EMPLOYMENT AGREEMENT
Exhibit 10.7
THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of March 21, 2008, effective as of
January 1, 2008 (the “Effective Date”), is between ASHFORD HOSPITALITY TRUST, INC., a corporation
organized under the laws of the State of Maryland and having its principal place of business at
Dallas, Texas (hereinafter, the “REIT”), ASHFORD HOSPITALITY LIMITED PARTNERSHIP, a limited
partnership organized under the laws of the State of Delaware and having its principal place of
business at Dallas, Texas (the “Operating Partnership”), and XXXX XXXXXXXX, an individual residing
in Dallas, Texas (the “Executive”).
RECITALS:
A. The REIT and the Operating Partnership (collectively, the “Company”) desire to employ the
Executive in the capacities and on the terms and conditions set out below; and
B. The Executive and the Company have previously entered into an employment agreement dated as
of August 29, 2003, as amended on March 29, 2006, but effective as of January 1, 2006,
(collectively, the “Previous Agreement”); and
C. The Company and the Executive desire to amend and restate the Previous Agreement in order
to make changes to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), as well as certain other changes.
NOW, THEREFORE, the Company and the Executive, in consideration of the respective covenants
set out below, hereby agree as follows:
1. EMPLOYMENT.
(a) POSITIONS. During the Term (defined below), the Executive shall be employed by the
Company as Chief Accounting Officer. At the Company’s request, the Executive shall serve the
Company’s subsidiaries and affiliates in other offices and capacities in addition to the foregoing.
If the Executive, during
the Term, serves in any one or more of such additional capacities, the Executive’s compensation
shall not be increased beyond that provided in Sections 3, 4 or 5 below. Further, if the
Executive’s service in one or more of such additional capacities is terminated, the Executive’s
compensation provided herein shall not be reduced for so long as the Executive otherwise remains
employed by the Company under the terms of this Agreement.
(b) RESPONSIBILITIES. The Executive’s principal employment duties and responsibilities shall
be those duties and responsibilities customary for the position of Chief Accounting Officer and
such other executive duties and responsibilities as the Chief Executive Officer of the Company
(“CEO”) or Board
of Directors of the REIT (the “Board”) shall from time to time reasonably assign to the Executive.
The Executive shall report directly to the CEO or such person(s) as the CEO may designate from time
to time.
-1-
(c) EXTENT OF SERVICES. Except for illnesses and vacation periods, the Executive shall devote
substantially all of his working time and attention and his best efforts to the performance of his
duties and responsibilities under this Agreement and shall not be otherwise employed. However, the
Executive may
(so long as the following do not materially interfere with the performance of the Executive’s
duties hereunder) (i) make any passive investments (including, without limitation, continuing
existing investments with Remington Hotel Corporation or its affiliates) where he is not obligated
or required to, and shall not in fact, devote material managerial efforts, (ii) participate in
charitable, academic or community activities or in trade or professional organizations, (iii) hold
directorships in charitable or non-profit organizations, or (iv) subject to CEO and Board approval
(which approval shall not be unreasonably withheld or withdrawn), hold
directorships in for profit companies, except only that the CEO or the Board shall have the right
to limit such services as a director or such participation whenever the CEO or the Board shall
reasonably believe that the time spent on such activities infringes in any material respect upon
the time required by the Executive for the performance of his duties under this Agreement or is
otherwise incompatible with those duties.
2. TERM. This Agreement shall become effective as of January 1, 2008 (the “Effective Date”)
and shall continue for a Term ending on December 31, 2008 (the “Initial Termination Date”) unless
it is sooner terminated pursuant to Section 6; provided, however, that this Agreement shall be
automatically extended for one additional year on the Initial Termination Date and on each
subsequent anniversary of the Initial Termination Date, unless either the Company or the Executive
elect not to extend the Term of this Agreement by notifying the other party in writing of such
election not less than one hundred twenty (120) days prior to the expiration of the then current
Term. For purposes of this Agreement, “Term” shall mean the actual duration of the Executive’s
employment hereunder, taking into account any extension pursuant to this Section 2 or early
termination of employment pursuant to Section 6.
3. SALARY. The Company shall pay the Executive a Base Salary which shall be payable in
periodic installments, less statutory deductions and withholdings, according to the Company’s
normal payroll practices. Commencing as of the Effective Date, the Executive’s base salary shall be
TWO HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($275,000) per year. The Board or a Compensation
Committee duly appointed by the Board (the “Compensation Committee”) shall thereafter review the
Executive’s Base Salary annually to determine within its sole discretion whether and to what extent
the Executive’s salary may be increased (for the purposes of this Agreement, the term “Base Salary”
shall mean the amount established and adjusted from time to time pursuant to this Section 3).
4. ANNUAL INCENTIVE AWARDS.
(a) INCENTIVE BONUS. The Executive shall be entitled to receive an annual cash incentive bonus
(the “Incentive Bonus”) for each calendar year during the Term of this Agreement based on the level
of accomplishment of management and performance objectives as established by the CEO, the Board or
Compensation Committee. Except as otherwise provided in Section 7, if the Executive is not employed
for the full calendar year, the Executive shall be paid a pro-rated Incentive Bonus in an amount
equal to the product of (x) the amount of the Incentive Bonus for the calendar year to which the
Executive would have been entitled if the Executive had remained employed for the entire calendar
year and (y) a fraction, the numerator of which is the number of days in the applicable calendar
year for which the Executive was employed through the
-2-
last day of his employment and the denominator of which is the 365 days of the calendar year. The
targeted Incentive Bonus for the Term is 20% to 60% of Base Salary. The Incentive Bonus shall be
paid as soon as reasonably practical following each calendar year but not later than December
31st of such year.
(b) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Term, the
Executive shall be entitled to participate in all other short- and long-term incentive plans, stock
and option plans, long term incentive partnership (“LTIP”) plans, practices, policies and other
programs, and all savings and retirement plans, practices, polices and programs, in each case that
are applicable generally to senior executives of the Company, as may be adopted, or amended from
time to time, by the Company’s Compensation Committee.
5. BENEFITS.
(a) VACATION. The Executive will be entitled to four (4) weeks of paid vacation per calendar
year. Vacation time not used within the calendar year will not carry forward. The Executive shall
not be entitled to cash in lieu of any unused vacation time except as provided herein.
(b) SICK LEAVE. The Executive shall be entitled to paid sick leave in accordance with the sick
leave policies of the Company in effect for other senior executive officers.
(c) EMPLOYEE BENEFITS. The Executive and his spouse and eligible dependents, if any, and their
respective designated beneficiaries where applicable, will be eligible for and entitled to
participate in other benefits maintained by the Company for its senior executive officers, as such
benefits may be modified from time to time and for all such employees, such as, without limitation,
any medical, dental, vision, pension, 401(k), accident, disability, and life insurance benefits, on
a basis not less favorable than that applicable to other senior executives of the Company. The
Executive will also be entitled to appropriate office space, administrative support, secretarial
assistance, and such other facilities and services as are suitable to the Executive’s positions and
adequate for the performance of the Executive’s duties.
