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                                                                    EXHIBIT 99.4

                         SUNSTONE HOTEL INVESTORS, INC.

                            1994 STOCK INCENTIVE PLAN

                                    ADDENDUM

TO STOCK OPTION AGREEMENT

                                                              SECTION 16 INSIDER

                  The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement ("Option Agreement")
by and between Sunstone Hotel Investors, Inc. (the "Corporation") and FIELD (1),
an officer of the Corporation subject to the short-swing profit restrictions of
the Federal securities laws ("Optionee"), evidencing the stock option granted on
FIELD (2) to Optionee under the terms of the Corporation's 1994 Stock Incentive
Plan, and such provisions shall be effective immediately. All capitalized terms
used in this Addendum, to the extent not otherwise specifically defined herein,
shall have the meanings assigned to such terms in the Option Agreement.

                        LIMITED STOCK APPRECIATION RIGHT

                  Optionee is hereby granted a limited stock appreciation right
in tandem with the option, exercisable upon the terms and conditions set forth
below:

                  1. Should a Hostile Take-Over (as defined below) occur at any
time after the option has been outstanding for a period of at least six (6)
months measured from the Effective Date of this Addendum indicated below, then
Optionee shall have the unconditional right (exercisable for a thirty (30)-day
period immediately following the consummation of such Hostile Take-Over) to
surrender the option to the Corporation, to the extent the option is at the time
exercisable for fully vested shares of Common Stock. In return for the
surrendered option, Optionee shall receive a cash distribution from the
Corporation in an amount equal to the excess of (i) the Take-Over Price (as
defined below) of the vested shares of Common Stock at the time subject to the
surrendered option (or surrendered portion of the option) over (ii) the
aggregate Exercise Price payable for such vested shares.

                  2. To exercise this limited stock appreciation right, Optionee
must, during the applicable thirty (30)-day exercise period, provide the
Corporation with written notice of the option surrender in which there is
specified the number of vested Option Shares as to which the Option is being
surrendered. Such notice must be accompanied by the return of Optionee's copy of
the Option Agreement, together with any written amendments to such Agreement.
The cash distribution shall be paid to Optionee within five (5) days following
such delivery date, and neither the approval of the Plan Administrator nor the
consent of the Board shall be required in connection with such option surrender
and cash distribution. Upon receipt of such cash distribution, the 
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option shall be cancelled with respect to the vested Option Shares subject to
the surrendered option (or the surrendered portion), and Optionee shall cease to
have any further right to acquire those Option Shares under the Option
Agreement. The option shall, however, remain outstanding for the balance of the
Option Shares (if any) in accordance with the terms and provisions of the Option
Agreement, and the Corporation shall issue to the Optionee a new stock option
agreement (substantially in the form of the surrendered Option Agreement) for
those remaining Option Shares.

                  3. For purposes of this limited stock appreciation right, the
following definitions shall be in effect:

                           A HOSTILE TAKE-OVER shall be deemed to occur should
         any person or related group of persons (other than the Corporation or a
         person that directly or indirectly controls, is controlled by, or is
         under common control with, the Corporation) directly or indirectly
         acquire beneficial ownership (within the meaning of Rule 13d-3 of the
         Securities Exchange Act of 1934, as amended) of securities possessing
         more than fifty percent of the total combined voting power of the
         Corporation's outstanding securities pursuant to a tender or exchange
         offer made directly to the Corporation's stockholders which the Board
         does not recommend such stockholders to accept, and

                           more than fifty percent (50%) of the securities
         acquired in such tender or exchange offer are accepted from holders
         other than the officers and directors of the Corporation subject to the
         short-swing profit restrictions of Section 16 of the Securities
         Exchange Act of 1934, as amended.

                           The TAKE-OVER PRICE per share of Common Stock shall
         be equal to the greater of (i) the Fair Market Value per share on the
         date the option is surrendered to the Corporation in connection with a
         Hostile Take-Over, as determined in accordance with the valuation
         provisions of Paragraph 9.c. of the Option Agreement, or (ii) the
         highest reported price per share of Common Stock paid by the tender
         offeror in effecting such Hostile Take- Over. However, if the
         surrendered option is designated as an Incentive Option in the Grant
         Notice, then the Take-Over Price shall not exceed the clause (i) price
         per share.

                                       2.
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                  4. In no event may this limited stock appreciation right be
exercised when there is not a positive spread between the Fair Market Value of
the vested Option Shares and the aggregate Exercise Price payable for such
shares. This limited stock appreciation right shall in all events terminate upon
the expiration or sooner termination of the option term and may not be assigned
or transferred by Optionee.

                  IN WITNESS WHEREOF, Sunstone Hotel Investors, Inc. has caused
this Addendum to be executed by its duly-authorized officer, and Optionee has
executed this Addendum, all as of the Effective Date specified below.


                                               SUNSTONE HOTEL INVESTORS, INC.

                                               By
                                                  -----------------------------

                                               Title
                                                    ---------------------------

                                               --------------------------------
                                               FIELD (1),      OPTIONEE


EFFECTIVE DATE:  FIELD (2)


                                       3.