Exhibit 10.3

 

RLJ LODGING TRUST

2015 EQUITY INCENTIVE PLAN

 

SHARE UNITS AGREEMENT

 

RLJ Lodging Trust, a Maryland real estate investment trust (the “Company”),
hereby grants share units (“Share Units”) for common shares of its beneficial
interests, par value $0.01 (“Shares”) to the Grantee named below, subject to the
vesting and other conditions set forth below.  Additional terms and conditions
of the grant are set forth in this cover sheet and in the attachment
(collectively, the “Agreement”) and in the Company’s 2015 Equity Incentive Plan
(as amended from time to time, the “Plan”).

 

Name of Grantee:

 

 

 

 Last Four Digits of Grantee’s Social Security Number:

 

 

 

 Number of Share Units:

 

 

 

 Grant Date:

 

 

 

 Vesting Schedule:

[                                 ]

 

 

 Purchase Price per Share:

$0.01 (par value)

 

By your signature below, you agree to all of the terms and conditions described
herein, in the attached Agreement and in the Plan, a copy of which is also
attached.  You acknowledge that you have carefully reviewed the Plan, and agree
that the Plan will control in the event any provision of this cover sheet or
Agreement should appear to be inconsistent.

 

Grantee:

 

 

Date:

 

 

(Signature)

 

 

 

 

 

 

 

 

Company:

 

 

Date:

 

 

(Signature)

 

 

 

 

 

 

 

 

 Name:

 

 

 

 

 

 

 

 

 Title:

 

 

 

 

Attachment

 

This is not a share certificate or a negotiable instrument.

 

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RLJ LODGING TRUST

2015 EQUITY INCENTIVE PLAN

 

SHARE UNITS AGREEMENT

 

Share Units

This Agreement evidences an award of Shares in the number set forth on the cover
sheet and subject to the vesting and other conditions set forth herein, in the
Plan and on the cover sheet (the “Share Units”).  The purchase price is deemed
paid by your [prior] Service.

 

 

Transfer of Unvested Share Units

Unvested Share Units may not be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered, whether by operation of law or otherwise,
nor may the Share Units be made subject to execution, attachment or similar
process.  If you attempt to do any of these things, the Share Units will
immediately become forfeited.

 

 

Vesting

The Company will issue your Share Units in the name set forth on the cover
sheet.

 

Your rights under this Share Units grant and this Agreement shall vest in
accordance with the vesting schedule set forth on the cover sheet so long as you
continue in Service on the vesting dates set forth on the cover sheet; provided
however, that for purposes of vesting, fractional number of Shares shall be
rounded down to the nearest whole number. You cannot vest in more than the
number of Shares covered by your Share Units, as set forth on the cover sheet of
this Agreement.

 

[Notwithstanding your vesting schedule, the Share Units will become 100% vested
upon your termination of Service due to your death or Disability.]

 

 

Delivery

As your Share Units vest, the Company will issue the Shares to which the then
vested Share Units relate.  The resulting aggregate number of vested Shares will
be rounded to the nearest whole number, and you cannot vest in more than the
number of shares covered by this grant.

 

 

[Change in Control

Notwithstanding the vesting schedule set forth above, upon the consummation of a
Change in Control, the Share Units will become 100% vested (i) if the Share
Units are not assumed, or equivalent restricted securities are not substituted
for the Share Units by the Company or its successor, or (ii) if assumed or
substituted for, upon your Involuntary Termination within the 12-month period
following the consummation of the Change in Control.

 

“Involuntary Termination” means termination of your Service by reason of
(i) your involuntary dismissal by the Company or its successor for reasons other
than Cause; or (ii) your voluntary resignation for Good Reason as defined in any
applicable employment or severance agreement, plan, or arrangement between you
and the Company, or if none, then as set forth in the Plan following (x) a
substantial adverse alteration in your title or responsibilities from those in
effect immediately prior to the Change in Control; (y) a reduction in your
annual base salary as of immediately prior to the Change in Control (or as the
same may be increased from time to time) or a material reduction in your annual
target bonus opportunity as of immediately prior to the Change in Control; or
(z) the relocation of your principal place of employment to a location more than
35 miles from your principal place of employment as of the Change in Control or
the Company’s requiring you to be based anywhere other than such principal place
of employment (or permitted relocation thereof) except for required travel on
the Company’s business to an extent substantially consistent with your business
travel obligations

 

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as of immediately prior to the Change in Control.  To qualify as an “Involuntary
Termination” you must provide notice to the Company of any of the foregoing
occurrences within 90 days of the initial occurrence and the Company shall have
30 days to remedy such occurrence.]

