Document:

EX-10.25(III)

 

EXHIBIT 10.25

Performance Share Agreement

     WHEREAS,                                          (hereinafter called the “Grantee”) is a key associate of Diebold,
Incorporated (hereinafter called the “Corporation”) or a Subsidiary; and

     WHEREAS, the execution of a Performance Share Agreement substantially in the form hereof has
been authorized by a resolution of the Compensation Committee (the “Committee”) of the Board of
Directors of the Corporation (the “Board”) duly adopted on                                         ,                     .

     NOW, THEREFORE, subject to the terms and conditions of the 1991 Equity and Performance
Incentive Plan (As Amended and Restated as of February 7, 2001), and as further amended by
Amendment No. 1 and Amendment No. 2 (the “Plan”), and the terms and conditions described below, the
Corporation hereby grants to the Grantee as of                                         ,                     ,                                          Performance Shares,
together with the opportunity to earn up to an additional 100% of such number of Performance Shares
for superior performance as described herein.

1.      Definitions.

     As used in this Agreement:

	 	(a)	 	A “Change in Control” shall be deemed to have occurred if any of the following events
shall occur:

	 	(i)	 	The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% of more of
either: (A) the then-outstanding shares of common stock of the Corporation (the
“Corporation Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (“Voting Stock”); provided, however,
that for purposes of this subsection (i), the following acquisition shall not
constitute a Change in Control (1) any acquisition directly from the Corporation,
(2) any acquisition by the Corporation, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or any
Subsidiary of the Corporation, or (4) any acquisition by any Person pursuant to a
transaction which complies with clauses (A), (B) and (C) of subsection (iii) of
this Section 1(b); or
	 
	 	(ii)	 	Individuals who, as to the date hereof, constitute the Board cease
for any reason (other than death or disability) to constitute at least a majority
of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for election
by the Corporation’s shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board (either by a specific vote
or by approval of the proxy statement of the Corporation in which such person is
named as a nominee for director, without objection to such nomination) shall be
considered as though such individual were a member of the Incumbent Board, but
excluding for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest (within the
meaning of Rule 14a-11 of the Exchange Act) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
	 
	 	(iii)	 	Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Corporation
(a “Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Corporation Common Stock and
Voting Stock immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors, as the
case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions relative to each other as their ownership, immediately prior to such
Business Combination, of the Corporation Common Stock and Voting Stock of the
Corporation, as the case may be, (B) no Person (excluding any entity resulting
from such Business Combination or any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 15% or more of,
respectively, the then-outstanding shares of common stock of the entity resulting
from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (C) at least a
majority of the members of the board of directors of the corporation

 

 

	 	 	 	resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board providing for such Business Combination;
or
	 
	 	(iv)	 	Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.

     (b) “Management Objectives” means                                          goals established by the Board for the
Corporation for the Performance Period covered by this Agreement as described in Section 2 of this
Agreement.

     (c) “Performance Period” means the period commencing with the closing price of the Common
Shares of the Corporation on                                         ,                      through                                         ,                     .

     (d) Capitalized terms used herein without definition shall have the meanings assigned to them
in the Plan.

2.      Management Objectives.

     The Management Objectives for the Performance Period covered by this Agreement are set forth
on Exhibit B-1. The following applies with respect to the Management Objectives.

     (a) Each Management Objective shall be evaluated separately with the total award determined
through the matrix set forth on Exhibits B-1 and B-2, which correlates the Corporation’s
performance against each Management Objective.

     (b) In no event shall the Grantee be entitled to receive more than 200% of the Performance
Shares granted hereunder.

3.      Grant of Performance Shares.

     The Corporation hereby grants to the Grantee the number of Performance Shares specified above,
which may be earned by the Grantee during the Performance Period as set forth in Section 4 of this
Agreement.

4.      Earned Shares.

     The Performance Shares granted hereby shall be earned based on the level of the Corporation’s
results with respect to each of the Management Objectives established for the Performance Period
covered by this Agreement. The number of Performance Shares earned shall be determined based on
the level of results of the Management Objectives in accordance with the matrix, which correlates
performance against both measures, as set forth on Exhibits B-1 and B-2. No additional
Performance Shares shall be earned for results in excess of the maximum level of results for the
Management Objectives. If results for a Management Objective are attained at interim levels of
performance on the matrix, a proportionate number of Performance Shares shall be earned, as
determined by mathematical interpolation, as described by example in Exhibit B-1. If the
Corporation’s performance with respect to both Management Objectives is determined to be below the
10th percentile, the number of Performance Shares earned, if any, shall be at the
discretion of the Committee, except in the case of Covered Employees.

5.      Payment of Awards.

     Payment shall be made in the form of the Corporation’s Common Shares, cash or a combination of
Common Shares and cash, as determined by the Committee in its sole discretion. Final awards shall
be paid, less applicable taxes, as soon as practicable after the receipt of audited financial
statements relating to the last fiscal year of the Performance Period covered by this Agreement and
the determination by the Committee of the level of attainment of each Management Objective, (but in
all events within 2 1/2 months of the last day of the last fiscal year of the Performance Period)
except as otherwise agreed to by the Corporation and the Grantee.

