<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 10, 1998
REGISTRATION NOS. 333- AND 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
------------------------
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER) CHARTER)
MARYLAND MARYLAND
(STATE OR OTHER JURISDICTION (STATE OR OTHER JURISDICTION
OF INCORPORATION OR ORGANIZATION) OF INCORPORATION OR ORGANIZATION)
52-0901263 52-1193298
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
2231 E. CAMELBACK ROAD, SUITE 410 2231 E. CAMELBACK ROAD, SUITE 400
PHOENIX, ARIZONA 85016 PHOENIX, ARIZONA 85016
(602) 852-3900 (602) 852-3900
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
1995 ITT CORPORATION INCENTIVE STOCK PLAN 1995 ITT CORPORATION INCENTIVE STOCK PLAN
(FULL TITLE OF THE PLAN) (FULL TITLE OF THE PLAN)
BARRY S. STERNLICHT RONALD C. BROWN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS
2231 E. CAMELBACK ROAD, SUITE 410 WORLDWIDE, INC.
PHOENIX, ARIZONA 85016 2231 E. CAMELBACK ROAD, SUITE 400
(NAME AND ADDRESS OF AGENT FOR SERVICE) PHOENIX, ARIZONA 85016
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(602) 852-3900 (602) 852-3900
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT
FOR SERVICE) FOR SERVICE)
</TABLE>
COPIES TO:
<TABLE>
<S> <C>
SHERWIN L. SAMUELS, ESQ. LAURA A. LOFTIN, ESQ.
SIDLEY & AUSTIN SIDLEY & AUSTIN
555 WEST FIFTH STREET 555 WEST FIFTH STREET
LOS ANGELES, CALIFORNIA 90013 LOS ANGELES, CALIFORNIA 90013
(213) 896-6000 (213) 896-6000
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
================================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
- --------------------------------------------------------------------------------------------------------------------------------
Shares of beneficial interest, $0.01 par
value, of Starwood Hotels & Resorts,
paired with shares of common stock, $0.01
par value, of Starwood Hotels & Resorts
Worldwide, Inc. .......................... 7,150,784 $52.63 $376,345,762 $111,022
================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee and,
pursuant to Rules 457(h)(1) and 457(c) under the Securities Act of 1933,
based upon the exercise price for outstanding stock options and the average
of the high and low sale prices of the above-described shares on the New
York Stock Exchange on April 9, 1998.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
* Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from the Registration Statement in accordance with Rule 428 under
the Securities Act of 1933, as amended (the "Securities Act"), and the Note to
Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed by Starwood Hotels & Resorts
(formerly Starwood Lodging Trust), a Maryland real estate investment trust (the
"Trust"), and Starwood Hotels & Resorts Worldwide, Inc. (formerly Starwood
Lodging Corporation), a Maryland corporation (the "Corporation" and, together
with the Trust, the "Company"), with the Securities and Exchange Commission (the
"Commission") are incorporated herein by reference and are made a part hereof:
(a) The Joint Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(b) The Joint Current Reports on Form 8-K dated January 2, 1998,
February 3, 1998, February 23, 1998 and February 24, 1998.
(c) The description of the Company's Paired Shares contained in the
Registration Statement on Form 8-A filed by the Company with the Commission
on October 3, 1986.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as amended, after the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
are deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the respective dates of filing of such documents (such
documents, and the documents enumerated in paragraphs (a) through (d) above,
being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such first statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation's charter and the Amended and Restated Declaration of the
Trust provide that the Corporation and the Trust, respectively, shall indemnify,
to the fullest extent permitted by law, all persons who may be indemnified
pursuant to the Maryland General Corporation Law (the "MGCL") and Title 8 of the
II-1
<PAGE> 3
Corporations and Associations Article of the Annotated Code of Maryland (the
"Maryland REIT Law"), respectively. The MGCL requires a corporation or a
Maryland real estate investment trust (a "Maryland REIT") (unless its charter or
declaration provides otherwise, which the Corporation Articles and the Trust
Declaration do not) to indemnify a director, trustee or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a corporation or Maryland REIT to indemnify its present and former
directors, trustees and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a) the
act or omission of the director, trustee or officer was material to the matter
giving rise to the proceeding and (i) was committed in bad faith or (ii) was the
result of active and deliberate dishonesty, (b) the director, trustee or officer
actually received an improper personal benefit in money, property or services or
(c) in the case of any criminal proceeding, the director, trustee or officer had
reasonable cause to believe that the act or omission was unlawful. However,
under the MGCL, a Maryland corporation or a Maryland REIT may not indemnify for
an adverse judgment in a suit by or in the right of the corporation or the
Maryland REIT or for a judgment of liability on the basis that personal benefit
was improperly received, unless in either case a court orders indemnification
and then only for expenses. In addition, the MGCL permits a corporation or a
Maryland REIT to advance reasonable expenses to a director, trustee or officer
upon the receipt by the corporation or the Maryland REIT of (a) written
affirmation by the director, trustee or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification by the corporation
and (b) a written undertaking by or on his behalf to repay the amount paid or
reimbursed by the corporation or the Maryland REIT if it shall ultimately be
determined that the standard of conduct was not met.
The Company has entered into indemnification agreements with its directors,
trustees and executive officers providing for the maintenance of directors,
trustees and officers liability insurance, subject to certain conditions, and
the indemnification of and advance of expenses to such directors, trustees and
executive officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
4.1 Amended and Restated Declaration of Trust of the Trust, as
amended (incorporated by reference to Exhibit 3.1 of the
Joint Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "1997 Form 10-K").
4.2 Amended and Restated Articles of Incorporation of the
Corporation, as amended (incorporated by reference to
Exhibit 3.2 of the 1997 Form 10-K).
4.3 Amended and Restated Trustees' Regulations of the Trust, as
amended (incorporated by reference to Exhibit 3.3 of the
1997 Form 10-K).
4.4 Amended and Restated Bylaws of the Corporation, as amended
(incorporated by reference to Exhibit 3.4 of the 1997 Form
10-K).
*4.5 1995 ITT Corporation Incentive Stock Plan, as amended.
*5.1 Opinion of Piper & Marbury L.L.P.
*23.1 Consent of Coopers & Lybrand L.L.P.
*24.1 Powers of Attorney (included on signature pages).
</TABLE>
- ---------------
*Filed herewith
II-2
<PAGE> 4
ITEM 9. UNDERTAKINGS
Each of the undersigned registrants (the "Registrants") hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act of 1933");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if this
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) If either Registrant is a foreign private issuer, to file a
post-effective amendment to the Registration Statement to include any
financial statements required by Rule 3-19 of this chapter at the start of
any delayed offering or throughout a continuous offering. Financial
statements and information otherwise required by Section 10(a)(3) of the
Act need not be furnished, provided, that such Registrant includes in the
prospectus, by means of a post-effective amendment, financial statements
required pursuant to this paragraph (4) and other information necessary to
ensure that all other information in the prospectus is at least as current
as the date of those financial statements. Notwithstanding the foregoing,
with respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if
such financial statements and information are contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
Each Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
II-3
<PAGE> 5
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of a
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by a Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Phoenix, State of Arizona, on this 10th day of
April, 1998.
