Document:

Exhibit 10.4

 

ASHFORD INC.

 

2014 INCENTIVE PLAN

 

[              ], 2014

 

 

ASHFORD INC.

 

2014 INCENTIVE PLAN

 

Table of Contents

 

	
ARTICLE I INTRODUCTION
    	
1
    
	
1.1
    	
Purpose
    	
1
    
	
1.2
    	
Shares Subject to the Plan
    	
1
    
	
1.3
    	
Administration of the Plan
    	
2
    
	
1.4
    	
Amendment and Discontinuance of the Plan
    	
2
    
	
1.5
    	
Granting of Awards
    	
2
    
	
1.6
    	
Term of Plan
    	
2
    
	
1.7
    	
Leave of Absence
    	
3
    
	
1.8
    	
Definitions
    	
3
    
	
ARTICLE II OPTIONS
    	
8
    
	
2.1
    	
Grants
    	
8
    
	
2.2
    	
Calculation of Exercise Price
    	
9
    
	
2.3
    	
Terms and Conditions of Options
    	
9
    
	
2.4
    	
Amendment
    	
10
    
	
2.5
    	
Acceleration of Vesting
    	
11
    
	
2.6
    	
Other Provisions
    	
11
    
	
2.7
    	
Option Repricing
    	
11
    
	
2.8
    	
Share Limitation
    	
11
    
	
ARTICLE III INCENTIVE   OPTIONS
    	
11
    
	
3.1
    	
Eligibility
    	
12
    
	
3.2
    	
Exercise Price
    	
12
    
	
3.3
    	
Dollar Limitation
    	
12
    
	
3.4
    	
10% Stockholder
    	
12
    
	
3.5
    	
Options Not Transferable
    	
12
    
	
3.6
    	
Compliance with Section 422 of the Code
    	
12
    
	
3.7
    	
Limitations on Exercise
    	
12
    
	
3.8
    	
Share Limitation
    	
12
    
	
ARTICLE IV PURCHASED STOCK
    	
12
    
	
4.1
    	
Eligible Persons
    	
12
    
	
4.2
    	
Purchase Price
    	
13
    
	
4.3
    	
Payment of Purchase Price
    	
13
    
	
4.4
    	
Share Limitation
    	
13
    
	
ARTICLE V BONUS STOCK
    	
13
    
	
5.1
    	
Eligible Persons
    	
13
    
	
5.2
    	
Share Limitation
    	
13
    
	
ARTICLE VI STOCK   APPRECIATION RIGHTS AND PHANTOM STOCK
    	
13
    
	
6.1
    	
Stock Appreciation Rights
    	
13
    
	
6.2
    	
Phantom Stock Awards
    	
14
    
	
ARTICLE VII RESTRICTED STOCK
    	
15
    
	
7.1
    	
Eligible Persons
    	
15
    
	
7.2
    	
Restricted Period and Vesting
    	
15
    

 

 

	
ARTICLE VIII   PERFORMANCE-BASED COMPENSATION
    	
16
    
	
8.1
    	
Eligible Persons
    	
16
    
	
8.2
    	
Performance-Based Compensation
    	
16
    
	
8.3
    	
Performance Goals
    	
16
    
	
ARTICLE IX OTHER AWARDS
    	
18
    
	
9.1
    	
Eligible Persons
    	
18
    
	
9.2
    	
Limits
    	
18
    
	
ARTICLE X CERTAIN PROVISIONS   APPLICABLE TO ALL AWARDS
    	
18
    
	
10.1
    	
General
    	
18
    
	
10.2
    	
Stand-Alone, Additional, Tandem, and Substitute Awards
    	
18
    
	
10.3
    	
Term of Awards
    	
19
    
	
10.4
    	
Form and Timing of Payment under Awards; Deferrals
    	
19
    
	
10.5
    	
Vested and Unvested Awards
    	
19
    
	
10.6
    	
Exemptions from Section 16(b) Liability
    	
20
    
	
10.7
    	
Other Provisions
    	
20
    
	
10.8
    	
Change of Control
    	
20
    
	
ARTICLE XI WITHHOLDING FOR   TAXES
    	
21
    
	
ARTICLE XII MISCELLANEOUS
    	
22
    
	
12.1
    	
No Rights to Awards
    	
22
    
	
12.2
    	
No Right to Employment
    	
22
    
	
12.3
    	
Governing Law
    	
22
    
	
12.4
    	
Severability
    	
22
    
	
12.5
    	
Other Laws
    	
22
    
	
12.6
    	
Stockholder Agreements
    	
22
    
	
12.7
    	
No Guarantee of Tax Consequences
    	
22
    
	
12.8
    	
Compliance with Section 409A of the Code
    	
22
    
	
12.9
    	
Claw-back Policy
    	
23
    

 

ii

 

ASHFORD INC.
 2014 INCENTIVE PLAN

 

ARTICLE I
 INTRODUCTION

 

1.1                               Purpose.  The Ashford Inc. 2014 Incentive Plan (the “Plan”) is intended to promote the interests of Ashford Inc., a Delaware corporation (the “Company”), and its stockholders by encouraging Employees, Consultants and Non-Employee Directors of the Company, the Advisor and each of their respective Affiliates (each term as defined below) to acquire or increase their equity interests in the Company, thereby giving them an added incentive to work toward the continued growth and success of the Company.  The Board of Directors of the Company (the “Board”) also contemplates that through the Plan, the Company, the Advisor and each of their respective Affiliates will be better able to compete for the services of the individuals needed for the continued growth and success of the Company.

 

The Plan shall not constitute any “employee benefit plan” for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

 

The Plan is intended to comply with Section 162(m) of the Code during the “transition period” under Treasury Regulation Section 1.162-27(f)(4)(iii).  Following the transition period, any Award granted under the Plan that is intended to be “performance-based compensation” under Section 162(m) of the Code (“Performance-Based Compensation”) shall be subject to the approval of the material terms of the Plan by a majority of the stockholders of the Company in accordance with Section 162(m) of the Code and Treasury Regulation Section 1.162-27(f)(4)(iii).

 

1.2                               Shares Subject to the Plan.  Subject to this Section 1.2, the aggregate number of shares of Common Stock, $0.01 par value per share, of the Company (“Common Stock”) that may be issued under the Plan commencing on [                  ], 2014, the date the stockholders approved the Plan set forth herein, shall not exceed 420,000 shares of outstanding Common Stock (“Share Limit”).  Notwithstanding the foregoing, the Share Limit shall be increased on the first day of each calendar year beginning in calendar year 2015 by a number of shares of Common Stock equal to the amount (if any) by which:

 

(i)                                     15% of the sum of (a) the number of outstanding shares of Common Stock on a fully converted and diluted basis and (b) the number of shares of Common Stock reserved for issuance under the Company’s deferred compensation plan, in each case on the last day of the immediately preceding calendar year exceeds

 

(ii)                                  the number of shares of Common Stock that are available for new Awards under the Plan as of that date (with the number of shares available for new Awards being equal to the annual Share Limit reduced by Plan shares issued during the preceding calendar year and shares underlying outstanding Awards granted during the preceding calendar year).

 

In the event that at any time after the Effective Date the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities

 

 

of the Company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares or the like, the aggregate number and class of securities available under the Plan shall be ratably adjusted by the Committee (as defined below), whose determination shall be final and binding upon the Company and all other interested persons.  In the event the number of shares to be delivered upon the exercise or payment of any Award granted under the Plan is reduced for any reason whatsoever or in the event any Award granted under the Plan can no longer under any circumstances be exercised or paid, the number of shares no longer subject to such Award shall thereupon be released from such Award and shall thereafter be available under the Plan for the grant of additional Awards.  Shares issued pursuant to the Plan (i) may be treasury shares, authorized but unissued shares or, if applicable, shares acquired in the open market and (ii) shall be fully paid and nonassessable.

 

1.3                               Administration of the Plan.  The Plan shall be administered by the Committee.  Subject to the provisions of the Plan, the Committee shall interpret the Plan and all Awards under the Plan, shall make such rules as it deems necessary for the proper administration of the Plan, shall make all other determinations necessary or advisable for the administration of the Plan and shall correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award under the Plan in the manner and to the extent that the Committee deems desirable to effectuate the Plan.  Any action taken or determination made by the Committee pursuant to this and the other paragraphs of the Plan shall be final, binding and conclusive on all parties.  The act or determination of a majority of the Committee shall be deemed to be the act or determination of the Committee.

 

1.4                               Amendment and Discontinuance of the Plan.  The Board may amend, suspend or terminate the Plan; provided, however, no amendment, suspension or termination of the Plan may, without the consent of the holder of an Award, terminate such Award or adversely affect such holder’s rights with respect to such Award in any material respect; provided further, however, that any amendment which would constitute a “material revision” of the Plan (as that term is used in the rules of the NYSE MKT Exchange, or any successor exchange on which the Company’s equity securities are listed).

 

1.5                               Granting of Awards.  The Committee shall have the authority to grant, prior to the expiration date of the Plan, Awards to such Employees, Consultants and Non-Employee Directors as may be selected by it on the terms and conditions hereinafter set forth in the Plan.  In selecting the persons to receive Awards, including the type and size of the Award, the Committee may consider any factors that it may deem relevant.

 

1.6                               Term of Plan.  The Plan shall be effective as of [                  ], 2014 (the “Effective Date”), the date of approval of the Plan by the stockholders of the Company.  The provisions of the Plan are applicable to all Awards granted on or after the Effective Date.  If not sooner terminated under the provisions of Section 1.4, the Plan shall terminate upon, and no further Awards shall be made, after the tenth anniversary of the Effective Date.  Notwithstanding the foregoing, following the transition period with respect to any Award granted that is intended to be “Performance-Based Compensation”, no such Awards shall be granted except in accordance with the shareholder disclosure and approval requirements set forth under Treasury Regulation Section 1.162-27(e)(4)(vi).

 

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1.7                               Leave of Absence.  If an employee of the Company, the Advisor or one of their respective Affiliates is on military, sick leave or other bona fide leave of absence, such person shall be considered an “Employee” for purposes of an outstanding Award during the period of such leave provided it does not exceed ninety (90) days, or, if longer, so long as the person’s right to reemployment is guaranteed either by statute or by contract.  If the period of leave exceeds ninety (90) days, such person shall be deemed to no longer be an “Employee” for purposes of an outstanding Award on the 91st day of such leave, unless the person’s right to reemployment is guaranteed by statute or contract.

 

1.8                               Definitions.  As used in the Plan, the following terms shall have the meanings set forth below:

 

“1934 Act” means the Securities Exchange Act of 1934, as amended.

 

“Advisor” means Ashford Hospitality Advisors LLC, a Delaware limited liability company, together with any successors and assigns.

 

“Affiliate” means (i) Remington, (ii) any entity in which the Company, the Advisor or Remington, directly or indirectly, owns 10% or more of the combined voting power, as determined by the Committee, (iii) any “parent corporation” of the Company, the Advisor or Remington (as defined in Section 424(e) of the Code), (iv) any “subsidiary corporation” of any such parent corporation (as defined in Section 424(f) of the Code) of the Company, the Advisor or Remington and (v) any trades or businesses, whether or not incorporated which are members of a controlled group or are under common control (as defined in Sections 414(b) or (c) of the Code) with the Company, the Advisor or Remington.

 

“Awards” means, collectively, Options, Purchased Stock, Bonus Stock, Stock Appreciation Rights, Phantom Stock, Restricted Stock or Other Awards.

 

“Bonus Stock” is defined in Article V.

