Exhibit 10.3

 

Laurence S. Geller

 

STRATEGIC HOTEL CAPITAL, INC.

2004 INCENTIVE PLAN

 

STOCK UNIT AWARD AGREEMENT

We are pleased to inform you that you have been awarded by Strategic Hotels &
Resorts, Inc. (the "Company"), a stock unit award (the "Stock Unit Award").

The terms of the Stock Unit Award are as set forth in this Stock Unit Award
Agreement (“Agreement”). The Stock Unit Award Agreement is granted under the
Strategic Hotel Capital, Inc. 2004 Incentive Plan (“Plan”) and, except as
expressly provided otherwise herein, is limited by and subject to the express
terms and conditions of the Plan, a copy of which is attached. Capitalized terms
that are not defined in this Agreement have the meanings given to them in the
Plan. The basic terms of the Stock Unit Award are summarized as follows:

Grant Date:

September 7, 2006

Number of Units:

58,824

1.

Vesting

(a)          The Stock Unit Award is subject to forfeiture upon termination of
your employment with the Employer as described below. The Stock Unit Award will
vest and no longer be subject to forfeiture on the dates set forth below (each a
“Vesting Date”) according to the following schedule:

Date at Which Portion of Stock Unit Award is Vested and No Longer Subject to
Forfeiture Provided Continuous Employment With the Employer From the Grant Date

Portion of Stock Unit Award Vested and No Longer Subject to Forfeiture

December 31, 2008

33-1/3%           [19,608]

December 31, 2009

66-2/3%           [39,216]

December 31, 2010

100%               [58,824]

(b)           Units that have vested and are no longer subject to forfeiture
according to the schedule above are referred to herein as "Vested Units." Units
that have not vested and remain subject to forfeiture under the preceding
schedule are referred to herein as "Unvested Units." The Unvested Units will
vest (and to the extent so vested cease to be Unvested Units remaining subject
to forfeiture) in accordance with the above schedule. Collectively, the Unvested
Units and Vested Units are referred to herein as the "Units."

(c)           Early lapse of the forfeiture restrictions may occur as described
below in connection with a Change of Control, your death, your Disability, a
Constructive Termination or a Termination without Cause. For purposes of this
Agreement, the terms “Disability,”

 

 

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“Constructive Termination,” “Termination without Cause,” “Cause” and “Agreement
Term” shall have the meanings given to such terms in your Employment Agreement
made and entered into as of September 7, 2006 (“Employment Agreement”).

2.

Termination of Employment or Services

If you terminate your employment with the Employer other than as a result of a
Constructive Termination occurring either during the Agreement Term or after the
Company or its successor notifies you of its intention not to extend the
Agreement Term to December 31, 2010, or the Company terminates your employment
relationship for Cause, any portion of this Stock Unit Award that has not vested
as provided in Section 1 will immediately terminate. You will forfeit all
Unvested Units upon such occurrence without the payment of any further
consideration to you.

If either during the Agreement Term or after the Company or its successor
notifies you of its intention not to extend the Agreement Term to December 31,
2010, your employment with the Employer terminates because of death, Disability,
Constructive Termination or Termination without Cause, the vesting of this Stock
Unit Award will accelerate and all Units under this Stock Unit Award will become
fully vested.

3.

Change of Control

Upon a Change of Control of the Company, the vesting of your Stock Unit Award
will accelerate and all Units under this Agreement shall become fully vested.
For purposes of this Agreement, “Change of Control” shall have the meaning
assigned to “Change in Control” under the Employment Agreement.

4.

Conversion of Units into Shares of Common Stock

Except as otherwise provided by a deferral election pursuant to Section 5 of
this Agreement, Vested Units shall be converted into shares of Common Stock and
distributed to you on or about the February 15th following the day when Unvested
Units become Vested Units at the applicable Vesting Date or as soon as
administratively feasible following your termination of employment with respect
to Unvested Units which become Vested Units in accordance with Section 2.

If, however, you elect to defer payment of the shares of Common Stock as
provided in Section 5 of this Agreement, the shares of Common Stock shall be
issued as set forth in the Deferral Election Agreement entered into between you
and the Committee.

5.

Deferral Election

Subject to Section 13, you may elect to defer delivery of the shares of Common
Stock that would otherwise be due by virtue of the lapse or waiver of the
vesting requirements as set forth in Section 1. The Committee shall, in its sole
discretion, establish the rules and procedures for such deferral elections and
payment deferrals.

 

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6.

Dividends

You shall be credited with dividend equivalents with respect to your Units under
this Agreement in the form of additional Units as set forth in Section 2(e)(iii)
of your Employment Agreement.

7.

No Rights as Shareholder

You shall not have voting or any other rights as a shareholder of the Common
with respect to the Units. Upon conversion of the Units into shares of Common
Stock, you will obtain full voting and other rights as a shareholder of the
Company.

8.