 

 

Evidence of Issuance

The issuance of the Shares under the grant of Share Units evidenced by this
Agreement shall be evidenced in such a manner as the Company, in its discretion,
will deem appropriate, including, without limitation, book-entry, registration
or issuance of one or more Share certificates.    You will have no further
rights with regard to a Share Unit once the Share related to such Share Unit has
been issued.

 

 

Forfeiture of Unvested Share Units

Unless the termination of your Service triggers accelerated vesting of your
Share Units, or other treatment pursuant to the terms of this Agreement, the
Plan, or any other written agreement between the Company or any Affiliate, as
applicable, and you, you will immediately and automatically forfeit to the
Company all of the unvested Share Units in the event you are no longer providing
Service for any reason.

 

 

Forfeiture of Rights

If you should take actions in violation or breach of or in conflict with any
employment agreement, non-competition agreement, any agreement prohibiting
solicitation of employees or clients of the Company or any Affiliate, or any
confidentiality obligation with respect to the Company or any Affiliate, or
otherwise in competition with the Company or any Affiliate, the Company has the
right to cause an immediate forfeiture of your rights to the Share Units awarded
under this Agreement and the Share Units shall immediately expire.

 

In addition, if you have vested in Share Units during the [three] year period
prior to your actions, you will owe the Company a cash payment (or forfeiture of
Shares) in an amount determined as follows: (1) for any Shares that you have
sold prior to receiving notice from the Company, the amount will be the proceeds
received from the sale(s), and (2) for any Shares that you still own, the amount
will be the number of Shares owned times the Fair Market Value of the Shares on
the date you receive notice from the Company (provided, that the Company may
require you to satisfy your payment obligations hereunder either by forfeiting
and returning to the Company the Share Units or any other Shares or making a
cash payment or a combination of these methods as determined by the Company in
its sole discretion).

 

 

Leaves of Absence

For purposes of this Agreement, your Service does not terminate when you go on a
bona fide leave of absence that was approved by your employer in writing if the
terms of the leave provide for continued Service crediting, or when continued
Service crediting is required by applicable law.  Your Service terminates in any
event when the approved leave ends unless you immediately return to active
employee work.

 

Your employer may determine, in its discretion, which leaves count for this
purpose, and when your Service terminates for all purposes under the Plan in
accordance with the provisions of the Plan. Notwithstanding the foregoing, the
Company may determine, in its discretion, that a leave counts for this purpose
even if your employer does not agree.

 

 

Withholding Taxes

You agree as a condition of this grant that you will make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the vesting or receipt of the Share Units within a reasonable time period, or
you shall forfeit the Shares. In the event that the Company or any Affiliate
determines that any federal, state, local, or foreign tax or withholding payment
is required relating to the

 

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vesting or receipt of Shares arising from this grant, the Company or any
Affiliate shall have the right to (i) require you to tender a cash payment,
(ii) deduct from payments of any kind otherwise due to you, (iii) permit or
require you to enter into a “same day sale” commitment with a broker-dealer that
is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”)
whereby you irrevocably elect to sell a portion of the Shares to be delivered in
connection with the Share Units to satisfy withholding obligations and whereby
the FINRA Dealer irrevocably commits to forward the proceeds necessary to
satisfy the withholding obligations directly to the Company or any Affiliate, or
(iv) withhold the delivery of vested Shares otherwise deliverable under this
Agreement to meet such obligations; provided that the Shares so withheld will
have an aggregate Fair Market Value not exceeding the minimum amount of tax
required to be withheld by Applicable Laws.

 

You agree that the Company or any Affiliate shall be entitled to use whatever
method it may deem appropriate to recover such taxes. You further agree that the
Company or any Affiliate may, as it reasonably considers necessary, amend or
vary this Agreement to facilitate such recovery of taxes.