STARWOOD HOTELS & RESORTS
By: /s/ BARRY S. STERNLICHT
------------------------------------
Barry S. Sternlicht
Chairman and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature to the Registration Statement appears below
hereby appoints Barry S. Sternlicht, Madison F. Grose and Sherwin L. Samuels,
and each of them, as his attorneys-in-fact, with full power of substitution and
resubstitution, to execute in the name and on behalf of such person,
individually and in the capacity stated below, and to file, all amendments to
this Registration Statement, which amendments may make such changes in and
additions to this Registration Statement as such attorneys-in-fact may deem
necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BARRY S. STERNLICHT Chairman, Chief Executive April 10, 1998
- ----------------------------------------------------- Officer and Trustee
Barry S. Sternlicht (Principal Executive,
Financial and Accounting
Officer)
/s/ JEAN-MARC CHAPUS Trustee April 10, 1998
- -----------------------------------------------------
Jean-Marc Chapus
/s/ BRUCE W. DUNCAN Trustee April 10, 1998
- -----------------------------------------------------
Bruce W. Duncan
/s/ MADISON F. GROSE Trustee April 10, 1998
- -----------------------------------------------------
Madison F. Grose
/s/ GEORGE J. MITCHELL Trustee April 10, 1998
- -----------------------------------------------------
George J. Mitchell
/s/ ROGER S. PRATT Trustee April 10, 1998
- -----------------------------------------------------
Roger S. Pratt
/s/ STEPHEN R. QUAZZO Trustee April 10, 1998
- -----------------------------------------------------
Stephen R. Quazzo
/s/ STUART M. ROTHENBERG Trustee April 10, 1998
- -----------------------------------------------------
Stuart M. Rothenberg
/s/ RAYMOND S. TROUBH Trustee April 10, 1998
- -----------------------------------------------------
Raymond S. Troubh
</TABLE>
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Phoenix, State of Arizona, on this 10th day of
April, 1998.
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By: /s/ RONALD C. BROWN
------------------------------------
Ronald C. Brown
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature to the Registration Statement appears below
hereby appoints Ronald C. Brown and Alan M. Schnaid, and each of them, as his
attorneys-in-fact, with full power of substitution and resubstitution, to
execute in the name and on behalf of such person, individually and in the
capacity stated below, and to file, all amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorneys-in-fact may deem necessary or
appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BARRY S. STERNLICHT Chairman of the Board of April 10, 1998
- ----------------------------------------------------- Directors and Director
Barry S. Sternlicht
/s/ RONALD C. BROWN Executive Vice President and April 10, 1998
- ----------------------------------------------------- Chief Financial Officer
Ronald C. Brown (Principal Financial and
Accounting Officer)
/s/ JUERGEN BARTELS Chief Executive, Hotel April 10, 1998
- ----------------------------------------------------- Operating Group and Director
Juergen Bartels (Principal Executive
Officer)
Director April , 1998
- -----------------------------------------------------
Brenda C. Barnes
/s/ JONATHAN D. EILIAN Director April 10, 1998
- -----------------------------------------------------
Jonathan D. Eilian
/s/ BRUCE M. FORD Director April 10, 1998
- -----------------------------------------------------
Bruce M. Ford
/s/ GRAEME W. HENDERSON Director April 10, 1998
- -----------------------------------------------------
Graeme W. Henderson
/s/ EARLE F. JONES Director April 10, 1998
- -----------------------------------------------------
Earle F. Jones
/s/ MICHAEL A. LEVEN Director April 10, 1998
- -----------------------------------------------------
Michael A. Leven
</TABLE>
II-6
<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DANIEL H. STERN Director April 10, 1998
- -----------------------------------------------------
Daniel H. Stern
/s/ BARRY S. VOLPERT Director April 10, 1998
- -----------------------------------------------------
Barry S. Volpert
/s/ DANIEL W. YIH Director April 10, 1998
- -----------------------------------------------------
Daniel W. Yih
</TABLE>
II-7
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
4.1 Amended and Restated Declaration of Trust of the Trust, as
amended (incorporated by reference to Exhibit 3.1 of the
Joint Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "1997 Form 10-K")....................
4.2 Amended and Restated Articles of Incorporation of the
Corporation, as amended (incorporated by reference to
Exhibit 3.2 of the 1997 Form 10-K)..........................
4.3 Amended and Restated Trustees' Regulations of the Trust, as
amended (incorporated by reference to Exhibit 3.3 of the
1997 Form 10-K).............................................
4.4 Amended and Restated Bylaws of the Corporation, as amended
(incorporated by reference to Exhibit 3.4 of the 1997 Form
10-K).......................................................
*4.5 1995 ITT Corporation Incentive Stock Plan, as amended.......
*5.1 Opinion of Piper & Marbury L.L.P............................
*23.1 Consent of Coopers & Lybrand L.L.P..........................
*24.1 Powers of Attorney (included on signature pages)............
</TABLE>
- ---------------
*Filed herewith
<PAGE> 1
EXHIBIT 4.5
ITT CORPORATION
14,000,000 SHARES OF COMMON STOCK, NO PAR VALUE
-----------------------------
1995 ITT CORPORATION INCENTIVE STOCK PLAN
AND
SUBSTITUTE STOCK OPTIONS
-----------------------------
PLAN INFORMATION
-----------------------------
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE PROSPECTUS COVERS SUCH ADDITIONAL SECURITIES AS MAY BE ISSUANCE AS A
RESULT OF ANTI-DILUTION PROVISIONS CONTAINED IN THE INSTRUMENTS PURSUANT TO
WHICH SECURITIES COVERED BY THE PROSPECTUS ARE ISSUED.
-----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NEITHER THE NEVADA STATE GAMING CONTROL BOARD, THE NEVADA
GAMING
COMMISSION, THE MISSISSIPPI GAMING COMMISSION, NOR THE NEW
JERSEY CASINO CONTROL COMMISSION HAS PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS OR THE INVESTMENT
MERITS OF THE SECURITIES OFFERED HEREBY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
-----------------------------
December 19, 1995
<PAGE> 2
Additional information about the 1995 ITT Corporation Incentive Stock
Plan (the "Plan") and its administration may be obtained without charge by
written or oral request to the Manager of Stock Option Plan Administration, ITT
Corporation, 1330 Avenue of the Americas, New York, New York 10019-5490,
telephone number: (212) 258-1000.
ITT's registration statement on Form 10 dated September 18, 1995, as
amended by Amendment No. 1 to Form 10/A dated November 13, 1995, with respect to
the shares of ITT's common stock (filed under the name ITT Destinations, Inc.,
File No. 1-13960); ITT's Current Report on Form 8-K dated November 27, 1995
(filed under the name ITT Destinations, File No. 1-13960); ITT's current
Restated Certificate of Incorporation describing ITT's authorized capital stock;
the current Plan Information; and all documents filed with the Securities and
Exchange Commission (the "Commission") by ITT pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") since
the end of the fiscal year covered by a Form 10-K and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in the Prospectus and to be part thereof from
the date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in the Prospectus shall
be deemed to be modified or superseded for purposes of the Prospectus to the
extent that a statement contained in the Prospectus or in any other subsequently
filed document which also is or is deemed to be incorporated by reference in the
Prospectus modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Prospectus. Any such document, as well as ITT's most
recent annual report to shareholders and any other report or communication
distributed to ITT shareholders generally, may be obtained without charge by
written or oral request to the Manager of Stock Option Plan Administration, ITT
Corporation, 1330 Avenue of the Americas, New York, New York 10019-5490,
telephone number: (212) 258-1000.
TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information......................................... 3
1995 ITT Corporation Incentive Stock Plan................... 4
Administration.............................................. 13
Federal Tax Treatment....................................... 13
</TABLE>
<PAGE> 3
GENERAL INFORMATION
The Plan contains a formula that determines the maximum number of shares
of common stock, no par value, of ITT Corporation (the "Common Stock") with
respect to which awards may be made in any one year and limits such amount to
1.5% of the total of the issued and outstanding shares plus treasury shares as
reported in ITT's Form 10-K for the preceding year plus unused portions of such
limit carried over from prior years. No more than 5,000,000 shares may be
available for incentive stock options, and no more than 20% of the total may be
available for awards of restricted stock or performance shares under the Plan.
