Document:

Exhibit 10.22

 

Exhibit 10.22

SEVERANCE/CHANGE IN CONTROL AGREEMENT

          THIS SEVERANCE/CHANGE IN CONTROL AGREEMENT (the “Agreement”), is made and entered into this
5th day of March 2007, by and between Hanesbrands Inc., a Maryland corporation (the
“Company ”), and Joia M. Johnson (“Executive”).

          WHEREAS, Executive is an employee of Company, Company desires to foster the continuous
employment of Executive and has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of Executive to her duties free from distractions
which could arise in anticipation of an involuntary termination of employment or a Change in
Control of Company;

          NOW, THEREFORE, in consideration of the mutual agreements herein set forth, Company and
Executive agree as follows:

     1. Term and Nature of Agreement. This Agreement shall commence on the date it is fully
executed (“Execution Date”) by all parties and shall continue in effect unless the Company gives at
least eighteen (18) months prior written notice that this Agreement will not be renewed. In the
event of such notice, this Agreement will expire on the next anniversary of the Execution Date that
is at least eighteen (18) months after the date of such notice. Notwithstanding the foregoing, if
a Change in Control occurs during any term of this Agreement, the term of this Agreement shall be
extended automatically for a period of twenty-four (24) months after the end of the month in which
the Change in Control occurs. Except to the extent otherwise provided, the parties intend for this
Agreement to be construed and enforced as an unfunded welfare benefit plan under the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) including without limitation the
jurisdictional provisions of ERISA.

     2. Involuntary Termination Benefits. Executive shall be eligible for severance benefits upon
an involuntary termination of employment under the terms and conditions specified in this section
2.

     (a) Eligibility for Severance.

	 	(i)	 	Eligible Terminations. Subject to subparagraph (a)(ii) below,
Executive shall be eligible for severance payments and benefits under this
section 2 if her employment terminates under one of the following
circumstances:

	 	(A)	 	Executive’s employment is terminated
involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or
	 
	 	(B)	 	Executive terminates her employment at the
request of Company.

	 	(ii)	 	Ineligible Terminations. Notwithstanding subparagraph (a)(i)
next above, Executive shall not be eligible for any severance payments or
benefits under this section 2 if her employment terminates under any of the
following circumstances:

 

 

	 	(A)	 	A termination for Cause. For purposes of this
Agreement, “Cause” means Executive has been convicted of (or pled
guilty or no contest to) a felony or any crime involving fraud,
embezzlement, theft, misrepresentation of financial impropriety; has
willfully engaged in misconduct resulting in material harm to Company;
has willfully failed to substantially perform duties after written
notice; or is in willful violation of Company policies resulting in
material harm to Company;
	 
	 	(B)	 	A termination as the result of Disability. For
purposes of this Agreement “Disability” shall mean a determination
under Company’s disability plan covering Executive that Executive is
disabled;
	 
	 	(C)	 	A termination due to death;
	 
	 	(D)	 	A termination due to Retirement. For purposes
of this Agreement “Retirement” shall mean Executive’s voluntary
termination of employment on or after Executive’s attainment of the
normal retirement age as defined in the Hanesbrands Inc. Pension and
Retirement Plan (the “Retirement Plan”);
	 
	 	(E)	 	A voluntary termination of employment other
than at the request of Company;
	 
	 	(F)	 	A termination following which Executive is
immediately offered and accepts new employment with Company, or becomes
a non-executive member of the Board;
	 
	 	(G)	 	The transfer of Executive’s employment to a
subsidiary or affiliate of Company with her consent;
	 
	 	(H)	 	A termination of employment that qualifies
Executive to receive severance payments or benefits under section 3
below following a Change in Control; or
	 
	 	(I)	 	Any other termination of employment under
circumstances not described in subparagraph 2(a)(i).

	 	(iii)	 	Characterization of Termination. The characterization of
Executive’s termination shall be made by the Committee (as defined in section 5
below) which determination shall be final and binding.
	 
	 	(iv)	 	Termination Date. For purposes of this section 2, Executive’s
“Termination Date” shall mean the date specified in the separation and release
agreement described under section 2(e) below.

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	 	(b)	 	Severance Benefits Payable. If Executive is terminated under circumstances
described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then in
lieu of any benefits payable under any other severance plan of the Company of any type
and in consideration of the separation and release agreement and the covenants
contained herein, the following shall apply:

	 	(i)	 	Executive shall receive continued payment of her Base Salary
(the “Salary Portion of Severance”) during the “Severance Period”. The
“Severance Period” shall mean the number of months determined by multiplying
the number of Executive’s full years of employment with Company or any
subsidiary or affiliate of Company (including periods of employment with Sara
Lee Corporation) by two; provided, however, that in no event shall the
Severance Period be less than twelve months or more than twenty-four months.
“Base Salary” shall mean the annual salary in effect for Executive immediately
prior to her Termination Date. At the discretion of the Committee, Executive
may receive an additional salary portion in an amount equal to as much as 100%
of Executive’s target bonus.
	 
	 	(ii)	 	Executive shall receive a pro-rata amount (determined based
upon the number of days from the first day of the Company’s current fiscal year
to Executive’s Termination Date divided by the total number of days in the
applicable performance period) of:

	 	(A)	 	The annual incentive, if any, payable under the
Annual Incentive Plan in effect with respect to the fiscal year or
Short Year in which the Termination Date occurs based on actual fiscal
year performance (the “Annual Incentive Portion of Severance”). In
this Agreement, “Short Year” means an incentive period of less than 12
months duration occurring immediately subsequent to the Company’s exit
from the Sara Lee Corporation’s controlled group of corporations
(within the meaning of Section 1563(a) of the Code)). “Annual
Incentive Plan” means the Hanesbrands Inc. annual incentive plan in
which Executive participates as of the Termination Date; and
	 
	 	(B)	 	The long-term incentive payable under the
Omnibus Plan in effect on Executive’s Termination Date for any
performance period or cycle that is at least fifty (50) percent
completed prior to Executive’s Termination Date and which relates to
the period of her service prior to her Termination Date. The “Omnibus
Plan” means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as
amended from time to time, and any successor plan or plans. The
long-term incentive described in this section (“Long-Term Cash
Incentive Plan ”) includes cash long-term incentives, but does not
include stock options, RSUs, or other equity awards.

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	 	 	 	Treatment of stock options, RSUs, or other equity awards shall be determined
pursuant to the Executive’s award agreement(s). Executive shall not be
eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive
Plan grants, or any other grants of stock options, RSUs, or other equity
awards under the Omnibus Plan during the Severance Period.
	 
	 	(iii)	 	Beginning on her Termination Date, Executive shall be eligible
to elect continued coverage under the group medical and dental plan available
to similarly situated senior executives. If Executive elects continuation
coverage for medical coverage, dental coverage or both, Company shall subsidize
the premium charged during the Severance Period so that the amount of such
premium payable by such Executive shall equal the amount payable by an active
executive of Company for similar coverage as adjusted from time to time;
provided, however, that Executive’s right to COBRA continuation coverage under
any such group health plan shall be reduced by the number of months of medical
and dental coverage otherwise provided pursuant to this subparagraph. The
premium charged for any COBRA continuation coverage after the end of the
Severance Period shall be entirely at Executive’s expense and shall be
different (greater) than the premium charged during the Severance Period.
Executive’s COBRA continuation coverage shall terminate in accordance with the
COBRA continuation of coverage provisions under Company’s group medical and
dental plans. If Executive is eligible for early retirement under the terms of
the Retirement Plan (or would become eligible if the Severance Period is
considered as employment), then, after exhausting any COBRA continuation
coverage under the group medical plan, Executive may elect to participate in
any retiree medical plan available to similarly situated senior executives in
accordance with the terms and conditions of such plan in effect on and after
Executive’s Termination Date; provided, that such retiree medical coverage
shall not be available to Executive unless she elects such coverage within
thirty (30) days following her Termination Date. The premium charged for such
retiree medical coverage may be different (greater) than the premium charged an
active employee for similar coverage;
	 
	 	(iv)	 	Except as otherwise provided herein or in the applicable plan,
participation in all other Company plans available to similarly situated senior
executives including but not limited to, qualified pension plans, stock
purchase plans, matching grant programs, 401(k) plans and ESOPs, personal
accident insurance, travel accident insurance, short and long term disability
insurance, and accidental death and dismemberment insurance, shall cease on
Executive’s Termination Date. During the Severance Period, Company shall
continue to maintain life insurance covering Executive under Company’s life
insurance program. If Executive is eligible for early retirement or becomes
eligible for early retirement during the Severance Period, then Company will
continue to pay the premiums

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	 	 	 	(or prepay the entire premium) so that Executive has a paid-up life
insurance benefit equal to her annual salary on her Termination Date.

	 	(c)	 	Payment of Severance. The Salary Portion of Severance shall be paid in
accordance with Company’s payroll schedule, unless the Committee shall elect to pay the
Salary Portion of Severance in a lump sum payment or a combination of regular payments
and a lump sum payment. Any lump sum payment shall be made as soon as practicable
following the Termination Date, but in no event later than the fifteenth day of the
third month after the date of termination), unless Company reasonably determines that
Section 409A of the United States Internal Revenue Code of 1986, as amended, and any
successors thereto (the “Code”) will result in the imposition of additional tax on
account of such payment before the expiration of the six-month period described in
Section 409A(a)(2)(B)(i) in which case, all missed payments will be paid on the date
that is six (6) months and one (1) day following the date of Executive’s separation
from service (as defined in Code Section 409A) or, if earlier, the date of death of
Executive (the “Delayed Payment Date”). The Annual Incentive Portion of Severance, if
any, shall be paid in cash on the same date the active participants under the Annual
Incentive Plan are paid. The Long-Term Cash Incentive Plan payout, if any, shall be
paid in the same form and on the same date the active participants under the Omnibus
Plan are paid. All payments hereunder shall be reduced by such amount as Company (or
any subsidiary or affiliate of Company) may be required under all applicable federal,
state, local or other laws or regulations to withhold or pay over with respect to such
payment.
	 
	 	(d)	 	Termination of Benefits. Notwithstanding any provisions in this Agreement to
the contrary, all rights to receive or continue to receive severance payments and
benefits under this section 2 shall cease on the earliest of: (i) the date Executive
breaches any of the covenants in the separation and release agreement described in
section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its
subsidiaries or affiliates.
	 
	 	(e)	 	Separation and Release Agreement. No benefits under this section 2 shall be
payable to Executive until Executive and Company have executed a separation and release
agreement and the payment of severance benefits under this section 2 shall be subject
to the terms and conditions of the separation and release agreement.
	 
	 	(f)	 	Death of Executive. In the event that Executive shall die prior to the payment
in full of any benefits described above as payable to Executive for Involuntary
Termination, payments of such benefits shall cease on the date of Executive’s death.

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	3.	 	Change in Control Benefits.

	 	(a)	 	Eligibility for Change in Control Benefits.

	 	(i)	 	Eligible Terminations. If (A) within three (3) months
preceding a Change in Control, the Executive’s employment is terminated by the
Company at the request of a third party in contemplation of a Change in
Control, (B) within twenty-four (24) months following a Change in Control,
Executive’s employment is terminated by Company other than on account of
Executive’s death, disability or retirement and other than for Cause, or (C)
within twenty-four (24) months following a Change in Control Executive
voluntarily terminates her employment for Good Reason, Executive shall be
entitled to the Change in Control benefits as described in section 3(b) below.
	 
	 	(ii)	 	Good Reason. For purposes of this section 3, “Good Reason”
means the occurrence of any one or more of the following (without Executive’s
written consent after a Change in Control):

	 	(A)	 	A material adverse change in Executive’s duties
or responsibilities;
	 
	 	(B)	 	A reduction in Executive’s annual base salary
except for any reduction of not more than ten (10) percent applicable
to all senior executives;
	 
	 	(C)	 	A material reduction in Executive’s level of
participation in any of Company’s short- and/or long-term incentive
compensation plans, or employee benefit or retirement plans, policies,
practices or arrangements in which Executive participates except for
any reduction applicable to all senior executives;
	 
	 	(D)	 	The failure of any successor to Company to
assume and agree to perform this Agreement;
	 
	 	(E)	 	Company’s requiring Executive to be based at an
office location which is at least fifty (50) miles from her office
location at the time of the Change in Control;

	 	 	 	The existence of Good Reason shall not be affected by Executive’s temporary
incapacity due to physical or mental illness not constituting a Disability.
Executive’s retirement shall constitute a waiver of her rights with respect
to any circumstance constituting Good Reason. Executive’s continued
employment shall not constitute a waiver of her rights with respect to any
circumstances which may constitute Good Reason; provided, however, that
Executive may not rely on any particular action or event described in clause
(A) through (E) above as a basis for terminating her employment for Good
Reason unless she delivers a Notice of Termination based on that action or
event within six months after its

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	 	 	 	occurrence and Company has failed to correct the circumstances cited by
Executive as constituting Good Reason within thirty (30) days of receiving
the Notice of Termination.
	 
