AMENDMENT TO EMPLOYEE STOCK GRANT AND SUPPLEMENTAL LONG-TERM CASH PAYMENT AGREEMENT
Exhibit
10.1
AMENDMENT
TO
EMPLOYEE
STOCK GRANT AND
SUPPLEMENTAL
LONG-TERM CASH PAYMENT AGREEMENT
This
Amendment (the “Amendment”) to that certain Employee Stock Grant and
Supplemental Long-Term Cash Payment Agreement dated as of February 19, 2009 (the
“Agreement”) is made as of the date indicated on the signature page hereof
between FelCor Lodging Trust Incorporated, a Maryland corporation (the
“Company”), and the undersigned employee of the Company (the
“Grantee”).
W I T N E S S E T H:
WHEREAS,
customarily, the Company makes annual grants of restricted stock to its officers
in connection with a comprehensive compensation program, with such the number of
shares included in a grant measured by reference to a participant’s base
salary;
WHEREAS,
in light of the recession and related steep decline in the trading price for the
Company’s common stock, in February 2009, the Compensation Committee
and Board of Directors of the Company authorized grants of restricted stock and
supplemental long-term compensation payments to the Company’s officers, the
structure of which was intended to provide an economic benefit to the Grantee
and other officers of the Company substantially similar to the benefit that
would have been provided had there been sufficient shares available for issuance
under the Company’s equity compensation plan;
WHEREAS,
the Compensation Committee has subsequently determined that the structure of the
long-term compensation payments – where such payment are made in arrears in
three annual increments, rather than at the outset but subject to vesting-like
“claw-back” restrictions and restricting investment of the payment (while
subject to the claw-back) to cash or the Company’s equity securities –
effectively deprived Grantee and other participants of the potential stock-price
appreciation as the economy recovered; and
WHEREAS,
the Compensation Committee, having consulted with its advisors, has determined
that the 2009 grant, to the extent comprised of supplemental long-term cash
payments payable in 2011 and 2012 (the “Later Payments”), should be modified so
that the amounts otherwise payable in those years should be paid, on a
restricted basis and subject to the terms hereof, as soon as
practicable.
NOW,
THEREFORE, in consideration of the mutual promises and covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as
follows:
1. Payment. Subject
to the terms, conditions and provisions contained in this Agreement, the Company
shall pay to the Grantee, as a matter of separate inducement and agreement in
connection with the Grantee’s employment, but not in lieu of any salary or other
compensation for the Grantee’s services, the cash amount equal to (a) the
Grantee’s Later Payment as indicated above the Grantee’s name on the signature
page hereof, less (b) such amount required to be withheld by the Company
sufficient to satisfy federal, state, and local withholding tax requirements on
such payment (the “Restricted Payment”).
2. Period of Restriction;
Deposit; Investment; Forfeiture.
a. Period
of Restriction. The Restricted Payment, regardless how invested or held,
shall be subject to forfeiture as set forth in Section 2c. On March
1st of
each of 2011 and 2012, so long as the Grantee remains an employee in good
standing of the Company or its successor on such date, the amount provided
below, as of the most recent prior account statement issued by the brokerage
firm or depositary holding the Restricted Payment in accordance with Section 2b,
shall no longer be subject to any restrictions hereunder:
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Date
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Amount to be Released
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2011
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One-half
of the assets in the account (measured as of the most recent prior
statement date)
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2012
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The
remaining assets in the account
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To the
extent the Restricted Payment is invested in FelCor Securities and/or cash, the
amount to be released in accordance with the foregoing schedule shall be
allocated proportionately by value among the assets in which the Restricted
Payment is invested. At all times, any interest, dividends and other
distributions and payments made in respect of the Restricted Payment shall be
fully vested in the Grantee, shall not be subject to forfeiture hereunder, and
shall be withdrawn from the Restricted Payment account promptly in accordance
with Section 2.b.iii below. In addition to the foregoing, upon the
occurrence of an event or circumstances that would result in accelerated vesting
of restricted stock under the Company’s 2005 Restricted Stock and Stock Option
Plan, as amended from time to time (the “Plan”), or any grant made to the
Grantee thereunder, or under a change in control and severance agreement (if
any) between the Company and the Grantee, the Restricted Payment, or a
proportionate amount thereof, shall no longer be subject to
forfeiture.
