Document:

EX-10.1

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS AGREEMENT, (“Agreement”) made and
entered into as of November 19, 2012 (“Execution Date”) effective as of November 2, 2012 (the “Effective Date”), by and between RAYMOND L. GELLEIN, JR. (the “Executive”) and STRATEGIC HOTELS &
RESORTS, INC. (the “Company”) sets forth the terms and conditions of the Executive’s employment with the Company. 
 1. Performance of Services. The Executive’s employment with the Company shall be subject to the following: 
  

	 	(a)	Subject to the terms of this Agreement, the Company hereby agrees to employ the Executive as its chief executive officer, with the titles of President and Chief
Executive Officer during the Agreement Term (as defined below), and the Executive hereby agrees to accept such employment during the Agreement Term. During the Agreement Term, while he is employed by the Company, the Executive shall be nominated for
election to the Board of Directors of the Company (the “Board”), so long as he is Chief Executive Officer. The Executive is also currently Chairman of the Board and shall continue in such role until the Executive or Company otherwise
determines. The “Agreement Term” shall be the period beginning on the Effective Date and ending on December 31, 2014. 

  

	 	(b)	During the Agreement Term, while the Executive is employed by the Company, the Executive shall devote his full time, energies and talents to serving as its President
and Chief Executive Officer. 

  

	 	(c)	The Executive agrees that he shall perform his duties faithfully and to the best of his abilities subject to the directions of the Board. The Executive’s duties
may include providing services for both the Company and the Subsidiaries (as defined below), as determined by the Board; provided, however, that the Executive shall not, without his consent, be assigned tasks that would be inconsistent with those of
President and Chief Executive Officer of the Company. The Executive will have such authority, power, responsibilities and duties as are inherent to his positions (and the undertakings applicable to his positions) and necessary to carry out his
responsibilities and the duties required of him hereunder. For purposes of this Agreement, the term “Subsidiary” shall mean any corporation, partnership, joint venture or other entity during any period, in which at least a majority
interest in such entity is owned, directly or indirectly, by the Company (or a successor to the Company). 

  

	 	(d)	 Notwithstanding the foregoing provisions of this paragraph 1, or any other provision of this Agreement, during the Agreement Term, the Executive may
continue as a director of those entities of which he is a member of the board of directors as of the Effective Date as listed on Schedule 1. In addition, notwithstanding the foregoing provisions of this paragraph 1, or any other provision of this
Agreement, during the Agreement Term, the Executive may devote reasonable time to activities other than those required under this 

	 	
Agreement, including investment in, management of and engagement in businesses set forth on Schedule 2 and similar or related entities, management of his personal investments and activities
involving professional, charitable, educational, religious and similar types of organizations, to the extent that such other activities do not, in the reasonable judgment of the Board, inhibit or prohibit the performance of the Executive’s
duties under this Agreement, or conflict in any material way with the business of the Company or any Subsidiary; provided, however, that the Executive shall obtain approval of the Board prior to nomination or seeking election to the board of
directors of any company not listed on Schedule 1, and such approval shall not be unreasonably withheld. 

  

	 	(e)	The Company shall, to the maximum extent permitted by applicable law, protect, defend, indemnify and hold harmless the Executive against any costs, losses, expenses,
claims, suits, proceedings, investigations, damages or liabilities to which the Executive may become subject which arise out of, are based upon or relate to, or are alleged to so arise, be based upon or to relate to the Executive’s employment
by the Company (and any Subsidiary) or the Executive’s service to the Company (and any Subsidiary) as an employee, officer or member of the Board, including, without limitation, reimbursement on a current basis, upon submission of invoices, for
any legal or other expenses reasonably incurred by the Executive in connection with investigating and defending against any such costs, losses, expenses, claims, suits, proceedings, investigations, damages or liabilities; provided, however, that the
Company shall not be required to pay any amounts under this paragraph except upon receipt of an unsecured undertaking by the Executive to repay any such amounts as to which it shall ultimately be determined by a court of competent jurisdiction that
the Executive is not entitled to indemnification by the Company. The Executive will be covered under the Company’s directors and officers insurance policy during the Agreement Term and for such period following the Date of Termination during
which any action may be brought against the Executive related to the matters above, so long as the Company maintains such coverage for any director or officer of the Company. The Company’s obligations under this paragraph 1(e) shall survive
termination or expiration of this Agreement and any termination of Executive’s employment with the Company or its affiliates. 

 2. Compensation. Subject to the terms of this Agreement, during the Agreement Term, while the Executive is employed by the Company, the Company shall compensate him for his services as follows:

  

	 	(a)	Salary and Bonus. 

  

	 	(i)	During the Agreement Term, the Executive shall receive an annual base salary (the “Salary”) of not less than $800,000. Such Salary shall be payable in
arrears, in accordance with the payroll practices of the Company. 

  
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	 	(ii)	For fiscal year 2012 and each subsequent fiscal year of the Company during the Agreement Term, the Executive shall be eligible to receive an annual cash
performance-based bonus (the “Bonus”) from the Company, with a target bonus opportunity of 100% of Salary (“Target Bonus”), a threshold bonus opportunity of 50% of Salary (“Threshold Bonus”), and a maximum bonus
opportunity of 200% of Salary (“Maximum Bonus”). For each fiscal year during the Agreement Term, the Executive shall have the opportunity to earn such Bonus pursuant to incentive parameters established by the Compensation Committee of the
Board (the “Committee”). The Bonus, if any, shall be paid in cash between January 1 and March 15th of the fiscal year following the fiscal year to which the Bonus relates. The Bonus opportunity for fiscal year 2012 shall be based
on the Salary earned by the Executive from the Company during the Agreement Term in 2012 and therefore shall be a prorated Bonus. 

  

	 	(iii)	In addition, the Committee may, in its discretion, award additional incentive compensation from time to time to Executive during the Agreement Term.

  

	 	(b)	Benefits. The Executive shall be eligible to participate in any employee pension and welfare benefit plans and programs made available to the Company’s
senior level executives, on terms which are no less favorable than the terms provided generally for the Company’s senior level executives from time to time, including, without limitation, pension, profit sharing, savings and other retirement
plans or programs, medical, dental, hospitalization, short-term and long-term disability and life insurance plans, accidental death and dismemberment protection, travel accident insurance, and any other pension or retirement plans or programs and
any other employee welfare benefit plans or programs that may be sponsored by the Company from time to time, including any plans that supplement the above-listed types of plans or programs, whether funded or unfunded. In addition, Executive shall be
entitled to an annual stipend of fifty thousand dollars ($50,000) (or a pro rata portion thereof with respect to any period during the Agreement Term which does not encompass a full calendar year) in recognition of certain commuting and travel
expenses. Such annual stipend shall be paid pro rata throughtout the year in the same manner as Salary in accordance with the payroll practices of the Company. 

 

	 	(c)	Vacation. The Executive shall be entitled to four weeks of paid vacation each calendar year (or a pro rata portion thereof with respect to any period during the
Agreement Term which does not encompass a full calendar year). Any unused vacation may be rolled over to the next calendar year, if permitted under the Company’s regular vacation policy as in effect from time to time. 

 

	 	(d)	Business Expenses. The Company will reimburse the Executive for reasonable expenses incurred by the Executive on Company business, pursuant to the Company’s
standard expense reimbursement policy as in effect from time to time, so long as the Executive provides proper documentation establishing the amount, date and business purpose of those expenses. 

  
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	 	(e)	Stock-Based Compensation. 

  

	 	(i)	Restricted Stock Unit Awards 

 Upon the Execution Date, the Executive shall receive an award of One Hundred Twelve Thousand Two Hundred Forty-Five (112,245) time-vesting restricted stock units in the form set forth on Attachment
A. 
  

	 	(ii)	Performance Share Awards 

 Upon the Execution Date, the Executive shall receive a Performance Share Award with a target award of Two Hundred Twenty-Seven Thousand Eight Hundred Ninety-One (227,891) shares of Common Stock of
the Company in the form set forth on Attachment B (“Performance Share Award”). 
  

	 	(iii)	Dividend Equivalents 

 Each restricted stock unit award under this paragraph 2(e) (“RSU”) shall provide for accrual of dividend equivalents until the delivery date, as follows. As of each dividend date with respect to
shares of Common Stock, a dollar amount equal to the amount of the dividend that would have been paid on the number of shares of Common Stock equal to the number of RSUs held by the Executive as of the close of business on the record date for such
dividend shall be converted into a number of RSUs equal to the number of whole and fractional shares of Common Stock that could have been purchased at the closing price on the dividend payment date with such dollar amount. In the case of any
dividend declared on shares of Common Stock which is payable in shares of Common Stock, Executive shall be credited with an additional number of RSUs equal to the product of (x) the number of his RSUs then held on the related dividend record
date and the (y) the number of shares of Common Stock (including any fraction thereof) distributable as a dividend on a share of Common Stock. Such dividend equivalents shall be paid to the Executive in shares of Common Stock, at such time as
shares are delivered for payment of the RSUs. 
  

	 	(iv)	Future Awards. 

For fiscal year 2014 during the Agreement Term, the Executive shall be eligible for a long-term incentive award with an opportunity of
250% of Salary with the terms of such award determined in good faith by the Committee. 

  
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 3. Termination. The Executive’s employment with the Company during the
Agreement Term may be terminated by the Company or the Executive without any breach of this Agreement under the circumstances described in paragraphs 3(a) through 3(g): 
  

	 	(a)	Death. The Executive’s employment hereunder will terminate upon his death. 

 

	 	(b)	Disability. The Company may terminate the Executive’s employment due to the Executive’s Disability. For purposes of this Agreement
“Disability” means the absence of the Executive from the Executive’s duties with the Company on a full-time basis for ninety (90) days (which need not be continuous) during any consecutive twelve-month period as a result of
incapacity due to a physical or mental illness which, in the opinion of the Board, renders the Executive incapable, after reasonable accommodation, of performing his duties under this Agreement. If the Executive disputes the Company’s
determination of Disability, the Executive (or his designated physician) and the Company (or its designated physician) shall jointly appoint a third-party physician to examine the Executive and determine whether the Executive has a Disability.

  

	 	(c)	Termination by Company for Cause. The Company may terminate the Executive’s employment hereunder at any time for Cause (“Termination for Cause”).
For purposes of this Agreement, the term “Cause” shall mean: 

  

	 	(i)	any conduct related to the Company involving gross negligence, gross mismanagement, or the unauthorized disclosure of confidential information or trade secrets;

  

	 	(ii)	dishonesty or a violation of the Company’s Code of Business Conduct and Ethics that has or reasonably could be expected to result in a detrimental impact on the
reputation, goodwill or business position of the Company or any Subsidiary; 

  

	 	(iii)	gross obstruction of business operations or illegal or disreputable conduct by Executive that impairs or reasonably could be expected to impair the reputation, goodwill
or business position of the Company or any Subsidiary, and any acts that violate any policy of the Company relating to discrimination or harassment; 

  

	 	(iv)	commission of a felony or a crime involving moral turpitude or the entrance of a plea of guilty or nolo contendere to a felony or a crime involving moral turpitude; or

  

	 	(v)	any action involving a material breach of the terms of this Agreement including material inattention to or material neglect of duties and Executive shall not have
remedied such breach within 30 days after receiving written notice from the Board specifying the details thereof. 

  
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 The Company shall not be deemed to have Cause to terminate Executive under this paragraph
3(c) unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board (excluding the Executive), after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board, finding that, in the good faith opinion of the Board, the Executive is guilty of conduct constituting Cause, and specifying
the particulars thereof in detail. 
  

	 	(d)	Constructive Termination. The Executive shall be considered to have terminated his employment as a result of a constructive termination (“Constructive
Termination”) if, without the written consent of the Executive, 

  

	 	(i)	the Company materially reduces Executive’s Salary or bonus opportunity or the Company materially breaches this Agreement; 

 

	 	(ii)	the Company materially reduces the Executive’s duties or authority, fails to nominate the Executive to the Board, or requires the Executive to report other than to
the Board or a committee of the Board; 

  

	 	(iii)	the Company relocates its principal offices, or the Executive’s principal place of employment, outside the Chicago metropolitan area; or 

 

	 	(iv)	any successor to the Company (or the Company itself, following a Change in Control as defined in paragraph 4(d)) fails to assume this Agreement or affirm its
obligations hereunder in any material respect. 

 Notwithstanding the foregoing, at the direction of the Board,
certain of the Executive’s duties may be reassigned to another director or officer for up to 30 days to permit an investigation of whether there is a basis to terminate the Executive for Cause. Such reassignment shall not constitute
Constructive Termination as long as the reassigned duties are directly and materially related to the subject of the investigation. Further, suspending the Executive’s duties, with full pay, bonus eligibility, welfare benefits and continued
vesting of equity awards and other benefits, after Executive has provided a notice of non-renewal of this Agreement shall not constitute Constructive Termination. A termination by the Executive shall not be deemed to be as a result of a Constructive
Termination unless the Executive shall have provided notice of the Constructive Termination event within 90 days of its occurrence and the Company shall have a reasonable opportunity to cure such conduct or event to the extent capable of cure within
30 days after receipt of written notice of the Constructive Termination from the Executive. 
  

	 	(e)	Voluntary Resignation. The Executive may terminate his employment hereunder at any time for any reason by giving the Company prior written notice of his
resignation, which shall be effective 30 days after receipt (provided, that, the Company may accelerate the Date of Termination to an earlier date by providing the Executive with notice of such action and paying Executive during such 30 day period,
or, alternatively, the Company may place the Executive on paid leave during such period) (“Voluntary Resignation”). The Executive shall not be required to specify a reason for any such termination under this paragraph 3(e) unless the
Executive intends for such termination to be subject to paragraph 3(d). 

  
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	 	(f)	Mutual Agreement. This Agreement may be terminated at any time by the mutual agreement of the parties (“Mutual Agreement”). Any termination of the
Executive’s employment by mutual agreement of the parties will be memorialized by an agreement which is reduced to writing and signed by the Executive and a duly appointed officer of the Company. 

 

	 	(g)	Termination by Company without Cause. The Company may terminate the Executive’s employment hereunder at any time for any reason, by giving the Executive
prior written notice of his termination, which shall be effective immediately or as of such later time as is specified in such notice (“Termination without Cause”). Termination of the Executive’s employment by the Company shall be
deemed to have occurred under this paragraph 3(g) unless the notice of termination provided to the Executive by the Company specifies that the Executive’s termination is for reasons described in paragraphs 3(b), 3(c) or 3(f).