     Any payment of awards due pursuant to this Agreement to a deceased Grantee shall be paid to
the beneficiary designated by the Grantee by the latest Designation of Death Beneficiary in the
form attached as Exhibit C hereto filed by the Grantee with the Corporation. If no such
beneficiary has been designated or survives the Grantee, payment shall be made to the Grantee’s
legal representative. A beneficiary designation may be changed or revoked by a Grantee at any
time, provided the change or revocation is filed with the Corporation.

     Prior to payment, the Corporation shall only have an unfunded and unsecured obligation to make
payment of earned awards to the Grantee.

6.      Effect of Change in Control.

     In the event of a Change in Control prior to the end of the Performance Period, the
Performance Shares granted hereby (and under any prior Performance Share Agreements between the
Corporation and the Grantee) shall be deemed to have been earned in full and shall be immediately
due and payable in the form of Common Shares as soon as practicable following such Change in
Control.

7.      Effect of Death, Disability or Retirement.

     If the Grantee’s employment with the Corporation or one of its Subsidiaries should terminate
because of death, permanent total disability or retirement under a retirement plan (including,
without limitation, any supplemental retirement plan) of the Corporation or a Subsidiary at or
after the earliest voluntary retirement age provided for in any such retirement plan or should
retire at an earlier age with the consent of the Committee, prior to the payment of an award, the
extent to which the Performance Shares granted

 

 

hereby shall be deemed to have been earned shall be determined as if the Grantee’s employment had not
terminated and the result shall be multiplied by a fraction, the numerator of which is the number
of full months the Grantee was employed during the Performance Period and the denominator of which
is the total number of months in the Performance Period; provided, however, the Board, upon the
recommendation of the Committee may, in its discretion, increase payments made under the foregoing
circumstances up to the full amount payable for service throughout the Performance Period.

8.      Effect of Other Terminations of Employment; Detrimental Activity.

     In the event that the Grantee’s employment shall terminate prior to the payment of an award in
a manner other than any specified in Section 7 hereof or if the Grantee shall at any time engage in
any Detrimental Activity (as defined below), the Grantee shall forfeit any rights he or she may
have in any Performance Shares that have not been paid out to the Grantee prior to the time of such
termination; provided, however, that the Board, upon recommendation of the Committee, may order
payment of an award in an amount determined as in Section 7 hereof for termination owing to death,
disability or retirement, under circumstances which warrant such exceptional treatment in the
judgment of the Committee and the Board.

9.      Detrimental Activity.

     If the Grantee, either during employment by the Corporation or a Subsidiary or within one year
after termination of such employment, shall engage in any Detrimental Activity, and the Board shall
so find, and (except for any Detrimental Activity described in Section 9(d)(v)(B)) if the Grantee
shall not have ceased all Detrimental Activity within 30 days after notice of such finding given
within one year after commencement of such Detrimental Activity, the Grantee shall:

     (a) Return to the Corporation all Performance Shares that the Grantee has not disposed of and
an amount equal to all cash paid out pursuant to this Agreement within a period of one year prior
to the date of the commencement of such Detrimental Activity, and

     (b) With respect to any Performance Shares that the Grantee has disposed of that were paid out
pursuant to this Agreement within a period of one year prior to the date of the commencement of
such Detrimental Activity, pay to the Corporation in cash the value of such Performance Shares on
the date such Performance Shares were paid out.

     (c) To the extent that the amounts referred to in Section 9(a) and (b) above are not paid to
the Corporation, the Corporation may set off the amounts so payable to it against any amounts that
may be owing from time to time by the Corporation or a Subsidiary to the Grantee, whether as wages,
deferred compensation or vacation pay or in the form of any other benefit or for any other reason.

     (d) For purposes of this Agreement, the term “Detrimental Activity” shall include:

	 	(i)	 	Engaging in any activity, as an employee, principal, agent, or
consultant for another entity, and in a capacity, that directly competes with the
Corporation or any Subsidiary in any actual product, service or business activity
(or in any product, service or business activity which was under active
development while the Grantee was employed by the Corporation if such development
is being actively pursued by the Corporation during the one-year period first
referred to in this Section 9) for which the Grantee has had any direct
responsibility and direct involvement during the last two years of his or her
employment with the Corporation or a Subsidiary, in any territory in which the
Corporation or a Subsidiary manufactures, sells, markets, services, or installs
such product or service, or engages in such business activity.
	 
	 	(ii)	 	Soliciting any employee of the Corporation or a Subsidiary to
terminate his or her employment with the Corporation or a Subsidiary.
	 
	 	(iii)	 	The disclosure to anyone outside the Corporation or a Subsidiary,
or the use in other than the Corporation or a Subsidiary’s business, without
prior written authorization from the Corporation, of any confidential,
proprietary or trade secret information or material relating to the business of
the Corporation and its Subsidiaries, acquired by the Grantee during his or her
employment with the Corporation or its Subsidiaries or while acting as a
consultant for the Corporation or its Subsidiaries thereafter.
	 
