Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) dated as of October 21, 2005 is
entered between La Quinta Corporation (the “Company”) and Noel E. Ferguson (the
“Executive”).

NOW, THEREFORE, for good and valuable consideration, the delivery and receipt of
which is hereby acknowledged by the parties hereto, respectively, said parties
hereby agree as follows:

ARTICLE I

Employment, Duties and Responsibilities

1.1 Employment. The Executive shall serve as the Senior Vice President-Human
Resources of the Company. The Executive hereby accepts such employment. The
Executive agrees to devote substantially all of his time and efforts to
promoting the interests of the Company.

1.2 Duties and Responsibilities. Subject to the supervision of and direction by
the President and Chief Operating Officer, the Executive shall perform such
duties as are customarily associated with the position of Senior Vice
President-Human Resources of the Company, and such related duties and
responsibilities with comparable levels of responsibilities and skill set
requirements as the Company may assign, from time to time.

1.3 Base of Operation. The Executive’s principal base of operation for the
performance of his duties and responsibilities under this Agreement shall be the
offices of the Company in Dallas, Texas.

ARTICLE II

Term

2.1 Term. The term of this Agreement (the “Term”) shall commence on the date of
this Agreement as indicated above, and shall continue for a period of three
years from the commencement date hereof. The Term and this Agreement will be
renewed automatically thereafter for successive one-year terms unless 6 months
notice of non-renewal is given by either party to the other. Regardless of the
term remaining on this Agreement determined as provided above, upon the
occurrence of a Change of Control of the Company, the Term of this Agreement
shall not expire until the later of the end of the remaining term then in effect
or two years from the date of such Change of Control.

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ARTICLE III

Compensation and Expenses

3.1 Salary and Benefits. As compensation and consideration for the performance
by the Executive of his obligations under this Agreement, the Executive shall be
entitled to the following (subject, in each case, to the provisions of Article V
hereof):

(a) The Company shall pay the Executive a base salary, payable in accordance
with the ordinary payment procedures of the Company and subject to such
withholdings and other ordinary employee deductions as may be required by law.
The total base salary paid to the Executive through the date of his next regular
annual salary review shall be $250,000. The base salary to be paid the Executive
during the Term for subsequent years shall be reviewed on an annual basis, by
the Board of Directors of the Company (the “Board”) or by the Compensation
Committee of the Board, (the “Compensation Committee”) subject to increase based
upon performance and competitive market data as determined by the Compensation
Committee in its sole discretion. In no event shall such base salary be less
than $250,000 per annum.

(b) The Executive shall participate during the Term in the annual cash bonus
plan maintained by the Company, subject to the performance goals and procedures
established by the Compensation Committee, from time to time. Subject to the
terms and conditions of the annual cash bonus plan, the Executive’s base target
bonus opportunity for each fiscal year for satisfaction of goals for such fiscal
year shall be 50 percent of the Executive’s base salary as actually paid in the
applicable calendar year (“Base Target”). In the event the Executive
significantly exceeds annual goals for any fiscal year, he may receive a cash
bonus of up to 100 percent of the Executive’s base salary as actually paid in
the applicable calendar year. Actual payments under the annual cash bonus plan
will be determined by the Compensation Committee, in its sole discretion.

(c) The Executive shall participate during the Term in such retirement, pension,
health, disability and medical insurance plans, and in such other employee
benefit plans and programs, as may be maintained from time to time during the
Term by the Company for the benefit of the employees of the Company, in each
case to the extent and in such manner available to other executive officers of
the Company and subject to the terms and provisions of such plans or programs.

(d) The Executive shall be entitled to an annual paid vacation period (but not
necessarily consecutive vacation weeks) during the Term, in accordance with the
Company’s employee benefit policies, but in no event less than four weeks per
year.

3.2 Expenses. The Company will reimburse the Executive for reasonable
business-related expenses incurred by him in connection with the performance of
his duties hereunder during the Term subject, however, to the Company’s policies
relating to business-related expenses as in effect from time to time during the
Term.

3.3 Long Term Incentives. The Company may provide the Executive with additional
opportunities to earn long-term incentive awards in the future, from time to
time, at levels that are competitive with external market place opportunities
for the Executives’ position and in line with the Company’s compensation
philosophies as in effect, from time to time, as may be approved by the
Compensation Committee, in its sole discretion.

