Document:

Exhibit

EXHIBIT  10.4

PERFORMANCE EQUITY GRANT AGREEMENT
(Financial Performance)
    
This Performance Equity Grant Agreement (this “Agreement”), dated as of the date shown on the signature page attached hereto, is made and entered into effective between FelCor Lodging Trust Incorporated, a Maryland corporation (the “Company”), and the undersigned executive officer of the Company (“Grantee”).

W I T N E S S E T H:

WHEREAS, the Compensation Committee and Board of Directors of the Company has adopted the FelCor Lodging Trust Incorporated 2014 Equity Compensation Plan (as amended, supplemented, modified, superseded or replaced through the date hereof, the “Plan”); and

WHEREAS, the stockholders of the Company have approved the Plan; and

WHEREAS, pursuant to the Plan, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has authorized the Company to grant to the Grantee the right to receive shares of common stock of the Company (“Common Stock”), whether awarded directly or issued in respect of restricted stock units, and certain other consideration on the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

1.Incorporation of the Plan; Certain Definitions.  A copy of the Plan, as amended, is attached hereto and hereby incorporated herein by reference, and all of the terms, conditions and provisions contained therein shall be deemed to be terms, conditions and provisions of this Agreement. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Plan.  As used in this Agreement:

“Average Indexed FFO” means the average Indexed FFO for the three calendar years comprising the Performance Period.

“Award Year” means the calendar year in which the Grant Date occurs. 

“Change in Control” means any transaction or series of related transactions as a consequence of which (i) the Company (x) is not the surviving entity in any merger or consolidation (or survives only as a subsidiary or another entity), (y) sells all or substantially 

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all of its assets to any person or entity (other than a subsidiary of the Company) or (z) is to be dissolved and liquidated or (ii) (x) a person or entity, or persons or entities working in concert, have obtained the ability to elect a majority of the Company’s Board of Directors or (y) a majority of the Company’s Board of Directors is comprised of directors who were not elected by the Company’s stockholders prior to such transaction or series of related transactions.

“FFO” means adjusted funds from operations per share, calculated in accordance with standards established the National Association of Real Estate Investment Trusts (i.e., net income or loss attributable to parent (computed in accordance with generally accepted accounting principles), excluding gains or losses from sales of property, plus depreciation, amortization and impairment losses, and adjusted to exclude certain items, all as disclosed in the Company’s quarterly earnings releases.

“Grant Date” means the date of this Agreement.

“Indexed FFO” means, for any calendar year, reported FFO expressed as a percentage of Target FFO for that year, not to exceed 200%.

“Performance” means, for any Performance Period, the Company’s Average Indexed FFO.

“Performance Period” means the three-calendar-year period beginning with the Award Year  and continuing through the end of the second successive calendar year; provided, however, that Performance Period shall end on such other date as otherwise contemplated by this Agreement, any other agreement between Grantee and the Company or any applicable Company policy, including without limitation, ending early (if not already ended) to the extent the Vesting Period is truncated by operation of clause a, b, c or d of the definition of “Vesting Date.”

“Target FFO” means target FFO established by the Committee early in each calendar year within the Performance Period, as subsequently adjusted by the Committee to take changes in original underlying assumptions and circumstances into account.

“Target Grant Amount” means the targeted number of shares of Common Stock to be delivered to Grantee in respect of the Award as shown on the signature page hereof.

“Vesting Date” means the date on which the Committee certifies Performance for the Performance Period for purposes of Section 162(m) of the Internal Revenue Code, as amended (or the immediately following business day if such date is not a business day) or such earlier date upon which the shares and other compensation subject to vesting in accordance with this Agreement, any other agreement between Grantee and the Company or any applicable Company policy are permitted to vest. Notwithstanding the foregoing:

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	a.
	if the status of Grantee as an Employee under the Plan shall terminate as a consequence of Grantee’s retirement and Grantee is at least 60 years old at the time of Grantee’s retirement, the Vesting Date shall be Grantee’s last day of employment with the Company immediately preceding separation from service on account of retirement and the Performance Period shall end on the immediately preceding trading day.  If Grantee is a “specified employee” (within the meaning of Code Section 409A) on the date of his “separation from service” (within the meaning of Code Section 409A), any payments of Vested Shares and Excess Shares that are nonqualified deferred compensation made with respect to such separation from service under this Agreement, will be delayed in order to comply with Code Section 409A(a)(2)(B)(i), and such payments or benefits will be paid or distributed to the Grantee on the earlier of:  (i) the expiration of the six-month period measured from the date of Grantee’s separation from service on account of retirement, or (ii) the date of Grantee’s death. Upon the expiration of the applicable six-month period under Code Section 409A(a)(2)(B)(i), all payments deferred pursuant to this Section a. will be paid to Grantee (or Grantee’s surviving spouse, or, if none, Grantee’s estate, in the event of Employee’s death) in a lump sum payment;

