STARWOOD HOTELS & RESORTS, S-3, 1999-11-18

STARWOOD HOTELS & RESORTS
S-3, 1999-11-18
REAL ESTATE INVESTMENT TRUSTS

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As filed with the Securities and Exchange
Commission on November 18, 1999 Registration Nos. 333-_______
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER

THE SECURITIES ACT OF 1933
------------------------------

<TABLE>
<S> <C>
STARWOOD HOTELS & RESORTS WORLDWIDE, STARWOOD HOTELS & RESORTS
INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND
MARYLAND (STATE OR OTHER JURISDICTION OF INCORPORATION OR
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
ORGANIZATION) 52-0901263
52-1193298 (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>

777 WESTCHESTER AVENUE
WHITE PLAINS, NEW YORK 10604
(914) 640-8100
(ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

JONATHAN H. YELLEN., ESQ.
VICE PRESIDENT, ASSOCIATE GENERAL COUNSEL AND ASSISTANT SECRETARY
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
777 WESTCHESTER AVENUE
WHITE PLAINS, NEW YORK 10604
(914) 640-8100
(NAME AND ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPY TO:
LAURA A. LOFTIN, ESQ.
SIDLEY & AUSTIN
555 WEST FIFTH STREET
LOS ANGELES, CALIFORNIA 90013
(213) 896-6000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [x]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]

--------------------
<PAGE> 2
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
===================================================================================================================================
Proposed
Maximum
Title Of Amount To Proposed Maximum Aggregate Amount Of
Securities Be Aggregate Price Per Offering Registration
to be Registered Registered Share Price Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of common stock, $0.01 par value per
share, of Starwood Hotels & Resorts
Worldwide, Inc. (including the attached
Preferred Stock Purchase Rights) attached to 200,000 $22.7813(2) $4,556,260(2) $1,266.64
class B Shares of beneficial interest, $0.01 par Shares (1)
value per share, of Starwood Hotels & Resorts,
which are attached and trade together as Shares
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Pursuant to Rule 416 under the Securities Act, this Registration Statement
also covers such additional Shares as may be issued to prevent dilution of the
Shares covered hereby resulting from stock splits, stock dividends or similar
transactions.

(2) The fee was calculated pursuant to Rule 457(c) under the Securities Act and
was based on the average of the high and low prices for the Shares on the New
York Stock Exchange on November 15, 1999.

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
<PAGE> 3
The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission becomes effective.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.

SUBJECT TO COMPLETION, DATED NOVEMBER 18, 1999

PROSPECTUS

200,000 Shares

[STARWOOD LOGO]

STARWOOD HOTELS & RESORTS WORLDWIDE, INC. STARWOOD HOTELS & RESORTS

Starwood Hotels & Resorts Worldwide, Inc. together with its subsidiaries
is one of the world's largest hotel operating companies.

This prospectus relates to the offer and sale of up to 200,000 Shares.
These Shares may be offered and sold to persons who are employed at hotel
properties that we manage or operate. Any offering or sale of these Shares will
be conducted under the Starwood Hotels & Resorts Worldwide, Inc. Savings and
Retirement Plan as adopted by those persons' employers.

Each Share consists of one share of common stock, par value $0.01 per
share, of Starwood Hotels & Resorts Worldwide, Inc., including the attached
Preferred Stock Purchase Right, and one class B share of beneficial interest,
par value $0.01 per share, of Starwood Hotels & Resorts.

The Shares are listed on the New York Stock Exchange under the symbol
"HOT". On November 17, 1999, the closing sale price of the Shares on the NYSE
was $23.50 per share.

Investing in the Shares involves risks. See "Risk Factors" beginning on
page 6.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION, NOR ANY STATE SECURITIES
COMMISSION, NOR THE NEVADA GAMING COMMISSION, THE NEVADA STATE GAMING CONTROL
BOARD, THE NEW JERSEY CASINO CONTROL COMMISSION, THE MISSISSIPPI GAMING
COMMISSION OR THE INDIANA GAMING COMMISSION HAS APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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

The date of this prospectus is November , 1999.
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TABLE OF CONTENTS

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Page
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Where You Can Find More Information................................ 2
Forward-Looking Statements......................................... 4
The Company........................................................ 5
Risk Factors....................................................... 6
Description of the Plan ........................................... 14
Use of Proceeds.................................................... 39
Plan of Distribution............................................... 39
Description of the Shares and Other Securities of Starwood......... 39
Legal Matters...................................................... 42
Experts............................................................ 42
</TABLE>

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any report, statement or other
information that we have filed at the SEC's public reference rooms. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms
or visit the following locations of the SEC:

Public Reference Room NorthEast Regional Office Midwest Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661

You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Our SEC filing are available to the public from
commercial document retrieval services and at the SEC's web site at
http://www.sec.gov. Our SEC filings also may be obtained from our website at
http://www.starwoodhotels.com.

The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the Participants purchase all the Shares being
offered or this offering is otherwise terminated:

1. Joint Annual Report on Form 10-K for the year ended December 31,
1998, as amended by Form 10-K/A dated May 17, 1999;

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2. Joint Quarterly Report on Form 10-Q for the quarters ended March
31, 1999, June 30, 1999 and September 30, 1999;

3. Joint Current Reports on Form 8-K dated January 6, 1999, March
15, 1999, April 27, 1999, May 17, 1999, July 9, 1999, and July 19, 1999;
and

4. The descriptions of the Shares contained in the Registration
Statements on Form 8-A dated October 3, 1986, December 21, 1998 and March
15, 1999.

You may request a copy of these documents, at no cost, by writing us at:

Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Avenue
White Plains, NY 10604
Attention: Investor Relations
Telephone number: 914-640-8100

YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED
ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN
OFFER OF THE SHARES IN ANY STATE OR OTHER JURISDICTION WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THOSE DOCUMENTS.

Copies of our Annual Report on Form 10-K for the year ended December 31,
1998, as amended, have been or will be delivered with this prospectus to each
Plan participant.

The name "Starwood Hotels & Resorts" is the designation of Starwood Hotels
& Resorts and its trustees (as trustees but not personally) under a declaration
of trust dated August 25, 1969, as amended and restated as of January 6, 1999,
as amended, and all persons dealing with Starwood Hotels & Resorts must look
solely to Starwood Hotels & Resorts' property for the enforcement of any claim
against Starwood Hotels & Resorts, as the trustees, officers, agents and
security holders of Starwood Hotels & Resorts assume no personal obligation of
Starwood Hotels & Resorts, and their respective properties shall not be subject
to claims of any person relating to such obligation.

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FORWARD-LOOKING STATEMENTS

We make statements in this prospectus and the documents we incorporate by
reference that are considered "forward-looking statements" within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934. All
statements other than statements of historical fact that address actions, events
or developments that Starwood intends, expects, projects, believes or
anticipates will or may occur in the future are forward-looking statements.
These statements contain words such as "believes," "expects," "intends,"
"plans", "should," "hope," "estimate" and other similar words. These statements
are based on assumptions and assessments made by our management in light of
their experiences and their perceptions of historical tends, current conditions,
expected future developments and other factors management believes to be
appropriate. These forward-looking statements are not guarantees of our future
performance; there are risks, uncertainties and other important factors that
could cause our actual results, developments and business decisions to be
materially different from those we project. These risks, uncertainties and
factors include those described in the section captioned "Risk Factors" below
and those that affect the hotel and lodging business generally, including, but
not limited to, economic, competitive, governmental and technological factors
affecting our operations, markets, products, services and prices. Please see the
documents we incorporate by reference for more information on these factors.

Given these uncertainties, you should not place undue reliance on these
forward-looking statements. These forward-looking statements represent our
expectations, estimates and assumptions only as of the date the statements are
made, and we do not have any obligation to update any such statement

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You should read this entire prospectus, and any prospectus supplement, including
the financial data and related notes and the information under the heading "Risk
Factors," before making a decision to invest in the Shares. Except as the
context may otherwise require, when we refer to "Starwood," "the Company," "we,"
"us" or "our" in this prospectus, we mean Starwood Hotels & Resorts Worldwide,
Inc. (the "Corporation") and its consolidated subsidiaries and joint ventures.

THE COMPANY

Starwood Hotels & Resorts Worldwide, Inc. is one of the world's largest
hotel operating companies. We conduct our hotel business both directly and
through our subsidiaries, including ITT Sheraton Corporation, Starwood Hotels &
Resorts (the "Trust") and CIGA, S.p.A. Our brand names include Sheraton, Westin,
St. Regis/Luxury Collection, W and Four Points. Through these brands, we are
represented in most major markets of the world.

Our business emphasizes the global operation of full-service hotels in the
luxury and upscale segment of the lodging industry. Starwood seeks to acquire
interests in or management rights with respect to this segment. At September 30,
1999, our portfolio of owned, leased, managed or franchised hotels totaled
approximately 710 hotels with over 217,000 rooms in 76 countries. This portfolio
is comprised of 172 hotels that we own or lease or in which we have a majority
equity interest (substantially all of which hotels we also manage),
approximately 240 hotels we manage on behalf of third-party owners (including
entities in which we have a minority equity interest), and approximately 298
hotels for which we receive franchise fees.

The Trust was organized in 1969, and the Corporation was incorporated in
1980, under the laws of Maryland. Our principal place of business is 777
Westchester Avenue, White Plains, New York 10604, and our telephone number is
(914) 640-8100.

Acquisition of Vistana

On October 1, 1999, the Corporation completed the acquisition of Vistana,
Inc. ("Vistana"), whereby Vistana merged with and into a subsidiary of the
Corporation and thereby became a wholly owned subsidiary of the Corporation.
Vistana's principal operations include the acquisition, development and
operation of vacation ownership resorts, marketing and selling vacation
ownership interests in the resorts, and providing financing to customers who
purchase such interests. Starwood financed the acquisition of Vistana with cash
of approximately $110 million, the assumption of approximately $280 million of
debt and the issuance of approximately 10.1 million Shares.

CIGA Tender Offer

Starwood currently owns approximately 70.32% of the ordinary shares and
approximately 30.85% of the outstanding savings shares of CIGA S.p.A. On October
29, 1999, we announced that one of our wholly owned subsidiaries has notified
the Borsa Italiana S.p.A., CONSOB and CIGA S.p.A. that the subsidiary intends to
make a tender offer to purchase all of the outstanding shares of CIGA S.p.A. not
currently owned by Starwood. If all of these shares are tendered, the aggregate
purchase price would be approximately $297 million.

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RISK FACTORS

This section describes some, but not all, of the risks of purchasing Shares. You
should carefully consider these risks, in addition to the other information
contained in this prospectus, before purchasing any of the shares offered
hereby. In connection with the forward-looking statements that appear in this
prospectus, you should carefully review the factors discussed below and the
cautionary statements referred to in "Forward-Looking Statements."

RISKS RELATED TO HOTEL OPERATIONS

OUR PROPERTIES ARE SUBJECT TO ALL THE OPERATING RISKS COMMON TO THE HOTEL
INDUSTRY.

Operating risks common to the hotel industry include:

- changes in general economic conditions;

- decreases in the level of demand for rooms and related services;

- cyclical over-building in the hotel industry;

- restrictive changes in zoning and similar land use laws and
regulations or in health, safety and environmental laws, rules and
regulations;

- the inability to obtain property and liability insurance to fully
protect against all losses or to obtain insurance at reasonable
rates; and

- changes in travel patterns.

In addition, the hotel industry is highly competitive. Our properties
compete with other hotel properties in their geographic markets, and some of our
competitors may have substantially greater marketing and financial resources
than we do.

THE HOTEL INDUSTRY IS SEASONAL IN NATURE.

The hotel industry is seasonal in nature; however, the periods during
which our properties experience higher hotel revenue vary from property to
property and depend principally upon location. Although our revenue historically
has been lower in the first quarter than in the second, third or fourth
quarters, future acquisitions may affect seasonal fluctuations in revenue and
cash flow.

THE HOTEL AND LODGING BUSINESS IS CAPITAL INTENSIVE.

In order for our properties to remain attractive and competitive, we have
to spend money periodically to keep them well maintained, modernized and
refurbished. This creates an ongoing need for cash and, to the extent
expenditures cannot be funded from cash generated by our

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operations, we may be required to borrow or otherwise obtain these funds.
Accordingly, our financial results may be sensitive to the cost and availability
of funds.

REAL ESTATE INVESTMENTS ARE SUBJECT TO A NUMEROUS RISKS.

Real property investments are subject to varying degrees of risk. The
investment returns available from equity investments in real estate depend in
large part on the amount of income earned and capital appreciation generated by
the related properties, as well as the expenses incurred.

In addition, a variety of other factors affect income from properties and
real estate values, including governmental regulations, real estate, zoning, tax
and eminent domain laws, interest rate levels and the availability of financing.
For example, new or existing real estate, zoning or tax laws can make it more
expensive and/or time-consuming to develop real property or expand, modify or
renovate hotels.

When interest rates increase, the cost of acquiring, developing, expanding
or renovating real property increases. On the other hand, when interest rates
increase, real property values decrease as the number of potential buyers
decreases. Similarly, as financing becomes less available, it becomes more
difficult both to acquire and to sell real property. Finally, governments can,
under eminent domain laws, take real property. Sometimes this taking is for less
compensation than the owner believes the property is worth. Any of these factors
could have a material adverse impact on our results of operations or financial
condition, as well as on our ability to make distributions to our shareholders.

In addition, equity real estate investments, such as the investments we
hold and any additional properties that we may acquire, are relatively difficult
to sell quickly. If our properties do not generate revenue sufficient to meet
operating expenses, including debt service and capital expenditures, our income
will be adversely affected.

HOTEL DEVELOPMENT IS SUBJECT TO TIMING, BUDGETING AND OTHER RISKS

We intend to develop hotel properties as suitable opportunities arise; we
are currently developing several luxury or upscale full-service hotels. New
project development has a number of risks, including risks associated with:

- construction delays or cost overruns that may increase project
costs;

- receipt of zoning, occupancy and other required governmental permits
and authorizations;

- incurring development costs for projects that are not pursued to
completion; and

- so-called "acts of God" such as hurricanes, floods or fires that
could adversely impact a project; and

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- governmental restrictions on the nature or size of a project.