	 	(iii)	 	Change in Control. For purposes of this Agreement, a “Change
in Control” will occur:

	 	(A)	 	Upon the acquisition by any individual, entity
or group, including any Person (as defined in the United States
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of
beneficial ownership (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of twenty (20) percent or more
of the combined voting power of the then outstanding capital stock of
Company that by its terms may be voted on all matters submitted to
stockholders of Company generally (“Voting Stock”); provided, however,
that the following acquisitions shall not constitute a Change in
Control:

	 	1)	 	Any acquisition directly from
Company (excluding any acquisition resulting from the exercise
of a conversion or exchange privilege in respect of outstanding
convertible or exchangeable securities unless such outstanding
convertible or exchangeable securities were acquired directly
from Company);
	 
	 	2)	 	Any acquisition by Company;
	 
	 	3)	 	Any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by
Company or any corporation controlled by Company; or
	 
	 	4)	 	Any acquisition by any
corporation pursuant to a reorganization, merger or
consolidation involving Company, if, immediately after such
reorganization, merger or consolidation, each of the conditions
described in clauses (1), (2) and (3) of subparagraph
3(a)(iii)(B) below shall be satisfied; and provided further
that, for purposes of clause (2) immediately above, if (i) any
Person (other than Company or any employee benefit plan (or
related trust) sponsored or maintained by Company or any
corporation controlled by Company) shall become the beneficial
owner of twenty (20) percent or more of the Voting Stock by
reason of an acquisition of Voting Stock by Company, and (ii)
such Person shall, after such acquisition by Company, become the
beneficial owner of any additional shares of the Voting Stock
and such beneficial ownership is publicly

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	 	 	 	announced, then such additional beneficial ownership shall
constitute a Change in Control; or

	 	(B)	 	Upon the consummation of a reorganization,
merger or consolidation of Company, or a sale, lease, exchange or other
transfer of all or substantially all of the assets of Company;
excluding, however, any such reorganization, merger, consolidation,
sale, lease, exchange or other transfer with respect to which,
immediately after consummation of such transaction:

	 	1)	 	All or substantially all of the
beneficial owners of the Voting Stock of Company outstanding
immediately prior to such transaction continue to beneficially
own, directly or indirectly (either by remaining outstanding or
by being converted into voting securities of the entity
resulting from such transaction), more than fifty (50) percent
of the combined voting power of the voting securities of the
entity resulting from such transaction (including, without
limitation, Company or an entity which as a result of such
transaction owns Company or all or substantially all of
Company‘s property or assets, directly or indirectly) (the
“Resulting Entity”) outstanding immediately after such
transaction, in substantially the same proportions relative to
each other as their ownership immediately prior to such
transaction; and
	 
	 	2)	 	No Person (other than any Person
that beneficially owned, immediately prior to such
reorganization, merger, consolidation, sale or other
disposition, directly or indirectly, Voting Stock representing
twenty (20) percent or more of the combined voting power of
Company’s then outstanding securities) beneficially owns,
directly or indirectly, twenty (20) percent or more of the
combined voting power of the then outstanding securities of the
Resulting Entity; and
	 
	 	3)	 	At least a majority of the
members of the board of directors of the entity resulting from
such transaction were members of the board of directors of
Company (the “Board”) at the time of the execution of the
initial agreement or action of the Board authorizing such
reorganization, merger, consolidation, sale or other
disposition; or

	 	(C)	 	Upon the consummation of a plan of complete
liquidation or dissolution of Company; or

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	 	(D)	 	When the Initial Directors cease for any reason
to constitute at least a majority of the Board. For this purpose, an
“Initial Director” shall mean those individuals serving as the
directors of Company immediately after Company ceased to be
wholly-owned by Sara Lee Corporation; provided, however, that any
individual who becomes a director of Company at or after the first
annual meeting of stockholders of Company whose election, or nomination
for election by the Company’s stockholders, was approved by the vote of
at least a majority of the Initial Directors then comprising the Board
(or by the nominating committee of the Board, if such committee is
comprised of Initial Directors and has such authority) shall be deemed
to have been an Initial Director; and provided further, that no
individual shall be deemed to be an Initial Director if such individual
initially was elected as a director of Company as a result of: (1) an
actual or threatened solicitation by a Person (other than the Board)
made for the purpose of opposing a solicitation by the Board with
respect to the election or removal of directors; or (2) any other
actual or threatened solicitation of proxies or consents by or on
behalf of any Person (other than the Board).

	 	(iv)	 	Termination Date. For purposes of this section 3, “Termination
Date” shall mean the date specified in the Notice of Termination as the date on
which the conditions giving rise to Executive’s termination were first met.

	(b)	 	Change in Control Benefits. In the event Executive becomes entitled to receive
benefits under this section 3, the following shall apply:

	 	(i)	 	In consideration of Executive’s covenant in section 4 below,
Company shall pay Executive:

	 	(A)	 	A lump sum payment equal to the unpaid portion
of Executive’s annual Base Salary and vacation accrued through the
Termination Date;
	 
	 	(B)	 	A lump sum payment equal to Executive’s
prorated Annual Incentive Plan payment (as determined in accordance
with subparagraph 2(b)(ii)(A) above;
	 
	 	(C)	 	A lump sum payment equal to Executive’s
prorated Long-Term Cash Incentive Plan payment(as determined in
accordance with subparagraph 2(b)(ii)(B) above; and
	 
	 	(D)	 	A lump sum payment equal to two times the sum
of (1) Executive’s annual Base Salary; and (2) the greater of (i)
Executive’s target annual incentive (as defined in the Annual Incentive
Plan) for the year in which the Change in Control occurs and (ii)
Executive’s

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	 	 	 	average annual incentive calculated over the three fiscal years
immediately preceding the year in which the Change in Control occurs
(including for this purpose any annual incentive received from Sara
Lee Corporation); and (3) an amount equal to the Company matching
contribution to the defined contribution plan in which Executive is
participating at the Termination Date (currently 4%).

	 	 	 	Treatment of stock options, RSUs, or other equity awards shall be determined
pursuant to the Executive’s award agreement(s). Executive shall not be
eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive
Plan grants, or any other grants of stock options, RSUs, or other equity
awards under the Omnibus Plan with respect to the CIC Severance Period as
defined immediately below.
	 
	 	(ii)	 	For a period of 24 months following Executive’s Termination
Date (the “CIC Severance Period”), Executive shall have the right to elect
continuation of the health insurance, life insurance, personal accident
insurance, travel accident insurance and accidental death and dismemberment
insurance coverages which insurance coverages shall be provided at the same
levels and the same costs in effect immediately prior to the Change in Control;
provided, however, that Executive’s right to COBRA continuation coverage under
any group health plan shall be reduced by the number of months of coverage
otherwise provided pursuant to this subparagraph. The premium charged for any
COBRA continuation coverage after the end of the CIC Severance Period shall be
entirely at Executive’s expense and may be different (greater) than the premium
charged during the CIC Severance Period. Executive’s COBRA continuation
coverage shall terminate in accordance with the COBRA continuation of coverage
provisions under Company’s group medical and dental plans. If Executive is
eligible for early retirement under the terms of the Retirement Plan (or would
become eligible if the Severance Period is considered as employment), then,
after exhausting any COBRA continuation coverage under the group medical plan,
Executive may elect to participate in any retiree medical plan available to
similarly situated senior executives in accordance with the terms and
conditions of such plan in effect on and after Executive’s Termination Date;
provided, that such retiree medical coverage shall not be available to
Executive unless she elects such coverage within thirty (30) days following her
Termination Date. The premium charged for such retiree medical coverage may be
different from the premium charged an active employee for similar coverage;
	 
	 	(iii)	 	If the aggregate benefits accrued by Executive as of the
Termination Date under the savings and retirement plans sponsored by Company
are not fully vested pursuant to the terms of the applicable plan(s), the
difference between the benefits Executive is entitled to receive under such
plans and

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	 	 	 	the benefits she would have received had she been fully vested will be
provided to Executive under the Hanesbrands Inc. Supplemental Employee
Retirement Plan (the “Supplemental Plan”). In addition, for purposes of
determining Executive’s benefits under the Supplemental Plan and Executive’s
right to post-retirement medical benefits under Company’s retiree medical
plan, additional years of age and service credits equivalent to the length
of the CIC Severance Period shall be included. However, Executive will not
be eligible to begin receiving any retirement benefits under any such plans
until the date she would otherwise be eligible to begin receiving benefits
under such plans;
	 
	 	(iv)	 	Except as otherwise provided herein or in the applicable plan,
participation in all other plans of Company or any subsidiary or affiliate of
Company available to similarly situated Executives of Company, shall cease on
Executive’s Termination Date.

	(c)	 	Termination for Disability. If Executive’s employment is terminated due to
Disability following a Change in Control, Executive shall receive her Base Salary
through the Termination Date, at which time her benefits shall be determined in
accordance with Company’s disability, retirement, insurance and other applicable plans
and programs then in effect, and Executive shall not be entitled to any other benefits
provided by this Agreement.
	 
	(d)	 	Termination for Retirement or Death. If Executive’s employment is terminated
by reason of her retirement or death following a Change in Control, Executive’s
benefits shall be determined in accordance with Company’s retirement, survivor’s
benefits, insurance, and other applicable programs then in effect, and Executive shall
not be entitled to any other benefits provided by this Agreement.
	 
	(e)	 	Termination for Cause, or Other Than for Good Reason or Retirement. If
Executive’s employment is terminated either by Company for Cause, or voluntarily by
Executive (other than for Retirement or Good Reason) following a Change in Control,
Company shall pay Executive her full Base Salary and accrued vacation through the
Termination Date, at the rate then in effect, plus all other amounts to which such
Executive is entitled under any compensation plans of Company, at the time such
payments are due, and Company shall have no further obligations to such Executive under
this Agreement.
	 
	(f)	 	Separation and Release Agreement. No benefits under this section 3 shall be
payable to Executive until Executive and Company have executed a “Separation and
Release Agreement” (in substantially the form attached hereto as Exhibit A) and the
payment of change in control benefits under this section 3 shall be subject to the
terms and conditions of the Separation and Release Agreement.
	 
	(g)	 	Deferred Compensation. All amounts previously deferred by or accrued to the
benefit of Executive under any nonqualified deferred compensation plan sponsored by
Company (including, without limitation, any vested amounts

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	 	 	deferred under incentive plans), together with any accrued earnings thereon, shall
be paid in accordance with the terms of such plan following Executive’s termination.
	 
	(h)	 	Notice of Termination. Any termination of employment under this section 3 by
Company or by Executive for Good Reason shall be communicated by a written notice which
shall indicate the specific Change in Control termination provision relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive’s employment under the provision so indicated (a
“Notice of Termination”).
	 
	(i)	 	Termination of Benefits. All rights to receive or continue to receive
severance payments and benefits pursuant to this section 3 by reason of a Change in
Control shall cease on the date Executive becomes reemployed by Company or any of its
subsidiaries or affiliates.
	 
	(j)	 	Form and Timing of Benefits. Subject to the provisions of this section 3, the
Change in Control benefits described herein shall be paid in cash to in a single lump
sum as soon as practicable following the Termination Date, but in no event later than
the fifteenth day of the third month after the date of termination, unless Company
reasonably determines that Code Section 409A will result in the imposition of
additional tax on account of such payment before the expiration of the six-month period
described in Code Section 409A(a)(2)(B)(i) in which case such payment will be paid on
the Delayed Payment Date as defined in section 2(c) of this Agreement.
	 
	(k)	 	Excise Tax Equalization Payment. Subject to the limitation below, in the event
that Executive becomes entitled to any payment or benefit under this section 3 (such
benefits together with any other payments or benefits payable under any other agreement
with, or plan or policy of, Company are referred to in the aggregate as the “Total
Payments”), if all or any part of the Total Payments will be subject to the tax (the
“Excise Tax”) imposed by Code Section 4999 (or any similar tax that may hereafter be
imposed), Company shall pay to Executive in cash an additional amount (the “Gross-Up
Payment”) such that the net amount retained by Executive after deduction of any Excise
Tax on the Total Payments and any federal, state and local income tax, penalties,
interest and Excise Tax upon the Gross-Up Payment provided for by this section 3
(including FICA and FUTA), shall be equal to the Total Payments. Any such payment
shall be made by Company to Executive as soon as practical following the Termination
Date, but in no event beyond twenty (20) days from such date. Executive shall only be
entitled to a Gross-Up Payment under this section 3 if Executive’s “parachute payments”
(as such term is defined in Code Section 280G) exceed three hundred thirty percent
(330%) (the “Threshold”) of Executive’s “base amount” (as determined under Code Section
280G(b)). In the event Executive’s parachute payments do not exceed the Threshold, the
benefits provided to such Executive under this Agreement that are classified as
parachute payments shall be reduced such that the value of the Total Payments that
Executive is entitled to receive shall

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	 	 	be one dollar ($1) less than the maximum amount which such Executive may receive
without becoming subject to the tax imposed by Code Section 4999, or which Company
may pay without loss of deduction under Code Section 280G(a). For purposes of
determining whether any of the Total Payments will be subject to the Excise Tax, the
amounts of such Excise Tax and the amount of any Gross Up Payment, the following
shall apply:

	 	(i)	 	Any other payments or benefits received or to be received by
Executive in connection with a Change in Control or Executive’s termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
policy, arrangement or agreement with Company, or with any Person whose actions
result in a Change in Control or any Person affiliated with Company or such
Persons) shall be treated as “parachute payments” within the meaning of Code
Section 280G(b)(2), and all “excess parachute payments” within the meaning of
Code Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless
in the opinion of Company’s tax counsel as supported by Company’s independent
auditors and acceptable to Executive, such other payments or benefits (in whole
or in part) do not constitute parachute payments, or unless such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Code Section 280G(b)(4) in
excess of the base amount within the meaning of Code Section 280G(b)(3), or are
otherwise not subject to the Excise Tax;
	 
	 	(ii)	 	The amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (A) the total amount
of the Total Payments; or (B) the amount of excess parachute payments within
the meaning of Code Section 280G(b)(1) (after applying the provisions of this
section 3(i) above);
	 
	 	(iii)	 	The value of any noncash benefits or any deferred payment or
benefit shall be determined by Company’s independent auditors in accordance
with the principles of Code Sections 280G(d)(3) and (4);
	 
	 	(iv)	 	Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of Executive’s
residence on the Termination Date, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes;
	 
	 	(v)	 	In the event the Internal Revenue Service adjusts any item
included in Company’s computations under this section 3(j) so that Executive
did not receive the full net benefit intended under the provisions of this
section 3(j), Company shall reimburse Executive for the full amount necessary
to

13

 

	 	 	 	make Executive whole, plus a market rate of interest, as determined by the
Committee; and
	 
	 	(vi)	 	In the event the Internal Revenue Service adjusts any item
included in Company’s computations under this section 3(j) so that Executive is
not required to pay the full amount of the excise tax assumed to have been
owing in the determination of the Gross-Up Payment hereunder (or receives a
refund of all or a portion of such excise tax), Executive shall repay to
Company within twenty (20) days of the date the actual refund or credit of such
portion has been made to Executive such portion of the Gross-Up Payment as
shall exceed the amount of federal, state and local taxes actually determined
to be owed together with such interest received or credited to her by such tax
authority for the period she held such portion.

	 	(l)	 	Company’s Payment Obligation. Company’s obligation to make the payments and
the arrangements provided in this section 3 shall be absolute and unconditional, and
shall not be affected by any circumstances, including, without limitation, any offset,
counterclaim, recoupment, defense, or other right which Company may have against
Executive or anyone else. All amounts payable by Company under this section 3 shall be
paid without notice or demand and each and every payment made by Company shall be
final, and Company shall not seek to recover all or any part of such payment from
Executive or from whomsoever may be entitled thereto, for any reason except as provided
in section 3(j) above.
	 
