Exhibit 10.1





Exhibit 10.1




DIAMONDROCK HOSPITALITY COMPANY




AMENDED AND RESTATED




2004 STOCK OPTION AND INCENTIVE PLAN




(as Amended and Restated on February 27, 2007)

(And as Further Amended on April 28, 2010)





			
	SECTION 1.	 	GENERAL PURPOSE OF THE PLAN; DEFINITIONS





The name of the plan is the DiamondRock Hospitality Company Amended and Restated 2004 Stock
Option and Incentive Plan (the “Plan”). The purpose of the Plan is to encourage and enable the
officers, employees, Non-Employee Directors and other key persons (including Consultants and
prospective employees) of DiamondRock Hospitality Company, a Maryland corporation (the “Company”),
DiamondRock Hospitality Limited Partnership, L.P., a Delaware limited partnership (the “Operating
Partnership”), and the Company’s other Subsidiaries upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a direct stake in the
Company’s welfare will assure a closer identification of their interests with those of the Company,
thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain
with the Company.




The following terms shall be defined as set forth below:




“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.




“Administrator” is defined in Section 2(a).



“Award” or “Awards,” except where referring to a particular category of grant under the Plan,
shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Deferred Stock Awards (which are also referred to as Deferred Stock Units, Restricted Stock Units
or Market Stock Units), Restricted Stock Awards, Unrestricted Stock Awards, Dividend Equivalent
Rights , Other Share-Based Awards and Performance Unit Awards.




“Board” means the Board of Directors of the Company.




“Change in Control” means 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 Company’s outstanding common stock (the “Common
Stock”) or (2) the combined voting power of the Company’s
outstanding securities entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”);


 


 









 





(ii) The merger or consolidation of the Company 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 Company 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 “Incumbent Director” is (1) an individual who is a member of the Board of
Directors on the effective date of this Plan 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 Company’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) “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 Company’s
securities; and (C) “Qualified Affiliate” shall mean (I) any directly or indirectly wholly owned
subsidiary of the Company or the Operating Partnership; (II) any employee benefit plan (or related
trust) sponsored or maintained by the Company or the Operating Partnership or by any entity
controlled by the Company 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 Company’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 Company as indicated in its most recent securities filing made
before the date of the transaction.



“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and
related rules, regulations and interpretations.


 


2









 






“Committee” means the Committee of the Board referred to in Section 2.



“Consultant” means any natural person that provides bona fide services to the Company, and
such services are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for the Company’s
securities.



“Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section
162(m) of the Code.




“Deferred Stock Award” means Awards granted pursuant to Section 8.




“Dividend Equivalent Right” means Awards granted pursuant to Section 11.



“Effective Date” means the date on which the Plan is approved by stockholders as set forth in
Section 20.



“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.



“Fair Market Value” of the Stock on any given date means the fair market value of the Stock
determined in good faith by the Administrator; provided, however, that if the Stock is admitted to
quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”),
NASDAQ Global Market or another national securities exchange, the determination shall be made by
reference to the closing price on the relevant date. If there is no closing price for such date,
the determination shall be made by reference to the last date preceding such date for which there
was a closing price.



“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive
stock option” as defined in Section 422 of the Code.



“Non-Employee Director” means a member of the Board who is not also an employee of the Company
or any Subsidiary.



“Non-Employee Directors’ Deferred Compensation Program” means the Non-Employee Directors’
Deferred Compensation Program established pursuant to the Plan and attached hereto as Appendix A.




“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.



“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to
Section 5.




“Other Share-Based Award” means any Award granted pursuant to Section 12.


 


3









 





“Performance Cycle” means one or more periods of time, which may be of varying and overlapping
durations but which may not be shorter than one year, as the Administrator may
select, over which the attainment of one or more performance criteria will be measured for the
purpose of determining a grantee’s right to and the payment of a Restricted Stock Award, Deferred
Stock Award or Performance Unit Award.




“Performance Unit Award” means Awards granted pursuant to Section 13.




“Restricted Stock Award” means Awards granted pursuant to Section 7.



“Stock” means the Common Stock, par value $0.01 per share, of the Company, subject to
adjustments pursuant to Section 3.




“Stock Appreciation Right” means any Award granted pursuant to Section 6.



“Subsidiary” means any corporation or other entity (other than the Company) in which the
Company has more than a 50% interest, either directly or indirectly.



“Unit” or “Units” means a unit or units of limited partnership interest in the Operating
Partnership.




“Unrestricted Stock Award” means any Award granted pursuant to Section 9.




			
	SECTION 2.	 	ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE
AWARDS





A. Committee. The Plan shall be administered by either the Board or a committee of
not less than two Non-Employee Directors (in either case, the “Administrator”).



B. Powers of Administrator. The Administrator shall have the power and authority to
grant Awards consistent with the terms of the Plan, including the power and authority:



(i) to select the individuals to whom Awards may from time to time be granted;



(ii) to determine the time or times of grant, and the extent, if any, of Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Deferred
Stock Awards, Unrestricted Stock Awards, Dividend Equivalent Rights, Performance Unit Awards and
Other Share-Based Awards, or any combination of the foregoing, granted to any one or more grantees;



(iii) to determine the number of shares of Stock to be covered by any Award;



(iv) to determine and modify from time to time the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions
may differ among individual Awards and grantees, and to approve the form of written instruments
evidencing the Awards;



(v) to accelerate at any time the exercisability or vesting of all or any portion of any
Award;


 


4









 





(vi) subject to the provisions of Section 5(a)(ii), to extend at any time the period in which
Stock Options may be exercised;



(vii) to determine at any time whether, to what extent, and under what circumstances
distribution or the receipt of Stock and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the grantee and whether and to what extent the
Company shall pay or credit amounts constituting interest (at rates determined by the
Administrator) or dividends or deemed dividends on such deferrals; and



(viii) at any time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan (including the Non-Employee Directors’ Deferred Compensation Program)
and for its own acts and proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration of the Plan.



