Document:

exv10w52

Exhibit 10.52

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made by and between STARWOOD HOTELS & RESORTS
WORLDWIDE, INC., a Maryland corporation (the “Company”) and FRITS VAN PAASSCHEN (“Executive”), and
amends and restates the employment agreement dated as of August 31, 2007 in its entirety.

     WHEREAS, the Company wishes to employ Executive, and Executive wishes to be employed by the
Company on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations
contained herein, the Company and Executive agree as follows:

ARTICLE 1

EMPLOYMENT AND DUTIES

     1.1 Employment Effective Date. Executive’s employment with the Company shall begin as
soon as practicable but no later than September 24, 2007. The date Executive’s employment
commences shall be known as the Effective Date.

     1.2 Penalties. From and after the Effective Date, the Company shall employ Executive
in the position of Chief Executive Officer and President and in such other positions as the parties
mutually may agree. Executive acknowledges that his prospective employment will be subject to all
policies and practices of the Company as may currently exist or as may be curtailed, modified or
implemented from time to time. As Chief Executive Officer and President, Executive shall be the
senior-most executive officer of the Company, reporting directly to the Board, with the duties,
responsibilities and authority customarily associated with and consistent with such position.

     1.3 Duties and Services. Executive agrees to serve in the positions referred to in
Paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services
appertaining to such positions as well as such additional duties and services appropriate to such
positions which the parties mutually may agree upon from time to time. Except due to periods of
business-related travel, Executive agrees to perform his duties from the Company’s White Plains,
New York offices (hereinafter “Company Headquarters”) and to be regularly and consistently present
at Company’s Headquarters during business hours. Additionally, commencing as of the Effective Date
Executive shall be nominated, appointed and shall serve on the Company’s Board of Directors,
subject to the Company’s customary procedures and conditions to Board membership, including
shareholder re-election.

     1.4 Executive Obligations. Executive shall devote his full business time, attention
and best efforts to the performance of his duties under this Agreement and shall not engage in any
other business activities except with the prior written approval of the Board; provided, however,
that Executive may engage in other activities that do not conflict with or interfere with the
performance of his duties and responsibilities hereunder, including, without limitation, (a)
investing his assets and funds, so long as the business of any such entity in which he shall make
his investments shall not be in direct competition with that of the Company (except that Executive
may invest in an entity in competition with the Company if the stock is listed for

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trading on a national stock exchange or traded in the over-the-counter market and Executive’s
holdings have an original cost less than $5,000,000 and represent less than five percent of its
outstanding stock) and (b) being involved in educational, civic and charitable activities which do
not unreasonably interfere with the services to be rendered by Executive hereunder. It is
acknowledged and agreed that Executive may not serve during the Term (as defined in Paragraph 2.1)
as a director of any board of which he is not already a member without the prior written approval
of the Board; however, Executive may continue to serve on any board of which he was already a
member as of the Effective Date of this Agreement.

ARTICLE 2

TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated, the term of this Agreement shall commence on the
Effective Date and shall continue, subject to earlier termination of such employment pursuant to
the terms of this Employment Agreement (hereinafter “Agreement”), from year to year thereafter (the
“Term”), unless either party provides 180 days written notice of his or its desire to cancel this
Agreement.

     2.2 Company’s Right to Terminate.

     (a) Notwithstanding the provisions of Paragraph 2.1 and 4.1, the Company shall have the
right to terminate Executive’s employment under this Agreement at any time for any of the
following reasons:

     (i) upon Executive’s death;

     (ii) upon Executive’s becoming incapacitated for a period of at least 180
consecutive days by accident, sickness or other circumstances which renders him
mentally or physically incapable of performing the essential functions of the duties
and services required of him hereunder, with reasonable accommodation, on a
full-time basis during such period (“Disability”);

     (iii) for Cause;

     (iv) without Cause in the sole discretion of the Board.

     (b) As used in this Agreement, the term “Cause” shall mean the occurrence of any of the
following events during the Term: (i) fraud, misappropriation or embezzlement with respect
to the Company (or any subsidiary); (ii) sexual (or other forms of) harassment in connection
with Executive’s duties; (iii) Executive’s refusal to follow the reasonable directions of
the Board; (iv) intoxication with alcohol or due to unlawful consumption of drugs while on
the Employer’s premises or while performing services on behalf of the Company at any other
place; (v) a conviction or plea of guilty or nolo contendere to a felony (other than one
arising from the operation of a motor vehicle that does not involve an accident involving
injury to a third party); (vi) engaging in an act of willful gross misconduct or willful
gross negligence in connection with the Company’s business; (vii) Executive’s material
breach of the Agreement, including the confidentiality, nonsolicitation, noncompetition and
other covenants contained herein;

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(viii) Executive’s failure to observe and comply with the Company’s Code of Conduct and
ethics codes; (ix) Executive’s substantial or continuous failure to observe and comply with
the Company’s policies or code; and/or (x) Executive’s breach of a material Company policy
or code; provided, however, in the case of clauses (iii), (vii), (viii), (ix), and (x), no
action(s) or inaction(s) will constitute Cause unless (1) a resolution finding that Cause
exists has been approved by a majority of all of the members of the Board and (2) where
remedial action is feasible, Executive fails to remedy the action(s) or inaction(s) within
10 days after receiving a written notice (“Cause Notice”) identifying in reasonable detail
the nature of such Cause. If Executive so effects a cure to the satisfaction of the Board,
the Cause Notice shall be deemed rescinded and of no force or effect.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of Paragraph 2.1,
Executive shall have the right to terminate his employment under this Agreement:

     (a) For “good Reason,” which shall mean, without Executive’s consent, (i) a reduction
(x) in Executive’s Base Salary as provided for under this Agreement, (y) target annual bonus
opportunity percentage or (z) target long-term incentive opportunity award value; (ii) the
assignment to Executive of any duties inconsistent in any material respect with Executive’s
position (including titles and reporting relationships), authority, duties or
responsibilities as contemplated by this Agreement, or any other action by the Company which
results in a significant diminution in such position, authority, duties or responsibilities
(for the avoidance of doubt, including Executive’s serving as Chief Executive Officer of the
Company (or its successor) at any time during which the common stock of the Company is not
publicly listed for trading on a United States national stock exchange or NASDAQ national
market); (iii) Executive being required to relocate to a principal place of employment more
than thirty-five (35) miles from the Company’s principal offices as of the Effective Date;
(iv) the Company’s material breach of the Agreement; or (v) the failure of the Company to
obtain a satisfactory agreement from any successor to all or substantially all of the assets
or business of the Company to assume and agree to perform this Agreement within fifteen (15)
days after a merger, consolidation, sale or similar transaction; provided, that in the case
of clauses (i) or (ii), Good Reason shall not include an inadvertent and isolated act in
good faith which is cured by the Company within 30 days after receipt by the Company of
written notice from Executive identifying in reasonable detail the acts or failures
allegedly constituting Good Reason hereunder; provided further, that if Executive does not
deliver to the Company a notice of termination within the sixty (60) days period after
Executive has knowledge that an event constituting Good Reason has occurred, such event will
no longer constitute Good Reason.

     (b) Without Good Reason, in the sole discretion of Executive.

     2.4 Notice of Termination. If the Company or Executive desires to terminate
Executive’s employment hereunder at any time, it or he shall do so by giving no less than 15 days
written notice to the other party that it or he has elected to terminate Executive’s employment
hereunder and stating the effective date (which shall not be December 31 of any

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year) and reason for such termination, provided that no such action shall alter or amend any
other provisions hereof or rights arising hereunder.

ARTICLE 3

COMPENSATION AND BENEFITS

     3.1 Base Salary; Sign-On Bonus.

     (a) Commencing on the Effective Date, during the period of this Agreement, Executive
shall receive an annual base salary (“Base Salary”) equal to $1,000,000 (partial years pro
rated), which shall be subject to annual review, commencing with executive salary reviews
occurring in 2008, and increase (but not decrease) in the discretion of the Board.
Executive’s annual Base Salary shall be paid in equal installments in accordance with the
Company’s standard policy regarding payment of compensation to executives but no less
frequently than semi-monthly.

