2003 Stock Incentive Plan - Ashford Hospitality Trust Inc.
ASHFORD HOSPITALITY TRUST, INC.
2003 STOCK INCENTIVE PLAN
___________________, 2003
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ASHFORD HOSPITALITY TRUST, INC.
2003 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
ARTICLE I INTRODUCTION .............................................. 1
1.1 Purpose .................................................. 1
1.2 Shares Subject to the Plan ............................... 1
1.3 Administration of the Plan ............................... 1
1.4 Amendment and Discontinuance of the Plan ................. 2
1.5 Granting of Awards to Participants ....................... 2
1.6 Term of Plan ............................................. 2
1.7 Leave of Absence ......................................... 2
1.8 Definitions .............................................. 2
ARTICLE II NONQUALIFIED STOCK OPTIONS ............................... 7
2.1 Grants ................................................... 7
2.2 Calculation of Exercise Price ............................ 7
2.3 Terms and Conditions of Options .......................... 7
2.4 Amendment ................................................ 9
2.5 Acceleration of Vesting .................................. 9
2.6 Other Provisions ......................................... 9
ARTICLE III INCENTIVE OPTIONS ....................................... 9
3.1 Eligibility .............................................. 10
3.2 Exercise Price ........................................... 10
3.3 Dollar Limitation ........................................ 10
3.4 10% Stockholder .......................................... 10
3.5 Options Not Transferable ................................. 10
3.6 Reload Options ........................................... 10
3.7 Compliance with 422 ...................................... 10
3.8 Limitations on Exercise .................................. 10
ARTICLE IV PURCHASED STOCK .......................................... 10
4.1 Eligible Persons ......................................... 10
4.2 Purchase Price ........................................... 11
4.3 Payment of Purchase Price ................................ 11
ARTICLE V BONUS STOCK ............................................... 11
ARTICLE VI STOCK APPRECIATION RIGHTS AND PHANTOM STOCK .............. 11
6.1 Stock Appreciation Rights ................................ 11
6.2 Phantom Stock Awards ..................................... 11
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ARTICLE VII RESTRICTED STOCK ......................................... 12
7.1 Eligible Persons ......................................... 12
7.2 Restricted Period and Vesting ............................ 12
ARTICLE VIII I PERFORMANCE AWARDS .................................... 13
8.1 Performance Awards ....................................... 13
8.2 Performance Goals ........................................ 13
ARTICLE IX OTHER STOCK OR PERFORMANCE BASED AWARDS ................... 15
ARTICLE X CERTAIN PROVISIONS APPLICABLE TO ALL AWARDS ................ 15
10.1 General .................................................. 15
10.2 Stand-Alone, Additional, Tandem, and Substitute Awards ... 15
10.3 Term of Awards ........................................... 16
10.4 Form and Timing of Payment under Awards; Deferrals ....... 16
10.5 Vested and Unvested Awards ............................... 16
10.6 Exemptions from Section 16(b) Liability .................. 17
10.7 Other Provisions ......................................... 17
ARTICLE XI WITHHOLDING FOR TAXES ..................................... 17
ARTICLE XII MISCELLANEOUS ............................................ 17
12.1 No Rights to Awards ...................................... 17
12.2 No Right to Employment ................................... 17
12.3 Governing Law ............................................ 18
12.4 Severability ............................................. 18
12.5 Other Laws ............................................... 18
12.6 Shareholder Agreements ................................... 18
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ASHFORD HOSPITALITY TRUST, INC.
2003 STOCK INCENTIVE PLAN
ARTICLE I
INTRODUCTION
1.1 PURPOSE. The Ashford Hospitality Trust, Inc. 2003 Stock Incentive
Plan (the "Plan") is intended to promote the interests of Ashford Hospitality
Trust, Inc., a Maryland corporation, (the "Company") and its stockholders by
encouraging Employees, Consultants and Non-Employee Directors of the Company or
its Affiliates (as defined below) to acquire or increase their equity interests
in the Company, thereby giving them an added incentive to work toward the
continued growth and success of the Company. The Board of Directors of the
Company (the "Board") also contemplates that through the Plan, the Company and
its Affiliates will be better able to compete for the services of the
individuals needed for the continued growth and success of the Company.
1.2 SHARES SUBJECT TO THE PLAN. The aggregate number of shares of
Common Stock, $.001 par value per share, of the Company ("Common Stock") that
may be issued under the Plan shall not exceed five percent (5%) of the fully
diluted shares of outstanding Common Stock as of the forty-fifth (45th) day
following the consummation of the initial public offering of Common Stock. No
more than 450,000 shares of Common Stock shall be issued to any one Participant
in any one calendar year. Notwithstanding the above, however, in the event that
at any time after the Effective Date the outstanding shares of Common Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares or the like, the aggregate number and class of securities available under
the Plan shall be ratably adjusted by the Committee (as defined below), whose
determination shall be final and binding upon the Company and all other
interested persons. In the event the number of shares to be delivered upon the
exercise or payment of any Award granted under the Plan is reduced for any
reason whatsoever or in the event any Award granted under the Plan can no longer
under any circumstances be exercised or paid, the number of shares no longer
subject to such Award shall thereupon be released from such Award and shall
thereafter be available under the Plan for the grant of additional Awards.
Shares issued pursuant to the Plan (i) may be treasury shares, authorized but
unissued shares or, if applicable, shares acquired in the open market and (ii)
shall be fully paid and nonassessable.
