Common use of Salary; Additional Compensation; Perquisites and Benefits Clause in Contracts

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of the Compensation Committee, upon the Executive’s individual performance. The Executive shall have the opportunity to earn an annual bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d) At the Board’s sole discretion, Executive shall be eligible for stock option grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however , the Company or the Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 210,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - — 25% of base salary; internal plan - 75plan: 50% of base salary; target - 125— 75% of base salary; and maximum bonus amount - 150— 100% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. The Compensation Committee has granted to the executive, effective on the commencement date, options to purchase 50,000 shares of the common stock of the company at an exercise price equal to the fair market value on the commencement date. Such options shall vest over three years as follows: First Anniversary of the Commencement Date 33-1/3% Vested Second Anniversary of the Commencement Date 66-2/3% Vested Third Anniversary of the Commencement Date 100% vested Such options shall be exercisable, vest and in all other respects shall be subject to the terms and conditions of the incentive plan. (2) On the Commencement Date the Company shall issue to the executive 15,000 shares of the Company’s common stock (the “Restricted Common Stock”). Subject to the Executive’s continued employment [and the other terms of the Company’s Restricted Stock Plan] the Restricted Common Stock shall vest over three years as follows: First Anniversary of the Commencement Date 33-1/3% Vested Second Anniversary of the Commencement Date 66-2/3% Vested Third Anniversary of the Commencement Date 100% vested [The Restricted Stock shall in all other respects be governed by the terms of the Company’s Restricted Stock Plan] (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i3(g) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(g) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 425,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125100% of base salary; and maximum bonus amount - 150125% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. As a returning employee, you will be given full credit for your previous service in determining length of service for employee benefits. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i3(g) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(g) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s 's or the Partnership’s LLC's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, -------- however , the Company or the PartnershipLLC, as the case may be, shall be relieved of this ------- obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 285,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn a cash bonus equal to an annual bonus in the following amounts: threshold target - 25amount between 0% and 100% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. . (c) In addition to the foregoing bonus amountsreferenced in Paragraph 3(b) above, the Executive will be eligible to receive participate in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon Company’s Development Incentive Plan on terms agreed to by the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Chief Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal yearsOfficer. (cd) As a signing bonus the Executive will be granted on the Commencement Date an amount of restricted stock equal to $225,000 based on the closing price of the shares of the Company’s common stock on the Commencement Date. The shares granted pursuant to this Paragraph 3(c) shall fully vest on March 1, 2006 and shall not subject to Section 5 or any other conditions. (e) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, deferred compensation plans, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (df) At the Board’s sole discretion, The Executive shall be eligible for stock option and restricted stock award grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof.. All such grants shall be at the discretion of the Board. Executive shall receive a separate option agreement governing any such grants. As of the Commencement Date, the Executive will be granted (i) 20,000 shares of restricted stock of the Company which will vest annually on a ratable basis over three years and (ii) 25,000 options in the Company’s stock which will vest annually on a ratable basis over three years. Subject to annual Board approval which shall be solely at the Board’s discretion, it is contemplated that Executive will be eligible for future annual grants of 20,000 shares of restricted stock and 25,000 options in the Company’s stock, (eg) The Company and the Partnership LLC will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (fh) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive., (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i3(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(i) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the PartnershipLLC’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,00025,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost. While employed by the Company, Executive will be covered by the directors’ and officers’ liability insurance policy on the same terms and conditions as are all other Executives of the Company. If the Company decides to not longer maintain directors’ and officers’ liability insurance policy, the Company will notify Executive.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 200,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn a cash bonus equal to an annual bonus in the following amounts: threshold target - 25amount between 0% of base salary; internal plan - and 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, deferred compensation plans, the Interstate Executive Real Estate Fund, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option and restricted stock award grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. All such grants shall be at the discretion of the Board. Executive shall receive a separate option agreement governing any such grants. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i3(g) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(g) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the PartnershipLLC’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,00025,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 200,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 12585% of base salary; and maximum bonus amount - 150100% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (2) In connection with the spin-off of the Company from CapStar Hotel Company, the Executive received options to purchase 27,500 shares of common stock of the Company (the "Pre-Spinoff Awards"). The Pre-Spinoff Awards will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Spin-Off Date. (3) The Compensation Committee has granted to the Executive, effective on the Commencement Date, options to purchase 47,500 shares of the common stock of the Company at an exercise price equal to the fair market value at the time of grant. Subject to the terms of this Agreement as to the acceleration of vesting of stock options, such options shall vest as follows: First Anniversary of the Commencement Date 33-1/3% vested Second Anniversary of the Commencement Date 66-2/3% vested Third Anniversary of the Commencement Date 100% vested Such options shall be exercisable, subject to vesting and continued service, for ten (10) years from the date of grant and in all other respects shall be subject to the terms and conditions of the Incentive Plan. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i3(g) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(g) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 424,360 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 7560% of base salary; target - 125100% of base salary; and maximum bonus amount - 150125% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 450,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d) At the Board’s sole discretion, Executive shall be eligible for stock option grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, Executive shall pay (i) be granted a car allowance of up to $40,000 annually 700 per month (to be increased annually by the prior year’s consumer price index index, (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (ih) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i4(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however , the Company or the Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership Subsidiary will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 96,000 per annum, subject to annual review by the Compensation Committee of the Board of Directors of the Company (the “"Compensation Committee”), ") and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Companybonus. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of the Compensation Committee, upon 's determination of actual performance as measured against goals and shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25of up to 100% of his base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or for the Partnership for their management employees or the general benefit of the their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. To the extent permitted by law, the Executive shall be given credit for his years of service to any predecessor entity of the Company in determining all waiting periods and vesting periods under such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's 1998 Stock Incentive Plan and in accordance with the terms thereof. (e) . The Company and shall recommend to the Partnership will reimburse Committee designated in accordance with such plan that the Company grant to the Executive, in accordance with their standard policies from time effective on the initial public offering of Company shares, options to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination purchase 45,000 shares of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee common stock of the Company or at an exercise price equal to the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition initial public offering price of such action, suit or proceeding upon stock (the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law"Option Price"). Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference Subject to the financial ability terms of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term Section 6(f) of this Agreement a directors’ and officers’ liability insurance policyas to the acceleration of vesting of stock options, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors such options shall vest on the earlier of the Company following calendar or value-appreciating schedules: i) Calendar Schedule: Four Years after the Partnership; providedgrant date, however , the Company or the Partnership, options are fully vested as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment 50% of the Company or applicable shares; Five Years after the Partnershipgrant date, it cannot be obtained at a reasonable costoptions are fully vested for the remaining 50% of the shares.