  

	 	(h)	Date of Termination. “Date of Termination” means the last day the Executive is employed by the Company, whether by reason of the expiration of the
Agreement Term, termination of employment in accordance with the foregoing provisions of this paragraph 3, or under any other circumstances. Notwithstanding anything contained in this Agreement to the contrary, the date on which a “separation
from service” pursuant to section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) (“Separation from Service”) occurs shall be the “Date of Termination” or termination of employment for
purposes of determining the timing of payments and benefits under this Agreement to the extent necessary to have such payments and benefits under this Agreement be exempt from the requirements of Section 409A or comply with the requirements of
Section 409A. 

 4. Rights Upon Termination. The rights and obligations of the Company and the
Executive with respect to compensation and benefits under this Agreement for periods after his Date of Termination shall be determined in accordance with the following provisions of this paragraph 4: 

 

	 	(a)	Termination for Cause; Voluntary Resignation; Mutual Agreement. If the Executive’s employment terminates under circumstances described in paragraph 3(c),
3(e) or 3(f), then, except as otherwise expressly provided in this Agreement or otherwise agreed in writing between the Executive and the Company, the Company’s only obligation to Executive after the Executive’s Date of Termination is
payment of the following: 

  

	 	(i)	The Executive’s Salary for the period ending on the Date of Termination and, if applicable, any earned but unpaid Bonus for the fiscal year ending on or before the
Date of Termination; 

  
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	 	(ii)	Payment for unused vacation days, as determined in accordance with the Company policy as in effect from time to time; and 

 

	 	(iii)	Any other payments or benefits to be provided to the Executive by the Company pursuant to any employee benefit plans or arrangements adopted by the Company, to the
extent such amounts are due from the Company (with paragraphs 4(a)(i), (ii) and this subsection (iii) referred to collectively herein as “Accrued Benefits”). 

 

	 	(b)	Termination due to Death or Disability; Termination prior to or more than 24 months following a Change in Control, Constructive Termination or Termination by the
Company without Cause. If the Executive’s employment terminates under circumstances described in paragraph 3(a) or 3(b) at any time during the Agreement Term, or if the Executive’s employment terminates under circumstances described in
paragraph 3(d) or 3(g) either prior to a Change in Control (as defined herein) or more than twenty-four (24) months following a Change in Control, the Executive (or, in the event of his death, his estate) shall be entitled to the following from
the Company: 

  

	 	(i)	Accrued Benefits; 

  

	 	(ii)	A lump sum amount equal to two (2) times the sum of (w) the current Salary then in effect, plus (x) his Target Bonus; 

 

	 	(iii)	A pro-rata Target Bonus for the elapsed portion of the calendar year through the Date of Termination, payable in a lump sum; 

 

	 	(iv)	Continued medical coverage under the Company’s medical plan for the Executive and his family during the twenty-four (24) months following the Date of
Termination, with benefits no less favorable in any material respect than the level of coverage applicable to them immediately prior to such Date of Termination, and the Company shall pay all premium amounts thereto; provided, however, the Company
in its sole discretion may determine because of legal restrictions, insurance availability or otherwise to pay Executive a lump sum amount equal to the amount which the Executive would have paid as the “applicable premium” under section
4980B(f)(4) of the Code for continuation of such coverage. The continued medical coverage during the twenty-four (24) months following the Date of Termination at the Company’s expense shall run concurrently with the time period for which
the Executive and his family members are entitled to continued medical coverage under the provisions of section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), and section 601 of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), if applicable, or any similar state law continuation coverage requirements; and 

  
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	 	(v)	The Executive’s RSUs, restricted stock and options shall continue to vest and become payable at the same time and in the same manner as though the Executive
continued employment with the Company. The Performance Share Award shall be treated in accordance with the terms of the Performance Share Award. 

  

	 	(c)	Termination due to Constructive Termination or Termination by the Company without Cause on or after a Change in Control. If the Executive’s employment
terminates on or within twenty-four months following a Change in Control under circumstances described in paragraphs 3(d) or 3(g), the Executive (or, in the event of his death, his estate) shall be entitled to the following from the Company:

  

	 	(i)	Accrued Benefits; 

  

	 	(ii)	A lump sum amount equal to three (3) times the sum of (x) the current Salary then in effect, plus (y) his Target Bonus; 

 

	 	(iii)	A pro-rata Target Bonus for the elapsed portion of the calendar year through the Date of Termination, payable in lump sum; 

 

	 	(iv)	Continued medical coverage under the Company’s medical plan for the Executive and his family during the thirty-six (36) months following the Date of
Termination, with benefits no less favorable in any material respect than the level of coverage applicable to them immediately prior to such Date of Termination, and the Company shall pay all premium amounts thereto; provided, however, the Company
in its sole discretion may determine because of legal restrictions, insurance availability or otherwise to pay Executive a lump sum amount equal to the amount which the Executive would have paid as the “applicable premium” under section
4980B(f)(4) of the Code for continuation of such coverage. The continued medical coverage during such thirty-six months at the Company’s expense shall run concurrently with the time period for which the Executive and his family members are
entitled to continued medical coverage under the provisions of section 4980B the Code, and section 601 of ERISA, if applicable, or any similar state law continuation coverage requirements; and 

 

	 	(v)	The Executive’s RSUs shall become immediately payable, all restrictions on any restricted stock shall lapse; all Options shall become immediately vested and
continue to be exercisable for the lesser of five (5) years following the Date of Termination or the remaining term of the Option if there had not been a Date of Termination; and the Performance Share Award shall be treated in accordance with
the terms of the Performance Share Award. 

  
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	 	(d)	Change in Control. For purposes of this Agreement the term “Change in Control” means the happening of any of the following: 

 

	 	(i)	Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
“group” within the meaning of Section 13(d)(3)) has or acquires Beneficial Ownership of twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding voting securities entitled to vote
generally in the election of directors (“Voting Securities”); provided, however, that in determining whether a Change in Control has occurred, Voting Securities which are held or acquired by the following: (i) the Company or any of
its Related Companies (as defined in paragraph 4(d)(iv) below) or (ii) an employee benefit plan (or a trust forming a part thereof) maintained by the Company or any of its Related Companies (the persons or entities described in (i) and
(ii) shall collectively be referred to as the “Excluded Group”), shall not constitute a Change in Control. For purposes of this Agreement, “Beneficial Ownership” shall mean beneficial ownership within the meaning of Rule
13d-3 promulgated under the Exchange Act. 

  

	 	(ii)	The individuals who are members of the Incumbent Board cease for any reason to constitute more than fifty percent (50%) of the Board. For purposes of this
Agreement, “Incumbent Board” shall mean the individuals who, as of the beginning of the period commencing two years prior to the determination date, constitute the Board; provided, however, that for purposes of this definition, any
individual who becomes a member of the Board subsequent to the beginning of such two-year period, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of those individuals who
are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; and provided further, however, that any
such individual whose initial assumption of office occurs as a result of or in connection with an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be considered a member of the
Incumbent Board. 

  

	 	(iii)	A consummation of a merger, consolidation or reorganization or similar event involving the Company, whether in a single transaction or in a series of transactions
(“Business Combination”), unless, following such Business Combination: 

  

	 	(a)	 the Persons with Beneficial Ownership of the Company, immediately before such Business Combination, have Beneficial Ownership of more than fifty
percent (50%) of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (or in the election of a comparable governing body of any other type of entity)
resulting from such Business Combination (including, 

  
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without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries)
(the “Surviving Company”) in substantially the same proportions as their Beneficial Ownership of the Voting Securities immediately before such Business Combination; 

 

	 	(b)	the individuals who were members of the Incumbent Board immediately prior to the execution of the initial agreement providing for such Business Combination constitute
more than fifty percent (50%) of the members of the board of directors (or comparable governing body of a noncorporate entity) of the Surviving Company; and 

 

	 	(c)	no Person (other than a member of the Excluded Group or any Person who immediately prior to such Business Combination had Beneficial Ownership of twenty-five percent
(25%) or more of the then Voting Securities) has Beneficial Ownership of twenty-five percent (25%) or more of the then combined voting power of the Surviving Company’s then outstanding voting securities. 

 

	 	(iv)	The assignment, sale, conveyance, transfer, lease or other disposition of all or substantially all of the assets of the Company to any Person (other than the Company,
any Related Company or an employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Company) unless, immediately following such disposition, the conditions set forth in paragraph (iii)(a), (b) and
(c) above will be satisfied with respect to the entity which acquires such assets. For purposes of this Agreement, “Related Company” shall mean any entity that is directly or indirectly controlled by, in control of or under common
control with the Company. 

  

	 	(v)	The occurrence of a liquidation or dissolution of the Company. 

 Notwithstanding the provisions of this paragraph (d), a Change in Control that results from a transaction consummated by a Person in which the Executive has an equity or debt interest (other than passive
ownership of the securities of a publicly traded company acquired in the open market with personal funds) or with which the Executive is associated as a director, officer, employee, consultant or advisor, shall not be considered a Change in Control
unless the Executive’s duties and responsibilities following such transaction are substantially and materially different from the duties and responsibilities contemplated by this Agreement for the role of a chief executive officer. 

  
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	 	(e)	Termination at End of Agreement Term by Either Party. If Executive’s employment with the Company terminates at the end of the Agreement Term by either party
other than for Cause, the Executive (or, in the event of his death, his estate) shall be entitled to the following from the Company: 

  

	 	(i)	Accrued Benefits; and 

  

	 	(ii)	The Executive’s RSUs, restricted stock and options shall continue to vest and become payable at the same time and in the same manner as though the Executive
continued employment with the Company. The Performance Share Award shall be treated in accordance with the terms of the Performance Share Award. 

 The Company shall not be deemed to have Cause to terminate Executive under this paragraph 4(e) unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the Board (excluding the Executive), after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before
the Board, finding that, in the good faith opinion of the Board, the Executive is guilty of conduct constituting Cause, and specifying the particulars thereof in detail. 

 

	 	(f)	In the event of the Executive’s death before payment of any amount that had become due and payable to or on behalf of the Executive pursuant to the terms of this
Agreement, payment of that amount shall be made to the Executive’s estate. 

  

	 	(g)	 The Company shall not be required to make the payments and provide the benefits specified in paragraphs 4(b) or 4(c) or 4(e) unless the Executive
executes and delivers to the Company an agreement releasing the Company, its affiliates and its officers, directors and employees from all liability (other than the payments and benefits under this Agreement) substantially in the form set forth
attached hereto as Exhibit A and such agreement has become effective and irrevocable. To the extent that any such payments or benefits under this Agreement are intended to be exempt from Section 409A as a short-term deferral pursuant to
Treasury Regulations §1.409A-1(b)(4) or any successor thereto, such release required for such payment or benefit must be provided no later than March 7th of the calendar year following the calendar year of the Executive’s Separation
from Service and the Company shall make such payments on the day following the date the release becomes effective and irrevocable. Subject to paragraph 4(i), to the extent that Executive is required to execute and deliver a release to receive a
payment or benefit that constitutes a “deferral of compensation” subject to Section 409A (after taking into account to the maximum extent possible any applicable exemptions) (“409A Payment”), such 409A Payment will be
provided upon the 30th day following Executive’s Separation from Service provided the release in the form mutually agreed upon between Executive and the Company or in substantially the form set forth as Exhibit A has been executed, delivered,
effective and irrevocable prior to such time. If a release is required for a 409A Payment and such release is not executed, delivered, effective and irrevocable by the 30th day following Executive’s Separation from Service, such 409A Payment

  
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shall not be provided to the Executive to the extent that providing such 409A Payment would cause such 409A Payment to fail to comply with Section 409A. Should this paragraph 4(g) result in
the delay of benefits under this Agreement, any such benefit shall be made available to the Executive by the Company during such delay period at Executive’s expense. On the first day any such benefits may be made without incurring additional
tax pursuant to Section 409A, the Company shall provide such benefits as provided for in this Agreement as well reimbursement of the amount Executive paid for benefits pursuant to the preceding sentence. 

 

	 	(h)	Except as may otherwise be expressly provided to the contrary in this Agreement, nothing in this Agreement shall be construed as requiring the Executive to be treated
as employed by the Company for purposes of any employee benefit plan or arrangement following the date of the Executive’s Date of Termination. 

  

	 	(i)	To the extent that any payment or benefit pursuant to this Agreement constitutes a 409A Payment treated as payable upon Separation from Service, then, if on the date of
the Executive’s Separation from Service, the Executive is a Specified Employee, then to the extent required for Executive not to incur additional taxes pursuant to Section 409A, no such 409A Payment shall be made to the Executive earlier
than the earlier of (i) six (6) months after the Executive’s Separation from Service; or (ii) the date of his death. Should this paragraph 4(i) result in the delay of benefits, any such benefit shall be made available to the
Executive by the Company during such delay period at Executive’s expense. Should this paragraph 4(i) result in a delay of payments or benefits to Executive, on the first day any such payments or benefits may be made without incurring additional
tax pursuant to Section 409A (the “409A Payment Date”), the Company shall make such payments and provide such benefits as provided for in this Agreement, provided that any amounts that would have been payable earlier but for the
application of this paragraph 4(i) as well reimbursement of the amount Executive paid for benefits pursuant to the preceding sentence, shall be paid in a lump-sum on the 409A Payment Date. For purposes of this paragraph 4(i), the term
“Specified Employee” shall have the meaning set forth in Section 409A, as determined in accordance with the methodology established by the Company. For purposes of determining whether a Separation from Service has occurred for
purposes of Section 409A, a Separation from Service is deemed to include a reasonably anticipated permanent reduction in the level of services performed by the Executive to less than fifty percent (50%) of the average level of services
performed by the Executive during the immediately preceding 36-month period. 

 5. Duties on Termination.
Subject to the terms and conditions of this Agreement, during the period beginning on the date of delivery of a notice of resignation by the Executive or notice of termination of the Executive’s employment by the Company, and ending on the Date
of Termination, the Executive shall continue to perform his duties as set forth in this Agreement, and during such period shall also perform such reasonable services for the Company as are necessary and appropriate for a smooth transition to the
Executive’s successor, if any. Notwithstanding the foregoing provisions of this paragraph 5, the Company may suspend the 

  
 13 

 
Executive from performing his duties under this Agreement following the delivery of any such notice of resignation or termination; provided, however, that during the period of suspension (which
shall end on the Date of Termination), the Executive shall continue to be treated as employed by the Company for other purposes, and his rights to compensation or benefits shall not be reduced by reason of the suspension. 

6. Noncompetition and Nonsolicitation. 
  

	 	(a)	Except as otherwise permitted under paragraph 1(d) of this Agreement, while the Executive is employed by the Company, he agrees that he will not directly or indirectly
(without prior written consent of the Company) engage in, assist, perform services for, establish or open, or have any equity interest (other than ownership of 5% or less of the outstanding stock of any corporation listed on the New York, American
or NASDAQ Stock Exchange) in any person, firm, corporation, or business entity (whether as an employee, officer, director, agent, security holder, creditor, consultant, or otherwise) that engages in any activity which is directly competitive with
the business of the Company. In addition, for a 12-month period after the Executive’s Date of Termination, the Executive agrees that he will not serve as chief executive officer or a comparable position of any publicly-traded lodging REIT.