As compensation and in consideration for the performance by the Executive of his
obligations under this Agreement, the Executive is receiving the following
(subject, in each case, to the provision of Article V hereof):

(a) Performance Shares. The Company will make a grant to the Executive of 20,000
shares of the common stock of La Quinta Corporation and shares of the common
stock of La Quinta Properties, Inc. which are paired for trading purposes
(“Paired Shares”), and may grant additional awards in the future, in accordance
with the provisions of the agreements pursuant to which such awards have been or
will be granted and the terms of the La Quinta Corporation 2005 Incentive
Compensation Plan and any additional or modified plans as may be adopted from
time to time, as applicable, (the “Award” of the “Performance Shares” under the
“Plans”).

(b) Stock Options. The Company will also make a grant to the Executive of 20,000
options to purchase Paired Shares and may grant additional awards in the future
(the “Options”) in accordance with the provisions of the agreements pursuant to
which such awards have been or will be granted and the terms of the Plans.

In the event of a Change in Control (as hereafter defined and provided for in
Section 5.7), all Performance Shares and Options shall become fully vested
immediately prior to the consummation of the Change in Control.

3.4 Automobile Allowance. In lieu of an automobile furnished by the Company, the
Executive shall receive an automobile allowance of $1,100 per month. All gas,
insurance, and maintenance will be at the Executive’s expense.

ARTICLE IV

Exclusivity, Etc.

4.1 Exclusivity. The Executive agrees to perform his duties, responsibilities
and obligations hereunder efficiently and to the best of his ability. The
Executive agrees that he will devote substantially all of his working time, care
and attention and best efforts to such duties, responsibilities and obligations
throughout the Term. The foregoing shall not be interpreted to prohibit the
Executive from serving as director or trustee of one or more corporations or
foundations (either for-profit or not-for-profit) other than the Company, after
obtaining consent from the Board, which shall not be unreasonably withheld. The
Executive also agrees so long as he is employed by the Company that he will not
engage in any other business activities, pursued for gain, profit or other
pecuniary advantage, that are competitive with the activities of the Company.

4.2 Other Business Ventures. The Executive agrees that, so long as he is
employed by the Company, he will not own, directly or indirectly, any
controlling or substantial stock or other beneficial interest in any business
enterprise which is engaged in, or competitive with, any business engaged in by
the Company. Notwithstanding the foregoing, the Executive may own, directly or
indirectly, up to 5% of the outstanding capital stock of any business having a
class of capital stock which is traded on any national stock exchange or in the
over-the-counter market.

4.3 Confidentiality. The Executive agrees that he will not, at any time during
or after the Term, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or means, or any other
confidential information concerning the business or policies of the Company,
which he may have learned in connection with his employment hereunder. For
purposes of this Agreement, a “trade or business secret, process, method or
means, or any other confidential information” shall mean and include written
information treated as both confidential and as a trade secret by the Company.
The Executive’s obligation under this Section 4.3 shall not apply to any
information which (a) is known publicly; (b) is in the public domain or
hereafter enters the public domain without the fault of the Executive; (c) is
known to the Executive prior to his receipt of such information from the
Company, as evidenced by written records of the Executive; or (d) is hereafter
disclosed to the Executive by a third party not under an obligation of
confidence to the Company. The Executive agrees not to remove from the premises
of the Company, except as an employee of the Company in pursuit of the business
of the Company or except as specifically permitted in writing by the Company,
any document or other object containing or reflecting any such confidential
information. The Executive recognizes that all such documents and objects,
whether developed by him or by someone else, will be the sole and exclusive
property of the Company. Upon termination of his employment hereunder, the
Executive shall forthwith deliver to the Company all such confidential
information, including without limitation all lists of lessees, customers,
correspondence, accounts, records and any other documents or property made or
held by him or under his control in relation to the business or affairs of the
Company, and no copy of any such confidential information shall be retained by
him. The provisions of this Section 4.3 shall survive any termination of this
Agreement.

4.4 Noncompetition and Non Disparagement. During the period commencing on the
date hereof and ending on the first anniversary of the date on which the
Executive’s employment is terminated, (the “Restricted Period”) whether before
or after the Term the Executive shall not, directly or indirectly, whether as an
employee, consultant, independent contractor, partner, joint venturer or
otherwise, (A) solicit or induce, or in any manner attempt to solicit or induce,
any person employed by, or as agent of, the Company to terminate such person’s
employment or agency, as the case may be, with the Company or (B) divert, or
attempt to divert, any person, concern, or entity from doing business with the
Company (including entering into a lease), nor will he attempt to induce any
such person, concern or entity to cease being a lessee, customer or supplier of
the Company. Furthermore, during the Restricted Period, the Executive shall not
make disparaging remarks about the Company. If the Executive is terminated by
the Company for other than Cause or by the Executive for Good Reason, or after a
Change of Control and Executive Termination Event, the provisions of this
Section 4.4 relating to non-competition shall not be binding on the Executive.
The provisions of this Section 4.4 shall survive the termination of this
Agreement.