 

“Cause” for termination of any Participant who is a party to an agreement of employment with or services to the Company or the Advisor shall mean termination for “Cause” as such term is defined in such agreement, the relevant portions of which are incorporated herein by reference.  If such agreement does not define “Cause” or if a Participant is not a party to such an agreement, “Cause” means (i) the willful commission by a Participant of a criminal or other act that causes or is likely to cause substantial economic damage to the Company, the Advisor or one of their respective Affiliates or substantial injury to the business reputation of the Company, the Advisor or one of their respective Affiliates; (ii) the commission by a Participant of an act of fraud in the performance of such Participant’s duties on behalf of the Company, the Advisor or one of their respective Affiliates; or (iii) the continuing willful failure of a Participant to perform the duties of such Participant to the Company, the Advisor or one of their respective Affiliates (other than such failure resulting from the Participant’s incapacity due to physical or mental illness) after written notice thereof

 

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(specifying the particulars thereof in reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to the Participant by the Committee.  For purposes of the Plan, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done or omitted to be done by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company, the Advisor or one of their respective Affiliates, as the case may be.

 

“Change of Control” shall be deemed to have occurred upon any of the following events:

 

(i)                                     any “person” (as defined in Section 3(a)(9) of the 1934 Act, and as modified in Section 13(d) and 14(d) of the 1934 Act) other than (A) the Company or any of its subsidiaries or any of its officers or directors, (B) any employee benefit plan of the Company or any of its subsidiaries, (C) Remington or any of its Affiliates, (D) a company owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company, or (E) an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the “beneficial owner” (as defined in Rule 13d-3 of the 1934 Act), directly or indirectly, of securities of the Company representing 30% or more of the shares of voting stock of the Company then outstanding; provided, however, that an initial public offering of Common Stock shall not constitute a Change of Control;

 

(ii)                                  the consummation of any merger, organization, business combination or consolidation of the Company, its operating company Ashford Hospitality Advisors LLC (“Ashford LLC”) or one of the subsidiaries of the Company or Ashford LLC with or into any other company, other than a merger, reorganization, business combination or consolidation which would result in the holders of the voting securities of the Company or Ashford LLC, as applicable, outstanding immediately prior thereto holding securities which represent immediately after such merger, reorganization, business combination or consolidation more than 50% of the combined voting power of the voting securities of the Company, Ashford LLC or the surviving company or the parent of such surviving company;

 

(iii)                               the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition if the holders of the voting securities of the Company outstanding immediately prior thereto hold securities immediately thereafter which represent more than 50% of the combined voting power of the voting securities of the acquiror, or parent of the acquiror, of such assets, or the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company; or

 

(iv)                              individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to

 

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the Effective Date whose election by the Board, was approved or recommended to stockholders of the Company by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an election contest with respect to the election or removal of directors or other solicitation of proxies or consents by or on behalf of a person other than the Board.

 

Further, in the case of any item of income under an Award to which the foregoing definition would otherwise apply with the effect that the income tax under Section 409A of the Code would apply or be imposed on income under that Award, but where such tax would not apply or be imposed if the meaning of the term “Change of Control” met the requirements of Section 409A(a)(2)(A)(v) of the Code, then the term “Change of Control” herein shall mean, but only with respect to the income so affected, a transaction, circumstance or event that constitutes a “Change of Control” (as defined above) and that also constitutes a “change in control event” within the meaning of Treas. Reg. §1.409A—3(i)(5).

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations thereunder.

 

“Committee” means the compensation committee appointed by the Board to administer the Plan or, if none, the Board; provided however, that with respect to any Award granted to a Covered Employee which is intended to be “performance-based compensation” as described in Section 162(m) of the Code, the Committee shall consist solely of two or more members of the Board, each of whom qualifies as (i) an “outside director” as described in Section 162(m) of the Code, (ii) a “non-employee director” within the meaning of Section 16b-3 under the 1934 Act, and (iii) as “independent directors” under the rules of any national securities exchange or national securities association, as applicable, that such Common Stock is traded on.

 

“Consultant” means any individual, other than a Director or an Employee, who renders consulting or advisory services to the Company, the Advisor or any of their respective Affiliates.

 

“Covered Employee” shall mean those employees of the Company who are “covered employees” as defined in Section 162(m) of the Code.

 

“Disability” means an inability to perform the Participant’s material services for the Company, the Advisor or any of their respective Affiliates, as applicable, for a period of ninety (90) consecutive days or a total of one hundred eighty (180) days, during any 365-day period, in either case as a result of incapacity due to mental or physical illness, which is determined to be total and permanent.  A determination of Disability shall be made by a physician satisfactory to both the Participant (or his guardian) and the Company, provided that if the Participant (or his guardian) and the Company do not agree on a

 

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physician, the Participant and the Company shall each select a physician and these two together shall select a third physician, whose determination as to Disability shall be binding on all parties. Eligibility for disability benefits under any policy for long-term disability benefits provided to the Participant by the Company, the Advisor or any of their respective affiliates shall conclusively establish the Participant’s disability.  If a Disability constitutes a payment event with respect to any Award which provides for the deferral of compensation and is subject to Section 409A, then, to the extent required to comply with Section 409A, the Participant must also be considered “disabled” within the meaning of Section 409A(a)(2)(C) of the Code.

 

“Employee” means any employee of the Company, the Advisor or any of their respective Affiliates.

 

“Employment” includes any period in which a Participant is an Employee or a paid Consultant to the Company, the Advisor or any of their respective Affiliates.

 

“Fair Market Value” or “FMV Per Share”.  The Fair Market Value or FMV Per Share of the Common Stock shall be the closing price on the NYSE MKT Exchange, or other national securities exchange or over-the-counter market, if applicable, for the date of the determination or, if no trade of the Common Stock shall have been reported for such date, the closing sales price quoted on such exchange for the most recent trade prior to the determination date.  If shares of the Common Stock are not listed or admitted to trading on any exchange, over-the-counter market or any similar organization as of the determination date, the FMV Per Share shall be determined by the Committee in good faith using any fair and reasonable means selected in its discretion.

 

“Good Reason” means termination of employment by an Employee, termination of service by a Consultant or resignation from the Board of a Non-Employee Director under any of the following circumstances:

 

(i)                                     if such Employee, Consultant or Non-Employee Director is a party to an agreement for employment with or service to the Company, the Advisor or any of their respective Affiliates, which agreement includes a definition of “Good Reason” for termination of employment with or service to the Company, the Advisor or any of their respective Affiliates, “Good Reason” shall have the same definition for purposes of the Plan as is set forth in such agreement, the relevant portions of which are incorporated herein by reference.

 

(ii)                                  if such Employee, Consultant or Non-Employee Director is not a party to an agreement with the Company, the Advisor or any of their respective Affiliates that defines the term “Good Reason,” such term shall mean termination of employment or service under any of the following circumstances, if the Company, the Advisor or any of their respective Affiliates, as applicable, fails to

 

6

 

cure such circumstances within thirty (30) days after receipt of written notice from the Participant setting forth a description of such Good Reason:

 

(a)                                 the removal from or failure to re-elect the Participant to the office or position in which he or she last served;

 

(b)                                 any material diminishment, on a cumulative basis, of the Participant’s overall duties, responsibilities, or status, including the assignment to the Participant of any duties, responsibilities, or reporting requirements materially inconsistent with his or her position with the Company, the Advisor or one of their respective Affiliates, as applicable;

 

(c)                                  a material reduction by the Company, the Advisor or one of their respective Affiliates in the Participant’s fees, compensation, or benefits that is not part of a reduction affecting all members of the management team or Board; or

 

(d)                                 the requirement by the Company, the Advisor or one of their respective Affiliates that the principal place of business at which the Participant performs his or her duties be changed to a location more than fifty (50) miles from downtown Dallas, Texas.

 

“Incentive Option” means any option which satisfies the requirements of Section 422 of the Code and is granted pursuant to Article III of the Plan.

 

“Non-Employee Director” means persons who are members of the Board but who are neither Employees nor Consultants of the Company, the Advisor or any of their respective Affiliates.

 

“Non-Qualified Option” shall mean an option not intended to satisfy the requirements of Section 422 of the Code and which is granted pursuant to Article II of the Plan.

 

“Option” means an option to acquire Common Stock granted pursuant to the provisions of the Plan, and refers to either an Incentive Option or a Non-Qualified Option, or both, as applicable.

 

“Optionee” means a Participant who has received or will receive an Option.

 

“Option Expiration Date” means the date determined by Committee which shall not be more than ten (10) years after the date of grant of an Option.

 

“Other Award” means an award granted pursuant to Article IX of the Plan that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Stock or cash, as are deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, rights convertible or exchangeable into Common Stock, purchase

 

7

 

rights for Common Stock, Awards with value and payment and/or settlement contingent upon performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the value of Common Stock or the value of securities of or the performance of specified subsidiaries.

 

“Outstanding Company Common Stock” means, as of any date of determination, the then outstanding shares of Common Stock of the Company.

 

“Outstanding Company Voting Securities” means, as of any date of determination, the combined voting power of the then outstanding voting securities of the Company entitled to vote generally on the election of directors.

 

“Participant” means any Employee, Consultant or Non-Employee Director granted an Award under the Plan.

 

“Phantom Stock” means an Award of the right to receive cash equal to the Fair Market Value of a specified number of shares of Common Stock at the end of a specified deferral period which is granted pursuant to Article VI of the Plan.

 

“Purchased Stock” is defined in Section 4.1.

 

“Remington” means Remington Lodging & Hospitality LLC, a Delaware limited liability company, and its affiliates.

 

“Restricted Period” shall mean the period established by the Committee with respect to an Award during which the Award either remains subject to forfeiture or is not exercisable by the Participant.

 

“Restricted Stock” shall mean any share of Common Stock, prior to the lapse of restrictions thereon, granted under Article VII of the Plan.

 

“Stock Appreciation Rights” means an Award granted pursuant to Article VI of the Plan.

 

ARTICLE II
 OPTIONS

 

2.1                               Grants.  The Committee may grant Options to purchase shares of Common Stock to any Employee, Consultant or Non-Employee Director of the Company according to the terms set forth below.  Options which are intended to comply with Treasury Regulation Section 1.409A-1(b)(5)(i)(A) or any successor regulation, may be granted only to Employees, Consultants or Non-Employee Directors of the Company or a corporation or other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Company and ending with the corporation or other entity for which such Employee, Consultant or Non-Employee Director performs services.  For these purposes, “controlling interest” means (i) in the case of a corporation, ownership of stock possessing at least 50% of total combined voting power of all classes of stock of such corporation entitled to vote or at least 50% of the total value of

 

8

 

shares of all classes of stock of such corporation; (ii) in the case of a partnership, ownership of at least 50% of the profits interest or capital interest of such partnership; (iii) in the case of a sole proprietorship, ownership of the sole proprietorship; or (iv) in the case of a trust or estate, ownership of an actuarial interest (as defined in Treasury Regulation Section 1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate.  The Committee may grant Options that are otherwise exempt from or compliant with Code Section 409A to any eligible Employee, Consultant or Non-Employee Director.

 

2.2                               Calculation of Exercise Price.  The exercise price to be paid for each share of Common Stock deliverable upon exercise of each Option granted under this Article II shall not be less than the FMV Per Share on the date of grant of such Option.  The exercise price for each Option granted under Article II shall be subject to adjustment as provided in Section 2.3(d).

 

2.3                               Terms and Conditions of Options.  Options shall be in such form as the Committee may from time to time approve, shall be subject to the following terms and conditions and may contain such additional terms and conditions, not inconsistent with this Article II, as the Committee shall deem desirable:

 

(a)                                 Option Period and Conditions and Limitations on Exercise.  No Option shall be exercisable later than the Option Expiration Date.  To the extent not prohibited by other provisions of the Plan, each Option shall be exercisable at such time or times as the Committee in its discretion may determine at the time such Option is granted.

