Document:

Asset Purchase Agreement - Rajiv Doshi

 

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

     THIS AGREEMENT (“Agreement”) is made and entered into as of this 18th day
of January, 2006 (the “Effective Date”), by and between Hollywood Fan Sites, Inc., a
Delaware corporation (the “Company”), and Mr. Rajiv Doshi, a New York resident (the
“Employee”).

RECITALS

	A.	 	The Company, an indirect wholly-owned subsidiary of Hollywood Media Corp., a Florida
corporation (“HMC”), is in the business of hosting unofficial celebrity fan web sites;

	B.	 	On or about the Effective Date, the Company, HMC, eFanGuide, Inc., a New York corporation
(“eFanGuide”), and each of the stockholders of eFanGuide (including the Employee)
entered into an asset purchase agreement pursuant (the “Asset Purchase Agreement”) to
which the Company acquired certain assets of eFanGuide (the “Acquisition”), including
the Internet domain names for certain celebrity fan web sites (collectively, the
“Fan Sites”);

	C.	 	Pursuant to the Asset Purchase Agreement, the Employee, as a stockholder of eFanGuide, shall
receive shares of common stock of HMC as consideration for the Acquisition;

	D.	 	The execution and delivery of this Agreement is an inducement to the Company and HMC to enter
into the Asset Purchase Agreement and is a condition to the Company’s consummation of the
Acquisition;

	E.	 	The Employee is experienced in, and knowledgeable concerning, one or more aspects of the
business of the Company and is able to render services to the Company that are of a special,
unique, extraordinary and intellectual character concerning the Company’s business; and

	F.	 	The Company and the Employee mutually desire to agree upon the terms of the Employee’s future
employment with the Company and related matters as provided in this Agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the
parties agree as follows:

     1. Term and Employment Period. The Company shall employ the Employee, and the Employee
shall serve the Company, on the terms and conditions set forth herein for the period commencing on
and as of the Effective Date and shall terminate on the date three (3) years following the
Effective Date (the “Term”), unless terminated earlier in accordance with the terms of this
Agreement.

     2. Duties, Responsibilities and Authority of the Employee. During the Term, the
Employee shall serve as the Director of Internet Operations for the Company, shall report to the
President of the Company or such other officer of the Company or HMC designated by the President of
the Company or the Chief Executive Officer of HMC (each, a “Supervisor”), and shall
diligently and faithfully perform all duties and responsibilities as may be assigned to him from
time to time by or upon the authority of Board of Directors of the Company or any Supervisor, in
each case consistent with his position. Such

 

 

duties shall specifically include: (a) the duty to promptly report to the President of the Company
any event or occurrence in the Company’s business that would reasonably be expected to be material
to such business or HMC; and (b) the duty to obtain the written consent of the President of the
Company or any Supervisor prior to the entry into any contract or arrangement by or on behalf of
the Company or its business (i) involving any payment or series of payments by or to the Company of
more than $500, whether in one or a series of transactions, or (ii) which is for a term of more
than six months and is not cancelable by the Company on thirty (30) days’ or less prior written
notice (without penalty or payment of any kind). The Employee shall at all times perform his
duties and responsibilities under this Agreement and conduct the Company’s business in compliance
with all applicable laws, rules, regulations or ordinances and in compliance with any judgments,
order or decrees or other legal obligations binding on the Company or HMC. During the Term, the
Employee shall devote all of the Employee’s working time to the performance of the services
required under this Agreement and shall not engage in any other business matters.

     3. Compensation.

     (a) Base Salary. During the Term, the Employee shall be paid a base annual salary
during the period he is employed hereunder at the annual rate of eighty thousand dollars ($80,000)
(the “Base Salary”), with such Base Salary payable in installments consistent with the
Company’s normal payroll schedule, subject to applicable withholding and other taxes. The Employee
shall be reviewed, at least annually, by the President of the Company or any Supervisor, and shall
be considered for any appropriate merit increases to his Base Salary as part of such review
process.

     (b) Grant of Stock.

          (i) On the Effective Date, HMC shall, in accordance with HMC’s 2004 Stock Incentive Plan (the
“Plan”), grant to the Employee that number of shares of common stock of HMC (the
“Shares”) equal to the quotient of (i) Sixty-Eight Thousand Five Hundred Dollars ($68,500)
divided by (ii) the Fair Market Value (as defined in Section 3(b)(ii) below) of the common stock of
HMC. As promptly as possible after the Effective Date, HMC shall cause American Stock Transfer &
Trust Company, the transfer agent for the common stock of HMC (together with its successors and
assigns, the “Transfer Agent”), to make a book entry record showing ownership for the
Shares in the name of the Employee subject to the terms and conditions of this Agreement. The
Shares shall be issued to the Employee from common stock reserved for issuance pursuant to the Plan
as grants under such Plan.

          (ii) For the purposes hereof, “Fair Market Value” means the average closing sales
price of the common stock of HMC on the ten trading days prior to the Closing Date on The Nasdaq
Stock Market, Inc., or such other U.S. national securities exchange, as reported by The Nasdaq
Stock Market, Inc. or, if not so reported by The Nasdaq Stock Market, Inc., the average of the high
bid and low asked quotations for one share of such stock as reported by the National Quotations
Bureau Incorporated or similar organization for the ten trading days prior to the closing date of
the Agreement; provided, that if none of the calculation methods set forth above are applicable,
then Fair Market Value shall be determined in good faith by the Board of Directors of HMC.

          (iii) Miscellaneous.

	 	(A)	 	The Employee represents that the Shares are
being acquired for investment and that the Employee has no present
intention to transfer, sell or otherwise dispose of the Shares, except
in compliance with applicable securities laws, and the parties agree
that the Shares are

Page 2

 

	 	 	 	being acquired in accordance with and subject to the terms,
provisions and conditions of this Agreement. These agreements shall
bind and inure to the benefit of the parties’ respective heirs, legal
representatives, successors and assigns.
	 
	 	(B)	 	The Employee understands that HMC will, and the
Employee hereby authorizes HMC to, issue such instructions to the
Transfer Agent as HMC may deem necessary or proper to comply with the
intent and purposes of this Agreement. This paragraph shall be deemed
to constitute the stock power contemplated by the Plan.

     (c) Bonuses. In addition to the Base Salary set forth above, during the Term the
Employee shall have the right to receive additional cash bonuses as follows:

	 	(i)	 	Net Profit Bonus. The Employee shall be entitled to receive a
cash bonus equal to five percent (5%) of the net profit generated by the
Company during each of fiscal quarter of HMC, if any. Any net profit bonus
earned by the Employee during a fiscal quarter shall be paid within thirty (30)
days of the filing of HMC’s Quarterly Report on Form 10-Q for such fiscal
quarter.
	 
	 	(ii)	 	Unique User Bonus. At any time after the earlier of (A) the
final implementation of the Fan Sites by the Company or (B) six (6) months from
the Effective Date, the Employee shall be entitled to receive a $500 cash bonus
for each month during which there is an increase in unique user traffic to
www.hollywood.com of 250,000 or more over the previous month (as reported by
the third party tracking tool utilized by Hollywood.com, Inc. to record such
information, which is currently Hitbox) that is directly attributable to the
Company or the Fan Sites. Any unique user bonus earned by the Employee during
a month shall be paid within thirty (30) days of the Comscore/Media Metrix
report for such month.
	 
	 	(iii)	 	Discretionary HMC Revenue Bonus. The President or any
Supervisor may also award the Employee a discretionary cash bonus based on any
net revenue generated by any other subsidiary or division of HMC if, in the
sole discretion of the President or any Supervisor, the revenue was generated
directly as a result of business opportunities referred to such subsidiary of
division by the Employee.

     4. Place of Performance. Except for required travel on the Company’s business, the
Employee shall be based at the Company’s offices in New York, New York or, as the Company may from
time to time determine in its sole discretion, at such other location within a thirty-mile radius
thereof.

     5. Vacation. The Employee shall be entitled to vacation accruable in accordance with
HMC’s general vacation policy, commensurate with other employees of the Company, HMC or any other
HMC Entity (as defined below), commensurate with other such employees holding similar titles. For
purposes of this Agreement, HMC and its subsidiaries, together with any nonconsolidated businesses
of HMC, including MovieTickets.com and Netco Partners, are referred to herein as the “HMC
Entities” or individually as an “HMC Entity.”

     6. Employee Benefits. The Employee shall be eligible to participate in all employee
benefit plans and benefit programs of the Company or HMC in effect during the Employment Period to
the same

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extent as other active employees of the Company or HMC. The Company or HMC, as applicable, may,
without notice, change, modify, amend, or terminate any employee benefit plans and benefit programs
that may be in effect either on the Effective Date or as may be adopted later.