We cannot assure you that any development project will be completed on
time or within budget.

OUR TIME-SHARE BUSINESS IS SUBJECT TO EXTENSIVE REGULATION.

The time-share business is subject to extensive regulation. In October
1999 Starwood completed the acquisition of Vistana. Vistana markets and sells
vacation ownership interests, which typically entitle the buyer to ownership of
a fully-furnished resort unit for a one-week period on either an annual or an
alternate-year basis. Vistana also acquires, develops and operates resorts, and
provides financing to purchasers of vacation ownership interests. These
activities are all subject to extensive regulation by the federal government and
the states in which Vistana's resorts are located and in which its vacation
ownership interests are marketed and sold. In addition, the laws of most states
in which Vistana sells vacation ownership interests grant the vacation ownership
interest purchaser the right to rescind a contract of purchase at any time
within a statutory rescission period. We believe that we are in material
compliance with all applicable federal, state, local and foreign laws and
regulations to which Vistana's marketing, sales and operations are currently
subject.

ENVIRONMENTAL REGULATIONS COULD MAKE US LIABLE FOR CLEANING UP HAZARDOUS
SUBSTANCES.

Environmental laws, ordinances and regulations of various federal, state,
local and foreign governments regulate certain of our operations and could make
us liable for the costs of managing, removing or cleaning up hazardous or toxic
substances on, under or in property we currently own or operate or that we
previously owned or operated. Those laws could impose liability without regard
to whether we knew of, or were responsible for, the presence of hazardous or
toxic substances. The presence of hazardous or toxic substances, or the failure
to properly clean up substances when present, could jeopardize our ability to
develop, use, sell or rent the real property or to borrow using the real
property as collateral. If we arrange for the disposal or treatment of hazardous
or toxic wastes we could be liable for the costs of removing or cleaning up
wastes at the disposal or treatment facility, even if we never owned or operated
that facility. Other laws, ordinances and regulations could require us to
manage, abate or remove lead- or asbestos-containing materials. Similarly, the
operation and closure of storage tanks are often regulated by federal, state,
local and foreign laws. Finally, certain laws, ordinances and regulations,
particularly those governing the management or preservation of wetlands, coastal
zones and threatened or endangered species, could limit our ability to develop,
use, sell or rent its real property.

GENERAL ECONOMIC CONDITIONS MAY NEGATIVELY IMPACT OUR ABILITY TO ACHIEVE
IMPORTANT FINANCIAL TESTS.

Moderate or severe economic downturns or adverse conditions may adversely
affect our hotel and gaming operations. These conditions may be widespread or
isolated to one or more geographic regions. As a result, general economic
conditions may have a negative impact on our

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ability to achieve or sustain substantial improvements in funds from operations
and other important financial tests.

Further, an economic downturn in the countries of our high-end
international customers could cause a reduction in the frequency of their visits
and, consequently, the revenue generated by those customers. Similarly, the
receivables from international gaming customers could be harder to collect due
to future business or economic trends, or significant events, in the countries
where those customers live.

Large parts of the world economy, including Asia, are currently in
moderate to severe recession. In addition, the United States could experience a
recession in the near or medium term. A continued recession overseas or a
recession in the United States would likely have a material adverse effect on
the results of our operations.

STARWOOD FACES RISKS RELATED TO THE YEAR 2000.

Many computer systems were originally designed to recognize calendar years
by the last two digits in the date code field. Beginning in the year 2000, these
date code fields will need to accept four digit entries to distinguish 21st
century dates from 20th century dates--that is, they will need to be "Year 2000
Compliant." As a result, the computerized systems and applications we use need
to be reviewed and evaluated and modified or replaced, if necessary. Before
December 31, 1999, we will need to ensure that all our financial, information
and operational systems are Year 2000 Compliant.

STATE OF READINESS. Starwood is addressing the Year 2000 Compliance issue
by separately focusing on the Company's central facilities, which include all
of its non-operating facilities, and on the Company's hotel properties.

Starwood has identified the critical central facility business
applications that may be affected by the Year 2000, such as the reservation
system application, including the frequent stay programs, and communication
system applications. The Company has conducted the discovery and assessment
stages on the reservations and communication system applications and assembled
a team to implement modifications or upgrades, as necessary, and to test
results. The majority of the Company's core business applications passed the
final testing, which was performed by internal personnel and independent third
parties in the second quarter of 1998. This testing process consisted of
testing of the internal code and conducting over 9,000 test cases on the
applicable systems. The specific testing included a three-step process
comprised of baseline tests, Year 2000 date tests and code enhancement tests.
Additional independent and internal testing took place during 1999 that
validated previous findings of Year 2000 readiness.

Starwood has communicated with others with whom it does significant
business to determine their Year 2000 Compliance. During 1998, Starwood and an
independent third-party reservation information service provider began testing
to ensure the compatibility of the Company's reservation system with the
service provider's reservation services. Starwood and this service provider
have substantially completed their compatibility validation testing; although
Starwood believes that these tests were successful, there can be no assurances
that these systems are fully compatible for purposes of complete Year 2000
Compliance.

Starwood also assessed its hardware components at its central facilities,
all of which were modified or upgraded, as necessary, to ensure Year 2000
Compliance.

Starwood has completed the initial assessment of the applications and
hardware at substantially all of the Company's owned and managed hotel
properties. In the third quarter of 1998, validation tools and resources were
deployed to the hotel properties that did not have an existing program in place.
These tools consisted of asset management tools for analysis of all
applications and data checking tools for patch application purposes and
testing Year 2000 readiness of the equipment. Any equipment failing the testing
was remediated. The domestic Year 2000 team has substantially completed its
visits to domestic hotel properties. The team is comprised of independent
consultants and five individuals from the Company that are dedicated to the
Year 2000 project. Each of the international properties had appointed internal
personnel to address Year 2000 Compliance and has access to such independent
consultants, if necessary. The test statistics for the hotel property
applications and hardware have been collected through the combined efforts of
internal staff, Year 2000 team members and third-party consultants.
Substantially all of the critical hotel property applications and hardware have
satisfied Year 2000 Compliance verification. Starwood expects to address
remaining remediation efforts by the end of 1999, although there can be no
assurances that this will be completed by the end of 1999.

YEAR 2000 PROJECT COSTS. Starwood estimates that total costs for the Year
2000 Compliance review, evaluation, assessment and remediation efforts for the
central facilities and owned hotel properties should not exceed $20 million,
although there can be no assurance that actual costs will not exceed this
amount. Of this amount, approximately $13 million had been expended as of
September 30, 1999.

Because we have tested all major computerized central facilities
reservation systems and applications and have already accepted reservations for
the year 2000, we believe that we have addressed all significant risks related
to our reservation function. The remaining risks relate to the non-critical
business applications, support hardware for the central facilities and embedded
systems at the properties we own or manage. A failure of some of these systems
to become Year 2000 Compliant could disrupt the timeliness or the accuracy of
management information provided by the central facilities.

We have asked substantially all of our significant vendors and service
providers to provide reasonable assurances as to those parties' Year 2000 state
of readiness. To the extent that vendors and service providers do not provide
satisfactory evidence that their products and services are Year 2000 Compliant,
we have and will continue to seek to obtain the necessary products and services
from alternative sources. There can be no assurance, however, that Year 2000
remediation by vendors and service providers will be completed timely or that
qualified replacement vendors and service providers will be available, and any
failure to such third parties' systems could have a material adverse impact on
our computer systems and operations.

CONTINGENCY PLAN. Starwood appointed an internal committee to direct the
contingency planning efforts. This team is comprised of individuals who
represent various disciplines within the organization. The team created
contingency planning guidelines that were distributed to all hotels. The
contingency planning has been substantially completed by a majority of hotels
by October 31, 1999. Although it is expected that substantially all of the
remaining hotels will have completed their contingency plans by November 30,
1999, there can be no assurance that they will be completed on schedule. Also,
testing of these contingency plans, including training of hotel personnel, has
commenced. The majority of critical contingency plans are expected to have been
tested by November 30, 1999. The balance of this testing will continue
throughout the month of December 1999.

FAILURE OF THE TRUST TO QUALIFY AS A REIT COULD INCREASE OUR TAX
LIABILITY.

Qualifying as a real estate investment trust (a "REIT") under the Internal
Revenue Code of 1986, as amended (the "Code") requires complying with highly
technical and complex tax provisions that courts and administrative agencies
have interpreted only to a limited degree. Due

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to the complexities of our ownership, structure and operations, the Trust is
more likely than are other REITs to face interpretive issues for which there are
no clear answers. Also, facts and circumstances that we do not control may
affect the Trust's ability to qualify as a REIT. The Trust believes that since
the taxable year ended December 31, 1995, the Trust has qualified as a REIT. The
Trust intends to continue to operate so as to qualify as a REIT. However, the
Trust cannot assure you that the Trust will continue to qualify as a REIT. If
the Trust failed to qualify as a REIT for any prior tax year, the Trust would be
liable to pay a significant amount of taxes for those years. Similarly, if the
Trust fails to qualify as a REIT in the future, our liability for taxes would
increase.

INTERNATIONAL OPERATIONS ARE SUBJECT TO SPECIAL POLITICAL AND MONETARY
RISKS.

We have significant international operations, which as of September 30,
1999, included (other than gaming properties, which are held for disposition) 31
properties owned in Europe, 15 properties owned in Latin America (including
three in Brazil) and three properties owned in the Asia/Pacific region.
International operations generally are subject to various political and other
risks that are not present in U.S. operations. These risks include the risk of
war or civil unrest, expropriation and nationalization. In addition, some
international jurisdictions restrict the repatriation of non-U.S. earnings.
Various international jurisdictions also have laws limiting the right and
ability of non-U.S. entities to pay dividends and remit earnings to affiliated
companies unless specified conditions have been met.

In addition, sales in international jurisdictions typically are made in
local currencies, which subject us to risks associated with currency
fluctuations. Currency devaluations and unfavorable changes in international
monetary and tax policies could materially adversely affect our profitability
and financing plans, as could other changes in the international regulatory
climate and international economic conditions. Other than Italy, where our risks
are heightened due to the relatively large number of properties we own, our
properties are geographically diversified and are not concentrated in any
particular region.

WE MUST ATTRACT AND RETAIN KEY PERSONNEL.

Our future success and our ability to manage future growth depends largely
upon the work of our senior management and our ability to hire key officers and
other highly qualified personnel and retain them. Competition for qualified
personnel is intense. Since January 1996, we have experienced significant
changes in our senior management, including our executive officers. We cannot
assure you that we will continue to be successful in attracting and retaining
qualified personnel.

WE ARE UNCERTAIN WHAT EFFECT THE ADOPTION OF THE EURO WILL HAVE ON US.

On January 1, 1999, 11 of the 15 member countries of the European Union
established fixed conversion rates between their existing sovereign currencies
and the Euro. Following the introduction of the Euro, the legacy currencies of
the participating countries will remain legal tender during a transition period
ending on January 1, 2002. During the transition period, both the legacy
currency and the Euro will be legal tender in the respective participating
countries, and

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<PAGE> 13
currency conversions will be computed by a triangulation with reference to
conversion rates between the respective currencies and the Euro. We currently
operate in 10 of the 11 participating countries. We are uncertain what effect
the adoption of the Euro by the participating countries will have on us.
However, it is possible that the Euro adoption will result in increased
competition in the European market. In addition, a number of our information
systems are not currently Euro compliant. We are evaluating and updating our
information systems to make them Euro compliant; however, we cannot assure you
that we or our third-party application vendors will successfully bring all our
systems into compliance. Failure to do so could result in disruptions in the
processing of transactions in Euros or computed by reference to the Euro.

STARWOOD CAPITAL GROUP MAY EXERT INFLUENCE OVER US.

Barry S. Sternlicht is the Chairman and Chief Executive Officer and a
board member of the Corporation and the Trust. Mr. Sternlicht also serves as the
President and Chief Executive Officer of, and may be deemed to control, Starwood
Capital Group, L.L.C. ("Starwood Capital"), which owns limited partnership
interests in SLT Realty Limited Partnership and SLC Operating Limited
Partnership. In addition, Jonathan D. Eilian and Madison F. Grose, each of whom
is a Director of the Corporation and a Trustee of the Trust, are also employed
by or affiliated with Starwood Capital Group. Although our policy requires a
majority of our Directors and Trustees to be "independent" of Starwood Capital,
Starwood Capital Group may be able to exercise influence over our affairs.
Because Starwood Capital Group's tax situation is different from our tax
situation, Starwood Capital Group may not have the same objectives as do our
stockholders or our management with regard to the pricing, structure and timing
of any sale of properties or mortgage loans.

INVESTING THROUGH PARTNERSHIPS OR JOINT VENTURES DECREASES OUR ABILITY TO
MANAGE RISK

Instead of purchasing hotel properties directly, we may invest as a
co-venturer. Joint venturers often have shared control over the operation of the
joint-venture assets. Therefore, joint venture investments may involve risks
such as the possibility that the co-venturer in an investment might become
bankrupt, or have economic or business interests or goals that are inconsistent
with our business interests or goals, or be in a position to take action
contrary to our instructions or requests or contrary to our policies or
objectives.

Consequently, actions by a co-venturer might subject hotel properties
owned by the joint venture to additional risk. Although we generally seek to
maintain sufficient control of any joint venture, we may be unable to take
action without the approval of our joint-venture partners. Alternatively, our
joint-venture partners could take actions binding on a joint venture without our
consent. Additionally, should a joint-venture partner become bankrupt, we could
become liable for our partner's share of joint-venture liabilities.

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<PAGE> 14
RISKS RELATED TO GAMING OPERATIONS

Although Starwood has entered into definitive agreements to sell
substantially all our gaming assets, we face risks related to gaming operations
until those sales are completed.