 

(b)                                 Manner of Exercise.  In order to exercise an Option, the Participant entitled to exercise it shall deliver to the Company payment in full for the shares being purchased, together with any required withholding taxes.  The payment of the exercise price for each Option shall either be (i) in cash or by check payable and acceptable to the Company, (ii) with the consent of the Committee, by tendering to the Company shares of Common Stock owned by the Participant for more than six months having an aggregate Fair Market Value as of the date of exercise that is not greater than the full exercise price for the shares with respect to which the Option is being exercised and by paying any remaining amount of the exercise price as provided in (i) above, (iii) subject to such conditions and requirements as the Committee may specify, at the written request of the Participant, by the Company’s withholding from shares otherwise deliverable pursuant to the exercise of the Option shares of Common Stock having an aggregate Fair Market Value as of the date of exercise that is not greater than the full exercise price for the shares with respect to which the Option is being exercised and by paying any remaining amount of the exercise price as provided in (i) above, or (iv) subject to such instructions as the Committee may specify, at the Participant’s written request the Company may deliver certificates for the shares of Common Stock for which the Option is being exercised to a broker for sale on behalf of the Participant, provided that the Participant has irrevocably instructed such broker to remit directly to the Company on the Participant’s behalf the full amount of the exercise price from the proceeds of such sale.  In the event that the Participant elects to make payment as allowed under clause (ii) above, the Committee may, upon confirming that the Participant owns the number of additional shares being tendered, authorize the issuance of a new certificate for the number of shares being acquired pursuant to the exercise of the Option less the number of shares being tendered upon the exercise and return to the Participant (or not require surrender of) the certificate for the shares being tendered upon the exercise.  If the Committee so requires, such

 

9

 

Participant shall also deliver a written representation that all shares being purchased are being acquired for investment and not with a view to, or for resale in connection with, any distribution of such shares.

 

(c)                                  Options not Transferable.  Except as provided below, no Non-Qualified Option granted hereunder shall be transferable other than by (i) will or by the laws of descent and distribution or (ii) pursuant to a domestic relations order and, during the lifetime of the Participant to whom any such Option is granted, and it shall be exercisable only by the Participant (or his or her guardian).  Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of, or to subject to execution, attachment or similar process, any Option granted hereunder, or any right thereunder, contrary to the provisions hereof, shall be void and ineffective, shall give no right to the purported transferee, and shall, at the sole discretion of the Committee, result in forfeiture of the Option with respect to the shares involved in such attempt.  With respect to a specific Non-Qualified Option, the Participant (or his or her guardian) may transfer, for estate planning purposes, all or part of such Option to one or more immediate family members or related family trusts or partnerships or similar entities.

 

(d)                                 Adjustment of Options.  In the event that at any time after the Effective Date the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares or the like, the Committee shall make an appropriate and equitable adjustment in the number and kind of shares as to which all outstanding Options granted, or portions thereof then unexercised, shall be exercisable, to the end that after such event the shares subject to the Plan and each Participant’s proportionate interest shall be maintained as before the occurrence of such event.  Such adjustment in an outstanding Option shall be made without change in the total price applicable to the Option or the unexercised portion of the Option (except for any change in the aggregate price resulting from rounding-off of share quantities or prices) and with any necessary corresponding adjustment in exercise price per share.  Any such adjustment made by the Committee shall be final and binding upon all Participants, the Company and all other interested persons.

 

(e)                                  Listing and Registration of Shares.  Each Option shall be subject to the requirement that if at any time the Committee determines, in its discretion, that the listing, registration, or qualification of the shares subject to such Option under any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the issue or purchase of shares thereunder, such Option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained and the same shall have been free of any conditions not acceptable to the Committee.

 

2.4                               Amendment.  The Committee may, without the consent of the Participant or Participants entitled to exercise any outstanding Option, amend, modify or terminate such Option; provided, however, such amendment, modification or termination shall not, without such Participant’s consent, reduce or diminish the value of such Option determined as if the Option had been exercised, vested, cashed in or otherwise settled on the date of such amendment or termination.  The Committee may at any time or from time to time, in its discretion, in the case

 

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of any Option which is not then immediately exercisable in full, accelerate the time or times at which such Option may be exercised to any earlier time or times.

 

2.5                               Acceleration of Vesting.  Any Option granted hereunder which is not otherwise vested shall vest (unless specifically provided to the contrary by the Committee in the document or instrument evidencing an Option granted hereunder) upon (i) termination or removal of an Employee, Consultant or Non-Employee Director without Cause or termination by or resignation of an Employee, Consultant or Non-Employee Director with Good Reason; (ii) termination, removal or resignation of an Employee, Consultant or Non-Employee Director for any reason within one (1) year from the effective date of the Change of Control; or death or Disability of the Participant.

 

2.6                               Other Provisions.

 

(a)                                 A Participant entitled to exercise, or who has exercised, an Option shall not be entitled to any rights as a stockholder of the Company with respect to any shares subject to such Option until he or she shall have become the holder of record of such shares.

 

(b)                                 No Option granted hereunder shall be construed as limiting any right which the Company, the Advisor or any of their respective Affiliates may have to terminate at any time, with or without Cause, the employment or service of any Participant to whom such Option has been granted.

 

(c)                                  Notwithstanding any provision of the Plan or the terms of any Option, the Company shall not be required to issue any shares hereunder if such issuance would, in the judgment of the Committee, constitute a violation of any state or federal law or of the rules or regulations of any governmental regulatory body.

 

2.7                               Option Repricing.  With stockholder approval only, the Committee, in its absolute discretion, may grant to holders of outstanding Non-Qualified Options, in exchange for the surrender and cancellation of such Non-Qualified Options, new Non-Qualified Options having exercise prices lower (or higher with any required consent) than the exercise price provided in the Non-Qualified Options so surrendered and canceled and containing such other terms and conditions as the Committee may deem appropriate.

 

2.8                               Share Limitation.  The maximum number of shares of Common Stock with respect to which Options may be granted under the Plan to any individual Covered Employee during any calendar year (whether such Options are intended to be Incentive Options or not), is 210,000 shares of Common Stock.

 

ARTICLE III
 INCENTIVE OPTIONS

 

The terms specified below shall be applicable to all Incentive Options.  Except as modified by the provisions of this Article III, all the provisions of Article II shall be applicable to Incentive Options.  Options which are specifically designated as Non-Qualified Options shall not be subject to the terms of this Article III.

 

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3.1                               Eligibility.  Incentive Options may only be granted to Employees of the Company.

 

3.2                               Exercise Price.  The exercise price per Share shall not be less than one hundred percent (100%) of the FMV Per Share on the option grant date.

 

3.3                               Dollar Limitation.  The aggregate Fair Market Value (determined as of the respective date or dates of grant) of shares of Common Stock for which one or more options granted to any Employee under the Plan (or any other option plan of the Company, or any parent or subsidiary thereof) may for the first time become exercisable as Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000).  To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted.

 

3.4                               10% Stockholder.  If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the FMV Per Share on the option grant date and the option term shall not exceed five (5) years measured from the option grant date.

 

3.5                               Options Not Transferable.  No Incentive Option granted hereunder shall be transferable other than by will or by the laws of descent and distribution and shall be exercisable during the Optionee’s lifetime only by such Optionee.

 

3.6                               Compliance with Section 422 of the Code.  All Options that are intended to be Incentive Options shall be designated as such in the Option grant and in all respects shall be issued in compliance with Section 422 of the Code.

 

3.7                               Limitations on Exercise.  No Incentive Option shall be exercisable more than three (3) months after the Optionee ceases to be an Employee for any reason other than death or Disability, or more than one (1) year after the Optionee ceases to be an Employee due to death or Disability.

 

3.8                               Share Limitation.  The maximum number of shares of Common Stock with respect to which Incentive Options may be granted under the Plan is 210,000 shares of Common Stock.

 

ARTICLE IV
 PURCHASED STOCK

 

4.1                               Eligible Persons.  The Committee shall have the authority to authorize the sale of shares of Common Stock (“Purchased Stock”) to such Employees, Consultants and Non-Employee Directors of the Company, the Advisor or their respective Affiliates as may be selected by it, on such terms and conditions as it may establish, subject to the further provisions of this Article IV.  Each issuance and sale of Purchased Stock under this Plan shall be evidenced by an agreement which shall be subject to applicable provisions of this Plan and to such other

 

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provisions not inconsistent with this Plan as the Committee may approve for the particular sale transaction.

 

4.2                               Purchase Price.  The price per share of Purchased Stock under this Plan shall be determined in the sole discretion of the Committee, and may be less than, but shall not be greater than, the FMV Per Share at the time of purchase.

 

4.3                               Payment of Purchase Price.  Payment of the purchase price for Purchased Stock under this Plan shall be made in full in cash or by check payable and acceptable to the Company.

 

4.4                               Share Limitation.  The maximum number of shares of Purchased Stock that may be granted under the Plan to any individual Covered Employee during any calendar year is 210,000 shares of Common Stock.

 

ARTICLE V
 BONUS STOCK

 

5.1                               Eligible Persons.  The Committee may, from time to time and subject to the provisions of the Plan, grant shares of Bonus Stock to Employees, Consultants or Non-Employee Directors of the Company, the Advisor or any of their respective Affiliates.  “Bonus Stock” shall be shares of Common Stock that are not subject to a Restricted Period under Article VII.

 

5.2                               Share Limitation.  The maximum number of shares of Bonus Stock that may be granted under the Plan to any individual Covered Employee during any calendar year is 210,000 shares of Common Stock.

 

ARTICLE VI
 STOCK APPRECIATION RIGHTS AND PHANTOM STOCK

 

6.1                               Stock Appreciation Rights.  The Committee is authorized to grant Stock Appreciation Rights to Employees, Consultants or Non-Employee Directors of the Company on the following terms and conditions.  Stock Appreciation Rights which are intended to comply with Treasury Regulation Section 1.409A-1(b)(5)(i)(B) or any successor regulation, may be granted only to Employees, Consultants or Non-Employee Directors of the Company or a corporation or other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Company and ending with the corporation or other entity for which such Employee, Consultant or Non-Employee Director performs services.  For these purposes, “controlling interest” means (i) in the case of a corporation, ownership of stock possessing at least 50% of total combined voting power of all classes of stock of such corporation entitled to vote or at least 50% of the total value of shares of all classes of stock of such corporation; (ii) in the case of a partnership, ownership of at least 50% of the profits interest or capital interest of such partnership; (iii) in the case of a sole proprietorship, ownership of the sole proprietorship; or (iv) in the case of a trust or estate, ownership of an actuarial interest (as defined in Treasury Regulation Section 1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate.  The Committee may grant Stock Appreciation Rights that are otherwise exempt from or compliant with Code Section 409A to any eligible Employee, Consultant or Non-Employee Director.

 

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(a)                                 Right to Payment.  A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the FMV Per Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by the Committee.

 

(b)                                 Rights Related to Options.  A Stock Appreciation Right granted in connection with an Option shall entitle a Participant, upon exercise thereof, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of an amount computed pursuant to Section 6.1(a).  That Option shall then cease to be exercisable to the extent surrendered.  A Stock Appreciation Right granted in connection with an Option shall be exercisable only at such time or times and only to the extent that the related Option is exercisable and shall not be transferable (other than by will or the laws of descent and distribution) except to the extent that the related Option is transferable.

 

(c)                                  Right Without Option.  A Stock Appreciation Right granted independent of an Option shall be exercisable as determined by the Committee and set forth in the Award agreement governing the Stock Appreciation Right.