  

	 	(b)	While the Executive is employed by the Company, and for a period of 12 months after the Executive’s Date of Termination, the Executive agrees that he will not in
any manner, directly or indirectly (without prior written consent of the Company) employ or solicit for employment for himself or any other business entity (other than the Company and its Subsidiaries) any individual (other than a current or former
executive assistant (secretary) of the Executive), who is an employee, officer, agent or representative of the Company (or any successor corporation into which the Company may be merged or consolidated) at the time of such solicitation or
employment. Nothing in this paragraph 6 or paragraph 7 shall be construed as limiting the Executive’s duty of loyalty to the Company while he is employed by the Company, or any other duty he may otherwise have to the Company while he is
employed by the Company. For the avoidance of doubt, it is understood that (i) the placement of general advertisements that may be targeted to a particular geographic or technical area but which are not targeted directly or indirectly towards
any employees, officers, agents or representatives of the Company (or any successor corporation into which the Company may be merged or consolidated) shall not be deemed a breach of this paragraph 6(b) and (ii) the employment or engagement by
such persons by an entity that is not controlled by Executive and whom Executive did not encourage, solicit, or induce or in any manner attempt to encourage, solicit, or induce to terminate his or her employment or consulting relationship with
Company shall not be deemed a breach of this paragraph 6(b). 

  
 14 

 7. Confidential Information and Non-Disparagement. The Executive agrees that:

  

	 	(a)	Except as may be required by the lawful order of a court or agency of competent jurisdiction, or except to the extent that the Executive has express authorization from
the Company, the Executive agrees to keep secret and confidential indefinitely all non-public information (including, without limitation, information regarding litigation and pending litigation) concerning the Company and the Subsidiaries which was
acquired by or disclosed to the Executive during the course of his employment with or negotiations for employment with the Company, or during the course of any consultation with the Company following his termination of employment pursuant to
paragraph 8, and not to disclose the same, either directly or indirectly, to any other person, firm, or business entity, or to use it in any way. 

  

	 	(b)	To the extent that any court or agency seeks to have the Executive disclose confidential information, he shall promptly inform the Company, and he shall take such
reasonable steps to prevent disclosure of confidential information until the Company has been informed of such requested disclosure, and the Company has an opportunity to respond to such court or agency. To the extent that the Executive obtains
information on behalf of the Company or any of the Subsidiaries that may be subject to attorney-client privilege as to the Company’s attorneys, the Executive shall take reasonable steps to maintain the confidentiality of such information and to
preserve such privilege. 

  

	 	(c)	Nothing in the foregoing provisions of this paragraph 7 shall be construed so as to prevent the Executive from using, in connection with his employment for himself or
an employer other than the Company or any of the Subsidiaries, knowledge which is generally known (other than by reason of a violation of this paragraph 7) to persons of his experience in other companies in the same industry.

  

	 	(d)	During the Agreement Term and thereafter (including following Executive’s termination of employment for any reason) he will not make statements or representations,
or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage the Company or its respective officers, directors, employees, advisors, businesses or reputations.
The Company agrees that, during the Agreement Term and thereafter, (including following Executive’s termination of employment for any reason) the Company (including, but not limited to any executives, officers, Directors or employees of the
Company) will not make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may directly or indirectly, disparage Executive or his business or reputation.
Notwithstanding the foregoing, nothing in this Agreement shall preclude either Executive or the Company from making truthful statements or disclosures that are required by applicable law, regulation, or legal process. 

  
 15 

 8. Defense of Claims. The Executive agrees that, for the period beginning on the
Effective Date, and continuing for a reasonable period after the Executive’s termination of employment with the Company, the Executive will cooperate with the Company in defense of any claims that may be made against the Company, and will
cooperate with the Company in the prosecution of any claims that may be made by the Company, to the extent that such claims may relate to services performed by the Executive for the Company. During his employment with the Company and for a
reasonable period thereafter, the Executive agrees to promptly inform the Company if he becomes aware of any lawsuits involving such claims that may be filed against the Company which lawsuit the Executive reasonably believes the Company is not yet
aware unless the Executive is bound by confidentiality restrictions prohibiting him from notifying the Company. The Company agrees to reimburse the Executive, for all of the Executive’s reasonable out-of-pocket expenses and, if any such
cooperation is requested after Executive’s termination of employment with the Company, to compensate the Executive for his time associated with such cooperation at an hourly rate based on the Executive’s Salary in effect immediately prior
to the Date of Termination divided by 2,000. The Executive also agrees to promptly inform the Company if he is asked to assist in any investigation of the Company (or its actions) that may relate to services performed by the Executive for the
Company, regardless of whether a lawsuit has then been filed against the Company with respect to such investigation. 
 9.
Equitable Remedies. The Executive acknowledges that the Company would be irreparably injured by a violation of paragraphs 6, 7 or 8, and he agrees that the Company, in addition to any other remedies available to it for such breach or
threatened breach, shall be entitled to a preliminary injunction, temporary restraining order, or other equivalent relief, restraining the Executive from any actual or threatened breach of any of paragraphs 6, 7 or 8. If a bond is required to be
posted in order for the Company to secure an injunction or other equitable remedy, the parties agree that said bond need not be more than a nominal sum. The parties hereto acknowledge that the potential restrictions on the Executive’s future
employment imposed by paragraphs 6, 7 and 8 are reasonable in duration and all other respects. If for any reason any court of competent jurisdiction shall find paragraphs 6, 7, or 8 unreasonable in duration or otherwise, the Executive and the
Company agree that the restrictions and prohibitions contained herein shall be effective to the fullest extent allowed under applicable law in such jurisdiction. 
 10. Potential Parachute Payment Cutback. Notwithstanding any other provision in this Agreement, in the event Executive becomes entitled to any payments or benefits whether pursuant to the terms of
or by reason of this Agreement or any other plan, arrangement, agreement, policy or program (including without limitation any restricted stock unit, stock option, stock appreciation right or similar right, or the lapse or termination of any
restriction on the vesting or exercisability of any of the foregoing) with the Company, any successor to the Company or to all or a part of the business or assets of the Company (whether direct or indirect, by purchase, merger, consolidation, spin
off, or otherwise and regardless of whether such payment is made by or on behalf of the Company or such successor) or any person whose actions result in a change of control or any person affiliated with the Company or such persons (in the aggregate,
“Payments”), which Payments are reasonably determined by the Executive, but for this paragraph 10, to be subject to the tax imposed by section 4999 or any successor provision of the Code (the “Excise Tax”), Executive shall be
paid either (i) the full amount of the Payments or (ii) the largest portion of the Payments that would result in no portion of the Payments being 

  
 16 

 
subject to the Excise Tax (the “Capped Payment”), whichever of the foregoing amounts, after taking into account all applicable federal, state and local employment taxes, income taxes
and the Excise Tax, results in the receipt by the Executive, on an after-tax basis, of the greatest amount of Payments notwithstanding that all or some portion of the Payments may be subject to the Excise Tax. 

To the extent the order of cutback is required to be specified by Section 409A (otherwise as determined by the Executive), if a
reduction in the Payments is required so that the amount of the Payments equals the Capped Payment, the Payments shall be reduced in the following order: (i) reduction of cash Payments otherwise payable to Executive that are exempt from
Section 409A; (ii) reduction of any other payments and benefits otherwise payable to Executive that are exempt from Section 409A; (iii) cancellation of accelerated vesting of equity awards (other than stock options) that are
exempt from Section 409A; (iv) cancellation of accelerated vesting of stock options that are exempt from Section 409A; and (v) reduction of any other payments and benefits otherwise payable to Executive on a pro-rata basis or
such other manner that complies with Section 409A, as determined by the Company. If acceleration of vesting of Executive’s stock options or other equity awards is to be reduced pursuant to clauses (iii) or (iv) of the immediately
preceding sentence, such acceleration of vesting shall be accomplished by first canceling such acceleration for the vesting installment of any options with an exercise price greater than the fair market value of the underlying shares and then
canceling such acceleration for the vesting installment that will vest last and continuing to the extent necessary by canceling such acceleration for the next vesting installment with the latest vesting. 

All computations and determinations called for by this paragraph 10 shall be made and reported in writing to the Company and Executive by
an independent accounting firm or independent tax counsel selected by the Executive subject to approval by the Company, which approval shall not be unreasonably withheld (the “Tax Advisor”). For purposes of such calculations and
determinations, the Tax Advisor may rely on reasonable, good faith interpretations concerning the application of sections 280G and 4999 of the Code. The Company and Executive shall furnish to the Tax Advisor such information and documents as the Tax
Advisor may reasonably request in order to make their required calculations and determinations. The Company shall pay all fees and expenses charged by the Tax Advisor in connection with its services. 

11. Non-alienation. The interests of the Executive under this Agreement are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Executive or the Executive’s estate. 
 12. Mitigation and Set-Off. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. The Company shall not
be entitled to set off against the amounts payable to the Executive under this Agreement any amounts earned by the Executive in other employment after termination of his employment with the Company, or any amounts which might have been earned by the
Executive in other employment had he sought such other employment. 

  
 17 

 13. Recoupment. Notwithstanding any other provisions in this Agreement to the
contrary, the Executive acknowledges that he will be subject to recoupment policies adopted by the Company pursuant to the requirements of Dodd-Frank Wall Street Reform and Consumer Protection Act or other law or the listing requirements of any
national securities exchange on which the shares of Common Stock of the Company are listed. 
 14. Amendment. This
Agreement may be amended or canceled only by mutual agreement of the parties in writing. So long as the Executive lives, no person, other than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter
hereof. 
 15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. 
 16. Severability. The invalidity or
non-enforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision were omitted (but only
to the extent that such provision cannot be appropriately reformed or modified). 
 17. Waiver of Breach. No waiver by
either party hereto of a breach of any provision of this Agreement by the other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent
breach by such other party or any similar or dissimilar provisions and conditions at the same or any prior or subsequent time. The failure of any party hereto to take any action by reason of such breach will not deprive such party of the right to
take action at any time while such breach continues. 
 18. Successors. This Agreement shall be binding upon, and inure
to the benefit of, the Company and its successors and assigns and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. 

19. Notices. Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered
personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by prepaid overnight courier to the parties at the addresses set forth below (or such other addresses as shall be specified by the parties by like
notice). Such notices, demands, claims and other communications shall be deemed given: (y) when received if given in person or by courier service or (z) three business days after being deposited in the U.S. mail, certified or registered
mail, postage prepaid: 
  

	 	(a)	If to the Company, addressed as follows: 

 Strategic Hotels & Resorts, Inc. 
 200 W. Madison Street, Suite 1700

 Chicago, Illinois 60606 
 Attention: General Counsel 
 Facsimile No.: (312) 658-5799 

  
 18 

	 	(b)	If to the Executive, addressed as follows: 

 Raymond L. Gellein, Jr. 
 200 W. Madison Street, Suite 1700 

Chicago, Illinois 60606 
 Facsimile No.: (312) 658-5799 
 with a copy (which shall not constitute
notice) to: 
 Lowndes, Drosdick, Doster, Kantor & Reed, P.A. 

215 North Eola Drive 
 Orlando, Florida 32801 
 Attn: Suzan A. Abramson 

20. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

21. Costs of Disputes. The Company shall reimburse the Executive’s reasonable expenses, including legal fees (i) to
negotiate and prepare this Agreement up to a maximum of $7,000; and (ii) in any dispute under this Agreement in which the Executive prevails on at least one material claim. 

22. Survival of Agreement. Except as otherwise expressly provided in this Agreement, the rights and obligations of the parties to
this Agreement shall survive the termination of the Executive’s employment with the Company. 
 23. Entire
Agreement. Except as otherwise noted herein this Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, if any, between the parties relating to
the subject matter hereof. 
 24. Acknowledgement by Executive. The Executive represents to the Company that he is
knowledgeable and sophisticated as to business matters, including the subject matter of this Agreement, that he has read this Agreement and that he understands its terms. The Executive acknowledges that, prior to assenting to the terms of this
Agreement; he has been given a reasonable time to review it, to consult with counsel of his choice, and to negotiate at arm’s-length with the Company as to the contents. The Executive and the Company agree that the language used in this
Agreement is the language chosen by the parties to express their mutual intent, and that no rule of strict construction is to be applied against any party hereto. The Executive represents and warrants that he is not, and will not become a party to
any agreement, contract, arrangement or understanding, whether of employment or otherwise, that would in any way restrict or prohibit him from undertaking or performing his duties in accordance with this Agreement. 

25. Inconsistency. In the event of any inconsistency between this Agreement and any plan, program or practice of the Company, the
terms of this Agreement shall control. 

  
 19 

 26. Effect of Restatement of Financial Results. Notwithstanding anything in this
Agreement to the contrary other than paragraph13, to the extent any financial results are misstated as a result of Executive’s willful misconduct or gross negligence, and as a result such financial results are subsequently restated downward
resulting in lower levels of performance-based vesting or award earnouts pursuant to paragraph 2, offsets shall be made against future awards and/or payments. For purposes of the preceding sentence, “willful” shall mean done or omitted in
bad faith and without reasonable belief that such conduct was in the best interests of the Company. Willful misconduct or gross negligence shall not be deemed to have occurred unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board (excluding the Executive), after reasonable notice is provided to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board, finding that, in the good faith opinion of the Board, the Executive is guilty of conduct described above, and specifying the particulars thereof in detail. If such future awards and/or payments
are insufficient to offset the full difference between award values or earnouts and restated award values or earnouts and/or if such restatement occurs at the end of the Agreement Term, awards or award values previously earned and/or delivered may
be clawed-back. 
 27. Section 409A Compliance. All payments pursuant to this Agreement shall be subject to the
provisions of this paragraph 27. Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and operated to the fullest extent possible so that the payments and benefits under this Agreement either shall be exempt
from the requirements of Section 409A or shall comply with the requirements of such provision; provided however that the preceding statement is not intended to transfer to the Company any liability for or with respect to any taxes, penalties or
interest which may be imposed upon the Executive pursuant to Section 409A. 
  