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ARTICLE V

Termination

5.1 Termination by the Company.

(a) The Company shall have the right to terminate the Executive’s employment at
any time with or without “Cause”. For purposes of this Agreement, “Cause” shall
mean that, prior to any termination the Executive shall have committed: (i) an
act of willful misconduct, fraud, embezzlement, theft, or any other act
constituting a felony, involving moral turpitude or causing material harm,
financial or otherwise, to the Company; (ii) a demonstrably intentional and
deliberate act or failure to act, including a gross neglect in duties, (other
than as a result of incapacity due to physical or mental illness), which is
committed in bad faith by the Executive, which causes or can be expected to
cause material financial injury to the Company; or (iii) an intentional and
material breach of this Agreement that is not cured by the Executive within
30 days after written notice from the Chief Executive Officer specifying the
breach and requesting a cure. For purposes of this Agreement, no act, or failure
to act, on the part of the Executive shall be deemed “intentional” if it was due
primarily to an error in judgment or negligence, but shall be deemed
“intentional” only if done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that his action or omission was in, or not
opposed to, the best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for “Cause” hereunder
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the Board then in office at a meeting of the Board of Directors called and
held for such purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive had
committed an act set forth above and specifying the particulars thereof in
detail. Nothing herein shall limit the right of the Executive or his
beneficiaries to contest the validity or propriety of any such determination.

(b) The end of the Term, due to the exercise by the Company of its non-renewal
right under Section 2.1, shall also constitute termination by the Company of the
Executive’s employment, with the giving of such notice by the Company creating a
severance payment obligation, which is payable at the end of the notice period.

5.2 Death. In the event the Executive dies during the Term, this Agreement shall
automatically terminate, such termination to be effective on the date of the
Executive’s death.

5.3 Disability. In the event that the Executive shall suffer a disability which
shall have prevented him from performing satisfactorily his obligations
hereunder for a period of at least 120 consecutive days, the Company shall have
the right to terminate this Agreement, such termination to be effective upon the
giving of notice thereof to the Executive in accordance with this Agreement.

5.4 Termination by the Executive for Good Reason. The Executive’s employment may
be terminated during the Term by the Executive for Good Reason, by giving to the
Company 30 days advance written notice specifying the event or circumstance
which the Executive alleges constitutes Good Reason. Such notice of resignation
will take effect, if not revoked by the Executive, at the conclusion of such
thirty-day period. For purposes of this Agreement, the following circumstances
shall constitute “Good Reason” if not cured prior to the expiration of such
thirty-day period:

(a) the assignment to the Executive of duties that are materially inconsistent
with the Executive’s position or with his authority, duties or responsibilities
as contemplated by Sections 1.1 and 1.2 of this Agreement, or any other action
by the Company or its successor which results in a material diminution or
material adverse change in such position, authority, duties or responsibilities;

(b) any material breach by the Company or its successor of the provisions of
this Agreement;

(c) the Company shall relocate its principal executive offices or require the
Executive to have his principal location of work changed, in either case, to any
location which is in excess of 45 miles from its current location; or

(d) the reduction of the Executive’s base salary below its then current level or
the reduction of the Executive’s Base Target bonus percentage factor.

5.5 Effect of Termination.

(a) In the event of termination of the Executive’s employment for any reason or
by reason of the Executive’s death or disability, the Company shall pay to the
Executive (or his beneficiary in the event of his death) within 30 days after
termination of employment any base salary, bonus, vested benefits in accordance
with the Company’s plans, and any other compensation earned but not paid to the
Executive prior to the effective date of such termination and, other than the
circumstances of termination by the Company for Cause or by the Executive
voluntarily without Good Reason, the pro rata amount of the annual cash bonus
payable under the plan based on the Base Target bonus for the year during which
such termination occurs, based on the number of days worked during such year.
Upon such termination, the Company’s obligation to pay base salary, annual bonus
and long term incentives ceases except to the extent vested, in accordance with
the plans, or as otherwise payable pursuant to this Agreement.