		
	b.
	if the status of Grantee as an Employee under the Plan shall terminate by reason of the death of Grantee or the Grantee’s Disability, all remaining Vesting Date be, and the Performance Period shall end on, the last trading day immediately preceding Grantee’s Death or determination of Grantee’s Disability; 

		
	c.
	in connection with a Change in Control, the Vesting Date shall be, and the Performance Period shall end on, the last trading day immediately preceding such Change in Control; and

		
	d.
	to the extent the Company and Grantee are parties to an employment agreement, change in control and severance agreement or similar agreement (each, an “Other Agreement”) that provides for accelerated vesting of equity-based compensation and related benefits, the Vesting Date shall be, and the Performance Period shall end on, the earlier of (x) the date provided for in this Agreement without reference to any such Other Agreement and (y) the earliest date provided for in any such Other Agreement.

“Vesting Period” mean the period beginning on the Grant Date and ending on the relevant Vesting Date.

2.    Grant.  

a.    Vested Shares. As authorized by the Committee, and subject to the terms, conditions and provisions contained in the Plan and this Agreement, the Company hereby grants to the Grantee, as a matter of separate inducement and agreement in connection with his employment, but not in lieu of any salary or other compensation for his services, an Award entitling Grantee to receive on the Vesting Date shares of Common Stock (or other consideration as contemplated by Section 2.b below) equal to the Target Grant Amount multiplied by the Average Indexed FFO (“Vested Shares”).  The Vested Shares, together with (in accordance with Section 2.d 

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below) all dividends that would have been distributed by the Company during the Vesting Period with respect to such Vested Shares had they been issued and outstanding throughout the Vesting Period, will be issued, transferred or paid on the Vesting Date, which shall not be later than two and one-half months following the end of the calendar year during which such Award vests.  Any portion of a Target Grant Amount that fails to vest on the Vesting Date shall be forfeited.

b.    Excess Shares. Notwithstanding anything in this Agreement to the contrary, the Award contemplated by this Agreement shall not provide for the issuance or delivery to Grantee, or the receipt thereby, of shares in excess of any limitation on the number of shares that could be granted to Grantee under the Plan or otherwise (“Excess Shares”).  In order to comply with such limitation and in lieu of delivering Excess Shares, the Company shall pay to Grantee, and Grantee shall be entitled to receive, on the Vesting Date, a cash payment equal to the fair market value of such Excess Shares, determined exclusively by reference to the closing price as reported by the New York Stock Exchange of shares of Common Stock on the nearest trading day preceding the Vesting Date, together with all dividends that would have been paid by the Company with respect to such Excess Shares had they been Vested Shares.

c.    Change in Control. Notwithstanding anything in this Agreement to the contrary, to the extent that Vested Shares are issuable, or a cash payment in lieu of issuing Excess Shares is due and payable, hereunder in connection with a Change in Control, the number of such Vested Shares and Excess Shares, if any, shall be the greater of (x) the Vested Shares and Excess Shares that would be issuable and payable, respectively, based upon the provisions of Sections 2.a and 2.b, with reference to the Performance Period ending on the last calendar quarter immediately preceding consummation of the transaction, and (y) the Target Grant Amount.

d.    Dividends. Dividends and other distributions earned (based upon the record date) during the Vesting Period shall accrue when otherwise paid by the Company but shall, in accordance with the Plan, only be paid with respect to the Award contemplated by this Agreement with respect to Vested Shares and Excess Shares upon vesting. 

e.Applicable Payroll Taxes; Withholding. Cash payments made in respect of (x) Excess Shares and (y) accrued dividends and other distributions in respect of Vested Shares and Excess Shares shall be made net of applicable income, employment and other required tax withholding (“Payroll Tax”).  In connection with issuing Vested Shares, for purposes of satisfying applicable Payroll Tax withholding requirements, the Company shall withhold that number of Vested Shares equal in value to the statutory amount of Payroll Tax to be paid in respect of Grantee’s earning such Vested Shares. Notwithstanding the foregoing, Grantee may elect, at any time prior to the Vesting Date, to have the Company withhold a different number of Vested Shares, so long as such different number has a value that is neither less than the minimum or more than the maximum statutory amount of Payroll Tax to be paid in respect of Grantee’s earning Vested Shares.  For purposes of this Section 2.e, the value of Vested Shares on the Vesting Date shall be the fair market value of such shares, determined exclusively by reference to the closing price as reported by the New York Stock Exchange of shares 

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of Common Stock on the Vesting Date (or the nearest trading day preceding the Vesting Date if the Vesting Date is not a trading day). 