	 	(m)	 	Other Employment. Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under this section 3, and the
obtaining of any such other employment shall in no event result in any reduction of
Company’s obligations to make the payments and arrangements required to be made under
this section 3, except to the extent otherwise specifically provided in this Agreement.
	 
	 	(n)	 	Payment of Legal Fees and Expenses. To the extent permitted by law, Company
shall pay all reasonable legal fees, costs of litigation or arbitration, prejudgment or
pre-award interest, and other expenses incurred in good faith by Executive as a result
of Company’s refusal to provide benefits under this section 3, or as a result of
Company contesting the validity, enforceability or interpretation of the provisions of
this section 3, or as the result of any conflict (including conflicts related to the
calculation of parachute payments or the characterization of Executive’s termination)
between Executive and Company; provided that the conflict or dispute is resolved in
Executive’s favor and Executive acts in good faith in pursuing her rights under this
section 3.
	 
	 	(o)	 	Arbitration for Change in Control Benefits. Any dispute or controversy arising
under or in connection with the benefits provided under this section 3 shall promptly
and expeditiously be submitted to arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in effect

14

 

	 	 	 	at the time of such arbitration proceeding utilizing a panel of three (3)
arbitrators sitting in a location selected by Executive within fifty (50) miles from
the location of her employment with Company. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The costs
and expenses of both parties, including, without limitation, attorneys’ fees shall
be borne by Company. Pending the resolution of any such dispute, controversy or
claim, Executive (and her beneficiaries) shall, except to the extent that the
arbitrator otherwise expressly provides, continue to receive all payments and
benefits due under this section 3.

     4. Remedies. In the event of any actual or threatened breach of the provisions of this
Agreement or any separation and release agreement, the party who claims such breach or threatened
breach shall give the other party written notice and, except in the case of a breach which is not
susceptible to being cured, ten calendar days in which to cure. In the event of a breach of any
provision of this Agreement or any separation and release agreement by Executive, (i) Executive
shall reimburse Company: the full amount of any payments made under section 2(b)(i) or (ii) or
section 3(b)(i) of this Agreement (as the case may be), (ii) Company shall have the right, in
addition to and without waiving any other rights to monetary damages or other relief that may be
available to Company at law or in equity, to immediately discontinue any remaining payments due
under subparagraph 2(b)(i) or (ii) or subparagraph 3(b)(i) of this Agreement (as the case may be)
including but not limited to any remaining Salary Portion of Severance payments, and (iii) the
Severance Period or the CIC Severance Period (as the case may be) shall thereupon cease, provided
that Executive’s obligations under, if applicable, any separation and release agreement shall
continue in full force and effect in accordance with their terms for the entire duration of the
Severance Period or CIC Severance Period as applicable. In addition, Executive acknowledges that
Company will suffer irreparable injury in the event of a breach or violation or threatened breach
or violation of the provisions of this Agreement or any separation and release agreement and agrees
that in the event of an actual or threatened breach or violation of such provisions, in addition to
the other remedies or rights available to under this Agreement or otherwise, Company shall be
awarded injunctive relief in the federal or state courts located in North Carolina to prohibit any
such violation or breach or threatened violation or breach, without necessity of posting any bond
or security.

     5. Committee. Except as specifically provided herein, this Agreement shall be administered by
the Compensation and Benefits Committee of the Board (the “Committee”). The Committee may delegate
any administrative duties, including, without limitation, duties with respect to the processing,
review, investigation, approval and payment of severance/Change in Control benefits, to designated
individuals or committees.

     6. Claims Procedure. If Executive believes that she is entitled to receive severance benefits
under this Agreement, she may file a claim in writing with the Committee within ninety (90) days
after the date such Executive believes she should have received such benefits. No later than
ninety (90) days after the receipt of the claim, the Committee shall either allow or deny the claim
in writing. A denial of a claim, in whole or in part, shall be written in a manner calculated to
be understood by Executive and shall include the specific reason or reasons for the denial;
specific reference to the pertinent provisions of this Agreement on which the denial is based; a
description of any additional material or information necessary for Executive to perfect the claim

15

 

and an explanation of why such material or information is necessary; and an explanation of the
claim review procedure. Executive (or her duly authorized representative) may within sixty 60 days
after receipt of the denial of her claim request a review upon written application to the
Committee; review pertinent documents; and submit issues and comments in writing. The Committee
shall notify Executive of its decision on review within sixty (60) days after receipt of a request
for review unless special circumstances require an extension of time for processing, in which case
a decision shall be rendered as soon as possible, but not later than one-hundred twenty (120) days
after receipt of a request for review. Notice of the decision on review shall be in writing. The
Committee’s decision on review shall be final and binding on Executive and any successor in
interest. If Executive subsequently wishes to file a claim under Section 502(a) of ERISA, any
legal action must be filed within ninety (90) days of the Committee’s final decision. Executive
must exhaust the claims procedure provided in this section 6 before filing a claim under ERISA with
respect to any benefits provided under section 2 of this Agreement.

     7. Notices. Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing and either delivered in person or sent by first class, certified or
registered mail, postage prepaid, if to Company at Company’s principal place of business, and if to
Executive, at her home address most recently filed with Company, or to such other address as either
party shall have designated in writing to the other party.

     8. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of North Carolina without regard to any state’s conflict of law principles.

     9. Severability and Construction. If any provision of this Agreement is declared void or
unenforceable or against public policy, such provision shall be deemed severable and severed from
this Agreement and the balance of this Agreement shall remain in full force and effect. If a court
of competent jurisdiction determines that any restriction in this Agreement is overbroad or
unreasonable under the circumstances, such restriction shall be modified or revised by such court
to include the maximum reasonable restriction allowed by law.

     10. Waiver. Failure to insist upon strict compliance with any of the terms, covenants or
conditions hereof shall not be deemed a waiver of such term, covenant or condition.

     11. Entire Agreement Modifications. This Agreement (including all exhibits hereto) constitutes
the entire agreement of the parties with respect to the subject matter hereof and supersede all
prior agreements, oral and written, between the parties hereto with respect to the subject matter
hereof. In the event of any inconsistency between any provision of this Agreement and any
provision of any plan, employee handbook, personnel manual, program, policy, arrangement or
agreement of Company or any of its subsidiaries or affiliates, the provisions of this Agreement
shall control. This Agreement may be modified or amended only by an instrument in writing signed
by both parties.

     12. Withholding. All payments made to Executive pursuant to this Agreement will be subject to
withholding of employment taxes and other lawful deductions, as applicable.

16

 

     13. Survivorship. Except as otherwise set forth in this Agreement, to the extent necessary to
carry out the intentions of the parties hereunder the respective rights and obligations of the
parties hereunder shall survive any termination of Executive’s employment.

     14. Successors and Assigns. This Agreement shall bind and shall inure to the benefit of
Company and any and all of its successors and assigns. This Agreement is personal to Executive and
shall not be assignable by Executive. Company may assign this Agreement to any entity which (i)
purchases all or substantially all of the assets of Company or (ii) is a direct or indirect
successor (whether by merger, sale of stock or transfer of assets) of Company. Any such assignment
shall be valid so long as the entity which succeeds to Company expressly assumes Company’s
obligations hereunder and complies with its terms.

          IN WITNESS WHEREOF, Company and Executive have duly executed and delivered this Agreement as
of the day and year first above written.

	 	 	 	 	 	 	 
	EXECUTIVE	 	HANESBRANDS INC.	 	 
	 
	 	 	 	 	 	 
	/s/ Joia M. Johnson

	 	By:
	 	/s/ Kevin W. Oliver	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title:   	Executive Vice President, Human Resources	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	           3-6-07	 	 

17

 

Exhibit A

MODEL FORM

SEPARATION AND RELEASE AGREEMENT

     Hanesbrands Inc.(the “Company”) and Joia M. Johnson (“Executive”) enter into this Separation
and Release Agreement which was received by Executive on the ___ day
of                    , 200_, signed by
Executive on the ___ day of                     , 200_, and is effective on the ___ day 

of                     , 200___ (the
“Effective Date”). The Effective Date shall be no less than 7 days after the date signed by
Executive.

W I T N E S S E T H:

     WHEREAS, Executive has been employed by the Company as a                     ; and

     WHEREAS, Executive’s employment with the Company is terminated as of                     , 200___ (the
“Termination Date”); and

     WHEREAS, pursuant to that certain Severance/Change in Control Agreement between Company and
Executive dated             , 2007 (the “Change in Control Agreement”), upon a termination of
Executive’s employment that satisfies the conditions specified in the Change in Control Agreement,
Executive is entitled to Change in Control benefits provided Executive executes a separation and
release agreement acceptable to Company; and

     WHEREAS, this separation and release agreement (the “Agreement”) is intended to satisfy the
requirements of the Change in Control Agreement and to form a part of the Change in Control
Agreement in such a manner that all the rights, duties and obligations arising between Executive
and Company, including, but in no way limited to, any rights, duties and obligations that have
arisen or might arise out of or are in any way related to Executive’s employment with the Company
and the conclusion of that employment are settled herein through the joinder of the Change in
Control Agreement with this Agreement.

     NOW, THEREFORE, in consideration of the obligations of the parties under the Change in Control
Agreement and the additional covenants and mutual promises herein contained, it is further agreed
as follows:

     1. Termination Date. Executive agrees to resign Executive’s employment and all appointments
Executive holds with Company, and its subsidiaries and affiliates, on the Termination Date.
Executive understands and agrees that Executive’s employment with the Company will conclude on the
close of business on the Termination Date.

     2. Change in Control Benefits. Executive and Company agree that Executive shall receive the
Change in Control benefits, less all applicable withholding taxes and other customary payroll
deductions, provided in the Change in Control Agreement.

     3. Receipt of Other Compensation. Executive acknowledges and agrees that, other than as
specifically set forth in the Change in Control Agreement or this Agreement, following

18

 

the Termination Date, Executive is not and will not be due any compensation, including, but
not limited to, compensation for unpaid salary (except for amounts unpaid and owing for Executive’s
employment with Company, its subsidiaries or affiliates prior to the Termination Date), unpaid
bonus, severance and accrued or unused vacation time or vacation pay from the Company or any of its
subsidiaries or affiliates. Except as provided herein, Executive will not be eligible to
participate in any of the benefit plans of the Company after Executive’s Termination Date.
However, Executive will be entitled to receive benefits which are vested and accrued prior to the
Termination Date pursuant to the employee benefit plans of the Company. Any participation by
Executive (if any) in any of the compensation or benefit plans of the Company as of and after the
Termination Date shall be subject to and determined in accordance with the terms and conditions of
such plans, except as otherwise expressly set forth in the Change in Control Agreement or this
Agreement.

     4. Continuing Cooperation. Following the Termination Date, Executive agrees to cooperate with
all reasonable requests for information made by or on behalf of Company with respect to the
operations, practices and policies of the Company. In connection with any such requests, the
Company shall reimburse Executive for all out-of-pocket expenses reasonably and necessarily
incurred in responding to such request(s).

     5. Executive’s Representation and Warranty. Executive hereby represents and warrants that,
during Executive’s period of employment with the Company, Executive did not willfully or
negligently breach Executive’s duties as an employee or officer of the Company, did not commit
fraud, embezzlement, or any other similar dishonest conduct, and did not violate the Company’s
business standards.

     6. Non-Solicitation and Non-Compete. In consideration of the benefits provided under this
Agreement, Executive agrees that during Executive’s employment and for the duration of the Change
in Control Severance Period, Executive will not, without the prior written consent of Company,
either alone or in association with others, solicit for employment or assist or encourage the
solicitation for employment, any employee of Company, or any of its subsidiaries or affiliates; and
will not, without the prior written consent of Company, directly or indirectly counsel, advise,
perform services for, or be employed by, or otherwise engage or participate in any Competing
Business (regardless of whether Executive receives compensation of any kind). For purposes of this
Agreement, a “Competing Business” shall mean any commercial activity which competes or is
reasonably likely to compete with any business that the Company conducts, or demonstrably
anticipates conducting, at any time during Executive’s employment.

     7. Confidentiality. At all times after the Effective Date, Executive will maintain the
confidentiality of all information in whatever form concerning Company or any of its subsidiaries
or affiliates relating to its or their businesses, customers, finances, strategic or other plans,
marketing, employees, trade practices, trade secrets, know-how or other matters which are not
generally known outside Company or any of its subsidiaries or affiliates, and Executive will not,
directly or indirectly, make any disclosure thereof to anyone, or make any use thereof, on
Executive’s own behalf or on behalf of any third party, unless specifically requested by or agreed
to in writing by an executive officer of Company. In addition, Executive agrees that Executive
will not disclose the existence or terms of this Agreement to any third parties with the exception
of Executive’s accountants, attorneys, or spouse, and shall ensure that none of them discloses

19

 

such existence or terms to any other person, except as required to comply with law. Executive
will promptly return to Company all reports, files, memoranda, records, computer equipment and
software, credit cards, cardkey passes, door and file keys, computer access codes or disks and
instructional manuals, and other physical or personal property which Executive received or prepared
or helped prepare in connection with Executive’s employment and Executive will not retain any
copies, duplicates, reproductions or excerpts thereof. The obligations of this paragraph 7 shall
survive the expiration of this Agreement.

     8. Non-Disparagement. At all times after the Effective Date, Executive will not disparage or
criticize, orally or in writing, the business, products, policies, decisions, directors, officers
or employees of Company or any of its subsidiaries or affiliates to any person. Company also
agrees that none of its executive officers will disparage or criticize Executive to any person or
entity. The obligations of this paragraph 8 shall survive the expiration of this Agreement.

     9. Breach of Agreement. Any actual or threatened breach of this Agreement will be handled as
provided in the Change in Control Agreement.