The Plan limits the award of stock options to any one person to no more than 10%
of the annual limit of available shares that year.
The Plan permits the committee administering the Plan (the "Committee")
to award performance shares and restricted stock, as well as non-qualified stock
options, incentive stock options and stock appreciation rights. Reference is
made to the text of the Plan herein for a complete description of awards
permitted under the Plan and the relevant provisions and conditions applicable
thereto.
The prospectus also covers Common Stock that may be subject to stock
options granted to certain persons in substitution for stock options previously
granted by companies that have been acquired by ITT and in substitution for
stock options previously granted by ITT Corporation, a Delaware corporation,
whose name was changed to ITT Industries, Inc.
("Substitute Stock Options").
The prospectus does not cover resales of Common Stock acquired pursuant
to the provision of the Plan. Resales may be subject to restrictions or
limitations imposed by the Securities Act of 1933 and the Exchange Act.
The Plan does not contain any provision prohibiting the cancellation and
reissuance of stock options at a lower option price. However, ITT has agreed
with The New York Stock Exchange, Inc. that it will not take any such action
without the approval of the ITT stockholders.
Neither the Plan nor the Substitute Stock Options are subject to any of
the provisions of the Employee Retirement Income Security Act of 1974.
Furthermore, Section 401 of the Internal Revenue Code relating to certain
qualified pension, profit-sharing and stock bonus plans does not apply to the
Plan or the Substitute Stock Options.
Plan participants receive information with respect to their
participation, including, the date of grant, the exercise price, the amount
exercisable and the expiration date, as well as applicable information
concerning whatever performance shares or restricted stock may be relevant to
them.
<PAGE> 4
1995 ITT CORPORATION INCENTIVE STOCK PLAN
The following is the text of the Plan:
1. PURPOSE
The purpose of the 1995 ITT Corporation Incentive Stock Plan is to
motivate and reward superior performance on the part of employees of ITT and its
subsidiaries ("ITT") and to thereby attract and retain employees of superior
ability. In addition, the Plan is intended to further opportunities for stock
ownership by such employees in order to increase their proprietary interest in
ITT and, as a result, their interest in the success of ITT. Awards will be made,
in the discretion of the Committee, to Key Employees (including officers and
directors who are also employees) whose responsibilities and decisions directly
affect the performance of any Participating Company and its subsidiaries. Such
incentive awards may consist of stock options, stock appreciation rights payable
in stock or cash, performance shares, restricted stock or any combination of the
foregoing, as the Committee may determine.
2. DEFINITIONS
When used herein, the following terms shall have the following meanings:
"Acceleration Event" means the occurrence of an event defined in Section
9 of the Plan.
"Act" means the Securities Exchange Act of 1934.
"Annual Limit" means the maximum number of shares of Stock for which
Awards may be granted under the Plan in each Plan Year as provided in Section 3
of the Plan.
"Award" means an award granted to any Key Employee in accordance with
the provisions of the Plan in the form of Options, Rights, Performance Shares or
Restricted Stock, or any combination of the foregoing.
"Award Agreement" means the written agreement evidencing each Award
granted to a Key Employee under the Plan.
"Beneficiary" means the beneficiary or beneficiaries designated pursuant
to Section 10 to receive the amount, if any, payable under the Plan upon the
death of a Key Employee.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.)
"Committee" means the Compensation and Personnel Committee of the Board
or such other committee as may be designated by the Board to administer the
Plan.
<PAGE> 5
"Company" means ITT Corporation, a Nevada corporation, and its
successors and assigns.
"Fair Market Value," unless otherwise indicated in the provisions of
this Plan, means, as of any date, the composite closing price for one share of
Stock on the New York Stock Exchange or, if no sales of Stock have taken plan on
such date, the composite closing price on the most recent date on which selling
prices were quoted, the determination to be made in the discretion of the
Committee.
"Incentive Stock Option" means a stock option qualified under Section
422 of the Code.
"Key Employee" means an employee (including any officer or director who
is also an employee) of any Participating Company whose responsibilities and
decisions, in the judgment of the Committee, directly affect the performance of
the Company and its subsidiaries.
"Limited Stock Appreciation Right" means a stock appreciation right
which shall become exercisable automatically upon the occurrence of an
Acceleration Event as described in Section 9 of the Plan.
"Option" means an option awarded under Section 5 of the Plan to purchase
Stock of the Company, which option may be an Incentive Stock Option or a
non-qualified stock option.
"Participating Company" means the Company or any subsidiary or other
affiliate of the Company; provided, however, for Incentive Stock Options only,
"Participating Company" means the Company or any corporation which at the time
such Option is granted qualifies as a "subsidiary" of the Company under Section
425(f) of the Code.
"Performance Share" means a performance share awarded under Section 6 of
the Plan.
"Plan" means the 1995 ITT Corporation Incentive Stock Plan, as the same
may be amended, administered or interpreted from time to time.
"Plan Year" means the calendar year.
"Restricted Stock" means Stock awarded under Section 7 of the Plan
subject to such restrictions as the Committee deems appropriate or desirable.
"Retirement" means eligibility to receive immediate retirement benefits
under a Participating Company pension plan.
"Right" means a stock appreciation right awarded in connection with an
Option under Section 5 of the Plan.
"Stock" means the common stock (no par value) of the Company.
"Total Disability" means the complete and permanent inability of a Key
Employee to perform all of his or her duties under the terms of his or her
employment with any Participating
<PAGE> 6
Company, as determined by the Committee upon the basis of such evidence,
including independent medical reports and data, as the Committee deems
appropriate or necessary.
3. SHARES SUBJECT TO THE PLAN
The aggregate number of shares of Stock which may be awarded under the
Plan in any Plan Year shall be subject to an annual limit. The maximum number of
shares of Stock for which Awards may be granted under the Plan in each Plan Year
shall be 1.5 percent (1.5%) of the total of the issued and outstanding shares of
Stock (including treasury stock) as reported in the Annual Report on Form 10-K
of the Company for the fiscal year ending immediately prior to any Plan Year.
Any unused portion of the Annual Limit for any Plan Year shall be carried
forward and be made available for awards in succeeding Plan Years.
In addition to the foregoing, in no event shall more than five million
(5,000,000) shares of Stock be cumulatively available for Awards of incentive
stock options under the Plan, and provided further, that no more than twenty
percent (20%) of the total number of shares on a cumulative basis shall be
available for restricted stock and performance shares Awards. For any Plan Year,
no individual employee may receive an Award of stock options for more than the
lesser of (i) ten percent (10%) of the Annual Limit on available shares
applicable to that Plan Year and (ii) 500,000 shares; except that each
individual employee may receive in addition to the foregoing limit that number
of stock options equal to the lesser of (x) 2,600,000 stock options and (y) the
number of substitute stock options required to replace "old" ITT Corporation
stock options surrendered by such employee in connection with the spin-off by
"old" ITT Corporation of the shares of the Company to "old" ITT Corporation
shareholders.
Subject to the above limitations, shares of Stock to be issued under the
Plan may be made available from the authorized but unissued shares, or shares
held by the Company in treasury or from shares purchased in the open market.
For the purpose of computing the total number of shares of Stock
available for Awards under the Plan, there shall be counted against the
foregoing limitations the number of shares of Stock which equal the value of
performance share Awards, in each case determined as at the dates on which such
Awards are granted. If any Awards under the Plan are forfeited, terminated,
expire unexercised, are settled in cash in lieu of Stock or are exchanged for
other Awards, the shares of Stock which were theretofore subject to such Awards
shall again be available for Awards under the Plan to the extent of such
forfeiture or expiration of such Awards. Further, any shares that are exchanged
(either actually or constructively) by optionees as full or partial payment to
the Company of the purchase price of shares being acquired through the exercise
of a stock option granted under the Plan may be available for subsequent Awards,
provided however, that such shares may be awarded only to those participants who
are not directors or executive officers (as that term is defined in the rules
and regulations under Section 26 of the Act).