3.    Reservation of Shares; Forfeiture. The Committee has caused the Company to set aside a sufficient number of shares of Common Stock for issuance to Grantee hereunder, assuming the maximum number of Vested Shares issuable hereunder, based on Performance, will be issued on the Vesting Date. Any such reserved shares that do not vest in accordance with the terms of this Agreement shall be automatically forfeited and returned to the status of authorized but unissued shares under the Plan. If the status of Grantee as an Employee under the Plan shall terminate for any reason other than as contemplated in clauses a, b, c and d of the definition of Vesting Date or otherwise as agreed in writing between the Company and Grantee, the then-unvested portion of the Award shall immediately terminate and be forfeited by Grantee without the payment of any consideration by the Company, and neither Grantee nor any of Grantee’s successors, heirs, assigns or legal representatives shall thereafter have any further rights or interest in the Award or underlying shares or other benefits so forfeited or any certificates evidencing the same.

4.    Disputes. If a dispute should arise between the Company and Grantee relating to the rights, duties or obligations of Grantee hereunder or under the Plan with respect to the Award granted hereby (or the underlying shares or other benefits), such dispute shall be resolved by the determination of the Committee, acting in good faith, which determination shall be final and binding upon the Company and Grantee, and pending such a determination and the resolution of all such disputes to the reasonable satisfaction of the Committee, (i) all shares potentially issuable, and other benefits and compensation potentially payable, by the Company to Grantee shall remain in the possession of the Company and subject to all of the terms of this Agreement, regardless of any intervening expiration of any Vesting Period, and (ii) any and all dividends payable with respect to any such shares held by the Company shall be received and held by the Company as custodian until all such disputes have been resolved to the reasonable satisfaction of the Committee, at which time the accumulated dividends then held by the Company shall be delivered (without interest thereon) to the person entitled to receive the shares with respect to which such dividends were originally paid.

5.    Restrictions on Resale of Common Stock.  If Vested Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and applicable state securities laws, such Vested Shares may not be sold, transferred or assigned by Grantee absent such registration, unless an opinion of counsel satisfactory to the Company shall have been received by the Company to the effect that such sale, transfer or assignment will not be in violation of the Securities Act and the rules and regulations thereunder, or applicable state securities laws.  Any certificate issued to Grantee to evidence Vested Shares that are not so registered may bear a legend to the foregoing effect.

6.    Clawback Acknowledgement. Grantee hereby acknowledges that he has received a copy of the FelCor Lodging Trust Incorporated 2014 Equity Compensation Plan (the “Plan”) and has previously reviewed the “clawback” policy adopted by the Committee (including any modification, supplement, amendment or successor thereto, the “Clawback Policy”).  Grantee acknowledges that he understands 

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that his right to receive or keep compensation paid under this Agreement may be forfeited under circumstances contemplated by the Clawback Policy, to the extent applicable to him, and he hereby consents to forfeiture of such compensation under such circumstances as contemplated by the Clawback Policy. 

7.    Notices.  All notices, surrenders and other communications required or allowed to be made or given in connection with the Award granted hereunder shall be in writing, shall be effective when received and shall be hand delivered or sent by registered or certified mail (i) if to the Company, to FelCor Lodging Trust Incorporated, 545 E. John Carpenter Frwy., Suite 1300, Irving, Texas 75062, Attention: General Counsel; or (ii) if to the Grantee, to the Grantee at the address set forth beneath Grantee’s signature hereto, or to such other address as to which Grantee may have notified the Company pursuant to this Section.

8.    Binding Effect.  This Agreement shall bind and, except as specifically provided in the Plan and this Agreement, shall inure to the benefit of, the respective Successors, heirs, legal representatives and assigns of the parties hereto.

9.    Governing Law.  This Agreement and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Maryland.

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IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement as the ___ day of _______ 20__.

	
			
	 
	COMPANY:

	 
	 

	 
	FELCOR LODGING TRUST INCORPORATED

	 
	 

	 
	 

	 
	 

	 
	By:
	 

	 
	 
	 

	 
	Name:

	 
	Title:

	 
	 

	 
	 

	 
	 

	 
	GRANTEE:

	 
	 

	 
	 

	 
	 

	 
	 

	 
	Name: 

	 
	Address:

Target Grant Amount: _______________ shares of Common Stock

7Exhibit

EXHIBIT 10.5

R E S T R I C T E D   S T O C K    A W A R D 

_________ ___, 20___

_________ Shares of Restricted Stock

[name]
[address]
[city, state, zip]

Congratulations and thank you for your continued commitment to FelCor, your colleagues at FelCor and FelCor’s investors. 