Salary; Additional Compensation; Perquisites and Benefits. (a) During Subject to the provisions of Section 5(g) of the Agreement, during the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 230,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125100% of base salary; and maximum bonus amount - 150125% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (di) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. The Compensation Committee granted to the Executive, effective on the date of the consummation of the merger (the "Merger") contemplated by the Agreement and Plan of Merger among American General Hospitality Corporation and American General Hospitality Operating Partnership, L.P. and CapStar Hotel Company ("CapStar"), CapStar Management Company, L.P. and CapStar Management Company II, L.P. dated as of March 15, 1998, as amended (the "Merger Date"), options to purchase 120,936 shares of the common stock of the Company at an exercise price equal to the fair market value at the time of grant. Subject to the terms of this Agreement as to the acceleration of vesting of stock options, such options shall vest as follows: First Anniversary of the Merger Date 33-1/3% Second Anniversary of the Merger Date 66-2/3% Third Anniversary of the Merger Date 100% vested Such options shall be exercisable, subject to vesting and continued service, for ten (10) years from the date of grant and in all other respects shall be subject to the terms and conditions of the Incentive Plan. (ii) By executing this Agreement, the Executive hereby agrees to waive the accelerated vesting of stock options granted to the Executive under the CapStar Hotel Company Equity Incentive Plan (the "CapStar Plan"), which would otherwise occur as a result of the consummation of the Merger, and such options shall continue to vest in accordance with their terms and the terms of the CapStar Plan. Such pre-Merger grants of options (the "Pre- Merger Awards") will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Merger. (iii) On the Merger Date, the Company issued to the Executive 10,146 shares of common stock of the Company (the "Restricted Stock"). The Restricted Stock vests in three nearly equal installments on each of the first, second and third anniversaries of the Merger Date, conditioned upon the Executive's continuing to be employed by the Company on such dates or as otherwise provided by this Agreement. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, Executive shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy provided with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 an automobile comparable to the Executiveautomobile provided to Executive by CapStar. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i3(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the Partnership, as the case may be, shall be -------- ------- relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 375,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn a cash bonus equal to an annual bonus in the following amounts: threshold target - 25amount between 0% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, deferred compensation plans, the Interstate Executive Real Estate Fund, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option and restricted stock award grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. All such grants shall be at the discretion of the Board. Executive shall receive a separate option agreement governing any such grants. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. Executive will also be reimbursed for certain reasonable relocation expenses including house-hunting trips, real estate costs, and moving fees in connection with Executive’s move to the Washington, DC area at the beginning of his employment. Finally, the Company shall pay for the Executive’s apartment offered through BridgeStreet for one year from the hire date. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 7,500 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive in accordance with the terms and conditions of such life insurance policy and (ii) up to $12,000 7,500 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability insurance policy whichwith a disability benefit payable to the executive in accordance with the terms and conditions of such disability insurance policy. The Company makes no representations or warranties that the insurance benefits contained in the insurance policies supplied pursuant to this section will be paid under any particular conditions, upon and the Company shall not be deemed a determination guarantor of such benefits. Such benefits shall be payable in accordance with the terms of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executiverespective insurance policy. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i3(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(h) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the PartnershipLLC’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,00025,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost. (i) The Company shall pay Executive a one-time bonus of $63,000 on or before June 1, 2005. (j) During the Term, the Company and the LLC shall reimburse the Executive for monthly and/or annual dues (not to include any meal, drink, golf, tennis or other activity allowances) paid by the Executive to maintain his membership in the Washington Golf and Country Club; provided however, that the total annual reimbursement provided to Executive pursuant to this Agreement (exclusive of the one-time initiation dues) shall not exceed $500 per month. Executive shall be solely responsible for any and all tax liabilities and consequences of such reimbursements, and neither the Company nor the LLC makes any representations or warranties to the Executive concerning the tax consequences of any reimbursements provided pursuant to this Section 3(i). (k) All of the unvested Restricted Shares granted to the Executive pursuant to the Restricted Stock Agreement, dated as of April 2, 2004, executed by the Company, the LLC and the Executive shall immediately vest as of the date of this Agreement and shall become free from all contractual restrictions. (l) The Executive’s unvested 66,666 options in the Company’s common stock which were part of a grant of 100,000 options granted to the Executive on April 1, 2004, will immediately vest in connection with the execution of this Agreement.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 225,000 per annum, subject to annual review by the Compensation Committee of the Board of Directors of the Company (the “"Compensation Committee”), ") and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during During the Term, the Executive will shall be eligible to receive a cash bonus from ("Bonus") as follows: Executive shall participate in such annual Bonus plans or programs as may be adopted by the Company. The award and amount 's Compensation Committee (collectively with any of such bonus shall its successors in authority, the "Committee") from time to time for senior executives, provided, however, that conditioned upon attainment of target performance measure requirements based on one or more performance measures as may be determined by the Compensation Committee Committee, the target Bonus for each calendar year subsequent to 2004 during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus Term for which Executive shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share and EBITDA. The remainder of the Executive’s annual bonus eligible shall be determined, at the discretion of the Compensation Committee, upon the Executive’s individual performance. The Executive shall have the opportunity to earn an annual bonus in the following amounts: threshold target - 2540% of Executive's base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal salary (partial years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal yearspro rated). (c) During The Company shall award to Executive 18,535 shares of restricted stock units under the TermCompany's 1998 Stock Incentive Plan (the "Equity Incentive Plan") (or successor plan) to be issued as follows: (i) Upon or as soon as practicable after the Effective Date, 3,707 shares of restricted common stock in the Company; (ii) On or as soon as practical after the first, second, third and fourth anniversaries of the Effective Date, provided that Executive will participate remains employed in all plans now existing the position or hereafter adopted positions contemplated in this Agreement on each such anniversary of the Effective Date, an annual award of 3,707 shares of restricted common stock in the Company; and (iii) The restricted common stock in the Company awarded pursuant to Sections 4(c)(i) and (ii) above shall be fully vested upon issuance. Executive shall be entitled to no further issuances of restricted common stock of the Company if Executive is not employed by the Company in the positions contemplated in this Agreement on of the first, second, third or fourth anniversaries of the Partnership for their management employees or Effective Date. Executive acknowledges and agrees that restricted common stock of the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and Company may be subject to various restrictions under the same qualifications as other senior executive officersCompany's Equity Incentive Plan, and under state and federal law and regulations promulgated thereunder. Executive acknowledges receipt of a copy of the Equity Incentive Plan. (d) At The Company shall grant options ("Options") under the Board’s sole discretionCompany's Equity Incentive Plan (or successor plan) to Executive as follows: (i) Upon the Effective Date, Options to purchase 80,000 shares of common stock of the Company. Such Options shall have an exercise price per share equal to the closing market price for the Company's common stock (as measured by reference to the New York Stock Exchange) on the trading day immediately prior to the Effective Date. Provided that Executive shall be eligible for stock option grants from time to time remains employed by the Company in the positions contemplated by this Agreement on the fourth anniversary of the Effective Date, 40,000 of the Options, less any Options that vest pursuant to the Company’s Incentive Plan following provisions of this paragraph, will vest on such date. Provided that Executive remains employed by the Company in the positions contemplated by this Agreement on the fifth anniversary of the Effective Date, the remaining 40,000 of such Options will vest on such date. Notwithstanding any vesting schedule set forth in this Agreement, at any time after the second anniversary of the Effective Date and in accordance prior to the fourth anniversary of the Effective Date, (a) 20,000 of the Options to be issued pursuant to this Section 4(d)(i)will vest on the 60th consecutive trading day the market price of the common stock of the Company (as measured by reference to the then applicable exchange) closes with a value that is at least twice the exercise price of such Options, and (b) 40,000 of the Options issued pursuant to this Section 4(d)(i), less any such options that may have previously vested pursuant to Section 4(d)(i)(a) above, will vest on the 60th consecutive trading day the market price of the common stock of the Company (as measured by reference to the then applicable exchange) closes with a value that is at least three times the exercise price of such Options. (ii) Any subsequent issuances of Options shall be subject to the discretion of the Committee, including the Committee's discretion with respect to the number, terms thereofand conditions of any such Options. (e) Nothing in the foregoing provisions of this Section 4 shall be deemed to prevent the Board in its sole discretion from awarding any additional or other amounts of cash, restricted stock or Options or other equity based awards in respect of any whole or partial year during the Term. (f) The Company and the Partnership will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (fg) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Company shall indemnify the Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, under the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee law of the Company or the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership State of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however , the Company or the Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable costWashington.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 350,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn a cash bonus equal to an annual bonus in the following amounts: threshold target - 25amount between 0% of base salary; internal plan - 75% of base salary; target - and 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, deferred compensation plans, the Interstate Executive Real Estate Fund, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option and restricted stock award grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. All such grants shall be at the discretion of the Board. Executive shall receive a separate option agreement governing any such grants. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. Executive will also be reimbursed for certain reasonable relocation expenses including house-hunting trips, real estate costs, and moving fees in connection with Executive’s move to the Washington, DC area at the beginning of his employment. Finally, the Company shall pay for the Executive’s apartment offered through BridgeStreet for one year from the hire date. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 7,500 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 1,000,000 payable to a beneficiary designated by the Executive in accordance with the terms and conditions of such life insurance policy and (ii) up to $12,000 7,500 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability insurance policy which, upon with a determination disability benefit of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 1,000,000 payable to the Executiveexecutive in accordance with the terms and conditions of such disability insurance policy. The Company makes no representations or warranties that the insurance benefits contained in the insurance policies supplied pursuant to this section will be paid under any particular conditions, and the Company shall not be deemed a guarantor of such benefits. Such benefits shall be payable in accordance with the terms of the respective insurance policy. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i3(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(h) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the PartnershipLLC’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,00025,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 285,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (2) By executing this Agreement, the Executive hereby agrees to waive the accelerated vesting of stock options and shares of restricted stock granted to the Executive under the American General Hospitality Corporation 1996 Incentive Plan, which would otherwise occur as a result of the consummation of the Merger. In consideration of this waiver, such options and shares of restricted stock will vest in three (3) nearly equal installments beginning on the first anniversary of their respective original dates of grant. In addition, such pre-Merger grants of options and shares of restricted stock (the "Pre- Merger Awards") will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Merger. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The CompanyIn the event that any payment, at its sole costbenefit or other right or compensation due to the Executive hereunder or otherwise from the Company including, shall pay (i) up without limitation, the accelerated vesting of the Executive's rights with respect to $40,000 annually (to be increased annually by stock options, restricted stock or any other benefit or compensation, results in the prior year’s consumer price index (“CPI”)) toward the premium imposition of a life insurance policy with a death benefit of at least $2,000,000 an excise tax payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination under Section 4999 of the Executive’s Disability (as hereinafter defined)Internal Revenue Code, pays at least $2,000,000 or any successor or other provision with respect to "excess parachute payments" within the meaning of Section 280G(b) of the Internal Revenue Code, the Company shall make a cash payment to the ExecutiveExecutive in the amount of such excise tax (the "Excise Tax Payment") and shall also make a cash payment to the Executive in an amount equal to the total of federal, state and local income and excise taxes for which the Executive may be liable on account of such Excise Tax Payment. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(isection 4(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(isection 4(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 325,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn a cash bonus equal to an annual bonus in the following amounts: threshold target - 25amount between 0% of base salary; internal plan - 75% of base salary; target - and 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, deferred compensation plans, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option and restricted stock award grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. All such grants shall be at the discretion of the Board. Executive shall receive a separate option agreement governing any such grants. The Executive shall be granted 25,000 restricted shares in the Company on the Commencement Date and these shares will immediately vest and become unrestricted. In addition, the Executive shall be granted 40,000 restricted shares in the Company on the Commencement Date and these shares will vest equally on the first, second and third anniversary of the date of grant as more fully described in a restricted stock agreement pursuant to which the shares will be granted. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. Executive will also be reimbursed for certain reasonable relocation expenses expected to be approximately $75,000 including real estate costs to sell Executive’s home in Florida and moving fees in connection with Executive’s move to the Washington, DC area at the beginning of his employment. Executive acknowledges he already has a home in the Washington, DC area and will not need to incur costs associated with finding a new residence. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, Company shall pay (i) up to $40,000 7,500 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive in accordance with the terms and (ii) up conditions of such life insurance policy. The Company makes no representations or warranties that the insurance benefits contained in the insurance policies supplied pursuant to $12,000 annually (to this section will be increased annually by paid under any particular conditions, and the prior year’s CPI) toward Company shall not be deemed a guarantor of such benefits. Such benefits shall be payable in accordance with the premium of a disability policy which, upon a determination terms of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executiverespective insurance policy. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i3(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(h) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the PartnershipLLC’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,00025,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 190,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for granted 500,000 stock options in the Company on December 11, 2001 at the then current market price. The options will vest equally on the first, second and third anniversary of the date of grant. Annual stock option grants from time to time pursuant to thereafter shall be at the Company’s Incentive Plan and in accordance with discretion of the terms thereofBoard. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The CompanyCompany (or MHC), at its sole cost, shall pay (i) up to $40,000 20,000 annually (to be increased annually by the prior year’s 's consumer price index (“index, "CPI”)") toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 20,000 annually (to be increased annually by the prior year’s 's CPI) toward the premium of a disability policy which, upon a determination of the Executive’s 's Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. The premiums for such insurance policies are to be split equally between the Company and MHC for so long as the Executive is employed by MHC. While the Executive is employed by both the Company and MHC, the Company and MHC, in the aggregate, shall not pay in excess of $20,000 annually (as increased by CPI) toward each premium. (h) The Executive shall be granted a car allowance of up to $1,700 1,000 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company (or MHC) for the use of the Executive. The monthly lease payment for such car is to be split equally between the Company and MHC for so long as the Executive is employed by MHC. While the Executive is employed by both the Company and MHC, the Company and MHC, in the aggregate, shall not pay in excess of $1,000 monthly toward such car lease. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s 's or the Partnership’s LLC's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however -------- however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this ------- obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 400,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn a cash bonus equal to an annual bonus in the following amounts: threshold target - 25amount between 0% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, deferred compensation plans, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option and restricted stock award grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. Except as noted below, all such grants shall be at the sole discretion of the Board. Executive shall receive a separate option agreement governing any such grants. Notwithstanding the foregoing, the Executive shall be granted annually no later than March 31 of each year (beginning in 2005) at least 50,000 restricted shares in the Company, as determined by the Board, depending on the performance of the Company. The shares will vest equally on the first, second and third anniversary of the date of grant. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. Until April 21, 2005, the Company shall provide at the Company’s cost an apartment for the Executive in Arlington, Virginia and shall reimburse the Executive for all travel to and from Arlington, Virginia relating to his relocation to the Washington, D.C. metropolitan area. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 10,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 15,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability insurance policy whichwith a disability benefit payable to the executive in accordance with the terms and conditions of such disability insurance policy. The Company makes no representations or warranties that the insurance benefits contained in the insurance policies supplied pursuant to this section will be paid under any particular conditions, upon and the Company shall not be deemed a determination guarantor of such benefits. Such benefits shall be payable in accordance with the terms of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executiverespective insurance policy. (h) The Executive shall be granted a car allowance of up to $1,700 1,000 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executivemonth. (i) The Company shall reimburse Executive for all relocation expenses incurred by Executive in moving he and his family to the Washington, D.C. metropolitan area (including but not limited to brokerage commissions on selling his current home) up to a maximum of $125,000 . (j) In addition to any bonus payable for calendar year 2005 pursuant to paragraph 4(b) above, the Executive shall be eligible for a one-time bonus for calendar year 2005 which shall have a maximum potential of $500,000 and shall be based on criteria, including the Company’s financial performance for the year, established by the Board. The bonus will be paid within 30 days of the Company’s filing of its Form 10-K for 2005 with the Securities and Exchange Commission. (k) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(k) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the PartnershipLLC’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,00025,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 162,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 12585% of base salary; and maximum bonus amount - 150100% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (2) In connection with the spin-off of the Company from CapStar Hotel Company, the Executive received options to purchase 108,129 shares of common stock of the Company (the "Pre-Spinoff Awards"). The Pre-Spinoff Awards will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Spin-Off Date. (3) The Compensation Committee has granted to the Executive, effective on the Commencement Date, options to purchase 10,000 shares of the common stock of the Company at an exercise price equal to the fair market value at the time of grant. Subject to the terms of this Agreement as to the acceleration of vesting of stock options, such options shall vest as follows: First Anniversary of the Commencement Date 33-1/3% vested Second Anniversary of the Commencement Date 66-2/3% vested Third Anniversary of the Commencement Date 100% vested Such options shall be exercisable, subject to vesting and continued service, for ten (10) years from the date of grant and in all other respects shall be subject to the terms and conditions of the Incentive Plan. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i3(g) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(g) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 275,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125100% of base salary; and maximum bonus amount - 150125% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers; provided, however, if superior benefits are provided by MHR to executives of MHR, the Executive will be provided benefits substantially equivalent to the MHR benefits. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. The Compensation Committee has granted to the Executive, effective on the Commencement Date, options to purchase 120,936 shares of the common stock of the Company at an exercise price equal to the fair market value at the time of grant. Subject to the terms of this Agreement as to the acceleration of vesting of stock options, such options shall vest as follows: First Anniversary of the Commencement Date 33-1/3% vested Second Anniversary of the Commencement Date 66-2/3% vested Third Anniversary of the Commencement Date 100% vested Such options shall be exercisable, subject to vesting and continued service, for ten (10) years from the date of grant and in all other respects shall be subject to the terms and conditions of the Incentive Plan. (2) By executing this Agreement, the Executive hereby agrees to waive the accelerated vesting of stock options granted to the Executive under the Capstar Hotel Company Equity Incentive Plan (the "Capstar Plan"), which would otherwise occur as a result of the consummation of the Merger, and such options shall continue to vest in accordance with their terms and the terms of the Capstar Plan. Such pre-Merger grants of options (the "Pre-Merger Awards") will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Merger. (3) On the Commencement Date, the Company shall issue to the Executive 10,146 shares of common stock of the Company (the "Restricted Stock"). The Restricted Stock shall vest in three nearly equal installments on each of the first, second and third anniversaries of the Commencement Date, conditioned upon the Executive's continuing to be employed by the Company on such dates or as otherwise provided by this Agreement. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, Executive shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy provided with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 an automobile comparable to the Executiveautomobile provided to Executive by CapStar. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i3(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 285,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125165% of base salary; and maximum bonus amount - 150200% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (di) At Annual stock option grants shall be at the discretion of the Board’s sole discretion, . (ii) Executive shall be eligible for stock option grants from time to time granted annually, on May 1 of 2002, 2003 and 2004, pursuant to the Company’s Incentive Plan 's Profits-Only Operating Partnership Units ("POPs") Plan, a minimum of 125,000 POPs and in accordance with a maximum of 200,000 POPs as determined by the terms thereofBoard. The POPs shall vest equally on the first, second and third anniversary of the date of grant. Annual POPs grants thereafter shall be at the discretion of the Board. The Company or the Partnership will pay the executive a distribution on each POP, while such POPs are outstanding, equal to, and at the same time as, distributions made to common operating partnership units of the Partnership. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The CompanyCompany (or MHR), at its sole cost, shall pay (i) up to $40,000 20,000 annually (to be increased annually by the prior year’s 's consumer price index (“index, "CPI”)") toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 20,000 annually (to be increased annually by the prior year’s 's CPI) toward the premium of a disability policy which, upon a determination of the Executive’s 's Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. The premiums for such insurance policies are to be split equally between the Company and MHR for so long as the Executive remains employed by MHR. While the Executive is employed by both the Company and MHR, both the Company and MHR, in the aggregate, shall not pay in excess of $20,000 annually (as increased by CPI) toward each premium. (h) The Executive shall be granted a car allowance of up to $1,700 1,000 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company (or MHR) for the use of the Executive. The monthly lease payment for such car is to be split equally between the Company and MHR for so long as the Executive is employed by MHR. While the Executive is employed by both the Company and MHR, the Company and MHR, in the aggregate, shall not pay in excess of $1,000 monthly toward such car lease. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the Partnership, -------- ------- as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 300,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125100% of base salary; and maximum bonus amount - 150125% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership Partnership, for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (2) By executing this Agreement, the Executive hereby agrees to waive the accelerated vesting of unvested stock options and shares of restricted stock granted to the Executive under the American General Hospitality Corporation 1996 Incentive Plan, which would otherwise occur as a result of the consummation of the Merger. In consideration of this waiver, such unvested options and shares of restricted stock will vest in three (3) nearly equal installments beginning on the first anniversary of their respective original dates of grant, except with respect to grants made on July 31, 1996. In addition, all such pre-Merger grants of options and shares of restricted stock (the "Pre-Merger Awards") will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Merger. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. The Company and the Partnership will reimburse the Executive for all normal and reasonable expenses incurred by the Executive in relocating his family and personal effects to the Washington, D.C. metropolitan area, including the expenses incurred in the sale of the Executive's primary and secondary homes in Texas, in accordance with the Company's policies and the agreement reached between the parties hereto. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such , and which shall include for calendar year 1998, vacation time shall not be carried over year accrued prior to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreementthe Merger. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 700 per month (to be increased annually by for the prior year’s CPI) toward the lease expense of an automobile to be leased by the Company for the use of the Executiveautomobile. (ih) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i4(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership Subsidiary will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 130,000 per annum, subject to annual review by the Compensation Committee of the Board of Directors of the Company (the “"Compensation Committee”), ") and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Companybonus. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of the Compensation Committee, upon 's determination of actual performance as measured against goals and shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25of up to 100% of his base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or for the Partnership for their management employees or the general benefit of the their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. To the extent permitted by law, the Executive shall be given credit for his years of service to any predecessor entity of the Company in determining all waiting periods and vesting periods under such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's 1998 Stock Incentive Plan and in accordance with the terms thereof. (e) . The Company and shall recommend to the Partnership will reimburse Committee designated in accordance with such plan that the Company grant to the Executive, in accordance with their standard policies from time effective on the initial public offering of Company shares, options to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination purchase 55,000 shares of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee common stock of the Company or at an exercise price equal to the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition initial public offering price of such action, suit or proceeding upon stock (the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law"Option Price"). Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference Subject to the financial ability terms of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term Section 6(f) of this Agreement a directors’ and officers’ liability insurance policyas to the acceleration of vesting of stock options, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors such options shall vest on the earlier of the Company following calendar or value-appreciation schedules: i) Calendar Schedule: Four Years after the Partnership; providedgrant date, however , the Company or the Partnership, options are fully vested as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment 50% of the Company or applicable shares; Five Years after the Partnershipgrant date, it cannot be obtained at a reasonable costoptions are fully vested for the remaining 50% of the shares.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 285,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75-25% of base salary; target - 125125 % of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (di) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. The Compensation Committee granted to the Executive, effective on the date of the consummation of the merger (the "Merger") contemplated by the Agreement and Plan of Merger among American General Hospital Corporation and American General Hospitality Operating Partnership, L.P. and CapStar Hotel Company, L.P. and CapStar Management Company II L.P. dated as of March 15, 1998, as amended (the "Merger Date"), options to purchase 353,743 shares of the common stock of the Company at an exercise price equal to the fair market value at the time of grant. Subject to the terms of this Agreement as to the acceleration of vesting of stock options, such options shall vest as follows: First Anniversary of the Merger Date 33-1/3% vested Second Anniversary of the Merger Date 66-2/3% vested Third Anniversary of the Merger Date 100% vested Such options shall be exercisable, subject to vesting and continued service, for ten (10) years from the date of grant and in all other respects shall be subject to the terms and conditions of the Incentive Plan. (ii) The Executive waived the accelerated vesting of stock options granted to the Executive under the CapStar Hotel Company Equity Incentive Plan (the "CapStar Plan"), which would otherwise have occurred as a result of the consummation of the Merger, and such options (the "Pre-Merger Awards") shall continue to vest in accordance with their terms and the terms of the CapStar Plan. (iii) On the Merger Date, the Company issued to the Executive 24,352 shares of common stock of the Company (the "Restricted Stock"). The Restricted Stock vests in three equal installments of 7,242 shares each on each of the first, second and third anniversaries of the Merger Date, conditioned upon the Executive's continuing to be employed by the Company on such dates or as otherwise provided by this Agreement. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i4(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the Partnership, -------- ------- as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 325,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. The first annual review for which Executive shall be eligible for a raise shall be on or about April 1, 2003. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - — 25% of base salary; internal plan - 75plan: 60% of base salary; target - 125— 100% of base salary; and maximum bonus amount - 150— 125% of base salary. In addition . (c) The Company shall also pay Executive for his 2002 pro-rated anticipated bonus from his previous employer, to the foregoing extent such bonus amountsis not paid by Executive’s previous employer. Such anticipated bonus equals $175,000, and shall be paid, to the Executive will be eligible to receive extent not paid by Executive’s previous employer, in 2007 a two thirds (2/3) cash and one-time additional third (1/3) restricted stock. To the extent such bonus award in is not paid by Executive’s previous employer, such cash payment and such restricted stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which payment shall be made in paid after a manner consistent with the calculation determination of the Executive’s other long term stock incentive awards for those years. Such one-time additional final bonus award shall be amount, but in addition toany event, and not to the exclusion ofno later March 31, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years2003. (cd) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (de) At On December 13, 2002, the Board’s sole discretion, Executive shall be eligible granted 50,000 shares of restricted stock and 100,000 stock options in the Company. Such restricted stock shall not vest until June 13, 2003. If the Executive terminates this Agreement without Good Reason, or if the Company terminates the Agreement for Cause prior to June 13, 2003, then Executive forfeits all shares in such restricted stock. With respect to the 100,000 stock option grants from time to time options grant, such options shall vest over three (3) years, pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. At the Board’s sole discretion, Executive shall also be eligible for stock option grants from time to time (currently anticipated to be considered during May of each year) pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. In addition, Executive shall be eligible for annual restricted stock grants ranging from a minimum of 15,000 shares to a maximum of 40,000 shares, as determined by the Board, in its sole discretion, and such restricted stock grants shall vest equally over three years, and in accordance with the terms of the Company’s standard form of restricted stock agreement. (ef) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (fg) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i3(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i3(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however , the Company or the Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 190,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (di) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (ii) In connection with the spin-off of the Company from CapStar Hotel Company, the Executive received options to purchase 250,000 shares of common stock of the Company (the "Pre-Spinoff Awards"). (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by provide the prior year’s consumer price index (“CPI”)) toward the premium of Executive with a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s 's Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 1000 per month (to be increased annually by the prior year’s CPI) toward for the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i4(j) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(j) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s 's or the Partnership’s LLC's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however , the -------- ------- Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 360,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”)) and, and in the discretion of such the Committee, increased to increase from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during During the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon participate in the Company’s achievement of predefined operating Executive Officers Variable Pay Plan dated effective January 1, 2005 and any successor or performance goals, such replacement bonus plans as FFO/Share and EBITDA. The remainder may be adopted by the Committee from time to time for senior executives of the Executive’s annual bonus Company (the “VPP”). If Executive achieves the target performance goals determined under the VPP by the Committee for any calendar year, he shall be determined, at the discretion of the Compensation Committee, upon the Executive’s individual performance. The Executive shall have the opportunity to earn an annual bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to a bonus for the 2004, 2005, and 2006 fiscal yearsthat year equal to at least 60% of his base salary for that year (with any partial year pro rated). (c) During The Company hereby confirms its award to Executive on November 22, 2004 of 18,535 restricted stock units under the TermCompany’s 1998 Stock Incentive Plan. The restrictions on 14,828 of these restricted stock units have already lapsed and the underlying shares of common stock of the Company have been issued to Executive. The restrictions on the remaining 3,707 of these restricted stock units shall lapse on November 22, 2008, and the underlying shares of common stock of the Company shall be issued to Executive will participate in all plans now existing or hereafter adopted as soon as practicable thereafter, provided that Executive remains employed by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officersat that date. (d) At The Board or the Board’s Committee in its sole discretiondiscretion may award any additional or other amounts of cash, Executive shall be eligible for restricted stock option grants from time to time pursuant to or options or other equity based awards in respect of any whole or partial year during the Company’s Incentive Plan and in accordance with the terms thereofTerm. (e) The Company and the Partnership will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, Company shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by indemnify the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, under the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee law of the Company or the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership State of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however , the Company or the Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable costWashington.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 260,000 per annum, subject to annual review by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”), ) and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during During the Term, the Executive will shall be eligible to receive a cash bonus from (“Bonus”) as follows: Executive shall participate in such annual Bonus plans or programs as may be adopted by the Company. The award and amount ’s Compensation Committee (collectively with any of such bonus shall its successors in authority, the “Committee”) from time to time for senior executives, provided, however, that conditioned upon attainment of target performance measure requirements based on one or more performance measures as may be determined by the Compensation Committee Committee, the target Bonus for each calendar year during an annual review the Term for which Executive shall be eligible shall be 40% of the Executive’s performance. Eighty percent base salary (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of the Compensation Committee, upon the Executive’s individual performance. The Executive shall have the opportunity to earn an annual bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal partial years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal yearspro rated). (c) During The Company hereby confirms its award to Executive on November 22, 2004 of 18,535 shares of restricted stock units under the TermCompany’s 1998 Stock Incentive Plan (the “Equity Incentive Plan”) (or successor plan) issued or to be issued, as applicable, as follows: (i) Upon or as soon as practicable after the November 22, 2004, 3,707 shares of restricted common stock in the Company; (ii) On or as soon as practical after the first, second, third and fourth anniversaries of November 22, 2004, provided that Executive will participate remains employed in all plans now existing the position or hereafter adopted positions contemplated in this Agreement on each such anniversary of November 22, 2004, an annual award of 3,707shares of restricted common stock in the Company; and (iii) The restricted common stock in the Company awarded pursuant to Sections 4(c)(i) and (ii) above shall be fully vested upon issuance. Executive shall be entitled to no further issuances of restricted common stock of the Company if Executive is not employed by the Company in the positions contemplated in this Agreement on of the first, second, third or fourth anniversaries of the Partnership for their management employees or November 22, 2004. Executive acknowledges and agrees that restricted common stock of the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and Company may be subject to various restrictions under the same qualifications as other senior executive officersCompany’s Equity Incentive Plan, and under state and federal law and regulations promulgated thereunder. Executive acknowledges receipt of a copy of the Equity Incentive Plan. (d) At the Board’s sole discretion, Executive shall be eligible for stock option grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereofIntentionally deleted. (e) Nothing in the foregoing provisions of this Section 4 shall be deemed to prevent the Board in its sole discretion from awarding any additional or other amounts of cash, restricted stock or Options or other equity based awards in respect of any whole or partial year during the Term. (f) The Company and the Partnership will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (fg) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Company shall indemnify the Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, under the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee law of the Company or the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership State of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however , the Company or the Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable costWashington.