 

(d)                                 Terms.  The Committee shall determine at the date of grant the time or times at which, and the circumstances under which, a Stock Appreciation Right may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the method of exercise, whether or not a Stock Appreciation Right shall be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right.  The grant price per each Stock Appreciation Right granted hereunder shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant.

 

(e)                                  Share Limitation.  The maximum number of shares of Common Stock with respect to which Stock Appreciation Rights that may be granted under the Plan to any individual Covered Employee during any calendar year is 210,000 shares of Common Stock.

 

6.2                               Phantom Stock Awards.  The Committee is authorized to grant Phantom Stock to the Participants, which are rights to receive cash equal to the Fair Market Value of a specified number of shares of Common Stock at the end of a specified deferral period, subject to the following terms and conditions:

 

(a)                                 Award and Restrictions.  Satisfaction of Phantom Stock shall occur upon expiration of the deferral period specified for such Phantom Stock by the Committee or, if permitted by the Committee, as elected by the Participant.  In addition, Phantom Stock shall be subject to such restrictions (which may include a risk of forfeiture), if any, as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, installments or otherwise, as the Committee may determine.

 

(b)                                 Forfeiture.  Except as otherwise determined by the Committee or as may be set forth in any Award, employment or other agreement pertaining to awards of Phantom Stock, upon termination of employment or services during the applicable deferral period or portion

 

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thereof to which forfeiture conditions apply, all Phantom Stock that is at that time subject to deferral (other than a deferral at the election of the Participant) shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Phantom Stock shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Phantom Stock.

 

(c)                                  Performance Goals.  To the extent the Committee determines that Phantom Stock granted pursuant to this Article VI shall constitute performance-based compensation for purposes of Section 162(m) of the Code, the grant or settlement of Phantom Stock shall, in the Committee’s discretion, be subject to the achievement of performance goals determined and applied in a manner consistent with Article VIII.

 

(d)                                 Share Limits.  The maximum number of shares of Phantom Stock that may be granted to any individual Covered Employee during any calendar year is 210,000 shares.

 

ARTICLE VII
 RESTRICTED STOCK

 

7.1                               Eligible Persons.  All Employees, Consultants and Non-Employee Directors shall be eligible for grants of Restricted Stock.

 

7.2                               Restricted Period and Vesting.

 

(a)                                 Unless the Award specifically provides otherwise, Restricted Stock shall be subject to restrictions on transfer by the Participant and repurchase by the Company such that the Participant shall not be permitted to transfer such shares and the Company shall have the right to repurchase or recover such shares for the lesser of the FMV Per Share on the forfeiture day or the amount of cash paid therefor, if any, if the Participant shall terminate employment from or services to the Company, the Advisor or any of their respective Affiliates, as applicable, provided that such transfer and repurchase restrictions shall lapse with respect to 33.33% of such initial shares on the first anniversary of the date of grant and on each subsequent anniversary of the date of grant that the Participant shall remain continuously as an Employee, Non-Employee Director or Consultant of the Company, the Advisor or any of their respective Affiliates, as applicable; subject to Section 7.2(b) below.

 

(b)                                 Notwithstanding the foregoing, unless the Award specifically provides otherwise, all Restricted Stock not otherwise vested shall vest upon (i) termination or removal of an Employee, Consultant or Non-Employee Director without Cause; (ii) termination by or resignation of an Employee, Consultant or Non-Employee Director with Good Reason; (iii) termination, resignation or removal of an Employee, Consultant or Non-Employee Director for any reason within one (1) year from the effective date of a Change of Control; or (iv) death or Disability of the Participant.

 

(c)                                  Each certificate representing Restricted Stock awarded under the Plan shall be registered in the name of the Participant and, during the Restricted Period, shall be left in deposit with the Company and a stock power endorsed in blank.  The grantee of Restricted Stock shall

 

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have all the rights of a stockholder with respect to such shares including the right to vote and the right to receive dividends or other distributions paid or made with respect to such shares.  Any certificate or certificates representing shares of Restricted Stock shall bear a legend similar to the following:

 

The shares represented by this certificate have been issued pursuant to the terms of the Ashford Inc. 2014 Incentive Plan and Grant of Restricted Stock dated                                 , 20         and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as is set forth in the terms of such plan or grant.

 

(d)                                 Share Limits.  The maximum number of shares of Restricted Stock that may be granted to any individual Covered Employee during any calendar year is 210,000 shares of Common Stock.

 

ARTICLE VIII
 PERFORMANCE-BASED COMPENSATION

 

8.1                               Eligible Persons.  All Covered Employees shall be eligible for grants of Awards that are intended to be Performance-Based Compensation.

 

8.2                               Performance-Based Compensation.  The Committee may grant Awards that are intended and designated by the Committee to be Performance-Based Compensation.  Other than awards of Options and Stock Appreciation Rights granted to a Covered Employee, such Awards shall specify performance goals based on performance criteria measured over a period of not less than one (1) year and not more than three (3) years.  The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to increase the amounts payable under any Award subject to performance conditions, except as limited under Section 8.3 in the case of an Award granted to a Covered Employee.

 

8.3                               Performance Goals.  The grant and/or settlement of an Award designated as Performance-Based Compensation shall be contingent upon terms set forth in this Section 8.3.

 

(a)                                 General.  The performance goals for Awards intended to qualify as Performance-Based Compensation shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee.  In the case of any Award granted to a Covered Employee which are intended to comply with Section 162(m) of the Code, performance goals shall be designed to be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder (including Treasury Regulation Section 1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance targeted by the Committee are such that the achievement of performance goals is “substantially uncertain” at the time of grant.  The Committee may determine that such Awards shall be granted and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a

 

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condition to the grant and/or settlement of such Awards.  Performance goals may differ among Awards granted to any one Participant or for such Awards granted to different Participants.

 

(b)                                 Business Criteria.  One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries, divisions or business or geographical units of the Company (except with respect to the total stockholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for Awards intended to qualify as Performance-Based Compensation granted to a Participant: (A) operating income; (B) return on net assets; (C) return on assets; (D) return on investment; (E) return on equity; (F) pretax earnings; (G) pretax earnings before interest, depreciation and amortization; (H) pretax operating earnings after interest expense and before incentives, service fees, and extraordinary or special items; (I) total stockholder return; (J) earnings per share; (K) increase in revenues; (L) increase in cash flow; (M) increase in cash flow return; (N) economic value added; (O) gross margin; (P) net income; (Q) debt reduction; (R) credit status; (S) stock price; and (T) any of the above goals determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable companies.

 

(c)                                  Performance Period; Timing for Establishing Performance Goals.  Achievement of performance goals in respect of Awards intended to qualify as Performance-Based Compensation shall be measured over a performance period of not less than one (1) year and not more than three (3) years, as specified by the Committee.  Performance goals in the case of any Award granted to a Covered Employee shall be established not later than ninety (90) days after the beginning of any performance period applicable to such Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.

 

(d)                                 Settlement of Awards Intended to Qualify as Performance-Based Compensation; Other Terms.  After the end of each performance period, the Committee shall determine the amount, if any, of Awards intended to qualify as Performance-Based Compensation payable to each Covered Employee based upon achievement of business criteria over a performance period.  The Committee may not exercise discretion to increase any such amount payable in respect of any such Award designed to comply with Section 162(m) of the Code.  Subject to Treasury Regulation Section 1.162-27(e)(2)(v), the Committee shall specify the circumstances in which such Awards shall be paid or forfeited in the event of termination of employment by the Participant prior to the end of a performance period or settlement of such Awards.

 

(e)                                  Written Determinations.  All determinations by the Committee as to the establishment of performance goals, the amount of any Awards intended to qualify as Performance-Based Compensation, and the achievement of performance goals relating to such Awards shall be made in writing in the case of any Award granted to a Covered Employee.  The Committee may not delegate any responsibility relating to such Awards.

 

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ARTICLE IX
 OTHER AWARDS

 

9.1                               Eligible Persons.  The Committee is hereby authorized to grant to Employees, Non-Employee Directors and Consultants of the Company, the Advisor or any of their respective Affiliates Other Awards, which shall consist of a right which (i) is not an Award described in any other Article and (ii) is denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock (including, without limitation, securities convertible into shares of Common Stock) or cash as are deemed by the Committee to be consistent with the purposes of the Plan.  Subject to the terms of the Plan, the Committee shall determine the terms and conditions of any such Other Award.

 

9.2                               Limits.  The maximum number of shares of Common Stock or the value for which Other Awards may be granted to any individual Covered Employee during any calendar year is 210,000 shares of Common Stock, if the Award is in shares of Common Stock, or $8,000,000, if the Award is denominated in dollars.

 

ARTICLE X
 CERTAIN PROVISIONS APPLICABLE TO ALL AWARDS

 

10.1                        General.  Awards may be granted on the terms and conditions set forth herein.  In addition, the Committee may impose on any Award or the exercise thereof, such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment by the Participant and terms permitting a Participant to make elections relating to his or her Award.  Notwithstanding the foregoing, the Committee may amend any Award without the consent of the holder if the Committee deems it necessary to avoid adverse tax consequences to the holder under Section 409A of the Code.  The Committee shall retain full power and discretion to accelerate or waive, at any time, any term or condition of an Award that is not mandatory under this Plan; provided, however, that the Committee shall not have discretion to accelerate or waive any term or condition of an Award (i) if such discretion would cause the Award to have adverse tax consequences to the Participant under Section 409A of the Code, or (ii) if the Award is intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code and such discretion would cause the Award not to so qualify.  Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of the Delaware General Corporation Law, no consideration other than services may be required for the grant of any Award.

 

10.2                        Stand-Alone, Additional, Tandem, and Substitute Awards.  Subject to Section 2.7, Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, the Advisor, any of their respective Affiliates, or any business entity to be acquired by the Company, the Advisor or any of their respective Affiliates, or any other right of a Participant to receive payment from the Company, the Advisor or any of their respective Affiliates.  Such additional, tandem and substitute or exchange Awards may be granted at any time.  If an Award is granted in substitution or

 

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exchange for another Award, the Committee shall require the surrender of such other Award in consideration for the grant of the new Award.  In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company, the Advisor or any of their respective Affiliates.

 

10.3                        Term of Awards.  The term or Restricted Period of each Award that is an Option, Stock Appreciation Right, Phantom Stock or Restricted Stock shall be for such period as may be determined by the Committee; provided that in no event shall the term of any such Award exceed a period of ten (10) years (or such shorter terms as may be require in respect of an Incentive Stock Option under Section 422 of the Code).

 

10.4                        Form and Timing of Payment under Awards; Deferrals.  Subject to the terms of the Plan and any applicable Award agreement, payments to be made by the Company or a subsidiary upon the exercise of an Option or other Award, or settlement of an Award may be made in a single payment or transfer, in installments, or on a deferred basis.  The settlement of any Award may, subject to any limitations set forth in the Award agreement, be accelerated and cash paid in lieu of shares in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events; provided, however, that such discretion may not be exercised by the Committee if the exercise of such discretion would result in adverse tax consequences to the Participant under Section 409A of the Code.  In the discretion of the Committee, Awards granted pursuant to Article VI or VIII of the Plan may be payable in shares to the extent permitted by the terms of the applicable Award agreement.  Installment or deferred payments may be required by the Committee (subject to Section 1.4 of the Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award agreement) or permitted at the election of the Participant on terms and conditions established by the Committee; provided, however, that no deferral shall be required or permitted by the Committee if such deferral would result in adverse tax consequences to the Participant under Section 409A of the Code.  Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of amounts in respect of installment or deferred payments denominated in shares.  Any deferral shall only be allowed as is provided in a separate deferred compensation plan adopted by the Company.