All decisions and interpretations of the Administrator shall be binding on all persons,
including the Company and Plan grantees.



C. Delegation of Authority to Grant Awards. Unless otherwise prohibited by applicable
law, the Administrator, in its discretion, may delegate to the Chief Executive Officer of the
Company all or part of the Administrator’s authority and duties with respect to the granting of
Awards, to individuals who are not subject to the reporting and other provisions of Section 16 of
the Exchange Act or “covered employees” within the meaning of Section 162(m) of the Code. Any such
delegation by the Administrator shall include a limitation as to the amount of Awards that may be
granted during the period of the delegation and shall contain guidelines as to the determination of
the exercise price of any Stock Option or Stock Appreciation Right, the conversion ratio or price
of other Awards and the vesting criteria. The Administrator may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any prior actions of the
Administrator’s delegate or delegates that were consistent with the terms of the Plan.



D. Indemnification. Neither the Board nor the Committee, nor any member of either or
any delegatee thereof, shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with the Plan, and the members of the Board and the
Committee (and any delegatee thereof) shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent
permitted by law and/or under any directors’ and officers’ liability insurance coverage which may
be in effect from time to time.




			
	SECTION 3.	 	STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION





A. Stock Issuable. The maximum number of shares of Stock reserved and available for
issuance under the Plan shall be 8,000,000 shares, subject to adjustment as provided in Section
3(b). For purposes of this limitation, the shares of Stock underlying any Awards which are
forfeited, canceled, held back upon exercise of an Option or settlement of an Award to cover



 


5









 






the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied
without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back
to the shares of Stock available for issuance under the Plan. Subject to such overall limitations,
shares of Stock may be issued up to such maximum number pursuant to any type or types of Award;
provided, however, that Stock Options or Stock Appreciation Rights with respect to no more than
500,000 shares of Stock may be granted to any one individual grantee during any one calendar year
period and no more than 2,000,000 shares may be issued in the form of Incentive Stock Options. The
shares available for issuance under the Plan may be authorized but unissued shares of Stock or
shares of Stock reacquired by the Company.



B. Changes in Stock. Subject to Section 3(c) hereof, if, as a result of any
reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Company’s capital stock, the outstanding shares of Stock are
increased or decreased or are exchanged for a different number or kind of shares or other
securities of the Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares of Stock or other
securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of
the assets of the Company, the outstanding shares of Stock are converted into or exchanged for
securities of the Company or any successor entity (or a parent or subsidiary thereof), the
Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of
shares reserved for issuance under the Plan, (ii) the number of Stock Options or Stock Appreciation
Rights that can be granted to any one individual grantee and the maximum number of shares that may
be granted under a Performance-based Award, (iii) the number and kind of shares or other securities
subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share
subject to each outstanding Restricted Stock Award, and (v) the price for each share subject to any
then outstanding Stock Options and Stock Appreciation Rights under the Plan. The Administrator
shall also make equitable or proportionate adjustments in the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to take into
consideration cash dividends paid other than in the ordinary course or any other extraordinary
corporate event. Notwithstanding the foregoing, no adjustment shall be made under this Section
3(b) if the Administrator determines that such action could cause any Award to fail to satisfy the
conditions of any applicable exception from the requirements of Section 409A or otherwise could
subject the grantee to the additional tax imposed under Section 409A in respect of an outstanding
Award or constitute a modification, extension or renewal of an Incentive Stock Option within the
meaning of Section 424(h) of the Code. The adjustment by the Administrator shall be final, binding
and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Administrator in its discretion may make a cash payment in lieu of
fractional shares.



C. Change in Control Transactions. Notwithstanding anything contained herein, the
rights of the Chief Executive Officer, President and Chief Operating Officer, Executive Vice
President and Chief Financial Officer, Executive Vice President and General Counsel and Chief
Accounting Officer (and any other officer who has entered into an employment or severance agreement
with the Company) following a Change in Control with respect to any accelerated exercisability or
vesting of time-based Awards shall be governed by the so-called “double trigger” provisions of each
of their individual employment or severance agreements with the Company.


 


6









 





For all other Awards granted to any individual who does not have an individual employment or
severance agreement with the Company, in the event of a Change in Control, all Options and Stock
Appreciation Rights that are not exercisable immediately prior to the effective time of the Change
in Control shall become fully exercisable as of the effective time of the Change in Control and all
other Awards shall become fully vested and nonforfeitable as of the effective time of the Change in
Control, except as the Administrator may otherwise specify with respect to particular Awards in the
relevant Award documentation.



Upon the effective time of the Change in Control, the Plan and all outstanding Awards granted
hereunder shall terminate, unless provision is made in connection with the Change in Control in the
sole discretion of the parties thereto for the assumption or continuation of Awards theretofore
granted by the successor entity, or the substitution of such Awards with new Awards of the
successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares
and, if appropriate, the per share exercise prices, as such parties shall agree (after taking into
account any acceleration hereunder). In the event of such termination, each grantee shall be
permitted, within a specified period of time prior to the consummation of the Change in Control as
determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights
held by such grantee, including those that will become exercisable upon the consummation of the
Change in Control; provided, however, that the exercise of Options and Stock Appreciation Rights
not exercisable prior to the Change in Control shall be subject to the consummation of the Change
in Control.



Notwithstanding anything to the contrary in this Section 3(c), in the event of a Change in
Control pursuant to which holders of the Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the Change in Control, the Company shall have
the right, but not the obligation, to make or provide for a cash payment to the grantees holding
Options and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal
to the difference between (A) the value as determined by the Administrator of the consideration
payable per share of Stock pursuant to the Change in Control (the “Sale Price”) times the number of
shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then
exercisable at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all
such outstanding Options and Stock Appreciation Rights.