(b) In the event of termination of the Executive’s employment (other than a
termination following a Change of Control as hereafter defined and provided for
in Section 5.7, which shall govern in such event) (i) by the Company other than
for Cause or (ii) by the Executive for Good Reason, (subject to the signing by
the Executive of the Company’s standard form of general release of employment
claims as generally used prior to the Change in Control and the expiration of
the statutory revocation period) the Company shall pay to the Executive, within
30 days after termination of employment in addition to the amounts described in
Section 5.5(a) hereof, a lump sum equal to one times the sum of Executive’s then
current base salary and then current Base Target bonus.

(c) In the event of the termination of the Executive’s employment (other than a
termination following a Change in Control as hereafter defined and provided for
in Section 5.7, which shall govern in such event) (i) by the Company other than
for Cause, (ii) by the Executive for Good Reason or (iii) on account of the
Executive’s death or disability, for 12 months (or, if later, the date the
Executive becomes eligible for Medicare if his employment terminates on account
of disability) following the Termination Date, the Company shall arrange to
provide the Executive with insurance benefits (medical, dental, life and
disability) on the same terms and conditions applicable to active executive
officers of the Company, and in the event of the Executive’s death, the Company
shall arrange to provide the Executive’s surviving spouse and dependents with
such benefits if they were provided with such benefits by the Company at the
time of the Executive’s death. If and to the extent that such benefits shall not
or cannot be paid or provided under any policy, plan, program or arrangement of
the Company solely due to the fact that the Executive is no longer an officer or
employee of the Company, then the Company shall pay to the Executive, his
dependents and beneficiaries, the amount of premiums that would have been
incurred by the Company were the Company able to provide such coverage through
its plan, program or arrangement. Such benefits shall be discontinued prior to
the end of the specified continuation period if the Executive receives
comparable coverage from a subsequent employer (except to the extent that the
subsequent employer does not cover the preexisting medical conditions of the
Executive or a previously covered member of the Executive’s family).

5.6 Termination Following a Change of Control.

(a) Definitions. As used herein, the following terms shall have the following
meanings:

(i) Change in Control. “Change in Control” shall mean

(1) any transaction, or series of transactions, including, but not limited to
any merger, consolidation, or reorganization, which results when any “person” as
defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange
Act”) and as used in Sections 13(d) and 14(d) thereof, including a “group” as
defined in Section 13(d) of the Exchange Act, but excluding the Company, any
subsidiary of the Company, and any employee benefit plan sponsored or maintained
by the Company or any subsidiary of the Company, directly or indirectly, becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of
securities of the Company representing more than 50% of the combined voting
power of the Company’s then outstanding securities;

(2) when, during any period of 24 consecutive months the individuals who, at the
beginning of such period, constitute the Board (the “Incumbent Directors”) cease
for any reason other than death to constitute at least a majority of the Board;
provided, however, that a director who was not a director at the beginning of
such 24-month period shall be deemed to have satisfied such 24-month requirement
(and be an Incumbent Director) if such director was elected by, or on the
recommendation of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors either actually (because they were
directors at the beginning of such 24-month period) or by prior operation of
this Section; or

(3) upon the closing of a transaction comprising: a stockholder approved plan of
complete liquidation of the Company; or an agreement for the sale or disposition
of substantially all of the Company’s assets; or a merger, consolidation, or
reorganization of the Company in which stockholders of the Company immediately
prior to the transaction own less than 50% of the combined voting power of the
surviving entity.

(ii) “Termination Date” shall mean the date on which the Executive’s employment
with the Company is terminated.

(b) Termination by the Company. Following a Change in Control, the Executive’s
employment may be terminated by the Company (a “Company Termination Event”) and
the Executive shall not be entitled to the severance benefits provided under
Section 5.7, provided that the Executive’s termination occurs as a result of one
or more of the following events:

(i) The Executive’s death;

(ii) The Executive’s disability, provided the Executive actually begins to
receive disability benefits pursuant to the long-term disability plan in effect
for senior executives of the Company immediately prior to the Change in Control;
or

(c) Executive Termination Event. If at any time during the two year period
commencing on the date of a Change in Control, the Company or the Executive
terminates his employment following the occurrence of one or more of the
following events (each, an “Executive Termination Event”), the Executive shall
be entitled to the severance benefits provided in Section 5.7 below:

(i) Any termination by the Company of the Executive’s employment during such two
year period for any reason, other than for Cause, as a result of the Executive’s
death, or by reason of the Executive’s disability and the actual receipt of
disability benefits pursuant to the long-term disability plan in effect for
senior executives of the Company immediately prior to the Change in Control.