GAMING OPERATIONS ARE SUBJECT TO EXTENSIVE REGULATORY REQUIREMENTS.

Pending the completion of the sale of Caesars World, Inc. ("Caesars
World") and the Desert Inn Hotel & Resort (the "Desert Inn") we own and operate
several casino gaming facilities, including Caesars Palace and the Desert Inn in
Las Vegas, Nevada; Caesars Atlantic City in Atlantic City, New Jersey; and
Caesars Tahoe in Stateline, Nevada. Our other gaming facilities are located in
Delaware, Indiana and Mississippi, in six foreign countries and on the cruise
ships S.S. Crystal Harmony and S.S. Crystal Symphony while they are in
international waters. Each of these gaming operations is subject to extensive
licensing, permitting and regulatory requirements administered by various
governmental entities.

We cannot assure you that the sale of Caesars World or the sale of the
Desert Inn will be completed under the terms of the current agreements or
completed at all. Either sale may be terminated, postponed or delayed for
numerous reasons, including the failure to obtain approval from the appropriate
gaming regulatory authorities.

Typically, gaming regulatory authorities have broad powers with respect to
the licensing of gaming operations. They may revoke, suspend, condition or limit
our gaming approvals and licenses and those of our gaming subsidiaries, impose
substantial fines and take other actions, any of which could have a material
adverse effect on our business and the value of our hotel/casinos. Our
directors, officers and some key employees, together with those of our gaming
subsidiaries, are subject to licensing or suitability determinations by various
gaming authorities. If any of those gaming authorities were to find someone
unsuitable, we would have to sever our relationship with that person.

WE ARE FACING INCREASED GAMING COMPETITION.

We are facing significant domestic and international competition from both
established casinos and newly emerging gaming operations. Our competitors have
made a significant number of proposals for casinos, both land-based and on
navigable waters, in a number of jurisdictions and large metropolitan areas. If
gaming were legalized in new jurisdictions, our competitors would have
additional opportunities to expand. This could have a negative impact on our
existing gaming operations. We believe that if legalized gaming is adopted in
any jurisdiction near Nevada (particularly California or the southwestern
states) or near New Jersey (particularly New York or Pennsylvania) or on nearby
Native American lands, this could have a material adverse effect on our
operations in Las Vegas and Atlantic City.

In November 1998, California voters approved a ballot initiative that
mandated that the California governor sign compacts relating to gaming on tribal
lands with California tribes upon their request. The initiative also amended
current California law to permit gambling devices, including slot machines,
banked card games and lotteries, at tribal casinos. The initiative was

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<PAGE> 15
subsequently struck down by the Supreme Court of California, however, in
September 1999 the State of California signed a compact with California Indian
tribes to allow expanded legal gambling on reservations. Because California
voters must approve (in March 2000) an amendment to the California constitution
that would grant Native Americans monopoly rights to operate slot machines and
other casino-style games in California before the tribes can expand their
casinos, the compact's ultimate impact on our gaming operations is uncertain.

THE HIGH-END GAMING BUSINESS HAS MORE RISKS THAN OTHER FORMS OF GAMING.

The high-end gaming business is more volatile than other forms of gaming.
Variability in high-end gaming could have a positive or negative impact on cash
flow, earnings and other financial measures in any given quarter. In addition, a
substantial portion of our table gaming revenue from our Caesars Palace and
Desert Inn operations is attributable to the play of a relatively small number
of international customers. The loss of, or a reduction in play of, the most
significant of those customers (because of recessionary conditions in Asia or
otherwise) could have a material adverse effect on our future operating results.

GAMING LAWS MAY REQUIRE REDEMPTION OF SHARES.

Although our gaming operations are currently treated as discontinued
operations, we cannot assure you that the sale of Caesars World or the sale of
the Desert Inn will be completed. If these sales are not completed, we will
continue to be subject to state gaming regulatory authorities. Some state gaming
regulatory authorities reserve the right to require beneficial owners of
securities issued by gaming companies or their affiliates to be licensed or
found qualified or suitable to hold such securities. Because we have a
significant presence in the gaming industry through Caesars World, if a gaming
authority required you to be licensed or found qualified or suitable to hold or
own Shares, you would either have to obtain that license or be found qualified
or suitable or you would have to dispose of your Shares. If you were required to
dispose of Shares and did not do so within the time period specified by the
gaming authority, Starwood would have the right to redeem your Shares.

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<PAGE> 16
DESCRIPTION OF THE PLAN

THIS PROSPECTUS DESCRIBES ONLY THE HIGHLIGHTS OF THE ADOPTED PLAN IN WHICH
YOU MAY CHOOSE TO PARTICIPATE, AS THAT PLAN HAS BEEN AMENDED TO DATE ("YOUR
PLAN"). FULL DETAILS ARE CONTAINED IN THE OFFICIAL PLAN DOCUMENTS, COPIES OF
WHICH ARE AVAILABLE FOR EXAMINATION AT THE OFFICE OF THE ADMINISTRATOR OF YOUR
PLAN. IN CASE OF A CONFLICT BETWEEN THIS PROSPECTUS AND A PLAN DOCUMENT, THE
PLAN DOCUMENT WILL ALWAYS GOVERN. THE EMPLOYER ADOPTING YOUR PLAN ("YOUR
ADOPTING EMPLOYER") RESERVES THE RIGHT TO MODIFY, DISCONTINUE OR TERMINATE YOUR
PLAN OR ANY PLAN BENEFIT AND TO IMPLEMENT CHANGES TO YOUR PLAN AT ANY TIME AND
FOR ANY REASON AT YOUR EMPLOYER'S SOLE DISCRETION.

YOU SHOULD NOT CONSTRUE THE CONTENTS OF THIS PROSPECTUS AS INVESTMENT, TAX
OR LEGAL ADVICE. ALL TERMS USED IN THIS PROSPECTUS AS DEFINED TERMS THAT ARE NOT
OTHERWISE DEFINED HEREIN HAVE THE MEANINGS GIVEN TO THOSE TERMS IN YOUR PLAN.

NAME OF PLAN

The name of your Plan is the "Starwood Hotels & Resorts Worldwide, Inc.
Savings and Retirement Plan" as adopted and amended to date by your Adopting
Employer.

ADMINISTRATION OF PLAN; ADOPTING EMPLOYER

Your Plan is administered by your Adopting Employer. The name of your
Adopting Employer and the name of the hotel property whose employees are covered
by your Plan can be found in the table under the caption "Other Information You
Should Know--Adopting Employers."

FEDERAL TAX CONSEQUENCES OF YOUR PLAN -- IN GENERAL

The principal federal income tax consequences of various features of your
Plan are complex, and you should consult a tax professional regarding the
tax-deferred benefits and consequences of your Plan. YOU SHOULD BEAR IN MIND
THAT YOUR TAX CONSEQUENCES MAY BE AFFECTED BY CHANGES IN LAW OR BY YOUR
PARTICULAR INDIVIDUAL SITUATION. IN ADDITION, YOU MAY BE AFFECTED BY DIFFERENCES
IN INDIVIDUAL STATE AND LOCAL TAX LAWS, BY ESTATE TAX LAWS OR BY SPECIAL RULES
THAT APPLY IF YOU ARE OR HAVE BEEN A RESIDENT OR CITIZEN OF A FOREIGN COUNTRY
WHILE A PARTICIPANT IN YOUR PLAN. YOU SHOULD THEREFORE CONSULT YOUR OWN TAX
ADVISOR ON ANY SPECIFIC QUESTIONS REGARDING THE TAX CONSEQUENCES OF YOUR
PARTICIPATION IN YOUR PLAN.

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<PAGE> 17
OBTAINING A COPY OF YOUR PLAN

Please contact your Adopting Employer to obtain a copy of your Plan.
Although some of the key provisions of your Plan are summarized below, these
statements do not purport to be complete and are qualified in their entirety by
reference to the provisions of your Plan.

PLAN HIGHLIGHTS

Your Plan is part of your program of compensation and benefits. It is
designed to encourage and assist you in saving for the future and meeting your
financial needs after you retire. In limited circumstances it may also provide
some financial assistance during your career. Contributions that you make to
your Plan are referred to in this prospectus as "your savings."

Your Plan provides you with:

- a way to save up to 18% of your compensation for future financial
needs, subject to Internal Revenue Service limitations;

- a match by your employer of amounts you contribute -- one dollar for
every dollar you save up to 2% of your compensation, and fifty cents
for every dollar you save on the next 2% of your compensation;

- opportunities to invest your savings through your Plan's investment
funds;

- the opportunity to reduce your income taxes for the current year
through your Plan's pre-tax savings option;

- access to money in your Plan account to help you meet periodic
financial needs through loans and withdrawals; and

- the potential for favorable tax treatment on amounts paid to you in
the future from your Plan account.

All these features are intended to work together to encourage you to save
for your long-term financial goals.

ELIGIBILITY

If you have been credited with one year of service, you automatically
become a member of your Plan no later than the second "entry date" after having
satisfied this service requirement, unless you choose otherwise, following the
procedures established by the Employees' Savings and Retirement Plan Committee.
Entry dates in your Plan will be July 1, 1999 and the first day of each month
after that. For purposes of eligibility, a year of service means either the 12
months of employment commencing on your "Hire Date," which is the date you first
perform an hour of service for your employer, or any Plan year commencing after
your Hire Date in which you are credited with at least 1,000 hours of service.
For purposes of your Plan, "hours of service" means

15
<PAGE> 18
all hours you have worked and for which you are compensated by Starwood, your
employer or an Adopting Employer or a company affiliated with Starwood, your
employer or an Adopting Employer, plus hours for which you are compensated even
though you have not worked, such as paid holidays, paid vacation, paid sick
leave, paid time off, etc. Each hour will count as one "hour of service" even
though you may be paid at more than the straight time rate.

Once you become a member of your Plan, you will automatically be enrolled
in your Plan at a 2% pre-tax contribution rate unless you elect to increase your
contribution rate or not to contribute to your Plan. Until you make your own
investment fund election, your contributions will be invested in the Stable
Value Fund (see "Investment Opportunities"). If you wish to increase or decrease
your pre-tax contribution rate, make or change your investment election, or stop
making contributions to your Plan, you must comply with procedures established
by the Employees' Savings and Retirement Plan Committee.

YOUR SAVINGS

You may contribute from 1% up to 18% of your compensation to your Plan on
a pre-tax basis, in increments of 1%, subject to limitations imposed by the
Internal Revenue Service. Your compensation includes your salary or wages
reported on Form W-2 as paid by your employer for services performed and any
amounts that would have been so reported but for your election to make pre-tax
contributions to the Plan or to a cafeteria plan subject to Section 125 of the
Code. Your compensation does not include third party sick pay, group term life
insurance payments, compensation reported on Form 1099, moving expenses or
income attributable to the grant, vesting or exercise of any stock option
granted to you by your employer.

PRE-TAX CONTRIBUTIONS

Pre-tax contributions are deducted from your salary before federal and, in
most cases, state and local income taxes are applied, although Social Security
and Medicare (FICA) taxes will be imposed on pre-tax savings. By saving with
pre-tax dollars, you reduce your taxable income and, therefore, reduce your
current year's tax bill. The government allows this reduction in taxable income
to encourage employees to save for retirement. For this reason, withdrawal
privileges for pre-tax savings are restricted by law and withdrawals prior to
age 59 1/2 may be subject to tax penalties.

Pre-tax savings under your Plan reduce your taxable income -- that is,
they are not included on your W-2 earnings statement. However, they are included
in determining your Social Security and Medicare taxes and your Social Security
benefits.

EMPLOYER MATCH

Your Adopting Employer will match 100% of your contributions up to 2% of
your compensation and 50% of your contributions up to an additional 2% of your
compensation. Match contributions made by your employer are not included on your
W-2 earnings statement or in determining your Social Security and Medicare taxes
and your Social Security benefits.

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<PAGE> 19
EXAMPLE OF PRE-TAX SAVINGS

As the following example shows, saving with pre-tax dollars makes it
possible for you to put aside money for your future and get a tax benefit at the
same time.

Assume you earn $25,000 a year and elect to save 6% of your earnings. Also
assume you are married, claim two exemptions on your tax return, and file
jointly. For purposes of simplicity, the example also assumes that you have no
other income or deductions. Here's how your pre-tax savings would affect your
taxes and your take-home pay:

<TABLE>
<CAPTION>
With no Pre-Tax Savings With Pre-Tax Savings
----------------------- --------------------
<S> <C> <C>
Compensation $25,000 $25,000
Pre-Tax Savings (6%) -0- -$1,500
Adjusted Gross Income $25,000 $23,500
Estimated Taxes* -$3,788 -$3,563
After-Tax Savings (6%) -$1,500 -0-
Take-Home Pay $19,712 $19,937
</TABLE>

* 1999 federal income and FICA taxes

Current Cost of $1,500 of Savings = $1,275
Tax-deferred Advantage = $225

Because of the tax deferral, your current cost would be $1,275 of pay --
that is, your take-home pay would decrease by only $1,275 for $1,500 worth of
savings. Your current taxes would be $225 less under this pre-tax saving method.
Of course, the amount deferred on a pre-tax basis would be taxable income to you
when distributed from your Plan -- at the tax rates in effect at that time.

When you add the employer match of $750 to the amount you save, it
currently costs you $1,275 for $2,250 worth of savings.

ROLLOVERS FROM OTHER QUALIFIED PLANS

You may roll over cash distributions to you from another employer's
qualified plan into your Plan, provided the distribution is an "eligible
rollover distribution" and is either directly transferred to your Plan from the
other qualified plan or you contribute it to your Plan within 60 days after you
receive those monies. If you do a proper rollover, you may defer paying federal
income taxes on the distribution. A qualified plan is one that, by meeting Code
requirements, is subject to special tax rules. Generally, qualified plans
include:

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<PAGE> 20
- pension plans, profit sharing plans, money purchase pension plans,
employee stock ownership plans, etc.,

- employees' savings plans such as 401(k) plans,

- Keogh plans - special retirement plans for self-employed
individuals, and, for rollover purposes only,

- IRAs if the account is attributable to a rollover from a qualified
plan.