4. GRANT OF AWARDS AND AWARD AGREEMENTS
(a) Subject to the provisions of the Plan, the Committee shall (i)
determine and designate from time to time those Key Employees or groups of Key
Employees to whom Awards are to be granted; (ii) determine the form or forms of
Award to be granted to any Key Employee;
<PAGE> 7
(ii) determine the amount or number of shares of Stock subject to each Award;
and (iv) determine the terms and conditions of each Award.
(b) Each Award granted under the Plan shall be evidenced by a written
Award Agreement. Such agreement shall be subject to and incorporate the express
terms and conditions, if any, required under the Plan or required by the
Committee.
5. STOCK OPTIONS AND RIGHTS
(a) With respect to Options and Rights, the Committee shall (i)
authorize the granting of Incentive Stock Options, non-qualified stock options,
or a combination of Incentive Stock Options and non-qualified stock options;
(ii) authorize the granting of Rights which may be granted in connection with
all or part of any Option granted under this Plan, either concurrently with the
grant of the Option or at any time thereafter during the term of the Option;
(iii) determine the number of shares of Stock subject to each Option or the
number of shares of Stock that shall be used to determine the value of a Right;
and (iv) determine the time or times when and the manner in which each Option or
Right shall be exercisable and the duration of the exercise period.
(b) Any Option issued hereunder which is intended to qualify as an
Incentive Stock Option shall be subject to such limitations or requirements as
may be necessary for the purposes of Section 422 of the Code or any regulations
and rulings thereunder to the extent and in such form as determined by the
Committee in its discretion.
(c) Rights may be granted only to Key Employees who may be considered
directors or officers of the Company for purposes of Section 16 of the Act.
(d) The exercise period for a non-qualified stock option and any related
Right shall not exceed ten years and two days from the date of grant, and the
exercise period for an Incentive Stock Option and any related Right shall not
exceed ten years from the date of grant.
(e) The Option price per share shall be determined by the Committee at
the time any Option is granted and shall be not less than the Fair Market Value
of one share of Stock on the date the Option is granted.
(f) No part of any Option or Right may be exercised until the Key
Employee who has been granted the Award shall have remained in the employ of a
Participating Company for such period after the date of grant as the committee
may specify, if any, and the Committee may further require exercisability in
installments; provided, however, the period during which a Right is exercisable
shall commence no earlier than six months following the date the Option or Right
is granted.
(g) The purchase price of the shares as to which an Option shall be
exercised shall be paid to the Company at the time of exercise either in cash or
Stock already owned by the optionee having a total Fair Market Value equal to
the purchase price, or a combination of cash and Stock having a total Fair
Market Value, as so determined, equal to the purchase price. The Committee shall
determine acceptable methods for tendering Stock as payment upon exercise of
an Option
<PAGE> 8
and may impose such limitations and prohibitions on the use of Stock to exercise
an Option as it deems appropriate.
(h) Unless Section 9 shall provide otherwise, Rights granted to a
director or officer shall terminate when such person ceases to be considered a
director or officer of the Company subject to Section 16 of the Act.
(i) In case of termination of employment, the following provisions shall
apply:
(A) If a Key Employee who has been granted an Option shall die
before such Option has expired, his or her Option may be exercised in
full by the person or persons to whom the Key Employee's rights under
the Option pass by will, or if no such person has such right, by his or
her executors or administrators, at any time, or from time to time,
within five years after the date of the Key Employee's death or within
such other period, and subject to such terms and conditions as the
Committee may specify, but not later than the expiration date specified
in Section 5(d) above.
(B) If the Key Employee's employment by any Participating
Company terminates because of his or her Retirement or Total Disability,
he or she may exercise his or her Options in full at any time, or from
time to time, within five years after the date of the termination of his
or her employment or within such other period, and subject to such terms
and conditions as the Committee may specify, but not later than the
expiration date specified in Section 5(d) above. Any such Options not
fully exercisable immediately prior to such optionee's retirement shall
become fully exercisable upon such retirement unless the Committee, in
its sole discretion, shall otherwise determine.
(C) Except as provided in Section 9, if the Key Employee shall
voluntarily resign before eligibility for Retirement or he or she is
terminated for cause as determined by the Committee, the Options or
Rights shall be canceled coincident with the effective date of the
termination of employment.
(D) If the Key Employee's employment terminates for any other
reason, he or she may exercise his or her Options, to the extent that he
or she shall have been entitled to do so at the date of the termination
of his or her employment, at any time, or from time to time, within
three months after the date of the termination of his or her employment
or within such other period, and subject to such terms and conditions as
the Committee may specify, but not later than the expiration date
specified in Section 5(d) above.
(j) No Option or Right granted under the Plan shall be transferable
other than by will or by the laws of descent and distribution. During the
lifetime of the optionee, an Option or Right shall be exercisable only by the
Key Employee to whom the Option or Right is granted (or his or her estate or
designated Beneficiary).
(k) With respect to an Incentive Stock Option, the Committee shall
specify such terms and provisions as the Committee may determine to be necessary
or desirable in order to qualify such Option as an "incentive stock option"
within the meaning of Section 422 of the Code.
<PAGE> 9
(l) With respect to the exercisability and settlement of Rights:
(i) Upon exercise of a Right, the Key Employee shall be
entitled, subject to such terms and conditions the Committee may
specify, to receive upon exercise thereof all or a portion of the excess
of (A) the Fair Market Value of a specified number of shares of Stock at
the time of exercise, as determined by the Committee, over (B) a
specified amount which shall not, subject to Section 5(e), be less than
the Fair Market Value of such specified number of shares of Stock at the
time the Right is granted. Upon exercise of a Right, payment of such
excess shall be made as the Committee shall specify in cash, the
issuance or transfer to the Key Employee of whole shares of Stock with a
Fair Market Value at such time equal to any excess, or a combination of
cash and shares of Stock with a combined Fair Market Value at such time
equal to any such excess, all as determined by the Committee. The
Company will not issue a fractional share of Stock and, if a fractional
share would otherwise be issuable, the Company shall pay cash equal to
the Fair Market Value of the fractional share of Stock at such time.
(ii) For the purposes of Subsection (i) of this Section 5(1), in
the case of any such Right or portion thereof, other than a Right
related to an Incentive Stock Option, exercised for cash during a
"window period" specified by Rule 16b-3 under the Act, the Fair Market
Value of the Stock at the time of such exercise shall be the highest
composite daily closing price of the Stock during such window period.
(iii) In the event of the exercise of such Right, the Company's
obligation in respect of any related Option or such portion thereof will
be discharged by payment of the Right so exercised.
6. PERFORMANCE SHARES
(a) Subject to the provisions of the Plan, the Committee shall (i)
determine and designate from time to time those Key Employees or groups of Key
Employees to whom Awards of Performance Shares are to be made, (ii) determine
the Performance Period (the "Performance Period") and Performance Objectives
(the "Performance Objectives") applicable to such Awards, (iii) determine the
form of settlement of a Performance Share and (iv) generally determine the terms
and conditions of each such Award. At any date, each Performance Share shall
have a value equal to the Fair Market Value of a share of Stock at such date;
provided that the Committee may limit the aggregate amount payable upon the
settlement of any Award. The maximum award for any individual employee in any
given year shall be 100,000 Performance Shares.
