Document:

Form of Medium-Term Notes, Series K, due January 4, 2022

 Exhibit 4.5 

[Face of Note] 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation
(“DTC”), to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein. 
  

	 CUSIP NO. 94986R3D1 
	
FACE AMOUNT: $                   
      

 REGISTERED NO.      

WELLS FARGO & COMPANY 

MEDIUM-TERM NOTE, SERIES K 

Due Nine Months or More From Date of Issue 

Principal at Risk Securities Linked to an ETF Basket 

due January 4, 2022 

WELLS FARGO & COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter
called the “Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & Co., or registered assigns, an amount equal to the
Redemption Amount (as defined below), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, on the Stated Maturity Date. The “Initial Stated Maturity
Date” shall be January 4, 2022. If the Calculation Day (as defined below) is not postponed for any Basket Component (as defined below), the Initial Stated Maturity Date will be the “Stated Maturity Date.” If the
Calculation Day is postponed for any Basket Component, the “Stated Maturity Date” shall be the later of (i) the Initial Stated Maturity Date and (ii) the third Business Day (as defined below) after the last Calculation Day
as postponed. This Security shall not bear any interest. 
 Any payments on this Security at Maturity will be made against
presentation of this Security at the office or agency of the Company maintained for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the Company for such purpose. 

“Face Amount” shall mean, when used with respect to this Security, the amount set forth on the face of this
Security as its “Face Amount.” 

 Determination of Redemption Amount 

The “Redemption Amount” of this Security will equal: 

 

	 	•	 	 if the Ending Price is greater than the Starting Price: the lesser of: 

 

	 	(i)	 the Face Amount plus: 

 

															
	 	 	   Face Amount  x  
	 	 	 	  Ending Price – Starting Price  	 	 	 	   x  Participation Rate  
	 	 	 	 ; and

	 	 	 	 	 	Starting Price	 	 	 	 	 	 

  

	 	(ii)	 the Capped Value; 

  

	 	•	 	 if the Ending Price is less than or equal to the Starting Price, but greater than or equal to the Threshold
Price: the Face Amount; or 

  

	 	•	 	 if the Ending Price is less than the Threshold Price: the Face Amount minus: 

 

							
	 	 	  Face Amount  x  	 	  Threshold Price – Ending Price  	 	 
	 	 	 	Starting Price	 	 

 All calculations with respect to the Redemption Amount will be rounded to the nearest one hundred-thousandth,
with five one-millionths rounded upward (e.g., 0.000005 would be rounded to 0.00001); and the Redemption Amount will be rounded to the nearest cent, with one-half cent rounded upward. 

“Basket” shall mean a basket comprised of the following Basket Components, with the return of each Basket
Component having the weighting noted parenthetically: SPDR S&P 500 ETF Trust (50%); iShares Russell 2000 ETF (15%); iShares MSCI EAFE ETF (15%); iShares MSCI Emerging Markets ETF (10%); PowerShares DB Commodity Index Tracking Fund (5%); and
Vanguard REIT ETF (5%). 
 “Basket Component” shall mean each of the SPDR S&P 500 ETF Trust, iShares
Russell 2000 ETF, iShares MSCI EAFE ETF, iShares MSCI Emerging Markets ETF, PowerShares DB Commodity Index Tracking Fund and Vanguard REIT ETF. 

“Underlying Index” shall mean each of the S&P 500 Index, Russell 2000 Index, MSCI EAFE Index, MSCI
Emerging Markets Index, DBIQ Optimum Yield Diversified Commodity Index Excess Return and MSCI US REIT Index. 
 The
“Pricing Date” shall mean December 29, 2016. 
 The “Starting Price” is 100. 

  
 2 

 The “Ending Price” will be calculated based on the weighted
returns of the Basket Components and will be equal to the product of (i) 100 and (ii) an amount equal to 1 plus the sum of: (A) 50% of the Component Return of the SPDR S&P 500 ETF Trust; (B) 15% of the Component Return of the
iShares Russell 2000 ETF; (C) 15% of the Component Return of the iShares MSCI EAFE ETF; (D) 10% of the Component Return of the iShares MSCI Emerging Markets ETF; (E) 5% of the Component Return of the PowerShares DB Commodity Index
Tracking Fund; and (F) 5% of the Component Return of the Vanguard REIT ETF. 
 The “Component Return”
of a Basket Component will be equal to: 
 Final Component Price – Initial Component Price 

Initial Component Price 

  where, 
  

	 	•	 	 the “Initial Component Price” is the Fund Closing Price of such Basket Component on the
Pricing Date; and 

  

	 	•	 	 the “Final Component Price” will be the Fund Closing Price of such Basket Component on the
Calculation Day. 

 The Initial Component Prices of the Basket Components are as follows: SPDR S&P
500 ETF Trust ($224.35); iShares Russell 2000 ETF ($135.37); iShares MSCI EAFE ETF ($57.53); iShares MSCI Emerging Markets ETF ($35.26); PowerShares DB Commodity Index Tracking Fund ($15.81); and Vanguard REIT ETF ($81.50). 

The “Fund Closing Price” with respect to a Basket Component on any Trading Day means the product of
(i) the Closing Price of one share of such Basket Component (or one unit of any other security for which a Fund Closing Price must be determined) on such Trading Day and (ii) the Adjustment Factor applicable to such Basket Component on
such Trading Day. 
 The “Closing Price” with respect to a share of a Basket Component (or one unit of any
other security for which a Closing Price must be determined) on any Trading Day means the price, at the scheduled weekday closing time, without regard to after hours or any other trading outside the regular trading session hours, of the share on the
principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended, on which the share (or any such other security) is listed or admitted to trading. 

The “Adjustment Factor” means, with respect to a share of a Basket Component (or one unit of any other
security for which a Fund Closing Price must be determined), 1.0, subject to adjustment in the event of certain events affecting the shares of such Basket Component. See “Anti-dilution Adjustments Relating To A Basket Component; Alternate
Calculation—Anti-dilution Adjustments” below. 
 The “Capped Value” is 154% of the Face Amount of
this Security. 
 The “Threshold Price” is 85, which is equal to 85% of the Starting Price. 

  
 3 

 The “Participation Rate” is 150%. 

“Business Day” shall mean a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banking institutions are authorized or required by law or regulation to close in New York, New York. 
 A
“Trading Day” with respect to a Basket Component means a day, as determined by the Calculation Agent, on which the Relevant Stock Exchange (as defined below) and each Related Futures or Options Exchange (as defined below) with
respect to such Basket Component, or any successor thereto, if applicable, are scheduled to be open for trading for their respective regular trading sessions. 

The “Related Futures or Options Exchange” for a Basket Component means each exchange or quotation system
where trading has a material effect (as determined by the Calculation Agent) on the overall market for futures or options contracts relating to such Basket Component. 