b. Deposit
of Restricted Payment; Investment of Restricted Payment.
i. The
Restricted Payment made hereunder shall be deposited in an account with a
brokerage firm designated by the Company, titled in the name of the Grantee,
with copies of all statements and trade confirmations relating to such account
sent to the Company’s Secretary during any period in which the restrictions set
forth in this Section 2 remain effective. Such account shall be restricted to
the effect that cash or securities held therein may not be used as collateral
for margin loans or otherwise pledged as security in any respect. The Restricted
Payment (however invested), and any derivative rights with respect thereto
(including voting, dividend, liquidation proceeds and similar rights), may not
be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, and no such sale, assignment, transfer, exchange, pledge,
hypothecation, or encumbrance, whether made or created by voluntary act of the
Grantee or by operation of law, shall be recognized by, or be binding upon, or
shall in any manner affect the rights of the Company pursuant
hereto.
ii.
Until such time as the Restricted Payment is no longer subject to the
restrictions set forth herein, the Restricted Payment may only be invested in
cash, cash equivalents (limited to money market funds, certificates of deposit,
U.S. Treasury issues and similar securities so designated by the Company) and
any equity securities issued by the Company (“FelCor Securities”), and the
Grantee may not sell any of the FelCor Securities (if any) held in such account
during the period in which such securities are restricted for purposes of this
Contract.
iii. The
account shall only hold the Restricted Payment, as invested, and no other
assets. The Grantee shall cause all amounts that are not subject to
the restrictions set forth herein (including, without limitation, interest,
dividends and other distributions and payments made in respect of the Restricted
Payment during the period in which restrictions hereunder are applicable) to be
withdrawn or otherwise transferred from the account without delay.
Notwithstanding the foregoing, the Grantee may not withdraw any amounts from the
Restricted Payment account until such time as the Grantee has received from the
Company written confirmation of his or her right to do so, which confirmation
shall include a definitive allocation of the items to be withdrawn to the extent
the Restricted Payment has been invested in more than one of FelCor Securities
and/or cash, with such allocation being made in good faith solely by the Company
in its good faith judgment and shall be definitive and not subject to
appeal.
c. Forfeiture
and Return; Settlement. Upon termination of the Grantee’s employment with
the Company, other than under circumstances that result in accelerated vesting
of restricted stock under the Plan or any grant made to the Grantee thereunder
or under a change in control and severance agreement (if any) between the
Company and the Grantee, any Restricted Payment that remains subject to
forfeiture hereunder shall be immediately forfeit and due and payable to the
Company. Payment thereof shall be made not later than 30 business
days following termination of the Grantee’s employment with the Company, and the
Company shall have the absolute right, without any further action by the
Grantee, to cause such payment to be settled by delivery of the remaining
balance in the account in which the Restricted Payment is deposited and held to
be delivered to the Company or its designee. In furtherance of the foregoing,
Grantee has delivered to the Company an irrevocable letter of instruction, in
form and substance reasonably satisfactory to the Company, directing the
brokerage or custodian of such account to deliver the assets contained therein
to the Company, as directed thereby, with no further instruction or confirmation
from Grantee. Interest, dividends and other distributions and payments received
by the Grantee with respect to the Restricted Payment prior to termination of
Grantee’s employment shall not be, in any event, subject to forfeiture
hereunder. In particular:
i. If
the status of the Grantee as an employee in good standing of the Company shall
terminate for any reason other than (i) the death of the Grantee, (ii) the
Disability (as defined in the Plan) of the Grantee, or (iii) the retirement of
the Grantee at or after the age of 60, then, in that event, any Restricted
Payment then subject to forfeiture hereunder shall, upon such termination, be
forfeited by the Grantee to the Company, without the payment of any
consideration by the Company, and neither the Grantee nor any of his or her
successors, heirs, assigns, or legal representatives shall thereafter have any
further rights or interest in the Restricted Payment so forfeited, and the