     (b) On the Effective Date, as a one-time sign-on bonus, (i) the Company shall pay to
Executive $1,500,000 in cash and (ii) award to Executive restricted stock units under the
Company’s 2004 Long-Term Incentive Plan (“2004 LTIP”) having a face value on the Effective
Date equal to $1,500,000, which shall fully vest on the grant date (subject to forfeiture as
provided below) and be payable in shares of common stock of the Company (one share for each
such unit), subject to share withholding for applicable withholding tax, within ten (10)
days after the earliest of (x) the third anniversary of the Effective Date, (y) the date of
termination of Executive’s employment for any reason and (z) the date of a “change in the
ownership or effective control” of the Company (within the meaning of Treasury Regulation
Section 1.409A-3(i)(5)). If Executive’s employment with the Company and all subsidiaries
terminates for any reason during the first full calendar year of Executive’s employment and
prior to the occurrence of a Change in Control (as defined below) of the Company, other than
due to his death, Disability, involuntary termination by the Company without Cause or
voluntary termination for Good Reason, Executive shall be obligated to repay the full amount
of the foregoing cash sign-on bonus and he shall forfeit the award of restricted stock
units, above.

     3.2 Annual Incentive Program, Restricted Stock Awards and Stock Option Grants.

     (a) Annual Incentive Plan. During the Term of the Agreement, Executive shall
participate in the Annual Incentive Plan for Certain Executives (“AIPCE”) maintained by the
Company for senior executive officers at a level that is not less than the maximum
participation level made available to any Company senior executive but consistent with the
terms hereof. Such bonuses shall range from 0% to 300% of base salary based on performance
versus objectives as set by the Board of Directors. Executive’s target bonus shall be 200%
of base salary (hereinafter, “Target Bonus”). Executive shall be guaranteed an amount not
less than a pro rated $2,000,000 as his bonus for the year 2007, payable no earlier than
January 2, 2008 and no later than March 31, 2008. An annual bonus shall not be deemed
earned by Executive until the Company has determined Executive’s entitlement to such bonus
in accordance with the AIPCE and

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Company procedures and practice then in effect. As of the date of this Agreement, the
AIPCE provides that a portion of Executive’s annual bonus will be deferred and payable in
Starwood stock or stock units. The current deferral portion of the bonus is 25% and is
payable in Starwood stock having a value on the date of deferral equal to 133% of the amount
deferred.

     (b) Long Term Incentive Compensation.

     (i) On the Effective Date, the Company shall award Executive, pursuant to the
2004 LTIP, a restricted stock award having a face value on the Effective Date of
$3,750,000 and a stock option award having a value on the Effective Date of
$1,250,000 (such value to be determined in accordance with the Company’s current
methodologies for valuing stock option awards). Executive’s stock options shall have
an exercise price equal to the Fair Market Value (as defined under the 2004 LTIP) of
Company common stock on the Effective Date, an eight (8)-year exercise period, and
shall vest at the rate of 25% per year commencing on the first anniversary of the
Effective Date and on each of the succeeding three (3) anniversaries thereafter.
Executive’s restricted stock shall vest as to 50% of the award on the third
anniversary of the Effective Date and the remaining 50% of the award on the fourth
anniversary of the Effective Date, provided that Executive is employed by the
Company or a subsidiary at such time for such respective installment to so vest,
except as otherwise provided herein. Share withholding shall apply to satisfy
withholding tax on vested restricted stock, based on the Fair Market Value of
Company common stock on the date of vesting. The stock option and restricted stock
awards shall have such other terms and conditions as are set forth in the forms of
stock option award and restricted stock award provided to Executive. Target grants
shall be in the same proportion of restricted stock to stock options as to other
senior executives of the Company.

     (ii) Executive shall be eligible for long-term incentive grants pursuant to the
2004 LTIP (or successor plan) commencing with grants to other senior executives
awarded in February 2008 and each year thereafter in the discretion of the Board (or
a Committee thereof). Executive’s target-level annual long-term incentive grant
opportunity in February 2008 shall not be less than $1,666,667 and in each year
thereafter shall be not less than $5,000,000 (in each case such value is to be
determined in accordance with the Company’s methodologies for valuing such awards at
the time of any such award). Executive hereby agrees and acknowledges that the
actual value of awards, if any, will be based upon Executive’s performance and the
metrics used for other senior executives of the Company. Target grants shall be in
the same proportion of restricted stock to stock options as to other senior
executives of the Company.

     (c) Nothing in the foregoing provisions of this Paragraph 3.2 shall be deemed to
prevent the Board in its sole discretion from awarding any additional or other amounts of
cash, restricted stock or options or other equity based awards in respect of any whole or
partial year during the Term.

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     3.3 Vacation and Sick Leave. During each year of his employment, Executive shall be
entitled to vacation and sick leave benefits under the Company’s policies equal to the maximum
available to any Company senior executive, but in any event not less than 4 weeks per calendar
year, determined without regard to the period of service that might otherwise be necessary to
entitle Executive to such vacation or sick leave in accordance with standard Company policy.

     3.4 Other Benefits.

     (a) Other Company Benefits. Executive shall participate in, and be eligible to
receive, all other benefits, including 401(k), medical, dental and disability plans
coverage, as may be provided by the Company to other senior Executive employees from time to
time pursuant to the terms and conditions of such benefits plans, programs and/or policies.
Except as set forth herein, Executive shall not be entitled to receive any other benefits
during the Term, unless expressly provided for and agreed to by the Company. The Executive
shall be eligible to participate in the Company’s “StarShare” employee benefit programs and
the Company 401(k) plan on the first day of the month following 90 days of employment. The
Executive and his eligible dependents will be covered by these benefits as per the
Executive’s coverage elections. The Company agrees to reimburse the Executive in 2007 for
any COBRA payments until the date the Executive becomes eligible for the Company’s health
benefits. The Company will reimburse the Executive the difference between the applicable
normal contribution rate with the Company and the Executive’s COBRA amount. The Company
shall not be obligated to institute, maintain, or refrain from changing, amending or
discontinuing any benefit plan or program of the Company, so long as such changes are
similarly applicable to other senior executive employees. Following Executive’s separation
from the Company, Executive shall receive notification from the Company regarding
Executive’s and Executive’s defendant(s)’ right to continue participation in any group
health care benefit plan sponsored by the Company at Executive’s and/or Executive’s
dependent(s)’ own expense under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)
subject to any applicable requirements for continuation of coverage as set forth by COBRA.
The Company agrees to continue Executive’s participation in the Company’s health, dental and
vision benefit plans for Executive and his spouse and other covered dependents for a period
of two years following Executive’s employment, which coverage shall run concurrently with
Executive’s entitlement to COBRA continuation benefits, and which coverage shall be reduced
or terminated, as applies, at such time as Executive obtains comparable benefits (determined
on a coverage-by-coverage and benefits-by-benefits basis) for himself, his spouse and other
covered dependents from a subsequent employer. The premium charge to Executive for each
month of such coverage will equal the Company’s monthly COBRA charge for such coverage in
which the Executive, his spouse and covered dependents (as applicable) is enrolled from time
to time (less the amount of any administrative charge typically assessed by the Company as
part of its COBRA charge), and Executive will be required to pay such monthly premium charge
in accordance with the Company’s standard COBRA premium payment requirements. On the date
of Executive’s termination of employment, the Company will pay Executive a lump sum in cash
equal to an initial multiple that is increased by a percentage. For this purpose, the
initial multiple is 24 times the difference that results from calculating (i) the

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Company’s monthly COBRA charge on Executive’s separation date for family coverage with
respect to the highest value health coverage provided to salaried employees, minus (ii) the
amount the Company charges active salaried employees for such coverage on Executive’s
separation date. In addition, for this purpose, the percentage is the sum of (I) 1% for
each month in the 24-month period that will fall in the calendar year following Executive’s
separation date, plus (II) 2% for each month in the 24-month period that will fall in the
second calendar year following Executive’s date of termination.

     (b) Driver and Car Service. The Company will provide Executive the use of a driver and
car service in the New York metropolitan area for business purposes (including commuting).
Any such use of a Company-provided driver for non-business purposes shall be charged to
Executive at the Company’s operating cost and shall be imputed to Executive as income and no
other amounts will be imputed to Executive.

     (c) Business and Entertainment Expenses. Subject to the Company’s standard policies
and procedures with respect to expense reimbursement as applied to its senior executive
employees generally, the Company shall reimburse Executive for, or pay on behalf of
Executive, reasonable and appropriate expenses incurred by Executive for business-related
purposes, including reasonable dues and fees to industry and professional organizations,
costs of entertainment and business development and business-related travel and to other
locations on Company business. Executive shall be entitled to use first-class travel
accommodations for such business-related travel. The Company shall pay in 2007 Executive’s
professional fees, up to a maximum of $50,000, incurred to negotiate and prepare this
Agreement and all related agreements hereto.