The “Relevant Stock Exchange” for a Basket Component means the primary exchange or quotation system on which
shares (or other applicable securities) of such Basket Component are traded, as determined by the Calculation Agent. 
 The
“Calculation Day” shall be December 28, 2021. If such day is not a Trading Day with respect to a Basket Component, the Calculation Day for such Basket Component will be postponed to the next succeeding Trading Day for such
Basket Component. Notwithstanding the postponement of the Calculation Day for a particular Basket Component due to a non-Trading Day for such Basket Component, the originally scheduled Calculation Day will remain the Calculation Day for any Basket
Component not affected by such non-Trading Day. The Calculation Day is also subject to postponement due to the occurrence of a Market Disruption Event (as defined below). If a Market Disruption Event occurs or is continuing with respect to a Basket
Component on the Calculation Day, such Calculation Day for such Basket Component will be postponed to the first succeeding Trading Day for such Basket Component on which a Market Disruption Event for such Basket Component has not occurred and is not
continuing; however, if such first succeeding Trading Day has not occurred as of the eighth Trading Day for such Basket Component after the originally scheduled Calculation Day, that eighth Trading Day shall be deemed to be the Calculation Day. If
the Calculation Day has been postponed eight Trading Days for a Basket Component after the originally scheduled Calculation Day for such Basket Component, and a Market Disruption Event occurs or is continuing with respect to such Basket Component on
such eighth Trading Day, the Calculation Agent will determine the Closing Price of such Basket Component on such eighth Trading Day based on its good faith estimate of the value of the shares (or other applicable securities) of such Basket Component
as of the Close of Trading (as defined below) on such eighth Trading Day. Notwithstanding the postponement of the Calculation Day for a particular Basket Component due to a Market Disruption Event with respect to such Basket Component, the
originally scheduled Calculation Day will remain the Calculation Day for any Basket Component not affected by a Market Disruption Event. See “—Market Disruption Events.” 

  
 4 

 “Calculation Agent Agreement” shall mean the Calculation Agent
Agreement dated as of March 18, 2015 between the Company and the Calculation Agent, as amended from time to time. 

“Calculation Agent” shall mean the Person that has entered into the Calculation Agent Agreement with the
Company providing for, among other things, the determination of the Ending Price and the Redemption Amount, which term shall, unless the context otherwise requires, include its successors under such Calculation Agent Agreement. The initial
Calculation Agent shall be Wells Fargo Securities, LLC. Pursuant to the Calculation Agent Agreement, the Company may appoint a different Calculation Agent from time to time after the initial issuance of this Security without the consent of the
Holder of this Security and without notifying the Holder of this Security. 
 Market Disruption Events 

A “Market Disruption Event” means, with respect to a Basket Component, any of the following events as
determined by the Calculation Agent in its sole discretion: 
  

	 	    (A)	 The occurrence or existence of a material suspension of or limitation imposed on trading by the Relevant Stock
Exchange or otherwise relating to the shares (or other applicable securities) of such Basket Component or any Successor Fund (as defined below) on the Relevant Stock Exchange at any time during the one-hour period that ends at the Close of Trading
on such day, whether by reason of movements in price exceeding limits permitted by such Relevant Stock Exchange or otherwise. 

  

	 	    (B)	 The occurrence or existence of a material suspension of or limitation imposed on trading by any Related
Futures or Options Exchange or otherwise in futures or options contracts relating to the shares (or other applicable securities) of such Basket Component or any Successor Fund on any Related Futures or Options Exchange at any time during the
one-hour period that ends at the Close of Trading on that day, whether by reason of movements in price exceeding limits permitted by the Related Futures or Options Exchange or otherwise. 

 

	 	    (C)	 The occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the
ability of market participants in general to effect transactions in, or obtain market values for, shares (or other applicable securities) of such Basket Component or any Successor Fund on the Relevant Stock Exchange at any time during the one-hour
period that ends at the Close of Trading on that day. 

  

	 	    (D)	 The occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the
ability of market participants in general to effect transactions in, or obtain market values for, futures or options contracts relating to shares (or other applicable securities) of such Basket Component or any Successor Fund on any Related Futures
or Options Exchange at any time during the one-hour period that ends at the Close of Trading on that day. 

  
 5 

	 	    (E)	 The closure of the Relevant Stock Exchange or any Related Futures or Options Exchange with respect to such
Basket Component or any Successor Fund prior to its Scheduled Closing Time unless the earlier closing time is announced by the Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, at least one hour prior to the earlier of
(1) the actual closing time for the regular trading session on such Relevant Stock Exchange or Related Futures or Options Exchange, as applicable, and (2) the submission deadline for orders to be entered into the Relevant Stock Exchange or
Related Futures or Options Exchange, as applicable, system for execution at the Close of Trading on that day. 

  

	 	    (F)	 The Relevant Stock Exchange or any Related Futures or Options Exchange with respect to such Basket Component
or any Successor Fund fails to open for trading during its regular trading session. 

   For
purposes of determining whether a Market Disruption Event has occurred: 
  

	 	    (1)	 “Close of Trading” means the Scheduled Closing Time of the Relevant Stock Exchange with
respect to such Basket Component or any Successor Fund; and 

  

	 	    (2)	 the “Scheduled Closing Time” of the Relevant Stock Exchange or any Related Futures or Options
Exchange on any Trading Day for such Basket Component or any Successor Fund means the scheduled weekday closing time of such Relevant Stock Exchange or Related Futures or Options Exchange on such Trading Day, without regard to after hours or any
other trading outside the regular trading session hours. 

 Anti-dilution Adjustments Relating To A Basket Component; Alternate
Calculation 
 Anti-dilution Adjustments 

The Calculation Agent will adjust the Adjustment Factor with respect to a Basket Component as specified below if any of the
events specified below occurs with respect to such Basket Component and the effective date or ex-dividend date, as applicable, for such event is after the Pricing Date and on or prior to the Calculation Day. 

The adjustments specified below do not cover all events that could affect a Basket Component. The Calculation Agent may, in
its sole discretion, make additional adjustments to any terms of this Security upon the occurrence of other events that affect or could potentially affect the market price of, or shareholder rights in, such Basket Component, with a view to
offsetting, to the extent practical, any such change, and preserving the relative investment risks of this Security. In addition, the Calculation Agent may, in its sole discretion, make adjustments or a series of adjustments that differ from those
described herein if the Calculation Agent determines that such adjustments do not properly reflect the economic consequences of the events specified herein or would not preserve the relative investment risks of this Security. All determinations made
by the Calculation Agent in making any adjustments to the terms of this Security, including adjustments that are in addition to, or that differ from, those described herein, will be made in good faith and a commercially reasonable manner, with the
aim of ensuring an 

  
 6 

 
equitable result. In determining whether to make any adjustment to the terms of this Security, the Calculation Agent may consider any adjustment made by the Options Clearing Corporation or any
other equity derivatives clearing organization on options contracts on the affected Basket Component. 
 For any event
described below, the Calculation Agent will not be required to adjust the Adjustment Factor unless the adjustment would result in a change to the Adjustment Factor then in effect of at least 0.10%. The Adjustment Factor resulting from any adjustment
will be rounded up or down, as appropriate, to the nearest one-hundred thousandth. 
  

	 	    (A)	 Stock Splits and Reverse Stock Splits 

If a stock split or reverse stock split has occurred, then once such split has become effective, the Adjustment Factor will
be adjusted to equal the product of the prior Adjustment Factor and the number of securities which a holder of one share (or other applicable security) of the Basket Component before the effective date of such stock split or reverse stock split
would have owned or been entitled to receive immediately following the applicable effective date. 
  

	 	    (B)	 Stock Dividends 

If a dividend or distribution of shares (or other applicable securities) to which this Security is linked has been made by a
Basket Component ratably to all holders of record of such shares (or other applicable security), then the Adjustment Factor will be adjusted on the ex-dividend date to equal the prior Adjustment Factor plus the product of the prior Adjustment Factor
and the number of shares (or other applicable security) of such Basket Component which a holder of one share (or other applicable security) of such Basket Component before the ex-dividend date would have owned or been entitled to receive immediately
following that date; provided, however, that no adjustment will be made for a distribution for which the number of securities of such Basket Component paid or distributed is based on a fixed cash equivalent value. 