 

10.5                        Vested and Unvested Awards.  After the satisfaction of all of the terms and conditions set by the Committee with respect to an Award of (i) Restricted Stock, a certificate, without the legend set forth in Section 7.2(c), for the number of shares that are no longer subject to such restrictions, terms and conditions shall be delivered to the Participant, (ii) Phantom Stock, to the extent not paid in cash, a certificate for the number of shares equal to the number of shares of Phantom Stock earned, and (iii) Stock Appreciation Rights, cash and/or a certificate for the number of shares equal in value to the number of Stock Appreciation Rights vested shall be delivered to the Participant.  Upon termination, resignation or removal of a Participant under circumstances that do not cause such Participant to become fully vested, any remaining unvested Options, shares of Restricted Stock, Phantom Stock, Stock Appreciation Rights or Other Awards, as the case may be, shall either be forfeited back to the Company or, if appropriate under the terms of the Award, shall continue to be subject to the restrictions, terms and conditions set by the Committee with respect to such Award.

 

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10.6                        Exemptions from Section 16(b) Liability.  It is the intent of the Company that the grant of any Awards to or other transaction by a Participant who is subject to Section 16 of the 1934 Act shall be exempt from Section 16(b) of the 1934 Act pursuant to an applicable exemption (except for transactions acknowledged by the Participant in writing to be non-exempt).  Accordingly, if any provision of this Plan or any Award agreement does not comply with the requirements of Rule 16b-3 as then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section 16(b) of the 1934 Act.

 

10.7                        Other Provisions.  No grant of any Award shall be construed as limiting any right which the Company, the Advisor or any of their respective Affiliates may have to terminate at any time, with or without cause, the employment of any person to whom such Award has been granted.

 

10.8                        Change of Control.  In the event of a Change of Control, the following provisions shall apply.

 

(a)                                 General.  Unless otherwise provided in the Award, in connection with a Change of Control, the Board shall have the authority in its sole discretion to take any one or more of the following actions with respect to the Awards:

 

(i)                                     the Board may accelerate vesting of all Awards and, with respect to Options and Stock Appreciation Rights, the time at which all Options and Stock Appreciation Rights then outstanding may be exercised or paid so that all Awards may be fully vested and exercised or paid in full for a limited period of time on or before a specified date fixed by the Board or the Committee, after which specified date all unexercised Awards, if any, and all rights of the Participants thereunder shall terminate, or the Board or the Committee may accelerate vesting or payment and the time at which such Awards may be exercised or paid so that such Awards may be exercised or paid in full for their then remaining term;

 

(ii)                                  the Board may waive, alter and/or amend the performance goals and other restrictions and conditions of Awards then outstanding, with the result that the affected Awards may be deemed vested, and the Restricted Period or other limitations on payment in full with respect thereto shall be deemed to have expired, as of the date of the Change of Control or such other date as may be determined by the Board;

 

(iii)                               the Board may cause the acquirer to assume the Plan and the Awards or exchange the Awards for awards for the acquirer’s stock;

 

(iv)                              the Board may terminate the Plan; and

 

(v)                                 the Board may terminate and cancel all outstanding unvested or unexercised Awards as of the date of the Change of Control on such terms and conditions as it deems appropriate.

 

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Notwithstanding the above provisions of this Section 10.8(a), the Board shall not be required to take any action described in the preceding provisions of this Section 10.8(a), and any decision made by the Board, in its sole discretion, not to take some or all of the actions described in the preceding provisions of this Section 10.8(a) shall be final, binding and conclusive with respect to the Company and all other interested persons.

 

(b)                                 Right to Cash-Out.  The Board shall, in connection with a Change of Control, have the right to require all, but not less than all, Participants to transfer and deliver to the Company all Awards previously granted to the Participants in exchange for an amount equal to the Cash Value (as defined below) of the Awards.  Such right shall be exercised by written notice to all affected Participants.  The amount payable to each Participant by the Company shall be in cash or by certified check paid within five (5) days following the transfer and delivery of such Award (but in no event later than fifty (50) days following the date of the Change of Control) and shall be reduced by any taxes required to be withheld.  “Cash Value” of an Award means the sum of (i) in the case of any Award which is not an Option or an Award of Restricted Stock, the value of all benefits to which the Participant would be entitled as if the Award were vested and settled or exercised and (ii) (A) in the case of any Award that is an Option, the excess of the FMV Per Share over the exercise price or (B) in the case of an Award of Restricted Stock, the FMV Per Share of Restricted Stock, multiplied by the number of shares subject to such Award, all as determined by the Board as of the date of the Change of Control or such other date as may be determined by the Board.

 

ARTICLE XI
 WITHHOLDING FOR TAXES

 

Any issuance of Common Stock pursuant to the exercise of an Option or payment of any other Award under the Plan shall not be made until appropriate arrangements satisfactory to the Company have been made for the payment of any tax amounts (federal, state, local or other) that may be required to be withheld or paid by the Company with respect thereto.  Such arrangements may, at the discretion of the Committee, include allowing the person to tender to the Company shares of Common Stock owned by the person, or to request the Company to withhold shares of Common Stock being acquired pursuant to the Award, whether through the exercise of an Option or as a distribution pursuant to the Award, which have an aggregate FMV Per Share as of the date of such withholding that is not greater than the sum of all tax amounts to be withheld with respect thereto, together with payment of any remaining portion of such tax amounts in cash or by check payable and acceptable to the Company.

 

Notwithstanding the foregoing, if on the date of an event giving rise to a tax withholding obligation on the part of the Company the person is an officer or individual subject to Rule 16b-3, such person may direct that such tax withholding be effectuated by the Company withholding the necessary number of shares of Common Stock (at the tax rate required by the Code) from such Award payment or exercise.

 

21

 

ARTICLE XII
 MISCELLANEOUS

 

12.1                        No Rights to Awards.  No Participant or other person shall have any claim to be granted any Award, there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards and the terms and conditions of Awards need not be the same with respect to each recipient.

 

12.2                        No Right to Employment.  The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company, the Advisor or any of their respective Affiliates.  Further, the Company, the Advisor or any of their respective Affiliates may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award agreement.

 

12.3                        Governing Law.  The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with applicable federal law and the laws of the State of Delaware, without regard to any principles of conflicts of law.

 

12.4                        Severability.  If any provision of the Plan or any Award is, becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Participant or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Participant or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

 

12.5                        Other Laws.  The Committee may refuse to issue or transfer any shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance of transfer or such shares or such other consideration might violate any applicable law.

 

12.6                        Stockholder Agreements.  The Committee may condition the grant, exercise or payment of any Award upon such person entering into a stockholders’ agreement in such form as approved from time to time by the Board.

 

12.7                        No Guarantee of Tax Consequences.  Each Participant shall be solely responsible for and liable for any tax consequences (including but not limited to any interest or penalties) as a result of his or her participation in the Plan.  None of the Board, the Company or the Committee makes any commitment or guarantee that any federal, state or local tax treatment will apply or be available to any person participating or eligible to participate hereunder and assumes no liability whatsoever for the tax consequences to the Participants.

 

12.8                        Compliance with Section 409A of the Code.  Certain items of compensation paid pursuant to this Plan are or may be subject to Section 409A of the Code.  In such instances, this Plan is intended to comply and shall be administered in a manner that is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such

 

22

 

intent.  Subject to any other restrictions or limitations contained herein, in the event that a “specified employee” (as defined under Section 409A of the Code) becomes entitled to a payment under the Plan that is subject to Section 409A of the Code on account of a “separation from service” (as defined under Section 409A of the Code), such payment shall not occur until the date that is six months plus one (1) day from the date of such “separation from service.”  In the event that a Participant becomes entitled to a payment under the Plan that is subject to Section 409A of the Code on account of a termination of employment, such termination of employment must also constitute a “separation from service” (as defined under Section 409A of the Code).

 

12.9                        Claw-back Policy.  All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any shares of Common Stock underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, the Advisor or any Affiliate, as applicable, including, without limitation, any claw-back policy adopted to comply with the requirements of any federal or state laws and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award agreement.

 

23Exhibit 10.14

 

ASHFORD INC.

AMENDED AND RESTATED

NONQUALIFIED DEFERRED COMPENSATION PLAN

Originally Adopted by Ashford Hospitality Trust, Inc., Effective January 1, 2008

Assumed by Ashford Inc., Effective [                        ], 2014

 

 

TABLE OF CONTENTS

 

ASHFORD INC.

AMENDED AND RESTATED

NONQUALIFIED DEFERRED COMPENSATION PLAN

 

	
CONTENTS
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
PREAMBLE
    	
 
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
PARTICIPATION   IN THE PLAN
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
DEFERRAL   ACCOUNTS
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
INVESTMENT   FUNDS
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
DISTRIBUTION   OF ACCOUNT
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
NON-ASSIGNABILITY
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7
    	
AMENDMENT   OR TERMINATION OF THE PLAN
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 8
    	
PLAN   ADMINISTRATION
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
MISCELLANEOUS
    	
 
    	
21
    

 

i

 

ASHFORD INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

Originally Adopted by Ashford Hospitality Trust, Inc., Effective January 1, 2008

Assumed by Ashford Inc., Effective November [    ], 2014

 

PREAMBLE

 

Ashford Hospitality Trust, Inc. (“Ashford Trust”) adopted on December 31, 2007, the Ashford Hospitality Trust, Inc. Nonqualified Deferred Compensation Plan (the “Original Plan”), effective January 1, 2008, for the benefit of a select group of management or highly compensated employees of the Company.  The Company subsequently restated the Original Plan on April 4, 2008, effective as of January 1, 2008 to clarify certain provisions.  On [                    ], 2014, in connection with the spin-off of Ashford Inc. from Ashford Trust, Ashford Trust transferred and assigned the Original Plan and all liabilities thereunder to Ashford Inc., and Ashford Inc. assumed the Original Plan and all liabilities thereunder.  Ashford Inc. then amended and restated the Original Plan to remove references to Ashford Trust and replace them with references to Ashford Inc. and to clarify certain provisions of the Original Plan (as amended, the “Plan”).  The purpose of the Plan is to permit designated executives and key employees of the Company to accumulate additional retirement income on a tax deferred basis.

 

This Plan is intended to be a nonqualified deferred compensation plan within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended.  The provisions of this Plan shall be construed consistent with the requirements of Code Section 409A and applicable regulations and other guidance issued thereunder.

 

ARTICLE 1
 DEFINITIONS

 

As used in this Plan, the following capitalized words shall have the meanings indicated below, unless the context clearly requires a different meaning:

 

1.1                               “Account” means the aggregate of a Participant’s Cash Account and Stock Account.

 

1.2                               “Allocation Date” means each business day during the Plan Year.

 

1.3                               “Base Salary” means a Participant’s base salary as shown in the personnel records of the Company.

 

1.4                               “Beneficiary” means the person or persons designated by a Participant or otherwise

 

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entitled to receive any amount credited to his or her Account that remains undistributed at the Participant’s death.

 

1.5                               “Bonus” means the annual bonus payable to a Participant as incentive compensation as determined by the Company, and any other bonus, including long-term incentive bonus, which the Committee, in its sole discretion, determines is eligible for deferral under the Plan.

 

1.6                               “Bonus Deferral Election” means an agreement between a Participant and the Company under which the Participant agrees to defer all or a portion of his or her Bonus.

 

1.7                               “Cash Account” means the separate bookkeeping account established on behalf of each Participant to reflect the amounts credited to the Plan on his or her behalf that are not invested in the Stock Account.   Separate sub-accounts shall be maintained in the Cash Account for deferrals attributable to each Plan Year.

 

1.8                               “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

1.9                               “Committee” means the committee appointed in accordance with Section 8.1 to administer the Plan.

 

1.10                        “Common Stock” means common stock of the Company, $.01 par value per share.

