AGREEMENT AND GENERAL RELEASE

1.

RESIGNATION . Executive hereby irrevocably and voluntarily resigns his employment with the Company and resigns his position as a Director of the Company. Executive’s last day of employment with Company and the effective date of his resignation from the Board of Directors shall be March 31, 2007 (hereinafter, the “Resignation Date”). The Company and Executive both hereby agree to waive any and all notice requirements contained in the Employment Agreement. Effective as of such date, Executive hereby resigns from all officerships, directorships, trusteeships and other positions he holds, in whole or in part, by virtue of his association with the Company and its subsidiaries, affiliates or other related entities, and he shall execute and deliver such additional documents or instruments, if any, as may be requested by the Company to confirm or effectuate any such resignations.

2.

TERMINATION OF EMPLOYMENT AGREEMENT . Except as provided for in this Agreement, the Employment Agreement is terminated and superseded by this Agreement.

3.

COMPENSATION; EQUITY INTERESTS .

a.

The Company agrees to reimburse Executive for any unused vacation days, as well as any business expenses pursuant to Sections 3.5(b) and (c) of his Employment Agreement and incurred by him on or before the Resignation Date, to the extent permitted under his Employment Agreement, and in accordance with the Company’s policies and practices, upon submission by him of appropriate documentation. Other than those amounts due and payable referenced in the preceding sentence, Executive agrees that the following compensation represents the sole and entire payment and compensation due or to become due to Executive in connection with his employment and the termination thereof, and no further or other payments, compensation, bonuses, vacation pay or benefits are or shall become due or payable at any time by the Company, other than as provided in this Agreement. In consideration for the execution by Executive of this Agreement, and his compliance with the promises made herein, Executive and the Company agree as follows:

i.

BASE SALARY . The Company has paid Executive $250,000, one quarter of his base salary at the current rate of $1,000,000 per annum, less applicable withholding of taxes, for the first quarter of 2007. Executive agrees that he has been paid all base salary that is owed to him and the Company shall make no additional payments of base salary to Executive.

ii.

ANNUAL INCENTIVE PROGRAM; RESTRICTED STOCK AWARDS; DEFERRED BONUS UNITS .

1.

Executive shall be paid cash incentive compensation for 2006 in the gross amount of $2,000,000 (less applicable withholding), payable within three (3) business days after execution of this Agreement. This amount represents Executive’s entire cash incentive compensation for 2006 pursuant to Section 3.2(a) of the Employment Agreement. The Compensation Committee of the Board of Directors has determined, pursuant to Section 5.1(a) of the Annual Incentive Plan for Certain Executives (the “Executive Plan”), as amended and restated as of January 1, 2005, to defer 0% of such bonus payment (and therefore no amount of such bonus is subject to Section 5.2 of the Executive Plan).

2.

Executive has received 65,236 restricted stock units under the 2004 Long-Term Incentive Compensation Plan (“2004 LTICP”) which have vested prior to the Resignation Date. Executive’s rights and obligations with respect to such vested restricted stock units, including but not limited to the exchange of such units for shares of Common Stock of the Company, shall be governed by the 2004 LTICP.

3.

Executive has been credited with a total of 8,723 deferred units in a Deferred Unit Account maintained pursuant to the Executive Plan, which have vested prior to the Resignation Date. Executive’s rights and obligations with respect to such vested deferred units including payment in respect of such units pursuant to Section 5.3 of the Executive Plan in shares of Company Stock, are governed by the Executive Plan.

4.

Notwithstanding any other agreement to the contrary, all stock options granted under the 2004 LTICP or otherwise, all unvested restricted stock units, all unvested deferred bonus units, and all unpaid portions of the 2007 base salary shall be forfeited.

5.

All amounts deferred by Executive pursuant to the Starwood Hotels & Resorts Worldwide, Inc., Deferred Compensation Plan (the “Deferred Compensation Plan”) or pursuant to the Starwood Hotels & Resorts Worldwide, Inc. Savings and Retirement Plan (the “Savings and Retirement Plan”), to the extent applicable, shall be distributed in accordance with such plan and the elections previously made by Executive with respect thereto (including in a manner that will not subject such distributions to any excise tax or additional payment pursuant to 409A).

6.

Company shall not maintain, nor shall it continue to pay the premiums on, the life insurance policy maintained pursuant to Section 3.3 of the Employment Agreement. The Company shall take all actions reasonably requested by Executive necessary to transfer any and all rights or interests it may have with respect to such policy as Executive directs at no cost to Executive.

7.

Executive’s participation, and if applicable Executive’s dependent(s)’ coverage, under all employee health benefit plans sponsored by the Company shall end as of March 31, 2007, provided, however, that Executive shall receive separate notification from the Company regarding Executive’s and Executive’s dependent(s)’ right to continue participation in any group health care benefit plan sponsored by the Company at Executive’s and/or Executive’s dependent(s)’ own expense under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) subject to any applicable requirements for continuation of coverage as set forth by COBRA .