 

	 	    (C)	 Extraordinary Dividends 

If an Extraordinary Dividend (as defined below) has occurred, then the Adjustment Factor will be adjusted on the ex-dividend
date to equal the product of the prior Adjustment Factor and a fraction, the numerator of which is the Closing Price per share (or other applicable security) of such Basket Component on the Trading Day preceding the ex-dividend date, and the
denominator of which is the amount by which the Closing Price per share (or other applicable security) of such Basket Component on the Trading Day preceding the ex-dividend date exceeds the Extraordinary Dividend Amount (as defined below). 

  
 7 

 For purposes of determining whether an Extraordinary Dividend has occurred: 

 

	 	    (1)	 “Extraordinary Dividend” means any cash dividend or distribution (or portion thereof) that
the Calculation Agent determines, in its sole discretion, is extraordinary or special; and 

  

	 	    (2)	 “Extraordinary Dividend Amount” with respect to an Extraordinary Dividend for the securities
of such Basket Component will equal the amount per share (or other applicable security) of such Basket Component of the applicable cash dividend or distribution that is attributable to the Extraordinary Dividend, as determined by the Calculation
Agent in its sole discretion. 

 A distribution on the securities of such Basket Component described
below under the section entitled “—Reorganization Events” below that also constitutes an Extraordinary Dividend will only cause an adjustment pursuant to that “—Reorganization Events” section. 

 

	 	    (D)	 Other Distributions 

If a Basket Component declares or makes a distribution to all holders of the shares (or other applicable security) of such
Basket Component of any non-cash assets, excluding dividends or distributions described under the section entitled “—Stock Dividends” above, then the Calculation Agent may, in its sole discretion, make such adjustment (if any) to the
Adjustment Factor as it deems appropriate in the circumstances. If the Calculation Agent determines to make an adjustment pursuant to this paragraph, it will do so with a view to offsetting, to the extent practical, any change in the economic
position of a holder of this Security that results solely from the applicable event. 
  

	 	    (E)	 Reorganization Events 

If a Basket Component, or any Successor Fund, is subject to a merger, combination, consolidation or statutory exchange of
securities with another exchange traded fund, and such Basket Component to which this Security is linked is not the surviving entity (a “Reorganization Event”), then, on or after the date of such event, the Calculation Agent shall,
in its sole discretion, make an adjustment to the Adjustment Factor or the method of determining the Redemption Amount or any other terms of this Security as the Calculation Agent determines appropriate to account for the economic effect on this
Security of such event, and determine the effective date of that adjustment. If the Calculation Agent determines that no adjustment that it could make will produce a commercially reasonable result, then the Calculation Agent may deem such event a
Liquidation Event (as defined below). 

  
 8 

 Liquidation Events 

If a Basket Component is de-listed, liquidated or otherwise terminated (a “Liquidation Event”), and a
successor or substitute exchange traded fund exists that the Calculation Agent determines, in its sole discretion, to be comparable to such Basket Component, then, upon the Calculation Agent’s notification of that determination to the Trustee
and the Company, any subsequent Fund Closing Price for such Basket Component will be determined by reference to the Fund Closing Price of such successor or substitute exchange traded fund (such exchange traded fund being referred to herein as a
“Successor Fund”), with such adjustments as the Calculation Agent determines are appropriate to account for the economic effect of such substitution on the holder of this Security. 

If a Basket Component undergoes a Liquidation Event prior to, and such Liquidation Event is continuing on, the date that any
Fund Closing Price of such Basket Component is to be determined and the Calculation Agent determines that no Successor Fund is available at such time, then the Calculation Agent will, in its discretion, calculate the Fund Closing Price for such
Basket Component on such date by a computation methodology that the Calculation Agent determines will as closely as reasonably possible replicate such Basket Component, provided that if the Calculation Agent determines in its discretion that it is
not practicable to replicate such Basket Component (including but not limited to the instance in which the sponsor of the index underlying such Basket Component discontinues publication of that index), then the Calculation Agent will calculate the
Fund Closing Price for such Basket Component in accordance with the formula last used to calculate such Fund Closing Price before such Liquidation Event, but using only those securities that were held by such Basket Component immediately prior to
such Liquidation Event without any rebalancing or substitution of such securities following such Liquidation Event. 

Notwithstanding the foregoing, if the PowerShares DB Commodity Index Tracking Fund undergoes a Liquidation Event prior to, and
such Liquidation Event is continuing on the Calculation Day, and the Calculation Agent determines in its discretion that (i) no Successor Fund is available at such time and (ii) it is not practicable to replicate the PowerShares DB
Commodity Index Tracking Fund, then the Calculation Agent will calculate the Fund Closing Price of the PowerShares DB Commodity Index Tracking Fund in good faith and in a commercially reasonable manner. 

If a Successor Fund is selected or the Calculation Agent calculates the Fund Closing Price as a substitute for such Basket
Component, such Successor Fund or Fund Closing Price will be used as a substitute for such Basket Component for all purposes, including for purposes of determining whether a Market Disruption Event exists. 

If any event is both a Reorganization Event and a Liquidation Event, such event will be treated as a Reorganization Event for
purposes of this Security unless the Calculation Agent makes the determination referenced in the last sentence of the section entitled “—Anti-dilution Adjustments—Reorganization Events” above. 

  
 9 

 Alternate Calculation 

If at any time the method of calculating a Basket Component or a Successor Fund, or the related Underlying Index, is changed
in a material respect, or if a Basket Component or a Successor Fund is in any other way modified so that such Basket Component does not, in the opinion of the Calculation Agent, fairly represent the price of the securities of such Basket Component
or such Successor Fund had such changes or modifications not been made, then the Calculation Agent may, at the close of business in New York City on the date that any Fund Closing Price is to be determined, make such calculations and adjustments as,
in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a Closing Price of an exchange traded fund comparable to such Basket Component or such Successor Fund, as the case may be, as if such changes or
modifications had not been made, and calculate the Fund Closing Price and the Redemption Amount with reference to such adjusted Closing Price of such Basket Component or such Successor Fund, as applicable. 

Calculation Agent 

The Calculation Agent will determine the Redemption Amount and the Ending Price. In addition, the Calculation Agent will
(i) determine if adjustments are required to the Fund Closing Price and/or the Adjustment Factor of a Basket Component under the circumstances described in this Security, (ii) if a Basket Component undergoes a Liquidation Event, select a
Successor Fund or, if no Successor Fund is available, determine the Fund Closing Price of such Basket Component, and (iii) determine whether a Market Disruption Event or non-Trading Day has occurred. 

The Company covenants that, so long as this Security is Outstanding, there shall at all times be a Calculation Agent (which
shall be a broker-dealer, bank or other financial institution) with respect to this Security. 

All determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the
Calculation Agent and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security. 

Tax Considerations 

The Company agrees, and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be
deemed to have agreed (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States federal income tax purposes to treat this Security as a prepaid derivative contract that is an “open
transaction.” 
 Redemption and Repayment 

This Security is not subject to redemption at the option of the Company or repayment at the option of the Holder hereof prior
to January 4, 2022. This Security is not entitled to any sinking fund. 

  
 10 

 Acceleration 

If an Event of Default, as defined in the Indenture, with respect to this Security shall occur and be continuing, the Redemption Amount
(calculated as set forth in the next sentence) of this Security may be declared due and payable in the manner and with the effect provided in the Indenture. The amount payable to the Holder hereof upon any acceleration permitted under the Indenture
will be equal to the Redemption Amount hereof calculated as provided herein as though the date of acceleration was the Calculation Day. 
  

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place. 
 Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof by manual signature or its duly authorized agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose. 
 [The remainder of this page has been left intentionally blank] 

  
 11 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal. 

DATED:                         
  
  

					
	WELLS FARGO & COMPANY
		
	By:	 	 
	 	 	 
	Its:	 	 

 [SEAL] 
  

					
		
	Attest:	 	 
		 	 
		 	Its:	 	 

  

			
	 TRUSTEE’S CERTIFICATE OF

AUTHENTICATION
 This is one of the Securities of the

series designated therein described
 in the within-mentioned Indenture.