Company shall, at any time thereafter, be entitled to effect the transfer of the
Restricted Payment so forfeited into the name of the Company;
ii. If
the status of the Grantee as an employee in good standing of the Company shall
terminate by reason of the death of the Grantee, the Disability of the Grantee
or the retirement of the Grantee at or after the age of 60, the Restricted
Payment shall no longer be subject to forfeiture hereunder, and all restrictions
set forth in this Contract with respect to the Restricted Payment shall be
deemed to have expired, in either case as of the date of such event;
and
iii. If
the Company (i) is not to be the surviving entity in any merger or consolidation
(or survives only as a subsidiary of another entity), (ii) sells all or
substantially all of its assets to any other person or entity (other than a
subsidiary of the Company) or (iii) is to be dissolved and liquidated, the
Restricted Payment shall no longer be subject to forfeiture hereunder, and all
restrictions set forth in this Contract with respect to the Restricted Payment
shall be deemed to have expired, in either case as of the date of such event
shall be deemed to have expired as of the date of next preceding such
event.
3. Disputes. If a
dispute should arise between the Company and the Grantee relating to the rights,
duties or obligations of the Grantee hereunder with respect to any portion of
the Restricted Payment granted hereby, such dispute shall be resolved by the
determination of the Compensation Committee, acting in good faith, which
determination shall be final and binding upon the Company and the Grantee, and
pending such a determination and the resolution of all such disputes to the
reasonable satisfaction of the Committee, (i) any portion of the Restricted
Payment then held on account for the Grantee shall remain in such account and
subject to all of the restrictions set forth in this Contract, regardless of any
intervening expiration of those restrictions, and (ii) any and all interest,
dividends or other distributions or payments payable with regard to the
Restricted Payment so held in such account shall be received and held in such
account until all such disputes have been resolved to the reasonable
satisfaction of the Compensation Committee, at which time the accumulated
interest, dividends and other distributions and payments then held in such
account shall be delivered (without interest thereon) to the person entitled to
receive the Restricted Payment with respect to which they were originally
paid.
4. Section 83(b)
Election. Grantee shall timely file a properly completed election under
Section 83(b) of the Internal Revenue Code (and Treasury Regulation 1.83-2) with
respect to the payment granted hereunder and shall promptly after the filing of
such election provide a copy of the election to the Company.
5. Notices. All
notices, surrenders and other communications required or allowed to be made or
given in connection with the Restricted Payment granted hereunder shall be in
writing, shall be effective when received and shall be hand delivered or sent by
registered or certified mail (i) if to the Company, to FelCor Lodging Trust
Incorporated, 000 X. Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
Attention: General Counsel; or (ii) if to the Grantee, to the Grantee at
the address set forth beneath his signature hereto, or to such other address as
to which he may have notified the Company pursuant to this Section.
6. Binding Effect;
Amendment. This Amendment shall bind and, except as
specifically provided in this Amendment, shall inure to the benefit of, the
respective successors, heirs, legal representatives and assigns of the parties
hereto. This Amendment modifies the terms set forth in the Agreement, and the
terms of this Amendment supercede in all respects any conflicting terms
contained in the Agreement.
7. Governing
Law. This Contract and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of Maryland.
IN
WITNESS WHEREOF, the Company has caused this Contract to be executed by its duly
authorized officer and the Grantee has hereunto set his hand, as of January ___,
2010.
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THE
COMPANY:
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FELCOR
LODGING TRUST INCORPORATED
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By:
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Name:
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Title:
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LATER
PAYMENT:
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$
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THE
GRANTEE:
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Name:
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Address:
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