     (d) Company Aircraft. The Company shall make available to Executive a Company-owned or
leased private aircraft for business-related travel and, when such aircraft is available,
for personal use. The use by Executive of any Company aircraft shall at all times be
subject to Company policies and procedures and to the availability of such aircraft.
Executive shall generally have first priority among Company employees for business usage of
Company aircraft. Executive’s use of Company aircraft for personal use shall be charged to
Executive at the Company’s operating cost, except as otherwise agreed by the Company and
Executive in writing; provided, however, the Company shall provide Executive up to $500,000
as a credit for personal use of aircraft during the first twelve (12) months of this
Agreement, which shall be imputed to Executive as income in accordance with the Standard
Industry Fare Level formula amount applicable under Treasury Regulation Section
1.61-21(g)(5).

     (e) Relocation. On or within thirty (30) days after the Effective Date, Executive
shall relocate himself to housing in the New York/Connecticut area. The Company shall
reimburse Executive the reasonable costs of relocating his household from their current home
in Denver, Colorado to a new residence by December 31, 2007 (or such later date that is on
or before July 15, 2008 as may reasonably be required, notwithstanding Executive’s
reasonable best efforts, to avoid unreasonable disruption with due regard for his family’s
particular needs and considerations) in the New York/Connecticut area, including all
physical relocation, househunting travel, real estate sale and purchase expenses (including
brokers’ commissions), a $75,000 unitemized

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miscellaneous cash allowance that will be paid in 2007, and a full gross-up for all
taxes incurred in connection with such relocation (other than taxes on any gain on
Executive’s sale of his residence). Any such gross-up will be paid to Executive, or
remitted by the Company to the appropriate tax authorities to the extent subject to
withholding, on the date that the related taxes are due (through withholding or otherwise).

     3.5 Withholding. The Base Salary and all other payments, grants and awards to
Executive for his services to the Company shall be subject to all withholding and deductions
required by federal, state or other law (including these authorized by Executive but not otherwise
required by law), including but not limited to state, federal and local income taxes, unemployment
tax, Medicare and FICA, together with such deductions as Executive may from time to time
specifically authorize under any employee benefit program which may be adopted by the Company for
the benefit of its senior executives or Executive.

ARTICLE 4

EFFECT OF TERMINATION ON COMPENSATION

     4.1 Separation Package.

     (a) In the event Executive’s employment is terminated at any time either (A) by the
Company without Cause under Paragraph 2.2(a)(iv) or (B) by Executive for Good Reason under
Paragraph 2.3(a), then, subject to Paragraph 4.2, as and for a separation package the
Company, Executive shall be entitled to:

     (i) a lump sum severance payment equal to two (2) times the sum of Executive’s
Base Salary and Target Bonus (determined without regard to any reduction of either
such amount constituting Good Reason), subject to Executive’s satisfaction of the
release requirement of Paragraph 4.2 and subject to the limitations under Item 32
(Policy on Severance Agreements with Certain Senior Executives) of the Starwood
Hotels & Resorts Worldwide, Inc. Corporate Governance Guidelines as in effect on the
date hereof (while such policy is in effect) (“Severance Limitation Policy”);

     (ii) a pro rated portion of Executive’s annual bonus through the date of
termination, earned and payable in accordance with, and subject to, the terms of the
AIPCE based on actual results for the fiscal year of such termination (determined
without regard for any exercise of negative discretion by the Board or applicable
Committee thereof under the AIPCE that is applied disproportionately to Executive)
as well as payroll policies in effect at the Company as if Executive were employed
at the time, which shall be paid on the later of (x) the date specified in Paragraph
4.2 that applies following satisfaction of Paragraph 4.2’s release requirement, or
(y) the date such bonuses are paid to other senior executives for such fiscal year
(but not later than two and one-half months after the last day of such fiscal year);

     (iii) Executive’s stock options and restricted stock grants shall vest or not
vest in accordance with the plan provisions and terms and conditions

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applicable to such equity award agreements; provided it is agreed by the
parties that any unvested portion of Executive’s stock option and restricted stock
grants awarded on the Effective Date shall not vest and shall be forfeited; and

     (iv) the following payments and benefits (collectively, “Accrued Benefits”):
(w) an amount equal to his unpaid Base Salary and any accrued and unpaid vacation
pay through the date of termination which shall be paid on the next payroll date
occurring on or following the date of termination, (x) any unpaid bonus earned for a
completed fiscal year preceding the fiscal year of such termination which shall be
paid during the fiscal year of termination when bonuses for such completed fiscal
year are paid to senior executives (but not later than two and one-half (21/2) months
after such completed fiscal year), (y) unreimbursed expenses which shall be payable
in accordance with Company policy (subject to compliance with Section 4.1(h)), and
(z) such other benefits that may be owed to Executive which shall be payable in
accordance with the Company’s applicable plans, programs or policies.

     (b) In the event Executive’s employment under this Agreement is terminated because of
the death or Disability of Executive under Paragraph 2.2(a)(i) or 2.2(a)(ii), then, subject
to Paragraph 4.2, as and for a severance package, then the Company shall provide to
Executive or, if he is deceased, the legal representative of his estate: (i) Executive’s
Accrued Benefits; (ii) a pro rated portion of a Target Bonus through the date of
termination, payable in accordance with, and subject to, the terms of the AIPCE as well as
payroll policies in effect at the Company as if Executive were employed at the time, but
such payment is subject to (I) Executive’s satisfaction of the release requirement of
Paragraph 4.2 and (II) the payment terms of Paragraph 4.2; and (iii) the unvested portion of
Executive’s stock options, restricted stock and other equity and long-term incentive grants
shall immediately fully vest as of the date of the termination of Executive’s employment and
his stock options shall be exercisable upon the earlier of (A) one (1) year following the
date of termination of employment, or (B) the original expiration date of such option.

     (c) In the event Executive’s employment is terminated at any time by the Company
without Cause or by Executive for Good Reason (A) within twelve (12) months after a Change
in Control (as defined below) or (B) at any time prior to but in contemplation of, or at the
direction of a third-party respecting, a Change in Control, then, subject to Paragraph 4.2,
as and for a separation package, the Company shall provide to Executive:

     (i) a lump sum severance payment equal to two (2) times the sum of Executive’s
Base Salary and Target Bonus (determined without regard for any reduction of either
such amount constituting Good Reason), but such payment is subject to (I)
Executive’s satisfaction of the release requirement of Paragraph 4.2 and (II) the
payment terms of Paragraph 4.2, and the Severance Limitation Policy;

     (ii) subject to Paragraph 4.1(h) in the case of any benefits that are not
exempt from Section 409A of the Internal Revenue Code of 1986, as amended

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(“Code”), for the twenty-four (24) month period immediately following the date
of termination, the Company shall arrange to provide Executive and his dependents
life, disability, and accident insurance benefits substantially similar to those
provided to Executive and his dependents immediately prior to the date of
termination or, if more favorable to the Executive, those provided to Executive and
his dependents immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, at no greater cost to Executive than the cost to the
Executive immediately prior to such date or occurrence. (In the event benefits are
payable under Paragraph 4.1(c), Paragraph 3.4(a) shall be applied with respect to
the health coverage or Executive’s related cost (or both), which is in effect
immediately prior to the first occurrence of an event or circumstance constituting
Good Reason, if such coverage or cost would be more favorable to Executive than the
coverage or cost (or both) that would otherwise apply under Paragraph 3.4(a).)
Benefits otherwise receivable by the Executive pursuant to this Paragraph 4.1(c)(ii)
shall be reduced to the extent benefits of the same type are received by the
Executive from another employer during the twenty-four (24) 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;

     (iii) the unvested portions of all other restricted stock, stock options and
other long-term incentive awards will become immediately fully vested upon such
termination and all such awards then subject to performance conditions over a
performance period that had not then concluded shall be deemed earned, vested and
payable at the maximum level of performance thereunder;

     (iv) an amount equal to the unvested portion (if any) of Executive’s account
balance under the Company ’s 401(k) Plan that is forfeited by reason of the
Executive’s termination of employment, but such payment is subject to (I)
Executive’s satisfaction of the release requirement of Paragraph 4.2 and (II) the
payment terms of Paragraph 4.2; and

     (v) Executive’s Accrued Benefits.