	
	 CITIBANK, N.A.,

      as Trustee

		
	By:	 	 
		 	Authorized Signature
	
	OR
	
	 WELLS FARGO BANK, N.A.,

  as Authenticating Agent for the Trustee

		
	By:	 	 
		 	Authorized Signature

  
 12 

 [Reverse of Note] 

WELLS FARGO & COMPANY 

MEDIUM-TERM NOTE, SERIES K 

Due Nine Months or More From Date of Issue 

Principal at Risk Securities Linked to an ETF Basket 

due January 4, 2022 

This Security is one of a duly authorized issue of securities of the Company (herein called the
“Securities”), issued and to be issued in one or more series under an indenture dated as of July 21, 1999, as amended or supplemented from time to time (herein called the “Indenture”), between the Company and
Citibank, N.A., as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is
one of the series of the Securities designated as Medium-Term Notes, Series K, of the Company, which series is limited to an aggregate principal amount or face amount, as applicable, of $25,000,000,000 or the equivalent thereof in one or more
foreign or composite currencies. The amount payable on the Securities of this series may be determined by reference to the performance of one or more equity-, commodity- or currency-based indices, exchange traded funds, securities, commodities,
currencies, statistical measures of economic or financial performance, or a basket comprised of two or more of the foregoing, or any other market measure or may bear interest at a fixed rate or a floating rate. The Securities of this series may
mature at different times, be redeemable at different times or not at all, be repayable at the option of the Holder at different times or not at all and be denominated in different currencies. 

Article Sixteen of the Indenture shall not apply to this Security. 

The Securities are issuable only in registered form without coupons and will be either
(a) book-entry securities represented by one or more Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated
securities issued to and registered in the names of, the beneficial owners or their nominees. 
 The Company agrees, to the
extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of interest against a Holder of this Security. 

Modification and Waivers 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the
Securities at the 

  
 13 

 
time Outstanding of all series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities of all
series at the time Outstanding affected by certain provisions of the Indenture, acting together as a class, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with those provisions of the Indenture. Certain
past defaults under the Indenture and their consequences may be waived under the Indenture by the Holders of a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such
series. Solely for the purpose of determining whether any consent, waiver, notice or other action or Act to be taken or given by the Holders of Securities pursuant to the Indenture has been given or taken by the Holders of Outstanding Securities in
the requisite aggregate principal amount, the principal amount of this Security will be deemed to be equal to the amount set forth on the face hereof as the “Face Amount” hereof. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security. 
 Defeasance 

Section 403 and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the
Indenture, relating to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants and certain Events of Default, upon compliance by the Company with certain conditions set forth therein,
shall not apply to this Security. The remaining provisions of Section 401 of the Indenture shall apply to this Security. 
 Authorized
Denominations 
 This Security is issuable only in registered form without coupons in denominations of $1,000 or any
amount in excess thereof which is an integral multiple of $1,000. 
 Registration of Transfer 

Upon due presentment for registration of transfer of this Security at the office or agency of the Company in the City of
Minneapolis, Minnesota, a new Security or Securities of this series, with the same terms as this Security, in authorized denominations for an equal aggregate Face Amount will be issued to the transferee in exchange herefor, as provided in the
Indenture and subject to the limitations provided therein and to the limitations described below, without charge except for any tax or other governmental charge imposed in connection therewith. 

This Security is exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not
appointed within 90 days after the Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines that this Security shall be exchangeable for definitive Securities in registered form
and notifies the Trustee thereof or (z) an Event of Default with respect to the Securities represented hereby has occurred and is continuing. If this Security is exchangeable pursuant to the preceding sentence, it shall be exchangeable for
definitive Securities in registered 

  
 14 

 
form, having the same date of issuance, Stated Maturity Date and other terms and of authorized denominations aggregating a like amount. 

This Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a nominee of such successor. Except as provided above, owners of beneficial interests in this Global
Security will not be entitled to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under the Indenture. 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary. 
 Obligation of the Company Absolute 

No reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the Redemption Amount at the times, place and rate, and in the coin or currency, herein prescribed, except as otherwise provided in this Security. 

No Personal Recourse 

No recourse shall be had for the payment of the Redemption Amount, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.

 Defined Terms 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture
unless otherwise defined in this Security. 
 Governing Law 

This Security shall be governed by and construed in accordance with the law of the State of New York, without regard to
principles of conflicts of laws. 

  
 15 

 ABBREVIATIONS 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations: 
  

					
	 TEN COM
	 	  -- 
	 	 as tenants in common

			
	 TEN ENT
	 	  -- 
	 	 as tenants by the entireties

			
	 JT TEN
	 	  -- 
	 	 as joint tenants with right

of survivorship and not
 as
tenants in common

  

									
	 UNIF GIFT MIN ACT
	 	  -- 
	 	 	 	 Custodian 
	 	 
		 		 	(Cust)	 		 	(Minor)

  

	
	Under Uniform Gifts to Minors Act
	
	   

	(State)

 Additional abbreviations may also be used though not in the above list. 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto 

 

	
	 Please Insert Social Security or
 Other
Identifying Number of Assignee

	
	
	   

  
  

 
  
  

 
 (PLEASE
PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

  
 16 

 the within Security of WELLS FARGO & COMPANY and does hereby irrevocably constitute and
appoint                                      attorney to
transfer the said Security on the books of the Company, with full power of substitution in the premises. 
 Dated:
                                         
        
  

	
	   

  

	
	   

 NOTICE: The signature to this assignment must correspond with the name as written upon the face of the
within instrument in every particular, without alteration or enlargement or any change whatever. 

  
 17Exhibit 10.1

 

December 20, 2016

 

Mr. Thomas Healy

c/o Ferguson Partners

Chicago, Illinois

 

Dear Tom:

 

We are excited to offer you a position with DiamondRock Hospitality Company (“DiamondRock” or the “Company”) as Chief Operating Officer and Executive Vice President, Asset Management, reporting to me. In this position, you will serve as a “named executive officer” of DiamondRock; a description of your responsibilities is set forth in Exhibit A. The commencement date of your employment will be January 16, 2017 or such other date as may be mutually agreed.

 

The compensation and benefits that we are able to offer you are as follows:

 

·                  Your base salary will be $450,000 per year.

 

·                  You will be eligible to receive an annual cash bonus with a target of 80% of your base salary that you receive in that year, with a maximum bonus percentage of 160% and a threshold bonus percentage of 40%; the actual percentage will be determined by DiamondRock’s Board of Directors based on your performance and DiamondRock’s financial results during the year.  You must be employed on the last day of the fiscal year to receive a bonus for that year.

 

Example: your annual salary is $450,000, you worked forty-eight weeks in 2017 and your bonus percentage is the target (80%), your bonus would be $332,307.

 

·                  You will be eligible to receive an equity incentive grant each year, subject to the approval of DiamondRock’s Board of Directors. Your initial equity incentive grant award will be valued at $600,000 and, subject to approval from the Board of Directors, is expected to be issued in February 2017. The equity incentive grant will be composed of two components, each of which will comprise 50% of the total equity incentive grant, as follows: (i) Restricted Stock, which will vest in three equal annual installments, commencing in February 2018 and (ii) Performance Stock Units which will all vest in February 2020 and will be based on (x) the total shareholder return of DiamondRock relative to the total shareholder return of a peer group over a three-year performance period and (y) achievement of certain targeted market share improvement by each of the Company’s hotels over three years. The actual amount of Restricted Stock and Performance Stock Units will be determined by the closing price of 

 

 

DiamondRock stock on an appropriate day following the  grant of the stock by the Board of Directors. The terms and conditions of the Restricted Stock and the Performance Stock Units will be fully set forth in separate agreements to be entered into at the time of the grant. DiamondRock retains the right to, at any time, change the design and vesting schedule for the equity incentive grant, but the design and vesting schedule each year will be the same as for the other executives of DiamondRock.

