HERSHA HOSPITALITY TRUST Form of Performance Share Award Agreement
Exhibit
10.1
THIS
AGREEMENT, dated as of the 5th day
of August, 2009, between HERSHA HOSPITALITY TRUST, a Maryland real estate
investment trust (the “Company”) and _______________ (“Participant”), is made
pursuant to the terms of the Company’s 2008 Equity Incentive Plan (the
“Plan”). All terms that are used herein that are defined in the Plan
shall have the same meaning given them in the Plan.
1.
Grant of
Performance Share Award. Pursuant to the Plan, on August 5,
2009 (the “Date of Grant”), the Company granted Participant a Performance Share
Award with respect to ______ shares of Common Stock, subject to the terms and
conditions of the Plan and subject further to the terms and conditions set forth
herein.
2.
Earning
the Performance Shares. Participant shall earn the Performance
Shares, and become entitled to the issuance of shares of Common Stock in
accordance with paragraph 3, to the extent that the following requirements are
satisfied.
(a) Participant
shall earn ______ of the Performance Shares if during the Measurement Period the
VWAP is at least $3.00 but less than $4.00. Participant shall earn an
additional _____ of the Performance Shares if during the Measurement Period the
VWAP is at least $4.00 but less than $5.00. Participant shall earn an
additional _______ of the Performance Shares if during the Measurement Period
the VWAP is $5.00 or more.
(b) If
during the Measurement Period the VWAP is at least $3.00, Participant may earn
up to an additional ____ of the Performance Shares. The additional
Performance Shares, if any, earned under this paragraph 2(b) shall be determined
by the Committee in its discretion following the last day of the Measurement
Period.
(c) Paragraphs
2(a) and 2(b) to the contrary notwithstanding, all of the Performance Shares not
previously earned shall be earned on a Control Change Date if Participant
remains in the continuous employ of the Company or an Affiliate from the Date of
Grant until the Control Change Date and the Control Change Date occurs during
the Measurement Period..
(d) Paragraphs
2(a) and 2(b) to the contrary notwithstanding, all of the Performance Shares not
previously earned shall be earned on the date of Participant’s termination of
employment with the Company and its Affiliates if (i) Participant’s employment
with the Company and its Affiliates is terminated by the Company or an Affiliate
without Cause before the last day of the Measurement Period and (ii) Participant
remained in the continuous employ of the Company or an Affiliate from the Date
of Grant until the date that Participant’s employment ends as described in the
preceding clause (i).
(e) Any
Performance Shares that are not earned on or before the date that Participant’s
employment with the Company and its Affiliates ends for any reason shall be
forfeited on the date that such employment ends.
3.
Settlement
of Performance Shares. Performance Shares that are earned in
accordance with paragraph 2 shall be settled by the issuance of shares of Common
Stock to Participant. The number of shares of Common Stock to be
issued to Participant shall equal the number of Performance Shares earned in
accordance with paragraph 2. Shares of Common Stock shall be issued
in settlement of earned Performance Shares within ten days after the
requirements of paragraph 2 are satisfied, e.g., within ten days after
each of the applicable VWAP performance criteria are satisfied, within ten days
after the Committee’s determination with respect to Performance Shares earned
under paragraph 2(b) and within ten days after a termination of employment
described in paragraph 2(c) or a Control Change Date. Shares of
Common Stock issued in settlement of earned Performance Shares shall be vested
and nonforfeitable and, subject to the requirements of applicable securities
laws, shall be transferable.
4.
Definitions. For
purposes of this Agreement, the following terms shall have the definitions set
forth below:
(a) “VWAP”
means the volume weighted average of the Fair Market Value of the Common Stock
during a period of twenty consecutive days on which the Common Stock is traded
on the principal exchange on which the Common Stock is listed for
trading.
(b) “Measurement
Period” means the period beginning on the Date of Grant and ending on August 4,
2010.
(c) “Cause”
has the same meaning as set forth in an employment agreement between Participant
and the Company. If Participant does not have an employment agreement
with the Company or if such employment agreement does not define the term
“Cause,” then for purposes of this Agreement the term “Cause” means a
termination by the Company or an Affiliate of Participant’s employment with the
Company and its Affiliates on account of:
(i) Participant’s
conviction of a felony;
(ii) Participant’s
theft, embezzlement, misappropriation of, or, misappropriation of or intentional
and malicious infliction of damage to the Company’s or an Affiliate’s property
or business opportunity;
(iii) Participant’s
material breach of any agreement between Participant and the
Company;
(iv) Participant’s
neglect of Participant’s duties or responsibilities to the Company or an
Affiliate or his failure or refusal to follow any written direction of the Board
or any duly constituted committee thereof, which failure continues for a period
of twenty calendar days after the Company provides Participant written notice
thereof; or
(v) Participant’s
abuse of alcohol, drugs or other substances or his engaging in other deviant
personal activities in a manner that, in the reasonable judgment of the Board,
adversely affects the reputation, goodwill or business position of the
Company.
5.
Shareholder
Rights. Participant will have no rights as a shareholder of
the Company with respect to the Performance Shares unless and until shares of
Common Stock are issued in settlement of earned Performance Shares.
6.
No Right
to Continued Employment. This Agreement does not confer upon
Participant any right with respect to continuance of employment by the Company
or an Affiliate, nor shall it interfere in any way with the right of the Company
or an Affiliate to terminate Participant’s employment at any time.
7. Change in
Capital Structure. In accordance with the terms of the Plan,
the terms of this Performance Share Award shall be adjusted as the Board
determines is equitably required in the event the Company effects one or more
stock dividends, stock split-ups, subdivisions or consolidations of shares or
other similar changes in capitalization.
8.
Governing
Law. This Agreement shall be governed by the laws of the State
of Maryland (other than any choice-of-law provisions that would require the
application of the laws of a State other than the State of
Maryland).
9.
Conflicts. In
the event of any conflict between the provisions of the Plan as in effect on the
Date of Grant and the provisions of this Agreement, the provisions of the Plan
shall govern. All reference herein to the Plan shall mean the Plan as
in effect on the Award Date.
10. Participant
Bound by Plan. Participant hereby acknowledges that a copy of
the Plan has been made available to Participant and Participant agrees to be
bound by all the terms and provisions thereof.
11. Binding
Effect. Subject to the limitations stated above and in the
Plan, this Agreement shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of the Participant and the
successors of the Company.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be signed on its
behalf, and the Participant has affixed his signature hereto.
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By
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Name:
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Title:
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PARTICIPANT
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Name:
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