In recognition of that commitment and your efforts on behalf of the FelCor family, the Compensation Committee of FelCor’s Board of Directors has authorized and directed that the Company make this Restricted Stock Award (this “Award”) with respect to the shares of Restricted Stock shown above, which is hereby granted to you (“Grantee”) pursuant to FelCor’s 2014 Equity Compensation Plan.  

This Award vests [in equal annual installments] on [insert vesting date(s)]  Awards may vest at one time or in two or more installments on a vesting schedule determined by the Compensation Committee of the Board of Directors when authorizing such awards.  (or the very next business day if such dates shall fall on a weekend or bank holiday).

This Award is governed by the General Terms and Conditions attached to this Award as Annex I and incorporated herein by reference (the “General Terms”), and the General Terms shall supersede any conflicting terms in this Award. Capitalized terms used but not otherwise defined in this Award shall have the meanings set forth in the General Terms.

This Award recognizes the important part you play in FelCor’s continued success.

On behalf of FelCor:

___________________________________    
[authorized officer]

Accepted and Agreed
As of the Date of this Award:

_________________________________    
[Grantee Name]
__________________________
1 Awards may vest at one time or in two or more installments on a vesting schedule determined by the Compensation Committee of the Board of Directors when authorizing such awards.

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Annex I

General Terms and Conditions Applicable to 
Restricted Stock Award Made Pursuant to 
FelCor’s 2014 Equity Compensation Plan
 

These General Terms and Conditions (these “General Terms”) shall apply to all restricted stock awards made on or after January 1, 2016 under the 2014 Equity Compensation Plan (the “Plan”) of FelCor Lodging Trust Incorporated (the “Company”).

1)    Incorporation of the Plan.  A copy of the Plan, as amended, is attached hereto and hereby incorporated herein by reference, and all of the terms, conditions and provisions contained therein shall be deemed to be terms, conditions and provisions of these General Terms.  All terms used herein that are defined in the Plan shall have the meanings given them in the Plan.

2)    Restricted Period; Vesting; Withholding.  Restricted Stock granted pursuant hereto shall be issued and registered in the name of the recipient of the Award (the “Grantee”), and the Grantee shall be entitled to vote the same (in person or by proxy) and to receive all dividends and other distributions thereon unless and until such Restricted Stock is forfeited as hereinafter provided.  During the period prior to the date the Restricted Stock granted pursuant hereto becomes vested in the Grantee (the “Restricted Period”), the shares of Restricted Stock shall be recorded on the register of restricted stock maintained by the Company’s transfer agent.  At such time, and from time to time, as shares of Restricted Stock become vested in the Grantee and all obligations of the Grantee hereunder and under the Plan with respect thereto shall have been fulfilled, the restrictions set forth in the Restricted Stock Award (the “Award”) to which these General Terms are attached and all forfeiture provisions set forth in the Award, herein or in the Plan shall cease to be applicable to such Restricted Stock, and the shares of Common Stock, then unrestricted, (“Vested Shares”) shall be delivered by the Company to the Grantee. Restricted Stock granted pursuant the Award, until the same becomes vested as herein provided, shall be subject to certain restrictions and to forfeiture upon the occurrence of certain events, all as set forth in the Award. 
 
In connection with vesting Vested Shares, for purposes of satisfying applicable income, employment and other required tax (“Payroll Tax”) withholding requirements, the Company shall withhold that number of Vested Shares equal in value to the statutory amount of related Payroll Tax payable in respect of such Vested Shares. Notwithstanding the foregoing, Grantee may elect, at any time prior to the vesting date, to have the Company withhold a different number of Vested Shares, so long as such different number has a value that is neither less than the minimum or more than the maximum statutory amount of Payroll Tax to be paid in respect of Grantee’s earning Vested Shares.  For purposes of this Section 2, the value of Vested Shares on the vesting date shall be the fair market value of such shares, determined exclusively by reference to the closing price as reported by the New York Stock 

Exchange of shares of Common Stock on the vesting date (or the nearest trading day preceding the vesting date if the vesting date is not a trading day).