     10. Release.

	 	(a)	 	Executive on behalf of Executive, Executive’s heirs, executors, administrators
and assigns, does hereby knowingly and voluntarily release, acquit and forever
discharge Company and any of its subsidiaries, affiliates, successors, assigns and
past, present and future directors, officers, employees, trustees and shareholders (the
“Released Parties”) from and against any and all complaints, claims, cross-claims,
third-party claims, counterclaims, contribution claims, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown,
suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any
time up to and including the date on which Executive signs this Agreement, exists, have
existed, or may arise from any matter whatsoever occurring, including, but not limited
to, any claims arising out of or in any way related to Executive’s employment with
Company or its subsidiaries or affiliates and the conclusion thereof, which Executive,
or any of Executive’s heirs, executors, administrators, assigns, affiliates, and agents
ever had, now has or at any time hereafter may have, own or hold against any of the
Released Parties based on any matter existing on or before the date on which Executive
signs this Agreement. Executive acknowledges that in exchange for this release,
Company is providing Executive with total consideration, financial or otherwise, which
exceeds what Executive would have been given without the release. By executing this
Agreement, Executive is waiving, without limitation, all claims (except for the filing
of a charge with an administrative agency) against the Released Parties arising under
federal, state and local labor and antidiscrimination laws, any employment related
claims under the employee Retirement Income Security Act of 1974, as amended, and any
other restriction on the right to terminate employment, including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities
Act of

20

 

	 	 	 	1990, as amended, and the North Carolina Equal Employment Practices Act, as amended.
Nothing herein shall release any party from any obligation under this Agreement.
Executive acknowledges and agrees that this release and the covenant not to sue set
forth in paragraph (c) below are essential and material terms of this Agreement and
that, without such release and covenant not to sue, no agreement would have been
reached by the parties and no benefits under the Change in Control Agreement would
have been paid. Executive understands and acknowledges the significance and
consequences of this release and this Agreement.
	 
	 	(b)	 	EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS
EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR
RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29
U.S.C. § 621 (“ADEA”). EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVE’S WAIVER OF RIGHTS
UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS
BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS
RELEASE; (iii) THAT EXECUTIVE’S WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR
CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY
PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT
EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN
ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD
OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT
EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVE’S EXECUTION OF THIS RELEASE, EXECUTIVE HAS
SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED,
AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF
EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS
AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER
EXECUTIVE SIGNS THIS AGREEMENT.
	 
	 	(c)	 	To the maximum extent permitted by law, Executive covenants not to sue or to
institute or cause to be instituted any action in any federal, state, or local agency
or court against any of the Released Parties, including, but not limited to, any of the
claims released this Agreement. Notwithstanding the foregoing, nothing herein shall
prevent Executive or any of the Released Parties from filing a charge with an
administrative agency, from instituting any action required to enforce the terms of
this Agreement, or from challenging the validity of this Agreement. In addition,
nothing herein shall be construed to prevent Executive from enforcing

21

 

	 	 	 	any rights Executive may have to recover vested benefits under the Employee
Retirement Income Security Act of 1974, as amended.
	 
	 	(d)	 	Executive represents and warrants that: (i) Executive has not filed or
initiated any legal, equitable, administrative, or other proceeding(s) against any of
the Released Parties; (ii) no such proceeding(s) have been initiated against any of the
Released Parties on Executive’s behalf; (iii) Executive is the sole owner of the actual
or alleged claims, demands, rights, causes of action, and other matters that are
released in this paragraph 10; (iv) the same have not been transferred or assigned or
caused to be transferred or assigned to any other person, firm, corporation or other
legal entity; and (v) Executive has the full right and power to grant, execute, and
deliver the releases, undertakings, and agreements contained in this Agreement.
	 
	 	(e)	 	The consideration offered herein is accepted by Executive as being in full
accord, satisfaction, compromise and settlement of any and all claims or potential
claims, and Executive expressly agrees that Executive is not entitled to and shall not
receive any further payments, benefits, or other compensation or recovery of any kind
from Company or any of the other Released Parties. Executive further agrees that in
the event of any further proceedings whatsoever based upon any matter released herein,
Company and each of the other Released Parties shall have no further monetary or other
obligation of any kind to Executive, including without limitation any obligation for
any costs, expenses and attorneys’ fees incurred by or on behalf of Executive.

     11. Executive’s Understanding. Executive acknowledges by signing this Agreement that
Executive has read and understands this document, that Executive has conferred with or had
opportunity to confer with Executive’s attorney regarding the terms and meaning of this Agreement,
that Executive has had sufficient time to consider the terms provided for in this Agreement, that
no representations or inducements have been made to Executive except as set forth in this
Agreement, and that Executive has signed the same KNOWINGLY AND VOLUNTARILY.

     12. Non-Reliance. Executive represents to Company and Company represents to Executive that in
executing this Agreement they do not rely and have not relied upon any representation or statement
not set forth herein made by the other or by any of the other’s agents, representatives or
attorneys with regard to the subject matter, basis or effect of this Agreement, or otherwise.

     13. Severability of Provisions. In the event that any one or more of the provisions of this
Agreement is held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or impaired thereby.
Moreover, if any one or more of the provisions contained in this Agreement are held to be
excessively broad as to duration, scope, activity or subject, such provisions will be construed by
limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable
law.

22

 

     14. Non-Admission of Liability. Executive agrees that neither this Agreement nor the
performance by the parties hereunder constitutes an admission by any of the Released Parties of any
violation of any federal, state, or local law, regulation, common law, breach of any contract, or
any other wrongdoing of any type.

     15. Assignability. The rights and benefits under this Agreement are personal to Executive and
such rights and benefits shall not be subject to assignment, alienation or transfer, except to the
extent such rights and benefits are lawfully available to the estate or beneficiaries of Executive
upon death. Company may assign this Agreement to any parent, affiliate or subsidiary or any entity
which at any time whether by merger, purchase, or otherwise acquires all or substantially all of
the assets, stock or business of Company.

     16. Choice of Law. This Agreement shall be constructed and interpreted in accordance with the
internal laws of the State of North Carolina without regard to any state’s conflict of law
principles.

     17. Entire Agreement. This Agreement, together with the Change in Control Agreement, sets
forth all the terms and conditions with respect to compensation, remuneration of payments and
benefits due Executive from Company and supersedes and replaces any and all other agreements or
understandings Executive may have or may have had with respect thereto. This Agreement may not be
modified or amended except in writing and signed by both Executive and an authorized representative
of Company.

     18. Notice. Any notice to be given hereunder shall be in writing and shall be deemed given
when mailed by certified mail, return receipt requested, addressed as follows:

To Executive at:

[add address]

To the Company at:

Hanesbrands Inc.

Attention: General Counsel

1000 East Hanes Mill Road

Winston-Salem, NC 27105

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

	 	 	 	 	 	 	 
	EXECUTIVE	 	HANESBRANDS INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title:  	 	 	 
	 

	 	 	 	 	 	 

23EX-10.1 AMENDED RESTATED EMPLOYMENT AGREEMENT

 

Exhibit 10.1

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and
between Edward J. Rohling, (“Executive”) and Lodgian, Inc. (“Company”) as of the 23rd day of April,
2007 (“Effective Date”).

WHEREAS, Executive is currently employed as President and Chief Executive Officer of the Company
pursuant to the Executive Employment Agreement between Executive and the Company dated July 12,
2005 (the “Prior Agreement”);

WHEREAS, the Company desires that Executive continue to serve as President and Chief Executive
Officer of the Company, and Executive desires to continue said employment; and

WHEREAS, the Company and Executive desire to express the terms and conditions of Executive’s
continued employment in this Amended and Restated Agreement.

NOW THEREFORE, in exchange of mutual consideration set forth herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:

1. TERMINATION OF PRIOR AGREEMENT. The Parties hereby terminate the Prior Agreement effective on
the Effective Date. The Parties acknowledge and agree that the termination of the Prior Agreement
does not and shall not result in the vesting, acceleration, or triggering of any employment benefit
in Executive’s favor, including, but not limited to, any post-termination payment obligation or any
separation payment or benefit, or any other right which Executive may have as a shareholder,
officer, or employee, or under any agreement or understanding between Executive and the Company,
including, but not limited to, the Prior Agreement. To the extent, if any, that the terms of this
Agreement are different from the terms of the Parties’ Employee Restricted Stock Agreement and the
Restricted Stock Award Agreement (together referred to as the “Restricted Stock Agreements”), then
any differences between this Agreement and the Restricted Stock Agreements shall be resolved by
applying the terms of whichever agreement is more beneficial to Executive.

2. TERM OF EMPLOYMENT. Executive’s employment under this Agreement shall commence on April 23,
2007 and shall end on December 31, 2008 (“Expiration Date”), or such earlier date on which
Executive’s employment is terminated under Section 6 of this Agreement (“Employment Term”).

3. NATURE OF DUTIES. Executive shall be the Company’s President and Chief Executive Officer
reporting to the Company’s Board of Directors (“Board”). Except as noted herein, Executive shall
work exclusively for the Company and shall have all of the customary powers and duties associated
with these positions. Executive shall devote Executive’s full business time and effort to the
performance of Executive’s duties for the Company, which Executive shall perform faithfully and to
the best of Executive’s ability. Executive shall be subject to the Company’s policies, procedures,
and approval practices, as generally in effect from time-to-time and applied to its senior
executives.

 

 

Notwithstanding the foregoing, Executive shall be able to serve on up to two boards of directors of
other for-profit entities. With Board approval, which shall not be unreasonably withheld,
Executive shall be permitted to exceed this limit of two. Nothing herein shall be construed as
limiting Executive’s ability to serve on the board of non-profit entities or otherwise engage in
activities for charities. However, nothing in this Section shall permit Executive to serve on the
board of directors of any entity to the extent that doing so would (a) interfere with Executive’s
duties to the Company, and/or (b) conflict with the interests of the Company.

4. PLACE OF PERFORMANCE. Executive’s primary office location shall be at 3445 Peachtree Road,
Suite 700, Atlanta, Georgia, except for required travel on the Company’s business.

5. COMPENSATION AND RELATED MATTERS.

     (a) BASE SALARY. The Company shall pay Executive base salary at an annual rate of $577,500,
which rate shall be increased by the Company on July 15, 2007 by at least 5%, and by at least 5% of
the then base salary rate on each July 15 every year thereafter that this Agreement remains in
effect. Executive’s base salary shall be paid in conformity with the Company’s salary payment
practices generally applicable to other similarly situated Company senior executives, but no less
often than once monthly.

     (b) SIGNING BONUS — STOCK.

          (i) On July 15, 2005, the Company granted to Executive a signing bonus in the form of 75,000
restricted shares of the Company’s common stock.

          (ii) The restricted stock shares in this Section 5(b) are subject to the terms of the
restricted stock plan and agreement under which they were issued. The restricted stock shares are
intended to qualify as “qualified performance based compensation” for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended (“Code”).

          (iii) On July 15, 2006, one-half of the restricted stock shares granted in this Section 5(b)
vested. On July 15, 2007, the remaining one-half of such restricted stock shares shall vest.
However, subject to Section 6, vesting shall be postponed during any health-related leave of
absence until Executive returns to work, unless such postponement is prohibited by law.

     (c) ANNUAL PERFORMANCE BONUS.

          (i) Subject to Section 6, Executive shall be eligible to receive an annual performance bonus
in the amount shown in the applicable row on the table attached hereto and incorporated herein for
all purposes as Exhibit A for each of the calendar years 2006-2008 as indicated, if Executive
remains employed through December 31 of each such calendar year (“Vesting Date”). Prior to payment
of the annual performance bonus, the Board shall review the actual operating EBITDA performance,
and determine the percentage of Target EBITDA (as defined herein) that

2

 

the Company achieved for the applicable calendar year. The Board shall not unreasonably
withhold approval of the payment of annual performance bonus upon its determination of the
Company’s actual EBITDA and the corresponding bonus due for that level of performance. The Company
shall pay the performance bonus for a given year on (and not earlier or later than) May 1 of the
following year.

          (ii) Subject to subsection (iii) below, the Company’s “Target EBITDA” as used herein for
calendar years 2006, 2007, and 2008 is, respectively, $72.0 million, $79.0 million, and $87.0
million.

          (iii) EBITDA is as defined in Exhibit A; provided, however, that, for purposes of this Section
5, the Board has the final and sole discretion to determine the calculation of EBITDA, provided
that such calculation is consistent with generally accepted accounting principles. If changes to
the Company’s portfolio are made, the Company shall adjust the applicable Target EBITDA as follows:

               (1) If a property is sold or otherwise transferred to a third party, the Target EBITDA for the
Year in which the sale occurs shall be reduced by the sold property’s EBITDA for the trailing 12
full months through the date of the sale, and actual EBITDA for the Year shall exclude the sold
property’s EBITDA. For each subsequent Year, Target EBITDA shall be reduced by the sum of the
reduction for the Year of sale plus 10 percent of that reduction for each Year since the Year of
sale.

               (2) If a property is acquired, the Target EBITDA for the Year in which the purchase occurs
shall be increased by the acquired property’s EBITDA for the trailing 12 full months through the
date of purchase, and actual EBITDA for the Year of purchase shall include the acquired property’s
EBITDA as if it had been acquired on the first day of the Year. For each subsequent Year, Target
EBITDA shall be increased by the sum of the increase for the Year of purchase plus 10 percent of
that increase for each Year since the Year of purchase.

               (3) For purposes of clauses (1) and (2), above, “Year” shall be deemed to be the annual
performance bonus calendar year in question or, with respect to Section 5(d), the long-term
compensation fiscal year in question.

          (iv) The Company shall pay each performance bonus in cash on (and not earlier or later than)
May 1st of the year immediately following the year to which the performance bonus relates.

     (d) LONG-TERM COMPENSATION.

          (i) Subject to Section 6, if Executive remains employed through December 31 of a calendar year
during the Employment Term, the Company shall grant Executive 20,000 restricted shares of Common
Stock for each such calendar year if (x) 100% of Target EBITDA is achieved for such calendar year,
or (y) the average closing price of the Company’s Common Stock for the last thirty (30) calendar
days of such calendar year is at least at the Stock Price Threshold for such calendar year as
described in Exhibit A. Such grant, if any, will occur on (and not earlier or later than) May 1 of
the

3

 

year immediately following the calendar year during which the event described in the preceding
subclause (x) or (y), whichever is applicable, occurs.

          (ii) Subject to Section 6, if Executive remains employed through December 31 of a calendar
year during the Employment Term, in addition to Section 5(d)(i) above, the Company shall also grant
Executive 30,000 and 40,000 restricted shares of Common Stock for 2007 and 2008 respectively, upon
achievement of 110% of Target EBITDA for such calendar year. Such grant, if any, will occur on
(and not earlier or later than) May 1 of the year immediately following the calendar year during
which the event described in the preceding sentence occurs.

          Subject to Section 5(d)(iii) and 6, the restricted share grants in this Section 5(d) shall
vest in three (3) equal annual installments beginning on March 15 of the year immediately following
the year of each grant as described in Section 5(d)(i) and 5(d)(ii) above.