1.3 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. Subject to the provisions of the Plan, the Committee shall interpret
the Plan and all Awards under the Plan, shall make such rules as it deems
necessary for the proper administration of the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defect or supply any omission or reconcile any inconsistency
in the Plan or in any Award under the Plan in the manner and to the extent that
the Committee deems desirable to effectuate the Plan. Any action taken or
determination made by the Committee pursuant to this and the other paragraphs of
the Plan shall be conclusive on all parties. The act or determination of a
majority of the Committee shall be deemed to be the act or determination of the
Committee.
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1.4 AMENDMENT AND DISCONTINUANCE OF THE PLAN. The Board may amend,
suspend or terminate the Plan; provided, however, no amendment, suspension or
termination of the Plan may without the consent of the holder of an Award
terminate such Award or adversely affect such person's rights with respect to
such Award in any material respect; provided further, however, that any
amendment which would constitute a "material revision" of the Plan (as that term
is used in the rules of the New York Stock Exchange) shall be subject to
shareholder approval.
1.5 GRANTING OF AWARDS TO PARTICIPANTS. The Committee shall have the
authority to grant, prior to the expiration date of the Plan, Awards to such
Employees, Consultants and Non-Employee Directors as may be selected by it on
the terms and conditions hereinafter set forth in the Plan. In selecting the
persons to receive Awards, including the type and size of the Award, the
Committee may consider any factors that it may deem relevant.
1.6 TERM OF PLAN. The Plan shall be effective as of August 1, 2003 (the
"Effective Date"), subject to approval by the shareholders of the Company. The
provisions of the Plan are applicable to all Awards granted on or after the
Effective Date. If not sooner terminated under the provisions of Section 1.4,
the Plan shall terminate upon, and no further Awards shall be made, after the
third anniversary of the Effective Date.
1.7 LEAVE OF ABSENCE. If an employee is on military, sick leave or
other bona fide leave of absence, such person shall be considered an "Employee"
for purposes of an outstanding Award during the period of such leave provided it
does not exceed 90 days, or, if longer, so long as the person's right to
reemployment is guaranteed either by statute or by contract. If the period of
leave exceeds 90 days, the employment relationship shall be deemed to have
terminated on the 91st day of such leave, unless the person's right to
reemployment is guaranteed by statute or contract.
1.8 DEFINITIONS. As used in the Plan, the following terms shall have
the meanings set forth below:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
"Affiliate" means (i) Remington, (ii) any entity in which the
Company or Remington, directly or indirectly, owns 10% or more of the
combined voting power, as determined by the Committee, (iii) any
"parent corporation" of the Company or Remington (as defined in section
424(e) of the Code), (iv) any "subsidiary corporation" of any such
parent corporation (as defined in section 424(f) of the Code) of the
Company or Remington and (v) any trades or businesses, whether or not
incorporated which are members of a controlled group or are under
common control (as defined in Sections 414(b) or (c) of the Code) with
the Company or Remington.
"Awards" means, collectively, Options, Purchased Stock, Bonus
Stock, Stock Appreciation Rights, Phantom Stock, Restricted Stock,
Performance Awards, or Other Stock or Performance Based Awards.
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"Bonus Stock" is defined in Article V.
"Cause" for termination of any Participant who is a party to
an agreement of employment with or services to the Company shall mean
termination for "Cause" as such term is defined in such agreement, the
relevant portions of which are incorporated herein by reference. If
such agreement does not define "Cause" or if a Participant is not a
party to such an agreement, "Cause" means (i) the willful commission by
a Participant of a criminal or other act that causes or is likely to
cause substantial economic damage to the Company or an Affiliate or
substantial injury to the business reputation of the Company or
Affiliate; (ii) the commission by a Participant of an act of fraud in
the performance of such Participant's duties on behalf of the Company
or an Affiliate; or (iii) the continuing willful failure of a
Participant to perform the duties of such Participant to the Company or
an Affiliate (other than such failure resulting from the Participant's
incapacity due to physical or mental illness) after written notice
thereof (specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to be heard and cure such failure are given to
the Participant by the Committee. For purposes of the Plan, no act, or
failure to act, on the Participant's part shall be considered "willful"
unless done or omitted to be done by the Participant not in good faith
and without reasonable belief that the Participant's action or omission
was in the best interest of the Company or an Affiliate, as the case
may be.
"Change of Control" shall be deemed to have occurred upon any
of the following events:
(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 13(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) Remington or any
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 (a "Person"), 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;
provided, however, that an initial public offering of Common Stock
shall not constitute a Change of Control;
(ii) the consummation of any merger, organization, 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;
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(iii) the consummation of a 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 by
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.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations thereunder.
"Committee" means the compensation committee appointed by the
Board to administer the Plan or, if none, the Board; provided however,
that with respect to any Award granted to a Covered Employee which is
intended to be "performance-based compensation" as described in Section
162(m)(4)(c) of the Code, the Committee shall consist solely of two or
more "outside directors" as described in Section 162(m)(4)(c)(i) of the
Code.
"Consultant" means any individual, other than a Director or an
Employee, who renders consulting or advisory services to the Company or
an Affiliate.
"Covered Employee" shall mean the Chief Executive Officer of
the Company or the four highest paid officers of the Company other than
the Chief Executive Officer as described in Section 162(m)(3) of the
Code.