 

1.11                        “Company” means Ashford Inc. a Delaware corporation, and any successor thereto.

 

1.12                        “Disability” means that a Participant:  (i) 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; or (ii) is, 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, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company.  For all purposes, the term “Disability” shall comply with the requirements of Section 409A.

 

1.13                        “Eligible Employee” means an employee of the Company who is a member of a select group of management or highly compensated employees and who is designated by the Company as eligible for participation in the Plan.

 

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1.14                        “Investment Fund” means one or more of the measurement investment funds designated by the Committee for purposes of crediting or debiting hypothetical investment gains and losses to the Cash Accounts of Participants.

 

1.15                        “Participant” means any Eligible Employee who satisfies the conditions for participation in the Plan set forth in Section 2.1.

 

1.16                        “Plan” means the Amended and Restated Ashford Inc. Nonqualified Deferred Compensation Plan, as set forth herein and as from time to time amended.

 

1.17                        “Plan Year” means the calendar year (January 1-December 31).

 

1.18                        “Retirement” means Separation from Service on or after attainment of age 55 with 10 or more years of service with the Company.

 

1.19                        “RSU Deferral Election” means an election to defer receipt of shares of Common Stock otherwise payable to the Participant upon the vesting of restricted stock unit awards under the Stock Incentive Plan.  The Committee, in its discretion, shall determine which restricted stock unit awards, if any, under the Stock Incentive Plan are eligible for deferral under the Plan.

 

1.20                        “Salary Deferral Election” means an agreement between a Participant and the Company under which the Participant agrees to defer a portion of his or her Base Salary.

 

1.21                        “Separation from Service” means the termination of a Participant’s employment with the Company which constitutes a “separation from service” as that term is defined under Code Section 409A and regulations issued thereunder.

 

1.22                        “Specified Employee” means a Participant who is a key employee (as defined in Code Section 416(i) without regard to Code Section 416(i)(5)) of the Company.  For purpose of this definition, a Participant is a key employee if the Participant meets the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)) at any time during the 12-month period ending on any December 31st.  If a Participant is a key employee as of any December 31st, then that Participant is treated as a Specified Employee for distributions during the 12-month period beginning on the April 1st following the relevant December 31st.

 

3

 

1.23                        “Stock Account” means the separate bookkeeping account established on behalf of each Participant to reflect amounts credited to the Plan on his or her behalf with respect to deferrals of restricted stock unit awards under the Stock Incentive Plan.  The Stock Account shall be maintained in the form of Stock Units and shall be payable solely in the form of shares of Common Stock from the Stock Incentive Plan.   Separate sub-accounts shall be maintained in the Stock Account for deferrals attributable to each Plan Year.

 

1.24                        “Stock Incentive Plan” means the Ashford Inc. 2014 Incentive Plan, and any successor thereto.

 

1.25                        “Stock Unit” means a unit that entitles the Participant to one share of Common Stock.

 

1.26                        Rules of Construction

 

(a)                                 Governing law.  The construction and operation of this Plan are governed by the laws of the State of Texas except to the extent pre-empted by ERISA or other applicable federal law.

 

(b)                                 Headings.  The headings of Articles, Sections and Subsections are for reference only and are not to be utilized in construing the Plan.

 

(c)                                  Gender.  Unless clearly inappropriate, all pronouns of whatever gender refer indifferently to persons or objects of any gender.

 

(d)                                 Singular and plural.  Unless clearly inappropriate, singular items also refer to the plural and vice versa.

 

(e)                                  Severability.  If any provision of this Plan is held illegal or invalid for any reason, the remaining provisions shall remain in full force and effect and be construed and enforced in accordance with the purposes of the Plan as if the illegal or invalid provision did not exist.

 

ARTICLE 2
 PARTICIPATION IN THE PLAN

 

2.1                               Eligibility

 

Participation in the Plan shall be limited to employees of the Company who (i) qualify for

 

4

 

inclusion in a “select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and (ii) are designated by the Company as being eligible to participate in the Plan. If the Company determines that a Participant no longer qualifies as being a member of a select group of management or highly compensated employees, the Company shall have the right to suspend the Participant’s contributions for future Plan Years, except to the extent prohibited by Section 409A of the Code.

 

2.2                               Commencement of Participation

 

Eligible Employees may elect to participate in the Plan, in the manner designated by and acceptable to the Company, prior to the first day of each Plan Year (or in the case of newly eligible enrollees, within 30 days of first becoming eligible to participate in the Plan).

 

ARTICLE 3
 DEFERRAL ACCOUNTS

 

3.1                               Deferral Elections

 

(a)                                 Deferral of Base Salary.  After satisfaction of applicable statutory tax withholding requirements and Company mandated withholding for applicable benefits, an Eligible Employee may elect to defer up to 100% of his or her Base Salary for a Plan Year by filing a Salary Deferral Election in accordance with Section 3.2.

 

(b)                                 Deferral of Bonus.  An Eligible Employee may elect to defer up to 100% of his or her Bonus for a Plan Year by filing a Bonus Deferral Election in accordance with Section 3.2.

 

(c)                                  Deferral of Equity Awards.  An Eligible Employee may elect to defer payment of up to 100% of his or her restricted stock units vesting under the Stock Incentive Plan by filing an RSU Deferral Election in accordance with Section 3.2.

 

3.2                               Deferral Elections.  A Participant’s deferral elections shall be in writing, and shall be filed with the Committee at such time and in such manner as the Committee shall provide, subject to the following:

 

(a)                                 Salary Deferrals. A Salary Deferral Election shall be made during the

 

5

 

election period established by the Committee, which shall end no later than the last day of the Plan Year preceding the Plan Year in which the Base Salary would otherwise be earned.

 

(b)                                 Bonus Deferrals.  If the Committee determines that Bonus eligible for deferral satisfies the requirements of “performance based compensation” within the meaning of Code Section 409A, then any election to defer such Bonus must be made no later than the date which is six months prior to the end of the performance period to which the Bonus relates.  If the Committee determines that any Bonus eligible for deferral under the Plan does not satisfy the requirements of performance based compensation, then any election to defer such Bonus must be made no later of the last day of the calendar year preceding the Plan Year which contains the first day of the performance period to which such Bonus relates.  Any deferral of Bonus shall be made in accordance with the rules and procedures established by the Committee.

 

(c)                                  Restricted Stock Unit Deferrals.  An RSU Deferral Election shall be made during the election period established by the Committee, which shall end no later than 30 days after the date such restricted stock units are awarded to the Eligible Employee provided that the vesting date under the Stock Incentive Plan for such RSU’s is at least 12 months after the date of such deferral election.  If the Committee determines that restricted stock units eligible for deferral satisfy the requirements of performance based compensation within the meaning of Code Section 409A, then the election to defer must be made no later than the date which is six months prior to the end of the performance period with respect to such restricted stock units.

 

(d)                                 Deferral elections may be expressed as a percentage or in whole dollar amounts (or whole shares, with respect to restricted stock units), within the limits provided under the Plan.

 

(e)                                  The minimum annual deferral of Base Salary under the Plan shall be ten thousand dollars ($10,000) and any deferral election that would provide a lesser deferral for a Plan Year shall be disregarded for such Plan Year.

 

(f)                                   Notwithstanding the foregoing provisions of this Section 3.2, the Committee

 

6

 

may provide that an employee who first becomes an Eligible Employee may make a deferral election within 30 days of first becoming an Eligible Employee, which deferral election shall relate to Base Salary, Bonus and restricted stock units earned for periods after the date such election is made.

 

Once made, the Committee may provide that a deferral election shall remain in effect for subsequent Plan Years unless changed or revoked by the Participant in accordance with rules established by the Committee.  Any such modification or revocation shall be effective for the Plan Year following the Plan Year in which it is made.  Participants shall be fully vested in their Plan benefits at all times.

 

3.3                               Account Reflecting Deferred Compensation

 

The Company shall establish and maintain a separate Account for each Participant which shall reflect the amount of a Participant’s total deferrals made under Section 3.2 and all credits or charges under Section 3.4, and applicable earnings and losses under Article IV. All amounts credited or charged to a Participant’s Account hereunder shall be in a manner and form determined within the sole discretion of the Company.

 

3.4                               Credits or Charges

 

(a)                                 Balance of Account

 

As of each Allocation Date, the amount credited to a Participant’s Account shall be the amount credited to his or her Account as of the immediately preceding Allocation Date, plus the Participant’s deferrals since the immediately preceding Allocation Date, minus any amount that is paid to or on behalf of a Participant pursuant to this Plan subsequent to the immediately preceding Allocation Date, plus or minus any hypothetical investment gains or losses determined pursuant to Section 3.4(b) below.

 

(b)                                 Earnings or Losses

 

As of each Allocation Date, a Participant’s Cash Account shall be credited or debited with earnings, gains or losses approximately equal to the earnings, gains or losses on the Investment Funds designated by the Participant to be used for purposes of calculating his or her Cash Account balance.

 

7

 

3.5                               Credits to Trust Fund

 

The Company may establish a Trust Fund and make credits to it corresponding to any or all amounts credited under this Article III with respect to Eligible Employees of the Company who participate in the Plan.  Notwithstanding any other provision of this Plan, any assets of the Trust Fund shall remain the property of the Company and are subject to the claims of its creditors in accordance with the terms of the Trust. No Participant (or Beneficiary) has any priority claim on Trust assets, if any, or any security interest or other right in or to such assets superior to the rights of general unsecured creditors of the Company.

 

ARTICLE 4
 INVESTMENT ELECTIONS

 

4.1                               Designation of Preferred Investment By Participants

 

(a)                                 Investment Funds

 

Each Participant may indicate to the Company, in writing, a preference that monies in his or her Cash Account be invested by the Company in one or more of the Investment Funds selected by the Committee for use by the Plan. If the monies are invested by the Company in one or more such Investment Funds, then the value of a Participant’s Cash Account at any time shall include the current fair market value of the investment in such Investment Funds.  A Participant’s investment election under this Section 4.1 may be changed as of each Allocation Date (or at such other times as permitted by the Committee) in accordance with rules determined by the Committee.

 

Notwithstanding Section 4.1 or any other provision in this Plan or any notice, statement, summary or other communication provided to a Participant that may be interpreted to the contrary, the Company shall have sole control and discretion over the investment, management and use of all amounts credited to a Participant’s Account until such amounts are distributed pursuant to Article V.  The Investment Funds are to be used for measurement purposes only, and a Participant’s preference of any such Investment Fund, the determination of credits and debits to his or her Account based on such Investment Funds, the Company’s actual ownership of such Investment Funds, and any authority granted by the Company to a Participant to change the investment of the Company’s assets, if any, shall not be considered or construed in any manner as an actual investment of the Cash Account in any such Investment Fund or to constitute a funding of this Plan.  The Company shall at all times retain the discretion to invest the monies credited to the Cash Accounts of Participants in any funds it may choose and shall not have a duty to notify a

 

8

 

Participant of the identity of such funds. In such event, the credits or charges to a Cash Account shall be determined using earnings, gains or losses equivalent to the hypothetical rate of earnings, gains or losses which such Account would have experienced had the Cash Account been invested in the Investment Funds designated by the Participant, based on the Participant’s most current investment preference in accordance with Section 4.1.

 

(b)                                 Investment in Common Stock

 

Each Participant may also elect Common Stock as his or her investment option.  Upon any such election of Common Stock as the investment option, all deferred amounts shall be credited to such Participant’s Account on the applicable deferral date, payable in a number of shares of Common Stock equal to such deferral amount divided by the market Common Stock price at the close of business on such day. Any issuance of Common Stock under the Plan, with respect to all deferral amounts for a particular Participant, shall be subject to the satisfaction of any and all requisite regulatory and legal conditions precedent to such issuance.