          (iii) The restricted stock granted under this Section 5(d) shall be subject to the terms of
the stock plan and agreement under which they are issued. Notwithstanding Section 5(d)(ii) but
subject to Section 6, vesting shall be postponed during any health-related leave of absence until
Executive returns to work, unless such postponement is prohibited by law.

     (e) STANDARD BENEFITS. During Executive’s employment, Executive shall be eligible to
participate in all employee benefit plans and programs, including but not limited to paid
vacations, medical/health/prescription and short and long term disability income protection
coverage, to the same extent generally available to other similarly situated Company senior
executives, in accordance with the terms of those plans and programs.

     (f) INTEGRATION WITH DISABILITY BENEFITS. If Executive is absent due to a health-related
disability, the Company compensation otherwise payable to Executive for that period shall be
reduced by payments for that period from Company-provided short or long term disability coverage
and Workers’ Compensation wage replacement benefits.

     (g) INDEMNIFICATION. The Company shall indemnify Executive to the fullest extent permitted by
applicable law with regard to Executive’s action or inaction on behalf of the Company, which
indemnification shall include the advancement of legal fees and other expenses on a current basis
to the fullest extent permitted by law, which shall survive termination of Executive’s employment.
In addition, the Company shall extend to Executive the same indemnification arrangements as are
generally provided to other similarly situated Company senior executives, which shall survive
termination of Executive’s employment. Moreover, the Company shall provide a Director’s and
Officer’s Liability insurance policy covering Executive’s duties hereunder during the Employment
Term, which shall survive the termination of Executive’s employment.

     (h) EXPENSES. Executive shall be entitled to receive prompt reimbursement (within sixty (60)
days after submission of the expense) for all reasonable and customary

4

 

travel and business expenses Executive incurs in connection with Executive’s employment,
provided that Executive accounts for those expenses in accordance with the policies and procedures
established by the Company and as applied to senior executives.

     (i) SARBANES-OXLEY ACT LOAN PROHIBITION. Notwithstanding this Agreement or any other Company
policy or program, the Company shall not make a loan to Executive that would violate the
Sarbanes-Oxley Act, and this Agreement does not contemplate any such loans.

     (j) CODE SECTION 409A. Payments made pursuant to this Agreement are intended to, and the
parties agree to amend this Agreement as necessary to, comply with Code Section 409A.

6. TERMINATION.

     (a) RIGHTS AND DUTIES. If Executive’s employment is terminated, and Section 8 below does not
apply, Executive shall be entitled to the payment of the amounts and/or benefits set forth below,
subject to the balance of this Section 6. The Company and Executive shall have no further
obligations to each other, except the Company’s ongoing indemnification obligation under Section 5
and Executive’s post-termination obligations under Sections 7 and 19, or as set forth in any
written agreement Executive subsequently enters into with the Company.

          (i) DISCHARGE FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON. If the Company terminates
Executive’s employment for Cause or Executive resigns without Good Reason, then Executive shall
receive payment of (1) any unpaid base salary, reimbursement of expenses incurred, and unused
vacation days accrued prior to the date of termination, to be paid within thirty (30) days after
the date of termination, and (2) other unpaid vested amounts or benefits under Company
compensation, incentive, and benefit plans, in accordance with the terms and provisions of such
compensation, incentive, and benefit plans.

          (ii) DISABILITY. If Executive’s employment terminates as a result of Executive’s Disability,
then Executive shall receive payment of (a) any unpaid base salary, reimbursement of expenses
incurred, and unused vacation days accrued prior to the date of termination, to be paid within
thirty (30) days after the date of termination, and (b) other unpaid vested amounts or benefits
under Company compensation, incentive, and benefit plans, in accordance with the terms and
provisions of such compensation, incentive, and benefit plans. In addition, upon Executive’s
“separation from service” (within the meaning of Code § 409A(a)(2)(A)(i)), (1) the Company shall
pay COBRA premiums for Executive and Executive’s eligible dependents under the Company’s major
medical group health plan on a monthly basis, beginning as of the date on which the first such
COBRA premiums would be required of the Executive and continuing until the earlier of (x) the
Expiration Date, or (y) the date that is eighteen (18) months from the date of termination under
this Section 6(a)(ii), (2) the Company shall pay a prorated annual performance bonus, calculated by
multiplying Three Hundred Thirty Thousand Dollars ($330,000.00) by a percentage equal to the total
number of days that Executive was employed for the bonus year in question, divided by 365, to be
paid within thirty (30)

5

 

days after the date of termination, (3) all restricted stock shares previously granted to
Executive shall immediately become fully vested as of the date of termination, and (4) the Company
shall pay a lump sum amount equal to the difference, if any, between Executive’s monthly base
salary and Executive’s monthly Company-provided short term disability benefits (to the extent
Executive elects to participate in such short-term disability benefit plan and is eligible to
receive such benefits) or, if applicable, Workers’ Compensation wage replacement benefits for up to
6 months, or the date that Executive’s Company-provided long-term disability benefits commence (to
the extent Executive elects to participate in such long-term disability benefit plan and is
eligible to receive such benefits), whichever is shorter, which lump sum payment shall be paid
within thirty (30) days after the date of termination. Executive shall be eligible to receive the
benefits and/or payments in clauses (1) through (4) (collectively, the “Disability Separation
Benefits”) only if Executive is terminated by the Company due to Disability, but not if Executive
resigns. Executive’s right to receive the Disability Separation Benefits shall be subject to
Section 9 below and the Separation Conditions set forth in Section 6(d) below.

          (iii) DISCHARGE WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. If the Company terminates
Executive’s employment without Cause or Executive’s resigns for Good Reason, and Section 8 below
does not apply, then Executive shall receive payment of (a) any unpaid base salary, reimbursement
of expenses incurred, and unused vacation days accrued prior to the date of termination, to be paid
within thirty (30) days after the date of termination, and (b) other unpaid vested amounts or
benefits under Company compensation, incentive, and benefit plans, in accordance with the terms and
provisions of such compensation, incentive, and benefit plans. In addition, upon Executive’s
“separation from service” (within the meaning of Code § 409A(a)(2)(A)(i)), (1) Executive shall
receive a lump sum payment equal to the remainder of Executive’s base salary in Section 5(a)
through the Expiration Date, which payment shall be paid within thirty (30) days after the date of
termination, (2) Executive shall receive payment of COBRA premiums for Executive and Executive’s
eligible dependents under the Company’s major medical group health plan on a monthly basis,
beginning as of the date on which the first such COBRA premiums would be required of the Executive
and continuing until the earlier of (x) the Expiration Date, or (y) the date that is eighteen (18)
months from the date of termination under this Section 6(a)(iii), (3) Executive shall receive a
lump sum payment of either (a) Six Hundred Sixty Thousand Dollars ($660,000.00) if the date of
termination occurs on or before December 31, 2007, or (b) Three Hundred Thirty Thousand Dollars
($330,000.00) if the date of termination occurs during the period from January 1, 2008 through
December 31, 2008, to be paid within thirty (30) days after the date of termination, and (4) all
restricted stock shares previously granted to Executive shall immediately become fully vested as of
the date of termination (subclauses (1)-(4) collectively, the “Without Cause/Good Reason Separation
Benefits”). Executive’s right to receive the Without Cause/Good Reason Separation Benefits shall
be subject to Section 9 below and the Separation Conditions set forth in Section 6(d) below.

          (iv) DEATH. If Executive’s employment terminates as a result of Executive’s death, Executive’s
estate shall receive payment of (a) any unpaid base salary, reimbursement of expenses incurred, and
unused vacation days accrued prior to the date

6

 

of death, to be paid within thirty (30) days after the date of Executive’s death, and (b)
other unpaid vested amounts or benefits under Company compensation, incentive, and benefit plans,
in accordance with the terms and provisions of such compensation, incentive, and benefit plans. In
addition, (1) the Company shall make payment of COBRA premiums for Executive’s eligible dependents
under the Company’s major medical group health plan on a monthly basis, beginning as of the date on
which the first such COBRA premiums would be required and continuing until the earlier of (x) the
Expiration Date, or (y) the date that is eighteen (18) months from the date of death, (2) all
restricted stock shares previously granted to Executive shall immediately become fully vested as of
the date of death, and (3) the Company shall pay to Executive’s estate a prorated annual
performance bonus, calculated by multiplying Three Hundred Thirty Thousand Dollars ($330,000.00) by
a percentage equal to the total number of days that Executive was employed for the bonus year in
question, divided by 365, to be paid within thirty (30) days after the date of termination
(subclauses (1)-(3) collectively, the “Death Benefits”). Executive’s estate’s right to receive the
Death Benefits shall be subject to Executive’s estate’s compliance with the Separation Conditions
set forth in Section 6(d) below.

          (v) TERMINATION OF EMPLOYMENT AT EXPIRATION DATE. If Executive’s employment terminates upon
the Expiration Date, and Section 8 below does not apply, then, upon Executive’s “separation from
service” (within the meaning of Code § 409A(a)(2)(A)(i)), (1) Executive shall receive payment of
any unpaid base salary, reimbursement of expenses incurred, and unused vacation days accrued prior
to the date of termination, to be paid within thirty (30) days after the date of termination, (2)
Executive shall receive payment of other unpaid vested amounts or benefits under Company
compensation, incentive, and benefit plans, in accordance with the terms and provisions of such
compensation, incentive, and benefit plans, (3) all restricted stock shares previously granted to
Executive shall immediately become fully vested, and (4) Executive shall receive a lump sum payment
of Three Hundred Thirty Thousand Dollars ($330,000.00), to be paid within thirty (30) days after
the date of termination (subclauses (1)-(4) collectively, the “Expiration Benefits”). Executive’s
right to receive the Expiration Benefits shall be subject to Section 9 below and the Separation
Conditions set forth in Section 6(d) below.

     (b) DISCHARGE FOR CAUSE. The Company may terminate Executive’s employment at any time if it
believes in good faith that it has Cause to terminate Executive. However, Executive’s termination
shall not be deemed for Cause unless the Company sends Executive a written notice detailing the
reasons it believes it has Cause to terminate Executive on or before the date it intends to
discharge Executive for Cause. “Cause” shall mean:

          (i) Executive’s willful refusal to follow the Board’s lawful directions or Executive’s
material failure to perform Executive’s duties (other than by reason of physical or mental illness,
injury, or condition), in either case, only after Executive has been given written notice by the
Board detailing the directives Executive has refused to follow or the duties Executive has failed
to perform and granting Executive at least 30 days to cure;

7

 

          (ii) Executive’s material and willful failure to comply with Company policies as applied to
senior executives, only after Executive has been given written notice by the Board detailing the
policies with which Executive has failed to comply and granting Executive at least 30 days to cure;

          (iii) Executive’s:

               (1) engaging in an act of fraud or dishonesty that materially harms the Company or its
affiliates;

               (2) conviction of a felony or conviction for any violation of any federal or state securities
law;

               (3) gross negligence in connection with any property or activity of the Company or its
subsidiaries or affiliates (“Group”);

               (4) repeated and intemperate use of alcohol or illegal drugs after written notice from the
Board;

               (5) material breach of any of Executive’s obligations under this Agreement (other than by
reason of physical or mental illness, injury, or condition), but only after Executive has been
given written notice by the Board of the breach and granting Executive at least 30 days to cure; or

               (6) becoming barred or prohibited by the SEC from holding Executive’s position with the
Company.

In the event Executive has tendered Executive’s resignation, the Company may not then or thereafter
terminate Executive for Cause.

     (c) TERMINATION FOR DISABILITY. Except as prohibited by applicable law, the Company may
terminate this Agreement on account of Executive’s Disability, or may transfer Executive to
inactive employment status, which shall have the same effect under this Agreement as a termination
for Disability.

“Disability” means a physical or mental illness, injury, or condition that prevents Executive from
performing substantially all of Executive’s material duties under this Agreement for at least 90
consecutive calendar days or for at least 120 calendar days, whether or not consecutive, in any 365
calendar day period.

     (d) DISCHARGE WITHOUT CAUSE. The Board may terminate Executive’s employment at any time
without Cause for any reason by providing Executive with 30 days advance written notice (the
“Notice Period’); provided, however, that that the Board may elect to terminate Executive’s
employment prior to the expiration of such Notice Period, in which event the Company will pay
Executive his then-current base salary through the expiration of the Notice Period (the “Notice
Period Payment”). The Company’s obligation to pay Executive the Notice Period Payment shall be in
addition to any payments owed to Executive under Section 6(a)(iii) above. If Executive

8

 

is terminated by the Company without Cause, Executive shall only receive the special benefits
provided under the applicable provisions of Section 6(a)(iii) if: (x) Executive complies with the
restrictive covenants (Section 7) and all post-termination obligations to which Executive is
subject, including, but not limited to, the obligations contained in this Agreement, and (y)
Executive signs a release form, subject to negotiation as provided below, within the time
prescribed by the Company which shall be no later than 45 days after Executive receives the release
from the Company and before asserting any claims covered by the release against the Company other
than claims pertaining to (i) Executive’s right to severance benefits, (ii) the Company’s
continuing indemnification obligations to Executive under Section 5, and (iii) claims for
defamation, slander and/or libel (the conditions set forth in the preceding subclauses (x) and (y)
to be referred to as the “Separation Conditions”). The Company shall furnish the release to
Executive at Executive’s termination. Subject to the exceptions in clauses (i) through (iii) of
the second preceding sentence, the parties shall in good faith negotiate the final form of such
release, but it shall include provisions customary in formal settlement agreements and general
releases, including, but not limited to, such things as Executive’s release of the Company and all
related persons or entities (“affiliates”) from all known and unknown claims, Executive’s covenant
never in the future to pursue any released claim, Executive’s promise never to seek employment with
the Company or any affiliate in the future, but not including any provision that expands
Executive’s obligations to the Company as set forth in Section 6(i) below. The Company and
Executive acknowledge that the severance benefits for which the release is required are intended to
effect Executive’s peaceful transition from the Company. If Executive chooses not to sign the
release, Executive shall have the right to pursue any claims Executive may have, but Executive
shall not be eligible to receive the severance benefits set forth in subclauses (1) through (6) of
Section 6(a)(iii). Executive also acknowledges that the Company’s obligation to provide any
severance benefits under Section 6(a)(iii) shall terminate immediately upon any breach by Executive
of any post-termination obligations to which he is subject; provided that the Company has provided
prior written notice to Executive setting forth the post-termination obligations Executive is
alleged to have breached and granting Executive 30 days to cure.