"Disability" means an inability to perform the Participant's
material services for the Company 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 Participant (or
his guardian) and the Company, provided that if the Participant (or his
guardian and the Company do not agree on a physician, the Participant
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. Eligibility for disability benefits
under any policy for long-term disability benefits provided to the
Participant by the Company shall conclusively establish the
Participant's disability.
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"Employee" means any employee of the Company or an Affiliate.
"Employment" includes any period in which a Participant is an
Employee or a paid Consultant to the Company or an Affiliate.
"Fair Market Value or FMV Per Share". The Fair Market Value or
FMV Per Share of the Common Stock shall be the closing price on the New
York Stock Exchange or other national securities exchange or
over-the-counter market, if applicable, for the date of the
determination, or if no trade of the Common Stock shall have been
reported for such date, the closing sales price quoted on such exchange
for the most recent trade prior to the determination date. If shares of
the Common Stock are not listed or admitted to trading on any exchange,
over-the-counter market or any similar organization as of the
determination date, the FMV Per Share shall be determined by the
Committee in good faith using any fair and reasonable means selected in
its discretion.
"Good Reason" means termination of employment by an Employee,
termination of service by a Consultant or resignation from the Board of
a Non-Employee Director under any of the following circumstances:
(i) if such Employee, Consultant or Non-Employee Director is a
party to an agreement for employment with or services to the Company,
which agreement includes a definition of "Good Reason" for termination
of employment with or services to the Company, "Good Reason" shall have
the same definition for purposes of the Plan as is set forth in such
agreement, the relevant portions of which are incorporated herein by
reference.
(ii) if such Employee, Consultant or Non-Employee Director is
not a party to an agreement with the Company that defines the term
"Good Reason," such term shall mean termination of employment or
service under any of the following circumstances, if the Company fails
to cure such circumstances within thirty (30) days after receipt of
written notice from the Participant to the Company setting forth a
description of such Good Reason:
(i) the removal from or failure to re-elect the
Participant to the office or position in which he or she last
served;
(ii) the assignment to the Participant of any duties,
responsibilities, or reporting requirements inconsistent with
his or her position with the Company, or any material
diminishment, on a cumulative basis, of the Participant's
overall duties, responsibilities, or status;
(iii) a material reduction by the Company in the
Participant's fees, compensation, or benefits; or
(iv) the requirement by the Company that the
principal place of business at which the Participant performs
his duties be changed to a location more than fifty (50) miles
from downtown Dallas, Texas.
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"Incentive Option" means any option which satisfies the
requirements of Code Section 422 and is granted pursuant to Article III
of the Plan.
"Non-Employee Director" means persons who are members of the
Board but who are neither Employees nor Consultants of the Company or
any Affiliate.
"Non-Qualified Option" shall mean an option not intended to
satisfy the requirements of Code Section 422 and which is granted
pursuant to Article II of the Plan.
"Option" means an option to acquire Common Stock granted
pursuant to the provisions of the Plan, and refers to either an
Incentive Stock Option or a Non-Qualified Stock Option, or both, as
applicable.
"Option Expiration Date" means the date determined by
Committee which shall not be more than ten years after the date of
grant of an Option.
"Optionee" means a Participant who has received or will
receive an Option.
"Other Stock-Based Award" means an award granted pursuant to
Article IX of the Plan that is not otherwise specifically provided for,
the value of which is based in whole or in part upon the value of a
share of Common Stock.
"Outstanding Company Common Stock" means, as of any date of
determination, the then outstanding shares of Common Stock of the
Company.
"Outstanding Company Voting Securities" means, as of any date
of determination, the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally on the
election of directors.
"Participant" means any Non-Employee Director, Employee or
Consultant granted an Award under the Plan.
"Performance Award" means an Award granted pursuant to Article
VIII of the Plan, which, if earned, shall be payable in shares of
Common Stock, cash or any combination thereof as determined by the
Committee.
"Purchased Stock" means a right to purchase Common Stock
granted pursuant to Article IV of the Plan.
"Phantom Shares" means an Award of the right to receive shares
of Common Stock issued at the end of a Restricted Period which is
granted pursuant to Article VI of the Plan.
"Reload Option" is defined in Section 2.3(f).
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"Remington" means Remington Hotel Corporation, a Texas
corporation or Remington Lodging & Hospitality, L.P., a Delaware
limited partnership.
"Restricted Period" shall mean the period established by the
Committee with respect to an Award during which the Award either
remains subject to forfeiture or is not exercisable by the Participant.
"Restricted Stock" shall mean any share of Common Stock, prior
to the lapse of restrictions thereon, granted under Article VII of the
Plan.
"Stock Appreciation Rights" means an Award granted pursuant to
Article VI of the Plan.
ARTICLE II
NONQUALIFIED STOCK OPTIONS
2.1 GRANTS. The Committee may grant Options to purchase the Common
Stock to any Employee, Consultant or Non-Employee Director according to the
terms set forth below.
2.2 CALCULATION OF EXERCISE PRICE. The exercise price to be paid for
each share of Common Stock deliverable upon exercise of each Option granted
under this Article II shall not be less than the FMV Per Share on the date of
grant of such Option. The exercise price for each Option granted under Article
II shall be subject to adjustment as provided in Section 2.3(d).