	 	(iv)	 	The failure or refusal to disclose promptly and to assign to the
Corporation upon request all right, title and interest in any invention or idea,
patentable or not, made or conceived by the Grantee during employment by the
Corporation and any Subsidiary, relating in any manner to the actual or
anticipated business, research or development work of the Corporation or any
Subsidiary or the failure or refusal to do anything reasonably necessary to
enable the Corporation or any Subsidiary to secure a patent where appropriate in
the United States and in other countries.
	 
	 	(v)	 	Activity that results in Termination for Cause. For the purposes
of this Section, “Termination for Cause” shall mean a termination:

	 	A.	 	due to the Grantee’s willful and continuous gross
neglect of his or her duties for which he or she is employed, or

 

 

	 	B.	 	due to an act of dishonesty on the part of the
Grantee constituting a felony resulting or intended to result, directly or
indirectly, in his or her gain for personal enrichment at the expense of
the Corporation or a Subsidiary.

10.      Shares Non-Transferable.

     The Performance Shares granted hereby that have not yet been paid out are not transferable
other than by will or the laws of descent and distribution.

11.      Dilution and Other Adjustments.

     In the event of any change in the aggregate number of outstanding Common Shares by reason of
any stock dividend or stock split, recapitalization, reclassification, merger, consolidation,
combination or exchange of shares or other similar corporate change, then the Committee, shall
adjust the Management Objectives and/or the number of Performance Shares then held by the Grantee.
Such adjustments made by the Committee shall be conclusive and binding for all purposes of this
Agreement.

12.      Withholding Taxes.

     To the extent that the Corporation is required to withhold federal, state, local or foreign
taxes in connection with the delivery of Common Shares to the Grantee or other person under this
Agreement, and the amounts available to the Corporation for such withholding are insufficient, it
shall be a condition to the receipt of such delivery that the Grantee or such other person will
make arrangements satisfactory to the Corporation for payment of the balance of such taxes required
to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment
of a portion of such benefit. In no event, however, shall the Corporation accept Common Shares for
payment of taxes in excess of required tax withholding rates, except that, in the discretion of the
Committee, the Grantee or such other person may surrender Common Shares owned for more than 6
months to satisfy any tax obligations resulting from any such transaction.

13.      Compliance with Section 409A of the Code.

     To the extent applicable, it is intended that this Agreement and the Plan comply with the
provisions of Section 409A of the Code, so that the income inclusion provisions of Section
409A(a)(1) do not apply to Grantee. This Agreement and the Plan shall be administered in a manner
consistent with this intent, and any provision that would cause the Agreement or the Plan to fail
to satisfy Section 409A of the Code shall have no force and effect until amended to comply with
Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section
409A of the Code and may be made by the Company without the consent of the Grantee). In
particular, to the extent the Performance Shares shall be deemed to be earned upon a Change in
Control pursuant to Section 6 and such Change in Control does not constitute a “change in the
ownership or effective control of the corporation, or in the ownership of a substantial portion of
the assets of the corporation” (determined in accordance with Section 409A), then notwithstanding
that the Performance Shares shall be deemed to be earned upon the Change in Control or anything to
the contrary in Section 6, payment which in such case may be in the form of Common Shares, cash or
a combination of Common Shares and cash, as determined by the Committee in its sole discretion,
will be made, to the extent necessary to comply with the provisions of Section 409A of the Code, to
the Grantee on the earlier of (a) the Grantee’s “separation from service” with the Company
(determined in accordance with Section 409A); provided, however, that if the Grantee is a
“specified employee” (within the meaning of Section 409A), the payment date shall be the date that
is six months after the date of the Grantee’s separation of service with the Company, (b) the date
payment otherwise would have made under Section 5 above, or (c) the Grantee’s death. Reference to
Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and
will also include any proposed, temporary or final regulations, or any other guidance, promulgated
with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue
Service.

14.      Employment Rights.

     For purposes of this Agreement, the continuous employ of the Grantee with the Corporation or a
Subsidiary shall not be deemed interrupted, and the Grantee shall not be deemed to have ceased to
be an associate of the Corporation or any Subsidiary, by reason of the transfer of his or her
employment among the Corporation and its Subsidiaries. This award is a voluntary, discretionary
bonus being made on a one-time basis and it does not constitute a commitment to make any future
awards. This award and any payments made hereunder will not be considered salary or other
compensation for purposes of any severance pay or similar allowance, except as otherwise required
by law. Nothing in this Agreement will give the Grantee any right to continue employment with the
Corporation or any Subsidiary, as the case may be, or interfere in any way with the right of the
Corporation or a Subsidiary to terminate the employment of the Grantee.

15.      Data Protection.

     Information about the Grantee and the Grantee’s participation in the Plan may be collected,
recorded and held, used and disclosed for any purpose related to the administration of the Plan.
The Grantee understands that such processing of this information may need to be carried out by the
Corporation and its Subsidiaries and by third party administrators whether such persons are located
within the Grantee’s country or elsewhere, including the United States of America. The Grantee
consents to the processing of information relating to the Grantee and the Grantee’s participation
in the Plan in any one or more of the ways referred to above.

 

 

16.      Amendments.

     Any amendment to the Plan shall be deemed to be an amendment to this agreement to the extent
that the amendment is applicable hereto; provided, however, that no amendment shall
adversely affect the rights of the Grantee with respect to the Performance Shares without the
Grantee’s consent.