D. Substitute Awards. The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or other key persons of
another corporation in connection with the merger or consolidation of the employing corporation
with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the substitute awards be
granted on such terms and conditions as the Administrator considers appropriate in the
circumstances. Any substitute Awards granted under the Plan shall not count against the share
limitation set forth in Section 3(a).




			
	SECTION 4.	 	ELIGIBILITY





Grantees under the Plan will be such full or part-time officers and other employees,
Non-Employee Directors and key persons (including consultants and prospective employees) of the
Company and its Subsidiaries as are selected from time to time by the Administrator in its
sole discretion.


 


7









 






			
	SECTION 5.	 	STOCK OPTIONS





Any Stock Option granted under the Plan shall be in such form as the Administrator may from
time to time approve.



Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified
Stock Options. Incentive Stock Options may be granted only to employees of the Company or any
Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To
the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.



A. Stock Options Granted to Employees, Non-Employee Directors and Key Persons. The
Administrator in its discretion may grant Stock Options to eligible employees, Non-Employee
Directors and key persons of the Company or any Subsidiary. Stock Options granted pursuant to this
Section 5(a) shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of
cash compensation at the optionee’s election, subject to such terms and conditions as the
Administrator may establish.



(i) Exercise Price. The exercise price per share for the Stock covered by a Stock
Option granted pursuant to this Section 5(a) shall be determined by the Administrator at the time
of grant but shall not be less than 100% of the Fair Market Value on the date of grant. If an
employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10 percent of the combined voting power of all classes of stock of the Company or
any parent or subsidiary corporation and an Incentive Stock Option is granted to such employee, the
option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market
Value on the grant date.



(ii) Option Term. The term of each Stock Option shall be fixed by the Administrator,
but no Incentive Stock Option shall be exercisable more than ten years after the date the Incentive
Stock Option is granted and no Non-Qualified Stock Option shall be exercisable more than ten years
after the date the Non-Qualified Stock Option is granted. If an employee owns or is deemed to own
(by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the
combined voting power of all classes of stock of the Company or any parent or subsidiary
corporation and an Incentive Stock Option is granted to such employee, the term of such Stock
Option shall be no more than five years from the date of grant.



(iii) Exercisability; Rights of a Stockholder. Stock Options shall become exercisable
at such time or times, whether or not in installments, as shall be determined by the Administrator
at or after the grant date. The Administrator may at any time accelerate the exercisability of all
or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to
shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.


 


8









 





(iv) Method of Exercise. Stock Options may be exercised in whole or in part, by
giving written notice of exercise to the Company, specifying the number of shares to be purchased.
Payment of the purchase price may be made by one or more of the following methods to the extent
provided in the Option Award agreement:




(A) In cash, by certified or bank check or other instrument acceptable to the
Administrator;




(B) Through the delivery (or attestation to the ownership) of shares of Stock that have
been purchased by the optionee on the open market or that have been beneficially owned by
the optionee and are not then subject to restrictions under any Company plan. Such
surrendered shares shall be valued at Fair Market Value on the exercise date;




(C) By the optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the Company cash
or a check payable and acceptable to the Company for the purchase price; provided that in
the event the optionee chooses to pay the purchase price as so provided, the optionee and
the broker shall comply with such procedures and enter into such agreements of indemnity and
other agreements as the Administrator shall prescribe as a condition of such payment
procedure; or




(D) By the optionee authorizing the Company to withhold from the shares of Stock to be
issued pursuant to the exercise of a Stock Option a number of shares with an aggregate Fair
Market Value (determined as of the date of such exercise) that would satisfy the purchase
price.



Payment instruments will be received subject to collection. The delivery of certificates
representing the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be
contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with
the provisions of the Stock Option) by the Company of the full purchase price for such shares and
the fulfillment of any other requirements contained in the Option Award agreement or applicable
provisions of laws. In the event an optionee chooses to pay the purchase price by previously-owned
shares of Stock through the attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of shares attested to.



(v) Annual Limit on Incentive Stock Options. To the extent required for “incentive
stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined
as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options
granted under this Plan and any other plan of the Company or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any calendar year shall not exceed
$100,000. To the extent that any Stock Option exceeds this limit, it shall constitute a
Non-Qualified Stock Option.


 


9









 





B. Non-transferability of Options. No Stock Option shall be transferable by the
optionee otherwise than by will or by the laws of descent and distribution and all Stock Options
shall be exercisable, during the optionee’s lifetime, only by the optionee, or by the
optionee’s legal representative or guardian in the event of the optionee’s incapacity.
Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide in the Award
agreement regarding a given Option that the optionee may transfer his Non-Qualified Stock Options
to members of his immediate family, to trusts for the benefit of such family members, or to
partnerships in which such family members are the only partners, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and
the applicable Option.




			
	SECTION 6.	 	STOCK APPRECIATION RIGHTS





A. Nature of Stock Appreciation Rights. A Stock Appreciation Right is an Award
entitling the recipient to receive an amount in cash or shares of Stock or a combination thereof
having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise
over the exercise price of the Stock Appreciation Right, which price shall not be less than 100
percent of the Fair Market Value of the Stock on the date of grant (or more than the option
exercise price per share, if the Stock Appreciation Right was granted in tandem with a Stock
Option) multiplied by the number of shares of Stock with respect to which the Stock Appreciation
Right shall have been exercised, with the Administrator having the right to determine the form of
payment.



B. Grant and Exercise of Stock Appreciation Rights. Stock Appreciation Rights may be
granted by the Administrator in tandem with, or independently of, any Stock Option granted pursuant
to Section 5 of the Plan. In the case of a Stock Appreciation Right granted in tandem with a
Non-Qualified Stock Option, such Stock Appreciation Right may be granted either at or after the
time of the grant of such Option. In the case of a Stock Appreciation Right granted in tandem with
an Incentive Stock Option, such Stock Appreciation Right may be granted only at the time of the
grant of the Option.