     (d) Anything in this Agreement to the contrary notwithstanding, in the event it shall
be determined that Executive shall become entitled to payments and/or benefits provided by
this Agreement or any other amounts in the “nature of compensation” (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with (A) the Company or
any affiliate, (B) any person whose actions result in a change of ownership or effective
control of the Company covered by Section 280G(b)(2) of the “Code”, or any successor
provision thereof, or (C) any person affiliated with the Company or such person) as a result
of such change in ownership or effective control of the Company (a “Payment” would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties,

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are hereinafter collectively referred to as the “Excise Tax”), the Company shall pay to
Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by
the Executive, after deduction of any Excise Tax on the Payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal
to the Total Payments.

     (i) For purposes of determining whether any of the Payments will be subject to
the Excise Tax and the amount of any such Excise Tax, (A) all of the Payments shall
be treated as “parachute payments” (within the meaning of section 280G(b)(2) of the
Code) unless 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”), delivers an opinion to
Executive that such payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (B)
all “excess parachute payments” within the meaning of section 280G(b)(1) of the Code
shall be treated as subject to the Excise Tax unless Tax Counsel delivers an opinion
to the Executive that such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
section 280G(b)(4)(B) of the Code) in excess of the Base Amount allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax, and (C) the
value of all noncash benefits or any deferred payments or benefit shall be
determined by the Auditor in accordance with the principles of sections 280G(d)(3)
and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment
that is to be made, state and local income taxes shall be calculated at the highest
marginal rate of taxation that is applicable in the state and locality of the
Executive’s residence on the date of employment termination (or if there is no date
of termination, then the date on which the Gross-Up Payment is calculated for
purposes of this Paragraph 4.1(d)), net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes. If the
Company is obligated to make a Gross-Up Payment, it will be paid to Executive, or
remitted by the Company to the appropriate tax authorities to the extent subject to
withholding, on the date that the Excise Tax is due (through withholding or
otherwise).

     (ii) In the event that the Excise Tax is finally determined to be less than the
amount taken into account hereunder in calculating the Gross-Up Payment, Executive
shall repay to the Company, within five (5) business days following the time that
the amount of such reduction in the Excise Tax is finally determined, the portion of
the Gross-Up Payment related to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by Executive), to the
extent that such repayments result in a reduction in the Excise Tax and a dollar for
dollar reduction in the Executive’s taxable income and wages for purposes of
federal, state and local income and employment taxes, plus interest on the amount of
such repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is determined, pursuant to an administrative or
judicial proceeding, to exceed

11

 

the amount taken into account hereunder in calculating the Gross-Up Payment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest, penalties
or additions payable by the Executive with respect to such excess) within five (5)
business days following the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Total Payments.

(e) As used in this Agreement, “Change in Control” means”

     (i) Any individual, entity or group (a “Person”), including any “person” within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Act”), is or becomes the beneficial owner within the meaning of
Rule 13d-3 promulgated under the Act (but without regard to any time period
specified in Rule 13d-3(d)(1)(i)), of 33-1/3 percent or more of either (i) then
outstanding shares of common stock, par value $.01 per share, of the Company
(“Common Stock”), the “Outstanding Shares”) or (ii) the combined voting power of
then outstanding securities of the Company entitled to vote generally in the
election of Directors (the “Outstanding Company Voting Securities”); excluding,
however, (A) any acquisition by the Company or (B) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company;

     (ii) Individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of such
Board; provided that any individual who becomes a Director of the Company subsequent
to the Effective Date whose election, or nomination for election by the Company’s
stockholders, was approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and
provided further, that any individual who was initially elected as a Director of the
Company as a result of an actual or threatened solicitation by a Person other than
the Board for the purpose of opposing a solicitation by any other Person with
respect to the election or removal of directors, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than the
Board shall not be deemed a member of the Incumbent Board;

     (iii) Consummation by the Company of a reorganization, merger, or consolidation
or sale of all or substantially all of the assets of the Company (a “Corporate
Transaction”); excluding, however, a Corporate Transaction pursuant to which (1) all
or substantially all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Shares and the Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 66-2/3 percent of, respectively,

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the outstanding shares of common stock, and the combined voting power of the
outstanding securities of such corporation entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or indirectly) in substantially the same
proportions relative to each other as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Shares and the Outstanding Company Voting
Securities, as the case may be, (2) no Person (other than: the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, the corporation resulting from such Corporate
Transaction, and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 33-1/3 percent or more of the
Outstanding Shares or the Outstanding Company Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 33-1/3 percent or more of,
respectively, the outstanding shares of common stock of the corporation resulting
from such Corporate Transaction or the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of
directors and (3) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or

     (iv) Approved by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.

     (f) This Agreement will be construed and administered to preserve the exemption from
Section 409A of the Code (“Section 409A”) of payments that qualify for exemption. With
respect to other amounts that are subject to Section 409A, it is intended, and this
Agreement will be so construed, that any such amounts payable under this Agreement and the
Company’s and Executive’s exercise of authority or discretion hereunder shall comply with
the provisions of Section 409A and the treasury regulations relating thereto so as not to
subject Executive to the payment of interest and additional tax that may be imposed under
Section 409A. As a result and notwithstanding any other provision of this Agreement, in the
event Executive is a “specified employee” on the date of Executive’s termination of
employment (with such status determined by the Company in accordance with rules established
by the Company in writing in advance of the “specified employee identification date” that
relates to the date of Executive’s termination of employment or, if later, by December 31,
2008, or in the absence of such rules established by the Company, under the default rules
for identifying specified employees under Section 409A), any payment that is subject to
Section 409A, that is payable to Executive in connection with Executive’s termination of
employment, shall not be paid earlier than six months after such termination of employment
(if Executive dies after the date of Executive’s termination of employment but before any
payment has been made, such remaining payments that were or could have been delayed will be
paid to Executive’s estate without regard to such six-month delay).

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     (g) “Termination of employment,” “employment termination,” or “terminates employment”
shall have the same meaning as “separation from service” under Section 409A(a)(2)(A)(i) of
the Code in any instance where such term or terms appears in this Agreement and affects the
time of payment of compensation that is covered by Section 409A, or where this definition is
specifically referenced, but without changing any vesting that is tied to such term or
terms.

     (h) To the extent that any expense reimbursement provided for by this Agreement does
not qualify for exclusion from Federal income taxation, except as specified otherwise in
this Agreement, the Company will make the reimbursement only if Executive incurs the
corresponding expense during the term of this Agreement (or, with respect to Paragraph 6.1
below, during the Executive’s lifetime) and submits the request for reimbursement no later
than two months prior to the last day of the calendar year following the calendar year in
which the expense was incurred so that the Company can (and it thereby will) make the
reimbursement on or before the last day of the calendar year following the calendar year in
which the expense was incurred. In the case of any such expense reimbursement and any
in-kind benefit provided for by this Agreement that does not qualify for exclusion from
Federal income taxation, the amount of expenses eligible for such reimbursement (and the
amount of in-kind benefits provided) during a calendar year will not affect the amount of
expenses eligible for such reimbursement (or benefits provided) in another calendar year;
and the right to such reimbursement or in-kind benefit is not subject to liquidation or
exchange for another benefit from the Company. Any gross-up authorized under the Agreement
shall be paid at the time specified in the Agreement.

     4.2 Liquidated Damages. The parties agree that the above severance package shall be
Executive’s sole and exclusive monetary remedy under this Agreement by reason of termination of
Executive’s employment by the Company without Cause or by Executive for Good Reason, it being
agreed that as his actual damages under this Agreement would be difficult to measure or quantify
and would be impracticable to determine, such amount shall constitute liquidated damages under this
Agreement for Executive by reason of such termination by Executive or the Company. Any such
payments shall not be reduced or limited by amounts Executive might earn or be able to earn from
other employment or ventures and Executive shall not be obligated to mitigate any amounts or
benefits owed to him by seeking other employment or ventures. Notwithstanding the foregoing, upon
any termination of Executive’s employment and the Company’s payment to Executive of the amounts
required to be paid under Paragraph 4.1 (other than his Accrued Benefits), Executive agrees to
execute a release of all then existing claims against the Company, its subsidiaries, affiliates,
shareholders, directors, officers, employees and agents in relation to claims relating to or
arising out of his employment or the business of the Company, and Executive shall not receive any
payments or benefits to which he may be entitled hereunder that are subject to the execution of a
release unless Executive satisfies the release requirements of this Paragraph 4.2. The release
required by this Paragraph 4.2 shall be provided to the Executive not later than the Termination
Date and shall be in the form attached hereto as Exhibit 4.2 (adjusted as necessary to confirm
to then existing legal requirements). To comply with this Paragraph 4.2, Executive must sign
and return the release within 21 days after the Termination Date if Executive’s employment
termination is not part of a group termination program within the meaning Section 7(f)(1)(F)(ii) of
the Age Discrimination

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in Employment Act of 1967, as amended, and within 45 days after the Termination Date if
Executive’s termination is part of such a group termination program, and Executive must not revoke
it during the seven-day revocation period that begins when the release is signed and returned to
the Company. The Company will pay the severance benefits that are conditioned on satisfying the
release requirement of this Paragraph 4.2 on the 53rd day following the date of employment
termination).  