(d) EXPENSES. The Executive will be entitled to reimbursement of all reasonable expenses, in
accordance with the Company’s policy as in effect from time to time and on a basis not less
favorable than that applicable to other senior executives of the Company, including, without
limitation, telephone (including in-home office telephone and DSL costs), travel and entertainment
expenses incurred by the Executive in connection with the business of the Company, promptly upon
the presentation by the Executive of appropriate documentation.
(e) D&O INSURANCE COVERAGE. During and for a period three (3) years after the Term, the
Executive shall be entitled to director and officer insurance coverage for his acts and omissions
while an officer of the Company on a basis no less favorable to him than the coverage provided
current officers or directors.
6. TERMINATION. The employment of the Executive by the Company and this Agreement (except as
otherwise provided herein) shall terminate upon the occurrence of any of the following:
(a) DEATH OR DISABILITY. Immediately upon death or Disability of the Executive. As used in
this Agreement, “Disability” shall mean an inability to perform the essential functions of his
duties,
-3-
with or without reasonable accommodation, for a period of 90 consecutive days or a total of 180
days, during any 365-day period, in either case as a result of incapacity due to mental or physical
illness which is determined to be total and permanent. A determination of Disability shall be made
by a physician satisfactory to both the Executive (or his guardian) and the Company, provided that
if the Executive
and the Company do not agree on a physician, the Executive (or his guardian) and the Company shall
each select a physician and these two together shall select a third physician, whose determination
as to Disability shall be binding on all parties. The appointment of one or more individuals to
carry out the offices or duties of the Executive during a period of the Executive’s inability to
perform such duties and pending a determination of Disability shall not be considered a breach of
this Agreement by the Company.
(b) FOR CAUSE. At the election of the Company, for Cause, immediately upon written notice by
the Company to the Executive unless the Executive fully corrects the circumstances constituting
Cause within the cure periods provided below, if applicable. For purposes of this Agreement,
“Cause” for termination shall be deemed to exist solely in the event of the following:
(i) The conviction of the Executive of, or the entry of a plea of guilty or nolo contendere by
the Executive to, a felony (exclusive of a conviction, plea of guilty or nolo contendere arising
solely under a statutory provision imposing criminal liability upon the Executive on a PER SE basis
due to the Company offices held by the Executive, so long as any act or omission of the Executive
with respect to such matter was not taken or omitted in contravention of any applicable policy or
directive of the CEO or the Board);
(ii) willful breach of duty of loyalty which is materially detrimental to the Company which is
not cured to the reasonable satisfaction of the CEO or the Board within fifteen (15) days following
written warning to the Executive from the CEO or the Board describing the alleged circumstances
provided that if there is an inconsistency in directives given by the Board as compared to a
directive from the CEO, the Board directives shall control;
(iii) willful failure to perform or adhere to explicitly stated duties or guidelines of
employment or to follow the directives of the CEO which continues for fifteen (15) days after
written warning to the Executive that it will be deemed a basis for a “For Cause” termination;
(iv) gross negligence or willful misconduct in the performance of the Executive’s duties
(which is not cured by the Executive within 30 days after written warning from the CEO);
(v) the Executive’s willful commission of an act of dishonesty resulting in economic or
financial injury to the Company or willful commission of fraud; or
(vi) the Executive’s chronic absence from work for reasons other than illness.
For purposes of this Section, no act, or failure to act, on the Executive’s part will be
deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without
a reasonable belief that the Executive’s act, or failure to act, was in the best interest of the
Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board, a directive of the CEO, or based upon the advise of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith
and in the best interests of the Company.
-4-
(c) WITHOUT CAUSE OR GOOD REASON. At the election of the Company, without Cause, and at the
election of the Executive, without Good Reason, in either case upon sixty (60) days’ prior written
notice to the Executive or to the Company, as the case may be. Provided, however, that if the
Executive gives notice, without Good Reason, the Company may waive all or a portion of the sixty
(60) days’ written notice and accelerate the effective date of the termination.
(d) FOR GOOD REASON. At the election of the Executive, for Good Reason, which is not cured by
the Company within thirty (30) days after written notice from the Executive to the Company setting
forth a description of the circumstances constituting Good Reason. For purposes of this Agreement,
“Good
Reason” shall mean any of the following actions, omissions or events occurring without the
Executive’s prior written consent:
(i) The assignment to the Executive of any duties, responsibilities, or reporting requirements
inconsistent with his position as Chief Accounting Officer of the Company, or any material
diminishment, on a cumulative basis, of the Executive’s overall duties, responsibilities, or
status;
(ii) a reduction by the Company in the Executive’s annual Base Salary;
(iii) the requirement by the Company that the principal place of business at which the
Executive performs his duties be changed to a location outside the greater Dallas metropolitan
area; or
(iv) any material breach by the Company of any provision of this Agreement.
(e) NOTICE OF TERMINATION. Any termination by the Company for Cause, or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the other parties hereto given in
accordance with Section 16(a) of this Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination date (provided that the date specified
shall not be more than thirty (30) days after the giving of the notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the
Company, respectively, hereunder or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.
(f) DATE OF TERMINATION. “Date of Termination” means (i) if the Executive’s employment is
terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified in the notice (provided that the date
specified shall not be more than thirty (30) days after the giving of the notice), as the case may
be, (ii) if the Executive’s employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company notifies the Executive
of such termination or such later date specified in such notice, (iii) if the Executive’s
employment is terminated by the Executive without Good Reason, the Date of Termination shall be the
date on which the Executive notifies the Company of such termination or such later date specified
in such notice, unless otherwise agreed by the Company and the
-5-
Executive, and (iv) if the Executive’s employment is terminated by reason of death or Disability or
non-renewal of this Agreement, the Date of Termination shall be the date of death or Disability of
the Executive or the Agreement’s non-renewal date, as the case may be.
7. EFFECTS OF TERMINATION.
(a) TERMINATION FOR DEATH OR DISABILITY; BY THE COMPANY WITHOUT CAUSE; OR NON-RENEWAL BY THE
COMPANY. If the employment of the Executive should terminate by reason of (i) death of the
Executive or Disability, (ii) termination by the Company for any reason (other than Cause) , or
(iii) the Company’s failure to renew this Agreement, then all compensation and benefits for the
Executive shall be as follows:
(i) The Executive shall be paid, in a single lump sum payment within thirty (30) days after
the Date of Termination, the aggregate amount of (A) the Executive’s earned but unpaid Base Salary
through the Date of Termination, and any Incentive Bonus required to be paid to the Executive
pursuant to Section 4(a) above for the prior calendar year to the extent not previously paid, and
reimbursement of all expenses through the Date of Termination as required pursuant to Section 5(d)
hereof (the “Accrued Obligations”), and (B) one (the “Severance Multiple”) times the sum of (x) the
Base Salary in effect on the Termination Date plus (y) the average Incentive Bonus received by the
Executive for the three complete calendar years (or such lesser number of calendar years as the
Executive has been employed by the Company) immediately prior to the Termination Date (the
“Severance Payment”).
