Exhibit 10.1

 

December 20, 2016

 

Mr. Thomas Healy

c/o Ferguson Partners

Chicago, Illinois

 

Dear Tom:

 

We are excited to offer you a position with DiamondRock Hospitality Company
(“DiamondRock” or the “Company”) as Chief Operating Officer and Executive Vice
President, Asset Management, reporting to me. In this position, you will serve
as a “named executive officer” of DiamondRock; a description of your
responsibilities is set forth in Exhibit A. The commencement date of your
employment will be January 16, 2017 or such other date as may be mutually
agreed.

 

The compensation and benefits that we are able to offer you are as follows:

 

·                  Your base salary will be $450,000 per year.

 

·                  You will be eligible to receive an annual cash bonus with a
target of 80% of your base salary that you receive in that year, with a maximum
bonus percentage of 160% and a threshold bonus percentage of 40%; the actual
percentage will be determined by DiamondRock’s Board of Directors based on your
performance and DiamondRock’s financial results during the year.  You must be
employed on the last day of the fiscal year to receive a bonus for that year.

 

Example: your annual salary is $450,000, you worked forty-eight weeks in 2017
and your bonus percentage is the target (80%), your bonus would be $332,307.

 

·                  You will be eligible to receive an equity incentive grant
each year, subject to the approval of DiamondRock’s Board of Directors. Your
initial equity incentive grant award will be valued at $600,000 and, subject to
approval from the Board of Directors, is expected to be issued in February 2017.
The equity incentive grant will be composed of two components, each of which
will comprise 50% of the total equity incentive grant, as follows:
(i) Restricted Stock, which will vest in three equal annual installments,
commencing in February 2018 and (ii) Performance Stock Units which will all vest
in February 2020 and will be based on (x) the total shareholder return of
DiamondRock relative to the total shareholder return of a peer group over a
three-year performance period and (y) achievement of certain targeted market
share improvement by each of the Company’s hotels over three years. The actual
amount of Restricted Stock and Performance Stock Units will be determined by the
closing price of

 

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DiamondRock stock on an appropriate day following the grant of the stock by the
Board of Directors. The terms and conditions of the Restricted Stock and the
Performance Stock Units will be fully set forth in separate agreements to be
entered into at the time of the grant. DiamondRock retains the right to, at any
time, change the design and vesting schedule for the equity incentive grant, but
the design and vesting schedule each year will be the same as for the other
executives of DiamondRock.

 

·                  DiamondRock will reimburse your actual cost of relocation
(including moving costs, rent and related items) up to an amount to be agreed. 
DiamondRock will require that at least two (2) bids be obtained for the moving
cost of such relocation.  In the event that you are not employed by DiamondRock
on the first annual anniversary of your start date, you will be obligated to
repay the amount reimbursed to you for relocation within 10 days of demand by
DiamondRock.

 

·                  Prior to the commencement of your employment, DiamondRock
will enter into a Severance Agreement with you, providing for, among other
things, compensation to be paid to you upon the termination of your employment
for certain reasons. For example, the Severance Agreement will provide that if
your employment terminates in connection with a change in control of the Company
for any reason (other than a voluntary resignation without good reason), you
will be entitled to a severance payment equal to (i) vesting in all stock,
(ii) payment of year-to date bonus accrued at target and (iii) two (2) times the
sum of (x) your then current base salary and (y) your target annual bonus.

 

·                  You will be eligible to participate in DiamondRock’s
401(k) Plan.  We have a company match where DiamondRock will match a portion of
your contribution to the 401(k) Plan.

 

·                  You will be eligible to participate in the DiamondRock
Hospitality Company Deferred Compensation Plan (DCP).  The DCP provides certain
senior-level employees with tax-advantaged means to accumulate assets for the
future.  Key features of the DCP include the ability to defer state and federal
income taxes on a designated percentage of your base salary (up to 80%), bonus
(up to 90%) and equity grants.  The DCP provides for a menu of investment
options and flexible retirement distribution options.

 

·                  You will receive twenty-five (25) days of paid time off (PTO)
per year; in your discretion, you may use your PTO days either for vacation or
for sick days.

 

·                  You will be eligible to participate in DiamondRock’s medical
and dental benefits.  If you enroll within thirty (30) days of the date you
start work, your coverage will be effective on the first day of the first full
month that you are employed by DiamondRock; otherwise, you generally must wait
until the Company’s annual enrollment period to enroll and benefits would not be
available until the following plan year, which starts on July 1 of each year.  
Currently, DiamondRock pays

 

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100% of the premium for the medical and dental plan, but DiamondRock retains the
right to, at any time, change the amount that it pays towards the premium.

