Exhibit 10.4
[Sunstone Hotel Investors, Inc.
Letterhead]
Sent Via Email
Only
January 10, 2006
Andrew W. Gross
2665 Zorada Drive
Los Angeles, CA 90046
Dear Andrew:
We are extremely pleased to extend
you an offer of employment as Senior Vice President – General
Counsel with S UNSTONE H OTEL I NVESTORS , I NC . located in San Clemente, California (the
“Company” or “Sunstone”). You will also
serve as Senior Vice President–General Counsel of Sunstone
Hotel Partnership, LLC, the Company’s operating partnership
(the “Operating Partnership”). Your start date will be
February 1, 2006. As General Counsel, your primary
responsibilities will be to manage all internal aspects of the
Company and the Operating Partnership which involve legal
oversight, as well as oversee relationships with and work product
from external law firms which represent Sunstone or the Operating
Partnership, including in real estate transactions, mortgage
financings, securities offerings, litigation and other corporate
transactions and matters.
In your position as General Counsel,
you will report directly to the Chief Executive Officer or, at the
option of the Chief Executive Officer and if the Company’s
other senior executives so report, the President of the Company.
Your annual salary will be $300,000 (as it may be adjusted from
time to time as provided herein, the “Base Salary”) and
will be paid at such intervals as the Company pays executive
salaries generally. You will receive a documented performance
review each year beginning in February 2007. At the time of each
annual review, your base salary may be increased in the
Company’s sole discretion; provided, however, that you
will be entitled to any annual cost-of-living increases in base
salary that are granted to senior executives of the Company
generally.
As part of your annual compensation,
you will participate in the Sunstone Hotel Investors’ bonus
program and other programs applicable to senior executives of the
Company, and you will be eligible to receive an annual cash bonus
in an amount up to the equivalent of 75% of your annual base salary
as in effect from time to time, with a target bonus of 50% of your
annual base salary. Your annual bonus will be based upon both your
individual performance and Sunstone’s overall financial
performance.
Andrew W. Gross
January 10, 2006
Page 2 of 4
In addition to your base salary and
annual bonus and subject to approval by the compensation committee
of the Board of Directors, you will receive an initial stock grant
with a current market value of $1,000,000 (with the stock valued
based on the average closing price of the Company’s common
stock on the New York Stock Exchange for the twenty consecutive
trading days ending on the third trading day prior to the date of
approval of the grant). Your initial stock grant will vest in equal
installments over four (4) years, beginning on
February 1, 2007 and continuing, subject to your continued
employment with Sunstone and as otherwise described in this offer
letter, to final vesting on February 1,2010. You will be
entitled to receive any quarterly dividends paid with respect to
the grant (including the unvested portion), beginning with the
first dividend payment after the approval of your stock grant. If
the Board of Directors approves an annual restricted stock program
and/or other equity awards subsequent to your start date, you will
also be eligible to receive additional annual stock or other equity
awards, as applicable.
Effective immediately, you will be
eligible to participate in the Company’s health, dental,
life, vision, accidental death, dismemberment and disability plans,
other welfare benefit plans and incentive, savings and retirement
plans, and to receive such fringe benefits and
perquisites