(ii) At the time when incentive bonuses are paid to the Company’s other senior executives for
the calendar year of the Company in which the Date of Termination occurs, the Executive shall be
paid a pro-rated Incentive Bonus in an amount equal to the product of (x) the amount of the
Incentive Bonus to which the Executive would have been entitled if the Executive’s employment had
not been terminated, and (y) a fraction, the numerator of which is the number of days in the
applicable calendar year for which the Executive was employed through the Date of Termination and
the denominator of which is the 365 days of the calendar year (a “Pro-Rated Bonus”).
(iii) The Company will allow the Executive and his dependents, at the Company’s cost, to
continue to participate for a period of eighteen (18) months following the Date of Termination in
the Company’s medical, dental and vision plan in effect as of the Date of Termination. The
Company’s payment of this medical coverage will be made monthly during this period of coverage. To
the extent such medical benefits are taxable to the Executive, such benefits will not affect
benefits to be provided in any other taxable year, and such amounts are intended to meet the
requirements of Treasury Regulation Section 1.409A-3(i)(1)(iv)(A) as “in-kind benefits”. In
addition, the Company will reimburse the Executive for a period of eighteen (18) months following
the Date of Termination for the cost of coverage for life insurance and long-term disability
insurance, based upon the level of such benefits that were provided to the Executive under the
Company’s life insurance and long-term disability plans in effect as of the Date of Termination,
which reimbursements will be paid with seven (7) days after the Executive pays any applicable
premium. The amount of any such reimbursements may not affect the expenses eligible for
reimbursement in any other year. Such reimbursements are intended to meet the requirements of
Treasury Regulation Section 1.409A-3(i)(1)(iv)(A). (Collectively, these welfare benefits under
(iii) are referred to as the “Other Benefits”). If the Executive engages in regular employment
after his termination of employment with any organization, any employee welfare benefits received
by the Executive in consideration of such employment which are similar
-6-
in nature to the Other Benefits provided by the Company will relieve the Company of its obligation
under this Section 7(a)(iii) to provide comparable benefits to the extent of the benefits so
received, and such benefit hereunder shall be forfeited.
(iv) Any annual performance shares, restricted shares, LTIP units or options awarded under
Section 4(b) hereof shall immediately vest. Without limiting the foregoing, it is agreed that if
the Executive’s employment is terminated pursuant to this Section 7(a), all outstanding stock
options, restricted stock and other equity awards granted to the Executive under any of the
Company’s equity incentive plans (or awards substituted therefore covering the securities of a
successor company) shall become immediately vested and exercisable in full.
(b) TERMINATION BY THE EXECUTIVE WITH GOOD REASON. In the event that the Executive’s
employment is terminated by the Executive with Good Reason, the Company will pay the Executive the
same Accrued Obligations, Pro-Rated Bonus, Other Benefits and accelerated vesting, all as provided
in Sections 7(a)(i) (ii), (iii) and (iv) above at the times as provided in such sections. In
addition, the Executive shall be entitled to a Severance Payment determined and paid in accordance
with Section 7(a)(i) above; PROVIDED, HOWEVER, the Severance Multiple shall be two (2). Without
limiting the foregoing, it is agreed that if the Executive’s employment is terminated pursuant to
this Section 7(b), all
outstanding stock options, restricted stock, LTIP units and other equity awards granted to the
Executive under any of the Company’s equity incentive plans (or awards substituted therefore
covering the securities of a successor company) shall become immediately vested and exercisable in
full.
(c) TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. If the Executive’s
employment is terminated by the Executive without Good Reason including a resignation by the
Executive without Good Reason and including an election not to renew this Agreement by the
Executive, the Company will pay the Executive the Accrued Obligations as provided in Section
7(a)(i) above but the Executive shall
not be entitled to the Severance Payment, Pro-rated Bonus and accelerated vesting set forth in
Sections 7(a)(i), (ii) and (iv) hereof; provided, however, the Company shall allow the Executive
and his dependents, at the Company’s cost, during the Non-Compete Period (hereinafter defined), to
continue to participate in the Company’s Other Benefits in effect as of the Date of Termination as
provided and paid in the manner set forth in Section 7(a)(iii), but only through the expiration of
the Non-Compete Period. If the Executive engages in regular employment after his Date of
Termination with any organization, any employee welfare benefits received by the Executive in
consideration of such employment which are similar in nature to the Other Benefits provided by the
Company will relieve the Company of its obligation under this Section 7(c) to provide comparable
benefits to the extent of the benefits so received, and such benefit hereunder shall be forfeited.
In addition, in consideration for the Executive’s agreement for honoring the non-compete covenant
in Section 10(a) hereof for the Non-Compete Period as a result of a termination of this Agreement
under this Section 7(c), the Company shall pay the Executive a non-compete payment (the
“Non-Compete Payment”) equal to the Severance Payment determined with a Severance Multiple
equal to one (1). The Non-Compete Payment shall be paid monthly over the one-year Non-Compete
Period following the Date of Termination in equal monthly installments of one-twelfth
(1/12th) of the Non-Compete Payment.
(d) TERMINATION BY THE COMPANY FOR CAUSE. If the Executive’s employment
is terminated by the Company for Cause, the Company will pay the Executive the Accrued Obligations
as provided in Section 7(a)(i) above but the Executive shall not be entitled to the Severance
Payment, Pro-Rated Bonus, Other Benefits and accelerated vesting set forth in Sections 7(a)(i),
(ii), (iii) and (iv) hereof.
-7-
(e) TERMINATION OF AUTHORITY. Immediately upon the Date of Termination or upon the expiration
of this Agreement, notwithstanding anything else to the contrary contained herein or otherwise, the
Executive will stop serving the functions of his terminated or expired positions, and shall be
without any of the authority or responsibility for such positions.
(f) RELEASE OF CLAIMS. As a condition of Executive’s entitlement to the Severance Payment,
Pro-Rated Bonus, Non-Compete Payment and Other Benefits provided by this Agreement, the Executive
shall be required to execute the terms of a waiver and release of claims against the Company
substantially in the form attached hereto as Exhibit “A” (as may be modified consistent with the
purposes of such waiver and release to reflect changes in law following the date hereof)(the
“Release”) within the applicable time period provided in the Release (the “Applicable Release
Period”); and shall forfeit all payments hereunder if it is not so timely executed; provided,
however, that in any case where the first and last days of the Applicable Release Period are in two
separate taxable years, any payments required to be made to Executive that are treated as deferred
compensation for purposes of Code Section 409A shall be made in the later taxable year, promptly
following the conclusion of the Applicable Release Period.
