PERSONAL & CONFIDENTIAL
January 12, 1999
Mr. Thomas C. Janson, Jr.
1736 Michael Lane
Pacific Palisades, CA 90272
We are very pleased to extend this offer of Executive Vice President, General
Counsel for Starwood Hotels & Resorts Worldwide, Inc. ("Starwood"). The
following will outline the specifics of your offer of employment:
Your employment with Starwood will begin on October 1, 1998.
You shall be the Executive Vice President, General Counsel and shall perform
such duties and services consistent with such position as may be assigned to
you. Further, you shall devote your full time and attention to the affairs of
the Company and to your duties as Executive Vice President, General Counsel.
Starwood recognizes that as a result of the professional obligations associated
with your previous position, it may be necessary from time to time to devote
some time to follow-up and transition issues to your former clients; provided
that such activities shall not materially interfere with the performance of your
Your initial base salary, expressed in semi-monthly terms, will be $18,750 (on
an annualized basis equivalent to $450,000), and will be subject to the
appropriate withholdings for FICA, state and federal taxes, and Medicare.
You will be eligible to receive a performance bonus based upon achieving
specified performance criteria, which will be established and approved. The
target bonus shall be 75% to 100% of your base salary. The maximum bonus will be
defined in accordance with
January 12, 1999
the Company's new plan, which will be recommended and must be approved by the
Board of Directors. However, for 1998 you will be guaranteed a minimum bonus of
You will be paid a retention bonus of $250,000, payable within your first 30
days of employment.
The Company will recommend to the Options Committee a grant of options for
100,000 Paired Shares for you in accordance with the Long Term Incentive Plan
(the "LTIP"), at an exercise price of $42.3125, which reflects the fair market
value of paired shares under the LTIP at the close of business on August 11,
1998. The options would vest in accordance with the provisions of the LTIP.
You will be awarded 5,000 shares of restricted stock. These shares will vest 25%
on each of the first four (4) anniversaries of your start date.
You shall be eligible to participate in all employee benefit programs as are
generally available to other key executives of the Company. The effective date
of coverage on the Starwood medical and dental plans is the first of the month
following your first ninety days of employment. In addition, Starwood agrees to
reimburse you for the costs and expenses required to elect COBRA coverage for
the benefits provided by your previous employer for the first ninety days of
your employment. In the event that changes are made to any of the above benefit
plans, compensation and bonus programs, or standard operating procedures, the
changes will apply to you as they do other key executives of the company.
The Company will pay the reasonable, out-of-pocket costs of relocating your
household furnishings and family from Pacific Palisades, CA to the
Fairfield/Westchester County area according to the provisions of Starwood's
Group Move Relocation Policy; all relocation expenses will be grossed up. Upon
your move to the Fairfield/Westchester County area, the Company will make a
second mortgage home loan available to you in the amount of $500,000 which would
be due in five years or upon termination of employment for Cause (as defined
below). The loan would be non-interest bearing and will be secured by a second
mortgage on your home in Fairfield/Westchester County. Further details of
Starwood's Group Move policy are enclosed. To initiate the move process, please
contact Helen Azevedo at the Corporate Office.
The Company reserves the right to terminate your employment with or without
Cause at any time. In the event of an involuntary termination without Cause, you
shall receive, as your sole right, exclusive remedy and liquidated damages, a
one time termination payment
January 12, 1999
equal to twelve (12) months base salary. The Company will also continue to
provide medical benefits coverage during the 12-month period subsequent to the
termination of your employment.
Cause shall mean gross misconduct, which continues after written notice from the
Board of Directors or the Chief Executive Officer. A reduction in the duties or
responsibilities of your position or relocation of Starwood outside of the White
Plains or Greenwich metropolitan areas shall be considered a constructive
termination without Cause.
No severance shall be due in the event that you are terminated for Cause or in
the event that you leave the full-time employ of the Company voluntarily.
In the event of any employment-related disputes with respect to your employment
by the Company, you and the Company agree that the same shall be resolved
through binding arbitration in the jurisdiction of the Company's headquarters
and in accordance with the rules and procedures from time to time of the
American Arbitration Association.
This letter and the plans and policies referred to herein represents the
entirety of our agreement with respect to your employment and any prior
discussions or negotiations are hereby merged herein.
If this offer is acceptable to you, please sign this letter in the space
provided below and send it to my attention.
Very truly yours,
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
/s/ RICHARD NANULA
President & Chief Operating Officer
ACCEPTED AND AGREED TO:
/s/ Thomas C. Janson, Jr. January 12, 1999
Thomas C. Janson, Jr. Date