 

·                  DiamondRock will reimburse your actual cost of relocation (including moving costs, rent and related items) up to an amount to be agreed.  DiamondRock will require that at least two (2) bids be obtained for the moving cost of such relocation.  In the event that you are not employed by DiamondRock on the first annual anniversary of your start date, you will be obligated to repay the amount reimbursed to you for relocation within 10 days of demand by DiamondRock.

 

·                  Prior to the commencement of your employment, DiamondRock will enter into a Severance Agreement with you, providing for, among other things, compensation to be paid to you upon the termination of your employment for certain reasons. For example, the Severance Agreement will provide that if your employment terminates in connection with a change in control of the Company for any reason (other than a voluntary resignation without good reason), you will be entitled to a severance payment equal to (i) vesting in all stock, (ii) payment of year-to date bonus accrued at target and (iii) two (2) times the sum of (x) your then current base salary and (y) your target annual bonus.

 

·                  You will be eligible to participate in DiamondRock’s 401(k) Plan.  We have a company match where DiamondRock will match a portion of your contribution to the 401(k) Plan.

 

·                  You will be eligible to participate in the DiamondRock Hospitality Company Deferred Compensation Plan (DCP).  The DCP provides certain senior-level employees with tax-advantaged means to accumulate assets for the future.  Key features of the DCP include the ability to defer state and federal income taxes on a designated percentage of your base salary (up to 80%), bonus (up to 90%) and equity grants.  The DCP provides for a menu of investment options and flexible retirement distribution options.

 

·                  You will receive twenty-five (25) days of paid time off (PTO) per year; in your discretion, you may use your PTO days either for vacation or for sick days.

 

·                  You will be eligible to participate in DiamondRock’s medical and dental benefits.  If you enroll within thirty (30) days of the date you start work, your coverage will be effective on the first day of the first full month that you are employed by DiamondRock; otherwise, you generally must wait until the Company’s annual enrollment period to enroll and benefits would not be available until the following plan year, which starts on July 1 of each year.   Currently, DiamondRock pays

 

 

100%  of the premium for the medical and dental plan, but DiamondRock retains the right to, at any time, change the amount that it pays towards the premium.

 

·                  You will be eligible to participate in DiamondRock’s life insurance and disability benefits.  DiamondRock currently provides life insurance equal to two times your salary, up to $200,000, Long Term Disability Insurance equal to 60% of your earnings up to $10,000 per month and Short Term Disability up to $1500 per week.  Currently, DiamondRock pays 100% of the premium for the life insurance and long term disability insurance, but DiamondRock retains the right to, at any time, change the amount that it pays towards the premium.

 

As you know, in the ordinary course of business, compensation and benefit programs evolve as business needs and laws change.  To the extent it becomes necessary and desirable to change any of the plans in which you may participate, such changes will apply to you as they do to other employees of DiamondRock.

 

This letter constitutes the full commitments that have been extended to you.  However, this does not constitute a contract of employment for any period of time. DiamondRock reserves the right, at the discretion of the Board of Directors, to modify the compensation terms in the future subject to the limitations in the Severance Agreement.  Further, please be aware that the Compensation Committee of DiamondRock’s Board of Directors will need to formally approve these terms.

 

Employment with DiamondRock is also contingent upon a satisfactory background and reference check.  Please complete the attached Employment Application Consent Release and return it to my attention together with this Offer Letter.

 

DiamondRock has established a Social Security Verification procedure for verifying Social Security numbers in order to prevent discrepancies and mismatches between the information in DiamondRock’s payroll records and the information on file with the Social Security Administration (SSA).  As part of your new hire paperwork, you will be required to complete Section 1 of the Record of Social Security Administration Verification form which includes your name, Social Security number, date of birth and gender.  This information will be verified with records at the SSA.

 

Under the Immigration Reform and Control Act, DiamondRock must verify your eligibility for employment in the United States. On your first day of work you will be expected to present one or more of the documents listed on the enclosed U.S. Department of Justice form and to complete a Government Form I-9.  This information will be used to verify your eligibility for employment and to preclude the unlawful hiring of individuals who are not authorized to work in the U.S.

 

On behalf of everyone at DiamondRock, I want to express our enthusiasm to have you join our Company.

 

 

Sincerely,

 

	
/s/ Mark Brugger
    	
 
    
	
 
    	
 
    
	
Mark Brugger
    	
 
    
	
Chief Executive Officer
    	
 
    
	
 
    	
 
    
	
CC:
    	
Bill Tennis
    	
 
    
			

 

I accept the above offer to be employed by DiamondRock Hospitality Company and I understand and agree to the terms set forth.

 

	
Signed:   
    	
/s/   Thomas Healy
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
December 21,   2016
    	
 
    

 

 

Exhibit A

 

Responsibilities

of the

Chief Operating Officer

and

Executive Vice President, Asset Management

 

The Chief Operating Officer and Executive Vice President, Asset Management (“COO”) will help formulate the Company’s strategy and be responsible for its successful implementation.  Providing leadership and direction to the overall business, the COO is expected to drive value and cash flow through superior operating results, and to ensure that the right organizational structure is in place and qualified executives are in appropriate roles.  The COO will be responsible to maintain DiamondRock’s strong culture, where individuals are compensated for performance.  In the near term, the COO is expected to achieve further operating efficiencies, implement enhanced sales and marketing strategies, and oversee appropriate property investments.  The COO is expected to successfully drive the Company’s growth plan.  The COO must develop strong relationships with a number of constituencies, including employees, the Board and Chief Executive Officer, and appropriate external parties.

 

Specific position duties and responsibilities include the following:

 

·                  Play a leadership role at the Company as the head of asset management with a team of more than 6 reporting up to the position.

·                  Play a leadership role outside of the Company as one of the primary interfaces with the senior leaders at the brand companies (e.g., Marriott, Hilton) and with the third-party operators (e.g., Davidson, Highgate, HEI).

·                  Manage the Company’s portfolio of assets as single, stand-alone investments. Analyze and track return on investment on the portfolio, individual assets and incremental investments.

·                  Oversee asset management function and focus on maximizing value of the hotel assets through:

1) Setting the revenue management strategy for each hotel; 2) implementing profit containment plans; and 3) reviewing the capital improvement plans for each hotel.

·                  Coordinate with the departmental team members to analyze, monitor and maximize the value of and return on the portfolio.

·                  Use research, industry analysis/benchmarking, accounting, hotel financial analysis and computer modeling fundamentals to analyze hotel operation, hotel business plans, hotel capital investments, sales & marketing plans and hotel strategic alternatives.

·                  Keep current on all markets affecting the hospitality industry and specifically the markets in which the assets are situated.

 

 

·                  Constantly examine and monitor the operating performance of the assets to ensure the return on investment in each asset is maximized.

·                  Meet with hotel executive teams to review operating performance, annual business plans and longer term strategic plans.

·                  Proactively identify and resolve ownership issues to maintain the integrity of the assets.

·                  Analyze and track of return on investment for the assets as well as profit improving projects, either implemented or proposed.

·                  Identify value enhancement opportunities within the portfolio.

·                  Oversee the preparation of monthly, quarterly and annual reports for all assets in designated territory.

·                  Play a key role in underwriting acquisition opportunities.  While the COO is not responsible for identifying acquisitions, he should play an integral part in the process.

