EXHIBIT 10.38



 





Exhibit 10.38



Executive Officer Compensation



On January 25, 2007, the Compensation Committee of the Board of Directors (the “Board”) of Winston
Hotels, Inc. (the “Company”) approved, and on January 25, 2007, the Board ratified, 2006
performance bonuses, new annual salaries for 2007, bonus ranges for 2007 and awards of restricted
common stock to each of the Company’s executive officers. These grants and awards are summarized in
the following table (amounts not in thousands for purpose of this Exhibit 10.38):




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2006	 	2007	 	 	 	 
	 	 	Cash	 	Annual	 	2007	 	2007 Restricted
	 	 	Bonus	 	Salary	 	Bonus Range	 	Shares Award (#) (1)
	Robert W. Winston, III
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Chief Executive Officer
	 	$	600,000	 	 	$	446,500	 	 	$	0–446,500	 	 	 	75,055	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Joseph V. Green
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	President and Chief Financial Officer
	 	$	367,500	 	 	$	386,000	 	 	$	0–386,000	 	 	 	53,807	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Kenneth R. Crockett
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executive
Vice President and Chief Development Officer
	 	$	325,500	 	 	$	341,750	 	 	$	0–341,750	 	 	 	47,657	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Brent V. West
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Vice
President and Chief Accounting Officer
	 	$	100,000	 	 	$	210,000	 	 	$	0–210,000	 	 	 	16,471	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	James P. Frey
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Vice President
	 	$	85,000	 	 	$	170,100	 	 	$	0–170,100	 	 	 	11,753	 








 




			
	(1)	 	Assuming continued employment by the executives, these
restricted stock awards vest 20% immediately and 20% on
each of January 1, 2008, 2009, 2010 and 2011. If we
complete the Merger, the unvested shares will vest in full
on the effective date of the Merger.




Bonus amounts will be determined by the Compensation Committee of the Board at the beginning of the
2008 fiscal year. The Compensation Committee set goals upon which 2007 bonuses for Robert W.
Winston, III, Joseph V. Green and Kenneth R. Crockett will be based. Any 2007 bonuses paid to these
executive officers will be based primarily on the attainment of certain individual and Company
goals. Approximately 75% of the 2007 bonus awards will be based upon the attainment of certain
Company goals, which generally will be based on the following performance criteria: the ranking of
the Company’s total return to shareholders, as compared to a peer group of hotel REITs, the
Company’s actual funds from operations (FFO) for the year ending December 31, 2007 as a percentage
of the Company’s FFO guidance targets for the year ending December 31, 2007, and certain
acquisition, disposition, lending and general corporate goals. Approximately 25% of the potential
bonus awards will be based upon attainment of individual goals, as determined by the Compensation
Committee.



Director Compensation



The Board also set compensation for the Company’s outside directors. Directors who are not
employees of the Company receive a fee of $1,500 for each Board meeting and $500 for each committee
meeting attended in person. For telephonic meetings of the Board or its committees that are more
than 30 minutes in length, directors will typically receive a fee of approximately $500 for their
participation. The Company also reimburses all directors for their out-of-pocket expenses in
connection with their service on the Board. Each director received a grant of 8,500 shares of
restricted stock in August 2004. These restricted stock awards vested 20% immediately, 20% on the
day of the Company’s annual meeting of shareholders in each of 2005 and 2006 and will vest 20% on
the date of the Company’s annual meeting in each of 2007 and 2008 assuming the director remains a
director of the Company on those dates. If we complete the Merger, the unvested shares will vest
in full on the effective date of the Merger.




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