	 	(a)	Reimbursements. For purposes of complying with Section 409A and without extending the payment timing otherwise provided in this Agreement, taxable
reimbursements under this Agreement, subject to the following sentence and to the extent required to comply with Section 409A, will be made no later than the end of the calendar year following the calendar year the expense was incurred. To the
extent required to comply with Section 409A, any taxable reimbursements and any in-kind benefit under this Agreement will be subject to the following: (a) payment of such reimbursements or in-kind benefits during one calendar year will not
affect the amount of such reimbursement or in-kind benefits provided during any other calendar year (other than for medical reimbursement arrangements as excepted under Treasury Regulations §1.409A-3(i)(1)(iv)(B) solely because the arrangement
provides for a limit on the amount of expenses that may be reimbursed under such arrangement over some or all of the period the arrangement remains in effect); (b) such right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another form of compensation to the Executive and (c) the right to reimbursements under this Agreement will be in effect for the lesser of the time specified in this Agreement or ten years plus the lifetime of the Executive. Any
taxable reimbursements or in-kind benefits shall be treated as not subject to Section 409A to the maximum extent provided by Treasury Regulations §1.409A-1(b)(9)(v) or otherwise under Section 409A. 

  
 20 

	 	(b)	No Acceleration; Separate Payments. No 409A Payment payable under this Agreement shall be subject to acceleration or to any change in the specified time or
method of payment, except as otherwise provided under this Agreement and consistent with Section 409A. If under this Agreement, a 409A Payment is to be paid in two or more installments, for purposes of Section 409A, each installment shall
be treated as a separate payment. 

  

	 	(c)	Cooperation. If the Executive or Company determines that any provision of this Agreement is or might be inconsistent with the requirements of Section 409A,
the parties shall attempt in good faith to agree on such amendments to this Agreement as may be necessary or appropriate to avoid subjecting Executive to the imposition of any additional tax under Section 409A without changing the basic
economic terms of this Agreement. This paragraph 27 is not intended to impose any restrictions on payments or benefits to Executive other than those otherwise set forth in this Agreement or required for Executive not to incur additional tax under
Section 409A and shall be interpreted and operated accordingly. The Company to the extent reasonably requested by Executive shall modify this Agreement to effectuate the intention set forth in the preceding sentence. 

IN WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has caused these presents to be executed in its name and on
its behalf, all as of the day and year first written above. 
  

	
	/s/ Raymond L. Gellein, Jr.
	    Executive

  

			
	STRATEGIC HOTELS & RESORTS, INC.
		
	By:	 	/s/ Paula C. Maggio
	Name:	 	Paula C. Maggio
	Title:	 	Executive Vice President, Secretary and General Counsel

  
 21 

 EXHIBIT A 

RELEASE AND WAIVER OF CLAIMS 
 THIS RELEASE is made as of this              day of             ,
            , by and between Strategic Hotels & Resorts, Inc. (the “Company”) and Raymond L. Gellein, Jr. (“Executive”). 

WHEREAS, Executive and the Company entered into that certain Employment Agreement, dated November __, 2012 and effective November 2,
2012 (“Agreement”); 
 WHEREAS, Executive’s employment with the Company as President and Chief Executive Officer
has terminated; and 
 WHEREAS, in connection with the termination of Executive’s employment, under the Agreement,
Executive is entitled to certain payments and other benefits. 
 NOW, THEREFORE, in consideration of the severance payments and
other benefits due Executive under the Agreement (“Severance Payments”): 
 1. Executive hereby for himself, and his
heirs, agents, executors, successors, assigns and administrators (collectively, the “Related Parties”), intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates, subsidiaries, parents,
joint ventures, and its and their officers, directors, shareholders, employees, predecessors, and partners, and its and their respective successors and assigns, heirs, executors, and administrators (collectively, “Releasees”) from all
causes of action, suits, debts, claims and demands whatsoever in law or in equity, which Executive ever had, now has, or hereafter may have, or which the Related Parties may have, by reason of any matter, cause or thing whatsoever, from the
beginning of his initial dealings with the Company to the date of this Release, and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to his employment relationship with Company, the
terms and conditions of that employment relationship, and the termination of that employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act (“ADEA”), as amended, 29 U.S.C.
§ 621 et seq., the Older Worker’s Benefit Protection Act, 29 U.S.C. § 626(f)(1), Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1871, the Civil Rights Act of 1991, the
Americans with Disabilities Act, 42 U.S.C. § 12101-12213, the Rehabilitation Act, the Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C. § 2601 et seq., and any other claims under any federal, state or local common law,
statutory, or regulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs, but not including claims that cannot be waived by law and claims to payments, benefits and other rights provided Executive under the
Agreement and any employee benefit plan of the Company in which Executive is a participant, including without limitation, stock-based compensation plans. This Release is effective without regard to the legal nature of the claims raised and without
regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort. Except as specifically provided herein, it is expressly understood and agreed that this Release shall operate as a clear and
unequivocal waiver by Executive of any claim for accrued or unpaid wages, benefits or any other type of payment other than as provided under the Agreement and any employee benefit plan of the Company in which Executive is a participant, including
without limitation, stock-based 

  
 A-1

 
compensation plans. It is the intention of the parties to make this release as broad and as general as the law permits as to the claims released hereunder. However, nothing in this Agreement is
intended to interfere with the Executive’s protected right to file a charge or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission as set forth in Section 626(f)(4) of the Older Workers
Benefit Protection Act. In addition, nothing in this Agreement is intended to limit or restrict any rights Executive may have to challenge the validity of this Agreement or whether this Agreement was entered into knowingly and voluntarily. Executive
does waive, however, his right to any monetary recovery should any agency pursue any claims on his behalf. 
 2. Executive
further agrees and recognizes that he has permanently and irrevocably severed his employment relationship with the Company, that he shall not seek employment with the Company or any affiliated entity at any time in the future, and that the Company
has no obligation to employ him in the future. 
 3. The parties agree and acknowledge that the Agreement, and the settlement
and termination of any asserted or unasserted claims against the Releasees pursuant to the Agreement, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by
any of the Releasees to Executive. 
 4. Executive certifies and acknowledges as follows: 

a. That he has read the terms of this Release, and that he understands its terms and effects, including the fact that he has agreed to
RELEASE AND FOREVER DISCHARGE all Releasees from any legal action or other liability of any type related in any way to the matters released pursuant to this Release other than as provided in the Agreement and in this Release; 

b. That he has signed this Release voluntarily and knowingly in exchange for the consideration described herein, which he acknowledges is
adequate and satisfactory to him and which he acknowledges is in addition to any other benefits to which he is otherwise entitled; 
 c. That he has been and is hereby advised in writing to consult with an attorney prior to signing this Release; 
 d. That he does not waive rights or claims that may arise after the date this Release is executed; 
 e. That he has been informed that he has the right to consider this Release and Waiver of Claims for a period of 21 days from receipt, and he has signed on the date indicated below after concluding that
this Release and Waiver of Claims is satisfactory to him; and 
 f. That neither the Company, nor any of its directors,
employees, or attorneys, has made any representations to him concerning the terms or effects of this Release and Waiver of Claims other than those contained herein. 
 g. That he has not filed any claim against the Company relating to his employment and/or cessation of employment with the Company, or otherwise involving facts that occurred on or prior to the date that
Executive has signed this Release and Waiver of Claims. 

  
 A-2

 h. That if he commences, continues, joins in, or in any other manner attempts to assert any
claim released herein against the Company, or otherwise violates the terms of this Release and Waiver of Claims, (i) the Executive will cease to have any further rights to Severance Payments from the Company, and (ii) the Executive shall
be required to return any Severance Payments made to the Executive by the Company (together with interest thereon). 
 i.
Executive acknowledges that he may later discover facts different from or in addition to those which he knows or believes to be true now, and he agrees that, in such event, this Release and Waiver of Claims shall nevertheless remain effective in all
respects, notwithstanding such different or additional facts or the discovery of those facts. 
 5. This Release and Waiver of
Claims may not be introduced in any legal or administrative proceeding, or other similar forum, except one concerning a breach of this Release and Waiver of Claims. 
 6. This Release and Waiver of Claims and the Agreement constitute the complete understanding between Executive and the Company concerning the subject matter hereof. No other promises or agreements will be
binding unless signed by Executive and the Company. 
 7. In the event that any provision or portion of this Release and Waiver
of Claims shall be determined to be invalid or unenforceable for any reason, the remaining provisions or portions of this Release and Waiver of Claims shall be unaffected thereby and shall remain in full force and effect to the fullest extent
permitted by law. 
 8. The respective rights and obligations of the parties hereunder shall survive termination of this Release
and Waiver of Claims to the extent necessary for the intended preservation of such rights and obligations. 
 9. This Release
and Waiver of Claims shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware without reference to the principles of conflict of law. 

10. Executive also understands that he has the right to revoke this Release and Waiver of Claims within 7 days after execution, and that
this Release and Waiver of Claims will not become effective or enforceable until the revocation period has expired, by giving written notice to the following: 
 Strategic Hotels & Resorts, Inc. 
 200 West Madison Street, Suite 1700

 Chicago, Illinois 60606 
 Attention: General Counsel 
 Facsimile No.: (312) 658-5799 

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties execute the foregoing Release and Waiver of Claims: 

 

	
	  
	Raymond L. Gellein, Jr.

  
 A-3

 SCHEDULE 1 
 Board of Directors Positions 
 Marriott Vacations Worldwide Corporation

 The Mind and Life Institute 
 American Resort Development Association 

 SCHEDULE 2 
 RBG Capital Advisors, LLC 
 RBG Advisors, LLC 

RG Black Diamond Golf Holdings, LLC, Member of Black Diamond Golf Holdings, 

LLC, Member of Escalante-Black Diamond, LLC 
 RG Graywood Golf Holdings, LLC, Member of Graywood Golf Holdings, LLC, 

Member of Escalante-Graywood, LLC 
 RG Grand Haven Golf Holdings, LLC, Member of Grand Haven Golf Holdings, 

LLC, Member of Escalante – Grand Haven, LLC 
 Gellein CM Glazing Holdings, LLC, Member of CM Glazing, LLC d/b/a Acme 

Glass Contract Glazing 

  
 A-2

 ATTACHMENT A 

STRATEGIC HOTELS & RESORTS, INC. 
 SECOND AMENDED AND RESTATED 2004 INCENTIVE PLAN 
 STOCK UNIT AWARD
AGREEMENT 
 We are pleased to inform you that you have been awarded by Strategic Hotels & Resorts, Inc. (the
“Company”), a stock unit award (the “Stock Unit Award”). 
 The terms of the Stock Unit Award are as set
forth in this Stock Unit Award Agreement (“Agreement”). The Stock Unit Award Agreement is granted under the Strategic Hotels & Resorts Second Amended and Restated 2004 Incentive Plan (“Plan”) and, except as expressly
provided otherwise herein, is limited by and subject to the express terms and conditions of the Plan, a copy of which has been made available to you. Capitalized terms that are not defined in this Agreement have the meanings given to them in the
Plan. The basic terms of the Stock Unit Award are summarized as follows: 
  

					
	 Grant Date:
	  	 	November 19, 2012	  
	 Number of Units:
	  	 	112,245	  

 1. Vesting 
 (a) The Stock Unit Award is subject to forfeiture upon termination of your employment or service relationship with the Employer as described below. The Stock Unit Award will vest and no longer be subject
to forfeiture on the dates set forth below (each a “Vesting Date”) according to the following schedule: 
  

					
	 Date at Which Portion of Stock Unit
 Award is Vested and No Longer Subject to
 Forfeiture Provided Continuous

Employment or Service With the Employer

From the Grant Date
	  	Portion of Stock Unit
Award Vested and No
Longer Subject to
Forfeiture	 
	 January 1, 2014
	  	 	33	% 
	 January 1, 2015
	  	 	67	% 
	 January 1, 2016
	  	 	100	% 

 (b) Units that have vested and are no longer subject to forfeiture according to the schedule above are
referred to herein as “Vested Units.” Units that have not vested and remain subject to forfeiture under the preceding schedule are referred to herein as “Unvested Units.” The Unvested Units will vest (and to the extent so vested
cease to be Unvested Units remaining subject to forfeiture) in accordance with the above schedule. Collectively, the Unvested Units and Vested Units are referred to herein as the “Units.” 

(c) Early lapse of the forfeiture restrictions may occur as described below in connection with your death or termination of employment
because of your Disability, a Constructive Termination or Termination without Cause. For purposes of this Agreement, the terms “Constructive Termination”, “Termination without Cause” and “Cause” shall have the meanings
given to such terms in your Employment Agreement with the Company dated as of November 19, 2012 (“Employment Agreement”) whether or not the Agreement Term under such Employment Agreement has ended. 

 2. Termination of Employment or Services 

If you terminate your employment or service relationship with the Employer other than as a result of a Constructive Termination or at the
end of the Agreement Term under the Employment Agreement or the Employer terminates your employment or service relationship for Cause, any portion of this Stock Unit Award that has not vested as provided in Section 1 will immediately terminate.
You will forfeit all Unvested Units upon such occurrence without the payment of any further consideration to you. 
 If your
employment or service relationship with the Employer terminates before a Change of Control because of death, Disability, a Constructive Termination, Termination without Cause or by either you or the Employer at the end of the Agreement Term under
the Employment Agreement other than for Cause, the vesting and payment of this Stock Unit Award will continue at the same time and in the same manner as though you remained employed by the Employer. 

If your employment or service relationship with the Employer terminates on or after a Change of Control because of death, Disability, a
Constructive Termination, Termination without Cause or by either you or the Employer at the end of the Agreement Term under the Employment Agreement other than for Cause, the vesting of this Stock Unit Award will accelerate and all Units under this
Stock Unit Award will become fully vested. 
 3. Conversion of Units into Shares of Common Stock 

Except as otherwise provided by a deferral election pursuant to Section 4 of this Agreement, Vested Units shall be converted into
shares of Common Stock as of February 15th (or the next business day thereafter if February 15 is not a business day) following the day when Unvested Units become Vested Units at the applicable Vesting Date or as soon as administratively
feasible following your termination of employment with respect to Unvested Units which become Vested Units in accordance with Section 2. 
 If, however, you elect to defer payment of the shares of Common Stock as provided in Section 4 of this Agreement, the shares of Common Stock shall be issued as set forth in the Deferral Election
Agreement entered into between you and the Committee. 
 4. Deferral Election 

Subject to Section 12, you may elect to defer delivery of the shares of Common Stock that would otherwise be due by virtue of the
lapse or waiver of the vesting requirements as set forth in Section 1. The Committee shall, in its sole discretion, establish the rules and procedures for such deferral elections and payment deferrals. 

  
 -2-

 5. Dividends 
 You shall be credited with dividend equivalents with respect to your Units under this Agreement in the form of additional Units as set forth in Section 2(e)(iii) of your Employment Agreement.