     7. Trade Secrets. The Employee acknowledges and agrees that, among the Employee’s
duties for the Company, the Employee will be employed by the Company in a position that could
provide him access to designs, plans, information, practice improvements, developments, ideas or
discoveries, whether patentable or unpatentable, which afford the Company or HMC competitive
advantages, and which the Company and HMC take steps to protect the confidentiality thereof
(collectively hereinafter referred to as “Trade Secrets”). The Employee acknowledges that
all Trade Secrets shall be and remain the sole and exclusive property of the Company. The Employee
hereby assigns, and agrees to assign, to the Company all of the Employee’s right, title and
interest in and to any and all Trade Secrets developed by the Employee in the scope of his
employment by the Company.

                                             Employee’s Initials  /s/ RD

     8. Copyrights. The Employee agrees that all right, title and interest in any and all
copyrights, copyright registrations and copyrightable works that the Employee authors or creates in
the scope of his employment with the Company shall be the sole and exclusive property of the
Company, and agrees that such works comprise works made for hire. The Employee hereby assigns, and
agrees to assign, all right, title and interest in any and all copyrights, copyright registrations
and copyrightable works authored or created by the Employee in the scope of his employment by the
Company.

                                             Employee’s Initials  /s/ RD

     9. Non-Competition and Non-Solicitation.

     (a) Covenants Not to Compete. Except in connection with his performance of services
for the Company or any other HMC Entity and/or to the extent otherwise expressly permitted herein,
at all times while the Employee is employed by the Company or any other HMC Entity and for a period
of (i) six (6) months immediately following termination of the Employee’s employment with the
Company or any HMC Entity if such termination is without Cause (as defined in Section 12(b) below)
or (ii) two (2) years immediately following termination of the Employee’s employment with the
Company or any HMC Entity for Cause or in the event of termination of employment by the Employee
for any reason, the Employee shall not, directly or indirectly, engage in or have any interest in,
or assist or render services (whether or not for compensation, and whether as a director, officer,
managing member, partner, shareholder, creditor, employee, agent, advisor or consultant) to or for
any sole proprietorship, corporation, company, limited liability company, partnership, association,
venture or business or any other person or entity (whether as an employee, officer, director,
partner, shareholder, managing member, venturer, agent, security or equity holder, creditor,
consultant or otherwise) that directly (or through any affiliated entity) competes or expects to
compete with the Company’s business anywhere in the United States, Canada or Europe;
provided, however, that this Section 9(a) shall not prohibit the Employee’s
ownership, solely as an investment, of securities of any issuer that are registered under Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted
for trading on any United States national securities exchange or that are quoted on the National
Association of Securities Dealers Automated Quotations System, or any similar system or automated
dissemination of quotations of securities prices in common use, so long as the Employee does not
(A) directly or indirectly own (legally or beneficially) or control more than five percent (5%) of
any class of capital stock or other equity of such issuer, or (B) control, acquire a controlling
interest in or become a member of a group which exceeds such five percent (5%) ownership or
exercises direct or indirect control of such issuer.

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For purposes hereof, the Company’s business shall mean the hosting unofficial celebrity fan web
sites and any and all current businesses operated by the Company and its affiliates.

     (b) Covenant Not to Solicit or Interfere. Except in connection with his performance
of services for the Company or any of its subsidiaries or affiliates, the Employee agrees during
the Term and for a period of one (1) year immediately following termination of the Employee’s
employment with the Company or any other HMC Entity, the Employee shall not interfere with the
business of the Company or any other HMC Entity within the United States, Canada or Europe in any
manner for the purpose of (A) hiring away any employees of the Company or any other HMC Entity, or
(B) soliciting customers or business relationships of the Company or any other HMC Entity.
Particularly, but without limitation, the Employee shall not, directly or indirectly, for himself
or for any other person, firm, corporation, partnership, sole proprietorship, association, venture
or business or any other entity (I) solicit the termination of employment of, attempt to divert any
employee, employ or attempt to employ or enter into a contractual arrangement with any employee or
former employee of the Company or any other HMC Entity, unless such employee or former employee has
not been employed by the Company or any other HMC Entity for a period in excess of one (1) year,
and/or (II) call on or solicit any of the actual or targeted prospective customers and/or clients
of the Company or any other HMC Entity on behalf of any person or entity in connection with any
business that competes with the Company or any other HMC Entity, nor shall the Employee make known
the names and addresses of such customers and/or clients or any information relating in any manner
to the Company’s or any other HMC Entity’s trade or business relationships with such customers
and/or clients, other than in connection with the performance of his employment duties for the
Company or any other HMC Entity, nor shall the Employee divert or attempt to divert any business or
customer of the Company or any other HMC Entity.

     (c) Blue Pencilling. In the event any provision of this Section 9 is held by an
arbitrator or court of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or invalidated in any
way. Without in any way limiting the generality of the preceding sentence, in the event the
covenant not to compete contained herein and/or the non-solicitation covenant contained herein, in
the view of a court or arbitrator asked to rule upon the issue, is deemed unenforceable by reason
of covering too large an area, too long a period of time or too many business activities, then the
same shall be deemed to cover only the largest area, the longest time period or the most business
activities, as the case may be, which will not render it unenforceable (as determined by the court
or arbitrator, as applicable).

     (d) It is expressly recognized and agreed that the covenants set forth in this Section 9 are
for the purposes of restricting the activities of the Employee only to the extent necessary for the
protection of the legitimate business interests of the Company and the HMC Entities, and the
Company and the Employee agree that said covenants are reasonable for that purpose and that such
covenants do not and will not preclude the Employee from engaging in activities sufficient for the
purpose of earning a living.

     10. Proprietary Information. The Employee acknowledges and agrees that certain
non-public information obtained by the Employee relating or pertaining to the Company’s businesses,
projects, products, services, trade secrets, confidential information (including methods of
operations and financial information), unpublished know-how (whether patented or unpatented) and
other business information not easily accessible to other persons in the trade and which give the
Company a competitive advantage and which the Company takes steps to keep confidential
(collectively, the “Proprietary Information”), are proprietary in nature; provided,
however, there shall be excluded from the meaning of Proprietary Information any
information which is or becomes generally known within the industry through some non-confidential
source other than the Employee. The Employee acknowledges that the Proprietary Information shall
be considered by the Employee to be confidential, and the Employee covenants and

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agrees not publish, disclose or reveal (whether directly or indirectly) any part of the
Proprietary Information to any entity or person or use the same for his/her own purposes or
personal gain or the purposes of other, during the term of this Agreement or after its termination
or expiration. Upon termination (voluntary or otherwise) of the Employee’s employment with the
Company, the Employee will return to the Company all things belonging to the Company, and all
documents, records, notebooks and tangible articles containing or embodying any Proprietary
Information, including copies thereof, then in the Employee’s possession or control, whether
prepared by the Employee or others, will be left with the Company.

                                             Employee’s Initials  /s/ RD

     11. Remedies. The Employee acknowledges that the Employee’s services are of a
special, unique, unusual, extraordinary and intellectual character with regard to the development
of the Company’s businesses and that in the each and every breach or violation or threatened breach
or violation by the Employee of any terms and conditions of this Agreement by the Employee
(including but not limited to Sections 7, 8, 9 and 10 above), the Company’s remedies at law may be
inadequate and that the Company, in addition to all other remedies available to it (including,
without limitation, specific performance of the provisions hereof), shall be entitled to seek to
enjoin the commencement or continuance thereof and may, with notice to the Employee, apply to any
court of competent jurisdiction for entry of equitable relief, including, without limitation, an
immediate restraining order or injunction without the necessity of posting bond.

                                              Employee’s Initials  /s/ RD

     12. Termination.

     (a) Death or Disability. In the event the Employee dies or becomes disabled during
the Employment Period, this Agreement shall terminate on the date on which death or disability
occurs and the sole remaining obligations of the Company under this Agreement shall be to pay the
Employee or the Employee’s named beneficiary or heirs any unpaid Base Salary or bonus amounts due
the Employee for the period through and until the date of the Employee’s disability or death and
any unreimbursed previously approved business expenses. For purposes of this Agreement, the
Employee shall be considered “disabled” when, as the result of injury or sickness, the Employee has
been wholly and continuously disabled and prevented from performing the Employee’s duties for
ninety (90) consecutive days.