17.      Validity.

     If any provision of this Agreement or the application of any provision hereof to any person or
circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision in any other person or circumstances shall not be affected,
and the provisions so held to be invalid, unenforceable or otherwise illegal shall be reformed to
the extent (and only to the extent) necessary to make it enforceable, valid and legal.

18.      Governing Law.

     This Agreement is made under, and shall be construed in accordance with the internal
substantive laws of the State of Ohio.

Executed as of the                      day of                                         ,                     .

DIEBOLD, INCORPORATED

The undersigned hereby acknowledges receipt of an executed original of this Performance Share
Agreement and accepts the Performance Shares granted thereunder on the terms and conditions set
forth therein and in the Plan.

Date:<PAGE>
                                                                   Exhibit 10.72

                               SEVERANCE AGREEMENT

          THIS AGREEMENT, dated October 1, 2003 (the "Effective Date"), is made
by and between Starwood Hotels and Resorts Worldwide, Inc., a Maryland
corporation (the "Company"), and Rip Gellein (the "Executive").

          WHEREAS, the Executive is employed by the Company as Chairman and CEO,
Starwood Vacation Ownership; and

          WHEREAS, the Company considers it essential to the best interests of
its stockholders to foster the continued employment of key management personnel;
and

          WHEREAS, the Board recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of senior management
personnel to the detriment of the Company and its stockholders; and

          WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's senior management, including the Executive, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control.

          NOW, THEREFORE, the Company and the Executive hereby agree as follows:

     1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in the last Section hereof.

     2. Term of Agreement. The Term of this Agreement shall commence on the
Effective Date and shall continue in effect through the third anniversary of the
Effective Date; provided, however, that on each anniversary of the Effective
Date during the Term of this Agreement, the Term shall automatically be extended
for one additional year unless, not later than 90 days prior to any such
anniversary, the Company or the Executive shall have given notice not to extend
the Term; and further provided, however, that if a Change in Control or a
Potential Change in Control shall have occurred during the Term, the Term shall
expire no earlier than twenty-four (24) months beyond the month in which such
Change in Control or a Potential Change in Control occurred.

     3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions

<PAGE>

described herein, to pay the Executive the Severance Payments and the other
payments and benefits described herein. Except as provided in Section 10 hereof,
no Severance Payments shall be payable under this Agreement unless during the
Term there shall have been (or, under the terms of the second sentence of
Section 6 hereof, there shall be deemed to have been) a termination of the
Executive's employment with the Company following a Change in Control. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the employ
of the Company.

     4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs during the Term, the Executive will remain in the employ of the
Company until the earliest of (i) a date which is six (6) months from the date
of such Potential Change of Control, (ii) the date of a Change in Control, (iii)
the date of termination by the Executive of the Executive's employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination
by the Company of the Executive's employment for any reason.

     5. Compensation Other Than Severance Payments.

          a. Payment of Salary During Disability. Following a Change in Control
and during the Term, during any period that the Executive is unable to perform
the Executive's full-time duties with the Company as a result of incapacity due
to physical or mental illness, the Company shall pay to the Executive the full
salary to which the Executive is entitled at the rate in effect at the
commencement of any such period, together with all compensation and benefits
payable to the Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period, until the
Executive's employment is terminated by the Company for Disability.

          b. Accrued salary. If the Executive's employment shall be terminated
for any reason following a Change in Control and during the Term, the Company
shall pay to the Executive such Executive's full salary through the Date of
Termination at the rate in effect immediately prior to the Date of Termination
or, if higher, the rate in effect immediately prior to the first occurrence of
an event or circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive through the Date of
Termination under the terms of the Company's compensation and benefit plans,
programs or arrangements as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive,

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<PAGE>

as in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason.

          c. Post-Termination Benefits. If the Executive's employment shall be
terminated for any reason following a Change in Control and during the Term, the
Company shall pay to the Executive the Executive's normal post-termination
compensation and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or circumstance constituting Good
Reason.

     6. Severance Payments.

          a. If the Executive's employment is terminated following a Change in
Control and during the Term, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive without Good Reason,
then, in any such case, the Company shall pay the Executive the amounts, and
provide the Executive the benefits, described in this Section 6 ("Severance
Payments") and Section 7, in addition to any payments and benefits to which the
Executive is entitled under Section 5 hereof. For purposes of this Agreement,
the Executive's employment shall be deemed to have been terminated following a
Change in Control by the Company without Cause or by the Executive with Good
Reason, if (i) the Executive's employment is terminated by the Company without
Cause prior to a Change in Control (whether or not a Change in Control ever
occurs) and such termination was at the request or direction of a Person who has
entered into an agreement with the Company the consummation of which would
constitute a Change in Control (an "Acquiring Person"), (ii) the Executive
terminates his employment for Good Reason prior to a Change in Control (whether
or not a Change in Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of an Acquiring
Person, or (iii) the Executive's employment is terminated by the Company without
Cause or by the Executive for Good Reason and such termination or the
circumstance or event which constitutes Good Reason is otherwise in connection
with or in anticipation of a Change in Control (whether or not a Change in
Control ever occurs). For purposes of any determination regarding the
applicability of the immediately preceding sentence, any position taken by the
Executive shall be presumed to be correct unless the Company establishes to the
Board by clear and convincing evidence that such position is not correct.