A Stock Appreciation Right or applicable portion thereof granted in tandem with a Stock Option
shall terminate and no longer be exercisable upon the termination or exercise of the related
Option.



C. Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights shall
be subject to such terms and conditions as shall be determined from time to time by the
Administrator, subject to the following:



(i) Stock Appreciation Rights granted in tandem with Options shall be exercisable at such time
or times and to the extent that the related Stock Options shall be exercisable.



(ii) Stock Appreciation Rights not granted in tandem with Options shall have a maximum term of
ten years and a minimum vesting period of one year.



(iii) Upon exercise of a Stock Appreciation Right, the applicable portion of any related
Option shall be surrendered.


 


10









 





(iv) All Stock Appreciation Rights shall be exercisable during the grantee’s lifetime only by
the grantee or the grantee’s legal representative.




			
	SECTION 7.	 	RESTRICTED STOCK AWARDS





A. Nature of Restricted Stock Awards. A Restricted Stock Award is an Award entitling
the recipient to acquire, at such purchase price (which may be zero) as determined by the
Administrator, shares of Stock subject to such restrictions and conditions as the Administrator may
determine at the time of grant (“Restricted Stock”). Conditions may be based on continuing
employment (or other service relationship) and/or achievement of pre-established performance goals
and objectives. The grant of a Restricted Stock Award is contingent on the grantee executing the
Restricted Stock Award agreement. The terms and conditions of each such agreement shall be
determined by the Administrator, and such terms and conditions may differ among individual Awards
and grantees.



B. Rights as a Stockholder. Upon execution of a written instrument setting forth the
Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the
rights of a stockholder with respect to the voting of the Restricted Stock, subject to such
conditions contained in the written instrument evidencing the Restricted Stock Award. Unless the
Administrator shall otherwise determine, (i) uncertificated Restricted Stock shall be accompanied
by a notation on the records of the Company or the transfer agent to the effect that they are
subject to forfeiture until such Restricted Stock are vested as provided in Section 7(d) below, and
(ii) certificated Restricted Stock shall remain in the possession of the Company until such
Restricted Stock is vested as provided in Section 7(d) below, and the grantee shall be required, as
a condition of the grant, to deliver to the Company such instruments of transfer as the
Administrator may prescribe.



C. Restrictions. Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of except as specifically provided herein or in the Restricted
Stock Award agreement. Except as may otherwise be provided by the Administrator either in the
Award agreement or, subject to Section 16 below, in writing after the Award agreement is issued, if
any, if a grantee’s employment (or other service relationship) with the Company and its
Subsidiaries terminates for any reason, any Restricted Stock that has not vested at the time of
termination shall automatically and without any requirement of notice to such grantee from or other
action by or on behalf of, the Company be deemed to have been reacquired by the Company at its
original purchase price from such grantee or such grantee’s legal representative simultaneously
with such termination of employment (or other service relationship), and thereafter shall cease to
represent any ownership of the Company by the grantee or rights of the grantee as a stockholder.
Following such deemed reacquisition of unvested Restricted Stock that are represented by physical
certificates, grantee shall surrender such certificates to the Company upon request without
consideration.



D. Vesting of Restricted Stock. The Administrator at the time of grant shall specify
the date or dates and/or the attainment of pre-established performance goals, objectives and other
conditions on which the non-transferability of the Restricted Stock and the Company’s right of
repurchase or forfeiture shall lapse. Notwithstanding the foregoing, in the event that any such



 


11









 






Restricted Stock shall have a performance-based goal, the restriction period with respect to
such shares shall not be less than one year, and in the event any such Restricted Stock shall have
a time-based restriction, the restriction period with respect to such shares shall not be less than
three years. Subsequent to such date or dates and/or the attainment of such pre-established
performance goals, objectives and other conditions, the shares on which all restrictions have
lapsed shall no longer be Restricted Stock and shall be deemed “vested.” Except as may otherwise
be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in
writing after the Award agreement is issued, a grantee’s rights in any shares of Restricted Stock
that have not vested shall automatically terminate upon the grantee’s termination of employment (or
other service relationship) with the Company and its Subsidiaries and such shares shall be subject
to the provisions of Section 7(c) above.




			
	SECTION 8.	 	DEFERRED STOCK AWARDS





A. Nature of Deferred Stock Awards. A Deferred Stock Award is an Award of phantom
stock units to a grantee, subject to restrictions and conditions as the Administrator may determine
at the time of grant. Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and objectives. The grant of
a Deferred Stock Award is contingent on the grantee executing the Deferred Stock Award agreement.
The terms and conditions of each such agreement shall be determined by the Administrator, and such
terms and conditions may differ among individual Awards and grantees. Notwithstanding the
foregoing, in the event that any such Deferred Stock Award shall have a performance-based goal, the
restriction period with respect to such award shall not be less than one year, and in the event any
such Deferred Stock Award shall have a time-based restriction, the restriction period with respect
to such award shall not be less than three years. At the end of the deferral period, the Deferred
Stock Award, to the extent vested, shall be paid to the grantee in the form of shares of Stock.



B. Election to Receive Deferred Stock Awards in Lieu of Compensation. The
Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of the
cash compensation or Restricted Stock Award otherwise due to such grantee in the form of a Deferred
Stock Award. Any such election shall be made in writing and shall be delivered to the Company no
later than the date specified by the Administrator and in accordance with rules and procedures
established by the Administrator. The Administrator shall have the sole right to determine whether
and under what circumstances to permit such elections and to impose such limitations and other
terms and conditions thereon as the Administrator deems appropriate.



C. Rights as a Stockholder. During the deferral period, a grantee shall have no
rights as a stockholder; provided, however, that the grantee may be credited with Dividend
Equivalent Rights with respect to the phantom stock units underlying his Deferred Stock Award,
subject to such terms and conditions as the Administrator may determine.