     (b) Cause. The Company may terminate the Employee’s employment and all of the
Company’s obligations hereunder solely for Cause (as defined below), by written notice to the
Employee particularizing the conduct constituting the Cause. In the event the Company invokes its
right as described in this paragraph, and the Employee challenges the Company’s interpretation of
the definition of cause, then such dispute shall be settled by binding arbitration in accordance
with Section 13(g) below. For purposes of this Agreement, “Cause” shall be defined as (i)
willful misconduct or intentional or continual failure to perform stated and material duties that
is not remedied or cured by Employee within ten (10) days after receiving written notice
particularizing the misconduct or failure to perform, (ii) a known breach of any fiduciary duty or
duty of loyalty owed to the Company in the Employee’s capacity as an officer of the Company where
that is not remedied or cured by Employee within ten (10) days after receiving written notice
particularizing the breach, or (iii) if the Employee (A) is convicted of any felony or other lesser
crime involving dishonesty, fraud, misrepresentation or other acts of moral turpitude or is
incarcerated while awaiting trial for a period of thirty (30) days or longer, (B) purposefully
engages in any conduct that gives rise to material liability of the Company or HMC under applicable

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laws, including, but not limited to, laws relating to discrimination and harassment in employment,
unless pursuant to an instruction from the President or any Supervisor, or (C) publishes any
remarks, comments or statements, whether written or oral, which disparage the Company or any HMC
Entity, or any of their respective directors or officers. In the event the Company terminates this
Agreement for Cause or in the event the Employee voluntarily resigns from the employment of the
Company for any reason or by reason of disability or death, the Company shall no longer be
obligated to make any further salary, bonus or other payments to the Employee except insofar as
they have accrued as of the date the Employee’s employment terminates. Other than as expressly set
forth hereinabove, upon any such termination, the Employee shall cease to have any future rights
under this Agreement, including but not limited to Section 3 herein.

     (c) Other. The Company may terminate the Employee’s employment for reasons other than
for Cause, in the sole discretion of the Company, by written notice to the Employee. In the event
that this Agreement is terminated by the Company other than for Cause, death or disability, upon
the Employee’s prior voluntary execution of a written release of any and all claims the Employee
may assert against the Company or any HMC Entity, including without limitation any claims for lost
wages or benefits, stock options, compensatory damages, punitive damages, attorneys’ fees,
equitable relief or any other form of damages or relief (excluding claims for amounts which may be
payable pursuant to this Agreement), which release shall be prepared by the Company, the Company
shall be obligated to pay the Employee (which shall constitute the Company’s sole obligation
hereunder) (i) any bonuses due and owing as calculated in accordance with Section 3(b) above as of
the date of such termination and (ii) a cash payment equal to the Base Salary described in Section
3 for the shorter of (1) the remainder of the Employment Period and (2) six months after the date
of such termination. Other than as expressly set forth hereinabove, upon any such termination, the
Employee shall cease to have any further rights under this Agreement.

     13. General.

     (a) Notices. All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by registered or certified mail, return receipt requested or when
sent by overnight delivery service, obtained signature for delivery, or by facsimile upon
confirmation of successful transmission of the facsimile.

	 	 	 	 	 
	               If to the Employee at:

	 	Rajiv Doshi
	 	 
	 

	 	560 S. Broadway, Suite #202	 	 
	 

	 	Hicksville, NY 11801	 	 
	 

	 	Facsimile: (516) 937-7506	 	 
	 
	 	 	 	 
	               with a copy to:

	 	Mark E. Gelfand, Esq.	 	 
	 

	 	560 South Broadway	 	 
	 

	 	Hicksville, NY 11801	 	 
	 

	 	Facsimile: (516) 933-3128	 	 

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	               and if to the Company, at:

	 	c/o Hollywood Media Corp.	 	 
	 

	 	2255 Glades Road, Suite 221A	 	 
	 

	 	Boca Raton, FL 33431	 	 
	 

	 	Attention:  Mitchell Rubenstein	 	 
	 

	 	                         Chief Executive Officer	 	 
	 

	 	Facsimile: (561) 998-2974	 	 
	 
	 	 	 	 
	               with a copy to:

	 	Hollywood Media Corp.	 	 
	 

	 	2255 Glades Road, Suite 221A	 	 
	 

	 	Boca Raton, FL 33431	 	 
	 

	 	Attention:  Legal Department	 	 
	 

	 	Facsimile: (561) 998-2974	 	 

     (b) Assignment. This Agreement shall inure to the benefit of, and shall be binding
upon, the Company and its successors and assigns, including any person with which the Company may
merge, consolidate or transfer all or substantially all of its assets. Insofar as the Employee is
concerned, this Agreement, being personal, cannot be assigned.

     (c) Governing Law. The validity, construction, performance and enforcement of this
Agreement shall be governed by the laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws.

     (d) Captions. The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement

     (e) Entire Agreement. This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof.

     (f) Amendment. This Agreement may not be amended, modified, superseded, canceled,
renewed or extended other than by written instrument executed by both of the parties hereto, or in
the case of waiver, by the party waiving compliance.

     (g) Arbitration. Except as otherwise provided in Section 11 hereof, the Employee and
the Company each agree that any and all disputes and claims arising out of or related to the
Employee’s employment by the Company or the termination thereof, shall be submitted to binding
arbitration in New York City, New York pursuant to the then-existing model employment dispute rules
of the American Arbitration Association (“Rules”), before three (3) arbitrators to be
selected pursuant to the then-existing Rules. THE EMPLOYEE AND THE COMPANY HEREBY ACKNOWLEDGE,
UNDERSTAND AND AGREE THAT, IN AGREEING TO SUBMIT SUCH DISPUTES AND/OR CLAIMS TO ARBITRATION, EACH
OF THE EMPLOYEE AND THE COMPANY GIVE UP THE RIGHT TO HAVE THE DISPUTE(S) OR CLAIMS(S) HEARD IN A
COURT OF LAW BY A JUDGE OR JURY. However, nothing herein shall in any way limit either the
Employee’s or the Company’s statutory rights and/or remedies, all of which are reserved and may be
alleged in the arbitration process, and nothing herein shall in any way limit the Company’s rights
under Section 11 hereof. Moreover, nothing herein shall restrict any resort to any statutory
agency charged with enforcing any of the Employee’s or the Company’s statutory rights and/or
remedies; however the review of any such agency’s actions shall be had before the arbitrators as
discussed above and not before a judge or jury. By signing this Agreement, the Employee
understands that the Employee may not have a jury decide any dispute or claim, but that

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any such dispute or claim shall be decided only by the arbitrators. The arbitrators shall issue a
written decision, including the arbitrators’ written findings and conclusions upon which any award
is based. Each party shall bear its own costs and expenses and an equal share of the arbitrators’
and administrative fees of arbitration, except that the arbitrators shall be authorized, in their
discretion, to award fees and expenses to a prevailing party in the interests of justice.

     (h) Waiver. The failure of either party at any time or times to require performance
of any provision hereof shall in no manner affect the right at a later time to enforce the same.
No waiver by either party of the breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or waiver of the breach of any other term or
covenant contained in this Agreement.

     (i) Agents for the Company for this Agreement. The parties agree that the Employee
shall not and is not permitted to take any action or make any decision for or on behalf of or in
the name of the Company with respect to the Company’s exercise of its rights under or with respect
to this Agreement.

     (j) Severability. Invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other provisions.

     (k) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.

[Signatures to Follow]

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     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first
above written.

	 	 	 
	 

	 	HOLLYWOOD FAN SITES, INC.
	 
	 	 
	 

	 	/s/ Mitchell Rubenstein
	 

	 	 
	 

	 	Name:     Mitchell Rubenstein
	 

	 	Title:      Chairman and Chief Executive Officer
	 
	 	 
	 

	 	HOLLYWOOD MEDIA CORP.
	 

	 	(solely with respect to Section 3(b) above)
	 
	 	 
	 

	 	/s/ Mitchell Rubenstein
	 

	 	 
	 

	 	Name:     Mitchell Rubenstein
	 

	 	Title:      Chairman and Chief Executive Officer
	 
	 	 
	 

	 	THE EMPLOYEE:
	 
	 	 
	 

	 	/s/ Rajiv Doshi
	 

	 	 
	 

	 	Rajiv DoshiEX-10.1 LODGIAN, INC. EXECUTIVE INCENTIVE PLAN

 

EXHIBIT 10.1

Lodgian, Inc. Executive Incentive Plan

(Covering the calendar years 2006 through 2008)

 

 

Lodgian, Inc. Executive Incentive Plan

(Covering the calendar years 2006 through 2008)

1 Brief Summary

     1.1 In General. Executive officers of the Company chosen by the Committee shall become
Participants in this Plan and shall be eligible to receive Cash Bonuses and grants of Restricted
Stock based upon the Company’s achieving certain EBITDA and stock price targets.

     1.2 Duration. The Plan is established with incentives for the years 2006 through 2008. The
Plan will need to be amended and “re-adopted” if incentives are to continue for years beyond 2008.
Absent such action, the Plan will automatically terminate following the payment of any Cash Bonuses
and the grant of any Restricted Shares for the 2008 Bonus Year.

2 Definitions

     2.1 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

     2.2 Applicable Percentage shall mean, for a given Bonus Year, the following:

	 	 	 	 	 
	Bonus Year:	 	Applicable Percentage:
	2006

	 	 	100	%
	2007

	 	 	150	%
	2008

	 	 	200	%

     2.3 Average Bonus Year Stock Price shall mean, with respect to a Bonus Year, the average
closing price of the Company’s common stock for the last 30 business days of such Bonus Year.

     2.4 Base Annual Restricted Shares shall mean the amount set forth on a Participant’s
Participation Form as such Participant’s Base Annual Restricted Shares.