 

·                  You will be eligible to participate in DiamondRock’s life
insurance and disability benefits.  DiamondRock currently provides life
insurance equal to two times your salary, up to $200,000, Long Term Disability
Insurance equal to 60% of your earnings up to $10,000 per month and Short Term
Disability up to $1500 per week.  Currently, DiamondRock pays 100% of the
premium for the life insurance and long term disability insurance, but
DiamondRock retains the right to, at any time, change the amount that it pays
towards the premium.

 

As you know, in the ordinary course of business, compensation and benefit
programs evolve as business needs and laws change.  To the extent it becomes
necessary and desirable to change any of the plans in which you may participate,
such changes will apply to you as they do to other employees of DiamondRock.

 

This letter constitutes the full commitments that have been extended to you. 
However, this does not constitute a contract of employment for any period of
time. DiamondRock reserves the right, at the discretion of the Board of
Directors, to modify the compensation terms in the future subject to the
limitations in the Severance Agreement.  Further, please be aware that the
Compensation Committee of DiamondRock’s Board of Directors will need to formally
approve these terms.

 

Employment with DiamondRock is also contingent upon a satisfactory background
and reference check.  Please complete the attached Employment Application
Consent Release and return it to my attention together with this Offer Letter.

 

DiamondRock has established a Social Security Verification procedure for
verifying Social Security numbers in order to prevent discrepancies and
mismatches between the information in DiamondRock’s payroll records and the
information on file with the Social Security Administration (SSA).  As part of
your new hire paperwork, you will be required to complete Section 1 of the
Record of Social Security Administration Verification form which includes your
name, Social Security number, date of birth and gender.  This information will
be verified with records at the SSA.

 

Under the Immigration Reform and Control Act, DiamondRock must verify your
eligibility for employment in the United States. On your first day of work you
will be expected to present one or more of the documents listed on the enclosed
U.S. Department of Justice form and to complete a Government Form I-9.  This
information will be used to verify your eligibility for employment and to
preclude the unlawful hiring of individuals who are not authorized to work in
the U.S.

 

On behalf of everyone at DiamondRock, I want to express our enthusiasm to have
you join our Company.

 

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Sincerely,

 

/s/ Mark Brugger

 

 

 

Mark Brugger

 

Chief Executive Officer

 

 

 

CC:

Bill Tennis

 

 

I accept the above offer to be employed by DiamondRock Hospitality Company and I
understand and agree to the terms set forth.

 

Signed:

/s/ Thomas Healy

 

 

 

 

Date:

December 21, 2016

 

 

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Exhibit A

 

Responsibilities

of the

Chief Operating Officer

and

Executive Vice President, Asset Management

 

The Chief Operating Officer and Executive Vice President, Asset Management
(“COO”) will help formulate the Company’s strategy and be responsible for its
successful implementation.  Providing leadership and direction to the overall
business, the COO is expected to drive value and cash flow through superior
operating results, and to ensure that the right organizational structure is in
place and qualified executives are in appropriate roles.  The COO will be
responsible to maintain DiamondRock’s strong culture, where individuals are
compensated for performance.  In the near term, the COO is expected to achieve
further operating efficiencies, implement enhanced sales and marketing
strategies, and oversee appropriate property investments.  The COO is expected
to successfully drive the Company’s growth plan.  The COO must develop strong
relationships with a number of constituencies, including employees, the Board
and Chief Executive Officer, and appropriate external parties.

 

Specific position duties and responsibilities include the following:

 

·                  Play a leadership role at the Company as the head of asset
management with a team of more than 6 reporting up to the position.

·                  Play a leadership role outside of the Company as one of the
primary interfaces with the senior leaders at the brand companies (e.g.,
Marriott, Hilton) and with the third-party operators (e.g., Davidson, Highgate,
HEI).

·                  Manage the Company’s portfolio of assets as single,
stand-alone investments. Analyze and track return on investment on the
portfolio, individual assets and incremental investments.

·                  Oversee asset management function and focus on maximizing
value of the hotel assets through:

1) Setting the revenue management strategy for each hotel; 2) implementing
profit containment plans; and 3) reviewing the capital improvement plans for
each hotel.

·                  Coordinate with the departmental team members to analyze,
monitor and maximize the value of and return on the portfolio.