 

4.2                               Stock Account.

 

A Participant’s deferrals of shares of Common Stock payable on the vesting of restricted stock units shall be credited to the Participant’s Stock Account in the form of Stock Units.  The Participant shall be credited with one Stock Unit for each share of Common Stock deferred under the Plan. All distributions from the Stock Account shall be made in shares of Common Stock, which shall be payable from the share reserve under the Stock Incentive Plan.  No interest or other earnings shall accrue on such Stock Account.

 

Prior to distribution, Stock Units shall receive dividend equivalents, which shall entitle the Participant to an amount equal to the dividends the Participant would have received if each Stock Unit held in the Stock Account on the dividend record date for the Common Stock were a share of Common Stock held by the Participant.  At the time the Participant enters into an RSU Deferral Election, the Participant shall indicate on such election the manner in which dividend equivalents with respect to the Stock Units subject to such election shall be treated.  The Participant may, in any combination permitted under the Plan, elect to (i) receive such dividend equivalents as current income or (ii) have the dividend equivalents deferred under the Plan.  If the Participant elects to have dividend equivalents paid as current income, the dividend equivalents shall be paid in cash (or Common Stock or other applicable property for a non-cash dividend) as of the last business day of each month.  If

 

9

 

the Participant elects to have dividend equivalents deferred under the Plan, the amount of the dividend equivalents shall be credited to the Participant’s Cash Account as of the dividend payment date and deemed invested in accordance with the Participant’s investment election then in effect for the Cash Account (or, if none, in accordance with the default deemed investment election established by the Committee).  If the Participant elects to have dividend equivalents deferred under the Plan, and such dividend equivalents are payable in the form of Common Stock, then the Participant shall be credited with additional Stock Units equal to the number of shares so payable.  If the dividends are deferred under the Plan, the amount attributable to the deferred dividend equivalents shall be paid in the same time and form as the underlying Stock Units to which they relate.

 

ARTICLE 5
 DISTRIBUTION OF ACCOUNT

 

5.1                               Distribution Upon Separation from Service

 

In the event a Participant incurs a Separation from Service for any reason other than death, Disability, or Retirement, the Participant’s Account shall be paid in a single lump-sum payment within 45 days following such Separation from Service.

 

5.2                               Distribution Upon Retirement

 

(a)                                 Time of Payment

 

In the event a Participant incurs a Separation from Service due to Retirement, the Participant’s Cash Account and Stock Account shall be paid as of such Retirement date in the form designated by the Participant in accordance with Section 5.2(b) below.

 

(b)                                 Form of Payment

 

At the time a Participant makes a deferral election, the Participant shall designate the manner in which the amounts deferred shall be paid upon a Separation from Service due to Retirement.  The optional forms of payment shall include: (i) a single lump-sum distribution; or (ii) annual installments of up to 15 years.  If a Participant fails to elect a form of retirement distribution for a given Plan Year, payment shall automatically be made in the form of a lump-sum distribution.

 

10

 

(c)                                  Modification of Form of Payment

 

A Participant may elect to modify the form of any benefit payment made in accordance with this Section 5.2, subject to the following:

 

(i)                                    the new distribution election must be made at least 12 months in advance of the originally scheduled distribution date and may not take effect for at least 12 months after the date the new distribution election is made;

 

(ii)                                 the new distribution election must require a revised distribution date of at least five years from the date such payment would otherwise have been made; and

 

(iii)                              the new distribution election shall not accelerate the schedule of any payment, except as permitted under the regulations under Code Section 409A.

 

Each subsequent election modification made under this Section 5.2 must comply with paragraphs (i), (ii) and (iii) above (as if the previously revised distribution date was the originally scheduled distribution date).

 

5.3                               Distribution Upon Death

 

(a)                                 Payment of Benefit

 

If a Participant dies before commencing the payment of his or her Account, the unpaid Account balance shall be paid to a Participant’s designated Beneficiary. Payment to such designated Beneficiary shall begin within 45 days after the Participant’s death. Distribution shall be made to the designated Beneficiary in accordance with the Participant’s death distribution election (or if the Participant would have been eligible for Retirement at the time of his or her death, then payment shall be made in the same manner that benefits would have been paid had the Participant retired from employment).

 

At the time of initial enrollment in the Plan, each Participant shall designate the manner in which his or her Account shall be paid upon death.  The optional forms of payment shall include: (i) a single lump-sum distribution; or (ii) annual installments of up to 15 years.  If a Participant fails to elect a form of distribution which shall apply in the event of death, payment shall be automatically made in the form of a lump-sum distribution. A Participant may elect to modify the form of any benefit payment made in accordance with this Section 5.3, provided that the new distribution

 

11

 

election must be made at least 12 months in advance of the distribution date and may not take effect for at least 12 months after the date the new distribution election is made, in accordance with the requirements of Code Section 409A.

 

If a Participant dies before receiving the total amount of his or her Account, but after benefit payments have commenced, the Participant’s remaining installments shall be paid to the Participant’s designated Beneficiary at the same time such payments would have been made had the Participant survived.

 

(b)                                 Designation of Beneficiary

 

A Participant shall designate a Beneficiary on a form to be supplied by the Company.  The Beneficiary designation may be changed by the Participant at any time, but any such change shall not be effective until the Beneficiary designation form completed by the Participant is delivered to and received by the Company. In the event that the Company receives more than one Beneficiary designation form from the Participant, the form bearing the most recent date shall be controlling. If the Participant fails to designate a Beneficiary, or no designated Beneficiary survives the Participant, then the Participant’s benefits under the Plan shall be made in the following order of priority:  (1) to the Participant’s surviving spouse; (2) if there is no surviving spouse, to the Participant’s children in equal shares by right of representation (one share for each surviving child and one share for each child who predeceases the Participant but has surviving descendants); and (3) to the Participant’s estate.

 

5.4                               Distribution Upon Disability

 

(a)                                 Time of Payment

 

In the event a Participant terminates employment due to Disability, the Participant’s Account shall be paid as of such date in the form designated by the Participant in accordance with Section 5.4(b) below.

 

(b)                                 Form of Payment

 

At the time of initial enrollment in the Plan, each Participant shall designate the manner in which his Account shall be paid upon Disability.  The optional forms of payment shall include: (i) a single lump sum payment; or (ii) annual installments of up to 15 years.  If a Participant fails to elect a Disability form of distribution, payment shall be automatically made in the form of a lump-sum distribution.

 

12

 

(c)                                  Modification of Form of Payment

 

A Participant may elect to modify the form of any benefit payment made in accordance with this Section 5.4, provided that the new distribution election must be made at least 12 months in advance of the distribution date and may not take effect for at least 12 months after the date the new distribution election is made, in accordance with the requirements of Code Section 409A.

 

5.5                               Distributions Due to Unforeseeable Emergency

 

Prior to Separation from Service, a Participant may receive a distribution of all or a portion of his or her Account upon demonstrating severe financial hardship due to an unforeseeable emergency in accordance with Code Section 409A and the regulations and other guidance issued thereunder.

 

For purposes of this Plan, an “unforeseeable emergency” is an unanticipated emergency that is caused by events beyond the control of the Participant or Beneficiary and would result in severe financial hardship if early withdrawal were not permitted.

 

This definition includes, but is not limited to: sudden unexpected illness or accident of the Participant or of a dependent (as defined in Internal Revenue Code Section 152(a)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  Expenses related to sending a Participant’s child to college or purchasing a home are not unforeseeable emergencies for purposes of this Section 5.5.  The Committee shall determine additional exclusions to the definition of an unforeseeable emergency on a case by case basis.

 

The Committee will determine the existence of severe financial hardship due to an unforeseeable emergency in a uniform and nondiscriminatory manner.  The determination will be based on the supporting facts, circumstances, and documentation provided by the Participant.  The Plan will permit early distribution only to the extent the hardship cannot be relieved by insurance, liquidation of other assets (to the extent the liquidation itself will not cause severe financial hardship), or cessation of deferrals under the Plan.

 

Withdrawals from Participants’ Accounts made in accordance with this Section 5.5 will be limited to the amount reasonably necessary to satisfy the emergency need, plus applicable taxes.

 

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In the event that a distribution is made to a Participant in accordance with this Section 5.5, the Participant’s deferrals under the Plan shall be automatically terminated and the Participant shall not eligible to re-enroll in the Plan until the enrollment period for the Plan Year that begins at least 12 months after such distribution.

 

5.6                               Distribution Prior to Separation From Service

 

(a)                                 Time of Payment

 

During the annual enrollment for each Plan Year, a Participant may designate a date or dates that any portion of his or her Base Salary, Bonus deferrals and RSU deferrals attributable to such Plan Year shall be paid prior to Separation from Service.  Any such distribution date must be no earlier than January 1 of the third Plan Year following the Plan Year with respect to which the deferral election was effective.  By way of example, the earliest in-service distribution date for amounts attributable to the 2008 Plan Year would be January 1, 2011.  At the time a Participant makes a deferral election with respect to restricted stock units, the Participant may also designate a date in a future Plan Year prior to Separation from Service on which all or a portion of the deferred restricted stock units shall be paid.  Such date must be no earlier than January 1 of the third Plan Year following the Plan Year in which the restricted stock units are credited to the Participant’s Stock Account under the Plan.

 

(b)                                 Form of Payment

 

At the time that a deferral election is made under this Section 5.6, a Participant shall elect whether the in-service distributions will be distributed in the form of: (i) a single lump-sum distribution; or (ii) a series of installment payments of a period of time not to exceed five years.

 

(c)                                  Modification of Time and/or Form of Payment

 

Subsequent to the Participant’s initial distribution election with respect to any Plan Year under this Section 5.6, the Participant may elect to modify, an unlimited number of times, the time and/or form of the payment of any benefit paid under this Section 5.6 subject to the following:

 

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(i)                                    the new distribution election must be made at least 12 months in advance of the originally scheduled distribution date and may not take effect for at least 12 months after the date the new distribution election is made;

 

(ii)                                 the new distribution date must be at least five Plan Years from the date such payment would otherwise have been made; and

 

(iii)                              the new distribution election shall not, with respect to time or form of payment, accelerate the schedule of any payment, except as permitted under the regulations under Code Section 409A.

 

Notwithstanding the foregoing provisions of this Section 5.6, if a Participant elects a distribution at one or more specific future dates under this Section 5.6 but becomes entitled to a distribution under Section 5.1, 5.2, 5.3 or 5.4 prior to any such date, distribution shall commence pursuant to Section 5.1, 5.2, 5.3 or 5.4, as applicable.  For purposes of the preceding sentence, installment payments made to a Participant shall be treated as a right to a series of separate payments.  Each subsequent election modification made under this Section 5.6 must comply with paragraphs (i), (ii) and (iii) above (as if the previously revised distribution date was the originally scheduled distribution date).

 

5.7                               Distributions Made To Specified Employees

 

Notwithstanding any provision of this Article V to the contrary, if a Participant is a Specified Employee at the time the Participant is to receive any distribution due to his or her Separation from Service (including “Retirement”), such Participant’s distribution shall be made (or commence to be made) on the first day following the six (6) month anniversary of his or her Separation from Service.

 

5.8                               Distribution of Small Sums

 

Notwithstanding the foregoing provisions of this Article V or any Participant election to the contrary, if at the time distribution of a Participant’s Account is to commence, the total value of the Account is less than the limitation then in effect under Code Section 402(g)(1)(B), the Participant’s Account shall be paid in a single lump sum payment.