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<PAGE>

          (1) Lump Sum Payment. In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall pay to
the Executive a lump sum severance payment, in cash, equal to two times the sum
of (i) the Executive's base salary as in effect immediately prior to the Date of
Termination or, if higher, in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason, and (ii) the average
annual bonuses earned by the Executive in the three fiscal years ending
immediately prior to the fiscal year in which occurs the Date of Termination or,
if higher, immediately prior to the fiscal year in which occurs the first event
or circumstance constituting Good Reason. For purposes of the preceding
sentence, in determining any bonus amount for any fiscal year, bonuses paid with
respect to any year in which employment of the Executive commenced shall be
annualized based on the number of days employed by the Company during such year.

          (2) Continuation of Welfare Benefits. For the twelve (12) month period
immediately following the Date of Termination, the Company shall arrange to
provide the Executive and his dependents life, disability, accident and health
insurance benefits and other benefits and perquisites (including employee stay
rates) substantially similar to those provided to the Executive and his
dependents immediately prior to the Date of Termination or, if more favorable to
the Executive, those provided to the Executive and his dependents immediately
prior to the first occurrence of an event or circumstance constituting Good
Reason, at no greater cost to the Executive than the cost to the Executive
immediately prior to such date or occurrence. Benefits otherwise receivable by
the Executive pursuant to this Section 6(a)(2) shall be reduced to the extent
benefits of the same type are received by the Executive from another employer
during the twelve (12) month period following the Executive's termination of
employment; provided, however, that the Company shall reimburse the Executive
for the excess, if any, of the cost of such benefits to the Executive over such
cost immediately prior to the Date of Termination or, if more favorable to the
Executive, the first occurrence of an event or circumstance constituting Good
Reason.

          (3) Incentive Compensation. Notwithstanding any provision of any
annual or long-term incentive plan to the contrary, the Company shall pay to the
Executive a lump sum amount, in cash, equal to the sum of (i) any unpaid
incentive compensation which has been allocated or awarded to the Executive for
a completed fiscal year or other measuring period preceding the Date of
Termination under any such plan and which, as

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<PAGE>

of the Date of Termination, is contingent only upon the continued employment of
the Executive to a subsequent date, and (ii) 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. Awards for uncompleted periods
shall be prorated based upon the number of days the Executive is employed by the
Company during such year.

          (4) Accelerated Vesting of Stock Options. All stock options and
restricted stock held by the Executive under any stock option or incentive plan
maintained by the Company (including the Company's 1995 and 1999 Long-Term
Incentive Plans) shall immediately vest and become exercisable as of the Date of
Termination, to be exercised in accordance with the terms of the applicable
plan.

          (5) Outplacement Services. The Company shall provide the Executive
with outplacement services suitable to the Executive's position for a period of
two (2) years or, if earlier, until the first acceptance by the Executive of an
offer of employment. The cost of such outplacement services shall not exceed
twenty percent (20%) of the Executive's base salary.

          (6) Deferred Compensation. The Company shall pay the Executive a lump
sum payment of any of the Executive's deferred compensation.

          (7) 401(k) Contributions. All unvested 40l(k) contributions in the
Executive's 401(k) account shall immediately vest or the Company shall pay the
Executive an amount equal to any such unvested amounts that are forfeited by
reason of the Executive's termination of employment.

          (8) Loans. The Company shall forgive in full any home, relocation and
other loans from the Company to the Executive, identified on Schedule A hereto,
that are outstanding as of the Date of Termination and execute and record any
investments and documents necessary or desirable to evidence the satisfaction in
full of such loans and the release of any lien securing such loan. In addition,
the Company shall pay to Executive an amount required, in the good faith
estimate of Executive's tax advisor, to permit Executive to pay any income tax
incurred by Executive as a result of

                                       5

<PAGE>

such loan forgiveness and the payment of such additional amounts by the Company,

     7. 280G Cap.

          a. Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by the Executive in
connection with a Change in Control or the termination of the Executive's
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person) (all
such payments and benefits, including the Severance Payments, being hereinafter
called "Total Payments") would not be deductible (in whole or part), by the
Company, an affiliate or Person making such payment or providing such benefit as
a result of section 280G of the Code, then, to the extent necessary to make such
portion of the Total Payments deductible (and after taking into account any
reduction in the Total Payments provided by reason of section 280G of the Code
in such other plan, arrangement or agreement), the cash Severance Payments shall
first be reduced (if necessary, to zero), and all other Severance Payments shall
thereafter be reduced (if necessary, to zero); provided, however, that the
Executive may elect to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance Payments.

          b. For purposes of this limitation, (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have waived at
such time and in such manner as not to constitute a "payment" within the meaning
of section 280G(b) of the Code shall be taken into account, (ii) no portion of
the Total Payments shall be taken into account which, in the opinion of tax
counsel ("Tax Counsel") reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the
Company's independent auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of section 280G(b)(2) of the Code, including by
reason of section 280G(b)(4)(A) of the Code, (iii) the Severance Payments shall
be reduced only to the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)) in their entirety constitute
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance
as deductions by reason of section 280G of the Code, in the opinion of Tax
Counsel, and (iv) the value of any noncash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the Auditor in
accordance with the principles of sections 280G(d)(3) and (4) of the Code.