(b) The Committee shall determine a Performance Period of not less than
two nor more than five years. Performance Periods may overlap and Key Employees
may participate simultaneously with respect to Performance Shares for which
difference Performance Periods are prescribed.
(c) The Committee shall determine the Performance Objectives of Awards
of Performance Shares. Performance Objectives may vary from Key Employee to Key
Employee and between groups of Key Employees and shall be based upon one or more
of the following
<PAGE> 10
objective criteria, as the Committee deems appropriate: earnings per share,
return on equity, cash flow or total shareholder return of ITT. If during the
course of a Performance Period there shall occur significant events which the
Committee expects to have a substantial effect on the applicable Performance
Objectives during such period, the Committee may revise such Performance
Objectives.
(d) At the beginning of a Performance Period, the Committee shall
determine for each Key Employee or group of Key Employees the number of
Performance Shares of the percentage of Performance Shares which shall be paid
to the Key Employee or member of the group of Key Employees if the applicable
Performance Objectives are met in whole or in part.
(e) If a Key Employee terminates services with all Participating
Companies during a Performance Period because of death, Total Disability,
Retirement, or under other circumstances where the Committee in its sole
discretion finds that a waiver would be in the best interests of the Company,
that Key Employee may, as determined by the Committee, be entitled to payment in
settlement of such Performance Shares at the end of the Performance Period based
upon the extent to which the Performance Objectives were satisfied at the end of
such period and prorated for the portion of the Performance Period during which
the Key Employee was employed by any Participating Company; provided, however,
the Committee may provide for an earlier payment in settlement of such
Performance Shares in such amount and under such terms and conditions as the
Committee deems appropriate or desirable. If a Key Employee terminates service
with all Participating Companies during a Performance Period for any other
reason, then such Key Employee shall not be entitled to any Award with respect
to that Performance Period unless the Committee shall otherwise determine.
(f) Each Award of a Performance Share shall be paid in whole shares of
Stock, or cash, or a combination of Stock and cash either as a lump sum payment
or in annual installments, all as the Committee shall determine, with payment to
commence as soon as practicable after the end of the relevant Performance
Period.
7. RESTRICTED STOCK
(a) Restricted Stock shall be subject to a restriction period (after
which restrictions will lapse) which shall mean a period commencing on the date
the Award is granted and ending on such date as the Committee shall determine
(the "Restriction Period"). The Committee may provide for the lapse of
restrictions in installments where deemed appropriate and it may also require
the achievement of predetermined performance objectives in order for such shares
to vest.
(b) Except when the Committee determines otherwise pursuant to Section
7(d), if a Key Employee terminates employment with all Participating Companies
for any reason before the expiration of the Restriction Period, all shares of
Restricted Stock still subject to restriction shall be forfeited by the Key
Employee and shall be reacquired by the Company.
(c) Except as otherwise provided in this Section 7, no shares of
Restricted Stock received by a Key Employee shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period.
<PAGE> 11
(d) In cases of death, Total Disability or Retirement or in cases of
special circumstances, the Committee may, in its sole discretion when it finds
that a waiver would be in the best interests of the Company, elect to waive any
or all remaining restrictions with respect to such Key Employee's Restricted
Stock.
(e) The Committee may require, under such terms and conditions as it
deems appropriate or desirable, that the certificates for Stock delivered under
the Plan may be held in custody by a bank or other institution, or that the
Company may itself hold such shares in custody until the Restriction Period
expires or until restrictions thereon otherwise lapse, and may require, as a
condition of any Award of Restricted Stock that the Key Employee deliver a stock
power endorsed in blank relating to the Restricted Stock.
(f) Nothing in this Section 7 shall preclude a Key Employee from
exchanging any shares of Restricted Stock subject to the restrictions contained
herein for any other shares of Stock that are similarly restricted.
(g) Subject to Section 7(e) and Section 8, each Key Employee entitled to
receive Restricted Stock under the Plan shall be issued a certificate for the
shares of Stock. Such certificate shall be registered in the name of the Key
Employee, and shall bear an appropriate legend reciting the terms, conditions
and restrictions, if any, applicable to such Award and shall be subject to
appropriate stop-transfer orders.
8. CERTIFICATES FOR AWARDS OF STOCK
(a) The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to (i) the listing of such shares on any
stock exchange on which the Stock may then be listed and (ii) the completion of
any registration or qualification of such shares under any federal or state law,
or any ruling or regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable.
(b) All certificates for shares of Stock delivered under the Plan shall
also be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or state securities
laws, and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. In making such
determination, the Committee may rely upon an opinion of counsel for the
Company.
(c) Except for the restrictions on Restricted Stock under Section 7,
each Key Employee who receives Stock in settlement of an Award of Stock, shall
have all of the rights of a shareholder with respect to such shares, including
the right to vote the shares and receive dividends and other distributions. No
Key Employee awarded an Option, a Right or Performance Share shall have any
right as a shareholder with respect to any shares covered by his or her Option,
Right or Performance Share prior to the date of issuance to him or her of a
certificate or certificates for such shares.
9. ACCELERATION EVENTS
<PAGE> 12
(a) For the purposes of this Plan, an Acceleration Event shall occur if
(i) a report on Schedule 13D shall be filed with the Securities and Exchange
Commission pursuant to Section 13(d) of the Act disclosing that any person
(within the meaning of Section 13(d) of the Act), other than the Company or a
subsidiary of the Company or any employee benefit plan sponsored by the Company
or a subsidiary of the Company, if the beneficial owner directly or indirectly
of twenty percent or more of the outstanding Stock of the Company; (ii) any
person (within the meaning of Section 13(d) of the Act), other than the Company
or a subsidiary of the Company or any employee benefit plan sponsored by the
Company or a subsidiary of the Company, shall purchase shares pursuant to a
tender offer or exchange offer to acquire any Stock of the Company (or
securities convertible into Stock) for cash, securities or any other
consideration, provided that after consummation of the offer, the person in
question is the beneficial owner (as such term is defined in Rule 13d-3 under
the Act), directly or indirectly, of fifteen percent or more of the outstanding
Stock of the Company (calculated as provided in paragraph (d) of Rule 13-d under
the Act in the case of rights to acquire Stock), (iii) the stockholders of the
Company shall approve (A) any consolidation or merger of the Company in which
the Company is not the continuing or surviving corporation or pursuant to which
shares of Stock of the Company would be converted into cash, securities or other
property, other than a merger of the Company in which holders of Stock of the
Company immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger as
immediately before, or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all the
assets of the Company; or (iv) there shall have been a change in a majority of
the members of the Board within a 12-month period unless the election or
nomination for election by the Company's stockholders of each new director
during such 12-month period was approved by the vote of two-thirds of the
directors then still in office who were directors at the beginning of such
12-month period.
(b) Notwithstanding any provisions in this Plan to the contrary:
(i) Each outstanding Option granted under the Plan shall become
immediately exercisable in full for the aggregate number of shares
covered thereby and all related Rights shall also become exercisable
upon the occurrence of an Acceleration Event described in this Section 9
and shall continue to be exercisable in full for cash for a period of 60
calendar days beginning on the date that such Acceleration Event occurs
and ending on the 60th calendar day following that date; provided,
however, that (A) no Right shall become exercisable earlier than six
months following the date the Right is granted, and (B) no Option or
Right shall be exercisable beyond the expiration date of its original
term.
(ii) Options and Rights shall not terminate and shall continue
to be fully exercisable for a period of seven months following the
occurrence of an Acceleration Event in the case of an employee who is
terminated other than for just cause or who voluntarily terminates his
employment because he in good faith believes that as a result of such
Acceleration Event he is unable effectively to discharge his present
duties or the duties of the position he occupied just prior to the
occurrence of such Acceleration Event. For purposes of this Section 9
only, termination shall be for "just cause" only if such termination is
based on fraud, misappropriation or embezzlement on the part of the
employee which results in a final conviction of a felony. Under no
circumstances,
<PAGE> 13
however, shall any Option or Right be exercised beyond the expiration
date or its original term.