 

ARTICLE 6
 NON-ASSIGNABILITY

 

Neither a Participant nor any Beneficiary of a Participant shall have any right to commute, sell, assign, pledge, transfer or otherwise convey the right to receive his or her Account until

 

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his Account is actually distributed to the Participant or Beneficiary. The portion of the Account which has not been distributed shall not be subject to attachment, garnishment or execution for the payment of any debts, judgments, alimony or separate maintenance and shall not be transferable by operation of law in the event of bankruptcy or insolvency of a Participant or a Participant’s Beneficiary.  Notwithstanding the foregoing or any other provision in this Plan to the contrary, the Plan will recognize a qualified domestic relations order relating to the division of a Participant’s Account and issued in connection with divorce proceeding.

 

ARTICLE 7
 AMENDMENT OR TERMINATION OF THE PLAN

 

7.1                               Amendment

 

The Company, by action of its Board of Directors or authorized committee, may, at any time and from time to time, amend, in whole or in part, any of the provisions of this Plan. Any such amendment is binding upon all Participants and their Beneficiaries, the Committee and all other parties in interest.

 

7.2                               Termination

 

The Company reserves the right to terminate the Plan at any time by action of its Board of Directors.  Upon the termination of the Plan, Participants’ Account balances shall remain in the Plan until the Participant becomes eligible for the distribution of benefits as provided in Article V. Notwithstanding the foregoing, the Board, in its discretion, may elect to distribute Participants’ Account balances following termination of the Plan, in which case the entire vested Account balances of all Participants shall be distributed during the period beginning 12 months after such termination date and ending 24 months after such termination date, notwithstanding any installment payment elections made by Participants; provided, however, if the Plan is terminated in connection with a change in control of the Company (within the meaning of Code Section 409A), then all Account balances shall be distributed within 12 months after such change in control, and any such distributions must comply with the requirements of Treas. Reg. § 1.409A-3(i)(4)(ix).

 

7.3                               When Amendments Take Effect

 

A resolution amending or terminating the Plan becomes effective as of the date specified therein.

 

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7.4                               Restriction on Retroactive Amendments

 

No amendment may be made that retroactively deprives a Participant of any benefit accrued before the date of the amendment.

 

ARTICLE 8
 PLAN ADMINISTRATION

 

8.1                               The Administrative Committee

 

The Plan shall be administered by a Committee appointed by the Company’s Board of Directors. The Company may remove any member of the Committee at any time, with or without cause, and may fill any vacancy. If a vacancy occurs, the remaining member or members of the Committee have full authority to act. The Company is responsible for transmitting to any trustee the names and authorized signatures of the members of the Committee and, as changes take place in membership, the names and signatures of new members. Any member of the Committee may resign by delivering his written resignation to the Company, any trustee and the Committee. Any such resignation becomes effective upon its receipt by the Company or on such other date as is agreed to by the Company and the resigning member.  The Committee may adopt such rules and appoint such subcommittees as it deems desirable for the conduct of its affairs and the administration of the Plan.  Initially, the Committee referenced in this Section 8.1 shall be the compensation committee of the board of directors of the Company.

 

8.2                               Powers of the Committee

 

In carrying out its duties with respect to the general administration of the Plan, the Committee has, in addition to any other powers conferred by the Plan or by law, the following powers:

 

(a)                                 to conclusively determine all questions relating to eligibility to participate in the Plan;

 

(b)                                 to compute and certify to any trustee or other appropriate party the amount and kind of distributions payable to Participants and their Beneficiaries;

 

(c)                                  to maintain all records necessary for the administration of the Plan that are not maintained by the Company, record keeper or any trustee;

 

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(d)                                 to conclusively construe and interpret the provisions of the Plan and to make and publish such rules for the administration of the Plan as are not inconsistent with the terms thereof;

 

(e)                                  to establish and modify the method of accounting for the Plan or any Trust;

 

(f)                                   to employ counsel, accountants and other consultants to aid in exercising its powers and carrying out its duties hereunder; and

 

(g)                                 to perform any other acts necessary and proper for the administration of the Plan, except those that are to be performed by the record keeper or trustee, if any.

 

8.3                               Indemnification

 

(a)                                 Indemnification of Members of the Committee by the Company

 

The Company agrees to indemnify and hold harmless each member of the Committee against any and all expenses and liabilities arising out of his or her action or failure to act in such capacity, excepting only expenses and liabilities arising out of the member’s own willful misconduct or gross negligence. This right of indemnification is in addition to any other rights to which any member of the Committee may be entitled.

 

(b)                                 Liabilities for Which Members of the Committee are Indemnified

 

Liabilities and expenses against which a member of the Committee is indemnified hereunder include, without limitation, the amount of any settlement or judgment, costs, counsel fees and related charges reasonably incurred in connection with a claim asserted or a proceeding brought against him or the settlement thereof.

 

(c)                                  Company’s Right to Settle Claims

 

The Company may, at its own expense, settle any claim asserted or proceeding brought against any member of the Committee when such settlement appears to be in the best interests of the Company.

 

8.4                               Claims Procedure

 

A Participant or Beneficiary or other person who feels he or she is being denied any benefit or right provided under the Plan (hereinafter referred to as “Claimant”) may file a written

 

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claim with the Committee or its delegate setting forth the claim.  Any such claim shall be signed by the Claimant and shall be considered filed on the date the claim is received by the Company or prescribed addressee.  The claim must be addressed as prescribed by the Company.  If a Participant shall fail to file a request for review in accordance with the procedures described herein, such Participant shall have no right to review and shall have no right to bring action in any court and the denial of the claim shall become final and binding on all persons for all purposes.

 

(a)                                 Committee Action

 

The Committee or its delegate shall, within 90 days after its receipt of such claim make its determination. However, in the event that special circumstances require an extension of time for processing the claim, the Committee or its delegate shall provide such Claimant with its determination not later than 180 days after receipt of the Claimant’s claim, but, in such event, the Committee or its delegate shall furnish the Claimant, within 90 days after its receipt of such claim, notification of the extension explaining the circumstances requiring such extension and the date that it is anticipated that its determination will be furnished.

 

In the event the claim is denied, the Committee or its delegate shall provide such Claimant a statement of the Adverse Benefit Determination, as defined in subsection (d) below. The notice of Adverse Benefit Determination shall contain the following:

 

(i)                                      the specific reason or reasons for Adverse Benefit Determination;

 

(ii)                                   a reference to the specific provisions of the Plan upon which the Adverse Benefit Determination is based;

 

(iii)           a description of any additional material or information that is necessary for the Claimant to perfect the claim;

 

(iv)                               an explanation of why that material or information is necessary; and

 

(v)                                 an explanation of the review procedure provided below, including applicable time limits and a notice of a Claimant’s rights to bring a legal action under ERISA after an Adverse Benefit Determination on final appeal.

 

(b)                                 Procedures for Appealing an Adverse Benefit Determination

 

Within 60 days after receipt of a notice of an Adverse Benefit Determination as provided above, if the Claimant disagrees with the Adverse Benefit Determination, the Claimant, or his or her authorized representative, may request, in writing, that the

 

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Committee or its delegate review the claim and may request to appear before the Committee or its delegate for such review.  If the Claimant does not request a review of the Adverse Benefit Determination within such 60 day period, the Claimant shall be barred and estopped from appealing the Committee’s or its delegate’s Adverse Benefit Determination.  The appeal shall be filed with the Committee or prescribed addressee at the address prescribed by the Company, and it shall be considered filed on the date it is received by the prescribed addressee.

 

The Claimant shall have the rights to:

 

(i)                                      submit written comments, documents, records and other information relating to the claim for benefits;

 

(ii)                                   request, free of charge, reasonable access to, and copies of all documents, records and other information relevant to the claim for benefits.

 

(c)                                  Response on Appeal

 

Within 60 days after receipt by the Committee or its delegate of a written application for review of a Claimant’s claim, the Committee or its delegate shall notify the Claimant of its decision; provided, however, in the event that special circumstances require an extension of time for processing such application, the Committee or its delegate shall so notify the Claimant of its decision not later than 120 days after receipt of such application.

 

In the event the Committee’s or its delegate’s decision on appeal is adverse to the Claimant, the Committee or its delegate shall issue a notice of an Adverse Benefit Determination on Appeal that will contain all of the following information, in a manner calculated to be understood by the Claimant:

 

(i)                                      the specific reason(s) for the Adverse Benefit Determination on Appeal;

 

(ii)                                   reference to specific plan provisions on which the benefit determination is based; and

 

(iii)           a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the Claimant’s claim for benefits; and a statement describing any voluntary appeal procedures offered by the Plan and the Claimant’s right to obtain the information about such procedures, as well as a statement of the Claimant’s right to bring an action under ERISA Section 502(a).

 

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(d)                                 Definition

 

As used herein, the term “Adverse Benefit Determination” shall mean a determination that results in the denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit.

 

8.5                               Expenses

 

The members of the Committee serve without compensation for services as such. All expenses of the Committee are paid by the Company.

 

8.6                               Conclusiveness of Action

 

Any action on matters within the discretion of the Committee will be conclusive, final and binding upon all Participants and upon all persons claiming any rights under the Plan, including Beneficiaries.

 

ARTICLE 9
 MISCELLANEOUS

 

9.1                               Compliance With Code Section 409A

 

Notwithstanding any provision in this Plan to the contrary, this Plan shall be interpreted and construed in accordance with Code Section 409A and regulations and other interpretative guidance issued thereunder, including without limitation any regulations or other guidance that may be issued after the effective date of this restatement. Notwithstanding any provision of this Plan to the contrary, the Company may adopt such amendments to the Plan or adopt other policies and procedures (including amendments, policies and procedures having a retroactive effect), or take any other actions, that the Company determines is necessary or appropriate to preserve the intended tax treatment of the benefits provided under the Plan and/or to comply with Code Section 409A.

 

Notwithstanding any provision of the Plan to the contrary, during the period ending December 31, 2008, the Company may allow Participants to make or change elections under the Plan in a manner that complies with the transition relief provided under Notice 2007-86 or other applicable IRS guidance.

 

9.2                               Plan Not a Contract of Employment

 

The adoption and maintenance of the Plan does not constitute a contract between the

 

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Company and any Participant or to be a consideration for the employment of any person. Nothing herein contained gives any Participant the right to be retained in the employ of the Company or derogates from the right of the Company to discharge any Participant at any time without regard to the effect of such discharge upon his or her rights as a Participant in the Plan.

 

9.3                               No Rights Under Plan Except as Set Forth Herein

 

Nothing in this Plan, express or implied, is intended, or shall be construed, to confer upon or give to any person, firm, association, or corporation, other than the parties hereto and their successors in interest, any right, remedy, or claim under or by reason of this Plan or any covenant, condition, or stipulation hereof, and all covenants, conditions and stipulations in this Plan, by or on behalf of any party, are for the sole and exclusive benefit of the parties hereto.

 

9.4                               Other Benefit Plans

 

Deferred compensation under this Plan shall not be deemed to be compensation for purposes of determining a Participant’s benefit or credit under any plan of the Company qualified under Code Section 401(a), or any life insurance plan or disability plan established or maintained by the Company, except to the extent specifically provided in such other plan.

 

9.5                               Withholding of Taxes

 

The Company shall cause taxes to be withheld from an Account distributed hereunder as required by law. For each Plan Year in which any deferral is made under Section 3.1, the Company shall withhold from that portion of the Participant’s compensation that is not being deferred, in a manner determined by the Company, the Participant’s share of FICA and other employment taxes on such deferral amount.

 

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IN WITNESS WHEREOF, Ashford Inc. has caused this document to be executed by its duly authorized officer this            day of                                     , 2014, to be effective as of such date.

 

 

	
 
    	
ASHFORD INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
(print)
    
	
 
    	
 
    	
 
    
	
 
    	
Name:   
    	
(signature)
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

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