(g) CODE SECTION 409A AND TERMINATION PAYMENTS. All payments provided under this Agreement
shall be subject to this Section 7(g). Notwithstanding anything herein to the contrary, to the
extent that the Board reasonably determines, in its sole discretion, that any payment or benefit to
be provided under this Agreement to or for the benefit of Executive would be subject to the
additional tax imposed under Section 409A(a)(1)(B) of the Code or a successor or comparable
provision, the commencement of such payments and/or benefits shall be delayed until the earlier of
(i) the date that is six months following the Date of Termination or (ii) the date of Executive’s
death (such date is referred to herein as the “Distribution Date”), provided, if at such time
Executive is a “specified employee” of the Company (as defined in Treasury Regulation Section
1.409A-1(i)) and if amounts payable under this Agreement are on account of an “involuntary
separation from service” (as defined in Treasury Regulation Section 1.409A-1(m)), Executive shall
receive payments during the six-month period immediately following the Date of Termination equal to
the lesser of (x) the amount payable under this Agreement, as the case may be, or (y) two times the
compensation limit in effect under Code Section 401(a)(17) for the calendar year in which the
Termination Date occurs (with any amounts that otherwise would have been payable under this
Agreement during such six-month period being paid on the first regular payroll date following the
six-month anniversary of the Date of Termination). In the event that the Board determines that
the commencement of any of the employee benefits to be provided under this Agreement are to be
delayed pursuant to the preceding sentence, the Company shall require Executive to bear the full
cost of such employee benefits until the Distribution Date at which time the Company shall
reimburse Executive for all such costs. Finally, for the purposes of this Agreement, amounts
payable under this Agreement shall be deemed not to be a “deferral of compensation” subject to
Section 409A to the extent provided in the exceptions in Treasury Regulation Sections
1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception
under subparagraph (iii)) and other applicable provisions of Treasury Regulation Section 1.409A-1
through A-6.
8. CHANGE OF CONTROL.
(a) CHANGE OF CONTROL. For purposes of this Agreement, a “Change of Control” will be deemed to
have taken place upon the occurrence of any of the following events:
-8-
(i) any “person” (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and as modified in Section 12(d) and 14(d) of the Exchange Act) other
than (A) the Company or any of its subsidiaries, (B) any employee benefit plan of the Company or
any of its subsidiaries, (C) any Remington Affiliate, (D) a company owned, directly or indirectly,
by stockholders of the Company in substantially the same proportions as their ownership of the
Company, or (E) an underwriter temporarily holding securities pursuant to an offering of such
securities, becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the shares of voting stock
of the Company then outstanding;
(ii) the consummation of any merger, reorganization, business combination or consolidation of
the Company or one of its subsidiaries with or into any other company, other than a merger,
reorganization, business combination or consolidation which would result in the holders of the
voting securities of the Company outstanding immediately prior thereto holding securities which
represent immediately after such merger, reorganization, business combination or consolidation more
than 50% of the combined voting power of the voting securities of the Company or the surviving
company or the parent of such surviving company;
(iii) the consummation of the sale or disposition by the Company of all or substantially all
of the Company’s assets, other than a sale or disposition if the holders of the voting securities
of the Company outstanding immediately prior thereto hold securities immediately thereafter which
represent more than 50% of the combined voting power of the voting securities of the acquiror, or
parent of the acquiror, of such assets; or the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company; or
(iv) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose election to the Board was
approved by a vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of an
election contest with respect to the election or removal of directors or other solicitation of
proxies or consents by or on behalf of a person other than the Board.
(b) CERTAIN BENEFITS UPON A CHANGE OF CONTROL. If a Change of Control
occurs during the Term and the Executive’s employment is terminated by the Company without Cause
or by the Executive for any reason on or before the one (1) year anniversary of the effective date
of the Change of Control, then the Executive shall be entitled to the Accrued Obligations,
Pro-Rated Bonus, Other Benefits and accelerated vesting, all as provided in Sections 7(a)(i), (ii),
(iii) and (iv) above at the times as provided in such sections. In addition, the Executive shall be
entitled to a Severance Payment determined and paid in accordance with Section 7(a)(i) above;
PROVIDED, HOWEVER, the Severance Multiple shall be two (2). Without limiting the foregoing, it is
agreed that if the Executive’s employment is terminated pursuant to this Section 8(b), all
outstanding stock options, restricted stock, LTIP units and other equity awards granted to the
Executive under any of the Company’s equity incentive plans (or awards substituted therefore
covering the securities of a successor company) shall become immediately vested and exercisable in
full. All payments under this Section 8(b) are subject to the restrictions set forth in Section
7(g) and may be delayed
-9-
as set forth in Section 7(g) in order to satisfy the requirements of Section 409A of the Internal
Revenue Code.
(c) EXCISE TAX.
(i) In the event that any payment or benefit received or to be received by the Executive in
connection with a Change of Control or the termination of the Executive’s employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a Change of Control or any person affiliated with the
Company or such person) (all such payments and benefits being hereinafter called “Total Payments”)
will be subject (in whole or part) to the excise tax (the “Excise Tax”) imposed under Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), then, subject to the provisions of
Section 8(c)(ii) hereof, the Company will pay to the Executive an additional amount (the “Gross-Up
Payment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on
the Total Payments and any federal, state and local income tax and Excise Tax upon the payment
provided for by this Section 8(c)(i), will be equal to the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the Executive will be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive’s residence on such date, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such state and local
taxes.
(ii) In the event that, after giving effect to any redeterminations described in Section
8(c)(iv) hereof, a reduction in the Total Payments to the largest amount that would result in no
portion of the Total Payments being subject to the Excise Tax (after taking into account any
reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan,
arrangement or agreement) would produce a net amount (after deduction of the net amount of federal,
state and local income tax on such reduced Total Payments) that would be greater than the net
amount of unreduced Total Payments (after deduction of the net amount of federal, state and local
income tax and the amount of Excise Tax to which the Executive would be subject in respect of such
Total Payments), then Section 8(c)(i) hereof will not apply and the Total Payments will be so
reduced.
(iii) The determination of whether any of the Total Payments will be subject to the Excise Tax
and the amount of such Excise Tax will be made by the Company’s independent auditors. The Company
will provide the Executive with its calculation of the amounts referred to in this Section 8(c) and
such supporting materials as are reasonably necessary for the Executive to evaluate the Company’s
calculations. If the Executive disputes the Company’s calculations (in whole or in part), the
reasonable opinion of the Company’s independent auditors with respect to the matter in dispute will
prevail.