·                  Use research, industry analysis/benchmarking, accounting,
hotel financial analysis and computer modeling fundamentals to analyze hotel
operation, hotel business plans, hotel capital investments, sales & marketing
plans and hotel strategic alternatives.

·                  Keep current on all markets affecting the hospitality
industry and specifically the markets in which the assets are situated.

 

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·                  Constantly examine and monitor the operating performance of
the assets to ensure the return on investment in each asset is maximized.

·                  Meet with hotel executive teams to review operating
performance, annual business plans and longer term strategic plans.

·                  Proactively identify and resolve ownership issues to maintain
the integrity of the assets.

·                  Analyze and track of return on investment for the assets as
well as profit improving projects, either implemented or proposed.

·                  Identify value enhancement opportunities within the
portfolio.

·                  Oversee the preparation of monthly, quarterly and annual
reports for all assets in designated territory.

·                  Play a key role in underwriting acquisition opportunities. 
While the COO is not responsible for identifying acquisitions, he should play an
integral part in the process.

 

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Exhibit B

 

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT (the “Agreement”) is made this     day of
             , by DiamondRock Hospitality Company, a Maryland corporation (the
“REIT”), with its principal place of business at 3 Bethesda Metro Center,
Suite 1500, Bethesda, Maryland 20814 and          , residing at
                                  (the “Executive”). This Agreement is effective
as of              , the first day of employment of Executive.

 

1.                                      Purpose

 

The REIT considers it essential to the best interests of its stockholders to
promote and preserve the continuous employment of key management personnel.  The
Board of Directors of the REIT (the “Board of Directors”) recognizes that, as in
the case with many corporations, the possibility of a termination of employment
exists and that such possibility, and the uncertainty and questions that it may
raise among management, may result in the distraction of key management
personnel to the detriment of the REIT and its stockholders.  Therefore, the
Board of Directors has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
REIT’s key management.  Nothing in this Agreement shall be construed as creating
an express or implied contract of employment and, except as otherwise agreed in
writing between the Executive and the REIT, the Executive shall not have any
right to be retained in the employ of the REIT.

 

2.                                      Definitions

 

(a)                                 Accrued Salary.  “Accrued Salary” shall mean
accrued and unpaid base salary through the Date of Termination.  In addition, in
the event the Executive’s annual bonus for the REIT’s most recently completed
fiscal year has not yet been paid to the Executive, then Accrued Salary also
shall include such prior fiscal year’s earned, accrued and unpaid bonus.

 

(b)                                 Cause.  “Cause” for termination shall mean a
determination by the Board of Directors in good faith that any of the following
events has occurred:  (i) indictment of the Executive of, or the conviction or
entry of a plea of guilty or nolo contendere by the Executive to any felony, or
any misdemeanor involving moral turpitude; (ii) the Executive  engaging in
conduct which constitutes a material breach of a fiduciary duty or duty of
loyalty, including without limitation, misappropriation of funds or property of
the REIT, DiamondRock Hospitality Limited Partnership (the “Operating
Partnership”) and their subsidiaries (the REIT, the Operating Partnership and
their subsidiaries are hereinafter referred to as the “DiamondRock Group”) other
than an occasional and de minimis use of Company property for personal purposes;
(iii) the Executive’s willful failure or gross negligence in the performance of
his assigned duties for the DiamondRock Group, which failure or gross negligence
continues for more than 5 days following the Executive’s receipt of written or
electronic notice of such willful

 

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failure or gross negligence from the Board of Directors; (iv) any act or
omission of the Executive that has a demonstrated and material adverse impact on
the DiamondRock Group’s reputation for honesty and fair dealing or any other
conduct of the Executive that would reasonably be expected to result in injury
to the reputation of the DiamondRock Group; or (v) willful failure to cooperate
with a bona fide internal investigation or an investigation by regulatory or law
enforcement authorities, after being instructed by the REIT to cooperate, or the
willful destruction or failure to preserve documents or other materials known to
be relevant to such investigation or the willful inducement of others to fail to
cooperate, destroy or fail to produce documents or other materials.

 

For purposes of this Section 2(b), any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board of Directors
or based upon the written advice of counsel for the DiamondRock Group 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 DiamondRock Group.   The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of the Board of Directors, finding that, in
the good faith opinion of the Board of Directors, the Executive has engaged in
the conduct described in this Section 2(b); provided, that if the Executive is a
member of the Board of Directors, the Executive shall not vote on such
resolution.