2.3 TERMS AND CONDITIONS OF OPTIONS. Options shall be in such form as
the Committee may from time to time approve, shall be subject to the following
terms and conditions and may contain such additional terms and conditions, not
inconsistent with this Article II, as the Committee shall deem desirable:
(a) Option Period and Conditions and Limitations on Exercise. No Option
shall be exercisable later than the Option Expiration Date. To the extent not
prohibited by other provisions of the Plan, each Option shall be exercisable at
such time or times as the Committee in its discretion may determine at the time
such Option is granted.
(b) Manner of Exercise. In order to exercise an Option, the person or
persons entitled to exercise it shall deliver to the Company payment in full for
the shares being purchased, together with any required withholding taxes. The
payment of the exercise price for each Option shall either be (i) in cash or by
check payable and acceptable to the Company, (ii) with the consent of the
Committee, by tendering to the Company shares of Common Stock owned by the
person for more than six months having an aggregate Fair Market Value as of the
date of exercise that is not greater than the full exercise price for the shares
with respect to which the Option is being exercised and by paying any remaining
amount of the exercise price as provided in (i) above, or (iii) subject to such
instructions as the Committee may specify, at the person's written request the
Company may deliver certificates for the shares of Common Stock for which the
Option is being exercised to a broker for sale on behalf of the person, provided
that the person has irrevocably instructed such broker to remit directly to the
Company on the person's behalf the full amount of the exercise price from the
proceeds of such sale. In the event that the person elects to make payment as
allowed under clause (ii) above, the Committee may, upon
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confirming that the optionee owns the number of additional shares being
tendered, authorize the issuance of a new certificate for the number of shares
being acquired pursuant to the exercise of the Option less the number of shares
being tendered upon the exercise and return to the person (or not require
surrender of) the certificate for the shares being tendered upon the exercise.
If the Committee so requires, such person or persons shall also deliver a
written representation that all shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such shares.
(c) Options not Transferable. Except as provided below, no
Non-qualified Option granted hereunder shall be transferable other than by (i)
will or by the laws of descent and distribution or (ii) pursuant to a domestic
relations order and, during the lifetime of the Participant to whom any such
Option is granted, and it shall be exercisable only by the Participant (or his
guardian). Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
Option granted hereunder, or any right thereunder, contrary to the provisions
hereof, shall be void and ineffective, shall give no right to the purported
transferee, and shall, at the sole discretion of the Committee, result in
forfeiture of the Option with respect to the shares involved in such attempt.
With respect to a specific Non-qualified Option, the Participant (or his
guardian) may transfer, for estate planning purposes, all or part of such Option
to one or more immediate family members or related family trusts or partnerships
or similar entities.
(d) Adjustment of Options. In the event that at any time after the
Effective Date the outstanding shares of Common Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of merger, consolidation, recapitalization, reclassification,
stock split, stock dividend, combination of shares or the like, the Committee
shall make an appropriate and equitable adjustment in the number and kind of
shares as to which all outstanding Options granted, or portions thereof then
unexercised, shall be exercisable, to the end that after such event the shares
subject to the Plan and each Participant's proportionate interest shall be
maintained as before the occurrence of such event. Such adjustment in an
outstanding Option shall be made without change in the total price applicable to
the Option or the unexercised portion of the Option (except for any change in
the aggregate price resulting from rounding-off of share quantities or prices)
and with any necessary corresponding adjustment in exercise price per share. Any
such adjustment made by the Committee shall be final and binding upon all
Participants, the Company, and all other interested persons.
(e) Listing and Registration of Shares. Each Option shall be subject to
the requirement that if at any time the Committee determines, in its discretion,
that the listing, registration, or qualification of the shares subject to such
Option under any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the issue or purchase of
shares thereunder, such Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained and the same shall have been free of any conditions not
acceptable to the Committee.
(f) Reload Options. A Non-qualified Option may, in the discretion of
the Committee, include a reload stock Option right which shall entitle the
Participant, upon (i) the exercise of such original Non-qualified Option prior
to the Participant's termination of
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employment and (ii) payment of the appropriate exercise price in shares of
Common Stock that have been owned by such Participant for at least six months
prior to the date of exercise, to receive a new Non-qualified Option (the
"Reload Option") to purchase, at the FMV Per Share on the date of the exercise
of the original Non-qualified Option, the number of shares of Common Stock equal
to the number of whole shares delivered by the Participant in payment of the
exercise price of the original Non-qualified Option. Such Reload Option shall be
subject to the same terms and conditions, including expiration date, and shall
be exercisable at the same time or times as the original Non-qualified Option
with respect to which it is granted.
2.4 AMENDMENT. The Committee may, without the consent of the person or
persons entitled to exercise any outstanding Option, amend, modify or terminate
such Option; provided, however, such amendment, modification or termination
shall not, without such person's consent, reduce or diminish the value of such
Option determined as if the Option had been exercised, vested, cashed in or
otherwise settled on the date of such amendment or termination. The Committee
may at any time or from time to time, in its discretion, in the case of any
Option which is not then immediately exercisable in full, accelerate the time or
times at which such Option may be exercised to any earlier time or times.
2.5 ACCELERATION OF VESTING. Any Option granted hereunder which is not
otherwise vested shall vest (unless specifically provided to the contrary by the
Committee in the document or instrument evidencing an Option granted hereunder)
upon (i) termination of an Employee or Consultant or removal of a Non-Employee
Director without Cause or termination by an Employee or Consultant or
resignation of a Non-Employee Director with Good Reason; (ii) termination,
removal or resignation of an Employee, Consultant or Non-Employee Director for
any reason within one (1) year from the effective date of the Change of Control;
or death or Disability of the Participant.