(iv) In the event that (A) the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of payment of the Total Payments and (B) after
giving effect to such redetermination, the Total Payments are reduced pursuant to Section 8(c)(ii)
hereof, the Executive will repay to the Company, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the
extent that such repayment results in a reduction in the Excise Tax and/or a federal, state or
local income tax deduction) plus interest on the amount of such
-10-
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that (X) the
Excise Tax is determined to exceed the amount taken into account hereunder at the time of the
termination of the Executive’s employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment) and (Y) after giving
effect to such redetermination, the Total Payments are not reduced pursuant to Section 8(c)(ii)
hereof, the Company will make an additional Gross-Up Payment in respect of such excess and in
respect of any portion of the Excise Tax with respect to which the Company had not previously made
a Gross-Up Payment (plus any additional taxes payable by the Executive with respect to such excess
and such portion) at the time that the amount of such excess is finally determined. The Company
shall also reimburse the Executive for any expenses (including interest and penalties) incurred in
any such additional Gross-Up redetermination to the extent permitted under Section 409A. (All
reimbursements of expenses incurred in connection with such additional Gross-Up redetermination
shall be made within thirty (30) days after the Executive incurs such expense, the amounts
reimbursed in a tax year will not affect such expenses eligible for reimbursement in any other tax
year, and such reimbursement period shall be effective so long as the applicable statute of
limitations for such Gross-Up redetermination is open. Such reimbursements are intended to comply
with Treasury Regulation Section 1.409A-3(i)(1)(iv)(A)).
(v) The Executive shall notify the Company in writing of any claim that, if successful, would
require the payment by the Company of a Gross-Up Payment or might entitle the Company to the refund
of all or part of any previous Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the date on which such
claim is required to be paid. The Executive shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which he gives such notice to the Company. If the
Company notifies the Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall: (i) give the Company any information reasonably requested
by the Company relating to such claim; (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney jointly
selected by the Executive and the Company; (iii) cooperate with the Company in good faith in order
to effectively contest such claim; and (iv) permit the Company to participate in any proceedings
relating to such claim. The Company shall reimburse the Executive for all costs and expenses
(including legal fees and additional interest and penalties to the extent permitted under 409A)
incurred in connection with such contest. All reimbursements of such expenses shall be made within
30 days after the Executive incurs such expense, the amounts reimbursed in a tax year will not
affect such expenses eligible for reimbursement in any other tax year, and such reimbursement
period shall be effective so long as the applicable statute of limitations for such claim is open.
Such reimbursements are intended to comply with Treasury Regulation Section 1.409A-3(i)(1)(iv)(A).
(vi) Without limitation on the foregoing, the Company shall control all audits and proceedings
taken in connection with any claim, audit or proceeding involving Excise Taxes or Gross-Up Payments
and, at its sole option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of any such claim, audit or
proceeding and may, at its sole option, either direct the Executive to pay the tax claimed and xxx
for a refund or contest the tax in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine; PROVIDED,
HOWEVER, that if the Company directs the Executive to pay such
-11-
tax and xxx for a refund, the Company shall reimburse the Executive within thirty (30) days after
the Executive pays such taxes (including interest or penalties with respect thereto to the extent
permitted under 409A). All reimbursements of such expenses shall be made within thirty (30) days
after the Executive incurs such expense, the amounts reimbursed in a tax year will not affect such
expenses eligible for reimbursement in any other tax year, and such reimbursement period shall be
effective so long as the applicable statute of limitations for such claim is open. Such
reimbursements are intended to comply with Treasury Regulation Section 1.409A-3(i)(1)(iv)(A). The
Company’s control of the contest shall be limited to issues with respect to which such a Gross-Up
Payment would be payable or refundable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue.
(vii) To the extent that a Gross-Up Payment is determined to be payable pursuant to this
Section 8(c), such payment must be made no later than the end of the taxable year immediate
following the taxable year in which the taxes described above are remitted by the Executive to the
taxing authority.
9. CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges that the Executive has
and will have access to confidential and proprietary information of the Company which constitute
valuable, special, and unique assets of the Company. The term “Confidential Information” as used in
this Agreement shall mean all proprietary information which is known only to the Executive, the
Company, other employees of the Company, or others in a confidential relationship with the Company,
and relating to the Company’s business (including, without limitation, information regarding
clients, customers, pricing policies, methods of operation, proprietary company programs, sales,
acquisitions, products, profits, costs, conditions (financial or other), cash flows, key personnel,
formulae, product applications, technical processes, and trade secrets, as such information may
exist from time to time, which the Executive acquired or obtained by virtue of work performed for
the Company, or which the Executive may acquire or may have acquired knowledge of during the
performance of said work.
The Executive acknowledges that the Company has put in place certain policies and practices to
keep such Confidential Information secret, including disclosing the information only on a
need-to-know basis. The Executive further acknowledges that the Confidential Information has been
developed or acquired by the Company through the expenditure of substantial time, effort, and money
and provides the Company with an advantage over competitors who do not know such Confidential
Information. Finally, the Executive acknowledges that such Confidential Information, if revealed to
or used for the benefit of the Company’s competitors or in a manner contrary to the Company’s
interests, would cause extensive and immeasurable harm to the Company and to the Company’s
competitive position.
The Executive shall not, during the Term or at any time thereafter, use for personal gain or
detrimentally to the Company all or any part of the Confidential Information, or disclose or make
available all or any part of the Confidential Information to any person, firm, corporation,
association, or any other entity for any reason or purpose whatsoever, directly or indirectly,
except as may be required pursuant to his employment hereunder, unless and until such Confidential
Information becomes publicly available other than as a consequence of the breach by the Executive
of his confidentiality obligations hereunder. Notwithstanding the foregoing, Executive shall not
be restricted from disclosing or using Confidential Information that: (i) is or becomes generally
available to the public other than as a result of an unauthorized disclosure by Executive or his
agent; (ii) becomes available to Executive in a manner that is not in contravention of applicable
law from a source (other than the Company or its affiliated entities or one of its or their
officers, employees, agents or representatives) that is not known by Executive, after reasonable
-12-
investigation, to be bound by a confidential relationship with the Company or its affiliated
entities or by a confidentiality or other similar agreement; or (iii) is required to be disclosed
by law, court order or other legal process: provided, however, that in the event disclosure is
required by law, court order or legal process, Executive shall provide the Company, if legally
permissible, with prompt notice of such requirement as set forth below in this Section 9.
The Executive acknowledges that the Confidential Information shall remain at all times the
exclusive property of the Company, and no license is granted. In the event of the termination of
his employment, whether voluntary or involuntary and whether by the Company or the Executive, or
within seven (7) business days of the Company’s request under any other circumstances, the
Executive shall deliver to the Company all Confidential Information, in any form whatsoever,
including electronic formats, and shall not take with him any Confidential Information or any
reproductions (in whole or in part) or extracts of any items relating to the Confidential
Information. The Company acknowledges that prior to his employment with the Company, the Executive
has lawfully acquired extensive knowledge of the industries in which the Company engages in
business including, without limitation, markets, valuation methods and techniques, capital markets,
investor relationships and similar items, and that the provisions of this Section 9 are not
intended to restrict the Executive’s use of such previously acquired knowledge.