 

(c)                                  Change in Control.  “Change in Control”
shall mean any of the following events:

 

(i)                                     The conclusion of the acquisition
(whether by a merger or otherwise) by any Person (other than a Qualified
Affiliate), in a single transaction or a series of related transactions, of
Beneficial Ownership of more than 50 % of (1) the REIT’s outstanding common
stock (the “Common Stock”) or (2) the combined voting power of the REIT’s
outstanding securities entitled to vote generally in the election of directors
(the “Outstanding Voting Securities”);

 

(ii)                                  The merger or consolidation of the REIT
with or into any other Person other than a Qualified Affiliate, if the directors
immediately prior to the merger or consolidation cease to be the majority of the
Board of Directors at anytime within 12 months of the completion of the merger
or consolidation;

 

(iii)                               Any one or a series of related sales or
conveyances to any Person or Persons (including a liquidation or dissolution)
other than any one or more Qualified Affiliates of all or substantially all of
the assets of the REIT or the Operating Partnership; or

 

(iv)                              Incumbent Directors cease, for any reason, to
be a majority of the members of the Board of Directors, where an

 

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“Incumbent Director” is (1) an individual who is a member of the Board of
Directors on the effective date of this Agreement or (2) any new director whose
appointment by the Board of Directors or whose nomination for election by the
stockholders was approved by a majority of the persons who were already
Incumbent Directors at the time of such appointment, election or approval, other
than any individual who assumes office initially as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board of Directors or as a result of an
agreement to avoid or settle such a contest or solicitation.

 

A Change in Control shall also be deemed to have occurred upon the completion of
a tender offer for the REIT’s securities representing more than 50% of the
Outstanding Voting Securities, other than a tender offer by a Qualified
Affiliate.

 

For purposes of this definition of Change in Control, the following definitions
shall apply: (A) “Beneficial Ownership,” “Beneficially Owned” and “Beneficially
Owns” shall have the meanings provided in Exchange Act Rule 13d-3; (B) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended; (C) “Person”
shall mean any individual, entity, or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act), including any natural person,
corporation, trust, association, company, partnership, joint venture, limited
liability company, legal entity of any kind, government, or political
subdivision, agency or instrumentality of a government, as well as two or more
Persons acting as a partnership, limited partnership, syndicate or other group
for the purpose of acquiring, holding or disposing of the REIT’s securities; and
(D) “Qualified Affiliate” shall mean (I) any directly or indirectly wholly owned
subsidiary of the REIT or the Operating Partnership; (II) any employee benefit
plan (or related trust) sponsored or maintained by the REIT or the Operating
Partnership or by any entity controlled by the REIT or the Operating
Partnership; or (III) any Person consisting in whole or in part of the Executive
or one or more individuals who are then the REIT’s Chief Executive Officer or
any other named executive officer (as defined in Item 402 of Regulation S-K
under the Securities Act of 1933) of the REIT as indicated in its most recent
securities filing made before the date of the transaction.

 

(d)                                 Date of Termination.  “Date of Termination”
shall mean the actual date of the Executive’s termination of employment with the
REIT.

 

(e)                                  Disability.  “Disability” shall mean if the
Executive is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months.

 

(f)                                   Good Reason.  “Good Reason” for
termination shall mean the occurrence of one of the following events, without
the Executive’s prior written consent, provided such event is not corrected
within 15 days following the Board of Director’s

 

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receipt of written or electronic notice of such event: (i) a material diminution
in the Executive’s duties or responsibilities or any material demotion from the
Executive’s current position at the REIT, including, without limitation: (A) if
the Executive is the CEO, either discontinuing his direct reporting to the Board
of Directors or a committee thereof or discontinuing the direct reporting to the
CEO by each of the senior executives responsible for finance, legal, acquisition
and operations or (B) if the Executive is not the CEO, discontinuing the
Executive reporting directly to the CEO or (C) if the Executive is the Chief
Accounting Officer, discontinuing the Executive’s reporting directly to the
Chief Financial Officer or to the Chief Executive Officer; (ii) if the Executive
is a member of the Board of Directors, the failure of the REIT or its affiliates
to nominate the Executive as a Director of the REIT; (iii) a requirement that
the Executive work principally from a location outside the 50 mile radius from
the REIT’s address, except for required travel on the REIT’s business to the
extent substantially consistent with the Executive’s business travel obligations
on the date hereof; (iv) failure to pay the Executive any compensation, benefits
or to honor any indemnification agreement to which the Executive is entitled
within 30 days of the date due; or (v) the occurrence of any of the following
events or conditions in the year immediately following a Change in Control:
(A) a reduction in the Executive’s annual base salary or annual bonus
opportunity as in effect immediately prior to the Change in Control; (B) the
failure of the REIT to obtain an agreement, reasonably satisfactory to the
Executive, from any successor or assign of the REIT to assume and agree to adopt
this Agreement for a period of at least two years from the Change in Control.