     2.5 Board shall mean the Board of Directors of the Company.

     2.6 Bonus Multiplier shall mean a factor determined for use in determining a Participant’s
grants of Restricted Stock under Section 6.2 of this Plan, as set forth on the Participant’s
Participation Form.

     2.7 Bonus Year shall mean a Plan Year for which a Cash Bonus and/or a Restricted Share Award
are being determined, which shall be the Plan Years coincident with the calendar years 2006, 2007
and 2008.

     2.8 Cause shall mean, with respect to a Participant, that the Participant has engaged in any
of the following conduct:

 

 

     (a) Any act of fraud or dishonesty that materially harms the Company or its
affiliates,

     (b) The commission by the Participant of a felony or any violation of any federal or
state securities law or the Participant’s being enjoined from violating any federal or
state securities law or being determined to have violated any such law,

     (c) Willful or reckless misconduct or gross negligence by the Participant in
connection with any property or activity of the Company and its subsidiaries and
affiliates, and successors,

     (d) Repeated and intemperate use of alcohol or illegal drugs by the Participant after
written notice from the immediate supervisor of the Participant or person to whom the
Participant reports,

     (e) Material breach of any obligations of the Participant under any agreement with the
Company (other than by reason of physical or mental illness, injury, or condition), but
only after the Participant has been given written notice of such breach by their immediate
supervisor or person to whom the Participant reports and at least thirty (30) days to cure
such breach, or

     (f) The Participant’s becoming barred or prohibited by the SEC from holding their
position with the Company.

     2.9 Code shall mean the Internal Revenue Code of 1986, as amended from time to time.

     2.10 COH EBITDA shall mean, with respect to a Bonus Year, the Company’s reported EBITDA for
the Company’s Continuing Operation Hotels for such Bonus Year, excluding the effects of certain
charges such as pre-emergence reorganization expenses, post-emergence Chapter 11 expenses included
in corporate and other on the Company’s consolidated statement of operations, impairment losses and
casualty losses, as reported by the Company in its stated filings. The Committee shall have the
discretion to make COH EBITDA adjustments for situations which fit within the “spirit” of the above
provisions, but which do not necessarily require an adjustment under the above provisions, and the
Committee shall have the authority to make appropriate adjustments consistent with the incentive
intended by this Plan.

     2.11 Committee shall mean the Compensation Committee of the Board.

     2.12 Company shall mean Lodgian, Inc., and its successors and assigns.

     2.13 Continuing Operation Hotels shall mean all hotels that the Company operates which are not
classified as “held for sale.”

     2.14 Disabled shall mean, with respect to a Participant, that the Participant has become
unable to perform the essential functions of their job even with reasonable accommodation, as
determined by the Company in its sole and absolute discretion.

Lodgian, Inc. Executive Incentive Plan

Page 3

 

 

     2.15 EBITDA shall mean reported earnings before interest, taxes, depreciation, and
amortization.

     2.16 Effective Date shall mean the date on which this Plan is adopted by the Committee, which
shall not be later than March 31st, 2006.

     2.17 Good Reason shall mean, with respect to a Participant, that the following has occurred:

     (a) The Company has, without the written consent of the Participant:

     (1) Taken an action which results in the material reduction of the
Participant’s then current duties or responsibilities,

     (2) Reduced the benefits to which the Participant is entitled, unless a
similar reduction is made for other executive employees,

     (3) Committed a material breach of any employment agreement with the
Participant,

     (4) Required the Participant to relocate more than fifty (50) miles from the
location of the Company’s offices,

     (b) the Participant has provided written notice to the Company of such action and
provided the Company with thirty (30) days to remedy such action (the “Cure Period”),

     (c) The Company has failed to remedy such action within the Cure Period, and

     (d) The Participant resigns within ten (10) days of the expiration of the Cure Period.

Good Reason shall not include any isolated, insubstantial or inadvertent action that (1) is not
taken in bad faith, and (2) is remedied by the Company within the Cure Period.

     2.18 Insider shall mean an individual who is, on the relevant date, an officer, director or
10% beneficial owner of any class of the Company’s equity securities that is registered pursuant to
Section 12 of the 1934 Act, all as defined under Section 16 of the 1934 Act.

     2.19 Maximum Annual Cash Bonus Amount shall mean the amount set forth on a Participant’s
Participation Form as such Participant’s Maximum Annual Cash Bonus Amount.

     2.20 Participant shall mean an eligible employee who has been selected by Committee to
participate in this Plan.

     2.21 Participation Form shall mean the form given to a Participant to notify and evidence such
person’s participation in the Plan attached hereto as Exhibit A. A Participant’s
Participation Form shall set forth the name of the Participant, the Bonus Years during which the
Participant shall be eligible for

Lodgian, Inc. Executive Incentive Plan

Page 4

 

 

incentive compensation pursuant to this Plan, and the Participant’s (1) Maximum Annual Cash
Bonus Amount, (2) Base Annual Restricted Shares, and (3) Bonus Multiplier.

     2.22 Plan shall mean this Lodgian, Inc. Executive Incentive Plan.

     2.23 Plan Year shall mean a fiscal year of the Company, which is coincident with the calendar
year.

     2.24 Qualifying Termination shall mean the termination of a Participant’s employment with the
Company for any one of the following reasons:

     (a) Death. The Participant dies during such Bonus Year.

     (b) Disability. The Participant becomes Disabled during such Bonus Year.

     (c) Termination for Good Reason. The Participant resigns or voluntarily terminates
his or her employment with the Company for Good Reason.

     (d) Termination without Cause. The Participant’s employment with the Company is
terminated by the Company without Cause.

No other type of termination of a Participant’s employment with the Company shall be considered a
Qualifying Termination.

     2.25 Restricted Shares shall mean shares of common stock of the Company which are granted to a
Participant subject to the terms and provisions of the Restricted Stock Agreement attached hereto
as Exhibit B.

     2.26 Restricted Stock Agreement shall mean the agreement attached hereto as Exhibit
B, to the terms and provisions of which Restricted Shares granted under this Plan shall be
subject.

     2.27 Target EBITDA shall mean the following for each of the Bonus Years noted:

Target EBITDA1

	 	 	 
	Bonus Year:	 	Target EBITDA Amount:
	2006
	 	$72,000,000
	2007
	 	$79,000,000
	2008
	 	$87,000,000

Target EBITDA for a given Bonus Year shall be adjusted as follows:

     (a) If a property is transferred after July 15, 2005, to discontinued operations, the
Target EBITDA for the Bonus Year in which the transfer occurs shall be reduced by the
transferred property’s EBITDA for the trailing 12 months through the end of the calendar
month preceding

 

			
	1	 	The baseline for Target EBITDA is the COH
EBITDA as of July 15, 2005. Target EBITDA is to be adjusted as provided herein
for property transfers occurring after that date.

Lodgian, Inc. Executive Incentive Plan

Page 5

 

 

the date of transfer. For each subsequent Bonus Year, Target EBITDA shall be reduced
by the sum of the reduction for the year of transfer plus 10% of that reduction for each
year since the year of transfer.

     (b) If a property is transferred after July 15, 2005, due to an acquisition into
continuing operations, the Target EBITDA for the year in which the transfer occurs shall be
increased by the transferred property’s EBITDA for the period of time from the date of
transfer until the end of the calendar year. For each subsequent year, Target EBITDA shall
be increased by the transferred property’s EBITDA for the trailing 12 months through the
end of the calendar month preceding the transfer plus 10% each calendar year after the year
of transfer.

     (c) If a property is transferred after July 15, 2005 into continuing operations
unrelated to an acquisition, the Target EBITDA for the year in which the transfer occurs
shall be increased by the transferred property’s EBITDA for that calendar year. For each
subsequent year, Target EBITDA shall be increased by the transferred property’s actual
EBITDA for each subsequent year.

For purposes of the adjustments described in Section 2.27 (a) – (c), a transferred property’s
EBITDA shall be calculated in the same manner as the Company calculates its COH EBITDA as described
in Section 2.10.

The Committee shall have the discretion to make Target EBITDA adjustments for situations which fit
within the “spirit” of the above provisions, but which do not necessarily require an adjustment
under the above provisions, and the Committee shall have the authority to make appropriate
adjustments consistent with the incentive intended by this Plan.

     2.28 Target Stock Price shall mean the following for each of the Bonus Years noted:

Target Stock Price

	 	 	 
	Bonus
Year:	 	Target Stock Price:
	2006
	 	$15.00 per share
	2007
	 	$18.00 per share
	2008
	 	$21.00 per share

3 Eligibility

     3.1 Becoming a Participant. The Committee shall, in its sole and absolute discretion,
determine which employees of the Company shall actually participate in the Plan, and shall promptly
notify such individuals that they have been selected to participate in the Plan by completing and
executing a Participation Form for such individual and delivering such form to the individual.
Eligible employees who have been so selected and notified by the Committee of

Lodgian, Inc. Executive Incentive Plan

Page 6

 

 

their participation in this Plan shall be Participants in this Plan. The Committee shall
select Participants from among the key employees of the Company.