Securities Law Compliance

Notwithstanding any other provision of this Agreement, you may not sell the
shares of Common Stock acquired upon the conversion of Units unless such shares
are registered under the Securities Act or, if such shares are not then so
registered, the Company has determined that such sale would be exempt from the
registration requirements of the Securities Act. The sale of such shares of
Common Stock must also comply with other applicable laws and regulations
governing the shares, and you may not sell the shares of Common Stock if the
Company determines that such sale would not be in material compliance with such
laws and regulations.

9.

Transfer Restrictions

9.1          Restrictions on Transfer of Unvested Shares. Any sale, transfer,
assignment, encumbrance, pledge, hypothecation, conveyance in trust, gift,
transfer by bequest, devise or descent, or other transfer or disposition of any
kind, whether voluntarily or by operation of law, directly or indirectly, of
Units shall be strictly prohibited and void, provided that such restrictions on
transfer will not apply to a gratuitous transfer of the Units, provided, and
only if, you obtain the Committee's prior written consent to such transfer.

9.2          Market Standoff. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act, you and any transferee
agree not to sell, make any short sale of, loan, hypothecate, pledge, assign,
grant any option for the purchase of, or otherwise dispose or transfer for value
or agree to engage in any of the foregoing transactions with respect to, any
shares of Common Stock acquired upon the conversion of Units if so requested by
the underwriter. Such limitations will be in effect for such period of time as
may be requested by the underwriter.

10.

Independent Tax Advice

You acknowledge that determining the actual tax consequences to you of receiving
Units or shares of Common Stock or deferring or disposing of Units or shares of
Common Stock may be complicated. These tax consequences will depend, in part, on
your specific situation and may also depend on the resolution of currently
uncertain tax law and other variables not within the control of the Company. You
are aware that you should consult a competent and independent tax advisor for a
full understanding of the specific tax consequences to you of receiving,
deferring or disposing of Units or shares of Common Stock. Prior to executing
this Agreement,

 

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you either have consulted with a competent tax advisor independent of the
Company to obtain tax advice concerning the Shares in light of your specific
situation or have had the opportunity to consult with such a tax advisor but
chose not to do so.

11.

Withholding and Disposition of Shares

You agree to make arrangements satisfactory to the Employer for the payment of
any federal, state, local or foreign withholding tax obligations that arise with
respect to this Stock Unit Award, including, without limitation, the receipt of
shares of Common Stock. Notwithstanding the previous sentence, you acknowledge
and agree that the Employer has the right to deduct from payments of any kind
otherwise due to you any federal, state or local taxes of any kind required by
law to be withheld with respect this Stock Unit Award, including, without
limitation, the receipt of shares of Common Stock.

12.

General Provisions

12.1        No Waiver. No waiver of any provision of this Agreement will be
valid unless in writing and signed by the person against whom such waiver is
sought to be enforced, nor will failure to enforce any right hereunder
constitute a continuing waiver of the same or a waiver of any other right
hereunder.

12.2        Undertaking. You hereby agree to take whatever additional action and
execute whatever additional documents the Committee may deem necessary or
advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on either you, the Units or the shares acquired upon
conversion of the Units pursuant to the express provisions of this Agreement.

12.4        Agreement Is Entire Contract. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.

12.5        Successors and Assigns. The provisions of this Agreement will inure
to the benefit of, and be binding on, the Company and its successors and assigns
and you and your legal representatives, heirs, legatees, distributees, assigns
and transferees by operation of law, whether or not any such person will have
become a party to this Agreement and agreed in writing to join herein and be
bound by the terms and conditions hereof.

12.6        No Employment or Service Contract. This Agreement does not confer
upon you any right with respect to continuance of employment by the Employer,
nor does it interfere in any way with the right of your employer to terminate
your employment or services at any time.

12.7        Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but which, upon
execution, will constitute one and the same instrument.

12.8        Governing Law. This Agreement will be construed and administered in
accordance with and governed by the laws of the State of Illinois.

 

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13.

Section 409A Compliance

The Company intends that any Unit conversion, deferral and other provisions
applicable to your Stock Unit Award fully comply with the payout and other
limitations and restrictions imposed under Section 409A of the Internal Revenue
Code of 1986, as amended (“Code”), as clarified or modified by IRS guidance – in
each case if and to the extent such Code Section 409A is otherwise applicable to
your Stock Unit Award and such compliance is necessary to avoid the penalties
otherwise imposed under Code Section 409A. In this connection, the Company and
you agree that the payout timing provisions applicable to the Stock Unit Award,
and the terms of any deferral and other rights regarding such Stock Unit Awards,
shall be deemed modified, if and to the extent necessary to comply with the
payout and other limitations and restrictions imposed under Code Section 409A,
as clarified or modified by IRS guidance – in each case if and to the extent
such Code Section 409A is otherwise applicable to your Stock Unit Award and such
compliance is necessary to avoid the penalties otherwise imposed under Code
Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement.

 

 

Date:  September 7, 2006

 

Date:  September 7, 2006

 

STRATEGIC HOTELS & RESORTS, INC.

By:       /s/ Janice J. Peterson
               Its:  Vice President, Human Capital

/s/ Laurence S. Geller
Laurence S. Geller

 

 

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