 

(g)                                  Restricted Period. The “Restricted Period”
shall mean, the Executive’s employment with the REIT, which period may be
extended for an additional period of 12 months if the Executive is entitled to,
and receives, the Cash Severance specified under Section 3(b)(2) hereof.

 

(h)                                 Retirement.  As used in this Agreement,
“Retirement” shall mean a retirement by the Executive if the Executive has been
designated as an eligible retiree by the Board of Directors, in the Board’s sole
discretion.

 

3.                                      Effect of Termination

 

(a)                                 Any Termination.  If the Executive’s
employment with the REIT terminates for any reason, the Executive shall be
entitled to any Accrued Salary.  The Executive shall have no rights or claims
against the DiamondRock Group except to receive the payments and benefits
described in this Section 3.  The REIT shall have no further obligations to
Executive except as otherwise expressly provided under this Agreement, provided
any such termination shall not adversely affect or alter Executive’s rights
under any employee benefit plan of the REIT in which Executive, at the Date of
Termination, has a vested interest, unless otherwise provided in such employee
benefit plan or any agreement or other instrument attendant thereto.

 

None of the benefits described in this Section 3 (other than Accrued Salary)
will be payable unless the Executive has signed a general release which has
become irrevocable, satisfactory to the REIT in the reasonable exercise of its
discretion, releasing the

 

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DiamondRock Group, its affiliates including the REIT, and their officers,
directors and employees, from any and all claims or potential claims arising
from or related to the Executive’s employment or termination of employment.  In
addition, the benefits described in this Section 3 (other than Accrued Salary)
are conditioned upon the Executive’s ongoing compliance with his/her
restrictions, covenants and promises under Sections 4, 5, 6 and 7 below (as
applicable).

 

(b)                                 Termination by the REIT without Cause or by
Executive for Good Reason.  If the REIT terminates the Executive’s employment
without Cause, or the Executive terminates his employment for Good Reason so as
to constitute, in either case, a separation from service for purposes of Code
Section 409A, then in addition to the benefits under Section 3(a) above, the
Executive shall be entitled to receive the following:

 

(i)                                     a pro-rata bonus for the fiscal year
determined through the Date of Termination and calculated based on the target
bonus for such fiscal year to be paid within 90 days after the Date of
Termination;

 

(ii)           an amount equal to (A) two times (B) the sum of (I) the
Executive’s base salary in effect immediately prior to the Date of Termination,
and (II) the Executive’s target annual bonus (collectively, the “Cash
Severance”) to be paid within 90 days after the date of Termination;

 

(iii)          continued payment by the REIT for health insurance coverage for
the Executive and the Executive’s spouse and dependents for 18 months,
consistent with COBRA  following the Date of Termination to the same extent that
the REIT paid for such coverage immediately prior to the termination of the
Executive’s employment and subject to the eligibility requirements and other
terms and conditions of such insurance coverage, provided that if any such
insurance coverage shall become unavailable and/or the REIT’s insurer refuses to
continue coverage during the 18 month period, the REIT thereafter shall be
obliged only to pay monthly to the Executive an amount which, after reduction
for applicable income and employment taxes, is equal to the monthly COBRA
premium for such insurance for the remainder of such severance period.

 

(iv)          vesting as of the Date of Termination of 100% of all unvested
time-based restricted stock awards, to the extent permitted by law.  The
treatment of equity compensation awards that are not time based vesting (such as
restricted stock which vests based on one or more performance metrics) granted
after the effective date of this agreement

 

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will be specified in the individual grant agreements and/or the applicable plans
covering such awards.

 

(c)                                  Termination In the Event of Death or
Disability.  If the Executive’s employment terminates because of the Executive’s
death or Disability, then in addition to the benefits under Section 3(a) above,
the Executive (or his estate or other legal representatives, as the case may be)
shall be entitled to receive:

 

(i)                                     a pro-rata bonus, payable within 90 days
after the Date of Termination, for the fiscal year determined through the Date
of Termination and calculated based on the target bonus for such fiscal year;

 

(ii)                                  continued payment by the REIT for health
insurance coverage for the Executive and the Executive’s spouse and dependents
for 18 months, consistent with COBRA, following the Date of Termination to the
same extent that the REIT paid for such coverage immediately prior to the
termination of the Executive’s employment and subject to the eligibility
requirements and other terms and conditions of such insurance coverage, provided
that if any such insurance coverage shall become unavailable and/or the REIT’s
insurer refuses to continue coverage during the 18 month period, the REIT
thereafter shall be obliged only to pay monthly to the Executive an amount
which, after reduction for applicable income and employment taxes, is equal to
the monthly COBRA premium for such insurance for the remainder of such severance
period.