                                       6

<PAGE>

          c. If it is established pursuant to a final determination of a court
or an Internal Revenue Service proceeding that, notwithstanding the good faith
of the Executive and the Company in applying the terms of this Section 7(c), the
Total Payments paid to or for the Executive's benefit are in an amount that
would result in any portion of such Total Payments being subject to the Excise
Tax, then, if such repayment would result in (i) no portion of the remaining
Total Payments being subject to the Excise Tax and (ii) a dollar-for-dollar
reduction in the Executive's taxable income and wages for purposes of federal,
state and local income and employment taxes, the Executive shall have an
obligation to pay the Company upon demand an amount equal to the sum of (i) the
excess of the Total Payments paid to or for the Executive's benefit over the
Total Payments that could have been paid to or for the Executive's benefit
without any portion of such Total Payments being subject to the Excise Tax; and
(ii) interest on the amount set forth in clause (i) of this sentence at the rate
provided in section 1274(b)(2)(B) of the Code from the date of the Executive's
receipt of such excess until the date of such payment.

     8. Termination Procedures and Compensation During Dispute.

          a. Notice of Termination. After a Change in Control and during the
Term, any purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of Termination from one
party hereto to the other party hereto in accordance with Section 12 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated. Further, a Notice of Termination for Cause is required
to include a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.

          b. Date of Termination. "Date of Termination," with respect to any
purported termination of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's employment is terminated
for Disability, thirty (30) days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is

                                       7

<PAGE>

terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination by the Company, shall not be less than
thirty (30) days (except in the case of a termination for Cause) and, in the
case of a termination by the Executive, shall not be less than fifteen (15) days
nor more than sixty (60) days, respectively, from the date such Notice of
Termination is given).

          c. Dispute Concerning Termination. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 8 (c)), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date on which the Term ends or (ii) the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended by a notice of
dispute given by the Executive only if such notice is given in good faith and
the Executive pursues the resolution of such dispute with reasonable diligence.

          d. Compensation During Dispute. If a purported termination occurs
following a Change in Control and during the Term and the Date of Termination is
extended in accordance with Section 8(c) hereof, the Company shall continue to
pay the Executive the full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given, until the Date of Termination, as determined in accordance with
Section 8(c) hereof. Amounts paid under this Section 8(d) are in addition to all
other amounts due under this Agreement (other than those due under Section 5(b)
hereof) and shall not be offset against or reduce any other amounts due under
this Agreement.

     9. No Mitigation. The Company agrees that, if the Executive's employment
with the Company terminates during the Term, the Executive is not required to
seek other employment or to attempt in any way to reduce any amounts payable to
the Executive by the Company pursuant to Section 6 hereof or Section 8(d)
hereof. Further, the amount of any payment or benefit provided for in this
Agreement (other than Section 6(a)(2) hereof) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.

                                       8

<PAGE>

     10. Successors: Binding Agreement.

          a. In addition to any obligations imposed by law upon any successor to
the Company, the Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to hereunder if the
Executive were to terminate the Executive's employment for Good Reason after a
Change in Control, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination.

          b. This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive's
estate.

     11. Indemnification. The Company shall indemnify and hold Executive
harmless for acts and omissions in his capacity as an officer, director or
employee of the Company to the maximum extent permitted under applicable law.
The Company shall maintain a Director's and Officer's Liability Insurance
Policy, which shall provide liability coverage for Executive's benefit, and the
Executive shall remain covered under such policy for a period of at least six
(6) years following the earlier of termination of employment or the occurrence
of a Change in Control.

     12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address inserted below the Executive's signature on the final
page hereof and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:

                                       9

<PAGE>

                                 To the Company:

                                 Starwood Hotels and Resorts Worldwide, Inc.
                                 1111 Westchester Avenue
                                 White Plains, NY 10604
                                 Attention: General Counsel

     13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or of any lack of compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. This Agreement supersedes any other
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by either party;
provided, however, that this Agreement shall supersede any agreement setting
forth the terms and conditions of the Executive's employment with the Company
only in the event that the Executive's employment with the Company is terminated
on or following a Change in Control, by the Company other than for Cause or by
the Executive other than for Good Reason. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York. All references to sections of the Exchange Act or the
Code shall be deemed also to refer to any successor provisions to such sections.
Any payments provided for hereunder shall be paid net of any applicable
withholding required under federal, state or local law and any additional
withholding to which the Executive has agreed. The obligations of the Company
and the Executive under this Agreement which by their nature may require either
partial or total performance after the expiration of the Term (including,
without limitation, those under Sections 6, 7, 8, and 9 hereof) shall survive
such expiration.