An "eligible rollover distribution" is one which is paid out over a term
of less than 10 years, and which would be taxable to you if you did not roll it
over.

You may make a rollover contribution to your Plan prior to satisfying your
Plan's eligibility requirements. However, you must meet your Plan's eligibility
requirements before you can start contributions to your Plan through payroll
deductions, even if you have made a rollover contribution to your Plan.

PLAN ACCOUNTS

Your pre-tax contributions will be contributed to a pre-tax account
established on your behalf. All match contributions of your employer will be
contributed to a match account on your behalf, and any rollover contributions
that you make will be contributed to a rollover account.

PRIOR PLANS AND PRIOR PLAN ACCOUNT BALANCES

Please see "Prior Plans and Prior Plan Account Balances" in the prospectus
supplement delivered with this prospectus.

INVESTMENT OPPORTUNITIES

The following investment opportunities are available under your Plan:

Stable Value Fund
AXP Bond Fund (Class Y)
Fidelity Diversified International Fund
American Express Trust Equity Index Fund II
AXP New Dimensions Fund (Class Y)
Fidelity Small Cap Selector Fund
American Express Trust Short-Term Horizon (25:75) Fund
American Express Trust Medium-Term Horizon (50:50) Fund
American Express Trust Long-Term Horizon (80:20) Fund
Starwood Company Stock Fund

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<PAGE> 21
Your Plan offers you the ability to choose investments that best meet your
personal financial planning needs and goals, from conservative trust funds to
aggressive funds offering potentially higher returns for those willing to accept
added investment risk.

FOR EACH OF THE INVESTMENT FUNDS DESCRIBED ABOVE THAT IS A MUTUAL FUND, A
SEPARATE PROSPECTUS FOR THAT FUND IS BEING DELIVERED TO YOU TOGETHER WITH THIS
PROSPECTUS. THE STARWOOD COMPANY STOCK FUND IS COVERED BY THIS PROSPECTUS. BE
SURE TO READ EACH PROSPECTUS CAREFULLY BEFORE YOU INVEST.

Investing Your Contributions, Employer Match Contributions and Prior Plan
Account Balances

You can invest your future contributions and employer match contributions
to your Plan and, if applicable, your existing account balances under the Prior
Plans in any of the investment funds under your Plan -- other than the Starwood
Company Stock Fund -- in multiples of 1%. For example, you can invest 100% of
your future contributions and employer match contributions and, if applicable,
your existing account balances under the Prior Plans, in just one of these
funds, or you can divide your savings between several of the funds. You also may
elect to invest up to 25% of your future contributions and employer match
contributions to your Plan in the Starwood Company Stock Fund, but not your
account balances, if any, from Prior Plans. If you fail to make an investment
election, your contributions, your employer match contributions and your account
balances from Prior Plans, if applicable, will be invested in the Stable Value
Fund.

Making Your Investment Decisions

Each of your Plan's investment funds offers different opportunities and
elements of risk. Therefore, you should make your investment choices carefully,
on the basis of your own financial goals.

More detailed information about each of the investment options that is a
mutual fund is available through the individual fund prospectuses, copies of
which have been given to you together with this prospectus. Each prospectus
contains information relating to that fund's past and current investment
performance and the fund's annual operating expenses, such as investment
management fees, administrative fees and transactional costs, which reduce the
net asset value of the fund and return to investors. PLEASE READ THE PROSPECTUS
FOR EACH FUND CAREFULLY PRIOR TO INVESTING.

Contributions to your Plan are transferred to American Express Trust
Company, the Trustee of your Plan, and invested in the investment funds
available under your Plan as directed by you. Plan assets invested in mutual
funds directed by you are managed according to the objectives and goals of the
particular fund as described in each fund's prospectus. Neither the Plan
Trustee, your employer nor any officer or employee of your employer is empowered
to advise you as to the manner in which any contributions should be invested.

Neither the Plan Trustee nor your employer guarantees that the market
value at the time of withdrawal or distribution of Shares or any other
investment will be equal to or greater than the purchase price of the Shares or
the other investment or that the total amount withdrawn or

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<PAGE> 22
distributed in any case will be equal to or greater than the amount of your
contributions. Nor is there any assurance that the investment options described
above will achieve their stated investment objectives. You assume all risks in
connection with any decrease in the market price of any common stock or other
investments held on your behalf, as provided in your Plan.

Your Plan is intended to be a plan described in Section 404(c) of ERISA
and Title 29 of the Code of Federal Regulations section 2550.404c-1 with respect
to your elections as to the investment of your savings under your Plan. This
means that fiduciaries of your Plan, such as your Plan Administrator, will not
have liability for any losses which are a direct and necessary result of
investment instructions given by you or your beneficiary if you die.

Summary of Investment Funds

The following are summary descriptions of the specific investment options
for future contributions to your Plan:

THE INFORMATION CONTAINED IN THESE SUMMARIES IS ONLY A BRIEF
SYNOPSIS OF THE VARIOUS INVESTMENT ALTERNATIVES. READ EACH FUND
PROSPECTUS CAREFULLY PRIOR TO INVESTING. IF THERE IS ANY DISCREPANCY
BETWEEN ANY INVESTMENT INFORMATION CONTAINED HEREIN AND ANY FUND
PROSPECTUS, THE FUND PROSPECTUS WILL CONTROL.

Fidelity Small Cap Selector (formerly Fidelity Small Cap Stock Fund) --
This fund seeks capital appreciation by normally investing in common stocks.
This fund normally invests at least 65% of the fund's total assets in companies
with small market capitalizations. Small market capitalization companies are
those whose market capitalization is similar to the market capitalization of
companies in the Russell 2000 at the time of the fund's investment. Companies
whose capitalization no longer meets this definition after purchase continue to
be considered to have a small market capitalization for purposes of the 65%
policy. As of April 30, 1999, the Russell 2000 included companies with
capitalizations between $4.1 million and $4.9 billion. The size of companies in
the Russell 2000 changes with market conditions and the composition of the
index. This fund's assets also may be invested in securities of foreign issuers
in addition to securities of domestic issuers. In buying and selling securities
for this fund, the fund manager uses computer-aided, quantitative analyses of
historical earnings, dividend yield, earnings per share and other factors
supported by fundamental analysis. Investing in small capitalization stocks may
involve greater risk than investing in medium and large capitalization stocks,
because they can be subject to more abrupt or erratic movements. Small
capitalization companies may have more limited product lines, markets or
financial resources.

American Express Trust Equity Index Fund II -- This fund is a collective
investment fund managed by American Express Trust Company, which invests
exclusively in the American Express Trust Equity Index Base Fund. The Equity
Index Base Fund's objective is to achieve a rate of return as close as possible
to the return of the Standard & Poor's 500 Stock Index, often referred to as the
S&P 500, although there can be no guarantee that this objective will be
achieved. The Equity Index Base Fund seeks to achieve its goal by creating a
portfolio with sector/industry weightings similar to the S&P 500. Under normal
market conditions, the Equity

20
<PAGE> 23
Index Base Fund's investments in common stock will equal or exceed 90% of the
market value of its portfolio, with the balance maintained in a cash fund and
S&P 500 stock index futures. Investments of the Equity Index Base Fund are
limited to common stocks, short-term money market instruments and stock index
futures contracts, including options on contracts and options on stock indices.
No other categories of investments are contemplated for inclusion at this time.
Under current policy no common stock holding will represent more than 10% of the
Equity Index Base Fund's portfolio at the time of purchase, and no holding may
exceed 5% of the outstanding voting shares of the issuing corporation at the
time of purchase.

American Express Trust Short-Term Horizon (25:75) Fund -- This fund is a
collective investment fund that invests in other investment funds. This fund
seeks to create a diversified portfolio with a conservative risk profile
appropriate for individuals with short-term time horizons although there can be
no guarantee that this objective will be achieved. New investments in this fund
are invested as follows:

- 20% in the American Express Trust Money Market Fund I -- a
collective investment fund focused on providing maximum current
income consistent with liquidity and conservation of capital;

- 15% in the American Express Trust Federal Income Fund -- a
collective investment fund focused on providing a high level of
current income and safety of principal consistent with investment in
U.S. government and government agency securities;

- 40% in the AXP Bond Fund -- a fund focused on providing shareholders
with a high level of current income while attempting to conserve the
value of the investment and to continue a high level of income;

- 15% in the American Express Trust Research 150 Fund -- a collective
investment fund focused on providing returns exceeding the U.S.
stock market return through investment in common stocks, short-term
money market instruments and stock index futures contracts; and

- 10% in the American Express Trust Core Growth Fund -- a fund focused
on achieving long-term capital appreciation through investments in
common stocks, convertible securities, short-term money market
instruments and stock index futures contracts.

American Express Trust Medium-Term Horizon (50:50) Fund -- This fund is a
collective investment fund that invests in other investment funds. Its objective
is to create a diversified portfolio with a conservative risk profile
appropriate for individuals with medium-term time horizons although there can be
no guarantee that this objective will be achieved. New investments in this fund
are invested approximately as follows:

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<PAGE> 24
- 40% in the AXP Bond Fund -- a fund focused on providing shareholders
with a high level of current income while attempting to conserve the
value of the investment and continue a high level of income;

- 20% in the American Express Trust Core Growth Fund -- a fund focused
on achieving long-term capital appreciation through investments in
common stocks, convertible securities, short-term money market
instruments and stock index futures contracts;

- 10% in the Baron Asset Fund -- a fund focused on seeking capital
appreciation through investments in securities of small and
medium-sized companies with undervalued assets or favorable growth
prospects;

- 20% in the American Express Trust Research 150 Fund -- a collective
investment fund focused on providing returns exceeding the U.S.
stock market return through investment in common stocks, short-term
money market instruments and stock index futures contracts; and

- 10% in the American Express Trust Money Market Fund I -- a
collective investment fund focused on providing maximum current
income consistent with liquidity and conservation of capital.

American Express Trust Long-Term Horizon (80:20) Fund -- This fund is a
collective investment fund that invests in other investment funds. Its objective
is to create a diversified portfolio with a conservative risk profile
appropriate for individuals with long-term time horizons. New investments in
this fund are invested approximately as follows:

- 5% in the Templeton Institutional Funds, Inc. - Foreign Equity
Series Fund -- a fund focused on long-term growth of capital through
a flexible policy of investing in equity securities and debt
obligations of companies and governments outside the United States;

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<PAGE> 25
- 35% in the AXP Bond Fund -- a fund focused on providing shareholders
with a high level of current income while attempting to conserve the
value of the investment and continue a high level of income; and

- 10% in the AXP Growth Fund -- a fund focused on providing
shareholders with long-term growth of capital by investing primarily
in stocks of U.S. and foreign companies.

Stable Value Fund -- This fund is a collective investment fund which holds
units of participation in BT Pyramid Fund and which invests new monies
exclusively in American Express Trust's Income Fund I, a collective investment
fund managed by American Express Trust Company. The Income Fund I's objective is
to preserve principal and interest while maximizing current income although
there is no guarantee that the Income Fund I will achieve this objective. The
Income Fund I seeks to achieve its objective by investing in insurance
investment contracts, bank investment contracts and stable value contracts. The
Income Fund I may also invest in high-quality, short-term instruments --
government securities, time deposits, A1/P1 rated commercial paper, and pooled
short-term investment funds invested primarily in similar obligations. The
Income Fund I seeks to diversify the holdings of its portfolio; accordingly,
each contract issuer is limited to no more than 15% of the assets of the fund at
the time of purchase. As of December 31, 1997, no more than 7% of the assets of
the fund were invested with any one contract issuer.

AXP Bond Fund -- This fund is a diversified mutual fund that invests
primarily in bonds and other debt securities issued by domestic and foreign
corporations and governments. At least half of this fund's net assets must be in
bonds rated "investment grade." This fund also invests in lower-quality debt
securities, convertible securities, stocks, derivative instruments and money
market instruments. Some of this fund's investments may be considered
speculative and involve additional investment risks. This fund offers its shares
in three classes; only Class Y shares are offered under your Plan.

AXP New Dimensions Fund -- This fund invests all its assets in the Growth
Trends Portfolio of the Growth Trust. The Growth Trends Portfolio invests
primarily in common stock of domestic and foreign companies showing potential
for significant growth. These companies usually operate in areas where dynamic
economic and technological changes are occurring. The Growth Trends Portfolio
also invests in preferred stocks, debt securities, derivative instruments and
money market instruments. Some of the Growth Trends Portfolio's investments may
be considered speculative and involve additional investment risks. This fund may
withdraw its assets from the Growth Trends Portfolio at any time if the board of
this fund determines that it is in the best interests of the fund to do so. This
fund offers its shares in three classes; only Class Y shares are offered under
your Plan.

Fidelity Diversified International Fund -- This fund, managed by Fidelity
Management & Research Company, seeks capital growth. Its investment strategies
include investing at least 65% of its total assets in foreign securities,
primarily in common stocks.

Starwood Company Stock Fund -- This fund invests in Shares, the purchase
price of which is the market price on the date of purchase. Dividends, if any,
will be automatically

23
<PAGE> 26
reinvested in more Shares. As with any stock investment, the value of the
Starwood Company Stock Fund is determined by the rise and fall in the market
value of the Shares. Unlike other funds in your Plan, this fund is invested in
only one business's stock. As an investment in the common stock of a single
business, the fund is unmanaged and nondiversified. The principal of the fund is
not guaranteed and would normally fluctuate more than that of a diversified
fund.

The following charts show the three-year performance of each of the funds
described above:

Chart I shows the three year annual returns for each mutual fund listed
above. Chart II shows the high and low per share sales prices of Shares and the
distribution per Share for each quarter of the last three years.