(iii) Any Right or portion thereof may be exercised for cash
within the 60- calendar-day period following the occurrence of an
Acceleration Event with settlement, except in the case of a Right
related to an Incentive Stock Option, based on the "Formula Price" which
shall be the highest of (A) the highest composite daily closing price of
the Stock during the period beginning on the 60th calendar day prior to
the date on which the Right is exercised and ending on the date such
Right is exercised, (B) the highest gross price paid for the Stock
during the same period of time, as reported in a report on Schedule 13D
filed with the Securities and Exchange Commission or (C) the highest
gross price paid or to be paid for a share of Stock (whether by way of
exchange, conversion, distribution upon merger, liquidation or
otherwise) in any of the transactions set forth in this Section 9 as
constituting an Acceleration Event.
(iv) Upon occurrence of an Acceleration Event, Limited Stock
Appreciation Rights shall automatically be granted as to any Option with
respect to which Rights are not then outstanding; provided, however,
that Limited Stock Appreciation Rights shall be provided at the time of
grant of any Incentive Stock Option subject to exercisability upon the
occurrence of an Acceleration Event. Limited Stock Appreciation Rights
shall entitle the holder thereof, upon exercise of such rights and
surrender of the related Option or any portion thereof, to receive,
without payment to the Company (except for applicable withholding
taxes), an amount in cash equal to the excess, if any, of the Formula
Price as that term is defined in this Section 9 over the option price of
the Stock as provided in such Option; provided that in the case of the
exercise of any such Limited Stock Appreciation Right or portion thereof
related to an Incentive Stock Option, the Fair Market Value of the Stock
at the time of such exercise shall be substituted for the Formula Price.
Each such Limited Stock Appreciation Right shall be exercisable only
during the period beginning on the first business day following the
occurrence of such Acceleration Event and ending on the 60th day
following such date and only to the same extent the related Option is
exercisable. In the case of persons who are considered directors or
officers of the Company for purposes of Section 16 of the Act, Limited
Stock Appreciation Rights shall not be so exercisable until they have
been outstanding for at least six months. Upon exercise of a Limited
Stock Appreciation Right and surrender of the related Option, or portion
thereof, such Option, to the extent surrendered, shall not thereafter be
exercisable.
(v) The restrictions applicable to Awards of Restricted Stock
issued pursuant to Section 7 shall lapse upon the occurrence of an
Acceleration Event and the Company shall issue stock certificates
without a restrictive legend. Key Employees holding Restricted Stock on
the date of an Acceleration Event may tender such Restricted Stock to
the Company which shall pay the Formula Price as that term is defined in
this Section 9; provided, such Restricted Stock must be tendered to the
Company within 60 calendar days of the Acceleration Event.
(vi) If an Acceleration Event occurs during the course of a
Performance Period applicable to an Award of Performance Shares pursuant
to Section 6, then the Key
<PAGE> 14
Employee shall be deemed to have satisfied the Performance Objectives
and settlement of such Performance Shares shall be based on the Formula
Price, as defined in this Section 9.
10. BENEFICIARY
(a) Each Key Employee shall file with the Company a written designation
of one or more persons as the Beneficiary who shall be entitled to receive the
Award, if any, payable under the Plan upon his or her death. A Key Employee may
from time to time revoke or change his or her Beneficiary designation without
the consent of any prior Beneficiary by filing a new designation with the
Company. The last such designation received by the Company shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall
be effective unless received by the Company prior to the Key Employee's death,
and in no event shall it be effective as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of a Key
Employee's death, or if no designated Beneficiary survives the Key Employee or
if such designation conflicts with law, the Key Employee's estate shall be
entitled to receive the Award, if any, payable under the Plan upon his or her
death. If the Committee is in doubt as to the right of any person to receive
such Award, the Company may retain such Award, without liability for any
interest thereon, until the Committee determines the rights thereto, or the
Company may pay such Award into any court of appropriate jurisdiction and such
payment shall be a completer discharge of the liability of the Company therefor.
11. ADMINISTRATION OF THE PLAN
(a) Each member of the Committee shall be both a member of the Board and
a "disinterested person" within the meaning of Rule 16b-3 under the Act or
successor rule or regulation. No member of the Committee shall be, or shall have
been, eligible to receive an Award under the Plan or any other plan maintained
by any Participating Company to acquire stock, stock options, stock appreciation
rights, performance shares or restricted stock of a Participating Company at any
time within the one year immediately preceding the member's appointment to the
Committee.
(b) All decisions, determinations or actions of the Committee made or
taken pursuant to grants of authority under the Plan shall be made or taken in
the sole discretion of the Committee and shall be final, conclusive and binding
on all persons for all purposes.
(c) The Committee shall have full power, discretion and authority to
interpret, construe and administer the Plan and any part thereof, and its
interpretations and constructions thereof and actions taken thereunder shall be,
except as otherwise determined by the Board, final, conclusive and binding on
all persons for all purposes.
(d) The Committee's decisions and determinations under the Plan need not
be uniform and may be made selectively among Key Employees, whether or not such
Key Employees are similarly situated.
<PAGE> 15
(e) The Committee may, in its sole discretion, delegate such of its
powers as it deems appropriate to the chief executive officer or other members
of senior management, except that Awards to executive officers shall be made
solely by the Committee and subject to compliance with Rule 16b-3 of the Act.
(f) If an Acceleration Event has not occurred and if the Committee
determines that a Key Employee has taken action inimical to the best interests
of any Participating Company, the Committee may, in its sole discretion,
terminate in whole or in part such portion of any Option (including any related
Right) as has not yet become exercisable at the time of termination, terminate
any Performance Share Award for which the Performance Period has not been
completed or terminate any Award of Restricted Stock for which the Restrictive
Period has not lapsed.
12. AMENDMENT, EXTENSION OR TERMINATION
The Board may, at any time, amend or terminate the Plan and,
specifically, may make such modifications to the Plan as it deems necessary to
avoid the application of Section 162(m) of the Code and the Treasury regulations
issued thereunder. However, no amendment shall, without approval by a majority
of the Company's stockholders, (a) alter the group of persons eligible to
participate in the Plan, (b) except as provided in Section 13, increase the
maximum number of shares of Stock which are available for Awards under the Plan,
(c) materially increase the benefits accruing to participants under the Plan or
(d) extend the period during which Awards may be granted beyond December 31,
2005. If an Acceleration Event has occurred, no amendment or termination shall
impair the rights of any person with respect to a prior Award.
13. ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK
In the event of any reorganization, merger, recapitalization,
consolidation, liquidation, stock dividend, stock split, reclassification,
combination of shares, rights offering, split-up or extraordinary dividend
(including a spin-off) or divestiture, or any other change in the corporate
structure or shares, the Committee may make such adjustment in the Stock subject
to Awards, including Stock subject to purchase by an Option, or the terms,
conditions or restrictions on Stock or Awards, including the price payable upon
the exercise of such Option and the number of shares subject to restricted stock
awards, as the Committee deems equitable.
14. SUBSTITUTE AWARDS
The Committee shall be authorized to issue substitute ITT stock options
and related rights to those key employees of Participating Companies who
surrender options to acquire stock in "old" ITT Corporation. The Committee may
make a determination as to the exercise price and number of such substitute
options as it may determine in order to preserve the economic value of the
surrendered "old" ITT Corporation options and related rights in the aggregate
amount not to exceed 14,000,000 shares. Subject to this limitation, shares of
Common Stock to be issued upon the exercise of substitute stock options may be
made available from authorized but unissued shares or from treasury or shares
held by ITT or in shares purchased in the open market.