 

(iii)                               vesting as of the Date of Termination of
100% of all unvested time-based restricted stock awards, to the extent permitted
by law.  The treatment of equity compensation awards that are not time based
vesting (such as restricted stock which vests based on one or more performance
metrics) granted after the effective date of this agreement will be specified in
the individual grant agreements and/or the applicable plans covering such
awards.

 

(d)                                 Termination In the Event of Retirement.  If
the Executive’s employment terminates because of his Retirement, then in
addition to the benefits under Section 3(a) above, the Executive shall be
entitled to receive the following:

 

(i)                                     a pro-rata bonus, payable within 90 days
after the date of termination, for the fiscal year determined through the Date
of Termination and calculated based on the target bonus for such fiscal year;
and

 

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(ii)                                  notwithstanding the Retirement by the
Executive, all unvested time-based restricted stock awards shall continue to
vest at the times and on the terms as set forth in the relevant restricted stock
award agreements as if the Executive remained continuously employed by the REIT
from the Date of Termination through each such vesting date.  The treatment of
non-time-based equity compensation awards (such as restricted stock which vests
based on one or more performance metrics) granted after the effective date of
this agreement will be specified in individual grant agreements and/or the
applicable plans covering such awards.

 

(e)                                  Termination In the Event of a Change in
Control. In the event the Executive’s termination of employment occurs in
connection with or following a Change in Control, and in the event that any
payment made pursuant to Section 3 hereof or any insurance benefits, accelerated
vesting, pro-rated bonus or other benefit payable to the Executive under this
Agreement or otherwise (the “Severance Payments”), are subject to the excise tax
imposed by Section 4999 (as it may be amended or replaced) of the Internal
Revenue Code of 1986, as amended (the “Excise Tax”); then

 

(i)                                     If the reduction of the Severance
Payments to the maximum amount that could be paid to the Executive without
giving rise to the Excise Tax (the “Safe Harbor Cap”) would provide the
Executive with a greater after tax benefit than if such amounts were not
reduced, then the amounts payable to the Executive under this Agreement shall be
reduced (but not below zero) to the Safe Harbor Cap.  The reduction of the
amounts payable hereunder, if applicable, shall be made by reducing first the
payments of cash orginating under Section 3 (a)-3(d) hereof, and then by
reducing other payments to the extent permitted by any applicable plan and/or
agreement.

 

(ii)                                  If the reduction for the Severance
Payments to the Safe Harbor Cap would not result in a greater after tax result
to the Executive, no amounts payable under this agreement shall be reduced
pursuant to this provision.

 

(iii)          The determination of whether the Excise Tax is payable and the
amount thereof shall be made in writing in good faith by a nationally recognized
independent certified public accounting firm selected by the REIT and approved
by the Executive, such approval not to be unreasonably withheld (the “Accounting
Firm”).  For purposes of

 

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making the calculations required by this Section 3(e), to the extent not
otherwise specified herein, reasonable assumptions and approximations may be
made with respect to applicable taxes and reasonable, good faith interpretations
of the Code may be relied upon.  The REIT and the Executive shall furnish such
information and documents as may be reasonably requested in connection with the
performance of the calculations under this Section 3(e).  The REIT shall bear
all costs incurred in connection with the performance of the calculations
contemplated by this Section 3(e).

 

4.                                      Non-Disparagement

 

The Executive agrees that he/she will not, whether during or after the
Executive’s employment with the REIT, make any statement, orally or in writing,
regardless of whether such statement is truthful, nor take any action, that
(a) in any way could disparage the DiamondRock Group or any officers,
executives, directors, partners, managers, members, principals, employees,
representatives, or agents of the DiamondRock Group, or which foreseeably could
or reasonably could be expected to harm the reputation or goodwill of any of
those persons or entities, or (b) in any way, directly or indirectly, could
knowingly cause, encourage or condone the making of such statements or the
taking of such actions by anyone else.