     14. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

     15. Settlement of Disputes; Arbitration.

          a. All claims by the Executive for benefits under this Agreement shall
be directed to and determined by the Board and shall be in writing. Any denial
by the Board of a claim for benefits under this Agreement shall be delivered to
the

                                       10

<PAGE>

Executive in writing and shall set forth the specific reasons for the denial and
the specific provisions of this Agreement relied upon. The Board shall afford a
reasonable opportunity to the Executive for a review of the decision denying a
claim and shall further allow the Executive to appeal to the Board a decision of
the Board within sixty (60) days after notification by the Board that the
Executive's claim has been denied.

          b. Any further dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in New York, in
accordance with the rules of the American Arbitration Association then in
effect; provided, however, that the evidentiary standards set forth in this
Agreement shall apply. Judgment may be entered on the arbitrator's award in any
court having jurisdiction. Notwithstanding any provision of this Agreement to
the contrary, the Executive shall be entitled to seek specific performance of
the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.

     16. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:

          a. "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.

          b. "Auditor" shall have the meaning set forth in Section 7 hereof.

          c. "Base Amount" shall have the meaning set forth in section
280G(b)(3) of the Code.

          d. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.

          e. "Board" shall mean the Board of Directors of the Company.

          f. "Cause" for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company after a written
demand for substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive's duties, and
Executive has not cured any such failure that is capable of being cured in all
material respects within ten (10) days of receiving such written demand, or (ii)
the willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the

                                       11

<PAGE>

Company or its subsidiaries, monetarily or otherwise. For purposes of clauses
(i) and (ii) of this definition, (x) no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company and
(y) in the event of a dispute concerning the application of this provision, no
claim by the Company that Cause exists shall be given effect unless the Company
establishes to the Board by clear and convincing evidence that Cause exists.

          g. A "Change in Control" shall be deemed to have occurred if the event
set forth in any one of the following paragraphs shall have occurred:

               (1) any Person is or becomes the Beneficial Owner, directly or
     indirectly, of securities of the Company (not including in the securities
     beneficially owned by such Person any securities acquired directly from the
     Company or its affiliates) representing 25% or more of the combined voting
     power of the Company's then outstanding securities, excluding any Person
     who becomes such a Beneficial Owner in connection with a transaction
     described in clause (i) of paragraph (3) below; or

               (2) the following individuals cease for any reason to constitute
     a majority of the number of directors then serving: individuals who, on the
     date hereof, constitute the Board and any new director (other than a
     director whose initial assumption of office is in connection with an actual
     or threatened election contest, including but not limited to a consent
     solicitation, relating to the election of directors of the Company) whose
     appointment or election by the Board or nomination for election by the
     Company's stockholders was approved or recommended by a vote of at least
     two-thirds (2/3) of the directors then still in office who either were
     directors on the date hereof or whose appointment, election or nomination
     for election was previously so approved or recommended; or

               (3) there is consummated a merger or consolidation of the Company
     or any direct or indirect subsidiary of the Company with any other
     corporation, other than (i) a merger or consolidation which would result in
     the voting securities of the Company outstanding immediately prior to such
     merger or consolidation continuing to represent (either by remaining
     outstanding or by being converted into voting securities of the surviving
     entity or any parent thereof), in combination with the ownership of any
     trustee or other fiduciary holding securities under an employee benefit
     plan of the Company or any subsidiary of the Company, at least 70% of the

                                       12

<PAGE>

     combined voting power of the securities of the Company or such surviving
     entity or any parent thereof outstanding immediately after such merger or
     consolidation and in proportion to their relative voting power immediately
     prior to such merger or consolidation, or (ii) a merger or consolidation
     effected to implement a recapitalization of the Company (or similar
     transaction) in which no Person is or becomes the Beneficial Owner,
     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

               (4) the stockholders of the Company approve a plan of complete
     liquidation or dissolution of the Company or there is consummated an
     agreement for the sale or disposition by the Company of all or
     substantially all of the Company's assets, other than a sale or disposition
     by the Company of all or substantially all of the Company's assets to an
     entity, at least 70% of the combined voting power of the voting securities
     of which are owned by stockholders of the Company in substantially the same
     proportions as their ownership of the Company immediately prior to such
     sale. Notwithstanding the foregoing, a "Change in Control" shall not be
     deemed to have occurred by virtue of the consummation of any transaction or
     series of integrated transactions immediately following which the record
     holders of the common stock of the Company immediately prior to such
     transaction or series of transactions continue to have substantially the
     same proportionate ownership in an entity which owns all or substantially
     all of the assets of the Company immediately following such transaction or
     series of transactions.

          h. "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

          i. "Company" shall mean Starwood Hotels and Resorts Worldwide, Inc.,
and, except in determining under Section 17(g) hereof whether or not any Change
in Control of the Company has occurred, shall include any successor to its
business and/or assets which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

          j. "Date of Termination" shall have the meaning set forth in Section 8
hereof.

          k. "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a

                                       13

<PAGE>

Notice of Termination for Disability, and, within thirty (30) days after such
Notice of Termination is given, the Executive shall not have returned to the
full-time performance of the Executive's duties.

          l. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.

          m. "Excise Tax" shall mean any excise tax imposed under section 4999
of the Code.

          n. "Executive" shall mean the individual named in the first paragraph
of this Agreement.