<PAGE> 16
The maximum number of substitute ITT stock options and related rights
that may be granted to an individual employee is 2,600,000 or such lower number
as may be necessary to preserve the economic value of the surrendered "old" ITT
Corporation options and related rights by any such individual employee.
The terms and conditions of each substitute stock award, including,
without limitation, the expiration date of the option, the time or times when,
and the manner in which, each substitute option shall be exercisable, the
duration of the exercise period, the method of exercise, settlement and payment,
and the rules in the event of termination, shall be the same as those of the
surrendered "old" ITT Corporation award.
The Committee shall also be authorized to issue substitute grants of ITT
Restricted Stock to replace shares of "old" ITT Corporation restricted stock
surrendered by employees of Participating Companies. Such substitute shares
shall be subject to the same terms and conditions as the surrendered shares of
"old" ITT Corporation restricted stock, including, without limitation, the
restriction period of such "old" ITT Corporation shares.
15. MISCELLANEOUS
(a) Except as provided in Section 9, nothing in this Plan or any Award
granted hereunder shall confer upon any employee any right to continue in the
employ of any Participating Company or interfere in any way with the right of
any Participating Company to terminate his or her employment at any time. No
Award payable under the Plan shall be deemed salary or compensation for the
purpose of computing benefits under any employee benefit plan or other
arrangement of any Participating Company for the benefit of its employees unless
the Company shall determine otherwise. No Key Employee shall have any claim to
an Award until it is actually granted under the Plan. To the extent that any
person acquires a right to receive payments from the Company under this Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts except as
provided in Section 7(e) with respect to Restricted Stock.
(b) The Committee may cause to be made, as a condition precedent to the
payment of any Award, or otherwise, appropriate arrangements with the Key
Employee or his or her Beneficiary, for the withholding of any federal, state,
local or foreign taxes.
(c) The Plan and the grant of Awards shall be subject to all applicable
federal and state laws, rules, and regulations and to such approvals by any
government or regulatory agency as may be required.
(d) The terms of the Plan shall be binding upon the Company and its
successors and assigns.
(e) Captions preceding the sections hereof are inserted solely as a
matter of convenience and in no way define or limit the scope or intent of any
provision hereof.
<PAGE> 17
16. EFFECTIVE DATE, TERM OF PLAN AND SHAREHOLDER APPROVAL
The effective date of the Plan shall be December 19, 1995. No Award
shall be granted under this Plan after the Plan's termination date. The Plan's
termination date shall be December 31, 2005. The Plan will continue in effect
for existing Awards as long as any such Award is outstanding.
The Plan was approved by shareholders at a special meeting held on
September 21, 1995.
ADMINISTRATION
The plan and Substitute Stock Options are administered by a Committee of
the Board of Directors of ITT, presently designated as the Compensation and
Personnel Committee, the members of which serve during the pleasure of the
Board. The Committee is composed of directors none of whom is an officer or
employee of ITT and none of whom is eligible to receive any Award under the
Plan.
FEDERAL TAX TREATMENT
The following is a brief summary of the current Federal income tax rules
generally applicable to options, stock appreciation rights, performance shares
and restricted stock. Awardees should consult their own tax advisors as to the
specific Federal, state and local tax consequences applicable to them.
A. OPTIONS AND STOCK APPRECIATION RIGHTS
Options granted under the Plan may be either non-qualified options or
"incentive stock options" qualifying under Section 422A of the Internal Revenue
Code.
Non-qualified Options
An optionee is not subject to Federal income tax upon grant of a
non-qualified option. At the time of exercise, the optionee will realize
compensation income (subject to withholding) to the extent that the then fair
market value of the stock exceeds the option price. The amount of such income
will constitute an addition to the optionee's tax basis in the optioned stock.
Sale of the shares will result in capital gain or loss (long-term or short-term
depending on the optionee's holding period). ITT is entitled to a Federal tax
deduction at the same time and to the same extent that the optionee realizes
compensation income.
Incentive Stock Options ("ISO")
Options under the Plan denominated as ISOs are intended to constitute
incentive stock options under Section 422A of the Internal Revenue Code of 1986,
as amended. An optionee is not subject to Federal income tax upon either the
grant or exercise of an ISO. If the optionee holds the shares acquired upon
exercise for at least one year after issuance of the optioned shares and until
at least two years after grant of the option, then the difference between the
amount realized on a subsequent sale or other taxable disposition of the shares
and the option price will
<PAGE> 18
constitute long-term capital gain or loss. To obtain favorable ISO tax treatment
for an ISO granted prior to 1987, an optionee cannot exercise any installment of
an ISO unless and until all installments of all ISOs previously granted to the
optionee (regardless of their price) have either been exercised, allowed to
expire, or canceled through the exercise of a related SAR. To obtain favorable
tax treatment, an ISO must be exercised within three months after termination of
employment (other than by retirement, disability, or death) with ITT or a 50%
subsidiary. To obtain favorable tax treatment, an ISO must be experienced within
three months of retirement or within one year of cessation of employment for
disability (with no limitation in the case of death), notwithstanding any longer
exercise period permitted under the terms of the Plan. ITT will not be entitled
to a Federal tax deduction with respect to the grant or exercise of the ISO.
If the optionee sells the shares acquired under an ISO before the
requisite holding period, he or she will be deemed to have made a "disqualifying
disposition" of the shares and will realize compensation income in the year of
disposition equal to the lesser of the fair market value of the shares at
exercise or the amount realized on their disposition over the option price of
the shares. (However, if the disposition is by gift or by sale to a related
party, the compensation income must be measured by the value of the shares at
exercise over the option price.) Any gain recognized upon a disqualifying
disposition in excess of the ordinary income portion will constitute either
short-term or long-term capital gain. In the event of a disqualifying
disposition, ITT will be entitled to a Federal tax deduction in the amount of
the compensation income realized by the optionee.
The option spread on the exercise of an ISO is an adjustment in
computing alternative minimum taxable income. No adjustment is required,
however, if the optionee made a disqualifying disposition of the shares in the
same year as he is taxed on the exercise.
Stock Appreciation Rights ("SARs")
SARs may have been awarded to officers and directors of ITT subject to
Section 16(b) of the Securities Exchange Act of 1934 with respect to both
incentive stock options and non-qualified options granted under the Plan. An
optionee is not taxed upon the grant of SARs. An optionee exercising SARs for
cash will realize compensation income (subject to withholding) in the amount of
the cash received. ITT is entitled to a tax deduction at the same time and to
the same extent that the optionee realizes compensation income.
B. PERFORMANCE SHARES
An awardee of performance shares will generally realize compensation
income (subject to withholding) when and to the extent that payment is made,
whether in the form of cash or shares of ITT common stock. To the extent that
payment is made in the form of stock, income shall be measured by the then fair
market value of the shares, which shall constitute an addition to the awardee's
tax basis in such shares. ITT will be entitled to a Federal tax deduction for
the value of payment at the time of payment.
C. RESTRICTED STOCK
<PAGE> 19
An awardee of restricted stock will generally realize compensation
income (subject to withholding) when and to the extent that the restrictions on
the shares lapse, as measured by the value of the shares at the time of lapse.
The awardee's holding period for the shares will not commence until the date of
lapse, and dividends paid during the restriction period will be treated as
compensation. The income realized on lapse of the restrictions will constitute
an addition to the awardee's tax basis in the shares.