 

5.                                      Non-Competition

 

(a)                                 Non-Competition.  Subject to
Section 5(b) hereof, the Executive agrees that during the Restricted Period the
Executive shall not, without the prior express written consent of the REIT,
directly or indirectly, anywhere in the United States, own an interest in, join,
operate, control or participate in, or be connected as an owner, officer,
executive, employee, partner, member, manager, shareholder, or principal of or
with, any lodging-oriented real estate investment company.  Notwithstanding the
foregoing, the Executive may own up to one percent (1%) of the outstanding stock
of a real estate investment company.  The restrictions of this
Section 5(a) shall not apply if the Executive’s employment with the REIT is
terminated without cause by the Company or the Executive effective during the 12
month period immediately following a Change in Control.

 

(b)                                 Board’s Discretion.  Notwithstanding
anything contained herein, the Board of Directors retains the right, in its sole
discretion, to shorten or eliminate the post-employment Restricted Period for
any Executive.

 

6.                                      Non-Solicitation of Employees.  The
Executive agrees that while he/she is employed as an employee of the REIT and
for a period of 12 months after the termination of the Employee’s employment
with the REIT for whatever reason, the

 

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Employee shall not, without the express written consent of the REIT, hire,
solicit, recruit, induce or procure (or assist or encourage any other person or
entity to hire, solicit, recruit, induce or procure), directly or indirectly or
on behalf of himself or any other person or entity, any officer, executive,
director, partner, principal, member, or non-clerical employee of the
DiamondRock Group or any person who was an officer, executive, director,
partner, principal, member, or non-clerical employee of the DiamondRock Group at
any time during the final year of the Executive’s employment with the REIT, to
work for the Executive or any person or entity with which the Executive is or
intends to be affiliated or otherwise directly or indirectly encourage any such
person to terminate his or her employment or other relationship with the
DiamondRock Group without the prior express written consent of the REIT.
Notwithstanding anything contained herein, the foregoing shall not restrain the
Executive from hiring, soliciting, recruiting, inducing or procuring any person
to work for the Executive or any person or entity with which the Executive is or
intends to be affiliated if such person was either terminated by the REIT or
such person resigned for Good Reason.  In addition, the Board of Directors
retains the right, in its sole discretion, to release any Executive from its
obligations under this Section.

 

7.                                      Injunctive Relief.  The Executive
understands that the restrictions contained in Section 4, 5 and 6 of this
Agreement are intended to protect the REIT’s interests in its proprietary
information, goodwill, and its employee and investor relationships, and agrees
that such restrictions (and the scope and duration thereof) are necessary,
reasonable and appropriate for this purpose.  The Executive acknowledges and
agrees that it would be difficult to measure any damages caused to the REIT
which might result from any breach by the Executive of his promises and
obligations under Sections 4, 5 and/or 6, that the REIT would be irreparably
harmed by such breach, and that, in any event, money damages would be an
inadequate remedy for any such breach.  Therefore, the Executive agrees and
consents that the REIT shall be entitled to an injunction or other appropriate
equitable relief (in addition to all other remedies it may have for damages or
otherwise) to restrain any such breach or threatened breach without showing or
proving any actual damage to the REIT; and the REIT shall be entitled to an
award of its attorneys fees and costs incurred in enforcing the Executive’s
obligations under Sections 4, 5 and/or 6.

 

8.                                      Miscellaneous

 

(a)                                 409A.  Notwithstanding anything to the
contrary, if the Executive is a “key employee” (as defined in Section 416(i) of
the Code without regard to paragraph (5) thereof) and any of the REIT’s stock is
publicly traded on an established securities market or otherwise, to the extent
necessary to avoid any penalties under Section 409A of the Code, any payment
hereunder may not be made before the date that is six months after the date of
separation from service.

 

(b)                                 Tax Withholding.  All payments made by the
REIT under this Agreement shall be net of any tax or other amounts required to
be withheld by the REIT under applicable law.

 

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(c)                                  No Mitigation.  The REIT agrees that, if
the Executive’s employment by the REIT is terminated during the term of this
Agreement, the Executive is not required to seek other employment or to attempt
in any way to reduce any amounts payable to the Executive by the REIT pursuant
to Section 3 hereof.  Further, the amount of any payment provided for in this
Agreement shall not be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the REIT or otherwise.

 

(d)                                 No Offset.  The REIT’s obligation to make
the payments provided for in this Agreement and otherwise perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the REIT, the Operating Partnership or any of their subsidiaries may
have against the Executive or others unless such set-off, counterclaim,
recoupment, defense, or other right arises from the Executive engaging in
conduct which constitutes a material breach of a fiduciary duty or duty of
loyalty, including without limitation, misappropriation of funds or property of
the Operating Partnership and their subsidiaries.