     4.3 Rights on Termination for Cause or Without Good Reason. No severance payments
shall be due or owing to Executive in the event that the Company shall fully terminate Executive’s
employment for Cause or Executive shall terminate his employment without Good Reason; provided,
however, that Executive shall be paid his Accrued Benefits, specifically excluding for purposes of
this Paragraph 4.3 any unpaid bonus earned for a completed fiscal year preceding the fiscal year of
such termination.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES:

NON-COMPETE AND NON-SOLICITATION

     5.1 Representations and Warranties.

     (a) Representation and Warranty of Executive. Executive hereby represents and
warrants to the Company that he is not aware of any presently existing fact, circumstance or
event (including, but without limitation, any health condition or legal constraint) which is
not known to the Company which would preclude or restrict him from providing to the Company
the services contemplated by this Agreement, or which would give rise to any breach of any
term or provision hereof, or which could otherwise result in the termination of his
employment hereunder for Cause (as such term is herein defined).

     (b) Representation and Warranty of the Company. The Company hereby represents
and warrants to Executive that (i) it is not aware of any fact, circumstance or event which
is not known to Executive which would give rise to any breach of any term or provision of
this Agreement, or which would form the basis for any claim or allegation that Executive’s
employment hereunder could be terminated for Cause hereunder, and (ii) it has received all
authorizations and has taken all actions, necessary or appropriate for the due execution,
delivery and performance of this Agreement, and all options, restricted stock and restricted
stock units described in Article 3.

     5.2 Non-Compete and Non-Solicitation.

     (a) General. Executive acknowledges that in the course of Executive’s
employment with the Company Executive will become familiar with trade secrets and other
confidential information concerning the Company and its subsidiaries and that Executive’s
services will be of special, unique and extraordinary value to the Company and its
subsidiaries.

     (b) Noncompetition. Executive agrees that during the period of Executive’s
employment with the Company and for a period of 24 months thereafter (the

15

 

“Noncompetition Period”), Executive shall not, without the express written consent of
the Board of Directors of the Company, directly or indirectly, whether for his own account
or for the account of any other person or entity, engage, participate or make any financial
investment in, become employment by or render advisory services to or otherwise assist or be
interested in any Competitive Business in any geographic area in which, as of the date of
termination of Executive’s employment, the Company or any of its subsidiaries is engaged or
planning to be engaged. As used herein, “Competitive Business” shall mean any business
engaged in the hotel, hospitality or timeshare businesses, as well as any corporation,
partnership or other entity that derives 33% or more of its total earnings before interest,
taxes, depreciation and amortization (determined, as of the Effective Date, in accordance
with generally accepted accounting principals consistently applied) from the hotel,
hospitality or timeshare businesses. Notwithstanding, Executive may invest in a Competitive
Business if its stock is listed for trading on a national stock exchange or traded in the
over-the-counter market and Executive’s holdings have an original cost less than $5,000,000
and represent less than five percent of its outstanding stock.

     (c) Nonsolicitation. Executive further agrees that during the Noncompetition
Period, Executive shall not, without the express written consent of the Board of Directors
of the Company, directly or indirectly, whether for his own account or for the account of
any other person or entity, other than the Company, hire, employ, retain or solicit the
hire, employment or retention of any managerial level employee of the Company or its
affiliates (including, without limitation, for this purpose any director level employee of
the Company and any General Manager of any hotel owned (in whole or in part) or managed by
the Company, or any person who was such an employee at any time during the twelve (12) month
period preceding Executive’s termination of employment with the Company or its affiliates,
or otherwise persuade, induce or encourage, or attempt to persuade, induce or encourage any
such person or consultant to the Company to terminate his, her or its relationship with the
Company; provided, that the foregoing shall not be violated by general advertising not
targeted at Company employees nor by serving as a reference for an employee with regard to
an entity with which the Executive is not affiliated.

     (d) Exceptions. Nothing in the Paragraph 5.2 shall prohibit Executive from
being (i) a stockholder in a mutual fund or a diversified investment company; (ii) an owner
of not more than five percent of the outstanding stock of any class of a corporation whose
securities are publicly traded so long as Executive has no active participation in the
business of such corporation; and (iii) an owner of any single assist hotels.

     (e) Reformation. If, at any time of enforcement of this Paragraph 5.2 the
Arbitrator (as defined in Paragraph 6.1(a)) holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be substituted
for the stated period, scope or area and that the Arbitrator shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area permitted by law.
This Agreement shall not authorize the Arbitrator to increase or broaden any of the
restrictions in this Paragraph 5.2.

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     5.3 Confidentiality. Executive shall not, at anytime during the Term or thereafter,
make use of or disclose, directly or indirectly, any (i) trade secret or other confidential or
secret information of the Company or of any of its subsidiaries or (ii) other technical, business,
proprietary or financial information of the Company or of any of its subsidiaries not available to
the public generally or to the competitors of the Company or to the competitors of any of its
subsidiaries (“Confidential Information”), except to the extent that such Confidential Information
(a) becomes a matter of public record or is published in a newspaper, magazine or other periodical
or on electronic or other media available to the general public, other than as a result of any act
or omission of Executive, (b) is required to be disclosed by any law, regulation or order of any
court or regulatory commission, department or agency, provided that Executive gives prompt notice
of such requirement to the Company to enable the Company to seek an appropriate protective order,
or (c) is required to be used or disclosed by Executive to perform properly Executive’s duties
under this Agreement. Promptly following the end of the Term, Executive shall surrender so the
Company all records, memoranda, notes, plans, reports, computer tapes and software and other
documents and data which constitute Confidential Information which Executive may then possess or
have under Executive’s control (together with all copies thereof). Subject to the Company’s right
of inspection to ensure that no Confidential Information is contained therein, Executive’s rolodex
or other tangible or electronic address book shall be deemed Executive’s personal property.

     5.4 Non-Disparagement. Executive shall not make any verbal or written statements to
any person or organization (including, but not limited to, members of the press and media, present
and former officers and directors, employees, contractors, customers and agents of Company, any
future employers of Executive and/or other members of the public) which materially denigrate,
disparage, defame or otherwise adversely affect the Company, its directors, officers, employees
and/or agents. The Company shall not make any verbal or written statements to any person or
organization (including, but not limited to, members of the press and media, present and former
officers and directors, employees, contractors, customers and agents of Company, any future
employers of Executive and/or other members of the public) which materially designate, disparage,
defame or otherwise adversely affect Executive.

     5.5 Intellectual Property. Executive shall not, at any time, have or claim any right,
title or interest is any trade name, patent, trademark, copyright, trade secret, intellectual
property, methodologies, technologies or other similar rights relating to the Company’s business
(collectively, “Intellectual Property”) belonging to the Company or any of its affiliates and shall
not have or claim any right, title or interest in or to any material or matter of any kind prepared
for or used in connection with the business or promotion of the Company or any of its affiliates,
whether produced, prepared or published in whole or in part by Executive or by the Company or any
of its affiliates. All Intellectual Property that is conceived, devised, made, developed or
perfected by Executive, alone or with others, during Executive’s employment that is related in any
way to the Company’s or any of its affiliates’ business or is devised, made, developed or perfected
utilizing equipment or facilities of the Company or its affiliates shall be promptly disclosed to
the Board, are works for hire and become the sole, absolute and exclusive property of the Company.
If and to the extent that any of such Intellectual Property should be determined for any reason not
to be a work for hire, Executive hereby assigns to the Company all of Executive’s right, title and
interest in and to such Intellectual Property. At the reasonable request and expense of the
Company but without charge to the Company, whether during or at any time

17

 

after Executive’s employment with the Company, Executive shall cooperate fully with the
Company and its affiliates in the securing of any trade name, patent, trademark, copyright or
intellectual property protection or other similar rights in the United States and in foreign
countries, including without limitation, the execution and delivery of assignments, patent
applications and other documents or papers.