3)    Restrictions.  During the Restricted Period applicable to any Restricted Stock granted hereunder:

(a)    The Grantee shall not become vested as to any such Restricted Stock if, (i) after taking into account for calculation purposes all of such Grantee’s “applicable employee remuneration” other than under the Plan, the vesting of such Restricted Stock would cause the Grantee’s “applicable employee remuneration” to exceed $1,000,000 for such taxable year or (ii) the vesting thereof would violate Federal or state securities laws;

(b)    The Restricted Stock and the right to vote the same and to receive dividends thereon may not, except as otherwise provided in the Plan, be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered, and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by voluntary act of the Grantee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of the Company pursuant the Award, these General Terms or the Plan.

(c)    If the status of the Grantee as an Employee under the Plan shall terminate for any reason other than (i) the death of the Grantee, (ii) the Disability (as defined in the Plan) of the Grantee, or (iii) the retirement of the Grantee at or after the age of 60, then, in that event, any Restricted Shares outstanding shall, upon such termination, be forfeited by the Grantee to the Company, without the payment of any consideration by the Company, and neither the Grantee nor any of Grantee’s successors, heirs, assigns, or legal representatives shall thereafter have any further rights or interest in the Restricted Stock so forfeited, and the Company shall, at any time thereafter, be entitled to effect the transfer of any Restricted Stock so forfeited into the name of the Company;

(d)    If the status of the Grantee as an Employee under the Plan shall terminate by reason of the death of the Grantee, the Disability of the Grantee or the retirement of the Grantee at or after the age of 60, the Restricted Period (and all restrictions set forth in this Section 3) with respect to all Restricted Stock granted hereby shall be deemed to have expired as of the date of such event;

(e)    If the Company (i) is not to be the surviving entity in any merger or consolidation (or survives only as a subsidiary of another entity), (ii) sells all or substantially all of its assets to any other person or entity (other than a subsidiary of the Company) or (iii) is to be dissolved and liquidated, the Restricted Period (and all restrictions set forth in this Section 3) with respect to all Restricted Stock granted hereby shall be deemed to have expired as of the date of next preceding such event; 

(f) Any shares of Restricted Stock eligible to become vested that do not become so vested in accordance with these General Terms or as otherwise set forth in the Award shall be forfeited and returned to the status of authorized but unissued shares under the applicable Plan; and

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(g)    If a dispute should arise between the Company and the Grantee relating to the rights, duties or obligations of the Grantee hereunder or under the Award or the Plan with respect to any Restricted Stock granted pursuant to the Award, such dispute shall be resolved by the determination of the Committee, acting in good faith, which determination shall be final and binding upon the Company and the Grantee, and pending such a determination and the resolution of all such disputes to the reasonable satisfaction of the Committee, (i) all Restricted Stock shall remain subject to all of the Restrictions set forth in this Section 3, regardless of any intervening expiration of the Restricted Period, and (ii) any and all dividends payable upon any Restricted Stock shall be set aside and withheld by the Company until all such disputes have been resolved to the reasonable satisfaction of the Committee, at which time the accumulated dividends then held by the Company shall be delivered (without interest thereon) to the person entitled to receive the Restricted Stock upon which such dividends were originally paid.

4)    Restrictions on Resale of Company Common Stock.  If shares of Restricted Stock granted pursuant to the Award have not been registered under the Securities Act of 1933, as amended, and applicable state securities laws, such shares of Restricted Stock may not be sold, transferred or assigned by the Grantee absent such registration, unless an opinion of counsel satisfactory to the Company shall have been received by the Company to the effect that such sale, transfer or assignment will not be in violation of the Securities Act of 1933, as amended, and the rules and regulations thereunder, or applicable state securities laws.  Any certificate issued to the Grantee to evidence Restricted Stock granted pursuant hereto that is not so registered may bear a legend to the foregoing effect.

5)    Notices.  All notices, surrenders and other communications required or allowed to be made or given in connection with the Award, the grant of Restricted Stock thereunder and/or as contemplated by these General Terms shall be in writing, shall be effective when received and shall be hand delivered or sent by registered or certified mail (i) if to the Company, to FelCor Lodging Trust Incorporated, 545 E. John Carpenter Frwy., Suite 1300, Irving, Texas 75062, Attention: General Counsel; or (ii) if to the Grantee, to the Grantee at the address set forth beneath Grantee’s signature on the Award, or to such other address as to which Grantee may have notified the Company pursuant to this Section 5.

6)    Binding Effect.  The Award, including these General Terms, shall bind and, except as specifically provided in the Plan, the Award and these General Terms, shall inure to the benefit of, the respective Successors, heirs, legal representatives and assigns of the Company and Grantee.

7)    Governing Law.  The Award and the rights of all persons claiming thereunder shall be construed and determined in accordance with the laws of the State of Maryland. 

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