In lieu of deferred recognition of income, the awardee may formally
elect, within 30 days of award, to realize compensation income at the time of
award, as measured by the fair market value of the stock on the date of award
determined without regard to the restrictions. The income realized will
constitute an addition to the tax basis of the shares. In the case of such
election, any appreciation (or depreciation) on the shares during the
restriction period will give rise to capital gain (or capital loss). In the
event that the awardee terminates employment during the restriction period and
forfeits his shares, no deduction may be claimed and the taxes paid on award of
the shares shall be forfeited.
ITT will be entitled to a Federal tax deduction at the same time and to
the same extent that the awardee realizes compensation income.
D. GOLDEN PARACHUTE TAX PENALTIES
Options, SARs, performance shares or restricted stock which are granted,
accelerated or enhanced upon the occurrence of a takeover (i.e., an Acceleration
Event as defined in the Plan) may give rise, in whole or in part, to "excess
parachute payments" within the meaning of Section 280G of the Internal Revenue
Code and, to such extent, will be nondeductible by ITT and subject to a 20%
excise tax to the awardee.
<PAGE> 20
ITT CORPORATION
* * * *
Regular Meeting of the Board of Directors
Tuesday, February 4, 1997
* * * *
APPROVAL OF THE AMENDMENT OF THE
1995 ITT CORPORATE STOCK INCENTIVE PLAN
* * * *
The Chairman stated that the Compensation and Personnel Committee of the
Board has approved certain changes to the 1995 ITT Corporate Stock Incentive
Plan, and recommended that the changes be submitted to the Board for adoption.
After discussion and on motion duly made and seconded, the following
resolutions were adopted:
RESOLVED, that Section 5(j) of the 1995 ITT Corporate Stock
Incentive Plan of the Corporation hereby is amended to read, in its
entirety, as follows:
"(j) Except as otherwise determined by the Committee, (i) no
Option or Right granted under the plan shall be transferable other than
by will or by the laws of descent and distribution, and (ii) during the
lifetime of the optionee, an Option or Right shall be exercisable only
by the Key Employee to whom the Option or Right is granted (or his
estate or designated Beneficiary)."
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Piper & Marbury]
April 10, 1998
Starwood Hotels & Resorts
2231 East Camelback Road, Suite 410
Phoenix, Arizona 85016
Starwood Hotels & Resorts Worldwide, Inc.
2231 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Ladies and Gentlemen:
We have acted as special Maryland counsel in connection the joint
registration statement on Form S-8 (the "Registration Statement") to be filed on
April 10, 1998 by Starwood Hotels & Resorts, a Maryland real estate investment
trust (the "Trust"), and Starwood Hotels & Resorts Worldwide, Inc., a Maryland
corporation (the "Corporation"), relating to the registration of an aggregate of
7,150,784 shares of beneficial interest, $.01 par value, of the Trust (the
"Trust Shares") and 7,150,784 shares of common stock, $.01 par value, of the
Corporation (the "Corporation Shares") which are "paired" and traded as units
consisting of one Trust Share and one Corporation Share (the "Paired Common
Shares"), to be issued under the 1995 Long-Term Incentive Plan of the Trust, as
amended (the "Trust Plan") and the 1995 Long-Term Incentive Plan of the
Corporation; as amended (the "Corporation Plan").
In our capacity as special Maryland counsel, we have reviewed the
following:
(q) The Declaration of Trust of the Trust, as amended to date,
certified by an officer of the Trust (the "Declaration of
Trust");
(r) The Charter of the Corporation, as amended to date, certified by
an officer of the Corporation (the "Charter");
(s) A copy of the Trustees' Regulations of the Trust as in effect on
the date hereof (the "Trust Regulations");
(t) A copy of the By-laws of the Corporation as in effect on the
date hereof (the "Corporation By-laws");
(u) The Registration Statement on Form S-8, relating to the Trust
Shares and the Corporation Shares, to be filed with the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, on April 10, 1998 (together with all
exhibits thereto, the "Registration Statement");
<PAGE> 2
Piper & Marbury
L.L.P.
Starwood Hotels & Resorts
Starwood Hotels & Resorts Worldwide, Inc.
April 10, 1998
Page 2
(v) The Trust Plan and the Corporation Plan;
(w) A specimen certificate evidencing the Trust Shares;
(x) A specimen certificate evidencing the Corporation Shares;
(y) Certified resolutions of the Board of Trustees of the Trust
relating to the filing of the Registration Statement and the
Trust Plan;
(z) Certified resolutions of the Board of Directors of the
Corporation relating to the filing of the Registration Statement
and the Corporation Plan;
(aa) A good standing certificate for the Trust, of recent date,
issued by the Maryland State Department of Assessments and
Taxation (the "Department");
(bb) A good standing certificate for the Corporation, of recent date,
issued by the Department;
(cc) An Officer's Certificate of the Trust dated as of the date
hereof as to certain factual matters (the "Trust Officer's
Certificate");
(dd) An Officer's Certificate of the Corporation dated as of the date
hereof as to certain factual matters (the "Corporation Officer's
Certificate"); and
(ee) Such other documents as we have considered necessary to the
rendering of the opinions expressed below.
In such examination, we have assumed, without independent investigation,
the genuineness of all signatures, the legal capacity of all individuals who
have executed any of the aforesaid documents, the authenticity of all documents
submitted to us as originals, the conformity with originals of all documents
submitted to us as copies and that all public records reviewed are accurate and
complete. As to any facts material to this opinion which we did not
independently establish or verify, we have relied solely upon the Trust
Officer's Certificate and the Corporation Officer's Certificate and have not
independently verified the matters stated therein.
We assume also that the issuance, sale and number of Trust Shares and
Corporation Shares to be offered from time to time will be authorized and
determined by proper action of the Board of Trustees of the Trust and the Board
of Directors of the Corporation, as the case may be, in accordance with the
parameters described in the Registration Statement (each, a "Board Action") and
in accordance with the Declaration of
<PAGE> 3
Piper & Marbury
L.L.P.
Starwood Hotels & Resorts
Starwood Hotels & Resorts Worldwide, Inc.
April 10, 1998
Page 3
Trust and the Charter, respectively, and applicable Maryland law. We further
assume that prior to the issuance of any Corporation Shares and Trust Shares
there will exist, under the Declaration of Trust or the Charter, as the case may
be, the requisite number of authorized but unissued Corporation Shares or Trust
Shares, as the case may be.
Based upon the foregoing, we are of the opinion that
(i) The Trust has been duly formed and is validly existing in good
standing as a real estate investment trust under the laws of the
State of Maryland.
(ii) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland.
(iii) (A) When specifically authorized for issuance by the
Corporation's Board of Directors in an amount not exceeding the
authorized but unissued capital stock of the Corporation and (B)
when issued as described in the Registration Statement and in
accordance with the Corporation Plan, the Corporation Shares
will be validly issued, fully paid and nonassessable.
(iv) (A) When specifically authorized for issuance by the Trust's
Board of Trustees in an amount not exceeding the authorized but
unissued capital stock of the Trust and (B) when issued as
described in the Registration Statement and in accordance with
the Trust Plan, the Trust Shares will be validly issued, fully
paid and nonassessable.
The opinions expressed above are limited to the laws of Maryland,
exclusive of the securities or "blue sky" laws of the State of Maryland. We
hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to our firm in the Registration Statement.
Very truly yours,
Piper & Marbury L.L.P.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this registration statement
on Form S-8 of our report dated February 27, 1998, on our audits of the
financial statements and financial statement schedules appearing in the Joint
Annual Report of Starwood Hotels & Resorts (formerly Starwood Lodging Trust) and
Starwood Hotels & Resorts Worldwide, Inc. (formerly Starwood Lodging
Corporation) on Form 10-K.
/s/ COOPERS & LYBRAND L.L.P.
Phoenix, AZ
April 10, 1998