CHART I

<TABLE>
<CAPTION>
Fund Name 1998 1997 1996
- --------- ---- ---- ----
<S> <C> <C> <C>
Fidelity Small Cap Selector (7.4) 27.3 13.6

American Express Trust Equity Index Fund II 6.0 6.0 6.1

AXP Bond Fund (a) 5.7 9.9 5.1
AXP New Dimensions Fund (a) 28.31 24.6 24.4

Fidelity Diversified International Fund
14.4 13.7 20.0
</TABLE>

(a) Performance shown is for Class A shares; the performance of Class Y shares
may vary from that shown above because of differences in sales charges and
fees.

CHART II
SHARES PERFORMANCE

<TABLE>
<CAPTION>
Quarter High Low Distribution
------- ---- --- ------------
<S> <C> <C> <C>
Quarter 1 - 1997 $45.88 $34.50 $0.39
Quarter 2 - 1997 $42.81 $34.25 $0.39
</TABLE>

24
<PAGE> 27
<TABLE>
<S> <C> <C> <C>
Quarter 3 - 1997 $57.44 $41.56 $0.48
Quarter 4 - 1997 $60.38 $52.13 $0.48
Quarter 1 - 1998 $57.88 $49.50 $0.48
Quarter 2 - 1998 $54.38 $47.00 $0.52
Quarter 3 - 1998 $49.19 $29.19 $0.52
Quarter 4 - 1998 $31.38 $18.75 $0.15
Quarter 1 - 1999 $34.19 $22.69 $0.15
Quarter 2 - 1999 $37.75 $28.00 $0.15
Quarter 3 - 1999 $31.00 $21.75 $0.15
Quarter 4 - 1999 $24.50 $19.50 $0.15
(through November
16, 1999)
</TABLE>

Each of your Plan's investment funds offers different opportunities and
elements of risk. Therefore, you should make your investment choices carefully,
on the basis of your own financial goals. More detailed information about each
of these investment options is available through the individual fund
prospectuses, copies of which are being given to you together with this
prospectus and which will update the information provided in this prospectus
from time to time.

VOTING AND TENDERING OF SHARES

You will have the right to vote and, under certain circumstances, tender
the Shares in your Starwood Company Stock Fund. Your voting rights are based on
the number of allocated Shares in your account. You have the right to direct the
Plan Trustee how to vote the number of Shares representing the value of the
units in the Starwood Company Stock Fund allocated to your Plan account on all
proposals voted on by the shareholders of Starwood at annual or special meetings
of those shareholders. You will receive the proxy materials and all information
that is sent to other shareholders on which you will indicate to the Plan
Trustee how to vote your interest in the Shares. If you do not give the Plan
Trustee instructions, Shares representing your investment in the Starwood
Company Stock Fund will be voted by the Plan Trustee in the same proportion as
the Shares for which the Plan Trustee has received voting instructions from
participants. Likewise, if there is a tender offer, you may direct the Plan
Trustee in writing to sell, exchange, or transfer Shares representing your
interest in the Starwood Company Stock Fund. If you fail to direct the Plan
Trustee or if you do not give valid or timely direction to the Plan Trustee to
sell, exchange or transfer Shares held on your behalf, Shares representing your
investment in the Starwood Company Stock Fund will not be tendered. Your
tendering instructions will be held confidential by the Plan Trustee and may not
be divulged to Starwood or to any other person, except to the extent that the
consequences of your directions are reflected in reports regularly

25
<PAGE> 28
communicated in the ordinary course of the Plan Trustee's performance of its
duties as trustee of your Plan.

VOTING MUTUAL FUND SHARES

You also have the right to exercise any voting rights attributable to
mutual fund shares representing the value of your interest in an investment fund
that is a mutual fund. You will receive the proxy materials and other
information that is distributed to holders of the mutual fund shares on which
you will indicate to the Plan Trustee, how to vote your mutual fund shares. If
you do not give the Plan Trustee instructions, your mutual fund shares will be
voted by the Plan Trustee in the same proportion as the mutual fund shares for
which the Plan Trustee has received voting instructions from participants.

VESTING

Vesting means your nonforfeitable right to receive the full or partial
value of your Plan account if your employment terminates with Starwood, your
employer or another Adopting Employer, or a company affiliated with your
employer.

You are always 100% vested in the value of your own contributions to your
Plan and any earnings on those amounts.

If you were a member of any of the Prior Plans, you are also 100% vested
in any of the following Prior Plan nonforfeitable accounts that you may have:
prior plan basic account, post- 1986 after-tax account, pre-1987 after-tax
account, ITT prior plan monies account, ITT pre-tax account and ITT rollover
account. See "Prior Plans and Prior Plan Account Balances" in the prospectus
supplement delivered with this prospectus.

You vest in your employer's match contributions to your Plan and earnings
on those contributions and, if applicable, in your Prior Plan forfeitable
accounts according to a three-year vesting schedule based on your years of
service with Starwood, your employer or another Adopting Employer, or a company
affiliated with your employer. A "year of service" is defined as any Plan year
in which you are credited with at least 1,000 hours of service. Once you have
completed three years of service, you are 100% vested in all these amounts.
However, unless your employment terminates after you have attained age 65 or due
to your death or total and permanent disability, if your employment terminates
before you have completed three years of service, you will forfeit your
employer's match contributions to your Plan, and earnings on those contributions
and, except as provided in the next sentence, amounts held in your Prior Plan
forfeitable accounts, if applicable. If you participated in a Prior Plan on
March 31, 1999 and your employment terminates before completing three years of
service, you will receive the same percentage of your Prior Plan forfeitable
accounts that you would have received determined under the terms of that Prior
Plan as in effect on March 31, 1999.

Prior Plan forfeitable accounts include: If you were employed at a Westin
property, Westin Match Account and Westin RAP Account; if you were employed at a
Sheraton property, ITT Match Account.

26
<PAGE> 29
If, however, you terminate employment, but later return to work for
Starwood, your employer or another Adopting Employer, or a company affiliated
with your employer, prior to incurring five consecutive "breaks in service"
(described below), amounts that you forfeited will be restored automatically if
you did not receive a distribution of your accounts or upon your repayment to
your Plan of amounts distributed to you. Notwithstanding the foregoing, any
participant in the Westin Hotel Company 401(k) Growth Opportunity Plan who
received a distribution prior to April 1, 1999 from that plan and who is rehired
prior to incurring a five-year break in service is not required to repay any
distribution from that plan before any forfeitures are restored to his account.
Any repayment must be made within five years of your reemployment date. A "break
in service" for vesting purposes is a Plan year in which you work 500 hours or
less. If you are absent from work or leave by reason of pregnancy or as
permitted by a family care or adoption policy of your employer or other Adopting
Employer, if applicable, you will not be treated as having incurred a break in
service for the Plan year in which your leave commenced, or in some cases for
the next following Plan year.

STATEMENT OF YOUR ACCOUNT VALUES

Quarterly, you will receive a statement showing both the value and status
of your Plan account.

PLAN DISTRIBUTIONS

After termination of employment, you may elect to receive your vested
account balance in your Plan in the form of a single sum payment or in monthly
or annual installments not to exceed 20 years. In addition, if you were a
participant on March 31, 1999 in either (a) the ITT 401(k) Retirement Savings
Plan or (b) the Westin Hotel Company 401(k) Growth Opportunity Plan and have a
RAP account you may elect to receive your vested Prior Plan account (your RAP
account only in the case of the Westin Hotel Company 401(k) Growth Opportunity
Plan) balance in your Plan in the form of an annuity purchased from an insurance
company. Before termination of employment, you may elect to receive the
in-service withdrawals described below. All distributions must be made in the
form of cash, except that you may elect to receive the value of your account
invested in the Starwood Company Stock Fund in full Shares and in cash for any
fractional shares.

LIMITATIONS AND PENALTIES ON DISTRIBUTIONS

Since your Plan is intended as a long-term savings vehicle, the federal
government imposes limitations and penalties on some distributions. It is
important that you understand these restrictions and the penalties that can be
imposed, as described below.

Tax Penalties

The federal government imposes a 10% penalty (and some states also impose
a penalty) on the taxable portion of the following in-service withdrawals and
Plan payouts taken before age 59 1/2.

27
<PAGE> 30
- Pre-tax savings, except for medical expenses for which a deduction
would be allowed

- Employer match contributions

- Prior Plan accounts, if applicable

- All earnings

- Rollover account balances

There is no tax penalty applied to distributions at retirement, disability
or death. In addition, there is no penalty on Plan payouts that are paid to you
if you terminate your service with your employer after you reach age 55, are
paid to an alternate payee pursuant to a QDRO, are rolled over to another
qualified plan or Individual Retirement Account or Individual Retirement Annuity
or payouts of amounts that are returned to you because they are "excess
contributions."

Tax Withholding

Except for distributions that are not "eligible rollover distributions",
such as hardship withdrawals, installment distributions over a period of 10
years or more and minimum required distributions after age 70 1/2, the taxable
portion of all distributions from your Plan is subject to mandatory 20% tax
withholding unless you request a direct rollover. In other words, you can take a
distribution in two ways. You can have all or a portion of your payment either:

- Rolled over directly to the eligible plan of your choice, or

- Paid to you.

The choice you make will affect the taxes that are withheld from your
distribution and the taxes you owe.

IF YOU CHOOSE TO HAVE THE MONIES ROLLED OVER DIRECTLY TO AN ELIGIBLE PLAN:

- You must request a direct rollover, following procedures established
by the Employees' Savings and Retirement Plan Committee.

- You will receive a check for the appropriate rollover amount made
payable to an IRA custodian or another employer's qualified plan.

- The amount rolled over will not be subject to income tax until you
withdraw it from the rollover plan.

- No income tax will be withheld on the amount directly rolled over.

28
<PAGE> 31
IF YOU CHOOSE TO HAVE THE PAYMENT PAID TO YOU:

- You will be paid only 80% of the taxable portion of the distribution
because your Plan Administrator is required to withhold 20% of the
taxable portion of the distribution and send it to the IRS as income
tax withholding to be credited against your federal income taxes.

- The taxable portion of the distribution paid to you will be taxed in
the year of the distribution unless you roll it over yourself. The
taxes you owe will depend on your individual tax situation. The 10%
tax penalty may also apply.

- If you roll over the taxable portion of your distribution yourself,
withholding applies, but the amount rolled over will not be subject
to income taxes until you withdraw it from the rollover plan.
However, if you want to roll over 100% of a taxable distribution to
an IRA or an employer's qualified plan, you must use money from
other resources to replace the 20% that is withheld. If you roll
over only the 80% that you receive, you will be taxed -- and
penalized, if applicable -- on the 20% that is withheld and not
rolled over.

- You have 60 days from the date you receive the distribution to make
a rollover.

- You are not subject to mandatory tax withholding on distributions of
less than $200, and may roll over that amount, if desired.

Withdrawals

The government allows organizations like your employer to set up plans
like your Plan to encourage long-term savings. In exchange for the tax
advantages you receive through your Plan, withdrawals from your accounts are
limited while you are still working. Withdrawals, when permitted, are taken from
the funds in which you are invested on a pro-rata basis. The minimum withdrawal
amount is $500 ($300 for a hardship withdrawal).

HARDSHIP WITHDRAWALS -- You may receive a distribution of your vested
account balance, other than amounts held in your Prior Plan basic account
or RAP account, if applicable, for a severe financial hardship. Generally,
a "financial hardship" is defined as an immediate and heavy financial need
that cannot be met by other reasonably available resources. You will be
required to apply for a maximum withdrawal of all vested withdrawable
account balances as well as a maximum loan before a hardship withdrawal
will be granted. Once a financial hardship withdrawal is approved, the
amount is taxed as ordinary income and, if you have not reached age
59 1/2, a 10% tax penalty is imposed, except in cases where the withdrawal
is for medical expenses for which a deduction would be allowed. Upon
receiving a hardship withdrawal, you will be suspended from contributing
to your Plan for twelve months. Also, during the calendar year following
the year you make a withdrawal, the amount you can save on a pre-tax basis
will be reduced by the amount of pre-tax savings you made in the year you
withdrew funds.

29
<PAGE> 32
AGE 59 1/2 WITHDRAWALS -- After age 59 1/2, you may withdraw an amount
from your vested account balance for any reason, other than amounts
credited to your Prior Plan basic account, if applicable. In this case,
there is no penalty tax upon withdrawal, but the amount withdrawn is
subject to ordinary income tax.

ROLLOVER ACCOUNT -- You may withdraw an amount from your rollover account
balance at any time. The withdrawal will be subject to income tax and
withdrawals prior to age 59 1/2 may be subject to the 10% tax penalty. You
may make no more than two such withdrawals per Plan year.

ITT PRIOR PLAN ACCOUNTS WITHDRAWAL -- You may withdraw an amount from your
vested ITT Prior Plan accounts, other than amounts credited to your Prior
Plan basic account, if applicable. The withdrawal will be subject to
income tax, and withdrawals prior to age 59 1/2 may be subject to a 10%
tax penalty. You may make no more than two such withdrawals per Plan year.

Taxes on Rollovers

To avoid the 10% tax penalty and income tax, you may roll over the taxable
portion of your distribution from your Plan into an IRA, or if you leave your
employer, another employer's qualified plan that accepts rollovers. Employees
who have reached age 70 1/2 can roll over eligible distributions only after
subtracting any required minimum distribution.

If you roll over all or part of your Plan distribution, the amount rolled
over will not be subject to income taxes until you make a withdrawal from the
rollover plan.

PLAN PAYOUTS UPON TERMINATION OF EMPLOYMENT

When your employment with Starwood, your employer, any other Adopting
Employer, or a company affiliated with your employer otherwise terminates, you
will be entitled to the "vested" portions of your Plan account. See "Vesting"
for information as to when you are vested.

When Payment Begins

If, when your employment terminates, your vested account balance exceeds
$5,000, you may request an immediate distribution from your Plan or keep your
money in your Plan and postpone your distribution to a later date, but not later
than April 1 following the date on which you are 70 1/2. If you do not make an
election to receive a distribution when you leave, you will be considered to
have made an election to defer payment until you reach age 70 1/2. You may,
however, at any time make an election to receive payment before that date.