4.

RELEASES .

a.

RELEASE OF COMPANY RELEASEES . Executive, on behalf of himself and his heirs, executors, administrators, distributees and legatees, hereby agrees not to sue the Company or any of its subsidiaries, affiliates or other related entities (whether or not such entities are wholly owned) or any of the past, present or future directors, officers, administrators, trustees, fiduciaries, employees, agents or attorneys of the Company or any of such other entities, or the predecessors, successors or assigns of any of them (hereinafter referred to as the “Company Releasees”), and agrees to release and discharge, fully, finally and forever, the Company Releasees from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands of any nature whatsoever, in law or in equity, both known and unknown, asserted or not asserted, foreseen or unforeseen, which Executive ever had or may presently have against any of the Company Releasees arising from the beginning of time up to and including the effective date of this Release, including, without limitation, all matters in any way related to the Employment Agreement, Executive’s employment by the Company and any of its subsidiaries, affiliates or other related entities, and the cessation of Executive’s employment with the Company and any of its subsidiaries, affiliates or other related entities, and including, without limitation, any and all claims arising under the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Family and Medical Leave Act, the Americans With Disabilities Act, the Employee Retirement Income Security Act of 1974, the New York State Human Rights Law (Executive Law Art. 15, Sec. 290 et seq.) or any other federal, state, local or foreign statute, regulation, ordinance or order, or pursuant to any common law doctrine; provided, however, that nothing contained in this Release shall apply to, or release the Company Releasees from any vested benefit pursuant to the Savings and Retirement Plan or the Deferred Compensation Plan. Nothing contained in this Paragraph shall release or discharge the Company Releasees from any rights Executive may have to indemnification for any acts or omissions during his employment pursuant to Section 7.11 of the Employment Agreement. Executive agrees that he has no present or future right to employment with the Company or any of the other Company Releasees and that he will not apply for or otherwise seek employment with any of them. Executive expressly represents and warrants that he is the sole owner of the actual and alleged claims, demands, rights, causes of action and other matters that are released herein; that the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and that he has the full right and power to grant, execute and deliver the general release, undertakings and agreements contained herein. Notwithstanding anything herein to the contrary, the release in this Paragraph shall not apply to any other claims of any kind which the Executive may have or may in the future have by virtue of rights and covenants under this Agreement or to any agreement made in connection herewith.

b.

RELEASE OF EXECUTIVE . Subject to the accuracy of the representations and warranties made by Executive herein, the Company Releasees hereby release and forever discharge Executive from any and all claims arising out of Executive’s exercise of any restricted stock awards or stock option grants during his employment with the Company prior to the Resignation Date. Notwithstanding anything herein to the contrary, the release in this Paragraph shall not apply to any other claims of any kind which the Company may have or may in the future have by virtue of rights and covenants under this Agreement or to any agreement made in connection herewith.

5.

RESTRICTIVE COVENANTS .

a.

NO ACQUISITIONS, BENEFICIAL OWNERSHIP, MERGERS OR OTHER BUSINESS COMBINATION . During the two-year period commencing from the Effective Date of this Agreement, Executive will not, directly or indirectly (whether or not pursuant to any legally binding agreement or commitment), (i) acquire, or offer to acquire, beneficial ownership (as defined under Section 13D of the Securities Exchange Act of 1934) of any equity securities of the Company, (ii) acquire, or offer to acquire, beneficial ownership of any options or other rights to acquire any equity securities of the Company (whether or not exercisable only after the passage of time or the occurrence of an event), (iii) offer to enter into any merger, business combination, sale of all or substantially all assets, or similar transaction, involving the Company or any acquisition of voting control of the Company (a “Restricted Transaction”), (iv) directly or indirectly participate in, or cause the formation of, any group (as defined under Section 13D of the Securities Exchange Act of 1934) which seeks to do any of the foregoing or (v) propose, or publicly announce or otherwise disclose any request for permission or any consent in respect of any of the foregoing. Nothing in this Agreement will prevent or prohibit the acquisition, receipt or exchange by Executive of beneficial ownership of any equity securities of the Company from the Company or pursuant to existing contracts to which the Company or any of its subsidiaries, affiliates or other related entities is a party.

B.

NONCOMPETITION . Executive agrees that for a period of two years from the Effective Date (the “Noncompetition Period”), Executive shall not in any manner, directly or indirectly (whether as an officer, director, employee, investor, consultant, or otherwise), engage or be engaged, or assist any other person, firm, corporation or enterprise in engaging or being engaged, in any business (a “Competing Business”) in which Executive w