2.6 OTHER PROVISIONS.
(a) The person or persons entitled to exercise, or who have exercised,
an Option shall not be entitled to any rights as a stockholder of the Company
with respect to any shares subject to such Option until he shall have become the
holder of record of such shares.
(b) No Option granted hereunder shall be construed as limiting any
right which the Company or any Affiliate may have to terminate at any time, with
or without cause, the employment of any person to whom such Option has been
granted.
(c) Notwithstanding any provision of the Plan or the terms of any
Option, the Company shall not be required to issue any shares hereunder if such
issuance would, in the judgment of the Committee, constitute a violation of any
state or federal law or of the rules or regulations of any governmental
regulatory body.
ARTICLE III
INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Article III, all the provisions of
Article II shall be applicable to
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Incentive Options. Options which are specifically designated as Non-Qualified
Options shall NOT be subject to the terms of this Section III.
3.1 ELIGIBILITY. Incentive Options may only be granted to Employees.
3.2 EXERCISE PRICE. The exercise price per Share shall not be less than
one hundred percent (100%) of the FMV Per Share on the option grant date.
3.3 DOLLAR LIMITATION. The aggregate Fair Market Value (determined as
of the respective date or dates of grant) of shares of Common Stock for which
one or more options granted to any Employee under the Plan (or any other option
plan of the Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one (1) calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
3.4 10% STOCKHOLDER. If any Employee to whom an Incentive Option is
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the FMV Per Share on the option
grant date and the option term shall not exceed five (5) years measured from the
option grant date.
3.5 OPTIONS NOT TRANSFERABLE. No Incentive Option granted hereunder
shall be transferable other than by will or by the laws of descent and
distribution and shall be exercisable during the Optionee's lifetime only by
such Optionee.
3.6 RELOAD OPTIONS. No Reload Options shall be granted with respect to
any Incentive Options.
3.7 COMPLIANCE WITH 422. All Options that are intended to be Incentive
Stock Options shall be designated as such in the Option grant and in all
respects shall be issued in compliance with Code Section 422.
3.8 LIMITATIONS ON EXERCISE. No Incentive Option shall be exercisable
more than three (3) months after the Optionee ceases to be an Employee for any
reason other than death or Disability, or more than one (1) year after the
Optionee ceases to be an Employee due to death or Disability.
ARTICLE IV
PURCHASED STOCK
4.1 ELIGIBLE PERSONS. The Committee shall have the authority to sell
shares of Common Stock to such Employees, Consultants and Non-Employee Directors
of the Company or its Affiliates as may be selected by it, on such terms and
conditions as it may establish, subject to the further provisions of this
Article IV. Each issuance of Common Stock under this Plan shall be evidenced by
an agreement which shall be subject to applicable provisions of this Plan and to
such other provisions not inconsistent with this Plan as the Committee may
approve for the particular sale transaction.
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4.2 PURCHASE PRICE. The price per share of Common Stock to be purchased
by a Participant under this Plan shall be determined in the sole discretion of
the Committee, and may be less than, but shall not greater than the FMV Per
Share at the time of purchase.
4.3 PAYMENT OF PURCHASE PRICE. Payment of the purchase price of
Purchased Stock under this Plan shall be made in full in cash.
ARTICLE V
BONUS STOCK
The Committee may, from time to time and subject to the provisions of
the Plan, grant shares of Bonus Stock to Employees, Consultants or Non-Employee
Directors. Bonus Stock shall be shares of Common Stock that are not subject to a
Restricted Period under Article VII.
ARTICLE VI
STOCK APPRECIATION RIGHTS AND PHANTOM STOCK
6.1 STOCK APPRECIATION RIGHTS. The Committee is authorized to grant
Stock Appreciation Rights to Employees, Consultants or Non-Employee Directors on
the following terms and conditions.
(a) Right to Payment. A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the FMV Per Share on the date of exercise over (B) the grant price
of the Stock Appreciation Right as determined by the Committee.
(b) Rights Related to Options. A Stock Appreciation Right granted in
connection with an Option shall entitle a Participant, upon exercise thereof, to
surrender that Option or any portion thereof, to the extent unexercised, and to
receive payment of an amount computed pursuant to Subsection 5.1(a)(i) hereof.
That Option shall then cease to be exercisable to the extent surrendered. A
Stock Appreciation Right granted in connection with an Option shall be
exercisable only at such time or times and only to the extent that the related
Option is exercisable and shall not be transferable (other than by will or the
laws of descent and distribution) except to the extent that the related Option
is transferable.
(c) Right Without Option. A Stock Appreciation Right granted
independent of an Option shall be exercisable as determined by the Committee and
set forth in the Award agreement governing the Stock Appreciation Right.
(d) Terms. The Committee shall determine at the date of grant the time
or times at which and the circumstances under which a Stock Appreciation Right
may be exercised in whole or in part (including based on achievement of
performance goals and/or future service requirements), the method of exercise,
whether or not a Stock Appreciation Right shall be in tandem or in combination
with any other Award, and any other terms and conditions of any Stock
Appreciation Right.