(ii) Termination by the Executive of his employment with the Company at any time
within two years after the Change in Control upon the occurrence of any of the
following events:

(1) The Company’s failure to elect, re-elect or otherwise maintain the Executive
in the office or position in the Company which the Executive held immediately
prior to a Change in Control.

(2) A significant, adverse change (increase or decrease) in the nature or scope
of the authorities, powers, functions, responsibilities or duties attached to
the position with the Company which the Executive held immediately prior to the
Change in Control, or a reduction in the aggregate of the Executive’s base pay
or annual incentive bonus opportunity (and relative level of goal achievement)
in which the Executive participated immediately prior to the Change in Control,
or the termination of the Executive’s rights to any employee benefits to which
he was entitled immediately prior to the Change in Control, or a reduction in
scope or value of such benefits, without prior written consent of the Executive,
any of which is not remedied within 10 calendar days after receipt by the
Company of a written notice from the Executive of such change, reduction, or
termination, as the case may be;

(3) The Company or its successor becomes a subsidiary of another company and the
Executive does not hold the position stated in Section 1.1 of the ultimate
parent company;

(4) The Company shall relocate its principal executive offices, or require the
Executive to have his principal location of work changed, to any location which
is in excess of 45 miles from the location thereof immediately prior to the
Change in Control; or

(5) Without limiting the generality or effect of the foregoing, any material
breach of this Agreement by the Company or any successor thereto.

5.7 Severance Benefits. In the event the Executive’s employment is terminated
within two years of the date of a Change in Control as a result of an Executive
Termination Event, the Executive shall be entitled to the benefits set forth
below, subject to the signing by the Executive of the Company’s standard form of
general release of employment claims as generally used prior to the Change in
Control and the expiration of any statutory revocation period. All amounts
payable under this Section 5.7(a) (b) (c) and (d) shall be paid to the Executive
in one lump sum within 30 days after his termination of employment.

(a) The Company shall pay to the Executive an amount equal to two times the
greater of: (i) average of his annual base salary for the three fiscal years (or
such fewer fiscal years that the Executive is actually employed by the Company)
preceding the Change in Control or (ii) his then current base salary (“average
Base Salary”) and two times the greater of: i) the average of his cash bonuses
paid with respect to the last two fiscal years (or such fewer fiscal years that
the Executive is actually employed by the Company) preceding the Change in
Control, or ii) his Base Target bonus.

(b) The Company shall pay the Executive his full base salary through the
Executive’s Termination Date. The Company shall also pay the Executive an amount
equal to the pro rata amount of the Base Target bonus award available to the
Executive under the bonus plan during the year of termination, based on the
number of days of the year elapsed prior to the Termination Date. Any cash-based
long-term incentives shall be cashed out on a pro-rata basis, based on the
greater of actual goal achievement or target.

(c) All Performance Shares, Options, Award grants and retirement benefits (such
as 401k) shall become vested in accordance with the applicable plan documents as
in effect on the dates of the respective grants.

(d) The Company will provide outplacement assistance from a service selected by
the Executive for a period of one year from the Termination Date. All associated
costs will be paid by the Company, up to a maximum of thirty percent (30%) of
the Executive’s average Base Salary.

(e) For a period of two years following the Executive’s termination of
employment the Company shall arrange to provide the Executive with insurance
benefits (medical, dental, life and disability) substantially similar to those
which the Executive was receiving or entitled to receive immediately prior to
the Termination Date with all costs paid by the Company. If and to the extent
that such benefits shall not or cannot be paid or provided under any policy,
plan, program or arrangement of the Company solely due to the fact that the
Executive is no longer an officer or employee of the Company, then the Company
shall pay to the Executive, his dependents and beneficiaries, the amount of
premiums that would have been incurred by the Company were the Company able to
provide such coverage through its plan, program or arrangement. Such insurance
benefits shall be discontinued prior to the end of the specified continuation
period if the Executive receives comparable coverage from a subsequent employer
(except to the extent that the subsequent employer does not cover the
preexisting medical conditions of the Executive or a previously covered member
of the Executive’s family).

5.8 Other Rights. A termination of the Executive’s employment by the Company
pursuant to this Agreement or by the Executive shall not affect adversely any
rights which the Executive may have pursuant to any agreement, employment
contract, policy, plan, program or arrangement of the Company providing employee
benefits, which rights shall be governed by the terms of such employee benefit
plan.