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 190,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (2) In connection with the spin-off of the Company from CapStar Hotel Company, the Executive received options to purchase 250,000 shares of common stock of the Company (the "Pre-Spinoff Awards"). The Pre-Spinoff Awards will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Spin-Off Date. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by provide the prior year’s consumer price index (“CPI”)) toward the premium of Executive with a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s 's Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 ___ per month (to be increased annually by the prior year’s CPI) toward for the lease of an automobile to be leased by the Company for the use of the Executive. (i) In the event that any payment, benefit or other right or compensation due to the Executive hereunder or otherwise from the Company including, without limitation the accelerated vesting of the Executive's rights with respect to stock options, restricted stock or any other benefit or compensation, results in the imposition of an excise tax payable by the Executive under Section 4999 of the Internal Revenue Code, or any successor or other provision with respect to "excess parachute payments" within the meaning of Section 280G(b) of the Internal Revenue Code, the Company shall make a cash payment to the Executive in the amount of such excise tax (the "Excise Tax Payment") and shall also make a cash payment to the Executive in an amount equal to the total of federal, state and local income and excise taxes for which the Executive may be liable on account of such Excise Tax Payment. (j) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i4(j) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(j) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership LLC will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 400,000 per annum, subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn a cash bonus equal to an annual bonus in the following amounts: threshold target - 25amount between 0% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership LLC for their management employees or the general benefit of their employees, such as any pension, profit-sharing, deferred compensation plans, the Interstate Executive Real Estate Fund, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. Notwithstanding the foregoing, the Company and the LLC may, in their sole discretion, discontinue or eliminate any such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option and restricted stock award grants from time to time pursuant to the Company’s Incentive Plan and in accordance with the terms thereof. Except as noted below, all such grants shall be at the sole discretion of the Board. Executive shall receive a separate option agreement governing any such grants. Notwithstanding the foregoing, the Executive shall be granted annually each January a minimum of 25,000 and a maximum of 125,000 restricted stock shares in the Company, as determined within that range by the Board, depending on the performance of the Company. The shares will vest equally on the first, second and third anniversary of the date of grant. Annual restricted stock grants thereafter shall be at the discretion of the Board. Additionally, the Executive shall be granted annually each January a minimum of 50,000 and a maximum of 100,000 stock options in the Company, as determined within that range by the Board, depending on the performance of the Company. The options will vest equally on the first, second and third anniversary of the date of grant. Annual stock option grants thereafter shall be at the discretion of the Board. (e) The Company and the Partnership LLC will reimburse the Executive, in accordance with their its standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. While Executive holds the title of Chief Executive Officer of the Company, the Company shall provide at the Company’s cost an apartment for the Executive in Arlington, Virginia. The Company also agrees to reimburse Executive for all costs incurred by Executive traveling between Dallas, Texas and Arlington, Virginia for Company business. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 10,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 15,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability insurance policy whichwith a disability benefit payable to the executive in accordance with the terms and conditions of such disability insurance policy. The Company makes no representations or warranties that the insurance benefits contained in the insurance policies supplied pursuant to this section will be paid under any particular conditions, upon and the Company shall not be deemed a determination guarantor of such benefits. Such benefits shall be payable in accordance with the terms of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executiverespective insurance policy. (h) The Executive shall be granted a car allowance of up to $1,700 1,000 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executivemonth. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership LLC against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the PartnershipLLC. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership LLC of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the PartnershipLLC, as the case may be, in advance of the final disposition of such action, suit or proceeding upon the Company’s or the PartnershipLLC’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct conduct, including fraud, theft, misfeasance, or malfeasance against the Company or the LLC, which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the PartnershipLLC, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership LLC shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ and officers’ liability insurance policy, with a policy limit of at least $5,000,00025,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the PartnershipLLC; provided, however however, the Company or the PartnershipLLC, as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment of the Company or the PartnershipLLC, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership Subsidiary will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 96,000 per annum, subject to annual review by the Compensation Committee of the Board of Directors of the Company (the “"Compensation Committee”), ") and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Companybonus. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of the Compensation Committee, upon 's determination of actual performance as measured against goals and shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25of up to 100% of his base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or for the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. To the extent permitted by law, the Executive shall be given credit for his years of service to any predecessor entity of the Company in determining all waiting periods and vesting periods under such plans. (d) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's 1998 Stock Incentive Plan and in accordance with the terms thereof. (e) . The Company and shall recommend to the Partnership will reimburse Committee designated in accordance with such plan that the Company grant to the Executive, in accordance with their standard policies from time effective on the initial public offering of Company shares, options to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination purchase 45,000 shares of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee common stock of the Company or at an exercise price equal to the Partnership. Indemnification under this Section 4(i) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition initial public offering price of such action, suit or proceeding upon stock (the Company’s or the Partnership’s receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law"Option Price"). Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference Subject to the financial ability terms of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term Section 6(f) of this Agreement a directors’ and officers’ liability insurance policyas to the acceleration of vesting of stock options, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors such options shall vest on the earlier of the Company following calendar or value-appreciation schedules: i)Calendar Schedule: Four Years after the Partnership; providedgrant date, however , the Company or the Partnership, options are fully vested as the case may be, shall be relieved of this obligation to maintain directors’ and officers’ liability insurance if, in the good faith judgment 50% of the Company or applicable shares; Five Years after the Partnershipgrant date, it cannot be obtained at a reasonable costoptions are fully vested for the remaining 50% of the shares.