6.2 PHANTOM STOCK AWARDS. The Committee is authorized to grant Phantom
Stock Awards to Participants, which are rights to receive cash equal to the Fair
Market Value of
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specified number of shares of Common Stock at the end of a specified deferral
period, subject to the following terms and conditions:
(a) Award and Restrictions. Satisfaction of a Phantom Stock Award shall
occur upon expiration of the deferral period specified for such Phantom Stock
Award by the Committee or, if permitted by the Committee, as elected by the
Participant. In addition, Phantom Stock Awards shall be subject to such
restrictions (which may include a risk of forfeiture), if any, as the Committee
may impose, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of
performance goals and/or future service requirements), separately or in
combination, installments or otherwise, as the Committee may determine.
(b) Forfeiture. Except as otherwise determined by the Committee or as
may be set forth in any Award, employment or other agreement pertaining to a
Phantom Stock Award, upon termination of employment or services during the
applicable deferral period or portion thereof to which forfeiture conditions
apply, all Phantom Stock Awards that are at that time subject to deferral (other
than a deferral at the election of the Participant) shall be forfeited; provided
that the Committee may provide, by rule or regulation or in any Award agreement,
or may determine in any individual case, that restrictions or forfeiture
conditions relating to Phantom Stock Awards shall be waived in whole or in part
in the event of terminations resulting from specified causes, and the Committee
may in other cases waive in whole or in part the forfeiture of Phantom Stock
Awards.
(c) Performance Goals. To the extent the Committee determines that any
Award granted pursuant to this Article VI shall constitute performance-based
compensation for purposes of Section 162(m) of the Code, the grant or settlement
of the Award shall, in the Committee's discretion, be subject to the achievement
of performance goals determined and applied in a manner consistent with Section
8.2.
ARTICLE VII
RESTRICTED STOCK
7.1 ELIGIBLE PERSONS. All Employees, Consultants and Non-Employee
Directors shall be eligible for grants of Restricted Stock.
7.2 RESTRICTED PERIOD AND VESTING.
(a) Unless the Award specifically provides otherwise, Restricted Stock
shall be subject to restrictions on transfer by the Participant and repurchase
by the Company such that the Participant shall not be permitted to transfer such
shares and the Company shall have the right to repurchase or recover such shares
for the amount of cash paid therefor, if any, if the Participant shall terminate
employment from or services to the Company, provided that such transfer and
repurchase restrictions shall lapse with respect to 33.33% of such initial
shares on the first anniversary of the date of grant and on each subsequent
anniversary of the date of grant that the Participant shall remain continuously
as an Employee, Non-Employee Director or Consultant of the Company; subject to
section 7.2(b) below.
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(b) Notwithstanding the foregoing, unless the Award specifically
provides otherwise, all Restricted Stock not otherwise vested shall vest upon
(i) termination of an Employee or Consultant or removal of a Non-Employee
Director without Cause; (ii) termination by an Employee or Consultant or
resignation of a Non-Employee Director with Good Reason; (iii) termination,
resignation or removal of an Employee, Consultant or Non-Employee Director for
any reason within one (1) year from the effective date of a Change of Control;
or (iv) death or Disability of the Participant.
(c) Each certificate representing Restricted Stock awarded under the
Plan shall be registered in the name of the Participant and, during the
Restricted Period, shall be left in deposit with the Company and a stock power
endorsed in blank. The grantee of Restricted Stock shall have all the rights of
a stockholder with respect to such shares including the right to vote and the
right to receive dividends or other distributions paid or made with respect to
such shares. Any certificate or certificates representing shares of Restricted
Stock shall bear a legend similar to the following:
The shares represented by this certificate have been issued
pursuant to the terms of the Ashford Hospitality Trust, Inc.
2003 Stock Incentive Plan (as amended and restated) and may
not be sold, pledged, transferred, assigned or otherwise
encumbered in any manner except as is set forth in the terms
of such award dated __________, 200___.
ARTICLE VIII
PERFORMANCE AWARDS
8.1 PERFORMANCE AWARDS. The Committee may grant Performance Awards
based on performance criteria measured over a period of not less than one year
and not more than five years. The Committee may use such business criteria and
other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to increase the amounts
payable under any Award subject to performance conditions except as limited
under Section 8.2 in the case of a Performance Award granted to a Covered
Employee.
8.2 PERFORMANCE GOALS. The grant and/or settlement of a Performance
Award shall be contingent upon terms set forth in this Section 8.2.
(a) General. The performance goals for Performance Awards shall consist
of one or more business criteria and a targeted level or levels of performance
with respect to each of such criteria, as specified by the Committee. In the
case of any Award granted to a Covered Employee, performance goals shall be
designed to be objective and shall otherwise meet the requirements of Section
162(m) of the Code and regulations thereunder (including Treasury Regulations
sec. 1.162-27 and successor regulations thereto), including the requirement that
the level or levels of performance targeted by the Committee are such that the
achievement of performance goals is "substantially uncertain" at the time of
grant. The committee may determine that such Performance Awards shall be granted
and/or settled upon achievement of any one performance goal or that two or more
of the performance goals must be achieved as a
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condition to the grant and/or settlement of such Performance Awards. Performance
goals may differ among Performance Awards granted to any one Participant or for
Performance Awards granted to different Participants.