     5.6 Sale of Stock. Executive shall not sell any stock owned by Executive while
Executive serves as Chief Executive Officer, except (and only to the extent permitted under
applicable securities laws) as may be withheld for taxes, (a) during the first 24 months of the
Effective Date; (b) without consultation with the Board of Directors following the first 24 months
of the Effective Date, and (c) without otherwise complying with all policies concerning the sale of
stock then in effect at the Company.

     5.7 Enforcement. The parties hereto agree that the Company and its subsidiaries would
be damaged irreparably in the event that any provision of Paragraphs 5.2, 5.3, 5.4 or 5.5 of this
Agreement were not performed in accordance with its terms or were otherwise breached and that money
damages would be an inadequate remedy for any such nonperformance or breach. Accordingly, the
Company and its successors and permitted assigns shall be entitled, in addition to other rights and
remedies existing in their favor, to seek an injunction or injunctions to prevent any breach or
threatened breach of any of such provisions and to enforce such provisions specifically (without
posting a bond or other security). Executive agrees that Executive will submit to the personal
jurisdiction of the courts of the State of New York in any action by the Company to enforce an
arbitration award against Executive or to obtain interim injunctive or other relief pending an
arbitration decision.

ARTICLE 6

ARBITRATION

     6.1 Arbitration. In the event of any controversy, dispute or claim arising out of or
related to this Agreement or Executive’s employment by the Company, the parties shall negotiate in
good faith in an attempt to reach a mutually acceptable settlement of such dispute. If
negotiations in good faith do not result in a settlement of any such controversy, dispute or claim,
it shall, except as otherwise provided for herein be finally settled by expedited arbitration
conducted by a single arbitrator selected as hereinafter provided (the “Arbitrator”) in accordance
with the Employment Arbitration and Mediation Rules and Procedures of the American Arbitration
Association (“National Rules”), subject to the following (the parties hereby agreeing that,
notwithstanding the provisions of Rule 1 of the National Rules, in the event that there is a
conflict between the provisions of the National Rules and the provisions of this Agreement, the
provisions of this Agreement shall control):

     (a) The Arbitrator shall be determined from a list of names of five impartial
arbitrators each of whom shall be an attorney experienced in arbitration matters concerning
executive employment disputes, supplied by the AAA chosen by Executive and the Company each
in turn striking a name from the list until one name remains (with the Company being the
first to strike a name).

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     (b) The expenses of the arbitration shall be borne by the Company; and the Company
shall bear its own legal fees and expenses and pay, at least monthly, all of Executive’s
legal fees and expenses incurred in connection with such arbitration, except that Executive
shall reimburse the Company for his legal fees and expenses paid by the Company if the
arbitrator finds that Executive brought an action in bad faith.

     (c) The Arbitrator shall determine whether and to what extent any party shall be
entitled to damages under this Agreement; provided that no party shall be entitled to
punitive or consequential damages (including, in the case of the Company, any claim for
alleged lost profits or other damages that would have been avoided had Executive remained an
employee), and each party waives all such rights, if any.

     (d) The Arbitrator shall not have the power to add to nor modify any of the terms or
conditions of this Agreement. The Arbitrator’s decision shall not go beyond what is
necessary for the interpretation and application of the provision(s) of this Agreement in
respect of the issue before the Arbitrator. The Arbitrator shall not substitute his or her
judgment for that of the parties in the exercise of rights granted or retained by this
Agreement. The Arbitrator’s award or other permitted remedy, if any, and the decision shall
be based upon the issue as drafted and submitted by the respective parties and the relevant
and competent evidence adduced at the hearing.

     (e) The Arbitrator shall have the authority to award any remedy or relief (including
provisional remedies and relief) that a court of competent jurisdiction could order or
grant. The Arbitrator’s written decision shall be rendered within sixty days of the closing
of the hearing. The decision reached by the Arbitrator shall be final and binding upon the
parties as to the matter in dispute. To the extent that the relief or remedy granted by the
Arbitrator is relief or remedy on which a court could enter judgment, a judgment upon the
award rendered by the Arbitrator shall be entered in any court having jurisdiction thereof
(unless in the case of an award of damages, the full amount of the award is paid within 10
days of its determination by the Arbitrator). Otherwise, the award shall be binding on the
parties in connection with their continuing performance of this Agreement and, in any
subsequent arbitral or judicial proceedings between the parties.

     (f) The arbitration shall take place in New York, New York.

     (g) The arbitration and all filing, testimony, documents and information relating to or
presented during the arbitration proceeding shall be disclosed exclusively for the purpose
of facilitating the arbitration process and in any court proceeding relating to the
arbitration, and for no other purpose, and shall be deemed to be information subject to the
confidentiality provisions of this Agreement.

     (h) The parties shall continue performing their respective obligations under this
Agreement notwithstanding the existence of a dispute while the dispute is being resolved
unless and until such obligations are terminated or expire in accordance with the provisions
hereof.

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     (i) The parties may obtain a pre-hearing exchange of information including depositions,
interrogatories, production of documents, exchange of summaries of testimony or exchange of
statements of position, and the Arbitrator shall limit such disclosure to avoid unnecessary
burden to the parties and shall schedule promptly all discovery and other procedural steps
and otherwise assume case management initiative and control to effect an efficient and
expeditious resolution of the dispute. At any oral hearing of evidence in connection with
an arbitration proceeding, each party and its counsel shall have the right to examine its
witness and to cross-examine the witnesses of the other party. No testimony of any witness,
or any evidence, shall be introduced by affidavit, except as the parties otherwise agree in
writing.

     (j) Notwithstanding the dispute resolution procedures contained in this Paragraph 6.1,
either party may apply to any court sitting in the County, City and State of New York (i) to
enforce this agreement so arbitrate, (ii) to seek provisional injunctive relief so as to
maintain the status quo until the arbitration award is rendered or the dispute is otherwise
resolved, (iii) to confirm any arbitration award, or (iv) to challenge or vacate any final
judgment, award or decision of the Arbitrator that does not comport with the express
provision of this Article 6.

ARTICLE 7

MISCELLANEOUS

     7.1 Notices. All notices, requests or other communications provided for in this
Agreement shall be made, if to the Company, to the Secretary of the Company at the Company’s
principal executive office, and if to Executive, to his address on the books of the Company (or to
such other address as the Company or Executive may give to the other in writing for purposes of
notice hereunder).

Copies of all notices given to Executive shall be sent to:

Robert F. Simon

Vedder, Price, Kaufman & Kammholz, P.C.

222 North LaSalle Street

Suite 2600

Chicago, Illinois 60601

Facsimile: (312) 609-5005

Copies of all notices given to the Company shall be sent to:

Starwood Hotels & Resorts Worldwide, Inc.

1111 Westchester Avenue

White Plains, New York 10604

Attention: Chief Administrative Officer and General Counsel

Facsimile: (914) 640-8240

     All notices, requests or other communications required or permitted by this Agreement shall be
made in writing either (a) by personal delivery to the party entitled thereto, (b) by

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mailing via certified mail, postage prepaid, return receipt requested, in the United States
mails to the last known address of the party entitled thereto, (c) by reputable overnight courier
service, or (d) by facsimile with confirmation or receipt. The notice, request or other
communication shall be deemed to be received upon actual receipt by the party entitled thereto;
provided, however, that if a notice, request or other communication is received after regular
business hours, it shall be deemed to be received on the next succeeding business day of the
Company.

     7.2 Applicable Law. This contract is entered into under, and shall be governed for
all purposes by, the laws of the State of New York.

     7.3 No Waiver. No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or provision of this
Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.

     7.4 Severability. If a court of competent jurisdiction determines that any provision
of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any other provision of this Agreement
and all other provisions shall remain in full force and effect.

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

     7.6 Headings. The paragraph headings have been inserted for purposes of convenience
and shall not be used for interpretive purposes.

     7.7 Gender and Plurals. Wherever the context so requires, the masculine gender
includes the feminine or neuter, and the singular number includes the plural and conversely.

     7.8 Successors. This Agreement shall be binding upon and insure to the benefit of the
Company and any successor of the Company, including without limitation any person, association or
entity which may hereafter acquire or succeed to all or substantially all of the business or assets
of the Company by any means whether direct or indirect, by purchase, merger, consolidation, or
otherwise. The Company shall requires any such successor to the Company to expressly assume, in
writing, satisfaction in form and substance to Executive all of the Company’s obligations to
Executive hereunder and otherwise. Except as provided in the preceding sentences, this Agreement
and the rights and obligations of the parties hereunder are personal, and neither this Agreement
nor any right, benefit or obligation of either party hereto shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without
the prior written consent of the other party. In the event that Executive dies before all amounts
payable under this Agreement have been paid, all remaining amounts shall be paid to the beneficiary
specifically designated by Executive in writing prior to his death, or, if no such beneficiary was
designated (or the Company is unable in good faith to determine the beneficiary designated), to
Executive’s personal representative or estate.