 

 

Retention Rights

This Agreement and the grant evidenced hereby do not give you the right to be
retained by the Company or any Affiliate in any capacity. Unless otherwise
specified in an employment or other written agreement between the Company or any
Affiliate and you, the Company or any Affiliate reserves the right to terminate
your Service at any time and for any reason.

 

 

Shareholder Rights

You, or your estate or heirs, do not have any of the rights of a shareholder
with respect to any vested or unvested Share Units until the Shares have been
issued to you and either a certificate evidencing your Shares have been issued
or an appropriate entry has been made on the Company’s books.

 

 

Clawback

This Award is subject to mandatory repayment by you to the Company to the extent
you are or in the future become subject to any Company “clawback” or recoupment
policy that requires the repayment by you to the Company of compensation paid by
the Company to you in the event that you fail to comply with, or violate, the
terms or requirements of such policy.

 

If the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, and you are subject
to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 and
you knowingly engaged in the misconduct, were grossly negligent in engaging in
the misconduct, knowingly failed to prevent the misconduct or were grossly
negligent in failing to prevent the misconduct, you shall reimburse the Company
the amount of any payment in settlement of this Award earned or accrued during
the 12-month period following the first public issuance or filing with the
United States Securities and Exchange Commission (whichever first occurred) of
the financial document that contained such material noncompliance.

 

[Notwithstanding any other provision of the Plan or any provision of this
Agreement, if the Company is required to prepare an accounting restatement, then
you shall forfeit any cash or Shares received in connection with this Award (or
an amount equal to the fair market value of such Shares on the date of delivery
if you no longer hold the Shares) if pursuant to the terms of this Agreement,
the amount of the Award earned or the vesting in the Award was explicitly based
on the achievement of pre-established performance goals set forth in this
Agreement (including earnings, gains, or other criteria) that are later
determined, as a result of

 

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the accounting restatement, not to have been achieved.]  [Include if any
performance goals are included in award]

 

 

Applicable Law

This Agreement will be interpreted and enforced under the laws of the state of
Maryland, other than any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction.

 

 

Corporate Activity

Your grant shall be subject to the terms of any applicable agreement of merger,
liquidation or reorganization in the event the Company is subject to such
corporate activity.

 

 

The Plan

The text of the Plan is incorporated in this Agreement by reference.

 

Certain capitalized terms used in this Agreement are defined in the Plan, and
have the meaning set forth in the Plan.

 

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this grant.  Any prior agreements, commitments or
negotiations concerning this grant are superseded; except that any written
employment or consulting, and/or severance agreement between you and the Company
or an Affiliate, as applicable, shall supersede this Agreement with respect to
its subject matter.

 

 

Data Privacy

In order to administer the Plan, the Company may process personal data about
you.  Such data includes, but is not limited to, information provided in this
Agreement and any changes thereto, other appropriate personal and financial data
about you such as your contact information, payroll information and any other
information that might be deemed appropriate by the Company to facilitate the
administration of the Plan.

 

By accepting this grant, you give explicit consent to the Company to process any
such personal data.

 

 

Notice Delivery

By accepting these Share Units, you agree that notices may be given to you in
writing either at your home address as shown in the records of the Company or an
Affiliate or by electronic transmission (including e-mail or reference to a
website or other URL) sent to you through the Company’s or an Affiliate’s, as
applicable, normal process for communicating electronically with its employees.

 

 

Code Section 409A

It is intended that this Award comply with Code Section 409A or an exemption to
Code Section 409A.  To the extent that the Company determines that you would be
subject to the additional 20% tax imposed on certain non-qualified deferred
compensation plans pursuant to Code Section 409A as a result of any provision of
this Agreement, such provision shall be deemed amended to the minimum extent
necessary to avoid application of such additional tax.  The nature of any such
amendment shall be determined by the Company. For purposes of this Award, a
termination of employment only occurs upon an event that would be a Separation
from Service within the meaning of Code Section 409A. Notwithstanding anything
to the contrary in the Plan or this Agreement, neither the Company, its
Affiliates, the Board, nor the Committee will have any obligation to take any
action to prevent the assessment of any excise tax or penalty on you under
Section 409A, and neither the Company, its Affiliates, the Board, nor the
Committee will have any liability to you for such tax or penalty.

 

By signing this Agreement, you agree to all of the terms and conditions
described above and in the Plan.

 

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