employment with the use of
the Company's time, materials or facilities or in any way within or related to
the existing or contemplated scope of the Company's business. Any discovery,
invention or improvement relating to any subject matter with which the Company
was concerned during Executive's employment and made, conceived or suggested by
Executive, either solely or jointly with others, within one year following
termination of Executive's employment under this Agreement or any successor
agreements will be irrebuttably presumed to have been so made, conceived or
suggested in the course of such employment with the use of the Company's time,
materials or facilities. Upon request by the Company with respect to any such
discoveries, inventions or improvements, Executive will execute and deliver to
the Company, at any time during or after his employment, all appropriate
documents for use in applying for, obtaining and maintaining such domestic and
foreign patents as the Company may desire, and all proper assignments therefor,
when so requested, at the expense of the Company, but without further or
additional consideration.

                  (e) Executive may use the Company's trade names, trademarks
and/or service marks in connection with the sale of the Company's products and
services, but only in such manner and for such purposes as may be authorized by
the Company. Upon any termination of this Agreement, Executive immediately will
cease the use of such trade names, trademarks and/or service marks and eliminate
them wherever they have been used or incorporated by Executive.

                  (f) The Executive will not directly or indirectly (i) solicit
or endeavor to cause any employee of the Company or any Subsidiary to leave his
employment or induce or attempt to induce any such employee to breach any
employment agreement with the Company or any


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Subsidiary or otherwise interfere with the employment of any such employee or
(ii) solicit, endeavor to cause, induce or attempt to induce any agent who
engages in the business of marketing the services of the Company or any
Subsidiary to terminate, reduce or modify its agency relationship with the
Company or any Subsidiary.

         8. SUCCESSORS AND BINDING AGREEMENT. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This Agreement will
be binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any persons acquiring directly or
indirectly all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
such successor will thereafter be deemed the "Company" for the purposes of this
Agreement), but will not otherwise be assignable, transferable or delegable by
the Company.

                  (b) This Agreement will inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.

                  (c) This Agreement is personal in nature and neither of the
parties hereto will, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in Sections 8(a) and (b). Without limiting the generality or
effect of the foregoing, the Executive's right to receive payments hereunder
will not be assignable, transferable or delegable, whether by pledge, creation
of a security interest, or otherwise, other than by a transfer by Executive's
will or by the laws of descent and distribution and, in the event of any
attempted assignment or transfer contrary to this Section 8(c), the Company will
have no liability to pay any amount so attempted to be assigned, transferred or
delegated.

         9. LEGAL FEES AND EXPENSES. It is the intent of the Company that the
Executive not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of Executive's rights
under this Agreement by litigation or otherwise because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Executive hereunder. Accordingly, if it should appear to the Executive that
the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation, arbitration or other action or proceeding designed to
deny, or to recover from, the Executive the benefits provided or intended to be
provided to the Executive hereunder, the Company irrevocably authorizes the
Executive from time to time to retain counsel of Executive's choice, at the
expense of the Company as hereafter provided, to advise and represent the
Executive in connection with any such interpretation, enforcement or defense,
including without limitation the initiation or defense of


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any litigation, arbitration or other legal action, whether by or against the
Company or any Director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. Without respect to whether the Executive prevails,
in whole or in part, in connection with any of the foregoing, the Company will
pay and be solely financially responsible for any and all attorneys' and related
fees and expenses incurred by the Executive in connection with any of the
foregoing.

         10. ADDITIONAL REMEDIES. (a) Notwithstanding any other remedy herein
provided for or available, if the Executive should be in breach of any of the
provisions of Section 6 or 7, the Executive expressly acknowledges and agrees
that the Company will be entitled to injunctive relief or specific performance,
without the necessity of proving damages, in addition to any other remedies it
may have.