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     7.9 Entire Agreement. Any modification of this Agreement shall be effective only if
it is in writing and signed by the party to be charged.

     7.10 Deemed Resignations. Any termination of Executive’s employment shall constitute
an automatic resignation of Executive as an officer of the Company and each affiliate of the
Company, and from the Board of Directors of the Company and from the board of directors or any
similar governing body of any corporation, trust, limited liability company or other entity in
which the Company or any affiliate holds an equity interest and with respect to which board or
similar governing body Executive serves as the Company’s or such affiliate’s designee or other
representative. Executive shall cooperate with the Company and execute all such formal
resignations and other documents as the Company may reasonably request in furtherance of the
foregoing.

     7.11 Indemnification.

     (a) In addition to any additional benefits provided under applicable state law, as an
officer and/or director of the company, Executive shall be entitled to the benefits of: (1)
those provisions of the Articles of Incorporation of the Company, as amended, and of the
by-laws of the Company as amended, which provide for indemnification of officers and
directors of the Company (and no such provision shall be amended in any way to limit or
reduce the extent of indemnification available to Executive as an officer and/or director of
the Company), (ii) the Indemnification Agreement between the Company and Executive (the
“Indemnification Agreement”) dated as of the Effective Date.

     (b) The rights of Executive under such indemnification obligations shall survive the
termination of this Agreement and be applicable for so long as Executive may be subject to
any claim, demand, liability, cost or expense, which the indemnification obligations
referred to in this Paragraph 7.11 are intended to protect and indemnify him against.

     (c) The Company shall, at no cost to Executive, use its reasonable best efforts to at
all times include Executive, sharing the term of Executive’s employment hereunder

     7.12 Survival. The provisions of Articles 4, 5, and 6, and Paragraph 7.11, shall
survive a termination of this Agreement and a termination of Executive’s employment, as well as
such provisions of Article 7 as are necessary to effectuate the intent of the parties thereunder.

22

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized
officer and Executive has signed this Agreement as of the day and year first above written.

	 	 	 	 	 
	 	STARWOOD HOTELS & RESORTS

WORLDWIDE, INC., a Maryland corporation

 	 
	 	By:  	/s/ Jeffrey Cava
 	 
	 	 	Name:  	Jeffrey Cava 	 
	 	 	Its:          EVP – Human Resources 	 
	 

	 	 	 	 	 
	 	FRITS VAN PAASSCHEN

 	 
	 	/s/ Frits Van Paasschen
 	 
	 	 	 
	 	 	 
	 

Dated: December 30, 2008

23exv10w57

Exhibit 10.57

SEVERANCE AGREEMENT

          THIS AGREEMENT, dated December 30, 2008 the “Effective Date”), is made by and between Starwood
Hotels and Resorts Worldwide, Inc., a Maryland corporation (the “Company”), and ___(the
“Executive”).

          WHEREAS, the Executive is employed by the Company as ___; 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; and

          WHEREAS, the Company and the Executive entered into an employment agreement (the “Original
Agreement”) dated August 2, 2006; and

          WHEREAS, the Company and the Executive hereby amend and restate the Original Agreement in its
entirety (the “Agreement”) in order to evidence documentary compliance with section 409A of
Code and the guidance thereunder (collectively “Section 409A”);

          NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Executive hereby agree as follows:

     1. Defined Terms. The definitions of capitalized terms used in this Agreement are
provided in Section 16 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

1

 

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 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:

          (1) a period of 409A Disability, the Executive shall continue to receive his base
salary in accordance with the Company’s standard payroll practices at the rate in effect at
the commencement of any such period, together with any compensation payable to the Executive
under the Company’s short-term and long-term disability plans for salaried employees during
such period and any benefit coverages customarily provided to disabled salaried employees,
until the Executive’s employment is terminated on account of the Executive’s General
Disability; or

          (2) a period of General Disability, the Executive shall receive any compensation
payable to the Executive under the Company’s short-term and long-term disability plans for
salaried employees during such period, as well as any benefit coverages customarily provided
to disabled salaried employees, until the Executive’s employment is terminated on account of
the Executive’s General Disability.

Thereafter the Executive’s benefits shall be determined under the Company’s retirement, insurance
and other compensation programs then in effect in accordance with the terms of such programs.

2

 

          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, 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.

          d. Time of Payment. Upon termination of the Executive’s employment following a Change
in Control and during the Term, the Executive shall receive the payments or benefits to which he
may be entitled under Section 5(b) and 5(c) and which constitute deferred compensation subject to
Section 409A either (A) at the time when due hereunder, or (B) if a payment date sufficient to
satisfy Section 409A is not otherwise stated for such payment or benefit, on the date of
Executive’s termination of employment, except as provided in Section 14 below.

     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, 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

3

 

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.

          (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 under the terms of his offer letter from the Company, 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 of the 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. In the event the date of
the Executive’s termination of employment occurs on or within two years following an event
that constitutes a change in the ownership or effective control of the Company or in the
ownership of a substantial portion of the assets of the Company within the meaning of
section 409A(a)(2)(a)(vi) of the Code, such amount will be paid in a lump sum within 30 days
following the date of the Executive’s termination of employment, except as set forth in
Section 14 below; otherwise, such amount will be paid 53 days following the date of the
Executive’s termination of employment, except as provided by Section 14 below.

          (2) Continuation of Welfare Benefits. Subject to Paragraph 15 in the case of
any benefits that are not exempt from Section 409A, for the twenty-four (24) month period
immediately following the Date of Termination, the Company shall arrange to provide the
Executive and his dependents life, disability, and accident 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 twenty-four (24) 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) Health Benefits. For the twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to provide

4

 

the Executive with group health coverage substantially similar to that which the
Executive was receiving immediately prior to the Notice of Termination. The premium charge
to the Executive for each month of such coverage will equal the Company’s monthly COBRA
charge for such coverage in which the Executive, his spouse and covered dependents (as
applicable) is enrolled from time to time (less the amount of any administrative charge
typically assessed by the Company as part of its COBRA charge) and the Executive will be
required to pay such monthly premium charge in accordance with the Company’s standard COBRA
premium payment requirements. The Company will pay Executive a lump sum in cash equal to an
initial multiple that is increased by a percentage. For this purpose, the initial multiple
is 24 times the difference that results from calculating (i) the Company’s monthly COBRA
charge on the Date of Termination for family coverage with respect to the highest value
health coverage provided to salaried employees, minus (ii) the amount the Company charges
active salaried employees for such coverage on Executive’s Date of Termination. In
addition, for this purpose, the percentage is the sum of (I) 1% for each month in the
24-month period that will fall in the calendar year following Executive’s Date of
Termination, plus (II) 2% for each month in the 24-month period that will fall in the second
calendar year following Executive’s Date of Termination. The Company will make such payment
within 30 days following the date of the Executive’s termination of employment, except as
provided by Section 14 below.

          (4) Incentive Compensation. Notwithstanding any provision of any annual or
long-term incentive plan to the contrary, the Company shall pay to the Executive in cash the
following amounts:

          (A) A lump sum equal to 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 of the
Date of Termination, is contingent only upon the continued employment of the
Executive to a subsequent date, paid during the fiscal year of termination when
bonuses for such completed fiscal year are paid to senior executives (but not later
than 2-1/2 months after such completed fiscal year, except as provided by Section 14
below; and

          (B) the value of each contingent incentive compensation award allocated or
awarded to the Executive for a then uncompleted period 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, paid in the year following the end of
such performance period when awards for such performance period are paid to senior
executives (but not later than 2-1/2 months after the end of such performance period,
except as provided by Section 14 below. Awards for uncompleted periods shall be
prorated based upon the number of days the Executive is employed by the Company
during such year.

          (5) Accelerated Vesting of Stock Options. All stock options and restricted
stock held by the Executive under any stock option or incentive plan

5

 

maintained by the Company (including the Company’s 1999, 2001 and 2004 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

          (6) Outplacement Services. The Company shall provide the Executive with
outplacement services suitable to the Executive’s position for a period of two (2) years
following the date of the Executive’s termination of employment 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 in effect on
the Date of Termination.