 

(e)                                  Litigation and Regulatory Cooperation. 
During and after Executive’s employment, Executive shall reasonably cooperate
with the REIT in the defense or prosecution of any claims or actions now in
existence or which may be brought in the future against or on behalf of the REIT
which relate to events or occurrences that transpired while Executive was
employed by the REIT; provided, however, that such cooperation shall not
materially and adversely affect Executive or expose Executive to an increased
probability of civil or criminal litigation.  Executive’s cooperation in
connection with such claims or actions shall include, but not be limited to,
being available to meet with counsel to prepare for discovery or trial and to
act as a witness on behalf of the REIT at mutually convenient times.  During and
after Executive’s employment, Executive also shall cooperate fully with the REIT
in connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while Executive was employed by the REIT.  The REIT
shall also provide Executive with compensation on an hourly basis (to be derived
from the sum of his Base Salary and average annual incentive compensation) for
requested litigation and regulatory cooperation that occurs after his
termination of employment, and reimburse Executive for all costs and expenses
incurred in connection with his performance under this Section 8(e), including,
but not limited to, reasonable attorneys’ fees and costs.

 

(f)                                   Notices.  All notices required or
permitted under this Agreement shall be in writing and shall be deemed effective
(i) upon personal delivery, (ii) upon deposit with the United States Postal
Service, by registered or certified mail, postage prepaid, or (iii) in the case
of facsimile transmission or delivery by nationally recognized overnight
delivery service, when received, addressed as follows:

 

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(i)                                     If to the REIT, to:

 

DiamondRock Hospitality Company

3 Bethesda Metro, Suite 1500
Bethesda, MD  20814
Facsimile: (240) 744-1199
Attn:  1) Lead Director; 2) Chairman of the Board and 3) Chairman of the
Compensation Committee

 

(ii)                                  If to the Executive, to:

 

INSERT ADDRESS

 

or to such other address or addresses as either party shall designate to the
other in writing from time to time by like notice.

 

(g)                                  Pronouns.  Whenever the context may
require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns and
pronouns shall include the plural, and vice versa.

 

(h)                                 Entire Agreement.  This Agreement
constitutes the entire agreement between the parties and supersedes all prior
agreements and understandings, whether written or oral, relating to the subject
matter of this Agreement.

 

(i)                                     Amendment.  This Agreement may be
amended or modified only by a written instrument executed by both the REIT and
the Executive.

 

(j)                                    Governing Law and Forum.  This Agreement
shall be construed, interpreted and enforced in accordance with the laws of the
State of Maryland, without regard to its conflicts of laws principles, by a
court of competent jurisdiction located within the State of Maryland.

 

(k)                                 Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of both parties and their
respective successors and assigns, including any entity with which or into which
the REIT may be merged or which may succeed to its assets or business or any
entity to which the REIT may assign its rights and obligations under this
Agreement; provided, however, that the obligations of the Executive are personal
and shall not be assigned or delegated by him.

 

(l)                                     Waiver.  No delays or omission by the
REIT or the Executive in exercising any right under this Agreement shall operate
as a waiver of that or any other right.  A waiver or consent given by the REIT
or the Executive on any one occasion shall be effective only in that instance
and shall not be construed as a bar or waiver of any right on any other
occasion.

 

(m)                             Captions.  The captions appearing in this
Agreement are for convenience of reference only and in no way define, limit or
affect the scope or substance of any section of this Agreement.

 

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(n)                                 Severability.  In case any provision of this
Agreement shall be held by a court or arbitrator with jurisdiction over the
parties to this Agreement to be invalid, illegal or otherwise unenforceable,
such provision shall be restated to reflect as nearly as possible the original
intentions of the parties in accordance with applicable law, and the validity,
legality and enforceability of the remaining provisions shall in no way be
affected or impaired thereby.  In the event that any portion or provision of
this Agreement (including, without limitation, any portion or provision of
Sections 4, 5, and/or 6) is determined by a court or arbitrator of competent
jurisdiction to be invalid, illegal or otherwise unenforceable by reason of
excessive scope as to geographic, temporal or functional coverage, such
provision will be reformed and deemed to extend only over the maximum
geographic, temporal and functional scope as to which it may be enforceable and
shall be enforced by said court or arbitrator accordingly.

 

(o)                                 Counterparts.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

 

 

DIAMONDROCK HOSPITALITY COMPANY

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

 

 

 

Name:

 

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