     (e) RESIGNATION FOR GOOD REASON. Executive may resign from employment for GOOD REASON, which
shall mean the occurrence of any of the following without Executive’s express written consent:

          (i) Relocation of Executive’s primary office location more than 50 miles from the current
location, as set forth in Section 4;

          (ii) Any change in or the Company’s refusal to comply with the provisions of Section 3;

          (iii) Any diminution in Executive’s title, or material diminution in his compensation or
duties;

          (iv) Material failure by the Company to keep any promise or make any payment provided herein;

9

 

          (v) Change in Control as defined in Section 8 below;

          (vi) Any transfer to any subsidiary or affiliate or other change that removes Executive from
the position of Chief Executive and President of the Company;

          (vii) Failure by the Company to continue, or continue Executive’s participation in, any
compensation plan in which Executive participates or is entitled to participate such that
Executive’s total compensation is reduced by more than five percent (5%); or

          (viii) Failure by the Company to continue, or continue Executive’s participation in, any
benefit plan in which Executive participates unless an equivalent substitute is adopted or made
available on a basis not less favorable to Executive and Executive’s spouse.

          However, an event that is or would constitute Good Reason shall cease to be Good Reason if:
(i) Executive does not provide the Company with written notice of Executive’s intent to terminate
Executive’s employment due to an event that would constitute Good Reason within the earlier of 30
days after the occurrence of such event or 30 days after Executive is officially notified or it is
officially announced that the Company will take any actions that would constitute Good Reason to
resign, (ii) the Company reverses the action or cures the default that constitutes Good Reason
within 30 days after receiving such written notice, (iii) Executive does not terminate employment
within 60 days after the event occurs, (iv) Executive is a primary instigator of the Good Reason
event other than a Change in Control and the circumstances make it inappropriate for Executive to
receive benefits under this Agreement (e.g., Executive initiates a relocation of the Company’s
headquarters); or (v) the Company in good faith temporarily suspends Executive for no more than 30
days (with full pay) to investigate any suspected wrongdoing that, if substantiated, would give the
Company reason to terminate Executive for Cause.

          If Executive resigns from employment for Good Reason as defined in this Section 6(e),
Executive shall only receive the severance benefits set forth in subclauses (1) through (6) of
Section 6(a)(iii) if Executive satisfies the Separation Conditions and any other obligations set
forth in Section 6(d) above.

     (f) RESIGNATION WITHOUT GOOD REASON. Executive may terminate Executive’s employment hereunder
at any time without Good Reason upon providing the Company with 30 days written notice of
Executive’s intention to do so; provided, however, that (i) the Company shall be entitled to accept
Executive’s resignation as of any earlier date, and (ii) the Board may elect to terminate
Executive’s employment prior to the expiration of the 30-day notice period, in which event the
Company will pay Executive his then-current base salary through the expiration of such notice
period. Executive’s termination under this Section 6(f) shall only entitle him to be eligible to
receive the benefits in Section 6(a)(i).

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Notwithstanding anything to the contrary in this Agreement or any other document, restricted
stock shares and all other performance or incentive compensation shall cease vesting when Executive
gives notice of resignation under this Section 6(f).

     (g) DEATH. If Executive dies while employed under this Agreement, the payments required by
Section 6(a)(iv) in the event of Executive’s death shall be made.

     (h) AMOUNTS OWED TO THE COMPANY. Any amounts payable to Executive under this Section shall
first be applied to repay any liquidated amounts Executive owes the Company (i.e., personal
expenses on Executive’s credit card).

     (i) NO FURTHER OBLIGATIONS. Upon termination of employment for any reason, the Company and
Executive shall have no further obligations to each other, except the Company’s ongoing
indemnification obligation under Section 5, and Executive’s post-termination obligations under
Sections 7 and 19, or as set forth in any written agreement Executive subsequently enters into with
the Company.

7. RESTRICTIVE COVENANTS. Executive acknowledges that: (i) his position is a position of trust and
responsibility with access to Confidential Information, Trade Secrets, and information concerning
employees and customers of the Company, (ii) the Trade Secrets and Confidential Information, and
the relationship between the Company and each of its employees and customers are valuable assets of
the Company and may not be used for any purpose other than the Company’s Business, (iii) the
Company will invest its time and money in the development of Executive’s skills in the Business,
and (iv) the restrictions contained in this Section 7 are reasonable and necessary to protect the
legitimate business interests of the Company, and will not impair or infringe upon Executive’s
right to work or earn a living after Executive’s employment with the Company ends.

     (a) PROMISE NOT TO DISCLOSE. Executive agrees that he will not: (i) use, disclose, or reverse
engineer the Trade Secrets or the Confidential Information for any purpose other than the Company’s
Business, except as authorized in writing by the Company; (ii) during Executive’s employment with
the Company, use, disclose, or reverse engineer (a) any confidential information or trade secrets
of any former employer or third party, or (b) any works of authorship developed in whole or in part
by Executive during any former employment or for any other party, unless authorized in writing by
the former employer or third party; or (iii) upon Executive’s resignation or termination for any
reason (a) retain Trade Secrets or Confidential Information, including any copies existing in any
form (including electronic form), which are in Executive’s possession or control, or (b) destroy,
delete, or alter the Trade Secrets or Confidential Information without the Company’s prior written
consent. The obligations under this subsection shall: (i) with regard to the Trade Secrets, remain
in effect as long as the information constitutes a trade secret under applicable law, and (ii) with
regard to the Confidential Information, remain in effect during Executive’s employment with the
Company and for a period of two (2) years after Executive’s employment with the Company ends for
any reason. The confidentiality, property, and proprietary rights protections available in this
Agreement are in addition to, and not exclusive of, any and all other rights to which the Company
is entitled under federal and state law, including, but not limited to, rights

11

 

provided under copyright laws, trade secret and confidential information laws, and laws
concerning fiduciary duties.

     (b) PROMISE NOT TO SOLICIT. During Executive’s employment and for a period of six (6) months
after Executive’s employment with the Company ends for any reason, Executive will not, directly or
indirectly, solicit, recruit or induce any Employee to (a) terminate his or her employment
relationship with the Company or (b) work for any other person or entity engaged in the Business.
The restrictions set forth in this subsection shall apply only to Employees (a) with whom Executive
had Material Interaction, or (b) Executive, directly or indirectly, supervised.

     (c) The capitalized terms set forth in subsections 7(a) and 7(b) above shall be defined as
follows:

          (i) “Business” shall mean the business of owning and operating hotels including, but not
limited to, full-service hotels which have food and beverage operations and meeting spaces.

          (ii) “Confidential Information” means (a) information of the Company, to the extent not
considered a Trade Secret under applicable law, that (i) relates to the business of the Company,
(ii) possesses an element of value to the Company, (iii) is not generally known to the Company’s
competitors, and (iv) would damage the Company if disclosed, and (b) information of any third party
(the “Third Party”) provided to the Company which the Company is obligated to treat as
confidential, including, but not limited to, information provided to the Company by its licensors,
suppliers, or customers. Confidential Information includes, but is not limited to, (i) future
business plans, (ii) the composition, description, schematic or design of products, future products
or equipment of the Company, (iii) communication systems, audio systems, system designs and related
documentation, (iv) advertising or marketing plans, (v) information regarding any Third Party,
independent contractors, employees, clients, customers, licensors, and/or suppliers of the Company,
and (vi) information concerning the Company’s or any Third Party’s financial structure and methods
and procedures of operation. Confidential Information shall not include any information that (i)
is or becomes generally available to the public other than as a result of an unauthorized
disclosure, (ii) has been independently developed and disclosed by others without violating this
Agreement or the legal rights of any party, or (iii) otherwise enters the public domain through
lawful means. For purposes of this definition of “Confidential Information” only, the term
“Company” shall include the Company’s parents, subsidiaries, affiliates, and all related companies;
provided, however that the definition of “Confidential Information” shall only apply to information
which Executive acquired or used by virtue of Executive’s employment with the Company.

          (iii) “Employee” means any person who (i) is employed by the Company at the time Executive’s
employment with the Company ends, or (ii) was employed by the Company during the last year of
Executive’s employment with the Company (or during Executive’s employment if employed less than a
year).

12

 

          (iv) “Material Interaction” means any interaction between Executive and an Employee which
relates or related, directly or indirectly, to the performance of Executive’s duties for the
Company.

          (v) “Trade Secrets” means information of the Company, and its licensors, suppliers, clients
and customers, without regard to form, including, but not limited to, technical or non-technical
data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, or a list of actual or potential
customers, clients, licensors, or suppliers which is not commonly known by or available to the
public and which information (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. For purposes of this definition of
“Trade Secrets” only, the term “Company” shall include the Company’s parents, subsidiaries,
affiliates, and all related companies; provided, however that the definition of “Trade Secrets”
shall only apply to information which Executive acquired or used by virtue of Executive’s
employment with the Company.

     (d) INJUNCTIVE RELIEF. Executive agrees that if he breaches Section 7(a) or 7(b) of this
Agreement: (i) the Company would suffer irreparable harm; (ii) it would be difficult to determine
damages, and (iii) money damages alone would be an inadequate remedy for the injuries suffered by
the Company. The alleged breach of such Sections shall be enforceable in a court of equity and
appropriate injunctive relief may be applied for and granted in connection therewith. Nothing
contained in this Agreement shall limit the Company’s right to any other remedies at law or in
equity.

     (e) RETURN OF INFORMATION. When Executive’s employment with the Company ends, Executive shall
promptly deliver to the Company, or, at its written instruction, destroy, all documents, data,
drawings, manuals, letters, notes, reports, electronic mail, recordings, and copies thereof, of or
pertaining to it or any Group member in Executive’s possession or control. In addition, during
Executive’s employment with the Company, Executive shall meet with Company personnel and, based on
knowledge or insights Executive gained during Executive’s employment with the Company, answer any
question they may have related to the Company or the Group. The Company shall pay Executive for
attending such meetings at a rate not less than the hourly equivalent of Executive’s base salary,
plus reimbursement of reasonable expenses in accordance with the Company’s reimbursement policy for
senior executives.

     (f) PROMISE TO DISCUSS PROPOSED ACTIONS IN ADVANCE. Executive promises that before he
discloses or uses Confidential Information, and before he commences employment, solicitations, or
any other activity that could violate the promises he has made in this Agreement, Executive shall
discuss his proposed actions with the Chairman of the Board, who shall advise Executive in writing
whether he believes that Executive’s proposed actions would violate this Agreement.

     (g) INTELLECTUAL PROPERTY. Intellectual property (including such things as all inventions,
plans, developments, software, data, configurations, materials

13

 

(whether written or machine-readable), designs, drawings, illustrations, and photographs, that
may be protectable, in whole or in part, under any patent, copyright, trademark, trade secret, or
other intellectual property law), developed, created, conceived, made, or reduced to practice
during Executive’s employment hereunder (except intellectual property that has no relation to the
Group or any Group customers that Executive developed, purely on Executive’s own time and at
Executive’s own expense), shall be the sole and exclusive property of the Company, and Executive
hereby assigns all Executive’s rights, title, and interest in any such intellectual property to the
Company.

8. CHANGE IN CONTROL.

     (a) EVENTS TRIGGERING CHANGE IN CONTROL. Change in Control shall mean the first of the
following to occur after the date of this Agreement:

          (i) Acquisition of Controlling Interest. Any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 51 percent or more of the combined voting
power of the Company’s then outstanding securities, except that a voting agreement or other voting
activity shall not make the Person a Beneficial Owner unless the voting activity in question is
intended to accomplish a Change in Control under Sections 7(a)(ii), (iii), or (iv). In applying the
preceding sentence, securities acquired directly from the Company or its affiliates by or for the
Person shall not be taken into account.

          (ii) Change in Board Control. During a consecutive 2-year period commencing after July 15,
2005, individuals who constituted the Board at the beginning of the period cease for any reason to
constitute a majority of the Board. In determining whether such a change in Board membership has
occurred, any Approved Replacement Director shall be treated as if he/she had been a director at
the beginning of the two-year period. For purposes of this Section, “Approved Replacement
Director” shall mean a director whose election (or nomination for election) was approved by a vote
of at least two-thirds of the directors then still in office who either were directors at the
beginning of the two-year period or were themselves Approved Replacement Directors.

          (iii) Merger Approved. The shareholders of the Company approve a merger or consolidation of
the Company with any other corporation unless: (a) the voting securities of the Company outstanding
immediately before the merger or consolidation would continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) at least 51
percent of the combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation.

          (iv) Sale of Assets. The shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets in a transaction or
series of transactions to an entity that is not owned, directly or indirectly, by the Company’s
Common Stock shareholders in substantially the same proportions as the owners of the Company’s
Common Stock before such transaction or series of transactions.

14

 

          (v) Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated transactions immediately
following which the record holders of Common Stock immediately prior to such transaction or series
of transactions continue to have substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Company immediately following such transaction
or series of transactions.

     (b) CERTAIN DEFINITIONS.

          (i) “Beneficial Owner” has the meaning set forth in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended.

          (ii) “Management Action” means any event, circumstance, or transaction that results from the
action of the Management Group.

          (iii) “Management Group” means any entity or group that includes, is affiliated with, or is
wholly or partly controlled by one or more executive officers of the Company.

          (iv) “Person” has the meaning given in Section 3(a)(9) of the Securities Exchange Act of 1934,
as amended, and as modified and used in Section 13(d) of that Act, and shall include a “group,” as
defined in Rule 13d-5 promulgated thereunder. However, a Person shall not include: (i) the Company
or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, (iv) Oaktree Capital Management, LLC, (v)
the Blackstone Group, or (vi) a corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of stock of the Company.