 

 

Exhibit B

 

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT (the “Agreement”) is made this     day of              , by DiamondRock Hospitality Company, a Maryland corporation (the “REIT”), with its principal place of business at 3 Bethesda Metro Center, Suite 1500, Bethesda, Maryland 20814 and          , residing at                                   (the “Executive”). This Agreement is effective as of              , the first day of employment of Executive.

 

1.                                      Purpose

 

The REIT considers it essential to the best interests of its stockholders to promote and preserve the continuous employment of key management personnel.  The Board of Directors of the REIT (the “Board of Directors”) recognizes that, as in the case with many corporations, the possibility of a termination of employment exists and that such possibility, and the uncertainty and questions that it may raise among management, may result in the distraction of key management personnel to the detriment of the REIT and its stockholders.  Therefore, the Board of Directors has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the REIT’s key management.  Nothing in this Agreement shall be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the REIT, the Executive shall not have any right to be retained in the employ of the REIT.

 

2.                                      Definitions

 

(a)                                 Accrued Salary.  “Accrued Salary” shall mean accrued and unpaid base salary through the Date of Termination.  In addition, in the event the Executive’s annual bonus for the REIT’s most recently completed fiscal year has not yet been paid to the Executive, then Accrued Salary also shall include such prior fiscal year’s earned, accrued and unpaid bonus.

 

(b)                                 Cause.  “Cause” for termination shall mean a determination by the Board of Directors in good faith that any of the following events has occurred:  (i) indictment of the Executive of, or the conviction or entry of a plea of guilty or nolo contendere by the Executive to any felony, or any misdemeanor involving moral turpitude; (ii) the Executive  engaging in conduct which constitutes a material breach of a fiduciary duty or duty of loyalty, including without limitation, misappropriation of funds or property of the REIT, DiamondRock Hospitality Limited Partnership (the “Operating Partnership”) and their subsidiaries (the REIT, the Operating Partnership and their subsidiaries are hereinafter referred to as the “DiamondRock Group”) other than an occasional and de minimis use of Company property for personal purposes; (iii) the Executive’s willful failure or gross negligence in the performance of his assigned duties for the DiamondRock Group, which failure or gross negligence continues for more than 5 days following the Executive’s receipt of written or electronic notice of such willful

 

 

failure or gross negligence from the Board of Directors; (iv) any act or omission of the Executive that has a demonstrated and material adverse impact on the DiamondRock Group’s reputation for honesty and fair dealing or any other conduct of the Executive that would reasonably be expected to result in injury to the reputation of the DiamondRock Group; or (v) willful failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the REIT to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the willful inducement of others to fail to cooperate, destroy or fail to produce documents or other materials.

 

For purposes of this Section 2(b), any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors or based upon the written advice of counsel for the DiamondRock Group shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the DiamondRock Group.   The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of the Board of Directors, finding that, in the good faith opinion of the Board of Directors, the Executive has engaged in the conduct described in this Section 2(b); provided, that if the Executive is a member of the Board of Directors, the Executive shall not vote on such resolution.

 

(c)                                  Change in Control.  “Change in Control” shall mean any of the following events:

 

(i)                                     The conclusion of the acquisition (whether by a merger or otherwise) by any Person (other than a Qualified Affiliate), in a single transaction or a series of related transactions, of Beneficial Ownership of more than 50 % of (1) the REIT’s outstanding common stock (the “Common Stock”) or (2) the combined voting power of the REIT’s outstanding securities entitled to vote generally in the election of directors (the “Outstanding Voting Securities”);

 

(ii)                                  The merger or consolidation of the REIT with or into any other Person other than a Qualified Affiliate, if the directors immediately prior to the merger or consolidation cease to be the majority of the Board of Directors at anytime within 12 months of the completion of the merger or consolidation;

 

(iii)                               Any one or a series of related sales or conveyances to any Person or Persons (including a liquidation or dissolution) other than any one or more Qualified Affiliates of all or substantially all of the assets of the REIT or the Operating Partnership; or

 

(iv)                              Incumbent Directors cease, for any reason, to be a majority of the members of the Board of Directors, where an

 

 

“Incumbent Director” is (1) an individual who is a member of the Board of Directors on the effective date of this Agreement or (2) any new director whose appointment by the Board of Directors or whose nomination for election by the stockholders was approved by a majority of the persons who were already Incumbent Directors at the time of such appointment, election or approval, other than any individual who assumes office initially as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors or as a result of an agreement to avoid or settle such a contest or solicitation.

 

A Change in Control shall also be deemed to have occurred upon the completion of a tender offer for the REIT’s securities representing more than 50% of the Outstanding Voting Securities, other than a tender offer by a Qualified Affiliate.

 

For purposes of this definition of Change in Control, the following definitions shall apply: (A) “Beneficial Ownership,” “Beneficially Owned” and “Beneficially Owns” shall have the meanings provided in Exchange Act Rule 13d-3; (B) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; (C) “Person” shall mean any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), including any natural person, corporation, trust, association, company, partnership, joint venture, limited liability company, legal entity of any kind, government, or political subdivision, agency or instrumentality of a government, as well as two or more Persons acting as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of the REIT’s securities; and (D) “Qualified Affiliate” shall mean (I) any directly or indirectly wholly owned subsidiary of the REIT or the Operating Partnership; (II) any employee benefit plan (or related trust) sponsored or maintained by the REIT or the Operating Partnership or by any entity controlled by the REIT or the Operating Partnership; or (III) any Person consisting in whole or in part of the Executive or one or more individuals who are then the REIT’s Chief Executive Officer or any other named executive officer (as defined in Item 402 of Regulation S-K under the Securities Act of 1933) of the REIT as indicated in its most recent securities filing made before the date of the transaction.

 

(d)                                 Date of Termination.  “Date of Termination” shall mean the actual date of the Executive’s termination of employment with the REIT.

 

(e)                                  Disability.  “Disability” shall mean if the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

 

(f)                                   Good Reason.  “Good Reason” for termination shall mean the occurrence of one of the following events, without the Executive’s prior written consent, provided such event is not corrected within 15 days following the Board of Director’s

 

 

receipt of written or electronic notice of such event: (i) a material diminution in the Executive’s duties or responsibilities or any material demotion from the Executive’s current position at the REIT, including, without limitation: (A) if the Executive is the CEO, either discontinuing his direct reporting to the Board of Directors or a committee thereof or discontinuing the direct reporting to the CEO by each of the senior executives responsible for finance, legal, acquisition and operations or (B) if the Executive is not the CEO, discontinuing the Executive reporting directly to the CEO or (C) if the Executive is the Chief Accounting Officer, discontinuing the Executive’s reporting directly to the Chief Financial Officer or to the Chief Executive Officer; (ii) if the Executive is a member of the Board of Directors, the failure of the REIT or its affiliates to nominate the Executive as a Director of the REIT; (iii) a requirement that the Executive work principally from a location outside the 50 mile radius from the REIT’s address, except for required travel on the REIT’s business to the extent substantially consistent with the Executive’s business travel obligations on the date hereof; (iv) failure to pay the Executive any compensation, benefits or to honor any indemnification agreement to which the Executive is entitled within 30 days of the date due; or (v) the occurrence of any of the following events or conditions in the year immediately following a Change in Control: (A) a reduction in the Executive’s annual base salary or annual bonus opportunity as in effect immediately prior to the Change in Control; (B) the failure of the REIT to obtain an agreement, reasonably satisfactory to the Executive, from any successor or assign of the REIT to assume and agree to adopt this Agreement for a period of at least two years from the Change in Control.