5.9 Retirement. The Executive will be entitled to retirement benefits and all
other applicable benefits if any, pursuant to the terms of any of the Company’s
plans. The Company’s obligation to pay base salary, annual bonus and long-term
incentives ceases upon retirement except to the extent vested, in accordance
with the plans, or as otherwise payable pursuant to this Agreement.

ARTICLE VI

Indemnification

The Company will indemnify the Executive to the fullest extent that would be
permitted by law (including a payment of expenses in advance of final
disposition of a proceeding) as in effect at the time of the subject act or
omission, or by the charter or by-laws of the Company as in effect at such time,
or by the terms of any indemnification agreement between the Company and the
Executive, whichever affords greatest protection to the Executive, and the
Executive shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its officers and/or,
during the Executive’s service in such capacity (if applicable), directors (and
to the extent the Company maintains such an insurance policy or policies, in
accordance with its or their terms to the maximum extent of the coverage
available for any Company officer or director); against all costs, charges and
expenses whatsoever incurred or sustained by the Executive (including but not
limited to any judgment entered by a court of law) at the time such costs,
charges and expenses are incurred or sustained, in connection with any action,
suit or proceeding to which the Executive may be made a party by reason of his
being or having been an officer or employee of the Company, or serving as a
director, officer or employee of an affiliate of the Company, at the request of
the Company, other than any action, suit or proceeding brought against the
Executive by or on account of his breach of the provisions of an employment
agreement with a third party that has not been disclosed by the Executive to the
Company. The provisions of this Article VI shall survive any termination of this
Agreement.

ARTICLE VII

Taxes and Miscellaneous Other Provisions

7.1 Tax Considerations. Notwithstanding anything herein to the contrary, in the
event any payments or benefits provided to the Executive hereunder upon a Change
in Control are determined by the Company to be subject to the tax imposed by
Section 4999 of the Internal Revenue Code (the “Code”, with all Code Section
references used herein being deemed to include any regulations thereunder), or
any similar federal or state excise tax, FICA tax, or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties are hereinafter collectively
referred to as the “Excise Tax”), the Company shall pay to the Executive at the
time specified in Section 5.5 (b) or 5.7 above (whichever applies), an
additional amount (the “Gross-Up Payment”) such that after the payment by the
Executive of all federal, state, or local income taxes, Excise Taxes, FICA tax,
or other taxes (including any interest or penalties imposed with respect
thereto) imposed upon the receipt of the Gross-Up Payment, Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed on the severance
payments and benefits provided herein.

(a) For purposes of determining whether any payments or benefits to the
Executive hereunder will be subject to the Excise Tax and the amount of such
Excise Tax:

(i) all payments or benefits received or to be received by the Executive in
connection with a Change in Control or the termination of employment (whether
pursuant to the terms of this Agreement or of any other plan, arrangement or
agreement with the Company) shall be treated as “parachute payments” within the
meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments”
within the meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company and
acceptable to the Executive, such payments or benefits (in whole or in part) do
not constitute parachute payments under Section 280G of the Code, or such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code;

(ii) the amount of the severance payments which shall be treated as subject to
the Excise Tax shall be equal to the amount of excess parachute payments within
the meaning of Sections 280G(b)(1) and (4) (after applying clause (a), above);
and

(iii) the parachute value of any noncash benefits or any deferred payment or
benefit shall be determined by Company in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.

(b) If the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder at the time of termination of employment, the
Executive shall repay to the Company, at the time the reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction. If the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of termination of employment, the Company shall
make an additional Gross-Up Payment to the Executive in respect of such excess
at the time the amount of such excess is finally determined. The Executive shall
notify the Company in writing of any claim by the Internal Revenue Service that,
if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later that ten
business days after the Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30 calendar day period following the date on which it gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company
relating to such claim,

(ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order to effectively contest
such claim, and

(iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including legal and accounting fees and additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax, FICA tax or
income tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this section, the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

If any such claim referred to in this Section is made by the Internal Revenue
Service and the Company does not request the Executive to contest the claim
within the 30 calendar day period following notice of the claim, the Company
shall pay to the Executive the amount of any Gross-Up Payment owed to the
Executive, but not previously paid pursuant to Section 7.1(b), immediately upon
the expiration of such 30 calendar day period. If any such claim is made by the
Internal Revenue Service and the Company requests the Executive to contest such
claim, but does not advance the amount of such claim to the Executive for
purposes of such contest, the Company shall pay to the Executive the amount of
any Gross-Up Payment owed to the Executive, but not previously paid under the
provisions of Section 7.1(b), within 5 business days of a Final Determination of
the liability of the Executive for such Excise Tax. For purposes of this
Agreement, a “Final Determination” shall be deemed to occur with respect to a
claim when (i) there is a decision, judgment, decree or other order by any court
of competent jurisdiction, which decision, judgment, decree or other order has
become final, i.e., all allowable appeals pursuant to this section have been
exhausted by either party to the action, (ii) there is a closing agreement made
under Section 7121 of the Code, or (iii) the time for instituting a claim for
refund has expired, or if a claim was filed, the time for instituting suit with
respect thereto has expired.