If your benefit payment does not commence by April 1 of the appropriate
calendar year, you may be subject to a 50% excise tax on the amount required to
be distributed but not properly distributed.

30
<PAGE> 33
If you defer payment of your accounts, they will continue to be invested
in Plan investment funds as though you were still employed. You will be
permitted to make reallocations among the investment funds, but you will not be
permitted to make a partial withdrawal or apply for a loan from your accounts.

If, when your employment terminates, your vested account balance is $5,000
or less, your entire vested balance will be paid to you as soon as
administratively possible after your termination of employment occurs.

Payment Methods

After termination of employment, you may elect to receive your vested
account balance in your Plan in the form of a single sum payment or in monthly
or annual installments not to exceed 20 years. In addition, if you were a
participant on March 31, 1999 either in (a) the ITT 401(k) Retirement Savings
Plan or (b) the Westin Hotel Company 401(k) Growth Opportunity Plan and have a
RAP account you may elect to receive your vested Prior Plan account (your RAP
account only in the case of the Westin Hotel Company 401(k) Growth Opportunity
Plan) balance in your Plan in the form of an annuity purchased from an insurance
company. If you are married, this annuity must be a qualified joint and 50%
survivor annuity, unless your spouse consents to a different form of payment.
All distributions will be made in the form of cash, except that you may elect to
receive the value of your account invested in the Starwood Company Stock Fund in
full Shares and in cash for any fractional Shares.

LOANS

Because of the restrictions on withdrawing pre-tax savings, your Plan
provides the opportunity for you to borrow from your vested account balance.

There are two types of loans available to you. You may borrow for purposes
of purchasing a principal residence (a home loan) or you may borrow for any
other reason (a regular loan). Only two loans will be permitted to be
outstanding at any time. If you have two outstanding loans and wish to apply for
a new loan, you must first repay one of your current loans in full. You may not
use the proceeds of the new loan to repay your current loans.

Amounts for the loan are withdrawn from the investment funds in which you
are invested on a pro-rata basis. The minimum loan amount is $1,000. The maximum
amount you may borrow is 50% of your total vested account balance, up to a
maximum loan amount of $50,000 minus the highest dollar amount owed on a loan
under your Plan during the preceding 12 months. The maximum applies to all
outstanding loans combined.

Home loans must be repaid within 120 months (10 years) and regular loans
must be repaid within 60 months (5 years).

All loans are repayable with interest. The interest rate is equal to the
prime rate as published in the Wall Street Journal on the first business day of
the month in which the loan is

31
<PAGE> 34
made plus 1%. Interest on Plan loans is not tax deductible. When you repay your
loan, both principal and interest are credited to your account.

The sole collateral for a loan is the vested portion of your account.

Under the current rules applicable to Plan loans, if you do not make a
loan payment within 90 days of its due date, your loan will be in default. You
then will be responsible for immediate payment of the entire amount of the
loan's outstanding principal and accrued interest. If you do not pay the entire
amount within 60 days after default, the entire amount outstanding will be
treated as a taxable distribution to you at that time. This amount will be
subject to ordinary income tax and may be subject to a 10% tax penalty. These
rules may change, however, to conform with changes in applicable law.

You will be required to take a loan before you will be allowed to make a
hardship withdrawal.

CONTRIBUTION LIMITATIONS

Federal tax laws impose limitations on contributions made to
employer-sponsored savings plans such as your Plan. The following limitations
currently apply:

Pre-Tax Savings

Although your Plan permits contributions of up to 18% of your pay on a
pre-tax basis, federal tax law limits the dollar amount of your annual pre-tax
contributions. The amount is indexed for inflation and adjusted in $500
increments. The dollar limit for 2000 will be $10,500.

Pre-tax contributions that exceed the dollar limit will be taxed in the
year contributed; related earnings will be taxed in the year distributed. These
excess contributions and related earnings will be returned to you by April 15 of
the following calendar year. If, however, you exceed the dollar limit because
pre-tax contributions are made to more than one tax-qualified plan, the excess
paid will not be distributed from your Plan unless notice is received by your
employer's Human Resources Department no later than March 1. If the amount that
exceeds the dollar limit is not returned to you by April 15th, it will be
taxable in the year to which the excess deferrals relate and will be taxed again
upon distribution.

All Contributions

Federal tax law also imposes an annual limit per individual, which applies
to all contributions to your Plan; this limit is currently, the lesser of
$30,000 or 25% of your compensation. Rollover contributions, if any, are not
counted for purposes of this limit. This provision of the law is referred to as
section 415 of the Code. If you are affected by this limit, you will be
notified.

32
<PAGE> 35
In addition, federal tax law has set a maximum pay level which can be used
for retirement plan purposes. In 2000, the maximum is $170,000. The amount is
adjusted for inflation by the federal government, but only in $10,000
increments.

Balance of Participation

Federal tax law requires that your Plan satisfy a complex set of rules to
assure a fair mix of pre-tax contributions from all eligible employees at all
earnings levels. To maintain the proper balance, it may be necessary from time
to time to limit the pre-tax savings made by highly compensated employees. If
you are in this category and your savings must be limited, or excess
contributions must be returned to you, you will be notified and will receive a
distribution of your excess contributions, which will be subject to tax.

A similar test applies to employer match contributions. You will be
notified if you are affected.

ESTATE TAX

The value of amounts distributable from your Plan as a result of the death
of a participant or a former participant may be includable in full in the
participant's estate for federal estate tax purposes, but affected employees are
advised to consult their tax advisors in this regard. Amounts payable to a
deceased participant's spouse may be eligible for the federal estate tax marital
deduction and may otherwise qualify to be rolled over by the spouse into an IRA.
Amounts distributed to the beneficiary, other than the deceased participant's
spouse, or the estate of a participant generally will be treated in
substantially the same way for federal income tax purposes as if distributed to
the participant after termination of employment, except that those amounts do
not qualify for rollover treatment unless the recipient is the participant's
spouse. Again, however, you should consult your tax advisor for a full
understanding of the potential estate tax consequences of your Plan benefits.

OTHER INFORMATION YOU SHOULD KNOW

Adopting Employers

The following Adopting Employers have adopted the Master Plan. The Master Plan,
as adopted by your employer, is your Plan. Your Plan may differ in some ways
from the Master Plan. As of the date hereof, none of the Adopted Plans differ in
any material respect from the Master Plan.

<TABLE>
<CAPTION>
ADOPTING EMPLOYERS HOTEL ADOPTION
DATE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Westbank Hotel Venture Westin Hotel - Copley Place April 1, 1999

Galleria Hotel Venture Westin Hotel - Hotel Galleria April 1, 1999
</TABLE>

33
<PAGE> 36
<TABLE>
<S> <C> <C>
Caesar Park Hotels & Resorts Westin Hotel - La Paloma April 1, 1999
Tucson Company

Westin Chicago Limited Westin Hotel - Michigan April 1, 1999
Partnership Avenue

Meridian Properties Number Westin Hotel - O'Hare April 1, 1999
Five (USA) Ltd.

Caesar Park Hotels & Resorts Westin Resort - Hilton Head April 1, 1999
Hilton Head Island Island

Westin St. Francis Limited Westin Hotel - St. Francis April 1, 1999
Partnership

William Penn, Inc. Westin Hotel - William Penn April 1, 1999

Kyoya Company Sheraton Palace Hotel April 1, 1999

Ski Time Square Enterprises Sheraton Resort & April 1, 1999
and Sheraton Steamboat Conference at Steamboat
Corporation Springs

Cityfront Hotel Associates Sheraton Chicago Hotel & April 1, 1999
L.P. Towers

Cerritos Associates, L.P. Sheraton Cerritos Hotel April 1, 1999

Elk Grove Suites (1) Sheraton Suites April 1, 1999
Investments, L.P. Wilmington

(2) Sheraton Suites Market
Center

(3) Sheraton Suites Elk
Grove

Plantation Hotel Limited Sheraton Suites Plantation April 1, 1999
Partnership

Lost Angeles County Fair Sheraton Suites Fairplex April 1, 1999
Associates

International Hotel Venture Sheraton Suites Country Club April 1, 1999
Inc. Plaza

Alexandria Suites (1) Sheraton Suites April 1, 1999
Investments, L.P. Alexandria

(2) Sheraton Suites
Columbus
</TABLE>

34
<PAGE> 37
<TABLE>
<S> <C> <C>
McGavock Associates, Ltd. Sheraton Music City Hotel July 1, 1999

Tysons Corner Hotel Residence Inn at Tysons July 1, 1999
Management LLC Corner

Nakano California, Inc. Four Points Santa Monica August 1, 1999

Portland Hotel LLC Westin Portland January 1, 2000
</TABLE>

Type of Plan

Your Plan is a qualified defined contribution plan under Section 401(a) of
the Code.

Plan Year

Each Plan year begins on January 1 and ends on December 31.

Plan Trustee and Funding

Contributions to your Plan go into a trust fund managed by a trustee
according to the terms of a trust agreement. The Plan Trustee invests
contributions made on your behalf as you direct. The Plan Trustee is American
Express Trust Company, P.O. Box 534, Minneapolis, Minnesota 55440.

Payment of Benefits

The Plan Trustee pays all benefits from the trust funds. The methods of
payment that you may elect are described earlier in this prospectus.

Forms and Procedures to Obtain Benefits

You or your beneficiary must file the appropriate forms to receive any
benefits under your Plan. Please contact your Human Resources representative to
obtain these forms.

Procedures for withdrawals and distributions from your Plan are described
earlier in this prospectus.

Claims Appeals

If an application for benefits is denied in whole or in part, you or your
beneficiary will receive notification from the Employees' Savings and Retirement
Plan Committee within 90 days, or 180 days if unusual circumstances exist.

The notice will include the reasons for the denial with reference to the
specific Plan provisions on which the denial was based, a description of any
information needed to process the claim and an explanation of the claim review
procedures.

35
<PAGE> 38
Within 60 days after receiving the denial, you or your beneficiary may
submit a written request for the reconsideration of the claim to the Employees'
Savings and Retirement Plan Committee. Any reconsideration request should be
accompanied by documents or records in support of the appeal. You or your
beneficiary may review pertinent documents and submit issues and comments in
writing.

The Employees' Savings and Retirement Plan Committee will respond within
60 days, or 120 days under special circumstances, after receipt of the appeal,
explaining the reasons for the decision, again with reference to the specific
Plan provision on which that decision is based.

The Employees' Savings and Retirement Plan Committee has the right and
discretionary authority to interpret the provisions of your Plan and determine
eligibility. These decisions are conclusive and binding.

Right to Serve Legal Process; Agent For the Service of Legal Process

If you believe you have been improperly denied a benefit under your Plan,
after exhausting the claims and appeals procedures, you have the right to serve
legal process. Legal process may be served upon the agent for service of legal
process for your Plan or your Plan Administrator. The agents for service of
process for your Plan are the Plan Trustee and your Plan Administrator.

COSTS

Individual investment funds may impose fees for purchase and/or redemption
of investment fund shares and various transfer taxes. In addition, there are
management costs associated with each fund. See the individual fund prospectuses
for details.

Some of the other costs associated with administering your Plan, including
record keeping, trustee services and other administrative expenses, will be
charged to your account under the Plan.

PLAN DOCUMENTS

This prospectus summarizes the key features of your Plan. Complete details
of your Plan can be found in the official Plan documents and trust agreements
(as applicable) which legally govern the operation of your Plan.

All statements made in this prospectus are subject to the provisions and
terms of those documents. Copies of those documents, as well as the latest
annual reports of Plan operations, as filed with the IRS and the U.S. Department
of Labor, are available for your review any time during normal working hours in
your employer's Human Resources Department.

Upon written request to your Plan Administrator, copies of any of these
documents will be furnished to a Plan participant or beneficiary within 30 days
at a nominal charge. In addition, once a year you will receive a copy of the
summary annual report of your Plan's financial activities at no charge.

36
<PAGE> 39
If there is a conflict between the official Plan documents and the
summaries in this prospectus, the Plan documents are controlling.

TOP-HEAVY PROVISION

If in any year your Plan is considered to be a "top heavy" plan, which
means that more than 60% of your Plan's assets are in the accounts of key
employees of your employer, your employer may be required under the Code to make
additional contributions to the accounts of non-key employees. You will be
notified if your Plan becomes top heavy and you will be affected by these
requirements. Technically, the Code also requires that minimum vesting schedules
take effect when a plan is top-heavy, but because these schedules are no more
favorable than your Plan's current vesting schedules, your vesting will not be
affected if your Plan becomes top heavy.

PLAN ADMINISTRATION

Your Plan is administered by your employer as your "Plan Administrator",
which acts through the Employees' Savings and Retirement Plan Committee. This
committee is appointed by the Board of Directors of the Corporation and has the
sole authority for interpreting and constructing provisions of your Plan and the
specific duties and obligations provided for in your Plan. These duties and
obligations include the day-to-day administration of your Plan and such things
as maintaining or directing others to maintain accounts, establishing the
requirements of loans, administering and managing your Plan's assets under its
control, directing the trustees, interpreting your Plan's provisions,
establishing rules and regulations for your Plan administration, and deciding
questions that may arise in connection with your Plan, including, but not
limited to, initial determinations concerning benefit eligibility.

NON-ASSIGNMENT OF BENEFITS

You cannot assign your benefits from your Plan to anyone else or use these
benefits to pay debts or obligations before the time of distribution. However,
your Plan will recognize a Qualified Domestic Relations Order, or QDRO,
requiring payment of part or all of a participant's vested Plan account to meet
marital, alimony or child support obligations. A QDRO is a court order that
meets conditions specified by law. If your Plan is served with any court order
relating to your benefits under your Plan, you will be notified and given
additional information about the procedures to be followed.