     3.2 Participant Status. Unless an employment agreement with a Participant expressly provides
otherwise, the Committee may determine that a Participant should cease to be a Participant in this
Plan at any time. However, notwithstanding the foregoing, the Committee’s determination that a
Participant should cease to be a Participant in this Plan shall not be effective until the first
day of the calendar year next following the date of such determination.

4 Incentive Plan Payments & Grants

     4.1 Cash Bonus Payments & Restricted Share Grants. Participants in the Plan may, for
each Bonus Year, receive a Cash Bonus and/or a grant of Restricted Shares based upon the Company’s
achievement of certain goals for such Bonus Year which have been pre-established by the Committee
by the adoption of this Plan and the selection of Participants and delivery to Participants of
their Participation Forms. The performance goals which must be met in order for a Participant to
receive an incentive payment or grant under this Plan are set forth in detail in sections 5 and 6
of this Plan.

     4.2 Individual Annual Maximum Amounts. No individual Participant in this Plan may receive in
excess of $600,000 per year in Cash Bonuses, and no individual Participant in this Plan may be
granted in excess of 42,000 shares per year of Restricted Stock.

     4.3 Aggregate Annual Maximum Amounts. The maximum amount of aggregate Cash Bonuses which may
be paid to all Participants for a given Bonus Year may not exceed $3,655,000. The maximum number
of Restricted Shares which may be granted to all Participants for a given Bonus Year may not exceed
280,000. Thus, a total maximum number of 820,000 Restricted Shares may be granted to Participants
under this Plan.

5 Cash Bonus Payments

     5.1 Determination of Cash Bonus Payment for a Bonus Year. Each Participant in the Plan
for a given Bonus Year shall receive a Cash Bonus equal to a percentage of such Participant’s
Maximum Annual Cash Bonus Amount if the COH EBITDA of the Company for such Bonus Year equals or
exceeds 90.0% of the Target EBITDA for such Bonus Year determined in accordance with the following:

Lodgian, Inc. Executive Incentive Plan

Page 7

 

 

	 	 	 	 	 
	 	 	Percentage of Maximum 
	Percentage of Target EBITDA Achieved:	 	Annual Cash Bonus Amount:
	At least 90.0%, but less than 100.0%

	 	 	41.56	%
	At least 100.0%, but less than 107.5%

	 	 	51.95	%
	At least 107.5%, but less than 115.0%

	 	 	65.71	%
	At least 115.0%, but less than 125.0%

	 	 	71.43	%
	At least 125.0%, but less than 135.0%

	 	 	77.14	%
	At least 135.0%, but less than 145.0%

	 	 	88.57	%
	At least 145.0%

	 	 	100.00	%

No Cash Bonus shall be paid for a Bonus Year during which the COH EBITDA of the Company for such
Bonus Year does not at least equal 90% of Target EBITDA for such Bonus Year.

     5.2 Timing of Payment of Cash Bonus. A Participant’s Cash Bonus for a Bonus Year shall be
paid in a single lump sum cash payment on March 15th of the calendar year immediately
following such Bonus Year.

     5.3 Requirements for Payment of Cash Bonus. Generally, a Participant must be employed with
the Company as of the date of payment of a Cash Bonus to receive such payment. However, if the
Participant incurs a Qualifying Termination during a Bonus Year, the Participant shall nonetheless
receive a Cash Bonus for such Bonus Year, and the amount of such Cash Bonus shall be (A) the Cash
Bonus amount that would have been paid to the Participant had the Participant (1) remained employed
by the Company to the date of payment of the Cash Bonus and (2) not experienced a Qualifying
Termination during such Bonus Year, multiplied by (B) a fraction, the numerator of which is equal
to the number of days during such Bonus Year prior to and including the date of the Participant’s
Qualifying Termination, and the denominator of which is equal to the total number of days during
such Bonus Year. Notwithstanding the foregoing, the Company may enter into an agreement with an
individual Participant which modifies the foregoing provisions of this Section 5.3 with respect to
such individual Participant; provided, however, any such modification of the foregoing provisions
of this Section 5.3 in any agreement must specifically reference this Plan and must be approved by
the Committee. No general reference to bonuses, incentives or other compensation in any agreement
between a Participant and the Company shall be deemed to be a reference to compensation payable
under this Plan, and each Participant agrees to be bound by this interpretation by accepting any
benefits under this Plan.

6 Restricted Stock Grants

     6.1 Determination of Restricted Stock Grant for Bonus Year. Each Participant in the Plan
for a given Bonus Year shall receive a grant of a number

Lodgian, Inc. Executive Incentive Plan

Page 8

 

 

of Restricted Shares equal to such Participant’s Base Annual Restricted Shares if either:

     (a) the COH EBITDA of the Company for such Bonus Year equals or exceeds 100% of the
Target EBITDA for such Bonus Year; or

     (b) the Average Bonus Year Stock Price for such Bonus Year equals or exceeds Target
Stock Price for such Bonus Year.

     6.2 Determination of Additional Restricted Stock Grant for Bonus Year. Each Participant in
the Plan for a given Bonus Year shall receive a grant of a number of Restricted Shares equal to the
product of (1) the Applicable Percentage for such Bonus Year, (2) the Participant’s Bonus
Multiplier, and (3) such Participant’s Base Annual Restricted Shares if either:

     (a) the COH EBITDA of the Company for such Bonus Year equals or exceeds 110% of the
Target EBITDA for such Bonus Year; or

     (b) substantially all of the assets of the Company are sold or a merger of the Company
is consummated for at least a 20% premium over the Target Stock Price for such Bonus Year
(determined using the closing price of the Company’s common stock on the last business day
prior to the date that the sale or merger is approved by the Board).

     6.3 Timing of Grant of Restricted Shares. A Participant’s grant of Restricted Shares for a
Bonus Year shall be made by the Company on March 15th of the calendar year immediately
following such Bonus Year.

     6.4 Requirements for Grant of Restricted Shares. Generally, a Participant must be employed
with the Company as of the date of grant of Restricted Shares to receive such Restricted Shares.
However, if the Participant incurs a Qualifying Termination during a Bonus Year, the Participant
shall nonetheless receive a grant of Restricted Shares for such Bonus Year, and the number of such
Restricted Shares shall be (A) the number of Restricted Shares that would have been granted to the
Participant had the Participant (1) remained employed by the Company to the date of grant of the
Restricted Shares and (2) not experienced a Qualifying Termination during such Bonus Year,
multiplied by (B) a fraction, the numerator of which is equal to the number of days during such
Bonus Year prior to and including the date of the Participant’s Qualifying Termination, and the
denominator of which is equal to the total number of days during such Bonus Year. Notwithstanding
the foregoing, the Company may enter into an agreement with an individual Participant which
modifies the foregoing provisions of this Section 6.4 with respect to such individual Participant;
provided, however, any such modification of the foregoing provisions of this Section 6.4 in any
agreement must specifically reference this Plan and must be approved by the Committee. No general
reference to bonuses, incentives, equity compensation or equity incentives, or other compensation
in any agreement between a Participant and the Company shall be deemed to be a reference to
compensation payable under this Plan, and each Participant agrees to be bound by this
interpretation by accepting any benefits under this Plan.

Lodgian, Inc. Executive Incentive Plan

Page 9

 

 

7 Miscellaneous Matters

     7.1 Committee Determination of Payments & Grants. No Cash Bonus shall be considered as
approved or earned or shall be paid, and no Restricted Shares shall be considered as approved or
earned or shall be granted, unless and until such Cash Bonus or grant of Restricted Shares has been
approved by the Committee and the Committee has made the certification required by Section 7.2.

     7.2 Committee Certification of Performance Goals. The Committee shall have complete
discretion to determine the COH EBITDA of the Company for each Bonus Year, applying the standards
and provisions set forth in this Plan. The Committee shall also have complete discretion to
determine the Average Bonus Year Stock Price for each Bonus Year. The Committee shall certify its
determinations in this regard by written resolutions shortly after the end of each Bonus Year.

     7.3 Amendment or Termination. The Committee and/or the Board shall have the right to amend or
terminate this Plan at any time for any reason. However, notwithstanding the foregoing, if the
Committee and/or the Board amend or termination this Plan, such amendment or termination may only
be effective for Bonus Years beginning on or after the date of such amendment or termination, and
shall not be effective with respect to the Bonus Year during which such amendment or termination
was adopted or otherwise effectuated by the Committee and/or the Board. No Participant or other
employee shall have any rights to a Cash Bonus or to a grant of Restricted Shares until such Cash
Bonus is actually paid or such Restricted Shares are actually granted, except as provided in
Sections 5.3 and 6.4. See also Section 1.2 above regarding the automatic termination of the Plan.