 6. No Rights as Shareholder 
 You shall not have voting or any other rights as a shareholder of the Common Stock with respect to the Units. Upon conversion of the Units into shares of Common Stock, you will obtain full voting and
other rights as a shareholder of the Company. 
 7. Securities Law Compliance 

Notwithstanding any other provision of this Agreement, you may not sell the shares of Common Stock acquired upon the conversion of Units
unless such shares are registered under the Securities Act or, if such shares are not then so registered, the Company has determined that such sale would be exempt from the registration requirements of the Securities Act. The sale of such shares of
Common Stock must also comply with other applicable laws and regulations governing the shares, and you may not sell the shares of Common Stock if the Company determines that such sale would not be in material compliance with such laws and
regulations. 
 8. Transfer Restrictions 
 8.1 Restrictions on Transfer of Unvested Shares. Any sale, transfer, assignment, encumbrance, pledge, hypothecation, conveyance in trust, gift, transfer by bequest, devise or descent, or other
transfer or disposition of any kind, whether voluntarily or by operation of law, directly or indirectly, of Units shall be strictly prohibited and void, except a transfer after death by will or by the applicable laws of descent and distribution, and
provided that such restrictions on transfer will not apply to a gratuitous transfer of the Units, provided, and only if, you obtain the Committee’s prior written consent to such transfer. 

8.2 Market Standoff. In connection with any underwritten public offering by the Company of its equity securities pursuant to an
effective registration statement filed under the Securities Act, you and any transferee agree not to sell, make any short sale of, loan, hypothecate, pledge, assign, grant any option for the purchase of, or otherwise dispose or transfer for value or
agree to engage in any of the foregoing transactions with respect to, any shares of Common Stock acquired upon the conversion of Units if so requested by the underwriter. Such limitations will be in effect for such period of time as may be requested
by the underwriter. 
 9. Independent Tax Advice 
 You acknowledge that determining the actual tax consequences to you of receiving Units or shares of Common Stock or deferring or disposing of Units or shares of Common Stock may be complicated. These tax
consequences will depend, in part, on your specific situation and may also depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You are aware that you should consult a competent and
independent tax advisor for a full understanding of the specific tax consequences to you of receiving, deferring or 

  
 -3-

 
disposing of Units or shares of Common Stock. Prior to executing this Agreement, you either have consulted with a competent tax advisor independent of the Company to obtain tax advice concerning
the Shares in light of your specific situation or have had the opportunity to consult with such a tax advisor but chose not to do so. 
 10.
Withholding and Disposition of Shares 
 You agree to make arrangements satisfactory to the Employer for the payment of any
federal, state, local or foreign withholding tax obligations that arise with respect to this Stock Unit Award, including, without limitation, the receipt of shares of Common Stock. Notwithstanding the previous sentence, you acknowledge and agree
that the Employer has the right to deduct from payments of any kind otherwise due to you any federal, state or local taxes of any kind required by law to be withheld with respect this Stock Unit Award, including, without limitation, the receipt of
shares of Common Stock. 
 11. General Provisions 
 11.1 No Waiver. No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce
any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder. 
 11.2
Undertaking. You hereby agree to take whatever additional action and execute whatever additional documents the Committee may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on
either you, the Units or the shares acquired upon conversion of the Units pursuant to the express provisions of this Agreement. 

11.3 Recoupment. Notwithstanding any other provisions in this Agreement to the contrary, you acknowledge that you will be subject
to recoupment policies adopted by the Company pursuant to the requirements of Dodd-Frank Wall Street Reform and Consumer Protection Act or other law or the listing requirements of any national securities exchange on which the shares of Common Stock
of the Company are listed. 
 11.4 Agreement Is Entire Contract. This Agreement constitutes the entire contract between
the parties hereto with regard to the subject matter hereof. 
 11.5 Successors and Assigns. The provisions of this
Agreement will inure to the benefit of, and be binding on, the Company and its successors and assigns and you and your legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person
will have become a party to this Agreement and agreed in writing to join herein and be bound by the terms and conditions hereof. 
 11.6 No Employment or Service Contract. This Agreement does not confer upon you any right with respect to continuance of employment by the Employer, nor does it interfere in any way with the right
of your employer to terminate your employment or services at any time, subject to the terms of the Employment Agreement. 

  
 -4-

 11.7 Counterparts. This Agreement may be executed in two or more counterparts, each
of which will be deemed an original, but which, upon execution, will constitute one and the same instrument. 
 11.8
Governing Law. This Agreement will be construed and administered in accordance with and governed by the laws of the State of Illinois. 

12. Section 409A Compliance 
 The Company intends that any Unit conversion, deferral and other provisions applicable to your Stock Unit Award fully comply with the payout and other limitations and restrictions imposed under
Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), as clarified or modified by IRS guidance, including without limitation, treating the date you have a separation from service under Code Section 409A as the
date you terminate employment or your service relationship for purposes of this Agreement – in each case if and to the extent such Code Section 409A is otherwise applicable to your Stock Unit Award and such compliance is necessary to avoid
the penalties otherwise imposed under Code Section 409A. In this connection, the Company and you agree that the payout timing provisions applicable to the Stock Unit Award, and the terms of any deferral and other rights regarding such Stock
Unit Awards, shall be deemed modified, if and to the extent necessary to comply with the payout and other limitations and restrictions imposed under Code Section 409A, as clarified or modified by IRS guidance – in each case if and to the
extent such Code Section 409A is otherwise applicable to your Stock Unit Award and such compliance is necessary to avoid the penalties otherwise imposed under Section 409A. This Stock Unit Award is subject to Section 17.5 of the Plan.

 REMAINDER OF PAGE INTENTIONALLY BLANK. 
 SIGNATURE PAGE FOLLOWS. 

  
 -5-

 IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year indicated
above on the first page of this Agreement as the Grant Date. 
  

			
	STRATEGIC HOTELS & RESORTS, INC.
		
	 	 	 
	By:	 	Paula C. Maggio
	Its:	 	Executive Vice President, Secretary & General Counsel

  

	
	
	 
	Raymond L. Gellein, Jr.

  
 -6-

 ATTACHMENT B 
 STRATEGIC HOTELS & RESORTS, INC. 
 SECOND AMENDED AND RESTATED
2004 INCENTIVE PLAN 
 PERFORMANCE SHARE AWARD AGREEMENT 

We are pleased to inform you that you have been awarded by Strategic Hotels & Resorts, Inc. (the “Company”) the
opportunity to earn a performance share award (the “Performance Share Award”). 
 The terms of the Performance Share
Award are as set forth in this Performance Share Award Agreement (“Agreement”). This Agreement is granted under the Strategic Hotels & Resorts Second Amended and Restated 2004 Incentive Plan (“Plan”) and, except as
expressly provided otherwise herein, is limited by and subject to the express terms and conditions of the Plan, a copy of which has been made available to you. Certain capitalized terms are defined in the Appendix to this Agreement. Capitalized
terms that are not defined in this Agreement (including the Appendix) have the meanings given to them in the Plan. The basic terms of the Performance Share Award are summarized as follows: 

 

			
	Target Number of Shares Subject to the Award (“Target Shares”):	  	227,891
		
	Performance Period:	  	 January 2, 2013 (“Start Date”) through
 December 31, 2015 (“End Date”)

 1. Earning Performance Shares Award 
 Subject to the conditions and limitations set forth herein, the Company will determine and distribute shares of Common Stock to the extent earned as set forth below on a date (“Distribution
Date”) in the first calendar quarter of 2016 (no later than March 15, 2016) in which the Committee determines and certifies the Relative SNL Lodging Index TSR Performance Percentage and the Relative MSCI US REIT Index TSR Performance
Percentage achieved, each as described in Section 2 hereof. The Committee will in good faith make such determination and certification and except as set forth in Sections 3, 4 and 6, distribute such shares of Common Stock within the time period
set forth in the preceding sentence. 
 (a) Base Performance Shares 

Shares of Common Stock are earned under this Performance Share Award based on two performance metrics (each, a “Performance
Metric”): (1) Relative SNL Lodging Index TSR Performance and (2) Relative MSCI US REIT Index TSR Performance. The weighting of each Performance Metric is set forth below: 

					
	 Performance Metrics
	  	Weighting	 
	 1. Relative SNL Lodging Index TSR
	  	 	75	% 
	 2. Relative MSCI US REIT Index TSR
	  	 	25	% 

 Shares of Common Stock are earned according to Relative SNL Lodging Index TSR Performance as set forth below: 

 

					
	 Percentile Rank
	  	Multiple of Target Shares
Earned	 
	 100%
	  	 	1.50	  
	 75%
	  	 	1.25	  
	 50%
	  	 	1.00	  
	 25%
	  	 	0.50	  
	 Below 25%
	  	 	0	  

 Shares of Common Stock are earned according to the Relative MSCI US REIT Index TSR Performance as set forth below:

  

					
	 Percentile Rank
	  	Multiple of Target
Shares Earned	 
	 100%
	  	 	1.50	  
	 75%
	  	 	1.25	  
	 50%
	  	 	1.00	  
	 25%
	  	 	0.50	  
	 Below 25%
	  	 	0	  

 The number of Shares that are earned with respect to each Performance Metric shall be interpolated on a straight line
basis between the Multiple of Target Shares Earned levels set forth in the schedules above. 
 (b) Kicker Shares

 “Kicker Shares” shall be an additional number of shares of Common Stock earned under this
Performance Share Award equal to 10% of the Target Shares applicable to the Performance Metric if the Company is at the
85th percentile or higher for such Performance Metric.
Therefore, 

  
 2 

	 	•	 	 The Kicker Shares for Relative SNL Lodging Index TSR Performance achievement at the 85th percentile or higher shall be an additional number of shares of Common Stock equal to 7.5% of the Target Shares.

  

	 	•	 	 The Kicker Shares for the Relative MSCI US REIT Index TSR Performance achievement at the 85th percentile or higher shall be an additional number of shares of Common Stock equal to 2.5% of the Target Shares.

 (c) Dividend Equivalents: 
 You shall be credited from the Start Date with dividend equivalents payable in shares of Common Stock with respect to shares of Common Stock you earn under this Performance Share Award until the delivery
date, without regard to any deferral election pursuant to Section 6, of such shares of Common Stock (or cash in a Go Private Transaction) under this Agreement. The number of shares of Common Stock you will acquire pursuant to dividend
equivalents is determined by assuming that as of each dividend ex-date from the Start Date to such delivery date under this Agreement with respect to the shares of Common Stock you earn under this Agreement without regard to this Section 1(c)
plus previously credited shares of Common Stock attributable to prior dividend equivalents under this Section 1(c), a dollar amount equal to the amount of the dividend that would have been paid on such number of shares of Common Stock under
this Performance Share Award for such dividend shall be converted into a number of shares of Common Stock equal to the number of whole and fractional shares of Common Stock that could have been purchased at the closing price on the dividend payment
date with such dollar amount. In the case of any dividend declared on shares of Common Stock which is payable in shares of Common Stock, you shall be credited with an additional number of shares of Common Stock equal to the product of (x) the
number of shares of Common Stock earned under this Agreement without regard to this Section 1(c) plus previously credited shares of Common Stock attributable to prior dividend equivalents under this Section 1(c) and the (y) the number
of shares of Common Stock (including any fraction thereof) distributable as a dividend on a share of Common Stock. Such dividend equivalents shall be paid to you in shares of Common Stock, (or cash in a Go Private Transaction (as defined hereafter))
at such time as the Performance Share Award is otherwise paid. 
 (d) Limitation on Shares of Common Stock To Be Earned:

 Notwithstanding anything to the contrary herein: 
 (1) No more than the Target Shares will be earned under this Performance Share Award if the Company TSR is less than or equal to 100%. 

(2) No shares of Common Stock will be earned under this Performance Share Award if the Performance Date Average Price is less than or
equal to 50% of the Start Date Average Price, with such dollar amount subject to adjustment consistent with Section 14.1 of the Plan. 

  
 3 

 (e) Example: 
 An example of a calculation of the earning of a Performance Share Award is set forth in Exhibit A. 

2. Determining Performance Metrics 
 As set forth above, the earning of shares of Common Stock under this Performance Share Award depends upon two Performance Metrics: Relative SNL Lodging Index TSR and Relative MSCI US REIT Index TSR.
Shares of Common Stock are earned under each of the relative TSR measures separately. Relative TSR for each Performance Metric will be based on the Company’s TSR performance relative to the equally-weighted TSRs of each Index Company included
in the SNL Lodging Index and MSCI US REIT Index (each, an “Index”) as applicable as of the Performance Date, excluding the Company if it is part of the Index. TSR is calculated as share price appreciation plus the reinvestment of dividends
during the applicable period. 
 To determine relative performance, the baseline metrics are the 60-trading day average closing
price of a share of Common Stock of the Company and of a share of common stock of each Index Company, with the last of the 60-trading days falling on December 31, 2012. This 60-trading day average establishes both the Company’s Start Date
Average Price and the Index Company Baseline Stock Price against which future Company stock performance and the stock performance of Index Companies within the applicable Index will be compared. If a company was added to the applicable Index after
the Start Date, such company’s average closing stock price for the 60-trading days prior to joining the Index will be used for purposes of determining the Index Company Baseline Stock Price. In the event such Index Company does not have a
trading history prior to joining the Index, the average closing stock price for the 60-trading days starting on the day the Index Company joined the Index will be used for purposes of determining the Index Company Baseline Stock Price. Any companies
included in the applicable Index as of the Start Date but which are no longer included in the applicable Index as of the Performance Date will not be included in the TSR analysis with respect to such Index. 

The 60-trading day average closing price of a share of Common Stock and of a share of each Index Company with the last trading day of
such 60-trading day period ending on the Performance Date (establishing both the “Performance Date Average Price” and the “Index Company Performance Date Average Price”, respectively) is separately determined. (The Performance
Date Average Price and the Index Company Performance Date Average Prices shall be automatically adjusted to account for any stock split or similar change in capitalization in a manner as set forth in Section 14.1 of the Plan.) 

Company performance will be measured by dividing the Performance Date Average Price plus Company dividends reinvested as of each dividend
ex-date between Start Date and the Performance Date by the Start Date Average Price, with the quotient expressed as a percentage of the Start Date Average Price (the “Company TSR”). The performance for each Index Company will be measured
separately by dividing the Index Company Performance Date Average Price plus Index Company dividends reinvested as of each dividend ex-date between Start Date and the Performance Date by the Index Company Baseline Stock Price, with the quotient
expressed as a percentage of the Index Company Baseline Stock Price 

  
 4 

 (the “Index Company TSR”). Therefore, the TSR for the Company and each Index
Company equals the change in value between Start Date Average Price and the Performance Date Average Price, plus dividends reinvested as of each dividend ex-date between Start Date and Performance Date, as a percentage of the Start Date Stock Price.