PLAN TERMINATION

Although your employer expects to continue your Plan indefinitely, your
employer necessarily reserves the right to amend or discontinue your Plan in its
sole discretion. Your employer's decision to terminate or amend your Plan may be
due to changes in federal or state laws governing employee benefits, the
requirements of the Code or the federal Employee Retirement Income Security Act
of 1974 ("ERISA"), or any other reason.

37
<PAGE> 40
If your Plan is terminated, you will be fully vested in your employer
match. Accounts will either be distributed as soon as possible after the
termination of your Plan or held in a trust until benefits are otherwise payable
under your Plan, as determined by your employer.

If your employer does change or terminate your Plan, it may decide to set
up a different plan providing similar or different benefits.

YOUR RIGHTS UNDER ERISA

As a participant in your Plan, you are entitled to rights and protection
under ERISA. ERISA provides that Plan participants shall be entitled to:

- Examine, without charge, at your Plan Administrator's office, all
Plan documents -- including pertinent insurance contracts, trust
agreements, annual reports and other documents filed with the IRS
and the U.S. Department of Labor.

- Obtain copies of all Plan documents and other Plan information upon
written request to your Plan Administrator. Your Plan Administrator
may make a reasonable charge for the copies.

- Receive a summary annual report of your Plan's annual financial
report. Your Plan Administrator is required by law to furnish each
participant with a copy of this summary annual report.

In addition to creating rights for Plan participants, ERISA imposes duties
upon the people who are responsible for the operation of your Plan. The people
who operate your Plan, called "fiduciaries" of your Plan, have a duty to do so
prudently and in the interest of you and other participants in, and
beneficiaries of, your Plan.

Another one of your rights relates to the claim appeal procedures
described earlier -- that is, the right to receive written notice if your claim
for benefits should, for any reason, be denied in whole or in part, plus the
right to have your claim reconsidered. Neither your employer nor any person can
discharge you or otherwise discriminate against you in any way to prevent you
from obtaining benefits from your Plan or exercising your rights under ERISA.

Because your rights under ERISA are protected by law, you can also file
suit if the need ever arises. For example, if your Plan Administrator should
fail to furnish within 30 days any documents you have requested in writing, you
can file suit in a federal court. The court may require your Plan Administrator
to pay you up to $110 for each day's delay until the materials are received,
unless the documents were not sent because of matters beyond your Plan
Administrator's control.

You can also seek assistance from the U.S. Department of Labor or file
suit in a federal court if you believe a fiduciary has misused Plan funds or if
your rights under the law are interfered with. Legal action can also be taken in
either a state or federal court if you believe you have been improperly denied a
benefit.

38
<PAGE> 41
The court will decide who pays court costs and legal fees. If you are
successful, the other party may have to pay. But, if you lose -- because, for
example, your case is considered frivolous -- you may have to pay all these
costs and fees on your own.

If you have any questions about your Plan, contact your employer's Human
Resources Department. If you have any questions about your rights under ERISA,
you can contact the nearest area office of the Pension and Welfare Benefits
Administration, United States Department of Labor, listed in your telephone
directory, or the Division of Technical Assistance and Inquiries, Pension and
Welfare Benefits Administration, United States Department of Labor, 200
Constitution Avenue, NW, Washington, DC 20210.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the Shares offered
hereby.

PLAN OF DISTRIBUTION

The Shares covered by this prospectus are being offered to eligible
persons under your Plan. The provisions of your Plan are described above under
"General Information about your Plan" and throughout this prospectus.

DESCRIPTION OF THE SHARES
AND OTHER SECURITIES OF STARWOOD

Shares. Descriptions of the Corporation's common stock and the class B
shares of beneficial interest of the Trust are contained in our Registration
Statements on Form 8-A dated October 3, 1986, and December 21, 1998,
incorporated by reference in this prospectus. See "Where You Can Find More
Information" for information on how to obtain copies of these documents.

Trust Preferred Shares; Partnership Units. The Class A Exchangeable
Preferred Shares of the Trust, par value $.01 per share ("Class A Preferred"),
and the Class B Exchangeable Preferred Shares of the Trust, par value $.01 per
share ("Class B Preferred" and, together with the Class A Preferred, the "Trust
Preferred Shares") were issued in connection with some of our acquisitions and
are directly or indirectly exchangeable on a one-to-one basis (subject to
adjustment) for Shares, subject to our right to elect to pay cash instead of
issuing shares. Shares of Class B Preferred have a liquidation preference of
$38.50 per share and provide the holders with the right, from and after January
2, 2003, to require us to redeem the shares at a price of $38.50. If a holder of
Class B Preferred makes this redemption election after January 2, 2003, we have
the option to issue shares of Class A Preferred instead of cash.

Some of our hotel properties are owned by SLT Realty Limited Partnership
or SLC Operating Limited Partnership. The Trust controls the Realty Partnership
as its sole general partner; the Corporation controls the Operating Partnership
as its sole general partner. Limited partnership interests, or "partnership
units," in the Partnerships were issued in connection with some of our
acquisitions of hotel properties and are together exchangeable on a one-to-one
basis

39
<PAGE> 42
(subject to adjustment) for Shares, subject to our right to elect to pay cash
instead of issuing shares. The partnership units held by the limited partners
are exchangeable for, at our option and subject to the 8% ownership limit,
either cash, Shares representing up to a total of 5.8% of the Shares that would
be outstanding after the exchange, based on the number of Shares outstanding on
December 31, 1998, or a combination of cash and Shares. Partnership units are
also exchangeable on a one-to-one basis at the option of the holders for shares
of Class B Preferred.

As of December 31, 1998, there were outstanding 4,373,457 shares of Class
A Preferred, 3,858,408 shares of Class B Preferred and 783,050 Partnership
Units.

Preferred Stock Purchase Rights. On March 15, 1999, our Board declared a
dividend of one Preferred Stock Purchase Right for each outstanding Corporation
Share and the Corporation entered into a Rights Agreement dated as of March 15,
1999, with ChaseMellon Shareholder Services, L.L.C. as Rights Agent. The
dividend was paid on April 5, 1999, to shareholders of record at the close of
business on that date. The Board also authorized the issuance of one Right for
each Corporation Share issued after the record date and before the earliest of:

- the Distribution Date (as defined below),

- redemption of the Preferred Stock Purchase Rights, or

- April 5, 2009.

Each Preferred Stock Purchase Right entitles the registered holder to
purchase from the Corporation 1/1000th of a share (a "Preferred Fraction") of
the Corporation's Series A Junior Participating Preferred Stock at a purchase
price of $125.00 per Right.

As of the date of this prospectus, the Preferred Stock Purchase Rights (a)
are attached to and can be transferred only with the Corporation's common stock;
(b) are not exercisable, and (c) are represented by the certificates
representing the Corporation's common stock. The Preferred Stock Purchase Rights
will separate from the Corporation's common stock and become exercisable, and
the "Distribution Date" will occur upon the earlier of:

- 10 days following a public announcement that there is an "acquiring
person," which may be a single person or a group of affiliated
persons who have acquired beneficial ownership of 15% or more of the
outstanding common stock of the Corporation; or

- 10 business days (which we may be able to extend) after a tender or
exchange offer commences that, if consummated, would result in a
person or group beneficially owning 15% or more of the outstanding
common stock of the Corporation.

Once a person or group has become an acquiring person, each holder of a
Preferred Stock Purchase Right other than the acquiring person has the right to
receive, upon exercise of the Right, Shares having a market value of twice the
then-current exercise price of the Right, or, in

40
<PAGE> 43
some cases, cash, property or other securities of Starwood. Similarly, unless
specific conditions are met, if after a person or group has become an acquiring
person:

- We engage in a merger or other business combination in which we are
not the surviving corporation;

- We are acquired in a merger or other business combination in which
we are the surviving corporation but as a result of the merger or
combination, all or a part of the Corporation's common stock is
converted into securities of another entity, cash or other property;
or

- 50% or more of our assets or earning power are sold or otherwise
transferred,

then, in any of these events, the Preferred Stock Purchase Rights will become
exercisable for stock of the acquiror having a market value of twice the
then-current exercise price of the Rights, or, in some cases, cash or other
property.

We may redeem all the Preferred Stock Purchase Rights, but not less than
all the Rights, at a price of $.01 per Right at any time before the earlier of:

- 10 days after a person or group first becomes an Acquiring Person;
or

- April 5, 2009.

We have this right only in some cases and only with the support of a majority of
the Directors of the Corporation not affiliated with the acquiring person.

We may, at our option, pay the redemption price in cash, Shares or any
other form of consideration that the Board determines is appropriate.
Immediately upon the Board's election to redeem the Preferred Stock Purchase
Rights, the right to exercise the Rights will terminate and the only right that
a holder of Rights will have will be to receive payment of the redemption price.

Until a Preferred Stock Purchase Right is exercised, the holder of a
Right, as such, has no rights as a shareholder of Starwood, including the right
to vote or to receive dividends or other distributions.

The purchase price payable, and the number of Preferred Fractions or other
securities issuable, upon exercise of the Preferred Stock Purchase Right and the
redemption price are subject to adjustment from time to time to prevent dilution
under circumstances specified in the Rights Agreement.

A full description of all the terms and conditions of the Preferred Stock
Purchase Rights is contained in a Rights Agreement, which is incorporated into
this prospectus by reference and a copy of which was filed with the SEC on March
15, 1999 as an exhibit to our Current Report on Form 8-K dated that date.
Because this is a summary, it is not a complete description of the

41
<PAGE> 44
provisions governing the Preferred Stock Purchase Rights. For a complete
description of all the terms of the Rights, you should carefully read the
complete Rights Agreement.

LEGAL MATTERS

The validity of the Shares offered pursuant to this prospectus will be
passed upon by Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland, our
special Maryland counsel. Sidley & Austin has provided an opinion letter with
respect to your Plan's compliance with ERISA.

EXPERTS

The consolidated balance sheets of Starwood as of December 31, 1998 and
1997 and the consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1998, and schedules, incorporated by reference in this prospectus have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are included herein in reliance upon
their authority as experts in accounting and auditing in giving said reports.

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<PAGE> 45
================================================================================

[STARWOOD LOGO]

200,000 SHARES

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

STARWOOD HOTELS & RESORTS

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

PROSPECTUS

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

================================================================================

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<PAGE> 46
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
Registration Fee........................................ $ 1,266.64
Printing and Engraving Expenses......................... 30,000
Legal Fees and Expenses................................. 45,000
Accounting Fees and Expenses............................ 5,000
Fees and Expenses of Transfer Agent..................... 10,000
Miscellaneous........................................... 45,000
Total............................................. $136,266.64
</TABLE>

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

* Expenses are estimated except for the registration fee.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Maryland General Corporation Law (the "MGCL") permits a Maryland
corporation to include in its charter a provision limiting the liability of its
directors and officers to the corporation and its stockholders for money damages
except for liability resulting from (a) actual receipt of an improper benefit or
profit in money, property or services or (b) active and deliberate dishonesty
established by a final judgment as being material to the cause of action. the
charter (the "Charter") of Starwood Hotels & Resorts Worldwide, Inc. ("the
Corporation") contains such a provision which eliminates such liability to the
maximum extent permitted by the MGCL.

The Maryland REIT Law (the "MRL") permits a Maryland REIT to include in
its declaration of trust a provision limiting the liability of its trustees and
officers to the trust and its shareholders for money damages except for
liability resulting from (a) actual receipt of an improper benefit or profit in
money, property or services or (b) active and deliberate dishonesty established
by a final judgment as being material to the cause of action. The Amended and
Restated Declaration of Trust, as amended (the "Trust Declaration"), of Starwood
Hotels & Resorts (the "Trust") contains such a provision which eliminates such
liability to the fullest extent permitted by the MRL for acts or omissions after
June 6, 1988.

The Charter and Trust Declaration 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 MGCL and MRL, respectively.
The MGCL requires a corporation or a Maryland REIT (unless its charter or
declaration provides otherwise, which the Charter 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

II-1
<PAGE> 47
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) 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
or the Maryland REIT 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 Trust Declaration provides that no Trustee, officer or agent of the
Trust shall be liable or held to any personal liability whatsoever for an
obligation or contract of the Trust. In addition, the Trust Declaration provides
that the provisions of the MGCL which set forth the standard of care required of
directors of corporations organized under the laws of the State of Maryland, and
all other statutory or decisional law which sets forth the standard of care
required of officers, employees and agents for corporations organized under the
laws of the State of Maryland, shall be fully applicable to the Trust, and to
the Trustees, officers, employees and agents of the Trust, as if the Trust were
a corporation organized under the laws of the State of Maryland and its
Trustees, officers, employees and agents were, respectively, directors,
officers, employees and agents of such corporation.

The Corporation and the Trust have entered into indemnification agreements
with their 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 advancement of expenses to
such trustees and executive officers.

ITEM 16. EXHIBITS.

The following exhibits are filed herewith:

II-2
<PAGE> 48
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the Corporation,
amended and restated as of February 1, 1995, as amended and
supplemented through March 26, 1999 (incorporated by reference to
Exhibit 3.2 to the Corporation's and the Trust's Joint Annual Report
on Form 10-K for the year ended December 31, 1998, as amended by the
Form 10-K/A filed May 17, 1998).

4.2 Amended and Restated Declaration of Trust of the Trust, as amended
through April 16, 1999 (incorporated by reference to Exhibit 3.1 to
the Corporation's and the Trust's Joint Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999).

4.3 Amended and Restated Intercompany Agreement dated as of January 6,
1999, between the Corporation and the Trust (incorporated by
reference to Exhibit 3 to the Trust's Registration Statement on Form
8-A filed on December 21, 1998, except that on January 6, 1999, the
Intercompany Agreement was executed and dated as of January 6, 1999).

4.4 Rights Agreement dated as of March 15, 1999 between the Corporation
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent
(incorporated by reference to Exhibit 4 to the Corporation's and the
Trust's Current Report on Form 8-K dated March 15, 1999).

5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP.