D. Restrictions. A Deferred Stock Award may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of during the deferral period.


 


12









 





E. Termination. Except as may otherwise be provided by the Administrator either in
the Award agreement or, subject to Section 16 below, in writing after the Award agreement is
issued, a grantee’s right in all Deferred Stock Awards that have not vested shall automatically
terminate upon the grantee’s termination of employment (or cessation of service relationship) with
the Company and its Subsidiaries for any reason.




			
	SECTION 9.	 	UNRESTRICTED STOCK AWARDS





The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase
price determined by the Administrator) an Unrestricted Stock Award to any grantee pursuant to which
such grantee may receive shares of Stock free of any restrictions (“Unrestricted Stock”) under the
Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid
consideration, or in lieu of cash compensation due to such grantee.




			
	SECTION 10.	 	PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES





Notwithstanding anything to the contrary contained herein, if any Restricted Stock Award,
Deferred Stock Award or Performance Unit Award granted to a Covered Employee is intended to qualify
as “Performance-based Compensation” under Section 162(m) of the Code and the regulations
promulgated thereunder (a “Performance-based Award”), such Award shall comply with the provisions
set forth below:



A. Performance Criteria. The performance criteria used in performance goals governing
Performance-based Awards granted to Covered Employees may include any or all of the following: (i)
revenue; (ii) revenue per employee; (iii) earnings as determined by generally accepted accounting
principles (“GAAP”); (iv) taxable earnings; (v) GAAP or taxable earnings per employee; (vi) GAAP or
taxable earnings per share (basic or diluted); (vii) operating income; (viii) earnings before
interest, taxes, depreciation and amortization (“EBITDA”) or EBITDA per share; (ix) funds from
operations (“FFO”) or FFO per share; (x) funds available for distribution “FAD” or FAD per share;
(xi) operating margins (however denominated); (xii) level of expenses, including capital expenses
or corporate overhead expenses; (xiii) cash flow or cash flow per share; (xiv) total shareholder
return; (xv) dividends paid or payable; (xvi) market share; (xvii) profitability as measured by
return ratios, including return on revenue, return on assets, return on equity (including adjusted
return on equity) and return on investment; (xviii) cash flow; (xix) economic value added (economic
profit); and (xx) any one or more of these measures applied to either the Company or any subset of
the Company’s hotels. In addition, performance goals may be established on a corporate-wide basis;
with respect to one or more business units, divisions, subsidiaries or business segments and in
either absolute terms or relative to the performance of one or more comparable companies or an
index covering multiple companies. The measurement of performance against goals may exclude, if
the Committee provides in individual grant agreements, the impact of charges for restructurings,
discontinued operations, extraordinary items, and other unusual or non-recurring items, and the
cumulative effects of tax or accounting changes, each as defined by generally accepted accounting
principles and as identified in the financial statements, management’s discussion and analysis or
other SEC filing.


 


13









 





B. Grant of Performance-based Awards. With respect to each Performance-based Award
granted to a Covered Employee, the Committee shall select, within the first 90 days of a
Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the
Code) the performance criteria for such grant, and the achievement targets with respect to each
performance criterion (including a threshold level of performance below which no amount will become
payable with respect to such Award). Each Performance-based Award will specify the amount payable,
or the formula for determining the amount payable, upon achievement of the various applicable
performance targets. The performance criteria established by the Committee may be (but need not
be) different for each Performance Cycle and different goals may be applicable to Performance-based
Awards to different Covered Employees.



C. Payment of Performance-based Awards. Following the completion of a Performance
Cycle, the Committee shall meet to review and certify in writing whether, and to what extent, the
performance criteria for the Performance Cycle have been achieved and, if so, to also calculate and
certify in writing the amount of the Performance-based Awards earned for the Performance Cycle.
The Committee shall then determine the actual size of each Covered Employee’s Performance-based
Award, and, in doing so, may reduce or eliminate the amount of the Performance-based Award for a
Covered Employee if, in its sole judgment, such reduction or elimination is appropriate.



D. Maximum Award Payable. The maximum Performance-based Award payable to any one
Covered Employee under the Plan for a Performance Cycle is 500,000 Shares (subject to adjustment as
provided in Section 3(b) hereof) and, for cash-based awards, $5,000,000.




			
	SECTION 11.	 	DIVIDEND EQUIVALENT RIGHTS





A. Dividend Equivalent Rights. A Dividend Equivalent Right is an Award entitling the
grantee to receive credits based on cash dividends that would have been paid on the shares of Stock
specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had
been issued to and held by the grantee. A Dividend Equivalent Right may be granted hereunder to
any grantee as a component of another Award or as a freestanding award. The terms and conditions
of Dividend Equivalent Rights shall be specified in the Award agreement. Dividend equivalents
credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any
such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as
may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend
Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single
installment or installments. A Dividend Equivalent Right granted as a component of another Award
may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or
payment of, or lapse of restrictions on, such other award, and that such Dividend Equivalent Right
shall expire or be forfeited or annulled under the same conditions as such other award. A Dividend
Equivalent Right granted as a component of another Award may also contain terms and conditions
different from such other award.


 


14









 





B. Interest Equivalents. Any Award under this Plan that is settled in whole or in
part in cash on a deferred basis may provide in the grant for interest equivalents to be credited
with respect to such cash payment. Interest equivalents may be compounded and shall be paid upon
such terms and conditions as may be specified by the grant.



C. Termination. Except as may otherwise be provided by the Administrator either in
the Award agreement or, subject to Section 16 below, in writing after the Award agreement is
issued, a grantee’s rights in all Dividend Equivalent Rights or interest equivalents granted as a
component of another Award that has not vested shall automatically terminate upon the grantee’s
termination of employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.