 

(g)                                  Restricted Period. The “Restricted Period” shall mean, the Executive’s employment with the REIT, which period may be extended for an additional period of 12 months if the Executive is entitled to, and receives, the Cash Severance specified under Section 3(b)(2) hereof.

 

(h)                                 Retirement.  As used in this Agreement, “Retirement” shall mean a retirement by the Executive if the Executive has been designated as an eligible retiree by the Board of Directors, in the Board’s sole discretion.

 

3.                                      Effect of Termination

 

(a)                                 Any Termination.  If the Executive’s employment with the REIT terminates for any reason, the Executive shall be entitled to any Accrued Salary.  The Executive shall have no rights or claims against the DiamondRock Group except to receive the payments and benefits described in this Section 3.  The REIT shall have no further obligations to Executive except as otherwise expressly provided under this Agreement, provided any such termination shall not adversely affect or alter Executive’s rights under any employee benefit plan of the REIT in which Executive, at the Date of Termination, has a vested interest, unless otherwise provided in such employee benefit plan or any agreement or other instrument attendant thereto.

 

None of the benefits described in this Section 3 (other than Accrued Salary) will be payable unless the Executive has signed a general release which has become irrevocable, satisfactory to the REIT in the reasonable exercise of its discretion, releasing the

 

 

DiamondRock Group, its affiliates including the REIT, and their officers, directors and employees, from any and all claims or potential claims arising from or related to the Executive’s employment or termination of employment.  In addition, the benefits described in this Section 3 (other than Accrued Salary) are conditioned upon the Executive’s ongoing compliance with his/her restrictions, covenants and promises under Sections 4, 5, 6 and 7 below (as applicable).

 

(b)                                 Termination by the REIT without Cause or by Executive for Good Reason.  If the REIT terminates the Executive’s employment without Cause, or the Executive terminates his employment for Good Reason so as to constitute, in either case, a separation from service for purposes of Code Section 409A, then in addition to the benefits under Section 3(a) above, the Executive shall be entitled to receive the following:

 

(i)                                     a pro-rata bonus for the fiscal year determined through the Date of Termination and calculated based on the target bonus for such fiscal year to be paid within 90 days after the Date of Termination;

 

(ii)           an amount equal to (A) two times (B) the sum of (I) the Executive’s base salary in effect immediately prior to the Date of Termination, and (II) the Executive’s target annual bonus (collectively, the “Cash Severance”) to be paid within 90 days after the date of Termination;

 

(iii)          continued payment by the REIT for health insurance coverage for the Executive and the Executive’s spouse and dependents for 18 months, consistent with COBRA  following the Date of Termination to the same extent that the REIT paid for such coverage immediately prior to the termination of the Executive’s employment and subject to the eligibility requirements and other terms and conditions of such insurance coverage, provided that if any such insurance coverage shall become unavailable and/or the REIT’s insurer refuses to continue coverage during the 18 month period, the REIT thereafter shall be obliged only to pay monthly to the Executive an amount which, after reduction for applicable income and employment taxes, is equal to the monthly COBRA premium for such insurance for the remainder of such severance period.

 

(iv)          vesting as of the Date of Termination of 100% of all unvested time-based restricted stock awards, to the extent permitted by law.  The treatment of equity compensation awards that are not time based vesting (such as restricted stock which vests based on one or more performance metrics) granted after the effective date of this agreement

 

 

will be specified in the individual grant agreements and/or the applicable plans covering such awards.

 

(c)                                  Termination In the Event of Death or Disability.  If the Executive’s employment terminates because of the Executive’s death or Disability, then in addition to the benefits under Section 3(a) above, the Executive (or his estate or other legal representatives, as the case may be) shall be entitled to receive:

 

(i)                                     a pro-rata bonus, payable within 90 days after the Date of Termination, for the fiscal year determined through the Date of Termination and calculated based on the target bonus for such fiscal year;

 

(ii)                                  continued payment by the REIT for health insurance coverage for the Executive and the Executive’s spouse and dependents for 18 months, consistent with COBRA, following the Date of Termination to the same extent that the REIT paid for such coverage immediately prior to the termination of the Executive’s employment and subject to the eligibility requirements and other terms and conditions of such insurance coverage, provided that if any such insurance coverage shall become unavailable and/or the REIT’s insurer refuses to continue coverage during the 18 month period, the REIT thereafter shall be obliged only to pay monthly to the Executive an amount which, after reduction for applicable income and employment taxes, is equal to the monthly COBRA premium for such insurance for the remainder of such severance period.

 

(iii)                               vesting as of the Date of Termination of 100% of all unvested time-based restricted stock awards, to the extent permitted by law.  The treatment of equity compensation awards that are not time based vesting (such as restricted stock which vests based on one or more performance metrics) granted after the effective date of this agreement will be specified in the individual grant agreements and/or the applicable plans covering such awards.

 

(d)                                 Termination In the Event of Retirement.  If the Executive’s employment terminates because of his Retirement, then in addition to the benefits under Section 3(a) above, the Executive shall be entitled to receive the following:

 

(i)                                     a pro-rata bonus, payable within 90 days after the date of termination, for the fiscal year determined through the Date of Termination and calculated based on the target bonus for such fiscal year; and

 

 

(ii)                                  notwithstanding the Retirement by the Executive, all unvested time-based restricted stock awards shall continue to vest at the times and on the terms as set forth in the relevant restricted stock award agreements as if the Executive remained continuously employed by the REIT from the Date of Termination through each such vesting date.  The treatment of non-time-based equity compensation awards (such as restricted stock which vests based on one or more performance metrics) granted after the effective date of this agreement will be specified in individual grant agreements and/or the applicable plans covering such awards.

 

(e)                                  Termination In the Event of a Change in Control. In the event the Executive’s termination of employment occurs in connection with or following a Change in Control, and in the event that any payment made pursuant to Section 3 hereof or any insurance benefits, accelerated vesting, pro-rated bonus or other benefit payable to the Executive under this Agreement or otherwise (the “Severance Payments”), are subject to the excise tax imposed by Section 4999 (as it may be amended or replaced) of the Internal Revenue Code of 1986, as amended (the “Excise Tax”); then

 

(i)                                     If the reduction of the Severance Payments to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”) would provide the Executive with a greater after tax benefit than if such amounts were not reduced, then the amounts payable to the Executive under this Agreement shall be reduced (but not below zero) to the Safe Harbor Cap.  The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments of cash orginating under Section 3 (a)-3(d) hereof, and then by reducing other payments to the extent permitted by any applicable plan and/or agreement.

 

(ii)                                  If the reduction for the Severance Payments to the Safe Harbor Cap would not result in a greater after tax result to the Executive, no amounts payable under this agreement shall be reduced pursuant to this provision.

 

(iii)          The determination of whether the Excise Tax is payable and the amount thereof shall be made in writing in good faith by a nationally recognized independent certified public accounting firm selected by the REIT and approved by the Executive, such approval not to be unreasonably withheld (the “Accounting Firm”).  For purposes of

 

 

making the calculations required by this Section 3(e), to the extent not otherwise specified herein, reasonable assumptions and approximations may be made with respect to applicable taxes and reasonable, good faith interpretations of the Code may be relied upon.  The REIT and the Executive shall furnish such information and documents as may be reasonably requested in connection with the performance of the calculations under this Section 3(e).  The REIT shall bear all costs incurred in connection with the performance of the calculations contemplated by this Section 3(e).

 

4.                                      Non-Disparagement

 

The Executive agrees that he/she will not, whether during or after the Executive’s employment with the REIT, make any statement, orally or in writing, regardless of whether such statement is truthful, nor take any action, that (a) in any way could disparage the DiamondRock Group or any officers, executives, directors, partners, managers, members, principals, employees, representatives, or agents of the DiamondRock Group, or which foreseeably could or reasonably could be expected to harm the reputation or goodwill of any of those persons or entities, or (b) in any way, directly or indirectly, could knowingly cause, encourage or condone the making of such statements or the taking of such actions by anyone else.