If, after the receipt by the Executive of an amount advanced by the Company
pursuant to this section, the Executive becomes entitled to receive any refund
with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of this Section) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to this Section, a determination is made by the
Internal Revenue Service that the Executive is not entitled to any refund with
respect to such claim and the Company does not notify the Executive in writing
of its intent to contest such denial of refund prior to the expiration of 30
calendar days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

7.2 No Set-Off. There shall be no set-off or counterclaim against, or delay in,
any payment of severance benefits by the Company to the Executive provided for
in this Agreement with respect to any claim against or debt or obligation of the
Executive, whether arising hereunder or otherwise except for insurance benefits
as provided in Sections 5.5(c) or 5.7(e).

7.3 No Mitigation Obligation. The Executive’s benefits hereunder shall be
payable to him as severance pay in consideration of his services under this
Agreement. The Company hereby acknowledges that it will be difficult, and may be
impossible, for the Executive to find reasonably comparable employment following
the Termination Date. Accordingly, the parties hereto expressly agree that the
payment of the severance benefits by the Company to the Executive in accordance
with the terms of this Agreement will be liquidated damages, and that the
Executive shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, nor shall any
profits, income, earnings or other benefits from any source whatever create any
mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise.

7.4 Enforcement Costs. The Company is aware that, upon the occurrence of a
Change in Control, the Board of Directors or a shareholder of the Company, or
the Company’s successor in interest, may then cause or attempt to cause the
Company to refuse to comply with its obligations under this Agreement, or may
cause or attempt to cause the Company to institute, or may institute litigation
seeking to have this Agreement declared unenforceable, or may take, or attempt
to take, other action to deny the Executive the benefits intended under this
Agreement. In these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Company that the Executive not be required
to incur the expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action, nor be bound to negotiate any
settlement of his rights hereunder under threat of incurring such expenses
because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Executive hereunder. Accordingly, if
following a Change in Control the Executive should conclude in good faith that
the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any action
to declare this Agreement void or unenforceable, or institutes any litigation or
other legal action designed to deny, diminish or to recover from the Executive
the benefits intended to be provided to the Executive hereunder, the Company
irrevocably authorizes the Executive from time to time to retain legal counsel
of his choice at the expense of the Company to represent the Executive in
connection with the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer, stockholder
or other person affiliated with the Company. The reasonable fees and expenses of
counsel selected from time to time by the Executive as provided herein shall be
paid or reimbursed to the Executive by the Company on a regular, periodic basis
upon presentation by the Executive of a statement or statements prepared by his
counsel in accordance with its customary practices. In any action involving this
Agreement, the Executive shall be entitled to prejudgment interest on any
amounts found to be due him as of the date such amounts would have been payable
to the Executive pursuant to this Agreement at an annual rate of interest of
10%.

7.5 Arbitration. The Company and the Executive hereby agree that certain issues
and/or disagreements arising in connection with this Agreement shall be settled
by arbitration. Accordingly, in the event the Company or the Executive believes
that the other party has violated any provision of this Agreement, including but
not limited to any action by the Company which the Executive believes would
entitle the Executive to terminate his employment with severance benefits in
accordance with Article V hereof, the party alleging such violation shall notify
the other party in writing of such alleged violation. In the event the party
receiving such violation notice disagrees with the position taken by the other
party in such written notice, the recipient of the violation notice may, within
20 days of receipt of such written notice, notify the other party, in writing,
that it has elected to submit such disagreement to arbitration. Arbitration of
such dispute shall be settled in Dallas, Texas, in accordance with the then
applicable rules of the American Arbitration Association. The Company shall bear
all costs associated with such arbitration. In the event the party receiving a
violation notice does not elect to submit any issue or disagreement to
arbitration within 10 days of its receipt of the written violation notice, such
party will be deemed to have accepted the position taken in such written notice.
Notwithstanding anything herein to the contrary, neither the Company nor the
Executive shall be required to arbitrate the basis of any involuntary
termination of the Executive’s employment with the Company by the Company or its
successor.