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 285,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125% of base salary; and maximum bonus amount - 150% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. The Compensation Committee has granted to the Executive, effective on the Commencement Date, options to purchase 353,743 shares of the common stock of the Company at an exercise price equal to the fair market value at the time of grant. Subject to the terms of this Agreement as to the acceleration of vesting of stock options, such options shall vest as follows: First Anniversary of the Commencement Date 33-1/3% vested Second Anniversary of the Commencement Date 66-2/3% vested Third Anniversary of the Commencement Date 100% vested Such options shall be exercisable, subject to vesting and continued service, for ten (10) years from the date of grant and in all other respects shall be subject to the terms and conditions of the Incentive Plan. (2) By executing this Agreement, the Executive hereby agrees to waive the accelerated vesting of stock options granted to the Executive under the Capstar Hotel Company Equity Incentive Plan (the "Capstar Plan"), which would otherwise occur as a result of the consummation of the Merger, and such options shall continue to vest in accordance with their terms and the terms of the Capstar Plan. Such pre-Merger grants of options (the "Pre-Merger Awards") will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Merger. (3) On the Commencement Date, the Company shall issue to the Executive 21,726 shares of common stock of the Company (the "Restricted Stock"). The (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The CompanyIn the event that any payment, at its sole costbenefit or other right or compensation due to the Executive hereunder or otherwise from the Company including, shall pay (i) up without limitation the accelerated vesting of the Executive's rights with respect to $40,000 annually (to be increased annually by stock options, restricted stock or any other benefit or compensation, results in the prior year’s consumer price index (“CPI”)) toward the premium imposition of a life insurance policy with a death benefit of at least $2,000,000 an excise tax payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination under Section 4999 of the Executive’s Disability (as hereinafter defined)Internal Revenue Code, pays at least $2,000,000 or any successor or other provision with respect to "excess parachute payments" within the meaning of Section 280G(b) of the Internal Revenue Code, the Company shall make a cash payment to the ExecutiveExecutive in the amount of such excise tax (the "Excise Tax Payment") and shall also make a cash payment to the Executive in an amount equal to the total of federal, state and local income and excise taxes for which the Executive may be liable on account of such Excise Tax Payment. (h) The Executive shall be granted a car allowance of up to $1,700 per month (to be increased annually by the prior year’s CPI) toward the lease of an automobile to be leased by the Company for the use of the Executive. (i) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i4(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.

Salary; Additional Compensation; Perquisites and Benefits. (a) During the Term, the Company and the Partnership will pay the Executive a base salary at an aggregate annual rate of not less than $635,000 300,000 per annum, subject to annual review by the Compensation Committee of the Board (the “"Compensation Committee”"), and in the discretion of such Committee, increased from time to time. Once increased, such base salary may not be decreased. Such salary shall be paid in periodic installments in accordance with the Company’s 's standard practice, but not less frequently than semi-monthly. (b) For each fiscal year during the Term, the Executive will be eligible to receive a bonus from the Company. The award and amount of such bonus shall be determined by the Compensation Committee during an annual review of the Executive’s performance. Eighty percent (80%) of this annual bonus shall be based upon the Company’s achievement of predefined operating or performance goals, such as FFO/Share goals and EBITDA. The remainder of the Executive’s annual bonus shall be determined, at the discretion of other criteria established by the Compensation Committee, upon which goals shall give the Executive’s individual performance. The Executive shall have the opportunity to earn an annual a bonus in the following amounts: threshold target - 25% of base salary; internal plan - 75% of base salary; target - 125100% of base salary; and maximum bonus amount - 150125% of base salary. In addition to the foregoing bonus amounts, the Executive will be eligible to receive in 2007 a one-time additional bonus award in stock having a maximum value of $1,250,000 as a long term incentive for the 2004, 2005, and 2006 fiscal years based upon the achievement of certain absolute and relative shareholder returns, the calculation of which shall be made in a manner consistent with the calculation of the Executive’s other long term stock incentive awards for those years. Such one-time additional bonus award shall be in addition to, and not to the exclusion of, any other long-term incentive stock awards to which the Executive might otherwise be entitled to for the 2004, 2005, and 2006 fiscal years. (c) During the Term, the Executive will participate in all plans now existing or hereafter adopted by the Company or the Partnership for their management employees or the general benefit of their employees, such as any pension, profit-sharing, bonuses, stock option or other incentive compensation plans, life and health insurance plans, or other insurance plans and benefits on the same basis and subject to the same qualifications as other senior executive officers. (d1) At the Board’s sole discretion, The Executive shall be eligible for stock option grants from time to time pursuant to the Company’s 's Incentive Plan and in accordance with the terms thereof. (2) In connection with the spin-off of the Company from CapStar Hotel Company, the Executive received options to purchase 137,500 shares of common stock of the Company (the "Pre-Spinoff Awards"). The Pre-Spinoff Awards will become fully vested if the Executive's employment is terminated voluntarily or involuntarily within twenty-four (24) months of the Spin-Off Date. (3) The Compensation Committee has granted to the Executive, effective on the Commencement Date, options to purchase 87,500 shares of the common stock of the Company at an exercise price equal to the fair market value at the time of grant. Subject to the terms of this Agreement as to the acceleration of vesting of stock options, such options shall vest as follows: First Anniversary of the Commencement Date 33-1/3% vested Second Anniversary of the Commencement Date 66-2/3% vested Third Anniversary of the Commencement Date 100% vested Such options shall be exercisable, subject to vesting and continued service, for ten (10) years from the date of grant and in all other respects shall be subject to the terms and conditions of the Incentive Plan. (e) The Company and the Partnership will reimburse the Executive, in accordance with their standard policies from time to time in effect, for all out-of-pocket business expenses as may be incurred by the Executive in the performance of his duties under this Agreement. (f) The Executive shall be entitled to vacation time to be credited and taken in accordance with the Company’s 's policy from time to time in effect for senior executives, which in any event shall not be less than a total of four weeks per calendar year. Such vacation time shall not be carried over year to year, and shall not be paid out upon termination of employment, or upon expiration of this Agreement. (g) The Company, at its sole cost, shall pay (i) up to $40,000 annually (to be increased annually by the prior year’s consumer price index (“CPI”)) toward the premium of a life insurance policy with a death benefit of at least $2,000,000 payable to a beneficiary designated by the Executive and (ii) up to $12,000 annually (to be increased annually by the prior year’s CPI) toward the premium of a disability policy which, upon a determination of the Executive’s Disability (as hereinafter defined), pays at least $2,000,000 to the Executive. (h) The Executive shall be granted a car allowance of up to $1,700 700 per month (to be increased annually by the prior year’s CPI) toward for the lease of an automobile to be leased by the Company for the use of the Executive. (ih) To the fullest extent permitted by applicable law, the Executive shall be indemnified and held harmless by the Company and the Partnership against any and all judgments, penalties, fines, amounts paid in settlement, and other reasonable expenses (including, without limitation, reasonable attorneys’ ' fees and disbursements) actually incurred by the Executive in connection with any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other) for any action or omission in his capacity as a director, officer or employee of the Company or the Partnership. Indemnification under this Section 4(i4(h) shall be in addition to, and not in substitution of, any other indemnification by the Company or the Partnership of its officers and directors. Expenses incurred by the Executive in defending an action, suit or proceeding for which he claims the right to be indemnified pursuant to this Section 4(i4(h) shall be paid by the Company or the Partnership, as the case may be, in advance of the final disposition of such action, action suit or proceeding upon the Company’s 's or the Partnership’s 's receipt of (x) a written affirmation by the Executive of his good faith belief that the standard of conduct necessary for his indemnification hereunder and under the provisions of applicable law has been met and (y) a written undertaking by or on behalf of the Executive to repay the amount advanced if it shall ultimately be determined by a court that the Executive engaged in conduct which precludes indemnification under the provisions of such applicable law. Such written undertaking in clause (y) shall be accepted by the Company or the Partnership, as the case may be, without security therefor and without reference to the financial ability of the Executive to make repayment thereunder. The Company and the Partnership shall use commercially reasonable efforts to maintain in effect for the Term of this Agreement a directors’ ' and officers’ ' liability insurance policy, with a policy limit of at least $5,000,000, subject to customary exclusions, with respect to claims made against officers and directors of the Company or the Partnership; provided, however however, the Company or the -------- ------- Partnership, as the case may be, shall be relieved of this obligation to maintain directors’ ' and officers’ ' liability insurance if, in the good faith judgment of the Company or the Partnership, it cannot be obtained at a reasonable cost.