5.2 Opinion of Sidley & Austin as to certain ERISA matters.

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in
Exhibit 5.1).

23.3 Consent of Sidley & Austin (included in Exhibit 5.2).

24.1 Powers of Attorney (contained in signature pages hereto).
</TABLE>

ITEM 17. UNDERTAKINGS.

(a) Each of the undersigned Registrants hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of such Registrant
pursuant to the provisions described in Item 15 above, or otherwise, such
Registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. If a claim for indemnification against such liabilities (other
than the payment by the Registrants of

II-3
<PAGE> 49
expenses incurred or paid by a director, officer or controlling person of the
Registrants 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, each 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.

(b) The undersigned Registrants hereby further undertake:

(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;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information in
the 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 end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
(Section 230-424(b) of 17 C.F.R.) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;

provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, 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 Registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act that are incorporated by reference in the
Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act, 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 that 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.

II-4
<PAGE> 50
The undersigned Registrants hereby further undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrants' annual reports pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrants pursuant to Rule 424(b) (1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

II-5
<PAGE> 51
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 the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of White Plains, State of
New York, on this 17 day of November, 1999.

STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.

By: /s/ Barry S. Sternlicht
----------------------------------------
Barry S. Sternlicht
Chairman and Chief Executive Officer

POWERS OF ATTORNEY

Each person whose signature to this Registration Statement appears below
hereby appoints Thomas C. Janson, Jr., Ronald C. Brown and Jonathan H. Yellen,
and each of them, as his or her 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>
<S> <C> <C>
/s/ Barry S. Sternlicht Chairman, Chief Executive November 17, 1999
- ---------------------------------- Officer and Director ----
Barry S. Sternlicht (Principal Executive Officer)

/s/ Ronald C. Brown Executive Vice President and November 17, 1999
- ---------------------------------- Chief Financial Officer (Principal ----
Ronald C. Brown Financial and Accounting Officer)

/s/ Brenda C. Barnes Director November 13, 1999
- ---------------------------------- ----
Brenda C. Barnes

/s/ Jean-Marc Chapus Director November 8, 1999
- ---------------------------------- -----
Jean-Marc Chapus
</TABLE>

II-6
<PAGE> 52
<TABLE>
<S> <C> <C>
/s/ Bruce W. Duncan Director November 17, 1999
- ---------------------------------- ----
Bruce W. Duncan

/s/ Jonathan D. Eilian Director November 17, 1999
- ---------------------------------- ----
Jonathan D. Eilian

/s/ Eric Hippeau Director November 12, 1999
- ---------------------------------- ----
Eric Hippeau

/s/ L. Dennis Kozlowski Director November 17, 1999
- ---------------------------------- ----
L. Dennis Kozlowski

/s/ Michael A. Leven Director November 10, 1999
- ---------------------------------- ----
Michael A. Leven

/s/ George J. Mitchell Director November 10, 1999
- ---------------------------------- ----
George J. Mitchell

/s/ Daniel H. Stern Director November 17, 1999
- ---------------------------------- ----
Daniel H. Stern

/s/ Raymond S. Troubh Director November 17, 1999
- ---------------------------------- ----
Raymond S. Troubh

/s/ Daniel W. Yih Director November 17, 1999
- ---------------------------------- ----
Daniel W. Yih
</TABLE>

II-7
<PAGE> 53
SIGNATURES

STARWOOD HOTELS & RESORTS

By: /s/ Barry S. Sternlicht
----------------------------------------
Barry S. Sternlicht
Chairman and Chief Executive Officer

POWERS OF ATTORNEY

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.

/s/ Ronald C. Brown Vice President, Chief Financial November 17, 1999
- ---------------------------------- Officer and Chief Accounting ----
Ronald C. Brown Officer (Principal Financial and
Accounting Officer)

/s/ Brenda C. Barnes Trustee November 13, 1999
- ---------------------------------- ----
Brenda C. Barnes

/s/ Jean-Marc Chapus Trustee November 8, 1999
- ---------------------------------- -----
Jean-Marc Chapus
</TABLE>

II-8
<PAGE> 54
<TABLE>
<S> <C> <C>
/s/ Bruce W. Duncan Trustee November 17, 1999
- ---------------------------------- ----
Bruce W. Duncan

/s/ Jonathan D. Eilian Trustee November 17, 1999
- ---------------------------------- ----
Jonathan D. Eilian

/s/ Eric Hippeau Trustee November 12, 1999
- ---------------------------------- ----
Eric Hippeau

/s/ L. Dennis Kozlowski Trustee November 17, 1999
- ---------------------------------- ----
L. Dennis Kozlowski

/s/ Michael A. Leven Trustee November 10, 1999
- ---------------------------------- ----
Michael A. Leven

/s/ George J. Mitchell Trustee November 10, 1999
- ---------------------------------- ----
George J. Mitchell

/s/ Daniel H. Stern Trustee November 17, 1999
- ---------------------------------- ----
Daniel H. Stern

/s/ Raymond S. Troubh Trustee November 17, 1999
- ---------------------------------- ----
Raymond S. Troubh

/s/ Daniel W. Yih Trustee November 17, 1999
- ---------------------------------- ----
Daniel W. Yih
</TABLE>

II-9
<PAGE> 55
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of Starwood Hotels &
Resorts Worldwide, Inc. (the "Corporation"), amended and restated as
of February 1, 1995, as amended and supplemented through March 26,
1999 (incorporated by reference to Exhibit 3.2 to the Joint Annual
Report on Form 10-K of the Corporation and Starwood Hotels & Resorts
(the "Trust") for the year ended December 31, 1998, as amended by the
Form 10-K/A filed May 17, 1998).

5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP.

5.2 Opinion of Sidley & Austin as to certain ERISA matters.

23.3 Consent of Sidley & Austin (included in Exhibit 5.2).

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in
Exhibit 5.1).

23.3 Consent of Sidley & Austin (included in Exhibit 5.2).

24.1 Powers of Attorney (contained in signature pages hereto).
</TABLE>

II-10

<PAGE> 1
EXHIBIT 5.1

[On letterhead of Ballard Spahr Andrews & Ingersoll, LLP]

FILE NUMBER
873310

November 17, 1999

Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Avenue
White Plains, New York 10604

Starwood Hotels & Resorts
777 Westchester Avenue
White Plains, New York 10604

Re: Starwood Hotels & Resorts Worldwide, Inc.
Starwood Hotels & Resorts
Registration Statement on Form S-3
-----------------------------------------

Ladies and Gentlemen:

We have served as Maryland counsel to 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, sometimes collectively referred to herein as "Starwood"), in
connection with certain matters of Maryland law arising out of the registration
of up to 200,000 shares (the "Corporation Shares") of common stock, par value
$.01 per share (the "Common Stock"), of the Corporation and up to 200,000 shares
(the "Trust Shares") of Class B Shares of beneficial interest, par value $.01
per share (the "Common Shares"), of the Trust, each of which is attached to a
Corporation Share and trades as a unit consisting of one Corporation Share and
one Trust Share (the "Shares"), covered by the Registration Statement on Form
S-3, as filed by Starwood on or about the date hereof under the Securities Act
of 1933, as amended (the "1933 Act") (the "Registration Statement"). The Shares
may be sold by the Starwood Hotel & Resorts Worldwide, Inc. Savings and
Retirement Plan (the "Plan"). We did not participate in the drafting of the
Plan. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Registration Statement.

<PAGE> 2
Starwood Hotels & Resorts Worldwide, Inc.
Starwood Hotels & Resorts
November 17, 1999
Page 2

In connection with our representation of Starwood, and as a basis for the
opinion hereinafter set forth, we have examined originals, or copies certified
or otherwise identified to our satisfaction, of the following documents
(collectively, the "Documents"):

1. The Registration Statement;

2. The Amended and Restated Declaration of Trust of the Trust (the
"Declaration"), certified as of a recent date by the State Department of
Assessments and Taxation of Maryland (the "SDAT");

3. The charter of the Corporation (the "Charter"), certified as of a
recent date by the SDAT;

4. The Amended and Restated Bylaws of the Trust (the "Trust Bylaws"),
certified as of a recent date by an officer of the Trust;

5. The Amended and Restated Bylaws of the Corporation (the "Corporation
Bylaws"), certified as of a recent date by an officer of the Trust;

6. A certificate of the SDAT, as of a recent date, as to the good
standing of the Trust;

7. A certificate of the SDAT, as of a recent date, as to the good
standing of the Corporation;

8. A certificate executed by an officer of the Trust, dated as of a
recent date;

9. A certificate executed by an officer of the Corporation, dated as a
recent date;

10. The form of certificate representing and evidencing a Share;

11. The Plan;

12. The Intercompany Agreement, in the form incorporated by reference in
the Registration Statement; and

13. Such other documents and matters as we have deemed necessary or
appropriate to express the opinion set forth in this
<PAGE> 3

Starwood Hotels & Resorts Worldwide, Inc.
Starwood Hotels & Resorts
November 17, 1999
Page 3

letter, subject to the assumptions, limitations and qualifications stated
herein.

In expressing the opinion set forth below, we have assumed the following:

1. Each individual executing any of the Documents, whether on behalf of
such individual or any other person, is legally competent to do so.

2. Each individual executing any of the Documents on behalf of a party
(other than Starwood) is duly authorized to do so.

3. Each of the parties (other than Starwood) executing any of the
Documents has duly and validly executed and delivered each of the Documents to
which such party is a signatory, and such party's obligations set forth therein
are legal, valid and binding and are enforceable in accordance with all stated
terms.

4. Any Documents submitted to us as originals are authentic. The form and
content of any Documents submitted to us as unexecuted drafts do not differ in
any respect relevant to this opinion from the form and content of such
Documents as executed and delivered. Any Documents submitted to us as certified
or photostatic copies conform to the original documents. All signatures on all
Documents are genuine. All public records reviewed or relied upon by us or on
our behalf are true and complete. All statements and information contained in
the Documents are true and complete. There has been no oral or written
modification of or amendment to any of the Documents, and there has been no
waiver of any provision of any of the Documents, by action or omission of the
parties or otherwise.

5. The Class B shares of beneficial interest of the Trust, par value $.01
per share, outstanding as of the date hereof (the "Outstanding Trust Shares"),
and shares of the common stock of the Corporation, par value $.01 per share,
outstanding as of the date hereof (the "Outstanding Corporation Shares,"
together with the Outstanding Trust Shares, the "Outstanding Shares") are
validly issued, fully paid and nonassessable. The Shares consist solely of
Outstanding Shares and the Plan will sell no Shares other than the Outstanding
Shares.

<PAGE> 4
Starwood Hotels & Resorts Worldwide, Inc.
Starwood Hotels & Resorts
November 17, 1999
Page 4

6. All certificates and affidavits submitted to us are true, correct and
complete, both when made and as of the date hereof.

The phrase "known to us" is limited to the actual knowledge, without
independent inquiry, of the lawyers at our firm who have performed legal
services in connection with the issuance of this opinion.

Based upon the foregoing, and subject to the assumptions, limitations and
qualifications stated herein, it is our opinion that:

1. The Trust is a real estate investment trust duly formed and existing
under and by virtue of the laws of the State of Maryland and is in good
standing with the SDAT.

2. The Corporation is a corporation duly incorporated and existing
under and by virtue of the laws of the State of Maryland and is in good
standing with the SDAT.

3. The Corporation Shares, to be sold by the Plan, are validly issued,
fully paid and nonassessable.

4. The Trust Shares, to be sold by the Plan, are validly issued, fully
paid and nonassessable.

The foregoing opinion is limited to the substantive laws of the State of
Maryland and we do not express any opinion herein concerning any other law. We
express no opinion as to the applicability or effect of any federal or state
securities laws, including the securities laws of the State of Maryland, any
federal or state laws regarding fraudulent transfers or any real estate
syndication laws of the State of Maryland. To the extent that any matter as to
which our opinion is expressed herein would be governed by any jurisdiction
other than the State of Maryland, we do not express any opinion on such matter.

We assume no obligation to supplement this opinion if any applicable law
changes after the date hereof or if we become aware of any fact that might
change the opinion expressed herein after the date hereof.

This opinion is being furnished to you solely for submission to the
Securities and Exchange Commission as an exhibit to the Registration Statement
and, accordingly, may not

<PAGE> 5
Starwood Hotels & Resorts Worldwide, Inc.
Starwood Hotels & Resorts
November 17, 1999
Page 5

be relied upon by, quoted in any manner to, or delivered to any person or
entity without, in each instance, our prior written consent.

Very truly yours,

Ballard Spahr Andrews & Ingersall, LLP

<PAGE> 1
EXHIBIT 5.2

[S I D L E Y & A U S T I N L E T T E R H E A D]

November 16, 1999

Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Avenue
White Plains, New York 10604

Ladies and Gentlemen:

You have requested our opinion with respect to the compliance of the
written documents constituting the Starwood Hotels & Resorts Worldwide, Inc.
Savings and Retirement Plan, as adopted by the employers of persons who are
employed at various hotel properties that are managed or operated by Starwood
Hotels & Resorts Worldwide, Inc. (the "Plan"), with the requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
pertaining to such provisions. A description of the Plan is contained in the
prospectus forming a part of the Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission with respect to the Plan. Such
description is incorporated herein by reference.

In our opinion the provisions of the written documents constituting the
Plan are in compliance with the requirements of ERISA pertaining to such
provisions.

We hereby consent to the filing of this opinion letter as an exhibit to
the registration statement on Form S-3 being filed by you with the Securities
and Exchange Commission to register the offer and sale of Shares (as therein
defined) pursuant to, and interests in, the Plan.

Very truly yours,

SIDLEY & AUSTIN

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated July 9,
1999, on the financial statements and financial statement schedules included in
Starwood Hotels & Resorts Worldwide, Inc. and Starwood Hotels & Resorts Joint
Current Report on Form 8-K filed July 23, 1999 and to all references to our Firm
included in this Registration Statement.

/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP

New York, New York
November 15, 1999