7.6 Employment Rights. Nothing expressed or implied in this Agreement shall
create any right or duty on the part of the Company or the Executive to have the
Executive remain in the employment of the Company prior to any Change in
Control, provided, however, that any event which would constitute an Executive
Termination Event had a Change in Control occurred following the commencement of
active negotiations with a third party (which negotiations are evidenced by the
delivery of evaluation material) that ultimately results in a Change in Control
shall be deemed to be a termination or removal of the Executive by the Company
other than for Cause after a Change in Control for purposes of this Agreement.

7.7 Benefit of Agreement; Assignment; Beneficiary. This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns,
including, without limitation, any corporation or person which may acquire all
or substantially all of the Company’s assets or business, or with or into which
the Company may be consolidated or merged. This Agreement shall also inure to
the benefit of, and be enforceable by, the Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amount would still
be payable to the Executive hereunder if he had continued to live, all such
amounts shall be paid in accordance with the terms of this Agreement to the
Executive’s beneficiary, devisee, legatee or other designee, or if there is no
such designee, to the Executive’s estate.

7.8 Notices. Any notice required or permitted hereunder shall be in writing and
shall be sufficiently given if personally delivered or if sent by telegram or
telex or by registered or certified mail, postage prepaid, with return receipt
requested, addressed:

(a) in the case of the Company, La Quinta Corporation, 909 Hidden Ridge,
Suite 600, Irving, Texas 75038, Attention: General Counsel; and

(b) in the case of the Executive, to Noel E. Ferguson, C/O La Quinta Corporation
909 Hidden Ridge, Suite 600, Irving, Texas 75038, or such other address as the
Executive may specify in writing to the Company.

7.9 Entire Agreement; Amendment. This Agreement contains the entire agreement of
the parties hereto with respect to the terms and conditions of the Executive’s
employment during the Term and supersedes any and all prior agreements and
understandings, whether written or oral, between the parties hereto with respect
to compensation due for services rendered hereunder. This Agreement may not be
changed or modified except by an instrument in writing signed by both of the
parties hereto.

7.10 Waiver. The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a continuing waiver or as a
consent to or waiver of any subsequent breach hereof.

7.11 Headings. The article and section headings herein are for convenience of
reference only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.

7.12 Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of Texas without
reference to the principles of conflict of laws.

7.13 Agreement to Take Actions. Each party hereto shall execute and deliver such
documents, certificates, agreements and other instruments, and shall take such
other actions, as may be reasonably necessary or desirable in order to perform
his or its obligations under this Agreement or to effectuate the purposes
hereof.

7.14 Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary for the intended preservation of the rights and obligations under this
Agreement.

7.15 Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

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

7.17 Corporate Authorization. The Company hereby represents that the execution,
delivery and performance by the Company of this Agreement are within the
corporate powers of the Company, and that the Chief Executive Officer has the
requisite authority to bind the Company hereby.

7.18 Third Party Agreements and Rights. The Executive represents to the Company
that the Executive’s execution of this Agreement, the Executive’s employment
with the Company and the performance of the Executive’s duties for the Company
will not violate any obligations the Executive may have to any employer, former
employer or other party, and the Executive does not possess tangible embodiments
of non-public information belonging to or obtained from any such previous
employment or other party. Further, the Executive represents and acknowledges
that to the extent that he is under any continuing obligation under any
agreement with any employer, former employer or other party with regard to
non-solicitation, non-inducement and confidentiality, he shall not violate any
such obligation.

7.19 Litigation and Regulatory Cooperation. During and after the Executive’s
employment, the Executive shall reasonably cooperate with the Company 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 Company which relate to events
or occurrences that transpired while the Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect the Executive or expose the Executive to an increased probability of
civil or criminal litigation. The 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 Company at mutually convenient times. During and after the
Executive’s employment, the Executive also shall cooperate fully with the
Company 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 the Executive was employed by the Company.
The Company shall also provide the Executive with compensation on an hourly
basis (to be derived from his then current or last applicable level of base
compensation, as paid by the Company) for requested litigation and regulatory
cooperation that occurs after his termination of employment, and reimburse the
Executive for all costs and expenses incurred in connection with his performance
under this Section 7.19, including, but not limited to, reasonable attorneys’
fees and costs.

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first above written.

LA QUINTA CORPORATION

By: /s/ Francis W. Cash
Francis W. Cash
Chairman of the Board and Chief Executive Officer

EXECUTIVE

/s/ Noel E. Ferguson

Name: Noel E. Ferguson

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