In the event that the Executive receives a request or is required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or similar process) to
disclose all or any part of the Confidential Information, the Executive agrees, if legally
permissible, to (a) promptly notify the Company of the existence, terms and circumstances
surrounding such request or requirement, (b) consult with the Company on the advisability of taking
legally available steps to resist or narrow such request or requirement and (c) assist the Company
in seeking a protective order or other appropriate remedy; provided, however, that the Executive
shall not be required to take any action in violation of applicable laws. In the event that such
protective order or other remedy is not obtained or that the Company waives compliance with the
provisions hereof, the Executive shall not be liable for such disclosure unless disclosure to any
such tribunal was caused by or resulted from a previous disclosure by the Executive not permitted
by this Agreement.
10. NON-COMPETITION, NONSOLICITATION AND NON-INTERFERENCE.
(a) NON-COMPETITION. During the Term and any Non-Compete Period (hereinafter defined), the
Executive will not, directly or indirectly, either as a principal, agent, employee, employer,
stockholder or partner engage in any “Competitive Business”; PROVIDED, HOWEVER, the foregoing shall
not prohibit or limit the Executive’s right to pursue and maintain passive investments allowed
pursuant to Section 1(c) hereof.
For purposes of this Section 10(a), “Competitive Business” means acquiring, investing in or
with respect to, owning, leasing, managing or developing hotel properties in the United States or
originating or acquiring loans in respect of hotel properties in the United States where the
Executive has duties or performs services that are the same or similar to those services actually
performed by the Executive for the Company.
For purposes of this Section 10(a), the “Non-Compete Period” shall mean:
-13-
(i) in the case of a termination of the Executive’s employment as a result of Disability, or a
termination by the Executive without Good Reason (including, without limitation, a resignation by
the Executive without Good Reason or an election by the Executive not to renew this Agreement), a
period during the Term and ending one (1) year after the Date of Termination; and
(ii) in the case of a termination of the Executive’s employment for any other reason
including, without limitation, as a result of (a) a Change in Control, (b) a termination by the
Executive for Good Reason, or (c) a termination by the Company for Cause or without Cause
(including non-renewal by the Company), the Non-Compete Period shall expire on the Date of
Termination.
The Executive acknowledges that the services provided by the Executive are of a special,
unique, and extraordinary nature. The Executive further acknowledges that his work and experience
with the Company will enhance his value to a Competitive Business, and that the nature of the
Confidential Information to which the Executive has immediate access and will continue to have
access during the course of his employment makes it difficult, if not impossible, for him to engage
in any Competitive Business or work in any capacity similar to the Executive’s duties or services
with the Company without disclosing or utilizing the Confidential Information. The Executive
further acknowledges that his work and experience with the Company places him in a position of
trust with the Company.
(b) NON-SOLICITATION. The Executive covenants and agrees that (i) during the Term, and (ii)
during the period ending on the first anniversary of his Date of Termination, he shall not, without
the prior written consent of the Company, directly or indirectly, whether for his own account or on
behalf of any person, firm, corporation, partnership, association or other entity or enterprise,
solicit, recruit, hire or cause to be hired any employees of the Company or any of its affiliates,
or any person who was an employee of the Company during the six months preceding the Executive’s
Date of Termination, or solicit or encourage any employee of the Company or any of its affiliates
to leave the employment of the Company or any of such affiliates, as applicable.
(c) NON-INTERFERENCE WITH COMPANY OPPORTUNITIES. The Executive understands and agrees that
all business opportunities with which he is involved during his employment with the Company
constitute valuable assets of the Company and its affiliated entities, and may not be converted to
Executive’s own use or converted by Executive for the use of any person, firm, corporation,
partnership, association or other entity or enterprise. Accordingly, Executive agrees that during
the Term and thereafter, Executive shall not, directly or indirectly, whether for his own account
or on behalf of any person, firm, corporation, partnership, association or other entity or
enterprise, interfere with, solicit, pursue, or in any manner make use of any such business
opportunities.
(d) REASONABLE RESTRAINTS. The Executive agrees that restraints imposed upon him pursuant to
this Section are necessary for the reasonable and proper protection of the Company and its
subsidiaries and affiliates, and that each and every one of the restraints is reasonable in respect
to subject matter, length of time and geographic area. The parties further agree that, in the event
that any provision of this Section shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its being extended over too great a time, too large a geographic area or
too great a range of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.
-14-
11. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company and for which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement with the Company.
Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any
plan, policy, practice or program of or any contract agreement with the Company at or subsequent to
the Date of Termination shall be payable in accordance with such plan, policy, practice or program
or contract or agreement except as explicitly modified by this Agreement. Notwithstanding anything
in this Agreement or any such plan, policy, practice or program noted above to the contrary, the
timing of all payments pursuant to this Agreement or any such plan, policy, practice or program
shall be subject to the timing rules specified in Section 7(g) of this Agreement.
12. FULL SETTLEMENT. The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the Company may have
against the
Executive or others. In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and except as expressly provided, such amounts shall not be reduced
whether or not the
Executive obtains other employment. The Company agrees to pay as incurred (within 30 days following
the Company’s receipt of an invoice from the Executive), to the full extent permitted by law, all
reasonable legal fees and expenses which the Executive or his beneficiaries may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others
of the validity or enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the Executive or his
beneficiaries about the amount of any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(a) of the Code to the extent permitted by 409A. The preceding sentence shall not
apply with respect to any such contest if the court having jurisdiction over such contest
determines that the Executive’s claim in such contest is frivolous or maintained in bad faith.
This reimbursement obligation shall remain in effect following the Executive’s termination of
employment for the applicable statute of limitations period relating to any such claim, and the
amount of reimbursements hereunder during any tax year shall not affect the expenses eligible for
reimbursement in any other tax year. Such reimbursements are intended to comply with Treasury
Regulation Section 1.409A-3(i)(1)(iv)(A).
13. DISPUTES.
(a) EQUITABLE RELIEF. The Executive acknowledges and agrees that upon any breach by the
Executive of his obligations under Sections 9 or 10 hereof, the Company will have no adequate
remedy at law, and accordingly will be entitled to specific performance and other appropriate
injunctive and equitable relief.