          o. "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a Change in Control under the
circumstances described in clauses (ii) and (iii) of the second sentence of
Section 6(a) hereof (treating all references in paragraphs (1) through (7) below
to a "Change in Control" as references to a "Potential Change in Control"), of
any one of the following acts by the Company, or failures by the Company to act,
unless, in the case of any act or failure to act described in paragraph (1),
(5), (6) or (7) below, such act or failure to act is corrected prior to the Date
of Termination specified in the Notice of Termination given in respect thereof:

               (1) the assignment to the Executive of any duties inconsistent
     with the Executive's status as a senior executive officer of the Company or
     a substantial adverse alteration in the nature or status of the Executive's
     responsibilities from those in effect immediately prior to the Change in
     Control;

               (2) a reduction by the Company in the Executive's annual base
     salary as in effect on the date hereof or as the same may be increased
     from time to time;

               (3) the relocation of the Executive's principal place of
     employment to a location more than 35 miles from the Executive's principal
     place of employment immediately prior to the Change in Control or the
     Company's requiring the Executive to be based anywhere other than such
     principal place of employment (or permitted relocation thereof) except for
     required travel on the Company's business to an extent substantially
     consistent with the Executive's present business travel obligations;

                                       14

<PAGE>

               (4) the failure by the Company to pay to the Executive any
     portion of the Executive's current compensation, or to pay to the Executive
     any portion of an installment of deferred compensation under any deferred
     compensation program of the Company, within seven (7) days of the date such
     compensation is due;

               (5) the failure by the Company to continue in effect any
     compensation plan in which the Executive participates immediately prior to
     the Change in Control which is material to the Executive's total
     compensation, including but not limited to the Company's stock option,
     bonus and other plans or any substitute plans adopted prior to the Change
     in Control, unless an equitable arrangement (embodied in an ongoing
     substitute or alternative plan) has been made with respect to such plan, or
     the failure by the Company to continue the Executive's participation
     therein (or in such substitute or alternative plan) on a basis not
     materially less favorable, both in terms of the amount or timing of payment
     of benefits provided and the level of the Executive's participation
     relative to other participants, as existed immediately prior to the Change
     in Control;

               (6) the failure by the Company to continue to provide the
     Executive with benefits substantially similar to those enjoyed by the
     Executive under any of the Company's pension, savings, life insurance,
     medical, health and accident, or disability plans in which the Executive
     was participating immediately prior to the Change in Control, the taking of
     any other action by the Company which would directly or indirectly
     materially reduce any of such benefits or deprive the Executive of any
     material fringe benefit enjoyed by the Executive at the time of the Change
     in Control, or the failure by the Company to provide the Executive with the
     number of paid vacation days to which the Executive is entitled on the
     basis of years of service with the Company in accordance with the Company's
     normal vacation policy or any employment agreement in effect at the time of
     the Change in Control; or

               (7) any purported termination of the Executive's employment which
     is not effected pursuant to a Notice of Termination satisfying the
     requirements of Section 8(a) hereof; for purposes of this Agreement, no
     such purported termination shall be effective.

          The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent

                                       15

<PAGE>

to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.

          For purposes of any determination regarding the existence of Good
Reason, any claim by the Executive that Good Reason exists shall be presumed to
be correct unless the Company establishes to the Board by clear and convincing
evidence that Good Reason does not exist.

          p. "Notice of Termination" shall have the meaning set forth in Section
8 hereof.

          q. "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

          r. "Potential Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

               (1) the Company enters into an agreement, the consummation of
     which would result in the occurrence of a Change in Control;

               (2) the Company or any Person publicly announces an intention to
     take or to consider taking actions which, if consummated, would constitute
     a Change in Control;

               (3) any Person becomes the Beneficial Owner, directly or
     indirectly, of securities of the Company representing 15% or more of either
     the then outstanding shares of common stock of the Company or the combined
     voting power of the Company's then outstanding securities (not including in
     the securities beneficially owned by such Person any securities acquired
     directly from the Company or its affiliates); or

               (4) the Board adopts a resolution to the effect that, for
     purposes of this Agreement, a Potential Change in Control has occurred.

                                       16

<PAGE>

          s. "Retirement" shall be deemed the reason for the termination by the
Executive of the Executive's employment if such employment is terminated in
accordance with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.

          t. "Severance Payments" shall have the meaning set forth in Section 6
hereof.

                                       17

<PAGE>

          u. "Tax Counsel" shall have the meaning set forth in Section 7 hereof.

          v. "Term" shall mean the period of time described in Section 2 hereof
(including any extension, continuation or termination described therein).

          w. "Total Payments" shall mean those payments so described in Section
7 hereof.

                                        STARWOOD HOTELS AND RESORTS
                                        WORLDWIDE, INC.

                                        By: /s/ D. Norton
                                            ------------------------------------
                                        Name: D. Norton
                                        Title: EVP, Human Resources
                                        Dated: October 1, 2003

                                        EXECUTIVE

                                        /s/ Rip Gellein
                                        ----------------------------------------
                                        Rip Gellein

                                        Dated: 10/1, 2003

                                        Address:

                                        ----------------------------------------

                                        ----------------------------------------

                                        ----------------------------------------
                                                (Please print carefully)

                                       18

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