     7.4 Intent of Plan Provisions. This Plan is not intended to provide any deferral of vested
compensation within the meaning of Code §409A. This Plan is also intended to provide compensation
which is performance-based within the meaning of Code §162(m). The Plan shall be interpreted in
accordance with these intentions.

     7.5 Withholding on Incentive Payments. All Cash Bonuses paid under the Plan shall be subject
to applicable withholding requirements and taxes. All Restricted Shares granted under the Plan
shall also be subject to applicable withholding requirements and taxes. Notwithstanding any
provision of this Plan or any agreement regarding Restricted Shares granted under this Plan to the
contrary, the Company shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company as a condition precedent to the grant of any Restricted Shares,
an amount sufficient to satisfy Federal, state and local taxes, domestic or foreign, required by
law or regulation to be withheld with respect to any taxable event arising as a result of this Plan
and/or any action taken by a Participant with respect to a grant of Restricted Shares. The Company
may, as set forth in a Restricted Stock Agreement, withhold (or allow a Participant to direct the
Company to withhold) Restricted Shares to satisfy

Lodgian, Inc. Executive Incentive Plan

Page 10

 

 

applicable withholding requirements. To the extent that a Participant is an Insider,
satisfaction of withholding requirements by having the Company withhold Restricted Shares shall be
deemed a subsequent transaction which is automatically approved with each and every original grant
of Restricted Shares pursuant to this Plan.

     7.6 No Rights to Employment. Neither the establishment of, nor the maintenance of, this Plan
shall confer on any employee or Participant any rights to continued employment with the Company.

     7.7 Committee Administrative Powers. The Committee shall have complete and absolute
discretion to interpret this Plan, and all terms and provisions hereof, including, without
limitation, the power to construe and interpret the Plan and to determine all questions that shall
arise thereunder, and to determine the benefit of the Plan to which any Participant may be
entitled. All employees of the Company and all Participants in this Plan shall be bound by any
determinations made by the Company regarding this Plan.

     7.8 Governing Law. This Plan shall be governed by the laws of the State of Georgia.

Lodgian, Inc. Executive Incentive Plan

Page 11

 

 

Exhibit A

Participation Form

Participation Form No.
                                        

Lodgian, Inc. Executive Incentive Plan

Participation Form

To:
                                        
                    

In accordance with the provisions of the Lodgian, Inc. Executive Incentive Plan (the “Plan”), you
are hereby notified that you have been selected to become a Participant in the Plan. As a
Participant, you may become entitled to incentive compensation pursuant to the terms and provisions
of the Plan for the Bonus Years noted below:

	 	 	 	 	 
	2006: o
	 	2007: o
	 	2008: o

Your Maximum Annual Cash Bonus Amount shall be:

 

 

Your Base Annual Restricted Shares shall be:

 

 

Your Bonus Multiplier shall be:

 

 

The Company must achieve certain performance goals noted in the Plan for you to receive all or any
portion of your Maximum Annual Cash Bonus Amount or all, any portion of, or a multiple of, your
Base Annual Restricted Shares. This Participation Form will evidence your participation in the
Plan. You should consult the Plan for details concerning the calculation and determination of your
potential incentive compensation.

In witness whereof, we, the undersigned members of the Committee have executed this
Participation Form as of this                      day of
                                        
, 20___.

	 	 	 
	 

	 	 
	Committee Member

	 	Committee Member
	 
	 	 
	 

Committee Member

	 	 

Lodgain,
Inc. Executive Incentive Plan

Participation Form

 

 

Exhibit B

LODGIAN, INC.

RESTRICTED STOCK AGREEMENT

(Granted under and pursuant to the terms and provisions of the Lodgian, Inc. Executive Incentive Plan)

	 	 	 	 	 	 	 
	Name of Recipient:

	 	[Participant Name]
	 	Award Date:
	 	[Date of Grant]
	 
	Number of Award Shares:

	 	[Number of Restricted Shares]	 	 	 	 

     THIS AGREEMENT (the “Agreement”) is made and entered into effective as of the Award Date noted
above by and between Lodgian, Inc. (the “Company”), a Delaware corporation and the Recipient noted
above (the “Recipient”).

W I T N E S S E T H:

     WHEREAS, the Company has adopted the Lodgian, Inc. Executive Incentive Plan (the “Plan”); and

     WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”)
has authorized the grant to Recipient of a restricted stock award under the Plan of shares of the
common stock of the Company (“Common Stock”), and the Company and Recipient wish to confirm herein
the terms, conditions, and restrictions of the restricted stock award;

     NOW, THEREFORE, in consideration of the premises, the mutual covenants contained herein, and
other good and valuable consideration, the parties hereto agree as follows:

1 Award of Shares

     1.1 Award of Award Shares. Subject to the terms, restrictions, limitations, and
conditions stated herein and in the Plan, the Company hereby awards to Recipient the number of
“Award Shares” noted above, which shall be shares of the common stock of the Company, subject to
all terms and provisions of this Agreement. By the execution of this Agreement, the Recipient
hereby accepts the Award Shares subject to all terms and provisions of this Agreement.

     1.2 Award Shares held by Custodian. The Recipient hereby
authorizes and directs the Company to deliver any share certificate issued by the Company to
evidence the Award Shares to the Secretary of the Company or such other officer of the Company as
may be designated by the Committee (the “Custodian”) to be held by the Custodian until any such
Award Shares become Vested Award Shares. As Award Shares become Vested Award Shares, and after
satisfaction of any required withholding obligations in accordance with Section 1.5 below, the
Company shall cause appropriate cancellation of share certificates held by the Custodian in the
name of the Recipient and the issuance of new share certificates representing the Vested Award
Shares and the delivery thereof directly to the Recipient. The Recipient hereby irrevocably
appoints the Custodian, and any successor thereto, as the true and lawful attorney-in-fact of
Recipient with full power and authority to execute any stock transfer power or other instrument
necessary to transfer the Award Shares to the Company pursuant to this Agreement, in the name,
place and stead of Recipient. The term of such appointment shall commence on the Award Date and
shall continue until such Award Shares become Vested Award Shares and the issuance of a new share
certificate representing such shares directly to the Recipient. During the period that the
Custodian holds Award Shares, the Recipient shall be entitled to all rights applicable to shares of
common stock of the Company not so held; provided, however, in the event the number of shares of
common stock is increased or reduced by changing par value, split-up, stock split, reverse stock
split, reclassification, merger, reorganization, consolidation, or otherwise, and in the event of
any distribution of common stock or other securities of the Company in respect of such Award
Shares, Recipient agrees that any certificate representing shares of common stock or other
securities of the Company issued as a result of any of the foregoing shall be delivered to the
Custodian and shall be subject to all of the provisions of this Agreement as if initially subject
hereto ab initio.

Lodgian,
Inc. Executive Incentive plan Restricted Stock Agreement

Page 1

 

 

     1.3 Vesting of Award Shares. Recipient shall become vested in a percentage of the
Award Shares shown below based upon the Continuous Service (as defined below) of the Recipient from
the Award Date of the Award Shares (as noted hereon):

	 	 	 
	Vesting Schedule:
	Percentage Vested:	 	Continuous Service from Award Date:
	0%
	 	Less than 1 year
	   331/3%
	 	At least 1 year, but less than 2 years
	   662/3%
	 	At least 2 years, but less than 3 years
	100%
	 	At least 3 years

If the above calculation of vested Shares would result in a fraction, any fraction will be rounded
to zero. For purposes of this Agreement, “Continuous Service” means a period of continuous
performance of services by Recipient for the Company or an affiliated company, as determined by the
Committee in its sole and absolute discretion. Notwithstanding the foregoing, in the event that
the Recipient incurs a Qualifying Termination (as defined in the Plan), all Award Shares shall
immediately become fully vested, and the Committee may, in its sole and absolute discretion,
accelerate the vesting of the Award Shares in whole or in part at any time for any reason. The
Award Shares which have become vested pursuant to the Vesting Schedule or by virtue of such
acceleration are herein referred to as the “Vested Award Shares” and all Award Shares which are not
Vested Award Shares are sometimes herein referred to as the “Unvested Award Shares.”

     1.4 Tax Consequences. For purposes of this Agreement, a “Code §83(b) Election”
shall mean the election available to the recipient of property transferred in connection with the
performance of services to include in gross income under Section 83(b) of the Internal Revenue Code
of 1986, as amended (The “Code”) the excess of the fair market value of the property transferred
determined as of the time of transfer over the amount (if any) paid for such property as
compensation for services. Recipient represents that Recipient has been advised by the Company
to consult with, and has fully consulted with, Recipient’s own tax consultants regarding his making
a Code §83(b) Election with respect to the Award Shares, and the resulting impact on Recipient’s
personal tax situation, prior to entering into this agreement and that Recipient is not relying on
the Company for any tax or investment advice. Recipient understands that Recipient may
suffer adverse tax consequences as a result of Recipient’s receipt and disposition of the Shares.
Recipient understands that Recipient may or may not make a Code §83(b) Election with respect to the
Award Shares, but that Recipient shall be subject to the withholding provisions of Section 1.5
below based upon the choice of Recipient regarding such Code §83(b) Election and the choice of
Recipient regarding the time and manner that withholding obligations shall be satisfied.