(b) ARBITRATION. Excluding only requests for equitable relief by the Company under Section
13(a) of this Agreement, in the event that there is any claim or dispute arising out of or relating
to this Agreement, or the breach thereof, and the parties hereto shall not have resolved such claim
or dispute
within 60 days after written notice from one party to the other setting forth the nature of such
claim or dispute, then such claim or dispute shall be settled exclusively by binding arbitration in
Dallas, Texas in accordance with the Commercial Arbitration Rules of the American Arbitration
Association by an
-15-
arbitrator mutually agreed upon by the parties hereto or, in the absence of such agreement, by an
arbitrator selected according to such Rules. Notwithstanding the foregoing, if either the Company
or the Executive shall request, such arbitration shall be conducted by a panel of three
arbitrators, one selected by the Company, one selected by the Executive and the third selected by
agreement of the first two, or, in the absence of such agreement, in accordance with such Rules.
Neither party shall have the right to claim or recover punitive damages. Judgment upon the award
rendered by such arbitrator(s) shall be entered in any Court having jurisdiction thereof upon the
application of either party.
14. INDEMNIFICATION. The Company will indemnify the Executive, to the maximum extent permitted
by applicable law, against all costs, charges and expenses incurred or sustained by the Executive,
including the cost of legal counsel selected and retained by the Executive in connection with any
action, suit or proceeding to which the Executive may be made a party by reason of the Executive
being or having been an officer, director, or employee of the Company or any subsidiary or
affiliate of the Company.
15. COOPERATION IN FUTURE MATTERS. The Executive hereby agrees that, for a period of one (1)
year following his termination of employment, he shall cooperate with the Company’s reasonable
requests relating to matters that pertain to the Executive’s employment by the Company, including,
without limitation, providing information or limited consultation as to such matters, participating
in legal proceedings, investigations or audits on behalf of the Company, or otherwise making
himself reasonably available to the Company for other related purposes. Any such cooperation shall
be performed at times scheduled taking into consideration the Executive’s other commitments,
including business and family matters, and the Executive shall be compensated at a reasonable
hourly or PER DIEM rate to be agreed by the parties to the extent such cooperation is required on
more than an occasional and limited basis. The
Executive shall not be required to perform such cooperation to the extent it conflicts with any
requirements of exclusivity of services for another employer or otherwise, nor in any manner that
in the good faith belief of the Executive would conflict with his rights under or ability to
enforce this Agreement.
16. GENERAL.
(a) NOTICES. All notices and other communications hereunder shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if delivered personally or if sent
by overnight courier or by certified mail, return receipt requested, postage prepaid or sent by
written telecommunication or telecopy, to the relevant address set forth below, or to such other
address as the recipient of such notice or communication shall have specified to the other party
hereto in accordance with this Section 16(a).
| If to the Company, to: | Ashford Hospitality Trust, Inc. | |||
| 00000 Xxxxxx Xxxxxxx, Xxxxx 0000 | ||||
| Xxxxxx, Xxxxx 00000 | ||||
| Attn: Chairman of the Board of Directors | ||||
| with a copy to: | Ashford Hospitality Trust, Inc. | |||
| 00000 Xxxxxx Xxxxxxx, Xxxxx 0000 | ||||
| Xxxxxx, Xxxxx 00000 | ||||
| Attn: Chief Legal Officer |
-16-
If to the Executive, at his last residence shown on the records of the Company, with a copy to:
Any such notice shall be effective (i) if delivered personally, when received, (ii) if sent by
overnight courier, when receipted for, and (iii) if mailed, two (2) days after being mailed as
described above.
(b) SEVERABILITY. If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired.
(c) WAIVERS. No delay or omission by either party hereto in exercising any right, power or
privilege hereunder shall impair such right, power or privilege, nor shall any single or partial
exercise of any such right, power or privilege preclude any further exercise thereof or the
exercise of any other right, power or privilege.
(d) COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument. In
making proof of this Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
(e) ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Company’s
successors and the Executive’s personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees. This Agreement shall not be assignable by the Executive, it
being
understood and agreed that this is a contract for the Executive’s personal services. This Agreement
shall not be assignable by the Company except in connection with a transaction involving the
succession by a third party to all or substantially all of the Company’s business and/or assets
(whether direct or indirect and whether by purchase, merger, consolidation, liquidation or
otherwise), in which case such successor shall assume this Agreement and expressly agree to perform
this Agreement in the same manner and to the same
extent as the Company would be required to perform it in the absence of a succession. For all
purposes under this Agreement, the term “Company” shall include any successor to the Company’s
business and/or assets that executes and delivers the assumption agreement described in the
immediately preceding sentence or that becomes bound by this Agreement by operation of law.
(f) ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties,
supersedes all prior agreements and understandings, whether written or oral, relating to the
subject matter hereof and may not be amended except by a written instrument hereafter signed by the
Executive and a duly
authorized representative of the Board.
(g) GOVERNING LAW. This Agreement and the performance hereof shall be construed and governed
in accordance with the laws of the State of Texas, without giving effect to principles of conflicts
of
-17-
law. Jurisdiction and venue shall be solely in the federal or state courts of Dallas County, Texas.
This provision should not be read as a waiver of any right to removal to federal court in Dallas
County.
(h) CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rule of strict construction will be applied
against any party. The headings of sections of this Agreement are for convenience of reference only
and shall not affect its meaning or construction.
(i) PAYMENTS AND EXERCISE OF RIGHTS AFTER DEATH. Any amounts due
hereunder after the Executive’s death shall be paid to the Executive’s designated beneficiary or
beneficiaries, whether received as a designated beneficiary or by will or the laws of descent and
distribution. The Executive may designate a beneficiary or beneficiaries for all purposes of this
Agreement, and may change at any time such designation, by notice to the Company making specific
reference to this Agreement. If no designated beneficiary survives the Executive or the Executive
fails to designate a beneficiary for purposes of this Agreement prior to his death, all amounts
thereafter due hereunder shall be paid, as and when payable, to his spouse, if she survives the
Executive, and otherwise to his estate.
(j) CONSULTATION WITH COUNSEL. The Executive acknowledges that he has had a full and complete
opportunity to consult with counsel or other advisers of his own choosing concerning the terms,
enforceability and implications of this Agreement, and that the Company has not made any
representations or warranties to the Executive concerning the terms, enforceability and
implications of this
Agreement other than as are reflected in this Agreement.
(k) WITHHOLDING. Any payments provided for in this Agreement shall be paid net of any
applicable tax withholding required under federal, state or local law.
(l) NON-DISPARAGEMENT. The Executive agrees that, during the Term and thereafter (including
following Executive’s termination of employment for any reason) he will not make statements or
representations, or otherwise communicate, directly or indirectly, in writing, orally, or
otherwise, or take any action which may, directly or indirectly, disparage the Company or its
affiliates or their respective officers, directors, employees, advisors, businesses or reputations.
The Company agrees that, during the Term and thereafter (including following Executive’s
termination of employment for any reason) the Company will not make statements or representations,
or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any
action which may directly or indirectly, disparage Executive or his business or reputation.