                  (b) Notwithstanding any of the foregoing, in the event of any
disputes regarding the interpretation or application of any provision of this
Agreement, either the Executive or the Company, or both parties, may request in
writing that such dispute be resolved through final and binding arbitration. The
parties will jointly select the arbitrator who will hear such dispute. If the
parties cannot agree on the selection of an arbitrator, the parties will request
that one be appointed by the American Arbitration Association. The arbitration
will be conducted in Pittsburgh, Pennsylvania (or in any other location mutually
agreed upon by the parties) in accordance with the rules of the American
Arbitration Association. The parties acknowledge and agree that time will be of
the essence throughout such procedure. The decision of the arbitrator may be
entered in any court having subject matter and personal jurisdiction over the
dispute and the Executive. The Company will pay any costs and expenses in
connection with any such dispute or procedure.

         11. REPRESENTATION. Each party represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
it and any other person or entity.

         12. SEVERABILITY. In the event that any provision or portion of this
Agreement is determined to be invalid or unenforceable for any reason, in whole
or in part, the remaining provisions of this Agreement will be unaffected
thereby and will remain in full force and effect to the fullest extent permitted
by law.

         13. LITIGATION AND REGULATORY COOPERATION. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not


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materially and adversely affect Executive or expose Executive to an increased
probability of civil or criminal litigation. Executive's cooperation in
connection with such claims or actions shall include, but not be limited to,
being available to meet with counsel to prepare for discovery or trial and to
act as a witness on behalf of the Company at mutually convenient times. During
and after Executive's employment, Executive also shall cooperate fully with the
Company in connection with any investigation or review of any federal, state or
local regulatory authority as any such investigation or review relates to events
or occurrences that transpired while Executive was employed by the Company. The
Company shall also provide Executive with compensation on an hourly basis
calculated as his final Base Pay for requested litigation and regulatory
cooperation that occurs after his termination of employment, and reimburse
Executive for all costs and expenses incurred in connection with his performance
under this Section 13; including, but not limited to, reasonable attorney" fees
and costs.

         14. INDEMNIFICATION. The Executive shall receive maximum
indemnification from the Company as permitted by the Company's by-laws in effect
at any time during the Term of this Agreement and applicable law.
This Section shall survive the termination of this Agreement.

         15. NOTICES. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals, required
or permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three business days after having been
sent by a nationally recognized overnight courier service such as Federal
Express or UPS, addressed to the Company (to the attention of the Secretary of
the Company) at its principal executive office and to the Executive at his
principal residence (with a copy to any counsel designated by the Executive), or
to such other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes of address will be
effective only upon receipt.

         16. DISCLOSURE. During the Term of Employment and for one year
thereafter, Executive will communicate the contents of this Agreement to any
person, firm, association, partnership, corporation or other entity which he or
she intends to be employed by, associated with, or represent and which is
engaged in a business that is competitive to the business of the Company.

         17. MODIFICATIONS AND WAIVERS. No provision of this Agreement may be
modified or discharged unless such modification or discharge is authorized by
the Board and is agreed to in writing, signed by the Executive and by an officer
of the Company duly authorized by the Board. No waiver by either party hereto of
any breach by the other party hereto of any condition or provision of this
Agreement to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at the time or at any prior or subsequent
time.


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         18. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to its subject matter, except
as such parties may otherwise agree in a writing which specifies that it is an
exception to the foregoing. This Agreement supersedes all prior agreements
between the parties hereto with respect to its subject matter and,
notwithstanding any other provision hereof, will become effective upon the
execution of this Agreement by the parties.

         19. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the Commonwealth of Pennsylvania, without giving
effect to the principles of conflict of laws of such Commonwealth.

         20. COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which will be deemed to be an original but all of
which together will constitute one and the same instrument.

         21. HEADINGS, ETC. The section headings contained in this Agreement are
for convenience of reference only and will not be deemed to control or affect
the meaning or construction of any provision of this Agreement. References to
Sections are to Sections in this Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                  INTERSTATE HOTELS CORPORATION

                                  By:   /s/ Thomas F. Hewitt
                                      --------------------------------




                                    /s/ J. William Richardson
                                    ----------------------------------
                                    J. William Richardson


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<PAGE>   14




                                    EXHIBIT A



Executive:                                  J. William Richardson





Duties and Responsibilities:                Vice Chairman
                                            and Chief Financial Officer





Primary Reporting Relationship:             Chairman and Chief Executive Officer



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