 The Company’s TSR will be ranked against the Index Company TSRs of the Index Companies within the SNL Lodging Index to
determine the Company’s Percentile Rank for purposes of Relative SNL Lodging Index TSR Performance Metric. The Company’s TSR will be ranked against the Index Company TSRs of the Index Companies within the MSCI US REIT Index to determine
the Company’s Percentile Rank for purposes of Relative MSCI US REIT Index Performance Metric. 
 An example including the
calculation of Start Date Average Price and a calculation of Company TSR for a prior three year period is set forth in Exhibit B. 
 3.
Change of Control 
 If a Change of Control occurs prior to December 31, 2015 the end date for the Performance Period
shall be treated as the date immediately prior to the Change of Control rather than December 31, 2015 and the relative TSR ranking for the Performance Metrics will be determined based on this shortened Performance Period (“Change of
Control Performance Period”) and TSRs for Index Companies shall be determined based on the 60-trading day average closing price of each Index Company with the last trading day of such 60-trading day period ending immediately prior to the Change
of Control. For purposes of the calculation of the Company’s TSR for the Change of Control Performance Period, the Company’s Performance Date Average Price shall be the fair market value of a share of Common Stock in the Change of Control.
The Company’s TSR for the Change of Control Performance Period shall equal the Performance Date Average Price as determined pursuant to the preceding sentence plus dividends reinvested as of each dividend ex-date between the Start Date and the
Performance Date, as a percentage of the Start Date Stock Price. 
 All payments under this Performance Share Award with respect
to a Change of Control constituting a Go Private Change of Control Transaction may be paid in, at the Company’s discretion, either (1) shares of Common Stock prior to the Go Private Change of Control Transaction at such time and in such
manner that you may participate fully as a holder of shares of Common Stock in the Go Private Change of Control Transaction or (2) cash. For purposes of this Performance Share Award, a “Go Private Change of Control Transaction” shall
be deemed to have occurred if on or immediately following the Change of Control no shares of Common Stock or other common stock of the Company (or any successor) are traded on a national securities exchange. 

4. Termination of Employment or Services 
 If the Company terminates your employment or service relationship for Cause or you terminate your employment or services relationship other than as a result of a Constructive Termination or at the end of
the Agreement Term under your Employment Agreement with the Employer dated as of November 19, 2012 (“Employment Agreement”), you shall have no right to any shares of Common Stock under this Performance Share Award and this Performance
Share Award will immediately terminate without the payment of any further consideration to you. 

  
 5 

 If your employment or service relationship with the Employer terminates prior to a Change
of Control because of death, Disability, Constructive Termination, Termination by the Employer other than for Cause or by either you or the Employer other than for Cause at the end of the Agreement Term under the Employment Agreement, you will
become fully vested in the shares of Common Stock that you would have earned under this Performance Share Award if you had remained employed through December 31, 2015 and such shares of Common Stock shall be payable in accordance with the Plan
as though you had remained employed with the Employer. 
 You will become fully vested in the shares of Common Stock earned
under this Performance Share Award on a Change of Control and such shares of Common Stock (or cash if the Change of Control is a Go Private Transaction) shall be payable to you upon such Change of Control. 

5. Distributions of Shares of Common Stock 
 Except as otherwise provided by a deferral election pursuant to Section 6 of this Agreement or by virtue of a Change of Control as described in Section 3 and 4, shares of Common Stock earned
pursuant to Sections 1, 2, 3 or 4 shall be distributed in the first calendar quarter of 2016 (no later than March 15, 2016). 
 If, however, you elect to defer payment of the shares of Common Stock as provided in Section 6 of this Agreement, the shares of Common Stock shall be issued as set forth in the Deferral Election
Agreement entered into between you and the Committee. 
 6. Deferral Election 

Subject to Section 13, you may elect to defer delivery of the shares of Common Stock that would otherwise be due by virtue of the
satisfaction of the requirements for distribution of shares of Common Stock under this Performance Share Award Agreement. The Committee shall, in its sole discretion, establish the rules and procedures for such deferral elections and payment
deferrals. 
 7. No Rights as Shareholder 
 You shall not have voting or any other rights as a shareholder of the shares of Common Stock with respect to the Performance Share Award until shares of Common Stock are actually delivered to you pursuant
to Section 4 or 5. Upon delivery of shares of Common Stock pursuant to this Performance Share Award, you will obtain full voting and other rights as a shareholder of the Company. 

  
 6 

 8. Securities Law Compliance 

Notwithstanding any other provision of this Agreement, you may not sell the shares of Common Stock acquired pursuant to this Performance
Share Award unless such shares of Common Stock are registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such sale would be exempt from the registration requirements of the
Securities Act. The sale of such shares of Common Stock must also comply with other applicable laws and regulations governing the shares of Common Stock, and you may not sell the shares of Common Stock if the Company determines that such sale would
not be in material compliance with such laws and regulations. 
 9. Transfer Restrictions 

Any sale, transfer, assignment, encumbrance, pledge, hypothecation, conveyance in trust, gift, transfer by bequest, or other transfer or
disposition of any kind, whether voluntarily or by operation of law, directly or indirectly, of this Performance Share Award shall be strictly prohibited and void except a transfer after death by will or by the applicable laws of descent and
distribution. 
 10. Independent Tax Advice 
 You acknowledge that determining the actual tax consequences to you of receiving this Performance Share Award or shares of Common Stock or cash thereunder or deferring or disposing of shares of Common
Stock or cash may be complicated. These tax consequences will depend, in part, on your specific situation and may also depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You are aware
that you should consult a competent and independent tax advisor for a full understanding of the specific tax consequences to you of receiving, deferring or disposing of the Performance Share Award or shares of Common Stock or cash hereunder. Prior
to executing this Agreement, you either have consulted with a competent tax advisor independent of the Company to obtain tax advice concerning the Performance Share Award with respect to your specific situation or have had the opportunity to consult
with such a tax advisor but chose not to do so. 
 11. Withholding and Disposition of Shares of Common Stock 

You agree to make arrangements satisfactory to the Employer for the payment of any federal, state, local or foreign withholding tax
obligations that arise with respect to this Performance Share Award, including, without limitation, the receipt of shares of Common Stock or cash. Notwithstanding the previous sentence, you acknowledge and agree that the Employer has the right to
deduct from payments of any kind otherwise due to you any federal, state or local taxes of any kind required by law to be withheld with respect this Performance Share Award, including, without limitation, the receipt of shares of Common Stock or
cash. 
 12. General Provisions 
 12.1 No Waiver. No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce
any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder. 

  
 7 

 12.2 Undertaking. You hereby agree to take whatever additional action and execute
whatever additional documents the Committee may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either you, the Performance Share Award or the shares of Common Stock or cash
acquired pursuant to the express provisions of this Agreement. 
 12.3 Recoupment. Notwithstanding any other provisions
in this Agreement to the contrary, you acknowledge that you will be subject to recoupment policies adopted by the Company pursuant to the requirements of Dodd-Frank Wall Street Reform and Consumer Protection Act or other law or the listing
requirements of any national securities exchange on which shares of Comon Stock of the Company are listed. 
 12.4 Agreement
Is Entire Contract. This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. 
 12.5 Successors and Assigns. The provisions of this Agreement will inure to the benefit of, and be binding on, the Company and its successors and assigns and you and your legal representatives,
heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person will have become a party to this Agreement and agreed in writing to join herein and be bound by the terms and conditions hereof. 

12.6 No Employment or Service Contract. This Agreement does not confer upon you any right with respect to continuance of
employment by the Employer, nor does it interfere in any way with the right of your employer to terminate your employment or services at any time, subject to the terms of the Employment Agreement. 

12.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but
which, upon execution, will constitute one and the same instrument. 
 12.8 Governing Law. This Agreement will be
construed and administered in accordance with and governed by the laws of the State of Illinois. 
 13. Section 409A Compliance

 The Company intends that any distribution of shares of Common Stock or cash, deferral and other provisions applicable to
your Performance Share Award fully comply with the payout and other limitations and restrictions imposed under Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), as clarified or modified by IRS guidance, including
without limitation, treating the date you have a separation from service under Code Section 409A as the date you terminate employment or your service relationship for purposes of this Agreement – in each case if and to the extent such Code
Section 409A is otherwise applicable to your Performance Share Award and such compliance is necessary to avoid the penalties otherwise imposed under Code Section 409A. In this connection, the Company and you agree that the payout timing
provisions applicable to the Performance Share Award, and the terms of any 

  
 8 

 
deferral and other rights regarding such Performance Share Award, shall be deemed modified, if and to the extent necessary to comply with the payout and other limitations and restrictions imposed
under Code Section 409A, as clarified or modified by IRS guidance – in each case if and to the extent such Code Section 409A is otherwise applicable to your Performance Share Award and such compliance is necessary to avoid the
penalties otherwise imposed under Code Section 409A, including, without limitation, any necessary delay in payment (but not vesting) of the Performance Share Award to avoid Code Section 409A adverse consequences with respect to a payment
that is subject to Code Section 409A if a Change of Control occurs that does not constitute a permissible distribution trigger for a payment that is subject to Code Section 409A. This Performance Share Award is subject to Section 17.5
of the Plan. 
 REMAINDER OF PAGE INTENTIONALLY BLANK. 
 SIGNATURE PAGE FOLLOWS. 

  
 9 

 IN WITNESS WHEREOF, the parties have executed this Agreement on this 19th day of November,
2012. 
  

			
	STRATEGIC HOTELS & RESORTS, INC.
		
		 	 
	By:	 	Paula C. Maggio
	Its:	 	 Executive Vice President, Secretary &
 General Counsel

  

	
	  
	Raymond L. Gellein, Jr.

  
 10 

 EXHIBIT A 

EXAMPLE OF PERFORMANCE SHARE AWARD CALCULATION 

 

																																	
	 	  	 Company %
 TSR Rank
	 	  	Multiple	 	  	 	 	  	Weighing	 	 	 	 	  	 	 	  	 	 	  	Weighted
Multiple	 
		  				  				  				  				 				  				  	 	

 	  	  			
	 SNL Lodging Index
	  	 	72	  	  	 	1.22	  	  	 	X	  	  	 	75	% 	 	 	=	  	  	 	0.92	  	  	  			
		  				  				  				  				 				  				  	  	 	1.26	  
	 MSCI US REIT Index
	  	 	85	  	  	 	1.35	  	  	 	X	  	  	 	25	% 	 	 	=	  	  	 	0.34	  	  	  			
		  				  				  				  				 				  				  	  			

  

																							
	2000	  	Weighted
Multiple	 	  	 	 	  	Target
Grant	 	  	 	 	  	 	  	 	 
		  	 	1.26	  	  	 	X	  	  	 	10,000	  	  	 	=	  	  	Base Grant	  	 	12,600	  

  

															
	 Because the Company’s Relative MSCI US REIT Index percentile equaled at least 85%, additional Kicker Grant =
2.5% x 10,000
	  	Kicker Grant	  	 	250	  
		  		  		  		  		  		  	  
	  
	 
		  	Total Grant =	  	 	12,850	  
			
	 Dividend Equivalents as calculated in the table below.
	  	Dividend     Equivalents	  	 	1,949 	  
		  		  		  		  		  		  	  
	  
	 
			
		  	Total Grant     with Dividend     Equivalents	  	 	14,799	  

  
 A-1

 Calculation of Dividend Equivalents assuming 2013-2016 was identical to 2005-2007: 

 

													
	 Date
	  	Stock Price	 	  	Dividends Per
Share	 	  	Shares Including
Dividends
Reinvested	 
	 Initial Shares
	  				  				  	 	12,850	  
	 4/20/05 Dividend Payment Date
	  	$	14.25	  	  	$	0.22	  	  	 	13,048	  
	 7/20/05 Dividend Payment Date
	  	$	18.06	  	  	$	0.22	  	  	 	13,207	  
	 10/20/05 Dividend Payment Date
	  	$	17.03	  	  	$	0.22	  	  	 	13,378	  
	 1/20/06 Dividend Payment Date
	  	$	21.04	  	  	$	0.22	  	  	 	13,518	  
	 4/20/06 Dividend Payment Date
	  	$	22.94	  	  	$	0.23	  	  	 	13,653	  
	 7/10/06 Dividend Payment Date
	  	$	20.52	  	  	$	0.23	  	  	 	13,806	  
	 10/10/06 Dividend Payment Date
	  	$	20.83	  	  	$	0.23	  	  	 	13,959	  
	 1/10/07 Dividend Payment Date
	  	$	20.80	  	  	$	0.23	  	  	 	14,113	  
	 4/10/07 Dividend Payment Date
	  	$	22.84	  	  	$	0.24	  	  	 	14,262	  
	 7/10/07 Dividend Payment Date
	  	$	23.21	  	  	$	0.24	  	  	 	14,409	  
	 10/10/07 Dividend Payment Date
	  	$	22.24	  	  	$	0.24	  	  	 	14,564	  
	 1/10/08 Dividend Payment Date
	  	$	14.89	  	  	$	0.24	  	  	 	14,799	  

  
 A-2

 EXHIBIT B 

EXAMPLE OF PRICE CALCULATION 
 Start Date Average Price for 60-trading days ending on December 30, 2011 would have been calculated as set forth below and the Start Date Average Price for this 60-trading days ending on
December 31, 2012 would be calculated in a comparable manner: 
  

									
	 	  	Date	 	  	Close	 
	 1
	  	 	30-Dec-11	  	  	$	5.37	  
	 2
	  	 	29-Dec-11	  	  	$	5.36	  
	 3
	  	 	28-Dec-11	  	  	$	5.33	  
	 4
	  	 	27-Dec-11	  	  	$	5.60	  
	 5
	  	 	23-Dec-11	  	  	$	5.54	  
	 6
	  	 	22-Dec-11	  	  	$	5.54	  
	 7
	  	 	21-Dec-11	  	  	$	5.42	  
	 8
	  	 	20-Dec-11	  	  	$	5.38	  
	 9
	  	 	19-Dec-11	  	  	$	4.97	  
	 10
	  	 	16-Dec-11	  	  	$	5.05	  
	 11
	  	 	15-Dec-11	  	  	$	5.00	  
	 12
	  	 	14-Dec-11	  	  	$	4.88	  
	 13
	  	 	13-Dec-11	  	  	$	4.87	  
	 14
	  	 	12-Dec-11	  	  	$	4.94	  
	 15
	  	 	9-Dec-11	  	  	$	5.14	  
	 16
	  	 	8-Dec-11	  	  	$	4.86	  
	 17
	  	 	7-Dec-11	  	  	$	5.14	  
	 18
	  	 	6-Dec-11	  	  	$	5.13	  
	 19
	  	 	5-Dec-11	  	  	$	5.22	  
	 20
	  	 	2-Dec-11	  	  	$	5.29	  
	 21
	  	 	1-Dec-11	  	  	$	4.98	  
	 22
	  	 	30-Nov-11	  	  	$	5.02	  
	 23
	  	 	29-Nov-11	  	  	$	4.69	  
	 24
	  	 	28-Nov-11	  	  	$	4.66	  
	 25
	  	 	25-Nov-11	  	  	$	4.40	  
	 26
	  	 	23-Nov-11	  	  	$	4.37	  
	 27
	  	 	22-Nov-11	  	  	$	4.71	  
	 28
	  	 	21-Nov-11	  	  	$	4.75	  
	 29
	  	 	18-Nov-11	  	  	$	5.04	  
	 30
	  	 	17-Nov-11	  	  	$	4.99	  
	 31
	  	 	16-Nov-11	  	  	$	5.06	  
	 32
	  	 	15-Nov-11	  	  	$	5.18	  
	 33
	  	 	14-Nov-11	  	  	$	5.11	  
	 34
	  	 	11-Nov-11	  	  	$	5.35	  
	 35
	  	 	10-Nov-11	  	  	$	5.20	  
	 36
	  	 	9-Nov-11	  	  	$	5.08	  