Notwithstanding the foregoing, nothing in this Agreement shall preclude either Executive or the
Company from making truthful statements or disclosures that are required by applicable law,
regulation, or legal process.
(m) CODE SECTION 409A. It is the intention of the parties to this Agreement that no payment
or entitlement pursuant to this Agreement will give rise to any adverse tax consequences to the
Executive under Section 409A of the Code. The Agreement shall be interpreted to that end and,
consistent with that objective and notwithstanding any provision herein to the contrary, the
Company may unilaterally take any action it deems necessary or desirable to amend any provision
herein to avoid the application of or excise tax under Section 409A. Further, no effect shall be
given to any provision herein in a manner that reasonably could be expected to give rise to adverse
tax consequences under that provision.
-18-
[SIGNATURE PAGE FOLLOWS]
-19-
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused
this Agreement to be duly executed under seal as of the date first above written.
| REIT: | ||||||||
| ASHFORD HOSPITALITY TRUST, INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| Dated: | ||||||||
| OPERATING PARTNERSHIP: | ||||||||
| ASHFORD HOSPITALITY LIMITED PARTNERSHIP | ||||||||
| By: | Ashford OP General Partner, LLC | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| Dated: | ||||||||
| EXECUTIVE: | ||||||||
| XXXX XXXXXXXX | ||||||||
| Dated: | ||||||||
-20-
EXHIBIT “A”
RELEASE AND WAIVER
THIS RELEASE AND WAIVER (the “Termination Release”) is made as of the day of
,
200___ by XXXX XXXXXXXX (the “Executive”).
WHEREAS, the Executive, Ashford Hospitality Trust, Inc. (the “REIT”), and Ashford Hospitality
Limited Partnership (the “Operating Partnership”) have entered into an Employment Agreement (the
“Agreement”) dated as of March 21, 2008, effective as of January 1, 2008 and providing certain
compensation and severance amounts upon the Executive’s termination of employment; and
WHEREAS, the Executive has agreed, pursuant to the terms of the Agreement, to execute a
release and waiver in the form set forth in this Termination Release in consideration of the REIT
and the Operating Partnership (collectively, the “Company”) agreement to provide the compensation
and severance amounts upon the Executive’s termination of employment set out in the Agreement; and
WHEREAS, the Company and the Executive desire to settle all rights, duties and obligations
between them, including without limitation all such rights, duties, and obligations arising under
the Agreement or otherwise out of the Executive’s employment by the Company;
NOW THEREFORE, intending to be legally bound and for good and valid consideration the
sufficiency of which is hereby acknowledged, the Executive agrees as follows:
1. RELEASE
(a) The Executive knowingly and voluntarily releases, acquits, covenants not to xxx and
forever discharges the Company, and its respective owners, parents, stockholders, predecessors,
successors, assigns, agents, directors, officers, employees, representatives, divisions and
subsidiaries (collectively, the “Releasees”) from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, damages, causes of action, suits, rights, costs,
losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected,
foreseen or unforeseen, matured or unmatured, against them which the Executive or any of his heirs,
executors, administrators, successors and assigns ever had, now has or at any time hereafter may
have, own or hold by reason of any matter, fact, or cause whatsoever from the beginning of time up
to and including the date of this Termination Release, including without limitation all claims
arising under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Employee
Retirement Income Security Act of 1974, Texas Labor Code Section 21.001, et seq. (Texas Employment
Discrimination); Texas Labor Code Section 61.001, et seq. (Texas Pay Day Act); Texas Labor Code
Section 62.002, et seq. (Texas Minimum Wage Act); Texas Labor Code Section 201.001, et seq. (Texas
Unemployment Compensation Act); Texas Labor Code Section 401.001, et seq., specifically Section
451.001 formerly codified as Article 8307c of the Revised Civil Statutes (Texas Workers’
Compensation Act and Discrimination Issues); and Texas Genetic Information and Testing Law, each as
amended, or any other
federal, state or local laws, rules, regulations, judicial decisions or public policies now or
hereafter recognized.
-21-
(b) The Executive represents that he has not filed or permitted to be filed against any of the
Releasees, any complaints, charges or lawsuits and covenants and agrees that he will not seek or be
entitled to any personal recovery in any court or before any governmental agency, arbitrator or
self-regulatory body
against any of the Releasees arising out of any matters set forth in Section 1(a) hereof. Nothing
herein shall prevent the Executive from seeking to enforce his rights under the Agreement. The
Executive does not hereby waive or release his rights to any benefits under the Company’s employee
benefit plans to which
he is or will be entitled pursuant to the terms of such plans in the ordinary course.
2. NON-DISPARAGEMENT. The Executive covenants and agrees he will not make statements or
representations, or otherwise communicate, directly or indirectly, in writing, orally, or
otherwise, or take any action which may, directly or indirectly, disparage the Company or its
affiliates or their respective officers, directors, employees, advisors, businesses or reputations.
Notwithstanding the foregoing, nothing herein or in the Agreement shall preclude the Executive
from making truthful statements or disclosures that are required by applicable law, regulation, or
legal process.
3. NON-SOLICITATION. The Executive covenants and agrees he shall not, without the prior
written consent of the Company for a period ending one (1) year from the Date of Termination (as
defined in the Agreement), directly or indirectly, whether for his own account or on behalf of any
person, firm, corporation, partnership, association or other entity or enterprise, solicit,
recruit, hire or cause to be hired any employees of the Company or any of its affiliates, or any
person who was an employee of the Company during the six months preceding the Executive’s Date of
Termination (as defined in the Agreement), or solicit or encourage any employee of the Company or
any of its affiliates to leave the employment of the Company or any of such affiliates, as
applicable.
4. NON-INTERFERENCE WITH COMPANY OPPORTUNITIES. The Executive understands and agrees that all
business opportunities with which he is involved during his employment with the Company constitute
valuable assets of the Company and its affiliated entities, and may not be converted to Executive’s
own use or converted by Executive for the use of any person, firm, corporation, partnership,
association or other entity or enterprise. Accordingly, Executive agrees he shall not, directly or
indirectly, whether for his own account or on behalf of any person, firm, corporation, partnership,
association or other entity or enterprise, interfere with, solicit, pursue, or in any manner make
use of any such business opportunities.
5. ACKNOWLEDGMENT. The Company has advised the Executive to consult
with an attorney of his choosing prior to signing this Termination Release and the Executive hereby
represents to the Company that he has been offered an opportunity to consult with an attorney prior
to signing this Termination Release. The Company has also advised the Executive that Executive has
up to
twenty-one days to consider and sign the Release and Waiver and up to seven days after signing in
which to revoke acceptance by giving notice to at by personal
delivery or by mail postmarked no later than the seventh day after the Executive signs the Release
and Waiver.
-22-
IN WITNESS WHEREOF, the Executive has executed this Termination Release under seal as of the
day and year first above written.
-23-