(b) Business Criteria. One or more of the following business criteria
for the Company, an a consolidated basis, and/or for specified subsidiaries,
divisions or business or geographical units of the Company (except with respect
to the total stockholder return and earnings per share criteria), shall be used
by the Committee in establishing performance goals for Performance Awards
granted to a Participant: (A) earnings per share; (B) increase in revenues; (C)
increase in cash flow; (D) increase in cash flow return; (E) return on net
assets; (F) return on assets; (G) return on investment; (H) return on capital;
(I) return on equity; (J) economic value added; (K) gross margin; (L) net
income; (M) pretax earnings; (N) pretax earnings before interest, depreciation
and amortization; (O) pretax operating earnings after interest expense and
before incentives, service fees, and extraordinary or special items; (P)
operating income; (Q) total stockholder return; (R) debt reduction; and (S) any
of the above goals determined on the absolute or relative basis or as compared
to the performance of a published or special index deemed applicable by the
Committee including, but not limited to, the Standard & Poor's 500 Stock Index
or a group of comparable companies.
(c) Performance Period; Timing for Establishing Performance Goals.
Achievement of performance goals in respect of Performance Awards shall be
measured over a performance period of not less than one year and not more than
three years, as specified by the Committee. Performance goals in the case of any
Award granted to a Participant shall be established not later than 90 days after
the beginning of any performance period applicable to such Performance Awards,
or at such other date as may be required or permitted for "performance-based
compensation" under Section 162(m) of the Code.
(d) Settlement of Performance Awards; Other Terms. After the end of
each performance period, the Committee shall determine the amount, if any, of
Performance Awards payable to each Participant based upon achievement of
business criteria over a performance period. The Committee may not exercise
discretion to increase any such amount payable in respect of a Performance Award
designed to comply with Section 162(m) of the Code. The Committee shall specify
the circumstances in which such Performance Awards shall be paid or forfeited in
the event of termination of employment by the Participant prior to the end of a
performance period or settlement of Performance Awards.
(e) Written Determinations. All determinations by the Committee as to
the establishment of performance goals, the amount of any Performance Award, and
the achievement of performance goals relating to Performance Awards shall be
made in writing in the case of any Award granted to a Participant. The Committee
may not delegate any responsibility relating to such Performance Awards.
(f) Status of Performance Awards under Section 162(m) of the Code. It
is the intent of the Company that Performance Awards granted to persons who are
designated by the Committee as likely to be Covered Employees within the meaning
of Section 162(m) of the Code and regulations thereunder (including Treasury
Regulations sec. 1.162-27 and successor regulations thereto) shall, if so
designated by the Committee, constitute "performance-based
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compensation" within the meaning of Section 162(m) of the Code and regulations
thereunder. Accordingly, the terms of this Section 8.2 shall be interpreted in a
manner consistent with Section 162(m) of the Code and regulations thereunder.
The foregoing notwithstanding, because the Committee cannot determine with
certainty whether a given Participant will be a Covered Employee with respect to
a fiscal year that has not yet been completed, the term Covered Employee as used
herein shall mean only a person designated by the Committee, at the time of
grant of a Performance Award, who is likely to be a Covered Employee with
respect to that fiscal year. If any provision of the Plan as in effect on the
date of adoption or any agreements relating to Performance Awards that are
designated as intended to comply with Section 162(m) of the Code does not comply
or is inconsistent with the requirements of Section 162(m) of the Code or
regulations thereunder, such provision shall be construed or deemed amended to
the extent necessary to conform to such requirements.
ARTICLE IX
OTHER STOCK OR PERFORMANCE BASED AWARDS
The Committee is hereby authorized to grant to Employees, Non-Employee
Directors and Consultants of the Company or its Affiliates, Other Stock or
Performance-Based Awards, which shall consist of a right which (i) is not an
Award described in any other Article and (ii) is denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
shares of Common Stock (including, without limitation, securities convertible
into shares of Common Stock) or cash as are deemed by the Committee to be
consistent with the purposes of the Plan. Subject to the terms of the Plan, the
Committee shall determine the terms and conditions of any such Other Stock or
Performance-Based Award.
ARTICLE X
CERTAIN PROVISIONS APPLICABLE TO ALL AWARDS
10.1 GENERAL. Awards may be granted on the terms and conditions set
forth herein. In addition, the Committee may impose on any Award or the exercise
thereof, such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment by the
Participant and terms permitting a Participant to make elections relating to his
or her Award. The Committee shall retain full power and discretion to accelerate
or waive, at any time, any term or condition of an Award that is not mandatory
under the Plan; provided, however, that the Committee shall not have a
discretion to accelerate or waive any term or condition of an Award that is
intended to qualify as "performance-based compensation" for purposes of Section
162(m) of the Code if such discretion would cause the Award not to so qualify.
Except in cases in which the Committee is authorized to require other forms of
consideration under the Plan, or to the extent other forms of consideration must
be paid to satisfy the requirements of the Maryland General Corporation Law, no
consideration other than services may be required for the grant of any Award.
10.2 STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution or exchange
for, any other Award or any award granted under another plan of the Company, any
Affiliate, or any business entity to be acquired by the
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Company or an Affiliate, or any other right of a Participant to receive payment
from the Company or any Affiliate. Such additional, tandem and substitute or
exchange Awards may be granted at any time. If an Award is granted in
substitution or exchange for another Award, the Committee shall require the
surrender of such other Award in consideration for the grant of the new Award.
In addition, Awards may be granted in lieu of cash compensation, including in
lieu of cash amounts payable under other plans of the Company or any Affiliate.
10.3 TERM OF AWARDS. The term or Restricted Period of each Award that
is an Option, Stock Appreciation Right, Phantom Stock or Restricted Stock shall
be for such period as may be determined by the Committee; provided that in no
event shall the term of any such Award exceed a period of ten years (or such
shorter terms as may be require in respect of an Incentive Stock Option under
Section 422 of the Code).