  
 B-1

  

									
	 	  	Date	 	  	Close	 
	 37
	  	 	8-Nov-11	  	  	$	5.43	  
	 38
	  	 	7-Nov-11	  	  	$	5.53	  
	 39
	  	 	4-Nov-11	  	  	$	5.54	  
	 40
	  	 	3-Nov-11	  	  	$	5.76	  
	 41
	  	 	2-Nov-11	  	  	$	5.71	  
	 42
	  	 	1-Nov-11	  	  	$	5.27	  
	 43
	  	 	31-Oct-11	  	  	$	5.69	  
	 44
	  	 	28-Oct-11	  	  	$	5.76	  
	 45
	  	 	27-Oct-11	  	  	$	5.39	  
	 46
	  	 	26-Oct-11	  	  	$	5.09	  
	 47
	  	 	25-Oct-11	  	  	$	5.13	  
	 48
	  	 	24-Oct-11	  	  	$	5.31	  
	 49
	  	 	21-Oct-11	  	  	$	5.22	  
	 50
	  	 	20-Oct-11	  	  	$	5.01	  
	 51
	  	 	19-Oct-11	  	  	$	4.95	  
	 52
	  	 	18-Oct-11	  	  	$	5.06	  
	 53
	  	 	17-Oct-11	  	  	$	4.59	  
	 54
	  	 	14-Oct-11	  	  	$	4.85	  
	 55
	  	 	13-Oct-11	  	  	$	4.73	  
	 56
	  	 	12-Oct-11	  	  	$	4.75	  
	 57
	  	 	11-Oct-11	  	  	$	4.54	  
	 58
	  	 	10-Oct-11	  	  	$	4.59	  
	 59
	  	 	7-Oct-11	  	  	$	4.25	  
	 60
	  	 	6-Oct-11	  	  	$	4.41	  
		  				  	$	5.09	  

 Performance Date Average Price, Index Company Baseline Stock Price and Index Company Performance Date Average Price shall
be calculated in the same manner as the Start Date Average Price was calculated. 

  
 B-2

 EXAMPLE OF TSR CALCULATION 

Below is a calculation of TSR for the Company from 2005 to 2007: 
  

				                     				                     				                     				                     	
	 Date
	  	Stock
Price	 	  	Dividends
Per Share	 	  	Value of
$100 Initial
Investment	 	  	TSR	 
	 12/31/04 60 Day Avg.
	  	$	14.82	  	  				  	$	100.00	  	  			
	 3/29/05 Dividend Ex-Date
	  	$	14.30	  	  	$	0.22	  	  	$	97.98	  	  			
	 6/28/05 Dividend Ex-Date
	  	$	17.96	  	  	$	0.22	  	  	$	124.56	  	  			
	 9/28/05 Dividend Ex-Date
	  	$	17.70	  	  	$	0.22	  	  	$	124.28	  	  			
	 12/16/05 Dividend Ex-Date
	  	$	20.35	  	  	$	0.22	  	  	$	144.43	  	  			
	 3/29/06 Dividend Ex-Date
	  	$	22.90	  	  	$	0.23	  	  	$	164.16	  	  			
	 6/28/06 Dividend Ex-Date
	  	$	20.06	  	  	$	0.23	  	  	$	145.45	  	  			
	 9/27/06 Dividend Ex-Date
	  	$	20.04	  	  	$	0.23	  	  	$	146.98	  	  			
	 12/22/06 Dividend Ex-Date
	  	$	21.14	  	  	$	0.23	  	  	$	156.73	  	  			
	 3/23/07 Dividend Ex-Date
	  	$	23.54	  	  	$	0.24	  	  	$	176.30	  	  			
	 6/22/07 Dividend Ex-Date
	  	$	22.20	  	  	$	0.24	  	  	$	168.07	  	  			
	 9/24/07 Dividend Ex-Date
	  	$	20.95	  	  	$	0.24	  	  	$	160.42	  	  			
	 12/24/07 Dividend Ex-Date
	  	$	18.37	  	  	$	0.24	  	  	$	142.50	  	  			
		  				  				  				  	  
	  
	 
	 12/31/07 60 Day Avg.
	  	$	21.61	  	  				  	$	167.64	  	  	 	167.64	% 
		  				  				  				  	  
	  
	 

 A comparable methodology for determining TSR for the Company and Index Companies during the Performance Period or Change
of Control Performance Period shall be used. 

  
 B-3

 APPENDIX 
 “Cause” has the meaning assigned to it in the Employment Agreement whether or not the Agreement Term under the Employment Agreement has ended. 

“Constructive Termination” has the meaning assigned to it in the Employment Agreement whether or not the Agreement Term under the Employment
Agreement has ended. 
 “Employment Agreement” means your Employment Agreement with the Company dated November 19, 2012.

 “Index Company” means each of the companies including in the SNL Lodging Index and MSCI US REIT Index. 

“Index Company Baseline Stock Price” means the baseline stock price for each Index Company. 

“Performance Date” means the earlier of the End Date or the date of a Change of Control. 

“Performance Date Average Price” means the average closing price of a share of Common Stock during the 60-trading day period ending on the End
Date if the Performance Date is the End Date or the fair market value of a share of Common Stock on the date of a Change of Control if the Performance Date is the date of a Change of Control. 
 “Start Date Average Price” means the average closing price of a Share during the 60-day trading period immediately prior to the Start Date. 

“TSR” means the total shareholder return. 

  
 B-4Third Supplemental Trust Indenture, Dated as of November 20, 2012

 Exhibit 4.2 
 EXECUTION COPY 
 Macy’s Retail Holdings, Inc., as
Issuer 
 and 
 Macy’s Inc., as Guarantor 
 and 

The Bank of New York Mellon Trust Company, N.A., as Trustee 

THIRD SUPPLEMENTAL TRUST INDENTURE 
 Dated as of November 20, 2012 
 Supplementing that certain

 Indenture 
 Dated as of January 13, 2012 
 Authorizing the Issuance and
Delivery of Senior Securities 
 consisting of 

$750,000,000 aggregate principal amount of 2.875% Senior Notes Due 2023 

 Table of Contents 

 

					
	 RECITALS
	  	 	1	  
		
	 [FORM OF FACE OF SECURITY]
	  	 	2	  
		
	 [FORM OF REVERSE OF SECURITY]
	  	 	4	  
		
	 ARTICLE I ISSUANCE OF SENIOR NOTES
	  	 	7	  
		
	 Section 1.1 Issuance Of Senior Notes; Principal Amount; Maturity; Additional Senior Notes
	  	 	7	  
		
	 Section 1.2 Interest On The Senior Notes; Payment Of Interest
	  	 	8	  
		
	 Section 1.3 Execution, Authentication And Delivery Of Securities
	  	 	8	  
		
	 ARTICLE II CERTAIN DEFINITIONS
	  	 	9	  
		
	 Section 2.1 Certain Definitions
	  	 	9	  
		
	 ARTICLE III CERTAIN COVENANTS
	  	 	16	  
		
	 Section 3.1 Liens
	  	 	16	  
		
	 Section 3.2 Sale And Leaseback Transactions
	  	 	16	  
		
	 Section 3.3 Permitting Unrestricted Subsidiaries To Become Restricted Subsidiaries
	  	 	17	  
		
	 Section 3.4 Payment Office
	  	 	17	  
		
	 ARTICLE IV ADDITIONAL EVENTS OF DEFAULT
	  	 	17	  
		
	 Section 4.1 Additional Events Of Default
	  	 	17	  
		
	 ARTICLE V DEFEASANCE
	  	 	18	  
		
	 Section 5.1 Applicability Of Article V Of The Indenture
	  	 	18	  
		
	 ARTICLE VI REDEMPTION OF SENIOR NOTES
	  	 	18	  
		
	 Section 6.1 Right Of Redemption
	  	 	18	  
		
	 ARTICLE VII CHANGE OF CONTROL
	  	 	19	  
		
	 Section 7.1 Repurchase At The Option Of Holders
	  	 	19	  
		
	 ARTICLE VIII MISCELLANEOUS
	  	 	19	  
		
	 Section 8.1 Reference To And Effect On The Indenture
	  	 	19	  
		
	 Section 8.2 Waiver Of Certain Covenants
	  	 	20	  
		
	 Section 8.3 Supplemental Indenture May Be Executed In Counterparts
	  	 	20	  
		
	 Section 8.4 Effect Of Headings
	  	 	20	  

  
 i 

 Third Supplemental Trust Indenture, dated as of November 20, 2012, among
Macy’s Retail Holdings, Inc., a corporation duly organized and existing under the laws of the State of New York, as issuer (the “Company”), Macy’s, Inc., a corporation duly organized and existing under the laws of the
State of Delaware, as guarantor (the “Guarantor”), and The Bank of New York Mellon Trust Company, N.A., a national banking association duly incorporated under the laws of the United States of America, as Trustee (the
“Trustee”), (this “Supplemental Indenture”) to the Indenture, dated as of January 13, 2012, among the Company, the Guarantor and the Trustee (as supplemented hereby, the “Indenture”).

 RECITALS 
 A. The Company has duly authorized the execution and delivery of the Indenture to provide for the issuance from time to time of its unsecured debentures, notes, or other evidences of indebtedness (the
“Securities”) to be issued in one or more series as provided for in the Indenture. 
 B. The Guarantor has
fully and unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions of the Indenture, the due and punctual payment of each series of Securities issued thereunder. 

C. The Indenture provides that the Securities of each series shall be in substantially the form set forth in the Indenture, or in such
other form as may be established by or pursuant to a Board Resolution or in one or more indentures supplemental thereto, in each case with such appropriate insertions, omissions, substitutions, and other variations as are required or permitted by
the Indenture, and may have such letters, numbers, or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their execution thereof. 
 D. The Company shall issue and
deliver, and the Trustee shall authenticate, Securities denominated “2.875% Senior Notes Due 2023” (the “Senior Notes”) pursuant to the terms of this Supplemental Indenture and substantially in the form set forth below, in
each case with such appropriate insertions, omissions, substitutions, and other variations as are required or permitted by the Indenture and this Supplemental Indenture, and with such letters, numbers, or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of such
Securities. 

 [Form of Face of Security] 

This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee thereof. This Security may not be transferred to, or registered or exchanged for Securities registered in the name of any Person other than the Depositary or a nominee thereof, and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, this Security shall be a Global Security subject to the foregoing, except in such
limited circumstances. 
 MACY’S RETAIL HOLDINGS,
INC. 
 2.875% Senior Notes Due 2023 
 GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,
AND INTEREST BY MACY’S, INC. 
  

			
	 No.            
	  	
$                

Cusip No. 55616X AH0

 MACY’S RETAIL HOLDINGS, INC., a corporation duly organized and existing under the laws of the State
of New York (hereinafter called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of $            on February 15, 2023 and to pay interest thereon from November 20, 2012 or from the most recent Interest Payment Date to which interest has been paid
or duly provided for, semiannually on February 15 and August 15 of each year, commencing on February 15, 2013, at the rate of 2.875% per annum, until the principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which will be February 1 or August 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof will be given to Holders of Securities of this series not less than 10 calendar days prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. 

MACY’S, INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the
“Guarantor”, which term includes any successor Person under the Indenture hereinafter referred to), has fully and unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions of the Indenture,
the due and punctual payment of each series of Securities issued thereunder (the “Guarantee”). The obligations of the Guarantor to the Holders and to the Trustee pursuant to the Guarantee are expressly set forth in Article XII of
the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. 
 Subject, in the case of
any Global Security, to any applicable requirements of the Depositary, payment of the principal of and any such interest on this Security will be made at the office or agency of the Company maintained for the purpose in New York, New York, in such
coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address
of the Person entitled thereto as such address appears in the Security Register. 

  
 2 

 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE REVERSE HEREOF. SUCH
PROVISIONS WILL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE. 
 This Security will not be
valid or become obligatory for any purpose until the certificate of authentication herein has been signed manually by the Trustee under said Indenture. 
 In Witness Whereof, the Company has caused this instrument to be duly executed in accordance with the Indenture. 
  

							
		 		 	MACY’S RETAIL HOLDINGS, INC.
				
	Date Issued:	 		 	By:	 	 

 The Guarantor has fully and unconditionally guaranteed, to the extent set forth in the Indenture and
subject to the provisions of the Indenture, the due and punctual payment of each series of Securities issued thereunder. In case of the failure of the Company punctually to make any such payment, the Guarantor hereby agrees to cause such payment to
be made punctually. 
 The obligations of the Guarantor to the Holders and to the Trustee pursuant to the Guarantee are
expressly set forth in Article XII of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. 

  
 3 

 In Witness Whereof, the Guarantor has caused this instrument to be duly executed in
accordance with the Indenture. 
  

							
		 		 	MACY’S, INC.
				
	Date Issued:	 		 	By:	 	 

 [Form of Reverse of Security] 
 MACY’S RETAIL HOLDINGS, INC. 
 This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”) issued and to be issued in one or more series under an Indenture, dated as of
January 13, 2012 (herein called the “Base Indenture”), by and among the Company, Macy’s, Inc., as guarantor (the “Guarantor”), and The Bank of New York Mellon Trust Company, N.A., a national banking
association, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), as amended and supplemented by the Third Supplemental Trust Indenture, dated as of November 20, 2012 among
the Company, the Guarantor and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties, and immunities thereunder of the Company, the Guarantor, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on the face hereof, initially limited in aggregate principal amount to $750,000,000. Subject to compliance with Section 1.1(c) of the Supplemental Indenture, the Company
is permitted to issue Additional Senior Notes under the Indenture in an unlimited principal amount. Any such Additional Senior Notes that are actually issued shall be treated as issued and outstanding Securities of this series for all purposes of
the Indenture, unless the context clearly indicates otherwise. 
 Prior to November 15, 2022, the Securities of this series
are redeemable in whole or in part, at the option of the Company at any time and from time to time, on not less than 30 or more than 60 days’ prior notice transmitted to the Holders of the Securities of this series, at a Redemption Price equal
to the greater of (i) 100% of the principal amount of the Securities of this series to be redeemed and (ii) the sum of the present values of the Remaining Scheduled Payments thereon discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points, together in either case with accrued interest on the principal amount being redeemed to the Redemption Date. 