			
	SECTION 12.	 	OTHER SHARE-BASED AWARDS





A. Nature of Other Share-Based Awards. Other forms of Awards (“Other Share-Based
Awards”) that may be granted under the Plan include Awards that are valued in whole or in part by
reference to, or are otherwise calculated by reference to or based on, shares of Stock, including
without limitation, (i) Units, (ii) convertible preferred shares, convertible debentures and other
convertible, exchangeable or redeemable securities or equity interests (including Units), (iii)
membership interests in a Subsidiary or operating partnership and (iv) Awards valued by reference
to book value, fair value or performance parameters relative to the Company or any Subsidiary or
group of Subsidiaries. For purposes of calculating the number of shares of Stock underlying an
Other Share-Based Award relative to the total number of shares of Stock reserved and available for
issuance under Section 3(a), the Administrator shall establish in good faith the maximum number of
shares of Stock to which a grantee of such Other Share-Based Award may be entitled upon fulfillment
of all applicable conditions set forth in the relevant Award documentation, including vesting,
accretion factors, conversion ratios, exchange ratios and the like. If and when any such
conditions are no longer capable of being met, in whole or in part, the number of shares of Stock
underlying such Other Share-Based Award shall be reduced accordingly by the Administrator and the
related shares of Stock shall be added back to the shares of Stock available for issuance under the
Plan. Other Share-Based Awards may be issued either alone or in addition to other Awards granted
under the Plan and shall be evidenced by an Award agreement. The Administrator shall determine the
recipients of, and the time or times at which, Other Share-Based Awards shall be made; the number
of shares of Stock or Units to be awarded; the price, if any, to be paid by the recipient for the
acquisition of Other Share-Based Awards; and the restrictions and conditions applicable to Other
Share-Based Awards. Conditions may be based on continuing employment (or other service
relationship), computation of financial metrics and/or achievement of pre-established performance
goals and objectives. The provisions of the grant of Other Share-Based Awards need not be the same
with respect to each recipient.



(b) Rights as Stockholder. Until such time as an Other Share-Based Award is actually
converted into, exchanged for, or paid out in shares of Stock, a recipient shall have no rights as
a stockholder.


 


15









 





(c) Non-Transferability. Except as otherwise provided by the Administrator, Other
Share-Based Awards may not be sold, transferred, pledged, hypothecated or assigned except by will
or the laws of descent and distribution.



(d) Termination of Employment or Service. In the event that a recipient ceases to be
employed by or to provide services to the Company, or any Subsidiary, any outstanding Other
Share-Based Awards previously granted to such recipient shall be subject to such terms and
conditions as set forth in the Award agreement governing such Other Share-Based Awards. Except as
may otherwise be provided by the Administrator either in the Award agreement, or, subject to
Section 16 below, in writing after the Award agreement is issued, a grantee’s rights in all Other
Share-Based Awards that have not vested shall automatically terminate upon the grantee’s
termination of employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.




			
	SECTION 13.	 	PERFORMANCE UNIT AWARDS.





The Committee may, in its sole discretion, grant cash-based awards to any grantee, subject to
the attainment of pre-established performance goals based on the attainment of performance criteria
including those described in this Plan, in such amount and upon such terms, and subject to such
conditions, as the Committee shall determine at the time of grant (“Performance Unit Award”).




			
	SECTION 14.	 	TAX WITHHOLDING





A. Payment by Grantee. Each grantee shall, no later than the date as of which the
value of an Award or of any Stock or other amounts received thereunder first becomes includable in
the gross income of the grantee for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income. The Company and its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from
any payment of any kind otherwise due to the grantee. The Company’s obligation to deliver stock
certificates to any grantee is subject to and conditioned on tax obligations being satisfied by the
grantee.



B. Payment in Stock. The required tax withholding obligation may be satisfied, in
whole or in part, (i) by the Company withholding from shares of Stock to be issued pursuant to any
Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the minimum withholding amount due (“Share Withholding”), or (ii)
subject to approval by the Administrator, by the grantee transferring to the Company shares of
Stock owned by the grantee with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount due. The Administrator has specifically
approved the use of Share Withholding with respect to all Awards made under the Plan and any
dividends paid thereon.


 


16









 






			
	SECTION 15.	 	TRANSFER, LEAVE OF ABSENCE, ETC.





For purposes of the Plan, the following events shall not be deemed a termination of
employment:



A. a transfer to the employment of the Company from a Subsidiary or from the Company to a
Subsidiary, or from one Subsidiary to another; or



B. an approved leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.




			
	SECTION 16.	 	SECTION 409A AWARDS





To the extent that any Award is determined to constitute “nonqualified deferred compensation”
within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional
rules and requirements as specified by the Administrator from time to time in order to comply with
Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from
service” (within the meaning of Section 409A) to a grantee who is then considered a “specified
employee” (within the meaning of Section 409A), then no such payment shall be made prior to the
date that is the earlier of (i) six months and one day after the grantee’s separation from service,
or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment
from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A.
Further, the settlement of any such Award may not be accelerated except to the extent permitted by
Section 409A.




			
	SECTION 17.	 	AMENDMENTS AND TERMINATION





The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any
time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any
other lawful purpose, but no such action shall adversely affect rights under any outstanding Award
without the holder’s consent. Except as provided in Section 3(b) or 3(c), in no event may the
Administrator exercise its discretion to reduce the exercise price of outstanding Stock Options or
effect repricing through cancellation and re-grants. Any material Plan amendments (other than
amendments that curtail the scope of the Plan), including any Plan amendments that (i) increase the
number of shares reserved for issuance under the Plan, (ii) expand the type of Awards available,
materially expand the eligibility to participate or materially extend the term of the Plan, or
(iii) materially change the method of determining Fair Market Value, shall be subject to approval
by the Company stockholders entitled to vote at a meeting of stockholders. In addition, to the
extent determined by the Administrator to be required by the Code to ensure that Incentive Stock
Options granted under the Plan are qualified under Section 422 of the Code or to ensure that
compensation earned under Awards qualifies as performance-based compensation under Section 162(m)
of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to
vote at a meeting of stockholders. Nothing in
this Section 17 shall limit the Administrator’s authority to take any action permitted
pursuant to Section 3(c).