(c) CHANGE IN CONTROL SEPARATION BENEFITS

          (i) If:

               (a) a Change in Control occurs on or before December 31, 2007, and this Agreement terminates
pursuant to a Discharge Without Cause during the period commencing sixty (60) days prior to such
Change in Control and ending on or before the earlier of (1) December 31, 2008, or (2) the three
hundred sixty fifth (365th) day after such Change in Control, or

               (b) a Change in Control occurs during the period from January 1, 2008 through December 31,
2008, and this Agreement terminates pursuant to a Discharge Without Cause during the period
commencing sixty (60) days prior to such Change in Control and ending on or before December 31,
2008,

               then the Company will pay Executive all accrued but unpaid base salary through the termination
date. In addition, upon Executive’s “separation from service”

15

 

(within the meaning of Code § 409A(a)(2)(A)(i)), the Company shall: (i) pay Executive a lump
sum payment equal to two and one half (21/2) times the sum of (a) Executive’s then current annual
base salary plus (b) Three Hundred Thirty Thousand Dollars ($330,000), to be paid within thirty
(30) days after the date of termination; and (ii) reimburse Executive’s and Executive’s eligible
dependents’ COBRA premiums under the Company’s major medical group health plan on a monthly basis
for the period during which Executive remains eligible for COBRA coverage or until Executive
becomes eligible to participate in any subsequent employer’s major medical group health plan, up to
a maximum of twenty-four (24) months (collectively, the payments and benefits set forth in the
preceding subclauses (i) — (ii) to be referred to as the “Change in Control Termination
Benefits”). Executive’s right to receive the Change in Control Termination Benefits shall be
subject to Section 9 below and the Separation Conditions set forth in Section 6(d) above. The
Change in Control Separation Benefits to be provided under this Section 8 shall constitute full
satisfaction of the Company’s obligations under this Agreement, any Company policy, or otherwise.

     Solely for the purpose of avoiding confusion as to the meaning of this Section 8(c)(i), the
following illustrates the intent of the parties. If the Executive’s base salary were Six Hundred
Six Thousand Three Hundred Seventy-Five Thousand Dollars ($606,375) at the time a Change in Control
occurs, subject to the terms and conditions set forth in this Section above, Executive would be
entitled to receive a payment of Two Million Three Hundred Forty Thousand Nine Hundred Thirty Seven
Dollars and Fifty Cents ($2,340,937.50) which is two and one-half (21/2) times Nine Hundred
Thirty-Six Thousand Three Hundred Seventy-Five Dollars ($936,375) which is the annual base salary
of Six Hundred Six Thousand Three Hundred Seventy-Five Dollars ($606,375) plus the annual bonus of
Three Hundred Thirty Thousand Dollars ($330,000).

          (ii) If a Change in Control occurs on or before July 31, 2008 and this Agreement terminates
pursuant to Executive’s Resignation For Good Reason within the period commencing sixty (60) days
prior to such Change in Control and ending sixty (60) days after such Change in Control, then the
Company will pay Executive all accrued but unpaid base salary through the termination date. In
addition, upon Executive’s “separation from service” (within the meaning of Code §
409A(a)(2)(A)(i)), the Company shall: (i) pay Executive a lump sum payment equal to one and one
half (11/2) times Executive’s then current annual base salary plus Three Hundred Thirty Thousand
Dollars ($330,000), to be paid within thirty (30) days after the date of termination; and (ii)
reimburse Executive’s and Executive’s eligible dependents’ COBRA premiums under the Company’s major
medical group health plan on a monthly basis for the period during which Executive remains eligible
for COBRA coverage or until Executive becomes eligible to participate in any subsequent employer’s
major medical group health plan, up to a maximum of twenty-four (24) months (collectively, the
payments and benefits set forth in the preceding subclauses (i) — (ii) to be referred to as the
“Change in Control Resignation Benefits”). Executive’s right to receive the Change in Control
Resignation Benefits shall be subject to Section 9 below and the Separation Conditions set forth in
Section 6(d) above. The Change in Control Resignation Benefits to be provided under this Section 8
shall constitute full satisfaction of the Company’s obligations under this Agreement, any Company
policy, or otherwise.

16

 

Solely for the purpose of avoiding confusion as to the meaning of this Section 8(c)(ii) above, the
following illustrates the intent of the parties. If the Executive’s base salary were Six Hundred
Six Thousand Three Hundred Seventy-Five Dollars ($606,375) at the time a Change in Control occurs,
subject to the terms and conditions set forth in this Section above, Executive would be entitled to
receive a payment of One Million Four Hundred Four Thousand Five Hundred Sixty-Two Dollars and
Fifty Cents ($1,404,562.50) which is one and one-half times Nine Hundred Thirty-Six Thousand Three
Hundred Seventy-Five Dollars ($936,375), which is the annual base salary of Six Hundred Six
Thousand Three Hundred Seventy-Five Dollars ($606,375) plus the annual bonus of Three Hundred
Thirty Thousand Dollars ($330,000).

     (d) CHANGE IN CONTROL COMPLETION BONUS. In the event of the closing of any transaction
constituting a Change in Control on or before December 31, 2008 and provided Executive is employed
on the date of such closing or within sixty (60) days prior to such closing, then the Company shall
grant Executive One Hundred Fifty Thousand (150,000) restricted shares of Common Stock subject to
the terms and conditions of the Employee Restricted Stock Agreement attached as Exhibit B (the
“Completion Bonus”). The One Hundred Fifty Thousand (150,000) shares shall become immediately
vested at the time of the Change in Control. Notwithstanding anything to the contrary set forth in
this Agreement, the Completion Bonus, if any, shall fully satisfy the Company’s payment obligations
under Sections 5(c) and 5(d) above for the calendar year in which the closing occurs. The Company
shall pay Executive the Completion Bonus within thirty (30) days following the closing of the
Change in Control; provided, however, the Company’s obligation to provide the Completion Bonus
shall be subject to Section 9 below and the Separation Conditions set forth in Section 6(d) above.

     (e) GOLDEN PARACHUTE LIMITATION/GROSS UP. Upon the closing of any transaction constituting a
Change in Control, and only if Executive is eligible for any payments or benefits under this
Section 8, the Company shall select an independent tax consultant (the “ITC”) who shall be a
lawyer, certified public accountant, or a compensation consultant, with expertise in the area of
executive compensation tax law. The Company shall pay all fees and disbursements of the ITC. As
soon as possible following the closing of the transaction constituting a Change in Control and the
selection of the ITC, the ITC shall determine the extent to which the amounts paid or payable or
distributed or distributable to Executive under this Section 8 that constitute “parachute payments”
(as defined in Code § 280G(b)(2)) (the “Parachute Payments”) would be subject to the Code § 4999
excise tax. If the ITC determines that no Code § 4999 excise tax is payable by Executive, the ITC
shall furnish Executive with a written opinion that Executive has substantial authority not to
report any Code § 4999 excise tax due on Executive’s income tax returns. Executive must provide
the ITC with all information reasonably necessary for the ITC to determine the proper amount of
excise tax which should be paid by Executive, and must agree to the release of such information by
the Company to the ITC; otherwise, Executive shall not be entitled to any benefits under this
Section 8(e).

          (i) Tax Gross Up. If Executive’s Parachute Payments equal an amount greater than one
hundred ten percent (110%) of three (3) times

17

 

Executive’s Base Amount (as defined in Code § 280G(b)(3)) (as determined by the ITC),
then the Company shall pay Executive an additional lump sum cash payment (the “Gross-Up
Payment”) in an amount such that, after Executive’s payment of all taxes (including any
Code § 4999 excise tax or any interest or penalties imposed with respect to such taxes)
imposed upon the Gross-Up Payment, Executive retains from the Gross-Up Payment an amount
equal to the Code § 4999 excise tax imposed upon the Parachute Payments. The Gross-Up
payment, if any, shall be paid within sixty (60) days of the date any applicable Code §
4999 excise tax imposed on the Parachute Payments is due.

          (ii) Golden Parachute Limitation. If Executive’s Parachute Payments equal an amount less
than or equal to one hundred ten percent (110%) of three (3) times Executive’s Base Amount
(as defined in Code § 280G(b)(3)) (as determined by the ITC), then the ITC shall determine
the maximum amount of Parachute Payments that could be paid to Executive so that no portion
of such maximum amount of Parachute Payments would be subject to the Code § 4999 excise tax
(the “Maximum Payment Amount”), and the Company shall reduce the Parachute Payments so that
they do not exceed the Maximum Payment Amount, with such reduction first applied with
respect to Parachute Payments that would be cash compensation, but otherwise determined by
the Company in its sole discretion.

9. DELAY IN PAYMENTS TO COMPLY WITH CODE § 409A. Notwithstanding any provision of this Agreement to
the contrary, if Executive is a “specified employee” within the meaning of Code § 409A(a)(2)(B)(i),
then any payment that is required to be made under Section 6 or Section 8 above within the first
six (6) months following Executive’s “separation from service” (within the meaning of Code §
409A(a)(2)(A)(i)) shall be paid on the date that is the first business day of the seventh (7th)
month after the date of Executive’s “separation from service” and shall be paid in a single lump
sum payment, provided that Executive satisfies the Separation Conditions set forth in Section 6(d)
above. The provisions of this Section are intended to require a delay in a payment under Section 6
or Section 8 above only to the extent that such a delay is required in order for such payment to
comply with Code § 409A(a)(2)(B)(i), and shall not otherwise apply. In addition, immediately prior
to Executive’s “separation from service” (within the meaning of Code §409A(a)(2)(A)(i)), the
Company shall (i) establish an irrevocable grantor trust (the “Trust”) that shall have terms
designed to be consistent with those allowed under the model trust set forth in IRS Revenue
Procedure 92-64 and that shall have an independent financial institution as trustee, (ii)
contribute to the Trust the amount of each payment delayed for six (6) months under this Section as
of the date such payment would otherwise be required to be paid absent the provisions of this
Section applying to delay such payment, and (iii) provide the trustee of the Trust with a written
direction to (A) hold said amount in a segregated account for Executive’s benefit and (B) pay from
such segregated account all payments delayed under this Section (with earnings thereon) to
Executive on the first business day of the seventh (7th) month after the date of Executive’s
“separation from service.” Trust assets shall be invested in the highest-yielding available money
market account of the trustee (or, if the trustee does not have such an account, then the
highest-yielding available money market account of Bank of America), and earnings on amounts
contributed to the Trust for purposes of the preceding

18

 

sentence shall be determined based on such chosen investment. All expenses of the trustee shall be
paid by the Company and not from the Trust’s assets. Upon the trustee’s final payment of the
entire corpus of the Trust in a single lump sum, the Trust shall terminate.

10. NOTICE.

     (a) TO THE COMPANY. Executive shall send all communications required by this Agreement to the
Company in writing by hand delivery or overnight, both requiring signature acknowledging receipt,
addressed as follows:

If Mailed to Company:

Lodgian Inc.

Attention: Daniel Ellis, Senior Vice President and General Counsel, 3445 Peachtree Road NE, Suite
700 Atlanta, Georgia 30326

With a copy to Lodgian Inc.

Attention: Chairman of the Board, 3445 Peachtree Road NE, Suite 700 Atlanta, Georgia 30326

     (b) TO EXECUTIVE. Company shall send all communications required by this Agreement to
Executive in writing by hand delivery or overnight, both requiring Executive’s signature
acknowledging receipt, addressed as follows: Edward J. Rohling, 3093 Ridgewood Road, Atlanta,
Georgia, 30327.

     (c) TIME NOTICE DEEMED GIVEN. Written notice as required by this Agreement shall be deemed to
have been given to either party when signed by such party or its representative acknowledging
receipt.

11. RELEASE. Executive releases and discharges the Company from any claim or liability, whether
known or unknown, arising out of any event, act or omission occurring on or before the day
Executive signs this Agreement, including, but not limited to, claims arising out of Executive’s
employment, claims arising out of or relating to the Prior Agreement or the termination of the
Prior Agreement, claims arising by virtue of Executive’s status as a shareholder of Company, claims
for breach of contract, tort, negligent hiring, negligent training, negligent supervision,
negligent retention, employment discrimination, retaliation, or harassment, claims arising out of
or relating to equity or other ownership interest in Company, as well as any other statutory or
common law claims, at law or in equity, recognized under any federal, state, or local law.
Executive also releases any claims for unpaid back pay, sick pay, vacation pay, expenses, bonuses,
commissions, attorneys’ fees, or any other compensation

12. AMENDMENT. No provisions of this Agreement may be modified, waived, or discharged except by a
written document signed by the Chairman of the Board and Executive. Thus, for example, promotions,
commendations, and/or bonuses shall not, by

19

 

themselves, modify, amend, or extend this Agreement. A waiver of any conditions or provisions of
this Agreement in a given instance shall not be deemed a waiver of such conditions or provisions at
any other time.

13. INTERPRETATION; EXCLUSIVE FORUM. The validity, interpretation, construction, and performance
of this Agreement shall be governed by the laws of the state of Georgia (excluding any that mandate
the use of another jurisdiction’s laws). Any litigation or similar proceeding with respect to such
matters only may be brought within that state, and all parties to this Agreement consent to that
state’s jurisdiction and agree that venue anywhere in that state would be proper.

14. SUCCESSORS. This Agreement shall be binding upon, and shall inure to the benefit of, Executive
and Executive’s estate, but Executive may not assign or pledge this Agreement or any rights arising
under it, except to the extent permitted under the terms of the benefit plans in which Executive
participates. Without Executive’s consent, the Company may not assign this Agreement to a
successor that agrees in writing to be bound by this Agreement, after which any reference to the
“Company” in this Agreement shall be deemed to be a reference to the successor. Thereafter, the
Company shall have no further primary, secondary or other responsibilities or liabilities under
this Agreement of any kind.

15. TAXES. The Company shall withhold taxes from payments it makes pursuant to this Agreement as
required by applicable law.

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

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

18. ENTIRE AGREEMENT. All oral or written agreements or representations, express or implied, with
respect to the subject matter of this Agreement are set forth in this Agreement. However, this
Agreement does not override other subsequent written agreements Executive may executed relating to
specific aspects of Executive’s employment, such as conflicts of interest.

19. FORMER EMPLOYERS. Except for the non-compete agreement with Pittsburgh Greentree Radisson
Hotel, as previously disclosed by Executive, Executive is not subject to any employment,
confidentiality, or other agreement or restriction that would prevent Executive from fully
satisfying Executive’s duties under this Agreement or that would be

20

 

violated if Executive did so. Without the Company’s prior written approval, Executive shall not
disclose proprietary information belonging to a former employer or other entity without its written
permission.

Executive shall indemnify and hold the Company harmless from any liabilities, including defense
costs, it may incur because Executive is alleged to have violated the provisions of this Section 19
or improperly revealed or used proprietary information of a former employer without its permission,
or if a former employer challenges Executive’s entering into this Agreement or rendering services
pursuant to it.