          (7)  401(k) Contributions. The Company shall pay the Executive an amount equal
to the unvested portion (if any) of the Executive’s account balance under the Company’s
401(k) Plan that is forfeited by reason of the Executive’s termination of employment. Such
payment shall be made within 30 days following the date of the Executive’s termination of
employment, except as provided by Section 14 below.

     7. 280G Gross Up Payments.

          a. Whether or not the Executive becomes entitled to the Severance Payments, if any of the
payments or benefits received or to be received by the Executive in connection with a Change in
Control or the Executive’s termination of 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)(such
payments or benefits, excluding the Gross-Up Payment, being hereinafter referred to as the “Total
Payments”) will be subject to the Excise Tax, the Company shall pay to the Executive an additional
amount (the “Gross-Up Payment”) such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Total Payments and any federal, state and local income and employment
taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Total Payments.

          b. For purposes of determining whether any of the Total Payments will be subject to the Excise
Tax and the amount of any such Excise Tax, (i) all of the Total Payments shall be treated as
“parachute payments” (within the meaning of section 280G(b)(2) of the Code) unless 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”),
delivers an opinion to the Executive that such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all
“excess parachute payments” within the meaning of section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax unless Tax Counsel delivers an opinion to the Executive that such
excess parachute payments (in whole or in part) represent reasonable compensation for services
actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of the Base
Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax,
and (iii) the value of all noncash benefits or any deferred payment or benefit shall be determined
by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For
purpose of determining the amount of the Gross-Up Payment that is to be made, state and local
income taxes shall be

6

 

calculated at the highest marginal rate of taxation that is applicable in the state and
locality of the Executive’s residence on the Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment is calculated for purposes of this Section
7), net of the maximum reduction in federal income taxes which could be obtained from deduction of
such state and local taxes. If the Company is obligated to make a Gross-Up Payment, it will be
paid to Executive, or remitted by the Company to the appropriate tax authorities to the extent
subject to withholding, on the date that the Excise Tax is due (through withholding or otherwise).

          c. In the event that the Excise Tax is finally determined to be less than the amount taken
into account hereunder in calculating the Gross-Up Payment, the Executive shall repay to the
Company, within five (5) business days following the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of the Gross-Up Payment related to such reduction
(plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up Payment being repaid by the Executive, to
the extent that such repayments result in a reduction in the Excise Tax and a dollar for dollar
reduction in the Executive’s taxable income and wages for purposes of federal, state and local
income and employment taxes, plus interest on the amount of such repayment at 120% of the rate
provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined,
pursuant to an administrative or judicial proceeding, to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make
an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) within five (5) business days following the
time that the amount of such excess is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with respect to the Total Payments.

          d. Legal Fees. The Company also shall pay to the Executive, as incurred, all legal
fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating
to the termination of the Executive’s employment, in seeking to obtain or enforce any benefit or
right provided by this Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or benefit provided
hereunder, unless it is determined that any such dispute or other action is frivolous and not in
good faith. Such payments shall be made within five (5) business days after delivery of the
Executive’s written requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.

     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 provisions

7

 

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
(1) 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 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 the Executive reasonably believes in good faith
the Company is not providing the Executive with a benefit or payment to which the Executive is
entitled under the terms of this Agreement, the Executive may notify the Company, within forty-five
(45) days after the Date of Termination or, if any such payment or benefit is due after such 45-day
period, within 45 days following such payment date, that a dispute exists concerning the
termination and/or the amount of such payment or benefit. In this event, the Company shall act
within fifteen (15) days to restore fully the disputed benefits and payments (so that all benefits
and payments are provided as of such date as would have been provided had there been no delay in
providing such benefits and payments) and to continue to provide such benefits and payments as
contemplated by this Agreement thereafter (provided, however, that in all events any payment or
benefit shall not be paid or provided to the Executive before the payment date set forth in this
Agreement or any applicable document), but subject to termination and recapture from the Executive
of these disputed benefits and payments in accordance with the terms of a 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).

     9. No Mitigation. The Company agrees that, if the Executive’s employment with the
Company terminated 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.

     10. Successors; Binding Agreement.

8

 

          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 terminate his employment
with the Company and receive 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:

To the Company:

Starwood Hotels and Resorts Worldwide, Inc.

1111 Westchester Avenue

White Plains, NY 10604

Attention: Chief Executive Officer

     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

9

 

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 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. Code Section 409A. This Agreement will be construed and administered to preserve
the exemption from Section 409A of payments that qualify as short-term deferrals pursuant to Treas.
Reg. §1.409A-1(b)(4) or that qualify for the two-times compensation exemption of Treas. Reg.
§1.409A-1(b)(9)(iii). With respect to any amounts that are subject to Section 409A, it is
intended, and this Agreement will be so construed, that such amounts and the Company’s and the
Executive’s exercise of authority or discretion hereunder shall comply with the provisions of
Section 409A so as not to subject the Executive to the payment of interest and additional tax that
may be imposed under Section 409A. For purposes of any payment in this Agreement that is subject
to Section 409A and triggered by the Executive’s “termination of employment”, (i) “termination of
employment” shall have the same meaning as “separation from service” under Section 409A(a)(2)(A)(i)
of the Code, and (ii) in the event the Executive is a “specified employee” on the date of the
Executive’s termination of employment (with such status determined by the Company in accordance
with rules established by the Company in writing in advance of the “specified employee
identification date” that relates to the date of the Executive’s termination of employment or, if
later, by December 31, 2008, or in the absence of such rules established by the Company, under the
default rules for identifying specified employees under Section 409A), any payment that is subject
to Section 409A, such payment shall not be paid earlier than six months after such termination of
employment (if the Executive dies after the date of the Executive’s termination of employment but
before any payment has been made, such remaining payments that were or could have been delayed will
be paid to the Executive’s estate without regard to such six-month delay). The Executive
acknowledges and agrees that the Company has made no representation to the Executive as to the tax
treatment of the compensation and benefits provided pursuant to this Agreement.

     15. Expense Reimbursements. To the extent that any expense reimbursement provided for
by this Agreement does not qualify for exclusion from Federal income taxation, except as specified
otherwise in this Agreement, the Company will make the reimbursement only if the Executive incurs
the corresponding expense during the term of this Agreement and submits the request for
reimbursement no later than two months prior to the last day of the calendar year

10

 

following the calendar year in which the expense was incurred so that the Company can (and it
thereby will) make the reimbursement on or before the last day of the calendar year following the
calendar year in which the expense was incurred. In the case of any such expense reimbursement and
any in-kind benefit provided for by this Agreement that does not qualify for exclusion from Federal
income taxation, the amount of expenses eligible for such reimbursement (and the amount of in-kind
benefits provided) during a calendar year will not affect the amount of expenses eligible for such
reimbursement (or benefits provided) in another calendar year; and the right to such reimbursement
or in-kind benefit is not subject to liquidation or exchange for another benefit from the Company.

     16. 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.

     17. 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 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.

     18. 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.

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          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 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 combined voting power of the

12

 

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. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

          l. “Excise Tax” shall mean any excise tax imposed under section 4999 of the Code.

          m. “Executive” shall mean the individual named in the first paragraph of this Agreement.

          n. The Executive will be deemed to have a “409A Disability” if (A) the Executive is unable to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, (B) the Executive is, by

13

 

reason of any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three (3) months under an
accident and health plan covering Company employees; or (C) the Executive is determined to be
totally disabled by the Social Security Administration.

          o. “General 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 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.

          p. “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;

          (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

14

 

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 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.

          q. “Gross-Up Payment” shall have the meaning set forth in Section 7 hereof.

          r. “Notice of Termination” shall have the meaning set forth in Section 8 hereof.

          s. “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.

15

 

          t. “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.

          u. “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.

          v. “Severance Payments” shall have the meaning set forth in Section 6 hereof.

          w. “Tax Counsel” shall have the meaning set forth in Section 7 hereof.

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

          y. “Total Payments” shall mean those payments so described in Section 7 hereof.

[Signature Page Follows)

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          IN WITNESS WHEREOF, the parties have caused this Supplement to be duly executed as of the date
first written above.

	 	 	 	 	 	 	 
	 	 	STARWOOD HOTELS AND RESORTS	 	 
	 	 	WORLDWIDE, INC.	 	 
	 
	 	By	 	 	 	 
	 

	 	
NAME:
	 	 

	 	 
	 

	 	TITLE:	 	 	 	 
	 	 	Dated: December 30, 2008	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Dated: December 30, 2008	 	 

17

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