 


17









 






			
	SECTION 18.	 	STATUS OF PLAN





With respect to the portion of any Award that has not been exercised and any payments in cash,
Stock or other consideration not received by a grantee, a grantee shall have no rights greater than
those of a general creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the Administrator may
authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver
Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts
or other arrangements is consistent with the foregoing sentence.




			
	SECTION 19.	 	GENERAL PROVISIONS





A. No Distribution; Compliance with Legal Requirements. The Administrator may require
each person acquiring Stock pursuant to an Award to represent to and agree with the Company in
writing that such person is acquiring the shares without a view to distribution thereof.



No shares of Stock shall be issued pursuant to an Award until all applicable securities law
and other legal and stock exchange or similar requirements have been satisfied. The Administrator
may require the placing of such stop-orders and restrictive legends on certificates for Stock and
Awards as it deems appropriate.



B. Delivery of Stock Certificates. Stock certificates to grantees under this Plan
shall be deemed delivered for all purposes when the Company or a stock transfer agent of the
Company shall have mailed such certificates in the United States mail, addressed to the grantee, at
the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed
delivered for all purposes when the Company or a Stock transfer agent of the Company shall have
given to the grantee by United States mail, addressed to the grantee, at the grantee’s last known
address on file with the Company, notice of issuance and recorded the issuance in its records
(which may include electronic “book entry” records).



C. Other Compensation Arrangements; No Employment Rights. Nothing contained in this
Plan shall prevent the Board from adopting other or additional compensation arrangements, including
trusts, and such arrangements may be either generally applicable or applicable only in specific
cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right
to continued employment with the Company or any Subsidiary.



D. Trading Policy Restrictions. Option exercises and other Awards under the Plan
shall be subject to such Company’s insider trading policy and procedures, as in effect from time to
time.


 


18









 





E. Designation of Beneficiary. Each grantee to whom an Award has been made under the
Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment
under any Award payable on or after the grantee’s death. Any such designation shall be on a form
provided for that purpose by the Administrator and shall not be effective until received by the
Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated
beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.




			
	SECTION 20.	 	EFFECTIVE DATE OF PLAN





This Plan shall become effective upon approval by the holders of a majority of the votes cast
at a meeting of stockholders at which a quorum is present. Subject to such approval by the
stockholders and to the requirement that no Stock may be issued hereunder prior to such approval,
Stock Options and other Awards may be granted hereunder on and after adoption of this Plan by the
Board. No grants of Stock Options and other Awards may be made hereunder after the tenth
(10th) anniversary of the Effective Date and no grants of Incentive Stock Options may be
made hereunder after the tenth (10th) anniversary of the date the Plan is approved by
the Board.




			
	SECTION 21.	 	GOVERNING LAW





This Plan and all Awards and actions taken thereunder shall be governed by, and construed in
accordance with, the laws of the State of Maryland, applied without regard to conflict of law
principles.



	 	 	 
	DATE APPROVED BY BOARD OF DIRECTORS:

	 	June 4, 2004
	 
	 	 
	DATE APPROVED BY STOCKHOLDERS:

	 	June 4, 2004
	 
	 	 
	DATE AMENDED AND RESTATED PLAN
	 	 
	APPROVED BY BOARD OF DIRECTORS:

	 	February 27, 2007
	 
	 	 
	DATE AMENDED AND RESTATED PLAN
	 	 
	APPROVED BY STOCKHOLDERS

	 	April 26, 2007
	 
	 	 
	DATE AMENDED PLAN APPROVED
	 	 
	BY BOARD OF DIRECTORS
	 	 
	(STOCKHOLDER APPROVAL NOT REQUIRED)

	 	April 28, 2010






 


19









 





APPENDIX A




NON-EMPLOYEE DIRECTORS’

DEFERRED COMPENSATION PROGRAM




UNDER THE DIAMONDROCK HOSPITALITY COMPANY

2004 STOCK OPTION AND INCENTIVE PLAN




I. INTRODUCTION




The DiamondRock Hospitality Company Non-Employee Directors’ Deferred Compensation Program (the
“Program”), effective April 28, 2010, is established pursuant to the DiamondRock Hospitality
Company 2004 Stock Option and Incentive Plan, as amended and restated on February 27, 2007 and as
further amended on April 28, 2010 (the “Plan”) and permits a Director who is not an employee (a
“Non-Employee Director”) of DiamondRock Hospitality Company (the “Company”) to defer receipt of
certain equity compensation payable to him or her by the Company. Capitalized terms used but not
defined herein shall have the meaning given such terms in the Plan.



II. ADMINISTRATION




The Program shall be administered by the Board of Directors of the Company or a designated
committee thereof (the “Administrator”). The Administrator shall have complete discretion and
authority with respect to the Program and its application, except as expressly limited by the
Program.



III. ELIGIBILITY




All Non-Employee Directors are eligible to participate in the Program.