20. INDEPENDENT ENFORCEMENT. The covenants set forth in Section 7 of this Agreement shall be
construed as agreements independent of any other agreements or any other provision in this
Agreement, and the existence of any claim or cause of action by Executive against the Company,
whether predicated on this Agreement or otherwise, regardless of who was at fault and regardless of
any claims that either Executive or the Company may have against the other, shall not constitute a
defense to the enforcement by the Company of the covenants set forth in Section 7 of this
Agreement. The Company shall not be barred from enforcing the restrictive covenants set forth in
Section 7 of this Agreement by reason of any breach of any other part of this Agreement or any
other agreement with Executive.

Executive acknowledges that all understandings and agreements between the Company and Executive
relating to the subjects covered in this Agreement are contained in it and that Executive has
entered into this Agreement voluntarily and not in reliance on any promises or representations by
the Company other than those contained in this Agreement itself.

Executive further acknowledges that he has carefully read this Agreement, that he understands all
of it, and that he has been given the opportunity to discuss this Agreement with his personal legal
counsel and has availed himself of that opportunity to the extent he wished to do so.

	 	 	 	 	 
	 	

LODGIAN, INC.

 	 
	 	By:  	/s/ Russel S. Bernard
 	 
	 	 	Name:  	Russel S. Bernard 	 
	 	 	Title:  	Chairman of the Board of Directors	 
	 	 	Date:  	April 20, 2007	 
	 
	 	EDWARD J. ROHLING

 	 
	 	By:  	/s/ Edward J. Rohling
 	 
	 	 	Name:  	Edward J. Rohling 	 
	 	 	Date:  	April 23, 2007	 

21

 

Exhibit A

IF THE COMPANY’S EBITDA ACHIEVES THE PERCENTAGE OF TARGET EBITDA FOR THE CALENDAR YEAR IN QUESTION,
COMPANY SHALL PAY EXECUTIVE THE ANNUAL PERFORMANCE BONUS OF

	 	 	 
	% of Target EBITDA Achieved	 	Cash Award
	Less than 90% of Target EBITDA

	 	2006 — 2008: $220,000
	90 — 99.99% of Target EBITDA

	 	2006 — 2008: $400,000
	100 — 107.49% of Target EBITDA

	 	2006 — 2008: $500,000
	107.5 — 114.99% of Target EBITDA

	 	2006 — 2008: $632,500
	115 — 124.99% of Target EBITDA

	 	2006 — 2008: $687,500
	125 — 134.99% of Target EBITDA

	 	2006 — 2008: $742,500
	135 — 144.99% of Target EBITDA

	 	2006 — 2008: $852,500
	Greater than 145% of Target EBITDA

	 	2006 — 2008: $962,500

EBITDA

For all purposes herein, EBITDA shall be defined as the Company’s reported Adjusted EBITDA.
Adjusted EBITDA is defined as EBITDA for the Company’s Continuing Operations Hotels, 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 for damage caused to the Company’s properties by the
hurricanes that struck the southeastern United States in the 2004 third quarter.

TARGET EBITDA

Target EBITDA is defined in Section 5(c)(iii) of the Agreement.

STOCK PRICE THRESHOLD

Stock Price Threshold shall mean:

	 	 	 
	2007:

	 	$18.00 per share
	2008:

	 	$21.00 per share

22

 

EXHIBIT
B

LODGIAN,
INC.

EMPLOYEE RESTRICTED STOCK AGREEMENT

	 	 	 
	Name of Recipient:

	 	Award Date:
	 

	Number of Award Shares:
	 	 

     THIS EMPLOYEE RESTRICTED STOCK AGREEMENT1 is made and entered into
effective as of the Award Date noted above by and between Lodgian, Inc., a Delaware corporation and
the Recipient noted above.

W I T N E S S E T H:

     WHEREAS, the Committee has authorized the grant to Recipient of a restricted stock award under
the Plan of shares of the 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 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 which
are 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.

     1.3 Vesting of Award Shares. Except to the extent otherwise expressly
provided in any other written agreement between Recipient and the Company executed before the Award
Date of this Agreement

 

			
	1	 	Unless otherwise indicated, all capitalized
terms used in this Agreement are defined in the “Definitions” section of
Exhibit A. Exhibit A is incorporated by reference and is
included in the definition of “Agreement.”

Lodgian, Inc. Employee Restricted Stock Agreement

Page 1

 

 

providing more favorable terms for the Recipient, Recipient shall become
vested in the percentage of the Award Shares shown below based upon the Continuous Service of the Recipient from the Award
Date of the Award Shares (as noted hereon):

	 	 	 	 	 	 
	 	Vesting Schedule:
	 
	 	Percentage Vested:

	 	 	Continuous Service from Award Date:	 
	 	 

	 	 	 	 
	 	 

	 	 	 	 
	 	 

	 	 	 	 
	 	 

	 	 	 	 
	 

If the above calculation of vested Shares would result in a fraction, any fraction will be rounded
to zero. However, notwithstanding the foregoing, in the event that the Recipient ceases Continuous
Service with the Company (1) by reason of death or Disability, (2) after having attained the age of
sixty-five (65), (3) because the Recipient’s employment with the Company has been terminated by the
Company without Cause, (4) because the Recipient has terminated employment with the Company for
Good Reason, or (5) because the Recipient’s employment contract with the Company (if any) has come
to an end and has not been renewed or extended, then the Recipient shall nonetheless immediately,
as of the date of such cessation of Continuous Service, become fully (100%) vested in the Award
Shares. Furthermore, notwithstanding the foregoing, in the event that a Change in Control of the
Company occurs, then the Recipient shall nonetheless immediately, as of the date of such Change in
Control, become fully (100%) vested in the Award Shares.

     1.4 Tax Consequences. 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 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 simultaneously with the Recipient’s
delivery to the Company of a copy of his Code §83(b) Election (which must occur no later
than thirty (30) days after the Award Date). 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 one (or, at the discretion of the Committee, a combination) of
the following methods of satisfying the Company’s withholding obligations:

Lodgian, Inc. Employee Restricted Stock Agreement

Page 2

 

 

     (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 withhold 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 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

Lodgian, Inc. Employee Restricted Stock Agreement

Page 3

 

 

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 Cessation of Services. Except to the extent otherwise expressly
provided in any other written agreement between Recipient and the Company executed before the Award
Date of this Agreement providing more favorable terms for the Recipient, upon the Recipient’s
cessation of the performance of services for the Company for any reason, all Unvested Award Shares
shall be forfeited, effective upon the date of such cessation of the performance of services.

     2.2 Restrictions on 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 do so with respect to 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.

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

Lodgian, Inc. Employee Restricted Stock Agreement

Page 4

 

 

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 an Employee Restricted Stock Agreement dated [INSERT], a copy of which is available from the
Company.

     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 Contractual Rights Created. Neither the establishment of the Plan nor the
award of Award Shares hereunder shall be construed as giving Recipient the right to employment
with, or the right to continued performance of services for, 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
the Company and its directors, officers or employees have no duty or obligation to disclose to the
Recipient any material non-public information regarding the business of the Company or affecting
the value of the Award Shares.

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

	 	 	 	 	 
	Company:
	 	Recipient:
	Lodgian, Inc.:	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	Its:

	 	 	 	[INSERT NAME]
	 

	 	 	 	 

Lodgian, Inc. Employee Restricted Stock Agreement

Page 5

 

 

Exhibit A

Definitions

A. Affiliate shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the
Securities Exchange Act of 1934, as amended.

B. Agreement shall mean this Employee Restricted Stock Agreement.

C. Associate shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the
Securities Exchange Act of 1934, as amended.

D. Award Shares shall mean the shares of common stock of the Company which are awarded to the
Recipient subject to the terms and conditions of this Agreement.

E. Base Salary shall mean the wages the Company pays Recipient on an annual basis, exclusive of all
benefits, bonuses, equity, commissions, or any other incentive-based compensation.

F. Beneficial Owner shall mean shall have the meaning ascribed to that term in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended.

G. Cause shall mean, with respect to a termination of Recipient’s employment, a termination by the
Company because of any one of the following events:

     (i) Recipient’s willful refusal to follow the lawful direction of the CEO and/or the person to
whom Recipient reports or Recipient’s material failure to perform Recipient’s duties (other than by
reason of Disability), in either case, only after Recipient has been given written notice by the
CEO and/or the person to whom Recipient reports detailing the directives Recipient has refused to
follow or the duties Recipient has failed to perform and at least 30 days to cure;

     (ii) Recipient’s material and willful failure to comply with Company policies as applied to
Company employees, only after Recipient has been given written notice by the CEO and/or the person
to whom Recipient reports detailing the policies with which Recipient has failed to comply and at
least 30 days to cure;

     (iii) Recipient’s engaging in any of the following conduct:

     (1) an act of fraud or dishonesty that materially harms the Company or its Affiliates,

     (2) a felony or any violation of any federal or state securities law or Recipient’s being
enjoined from violating any federal or state securities law or being determined to have violated
any such law;

     (3) gross negligence in connection with any property or activity of the Company and/or its
Subsidiaries, Affiliates and successors;

     (4) repeated and intemperate use of alcohol or illegal drugs after written notice from the
CEO and/or the person to whom Recipient reports;

     (5) material breach of any of Recipient’s obligations under any agreement between Recipient
and the Company (other than by reason of physical or mental illness or injury), but only after
Recipient has been given written notice of the breach by the CEO and/or the person to whom
Recipient reports and at least thirty (30) days to cure;

     (6) Recipient’s becoming barred or prohibited by the SEC from holding Recipient’s position
with the Company; or

Lodgian, Inc. Employee Restricted Stock Agreement

Exhibit A — Definitions

Page 1

 

 

     (7) Recipient’s resignation for other than Good Reason.

H. Change in Control means the first of the following to occur after the date of this Agreement:

     (i) Acquisition of Controlling Interest. Any person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 51 percent or more of the combined voting
power of the Company’s then outstanding securities, except that a voting agreement or other voting
activity shall not make the Person a Beneficial Owner unless the voting activity in question is
intended to accomplish a Change in Control under Sections H(ii), (iii), or (iv). In applying the
preceding sentence, securities acquired directly from the Company or its affiliates by or for the
Person shall not be taken into account.

     (ii) Change in Board Control. During a consecutive 2-year period commencing after July 15,
2005, individuals who constituted the Board of Directors at the beginning of the period cease for
any reason to constitute a majority of the Board of Directors. In determining whether such a change
in Board of Directors membership has occurred, any Approved Replacement Director shall be treated
as if he/she had been a director at the beginning of the two-year period. For purposes of this
Section, “Approved Replacement Director” shall mean a director whose election (or nomination for
election) was approved by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the two-year period or were themselves Approved
Replacement Directors.

     (iii) Merger Approved. The shareholders of the Company approve a merger or consolidation of
the Company with any other corporation unless: (a) the voting securities of the Company outstanding
immediately before the merger or consolidation would continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) at least 51
percent of the combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation.

     (iv) Sale of Assets. The shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets in a transaction or
series of transactions to an entity that is not owned, directly or indirectly, by the Company’s
Common Stock shareholders in substantially the same proportions as the owners of the Company’s
Common Stock before such transaction or series of transactions.

     (v) Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated transactions immediately
following which the record holders of Common Stock immediately prior to such transaction or series
of transactions continue to have substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Company immediately following such transaction
or series of transactions.

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

J. 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 Code §83(b) 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.

K. Combined Voting Power shall mean the combined voting power of the Company’s or other relevant
entity’s then outstanding voting securities.

L. Common Stock shall mean the common stock of the Company.

M. Company shall mean Lodgian, Inc., and any successor thereto.

N. Committee shall mean the Compensation Committee of the Board of Directors.

Lodgian, Inc. Employee Restricted Stock Agreement

Exhibit A — Definitions

Page 2

 

 

O. Continuous Service shall mean a period of continuous performance of services by Recipient for
the Company or an Affiliate, as determined by the Committee in its sole and absolute discretion.

P. Custodian shall mean the Secretary of the Company or such other officer of the Company as may be
designated by the Committee to hold Award Shares until such time as any such Award Shares become
Vested Award Shares.

Q. Disability shall mean a physical or mental impairment which renders You unable to perform the
essential functions of Your job even with reasonable accommodation, as determined by the Company in
its sole discretion.

R. Good Reason shall exist if (i) the Company, without Recipient’s written consent, (A) takes any
action which results in the material reduction of Recipient’s then current duties or
responsibilities, (B) reduces Recipient’s then-current Base Salary, (C) reduces the benefits to
which Recipient is entitled on the Award Date, unless a similar reduction is made for other
executive employees, (D) commits a material breach of this Agreement, or (E) requires Recipient to
relocate more than fifty (50) miles from the location where the Recipient performs services for the
Company on the Award Date; (ii) Recipient provides written notice to the Company of such action and
provides the Company with thirty (30) days to remedy such action (the “Cure Period”), (iii) the
Company fails to remedy such action within the Cure Period, and (iv) Recipient resigns within ten
(10) days of the expiration of the Cure Period. Good Reason shall not include any isolated,
insubstantial or inadvertent action that (i) is not taken in bad faith, and (ii) is remedied by the
Company within the Cure Period.

S. Parent shall mean any corporation which is a “parent corporation” within the meaning of Code
§424(e) with respect to the Company.

T. Plan shall mean the Lodgian, Inc., Amended & Restated 2002 Stock Incentive Plan.

U. Recipient shall mean the individual shown on this Agreement as the Recipient.

V. Subsidiary shall mean any corporation which is a “subsidiary corporation” within the meaning of
Code §424(f) with respect to the Company.

W. Unvested Award Shares shall mean the Award Shares which have not become vested pursuant to the
Vesting Schedule or otherwise.

X. Vested Award Shares shall mean the Award Shares which have become vested pursuant to the Vesting
Schedule or otherwise.

Lodgian, Inc. Employee Restricted Stock Agreement

Exhibit A — Definitions

Page 3

 

 

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 its 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,
not later than 30 days after the date the above-described property was transferred to the
Taxpayer.

Dated this ____________ day of
__________________, 20___.

Signature: __________________________________________

Name
of Taxpayer:
___________________________________

Code §83(b) Election Form

 

 

Exhibit 2

WITHHOLDING ELECTION

	 	 	 
	TO:     Lodgian, Inc.

	 	Restricted Stock Agreement:
	RE:     Withholding Election

	 	Restricted Stock Agreement between the Recipient
(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
(the “Vesting Shares”):

	 	Date of Agreement: _________________________________
	 
	 	 
	Number of Vesting Shares: _____________________

	 	Total Number of Restricted Shares subject to Restricted 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 repurchase 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:
______ - ______ - _________

Withholding Election Form

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