10.4 FORM AND TIMING OF PAYMENT UNDER AWARDS; DEFERRALS. Subject to the
terms of the Plan and any applicable Award agreement, payments to be made by the
Company of a Subsidiary upon the exercise of an Option or other Award or
settlement of an Award may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Award may, subject
to any limitations set forth in the Award agreement, be accelerated and cash
paid in lieu of shares in connection with such settlement, in the discretion of
the Committee or upon occurrence of one or more specified events. In the
discretion of the Committee, Awards granted pursuant to Article VI or VIII of
the Plan may be payable in shares to the extent permitted by the terms of the
applicable Award agreement. Installment or deferred payments may be required by
the Committee (subject to Section 1.4 of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not
provided for in the original Award agreement) or permitted at the election of
the Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of amounts in respect of installment or deferred payments denominated
in shares. Any deferral shall only be allowed as is provided in a separate
deferred compensation plan adopted by the Company. The Plan shall not constitute
any "employee benefit plan" for purposes of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.
10.5 VESTED AND UNVESTED AWARDS. After the satisfaction of all of the
terms and conditions set by the Committee with respect to an Award of (i)
Restricted Stock, a certificate, without the legend set forth in Section 7.2(a),
for the number of shares that are no longer subject to such restrictions, terms
and conditions shall be delivered to the Employee, (ii) Phantom Stock, to the
extent not paid in cash, a certificate for the number of shares equal to the
number of shares of Phantom Stock earned, and (iii) Stock Appreciation Rights or
Performance Awards, cash and/or a certificate for the number of shares equal in
value to the number of Stock Appreciation Rights or amount of Performance Awards
vested shall be delivered to the person. Upon termination, resignation or
removal of a Participant under circumstances that do not cause such Participant
to become fully vested, any remaining unvested Options, shares of Restricted
Stock, Phantom Stock, Stock Appreciation Rights or Performance Awards, as the
case may be, shall either be forfeited back to the Company or, if appropriate
under the terms of the Award, shall continue to be subject to the restrictions,
terms and conditions set by the Committee with respect to such Award.
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10.6 EXEMPTIONS FROM SECTION 16(b) LIABILITY. It is the intent of the
Company that the grant of any Awards to or other transaction by a Participant
who is subject to Section 16 of the Exchange Act shall be exempt from Section
16(b) of the Exchange Act pursuant to an applicable exemption (except for
transactions acknowledged by the Participant in writing to be non-exempt).
Accordingly, if any provision of this Plan or any Award agreement does not
comply with the requirements of Rule 16b-3 as then applicable to any such
transaction, such provision shall be construed or deemed amended to the extent
necessary to conform to the applicable requirements of Rule 16b-3 so that such
Participant shall avoid liability under Section 16(b) of the Exchange Act.
10.7 OTHER PROVISIONS. No grant of any Award shall be construed as
limiting any right which the Company or any Affiliate may have to terminate at
any time, with or without cause, the employment of any person to whom such Award
has been granted.
ARTICLE XI
WITHHOLDING FOR TAXES
Any issuance of Common Stock pursuant to the exercise of an Option or
payment of any other Award under the Plan shall not be made until appropriate
arrangements satisfactory to the Company have been made for the payment of any
tax amounts (federal, state, local or other) that may be required to be withheld
or paid by the Company with respect thereto. Such arrangements may, at the
discretion of the Committee, include allowing the person to tender to the
Company shares of Common Stock owned by the person, or to request the Company to
withhold shares of Common Stock being acquired pursuant to the Award, whether
through the exercise of an Option or as a distribution pursuant to the Award,
which have an aggregate FMV Per Share as of the date of such withholding that is
not greater than the sum of all tax amounts to be withheld with respect thereto,
together with payment of any remaining portion of such tax amounts in cash or by
check payable and acceptable to the Company.
Notwithstanding the foregoing, if on the date of an event giving rise
to a tax withholding obligation on the part of the Company the person is an
officer or individual subject to Rule 16b-3, such person may direct that such
tax withholding be effectuated by the Company withholding the necessary number
of shares of Common Stock (at the tax rate required by the Code) from such Award
payment or exercise.
ARTICLE XII
MISCELLANEOUS
12.1 NO RIGHTS TO AWARDS. No Participant or other person shall have any
claim to be granted any Award, there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards and the terms
and conditions of Awards need not be the same with respect to each recipient.
12.2 NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or any Affiliate may at any time
dismiss a Participant from employment,
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free from any liability or any claim under the Plan, unless otherwise expressly
provided in the Plan or in any Award Agreement.
12.3 GOVERNING LAW. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with applicable federal law and the laws of the State of Maryland,
without regard to any principles of conflicts of law.
12.4 SEVERABILITY. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Participant or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to the applicable laws, or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Participant or Award and
the remainder of the Plan and any such Award shall remain in full force and
effect.
12.5 OTHER LAWS. The Committee may refuse to issue or transfer any
shares or other consideration under an Award if, acting in its sole discretion,
it determines that the issuance of transfer or such shares or such other
consideration might violate any applicable law.
12.6 SHAREHOLDER AGREEMENTS. The Committee may condition the grant,
exercise or payment of any Award upon such person entering into a stockholders'
agreement in such form as approved from time to time by the Board.
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