 


20









 





IV. DEFERRAL OF ANNUAL EQUITY GRANT




A Non-Employee Director may elect in advance to defer the receipt of the annual Unrestricted
Stock Award under the Plan that is generally made to Non-Employee Directors following the Company’s
annual stockholders meeting (the “Eligible Grant”). To make an election to defer the Eligible
Grant, the Non-Employee Director must execute and deliver to the Administrator an election form
specifying that he or she wishes to defer his Eligible Grant. Except with respect to a newly
elected or appointed Non-Employee Director or in connection with the establishment of this Program,
any election under this paragraph shall apply only to Eligible Grants that are earned with respect
to services to be performed beginning on or after the start of the next calendar year after such
election is made. A Non-Employee Director who is serving as a Director on the Effective Date may,
within 30 days of the Effective Date, file a deferral election which shall apply only to Eligible
Grants that are earned with respect to services performed subsequent to the election. A newly
elected or appointed Non-Employee Director, may, within 30 days of becoming a Non-Employee
Director, file a deferral election which shall apply only to Eligible Grants that are earned with
respect to services to be performed subsequent to the election. An election shall remain in effect
from year to year, until a new election becomes effective with respect to Eligible Grants to be
made in the next calendar year. A Non-Employee Director may revoke his or her deferral election
with respect to Eligible Grants that are issuable in the calendar year beginning after the calendar
year in which such revocation is received and accepted by the Company.



A. Deferred Account. As of the date of grant of the Eligible Grant, a Non-Employee
Director’s deferred account (“Account”) shall be credited with a number of whole and fractional
Deferred Stock Units equal to the number of shares of Stock that would otherwise be issued to him
or her pursuant to the Unrestricted Stock Award absent the election described above.


 


21









 





B. Dividend Equivalent Amounts. Whenever dividends are paid with respect to the
Stock, each Account shall be credited with a number of whole and fractional Deferred Stock Units
determined by multiplying the dividend value per share by the Deferred Stock Unit balance of the
Account on the record date and dividing the result by the fair market value of a share of Stock on
the dividend payment date. The Administrator may in the future permit Non-Employee Directors to
elect whether dividends will be deferred or paid currently; provided that any such election
complies with the requirements of Section 409A of the Code. In the absence of any such election,
dividends shall be deferred as described in the first sentence of this Section IV.B.



C. Designation of Beneficiary. A Non-Employee Director may designate one or more
beneficiaries to receive payments from his or her Account in the event of his or her death. A
designation of beneficiary shall apply to a specified percentage of a Non-Employee Director’s
Account. Such designation, or any change therein, must be in writing and shall be effective upon
receipt by the Company. If there is no effective designation of beneficiary, or if no beneficiary
survives the Non-Employee Director, the estate of the Non-Employee Director shall be deemed to be
the beneficiary. All payments to a beneficiary or estate shall be made in a lump sum in shares of
Stock, with any fractional share paid in cash.



D. Payment. All Deferred Stock Units credited to a Non-Employee Director’s Account
shall be paid in shares of Stock to the Non-Employee Director, or his or her designated beneficiary
(or beneficiaries) or estate, in a lump sum; provided, however, that any fractional shares shall be
paid in cash. Such payment shall be made as soon as practicable on the first business day that
occurs six months after the Non-Employee Director ceases to be a member of the Board of Directors
of the Company so long as such cessation of membership constitutes a “separation from service” for
purposes of Section 409A of the Code. If such cessation of



 


22









 






membership on the Board does not constitute a “separation from service” for purposes of
Section 409A of Code, the payment shall be made on the first business day that occurs six months
after such Non-Employee Director has such a separation from service. Notwithstanding the
foregoing, in the event of a Change in Control (as defined in Section 3(c) of the Plan) which
constitutes a change in ownership or effective control of the Company or a change in ownership of a
substantial portion of the Company’s assets for purposes of Section 409A of the Code, all Accounts
under the Program shall become immediately payable on the date of such Change in Control in a lump
sum in either shares of Stock or in cash, as determined by the Administrator.



V. ADJUSTMENTS




The Administrator shall make appropriate or proportionate adjustments in the number of
Deferred Stock Units credited to Non-Employee Directors’ Accounts in accordance with Section 3(b)
of the Plan.



VI. AMENDMENT OR TERMINATION OF PROGRAM




The Company reserves the right to amend or terminate the Program at any time, by action of its
Board of Directors, provided that no such action shall adversely affect a Non-Employee Director’s
right to receive compensation earned before the date of such action or his or her rights under the
Program with respect to amounts credited to his or her Account before the date of such action. In
no event shall the distribution of Accounts to Non-Employee Directors be accelerated or delayed by
virtue of any amendment or termination of the Program, except to the extent permitted by Section
409A of the Code.


 


23









 





VII. MISCELLANEOUS PROVISIONS




A. Notices. Any notice required or permitted to be given by the Company or the
Administrator pursuant to the Program shall be deemed given when personally delivered or deposited
in the United States mail, registered or certified, postage prepaid, addressed to the Non-Employee
Director at the last address shown for the Non-Employee Director on the records of the Company.



B. Nontransferability of Rights. During a Non-Employee Director’s lifetime, any
payment under the Program shall be made only to him. No sum or other interest under the Program
shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt by a Non-Employee Director or any beneficiary under the
Program to do so shall be void. No interest under the Program shall in any manner be liable for or
subject to the debts, contracts, liabilities, engagements or torts of a Non-Employee Director or
beneficiary entitled thereto.



C. Company’s Obligations to Be Unfunded and Unsecured. The Accounts maintained under
the Program shall at all times be entirely unfunded, and no provision shall at any time be made
with respect to segregating assets of the Company (including Stock) for payment of any amounts
hereunder. No Non-Employee Director or other person shall have any interest in any particular
assets of the Company (including Stock) by reason of the right to receive payment under the
Program, and any Non-Employee Director or other person shall have only the rights of a general
unsecured creditor of the Company with respect to any rights under the Program.


 


24









 





D. Section 409A. The Program is intended to comply with Section 409A of the Code and
shall be interpreted accordingly.



E. Governing Law. The terms of the Program shall be governed, construed, administered
and regulated in accordance with the laws of the State of Maryland. In the event any provision of
this Program shall be determined to be illegal or invalid for any reason, the other provisions
shall continue in full force and effect as if such illegal or invalid provision had never been
included herein.



F. Effective Date of Program. The Program shall become effective upon the date
specified in Section I hereof.




 


25