 

5.                                      Non-Competition

 

(a)                                 Non-Competition.  Subject to Section 5(b) hereof, the Executive agrees that during the Restricted Period the Executive shall not, without the prior express written consent of the REIT, directly or indirectly, anywhere in the United States, own an interest in, join, operate, control or participate in, or be connected as an owner, officer, executive, employee, partner, member, manager, shareholder, or principal of or with, any lodging-oriented real estate investment company.  Notwithstanding the foregoing, the Executive may own up to one percent (1%) of the outstanding stock of a real estate investment company.  The restrictions of this Section 5(a) shall not apply if the Executive’s employment with the REIT is terminated without cause by the Company or the Executive effective during the 12 month period immediately following a Change in Control.

 

(b)                                 Board’s Discretion.  Notwithstanding anything contained herein, the Board of Directors retains the right, in its sole discretion, to shorten or eliminate the post-employment Restricted Period for any Executive.

 

6.                                      Non-Solicitation of Employees.  The Executive agrees that while he/she is employed as an employee of the REIT and for a period of 12 months after the termination of the Employee’s employment with the REIT for whatever reason, the

 

 

Employee shall not, without the express written consent of the REIT, hire, solicit, recruit, induce or procure (or assist or encourage any other person or entity to hire, solicit, recruit, induce or procure), directly or indirectly or on behalf of himself or any other person or entity, any officer, executive, director, partner, principal, member, or non-clerical employee of the DiamondRock Group or any person who was an officer, executive, director, partner, principal, member, or non-clerical employee of the DiamondRock Group at any time during the final year of the Executive’s employment with the REIT, to work for the Executive or any person or entity with which the Executive is or intends to be affiliated or otherwise directly or indirectly encourage any such person to terminate his or her employment or other relationship with the DiamondRock Group without the prior express written consent of the REIT. Notwithstanding anything contained herein, the foregoing shall not restrain the Executive from hiring, soliciting, recruiting, inducing or procuring any person to work for the Executive or any person or entity with which the Executive is or intends to be affiliated if such person was either terminated by the REIT or such person resigned for Good Reason.  In addition, the Board of Directors retains the right, in its sole discretion, to release any Executive from its obligations under this Section.

 

7.                                      Injunctive Relief.  The Executive understands that the restrictions contained in Section 4, 5 and 6 of this Agreement are intended to protect the REIT’s interests in its proprietary information, goodwill, and its employee and investor relationships, and agrees that such restrictions (and the scope and duration thereof) are necessary, reasonable and appropriate for this purpose.  The Executive acknowledges and agrees that it would be difficult to measure any damages caused to the REIT which might result from any breach by the Executive of his promises and obligations under Sections 4, 5 and/or 6, that the REIT would be irreparably harmed by such breach, and that, in any event, money damages would be an inadequate remedy for any such breach.  Therefore, the Executive agrees and consents that the REIT shall be entitled to an injunction or other appropriate equitable relief (in addition to all other remedies it may have for damages or otherwise) to restrain any such breach or threatened breach without showing or proving any actual damage to the REIT; and the REIT shall be entitled to an award of its attorneys fees and costs incurred in enforcing the Executive’s obligations under Sections 4, 5 and/or 6.

 

8.                                      Miscellaneous

 

(a)                                 409A.  Notwithstanding anything to the contrary, if the Executive is a “key employee” (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof) and any of the REIT’s stock is publicly traded on an established securities market or otherwise, to the extent necessary to avoid any penalties under Section 409A of the Code, any payment hereunder may not be made before the date that is six months after the date of separation from service.

 

(b)                                 Tax Withholding.  All payments made by the REIT under this Agreement shall be net of any tax or other amounts required to be withheld by the REIT under applicable law.

 

 

(c)                                  No Mitigation.  The REIT agrees that, if the Executive’s employment by the REIT is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the REIT pursuant to Section 3 hereof.  Further, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the REIT or otherwise.

 

(d)                                 No Offset.  The REIT’s obligation to make the payments provided for in this Agreement and otherwise perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the REIT, the Operating Partnership or any of their subsidiaries may have against the Executive or others unless such set-off, counterclaim, recoupment, defense, or other right arises from the Executive engaging in conduct which constitutes a material breach of a fiduciary duty or duty of loyalty, including without limitation, misappropriation of funds or property of the Operating Partnership and their subsidiaries.

 

(e)                                  Litigation and Regulatory Cooperation.  During and after Executive’s employment, Executive shall reasonably cooperate with the REIT in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the REIT which relate to events or occurrences that transpired while Executive was employed by the REIT; provided, however, that such cooperation shall not materially and adversely affect Executive or expose Executive to an increased probability of civil or criminal litigation.  Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the REIT at mutually convenient times.  During and after Executive’s employment, Executive also shall cooperate fully with the REIT in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the REIT.  The REIT shall also provide Executive with compensation on an hourly basis (to be derived from the sum of his Base Salary and average annual incentive compensation) for requested litigation and regulatory cooperation that occurs after his termination of employment, and reimburse Executive for all costs and expenses incurred in connection with his performance under this Section 8(e), including, but not limited to, reasonable attorneys’ fees and costs.

 

(f)                                   Notices.  All notices required or permitted under this Agreement shall be in writing and shall be deemed effective (i) upon personal delivery, (ii) upon deposit with the United States Postal Service, by registered or certified mail, postage prepaid, or (iii) in the case of facsimile transmission or delivery by nationally recognized overnight delivery service, when received, addressed as follows:

 

 

(i)                                     If to the REIT, to:

 

DiamondRock Hospitality Company

3 Bethesda Metro, Suite 1500
 Bethesda, MD  20814
 Facsimile: (240) 744-1199
 Attn:  1) Lead Director; 2) Chairman of the Board and 3) Chairman of the Compensation Committee

 

(ii)                                  If to the Executive, to:

 

INSERT ADDRESS

 

or to such other address or addresses as either party shall designate to the other in writing from time to time by like notice.

 

(g)                                  Pronouns.  Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.

 

(h)                                 Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

 

(i)                                     Amendment.  This Agreement may be amended or modified only by a written instrument executed by both the REIT and the Executive.

 

(j)                                    Governing Law and Forum.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Maryland, without regard to its conflicts of laws principles, by a court of competent jurisdiction located within the State of Maryland.

 

(k)                                 Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any entity with which or into which the REIT may be merged or which may succeed to its assets or business or any entity to which the REIT may assign its rights and obligations under this Agreement; provided, however, that the obligations of the Executive are personal and shall not be assigned or delegated by him.

 

(l)                                     Waiver.  No delays or omission by the REIT or the Executive in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent given by the REIT or the Executive on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

 

(m)                             Captions.  The captions appearing in this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

 

 

(n)                                 Severability.  In case any provision of this Agreement shall be held by a court or arbitrator with jurisdiction over the parties to this Agreement to be invalid, illegal or otherwise unenforceable, such provision shall be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law, and the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.  In the event that any portion or provision of this Agreement (including, without limitation, any portion or provision of Sections 4, 5, and/or 6) is determined by a court or arbitrator of competent jurisdiction to be invalid, illegal or otherwise unenforceable by reason of excessive scope as to geographic, temporal or functional coverage, such provision will be reformed and deemed to extend only over the maximum geographic, temporal and functional scope as to which it may be enforceable and shall be enforced by said court or arbitrator accordingly.

 

(o)                                 Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

 

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

 

	
 
    	
 
    	
DIAMONDROCK HOSPITALITY   COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
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EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:

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