Caesars executive sues Starwood for stock options

Wednesday, March 22, 2000 | 10:24 a.m.

A Caesars Palace executive is seeking an order to force its former owner, Starwood Hotels & Resorts Worldwide Inc. of White Plains, N.Y., to award him a stock option incentive plan.

In a Clark County District Court suit, David J. Totaro, who was hired last May as Caesars' senior vice president of marketing for a two-year term, alleged Starwood had no intention of granting him the stock options and only used the incentive plan to induce high-quality personnel to join so it could sell Caesars Palace at a more attractive price.

Caesars Palace was sold along with most other Caesars World properties to Park Place Entertainment Corp. last year for $3 billion.

The suit said Starwood had agreed to grant Totaro a 10-year stock option to buy 10,000 shares of Starwood common stock at an exercise price equal to the stock's closing price on May 10, 1999, and a second option to buy an additional 10,000 shares on May 10, 2000.

But Totaro said he was entitled to buy the additional 10,000 shares on Dec. 29 without having to wait for the anniversary of his employment agreement because the agreement contained a provision that said he could do so if there was a change of company control. The suit said Caesars' sale constituted a change of control of Starwood's gaming properties.

Totaro, who said his repeated attempts to get the stock options from Starwood failed, alleged Merrill Lynch, the administrator of Starwood's incentive plan, told him the company never registered stock options for him.

Starwood officials could not be reached for comment.