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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 26, 1998
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STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
(Exact Name of Registrant as Specified in Charter) (Exact Name of Registrant as Specified in Charter)
Maryland Maryland
(State or Other Jurisdiction (State or Other Jurisdiction
of Incorporation) of Incorporation)
1-6828 1-7959
(Commission File Number) (Commission File Number)
52-0901263 52-1193298
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
777 Westchester Avenue 777 Westchester Avenue
White Plains, New York 10604 White Plains, New York 10604
(Address of Principal Executive (Address of Principal Executive
Offices, including Zip Code) Offices, including Zip Code)
(914) 640-8100 (914) 640-8100
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
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Item 5. Other Events.
Proposed Restructuring. On August 26, 1998, Starwood Hotels & Resorts,
a Maryland real estate investment trust (the "Trust"), and Starwood Hotels &
Resorts Worldwide, Inc., a Maryland corporation (the "Corporation," and together
with the Trust, "Starwood"), announced that the Board of Trustees of the Trust
and the Board of Directors of the Corporation (the "Boards") had approved a
proposal to restructure the Trust and the Corporation (the "Restructuring").
In the Restructuring, a newly organized, wholly owned subsidiary of
the Corporation will merge into the Trust, with the result that the Trust will
become a subsidiary of the Corporation and each outstanding common share of
beneficial interest in the Trust (a "Trust Share") will be converted into one
share of newly created, non-voting Class B Shares of beneficial interest in the
Trust. Holders of Class B Shares will be entitled to receive a non-cumulative
annual dividend of $.60 per share (which amount will increase by 15% per year,
subject to certain conditions) to the extent the dividend is declared by the
Board of Trustees of the Trust. Each Class B Share will be attached to and trade
as a unit with the share of the Corporation's common stock that had been
"paired" with the Trust Share converted into that Class B Share.
Upon consummation of the Restructuring, Barry S. Sternlicht, currently
President and Chief Executive Officer of the Trust, will become Chairman and
Chief Executive Officer of the Corporation, and Richard D. Nanula, currently the
Corporation's President and Chief Executive Officer, will become President and
Chief Operating Officer of the Corporation.
Consummation of the Restructuring is expected to occur in January 1999
and is subject to, among other conditions, approval of the transaction by the
holders of a majority of Starwood's outstanding Paired Shares and the holders of
the two classes of the Trust's exchangeable preferred shares (voting as a single
class) currently outstanding and the receipt of certain regulatory and
third-party consents and approvals.
In connection with the Restructuring, Starwood will incur a non-
recurring special charge of approximately $1.2 billion, substantially all of
which will represent a deferred tax liability that will result from the
combination as required by the Statement of Financial Accounting Standards No.
109.
Change in Dividend Policy. The Board of Trustees of the Trust has
determined that commencing with the dividend paid for the fourth quarter of
1998, the Trust's current per share dividend of $.52 per quarter will decrease
to $.15 per quarter ($.60 on an annual basis).
Share Repurchase Program. The Boards also have authorized, and
Starwood has received financing commitments for, the repurchase from time to
time of up to $1 billion of Starwood's currently outstanding Paired Shares. Such
repurchases may be made on the New York Stock Exchange or otherwise from time to
time at prices deemed advantageous by the Executive Committees of the Boards,
and also may include the repurchase of shares issued in earlier forward equity
transactions and transactions in derivatives (such as the sale of put options)
of Paired Shares.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By: /s/ STEVEN M. GOLDMAN By: /s/ RONALD C. BROWN
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Steven M. Goldman Ronald C. Brown
Executive Vice President Executive Vice President
Date: September 2, 1998