     1.5 Withholding on Award Shares. Recipient hereby agrees that, in consideration for
the grant of the Award Shares, the following federal and state income tax withholding provisions
shall apply:

     (a) Code §83(b) Election Made by Recipient. If the Recipient makes a Code
§83(b) Election with respect to the Award Shares, then, in order not to forfeit Award
Shares, the Recipient must deliver to the Company, within the ten (10) day period commencing
on the Award Date noted above, a check payable to the Company in the amount of all
withholding or other tax obligations (whether federal, state or local) imposed on the
Company by reason of such Code §83(b) Election. If the Recipient does not timely make such
payment, the Award Shares shall be immediately forfeited by the Participant, and any amounts
which must be paid by the Company for any required withholding or other tax obligations
imposed on the Company by reason of such Code §83(b) Election shall be paid by the Recipient
by directly withholding all such amounts as quickly as possible consistent with applicable
law from any other compensation payable to the Recipient on or after the date of such Code
§83(b) Election. The Recipient hereby agrees to the withholding by the Company outlined in
the preceding sentence, and authorizes and directs that such withholding from the
Recipient’s compensation be made if such sentence is applicable.

     (b) Code §83(b) Election Not Made by Recipient. If the Recipient does not
make a Code §83(b) Election with respect to the Award Shares, then the Recipient shall be
entitled to elect

Lodgian,
Inc. Executive Incentive plan Restricted Stock Agreement

Page 2

 

 

one (or, at the discretion of the Committee, a combination) of the following methods of
satisfying the Company’s withholding obligations:

     (1) Direct Payment on or prior to Substantial Vesting Event. The
Recipient may, on or before the date of occurrence of an event pursuant to which
such Award Shares become “substantially vested” within the meaning of Code §83,
deliver to the Company cash and/or a check payable to the Company in the amount of
all withholding or other tax obligations (whether federal, state or local) imposed
on the Company by reason of the substantial vesting of such Award Shares.

     (2) Return of Vested Award Shares upon Substantial Vesting Event.
The Recipient may, as of the close of business on the business day which is
coincident with or which immediately follows the occurrence of an event pursuant to
which such Award Shares become “substantially vested” within the meaning of Code
§83, allow the Company to repurchase from the Recipient the smallest whole number of
Vested Award Shares which, when multiplied by the fair market value of the Common
Stock on such business date, is sufficient to satisfy the amount of the withholding
tax obligations imposed on the Company by reason of the vesting of the Award Shares.
If the Recipient elects this method of satisfying withholding obligations, the
Recipient acknowledges and understands that any Vested Award Shares repurchased from
the Recipient may result in tax consequences to the Recipient.

     (3) Incremental Withholding over Likely Vesting Period. The
Recipient may, beginning as of the Award Date, allow the Company to withholding from
future compensation payments to the Recipient substantially equal amounts such that
the aggregate of such amounts shall, as of the next likely date of occurrence of an
event pursuant to which any such Award Shares shall become “substantially vested”
within the meaning of Code §83, be sufficient to satisfy the amount of the
withholding tax obligations imposed on the Company by reason of the vesting of the
Award Shares. If the Recipient elects this method of satisfying withholding
obligations, the Recipient acknowledges and understands that:

     (i) The Company shall have complete discretion to determine
how much and when amounts shall be withheld;

     (ii) Amounts withheld may be immediately paid to the
appropriate tax authority as a prepayment of the withholding obligations, or
may be held by the Company until such time as the withholding obligations
become due, in the sole and complete discretion of the Company;

     (iii) No interest or earnings shall accrue based on such
incremental withholding; and

     (iv) In the event that the vesting of Award Shares should
occur earlier than forecasted in determining the substantially equal amounts
to be withheld from the Recipient’s future compensation payments, the
Recipient may nonetheless be required to deliver to the Company a check
payable to the Company in the amount of all withholding or other tax
obligations (whether federal, state or local) imposed on the Company by
reason of the substantial vesting of such Award Shares.

The Recipient’s election of a method of withholding under this Section 1.5 must be made prior to
the date of occurrence of an event pursuant to which such Award Shares become “substantially
vested” within the meaning of Code §83; provided, however, (1) the Participant’s election of the
method specified in Section 1.5(b)(3) above must be made within thirty (30) days of the Award Date,
and (2) if the Recipient is required to file beneficial ownership reports pursuant to Section 16(a)
of the Securities Exchange Act of 1934, the Participant’s election of the method specified in
Section 1.5(b)(2) must be made either (A) at least six months prior to the date of vesting of any
of such Award Shares, or (B) prior to the date of vesting of any of such Award Shares and in any
ten-day period beginning on the third day following the release of the

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Inc. Executive Incentive plan Restricted Stock Agreement

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Company’s quarterly or annual summary statement of sales and earnings. The Recipient’s election of
a method of withholding under this Section 1.5 shall, once made, be irrevocable. Notwithstanding
the above, if, for any reason, withholding or other tax obligations (whether federal, state or
local) are imposed upon the Company by reason of the grant of the Award Shares or their becoming
substantially vested, the Company shall have the power and the right to deduct or withhold, or
require the Recipient to remit to the Company as a condition precedent to immediate forfeiture of
the Award Shares, an amount sufficient to satisfy such withholding or other tax obligations
(whether federal, state or local), and, in this regard, the Company may offer the Recipient various
alternatives for satisfying such obligations. Upon receipt of payment in full of all withholding
tax obligations, the Company shall cause a certificate representing the Award Shares which are the
Vested Award Shares to be issued and delivered to the Recipient.

     1.6 Rights as Stockholder. Recipient shall have no rights as a stockholder with
respect to any Award Shares until a stock certificate for the shares is issued in Recipient’s name
and held by the Custodian.

2 Restrictions on, & Forfeiture of, Unvested Award Shares

     2.1 Forfeiture upon Termination of Employment. Notwithstanding anything to the contrary
herein, upon the Recipient’s termination of employment with the Company for any reason, all
Unvested Award Shares shall be forfeited, effective upon the date of such termination of
employment. The preceding sentence shall not be effectuated until any vesting required by reason
of a Qualifying Termination pursuant to Section 1.3 shall have occurred.

     2.2 Restrictions on Transfer of Unvested Award Shares. None of the Unvested Award
Shares may be conveyed, pledged, assigned, transferred, hypothecated, encumbered, or otherwise
disposed of by Recipient, and any attempt to transfer Unvested Award Shares shall be null and void
ab initio, unless (1) the Committee expressly authorizes such in writing, or (2) Unvested Award
Shares are transferred by the Recipient as a bona fide gift (i) to the spouse, lineal descendant or
lineal ascendant, siblings and children by adoption of the Recipient, (ii) to a trust for the
benefit of one or more individuals described in clause (i) and no other persons, or (iii) to a
partnership of which the only partners are one or more individuals described in clause (i), in
which case the transferee shall be subject to all provisions of this Restricted Stock Agreement.
If Unvested Award Shares are transferred pursuant to (1) or (2) above, the Recipient agrees to
notify the Committee at least thirty (30) days prior to such transfer, and the Committee may
require that the transferee thereof execute and deliver to the Company such documents and
agreements as the Company shall reasonably require to evidence the fact that the Award Shares to be
owned, either directly or beneficially, by such transferee shall continue to be subject to all the
restrictions set forth in this Agreement and all applicable rights in favor of the Company set
forth elsewhere herein, and that such transferee is subject to and bound by such restrictions and
provisions. The restrictions of this Section 2.2 shall not apply to Vested Award Shares.

     2.3 Dividends & Voting Rights. Recipient shall be entitled to dividends paid or
declared on Vested and Unvested Award Shares for which the record date is on or after the date such
Award Shares have been issued in the Recipient’s name. Recipient shall be entitled to vote all
Vested and Unvested Award Shares for which the record date is on or after the date such Award
Shares have been issued in the Recipient’s name. Recipient shall have no rights whatsoever
(dividend, voting or otherwise) with respect to Award Shares which have been forfeited under
Section 2.1.

3 General Provisions

     3.1 Change in Capitalization. If the number of outstanding shares of the Common Stock
shall be increased or decreased by a change in par value, split-up, stock split, reverse stock
split, reclassification, distribution of common stock dividend, or other similar capital
adjustment, an appropriate adjustment shall be made by the Board of Directors in the number and
kind of Vested and Unvested Award Shares, such that Recipient’s proportionate interest in Vested
and Unvested Award Shares shall be maintained as before the occurrence of the event. No fractional
shares shall be issued in making such adjustment. All adjustments made by the Board of Directors
under this Section shall be final, binding, and conclusive.

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Inc. Executive Incentive plan Restricted Stock Agreement

Page 4

 

 

     3.2 Legends . Each certificate representing the Award Shares shall be
endorsed with the following legend:

Shares are Restricted & Subject to Forfeiture

The securities evidenced by this certificate are subject to certain
restrictions (including restrictions on transferability) and are subject
to forfeiture, all as set forth in a Restricted Stock Agreement dated
                                        
, a copy of which is available from the
Company.

The securities evidenced by this certificate may not be sold,
transferred, assigned or hypothecated unless (1) there is an effective
registration under the Securities Act of 1933 covering such securities,
(2) the transfer is made in compliance with Rule 144 promulgated under
such act, or (3) the issuer receives an opinion of counsel, reasonably
satisfactory to the Company, stating that such sale, transfer, assignment
or hypothecation is exempt from the registration requirements of such
act.

     3.3 Removal of Legend . Any legend endorsed on a certificate representing
Award Shares pursuant to Section 3.2 above shall be removed and the Company shall issue a
certificate without such legend to the holder thereof if such Award Shares become Vested Award
Shares pursuant to this Agreement.

     3.4 Governing Laws. This Agreement shall be construed, administered and enforced
according to the laws of the State of Delaware.

     3.5 Successors. This Agreement shall be binding upon and inure to the benefit of
the heirs, legal representatives, successors, and permitted assigns of the parties.

     3.6 Severability. In the event that any one or more of the provisions or portion
thereof contained in this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, the same shall not invalidate or otherwise affect any other
provisions of this Agreement, and this Agreement shall be construed as if the invalid, illegal or
unenforceable provision or portion thereof had never been contained herein.

     3.7 Entire Agreement. Subject to the terms and conditions of the Plan, this
Agreement expresses the entire understanding and agreement of the parties with respect to the
subject matter. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same instrument.

     3.8 Headings. Paragraph headings used herein are for convenience of reference only
and shall not be considered in construing this Agreement.

     3.9 No Employment Rights Created. Neither the establishment of the Plan nor the
award of Award Shares hereunder shall be construed as giving Recipient the right to continued
employment with the Company.

     3.10 Capitalized Terms. All capitalized terms used in this Agreement shall have the
meanings given to them herein or in the Plan.

     3.11 Specific Performance. In the event of any actual or threatened default in, or
breach of, any of the terms, conditions and provisions of this Agreement, the party or parties who
are thereby aggrieved shall have the right to specific performance and injunction in addition to
any and all other rights and remedies at law or in equity, and all such rights and remedies shall
be cumulative.

     3.12 No Disclosure Duty. The Recipient and the Company acknowledge and agree that
neither the Company nor its directors, officers or employees have any duty or obligation to
disclose to the Recipient any material information regarding the business of the Company or
affecting the value of the Award Shares.

Lodgian,
Inc. Executive Incentive plan Restricted Stock Agreement

Page 5

 

 

     IN WITNESS WHEREOF, the parties have executed and sealed this Agreement on the day and year
first set forth above.

	 	 	 
	Company:

	 	Recipient:
	Lodgian, Inc.:

	 	[Participant Name]
	 
	 	 
	 
	 	 
	 
	 	 
	By:
	 	 
	 

	 	 
	Its:
	 	 
	 

	 	 
	 
	 	 
	Attest:
	 	 
	 
	 	 
	By:
	 	 
	 

	 	 
	Its:
	 	 
	 

	 	 

Lodgian,
Inc. Executive Incentive plan Restricted Stock Agreement

Page 6

 

 

Exhibit 1

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE

     The undersigned taxpayer (the “Taxpayer”) hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in his gross income for the current taxable
year, the amount of any compensation taxable to him in connection with his receipt of the property
described below:

     1. The name, address and taxpayer identification number of the undersigned Taxpayer are as
follows:

	 	 	 
	Name:
	 	 
	 

	 	 
	 
	 	 
	Address:
	 	 
	 

	 	 
	 
	 	 
	Social Security Number (TIN):
	 	 
	 

	 	 

     2. The property with respect to which the election is made is:

                                                                     
 shares of common stock of Lodgian, Inc.

     3. The date on which the property was transferred and the taxable year for which this election
is made are:

Date on Which Property Was Transferred:
                                        
                                                            

Taxable Year for Which Election is Made:
                                        
                                                            

     4. The property is subject to transferability, forfeiture and other restrictions, all as set
forth in a Restricted Stock Agreement between the Taxpayer and Lodgian, Inc.

     5. The fair market value at the time of transfer, determined without regard to any restriction
other than a restriction which by is terms will never lapse, of such property is:

$                                        /
Share
x      
                                    Shares
 =
$                                        

     6. No amount was paid for such property.

     The undersigned Taxpayer has submitted copies of this statement to Lodgian, Inc., the person
for whom the services were performed in connection with the Taxpayer’s receipt of the
above-described property. The Taxpayer is the person performing the services in connection with
the transfer of said property. The undersigned Taxpayer understands that the foregoing election
may not be revoked except with the consent of the Commissioner, which will only
be granted when the Taxpayer is under a mistake of fact as to the underlying transaction and when
made within 60 days of the date such mistake of fact first became known to the Taxpayer.

     The undersigned Taxpayer understands and acknowledges that, for this election to be
effective, copies of this completed election form must be filed with the Internal Revenue Service
(at the location where the Taxpayer’s income tax return would be filed) not later than 30 days
after the date the above-described property was transferred to the Taxpayer, and must also be
submitted with the Taxpayer’s federal income tax return for the taxable year in which the
above-described property was transferred. A copy of this completed election must also be submitted
to Lodgian, Inc., along with full payment of amounts required to be withheld under applicable law,
within 10 days after the date the above-described property was transferred to the Taxpayer.

Dated this          day of
                    ,20                    .

Signature:                                                                                    

Name of Taxpayer:
                                                            

Exhibit 2

WITHHOLDING ELECTION

WITH RESPECT TO RESTRICTED STOCK GRANTED UNDER

Lodgian, Inc. Executive Incentive Plan

Withholding Election Form

 

 

THE LODGIAN, INC. EXECUTIVE INCENTIVE PLAN

	 	 	 
	TO: Lodgian, Inc.

	 	Restricted Stock Agreement:
	 
	 

	 	Restricted Stock Agreement between the Recipient
	RE: Withholding Election

	 	(designated below) and Lodgian, Inc. (the “Company”).
	 
	 	 
	This election relates to the number
of shares of common stock of the Company
which will vest on the date noted below

	 	Date of Agreement:
	(the “Vesting Shares”):

	 	 

	 

	 	Total Number of Restricted Shares subject to Restricted
	Number of Vesting Shares:

	 	Stock Agreement:
	 

	 	 

	 
	 	 
	Date of Vesting:
	 	 
	 
	 	 

I, the undersigned Recipient, hereby certify that:

1. My correct name and social security number and my current address are set forth at the end of
this document.

2. I have read and understand the Restricted Stock Agreement and the various methods by which
withholding obligations regarding the Vesting Shares subject to the Restricted Stock Agreement may
be satisfied.

3. I do hereby elect the following method of withholding pursuant to Section 1.5 of the Restricted
Stock Agreement with respect to any withholding or other tax obligations (whether federal, state or
local) imposed on the Company by reason of the substantial vesting of the Vesting Shares (the
“Withholding Obligations”), assuming that I have met all requirements under the Plan relative to
such election and such election is approved by the Company:

	o 	 	In accordance with Section 1.5(b)(1), I hereby elect to pay to
the Company the entire amount of all Withholding Obligations with
respect to the Vesting Shares in cash or by check on or before the
Date of Vesting.
	 
	o	 	In accordance with Section 1.5(b)(2), I hereby elect that the
entire amount of all Withholding Obligations with respect to the
Vesting Shares should be paid by having the Company repurchasing
the smallest whole number of the Vested Shares which, when
multiplied by the fair market value per share of the common stock
of the Company as of the close of business on the business day
which is coincident with or immediately follows the Date of
Vesting, will be sufficient to satisfy the amount of such
Withholding Obligations, and applying all the proceeds from such
repurchase to such Withholding Obligations. I further acknowledge
and understand that the repurchase by the Company of any Vested
Shares may result in tax consequences to me.
	 
	o	 	 In accordance with Section 1.5(b)(3), I hereby elect for the
Company to withhold substantially equal amounts from my future
compensation so that the total of such amounts shall, as of the
Date of Vesting, be designed to be sufficient to satisfy the amount
of all Withholding Obligations with respect to the Vesting Shares.

4. I understand that capitalized terms used in this Notice of Withholding Election without
definition herein shall have the meanings given to them in the Restricted Stock Agreement and in
the Plan.

	 	 	 
	Dated this ___day of ___, 20___

	 	Recipient:
	 
	 	 
	Recipient’s Address:
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	Printed Name:
	 

	 	 

	 
	 	 
	 

	 	Social Security Number: ______ — ______ — ______
	 

	 	 

Lodgian, Inc. Executive Incentive Plan Restricted Stock Agreement

Page 8

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