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker that
would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Securities of this series. “Independent
Investment Banker” means one of the Reference Treasury Dealers appointed by the Company. 
 “Comparable
Treasury Price” means, with respect to any Redemption Date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day
preceding such Redemption Date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S. Government
Securities” or (ii) if such release (or any successor release) is not published or does not contain such prices on such business day, (a) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (b) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations. 

  
 4 

 “Reference Treasury Dealer” means each of Credit Suisse Securities (USA)
LLC, J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated and their respective successors and one other nationally recognized investment banking firm that is a primary U.S. Government securities dealer in New
York City (a “Primary Treasury Dealer”) specified from time to time by the Company, except that if any of the foregoing ceases to be a Primary Treasury Dealer, the Company is required to designate as a substitute another nationally
recognized investment banking firm that is a Primary Treasury Dealer. 
 “Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer as of 3:30 p.m., New York City time, on the third Business Day preceding such Redemption Date. 
 “Remaining Scheduled Payments” means, with respect to each Security of this series to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that
would be due after the related Redemption Date but for such redemption, except that, if such Redemption Date is not an interest payment date with respect to such Security, the amount of the next succeeding scheduled interest payment thereon will be
reduced by the amount of interest accrued thereon to such Redemption Date. 
 “Treasury Rate” means, with
respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity (computed as of the second business day immediately preceding such Redemption Date) of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. 
 At any time on and after November 15, 2022, the Company may, at its option, redeem the Securities in whole or in part on not less than 30 nor more than 60 days’ prior notice transmitted to the
holders of the Securities of this series to be redeemed. The Securities will be so redeemable at a Redemption Price equal to 100% of the principal amount of the Securities to be redeemed plus accrued and unpaid interest on the Securities to be
redeemed to the Redemption Date. 
 On and after any Redemption Date, interest will cease to accrue on the Securities of this
series or any portion thereof called for redemption. On or prior to any Redemption Date, the Company shall deposit with a paying agent money sufficient to pay the Redemption Price of and accrued interest on the Securities of this series to be
redeemed on such date. If less than all the Securities of this series are to be redeemed, (a) if such Securities are represented by Global Securities, the Securities of this series to be redeemed shall be selected for redemption in accordance
with the customary procedures of The Depository Trust Company, a New York corporation (“DTC”), or (b) if such Securities are represented by Securities in certificated form, the Securities of this series to be redeemed shall be
selected by the Trustee by such method as the Trustee shall deem fair and appropriate in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances. 

If a Change of Control Triggering Event occurs, unless the Company has exercised its right to redeem the Securities of this series, the
Holders of the Securities of this series will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their Securities of this series pursuant to the Change of
Control Offer, on the terms set forth in the Indenture. In the Change of Control Offer, the Company will offer payment in cash equal to 101% of the aggregate principal amount of the Securities of this series repurchased plus accrued and unpaid
interest, if any, on the Securities of this series repurchased, to the date of purchase in accordance with the terms of the Indenture. 
 The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness evidenced by this Security or (b) certain restrictive covenants and Events of Default with respect to
this Security, in each case upon compliance with certain conditions set forth in the Indenture. 
 If an Event of Default with
respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. 

  
 5 

 The Indenture permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company, the Guarantor and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security will be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. 
 As provided in and
subject to the provisions of the Indenture, the Holder of this Security will not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder unless such
Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time
Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority
in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request and shall have failed to institute such proceeding for 60 calendar days after receipt of such notice, request, and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 No reference herein to the Indenture and no provision of this Security or of the Indenture will alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place, and rate, and in the coin or currency, herein prescribed. 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the
Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 The Securities of this series are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
 Prior to due presentment of
this Security for registration of transfer, the Company, the Guarantor, the Trustee, and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the Guarantor, the Trustee, nor any such agent will be affected by notice to the contrary. 
 Unless this Security is presented by an authorized representative of DTC, to the Company or its agent for registration of transfer, exchange, or payment, and any Security issued is registered in the name
of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC) any transfer, pledge,
or other use hereof for value or otherwise by or to any person is wrongful because the registered owner hereof, Cede & Co., has an interest herein. 

  
 6 

 All terms used in this Security that are defined in the Indenture shall have the respective
meanings assigned to them in the Indenture. 
 The Trustee’s certificate of authentication shall be in substantially the
following form: 
 Trustee’s Certificate Of Authentication 
 This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 
 Dated:                                
     
  

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
		
	By:	 	 
		 	Authorized Officer

 All acts and things necessary to make the Senior Notes, when the Senior Notes have been executed by
the Company and the Guarantor and authenticated by the Trustee and delivered as provided in the Indenture and this Supplemental Indenture, the valid, binding, and legal obligations of the Company and the Guarantor and to constitute these presents a
valid indenture and agreement according to its terms, have been done and performed, and the execution and delivery by the Company and the Guarantor of the Indenture and this Supplemental Indenture and the issue hereunder of the Senior Notes have in
all respects been duly authorized; and the Company and the Guarantor , in each case in the exercise of legal right and power in it vested, have executed and delivered the Indenture and are executing and delivering this Supplemental Indenture and
propose to make, execute, issue, and deliver the Senior Notes. 
 NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

 In order to declare the terms and conditions upon which the Senior Notes are authenticated, issued, and delivered, and in
consideration of the premises and of the purchase and acceptance of the Senior Notes by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of the respective Holders from time to time of the Senior Notes, as follows:

 ARTICLE I ISSUANCE OF SENIOR NOTES. 
 Section 1.1 Issuance Of Senior Notes; Principal Amount; Maturity; Additional Senior Notes. 
 (a) On November 20, 2012, the Company shall issue and deliver to the Trustee, and the Trustee shall authenticate, Senior Notes substantially in the form set forth above, in each case with such
appropriate insertions, omissions, substitutions, and other variations as are required or permitted by the Indenture and this Supplemental Indenture, and with such letters, numbers, or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Senior Notes, as evidenced by their execution of such Senior Notes. 

  
 7 

 (b) The Senior Notes shall be issued in the initial aggregate principal amount of
$750,000,000 and shall mature on February 15, 2023. 
 (c) Subject to the terms and conditions contained herein, the Company
may from time to time, without the consent of the existing Holders of Senior Notes create and issue additional senior notes (the “Additional Senior Notes”) having the same terms and conditions as the Senior Notes in all respects,
except for issue date, issue price and the first payment of interest thereon. Such Additional Senior Notes, at the Company’s determination and in accordance with the provisions of the Indenture, will be consolidated with and form a single
series with the previously outstanding Senior Notes for all purposes under the Indenture, including, without limitation, amendments, waivers and redemptions. The aggregate principal amount of the Additional Senior Notes, if any, shall be unlimited.

 Section 1.2 Interest On The Senior Notes; Payment Of Interest. 

(a) The Senior Notes shall bear interest at the rate of 2.875% per annum from November 20, 2012, except in the case of Senior
Notes delivered pursuant to Sections 2.05 or 2.07 of the Indenture, which shall bear interest from the most recent Interest Payment Date to which interest has been paid or duly provided for, until the principal thereof is paid or made available for
payment. Such interest shall be payable semiannually on February 15 and August 15 of each year commencing February 15, 2013. 
 (b) The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in the Indenture, be paid to the Person in whose name a Senior Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the February 1 or August 1 (whether or not a Business Day), as the case may be, next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name the Senior Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Senior Notes not less than 10 calendar days prior to
such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture. 
 (c) Subject, in the case of any Global Security, to any applicable requirements of the
Depositary, payment of the principal of (and premium, if any) and any interest on the Senior Notes shall be made in immediately available funds. 
 Section 1.3 Execution, Authentication And Delivery Of Securities. 
 The
Senior Notes will be executed (which signatures may be via facsimile) (a) on behalf of the Company by any one of the President, the Chief Financial Officer, or any Vice President of the Company, and (b) on behalf of the Guarantor by any
one of the President, the Chief Financial Officer or any Vice President of the Guarantor. 

  
 8 

 ARTICLE II CERTAIN DEFINITIONS. 

Section 2.1 Certain Definitions. 
 The terms defined in this Section 2.1 (except as herein otherwise expressly provided or unless the context of this Supplemental Indenture otherwise requires) for all purposes of this Supplemental
Indenture and of any indenture supplemental hereto have the respective meanings specified in this Section 2.1. All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP. All other terms used in
this Supplemental Indenture that are defined in the Indenture or the Trust Indenture Act, either directly or by reference therein (except as herein otherwise expressly provided or unless the context of this Supplemental Indenture otherwise
requires), have the respective meanings assigned to such terms in the Indenture or the Trust Indenture Act, as the case may be, as in force at the date of this Supplemental Indenture as originally executed. 

“Bank Facilities” means the Credit Agreement, dated as of June 20, 2011, among Macy’s, Inc., Macy’s
Retail Holdings, Inc., the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and paying agent, and Bank of America, N.A., as administrative agent, as the same may be amended, supplemented or otherwise modified from time to
time. 
 “Cash Equivalent” means: (a) obligations issued or unconditionally guaranteed as to principal and
interest by the United States of America or by any agency or authority controlled or supervised by and acting as an instrumentality of the United States of America; (b) obligations (including, but not limited to, demand or time deposits,
bankers’ acceptances and certificates of deposit) issued by a depository institution or trust company or a wholly owned Subsidiary or branch office of any depository institution or trust company, provided that (i) such depository
institution or trust company has, at the time of the Company’s or any Restricted Subsidiary’s Investment therein or contractual commitment providing for such Investment, capital, surplus, or undivided profits (as of the date of such
institution’s most recently published financial statements) in excess of $100.0 million and (ii) the commercial paper of such depository institution or trust company, at the time of the Company’s or any Restricted Subsidiary’s
Investment therein or contractual commitment providing for such Investment, is rated at least A1 by S&P, P-1 by Moody’s or F1 by Fitch; (c) debt obligations (including, but not limited to, commercial paper and medium term notes) issued
or unconditionally guaranteed as to principal and interest by any corporation, state, or municipal government or agency or instrumentality thereof, or foreign sovereignty, if the commercial paper of such corporation, state, or municipal government
or foreign sovereignty, at the time of the Company’s or any Restricted Subsidiary’s Investment therein or contractual commitment providing for such Investment, is rated at least A1 by S&P, P-1 by Moody’s or F1 by Fitch;
(d) repurchase obligations with a term of not more than seven days for underlying securities of the type described above entered into with a depository institution or trust company meeting the qualifications described in clause (b) above;
and (e) Investments in money market or mutual funds that invest predominantly in Cash Equivalents of the type described in clauses (a), (b), (c), and (d) above; provided, however, that, in the case of clauses (a) through
(c) above, each such Investment has a maturity of one year or less from the date of acquisition thereof. 
 “Change
of Control” means the occurrence of any of the following: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the properties or assets of the Guarantor and its subsidiaries taken as a whole to any Person other than the Guarantor or one of its subsidiaries; (2) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any Person becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Guarantor’s Voting Stock or other Voting
Stock into which the Voting Stock of the Guarantor is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares; (3) the Guarantor consolidates with, or merges with or into, any Person, or any
Person consolidates with, or merges with or into the Guarantor, in any such event pursuant to a transaction in which any of the outstanding shares of the Guarantor’s Voting Stock or the Voting Stock of such other Person is converted into or
exchanged for cash, securities or other property, other than any such transaction where the shares of the Guarantor’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority
of the Voting Stock of the resulting or surviving Person or any direct or indirect parent company of the resulting or surviving Person immediately after giving effect to such transaction; (4) the first day on which a majority of the members of
the 

  
 9 

 
Guarantor’s Board of Directors are not Continuing Directors; or (5) the adoption of a plan providing for the liquidation or dissolution of the Guarantor. Notwithstanding the foregoing,
a transaction shall not be deemed to involve a Change of Control under clause (2) above if (i) the Guarantor becomes a direct or indirect wholly owned subsidiary of a holding company and (ii)(A) the direct or indirect holders of the Voting
Stock of such holding company immediately following that transaction are substantially the same as the holders of the Guarantor’s Voting Stock immediately prior to that transaction or (B) immediately following that transaction no Person
(other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company. The term “Person,” as used in this
definition, has the meaning given thereto in Section 13(d)(3) of the Exchange Act. 
 “Change of Control Triggering
Event” means the occurrence of both a Change of Control and a Rating Event. 
 “Consolidated Net Tangible
Assets” means total assets (less depreciation and valuation reserves and other reserves and items deductible from gross book value of specific asset accounts under GAAP) after deducting therefrom (i) all current liabilities and
(ii) all goodwill, trade names, trademarks, patents, unamortized debt discount, organization expenses, and other like intangibles, all as set forth on the most recent balance sheet of the Company and its consolidated Subsidiaries and computed
in accordance with GAAP. 
 “Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Guarantor who (1) was a member of such Board of Directors on the date of this Supplemental Indenture; or (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of such nomination or election (either by a specific vote or by approval of the Guarantor’s proxy statement in which such member was named as a nominee for election as
a director, without objection to such nomination). 
 “Existing Indebtedness” means all Indebtedness under or
evidenced by: 
  

	 	•	 	 the Senior Notes; 

  

	 	•	 	 the Company’s 7.875% Senior notes due 2015; 

  

	 	•	 	 the Company’s 5.875% Senior notes due 2013; 

  

	 	•	 	 the Company’s 6.375% Senior notes due 2037; 

  

	 	•	 	 the Company’s 5.90% Senior notes due 2016; 

  

	 	•	 	 the Company’s 5.75% Senior notes due 2014; 

  

	 	•	 	 the Company’s 6.9% Senior debentures due 2029; 

  

	 	•	 	 the Company’s 6.7% Senior debentures due 2034; 

  

	 	•	 	 the Company’s 7.45% Senior debentures due 2017; 

  

	 	•	 	 the Company’s 6.65% Senior debentures due 2024; 

  

	 	•	 	 the Company’s 7.0% Senior debentures due 2028; 

  

	 	•	 	 the Company’s 8.75% Senior debentures due 2029; 

  

	 	•	 	 the Company’s 6.9% Senior debentures due 2032; 

  

	 	•	 	 the Company’s 8.5% Senior debentures due 2019; 

  
 10 

	 	•	 	 the Company’s 6.7% Senior debentures due 2028; 

  

	 	•	 	 the Company’s 7.875% Senior debentures due 2030; 

 

	 	•	 	 the Company’s 7.875% Senior debentures due 2036; 

 

	 	•	 	 the Company’s 6.79% Senior debentures due 2027; 

  

	 	•	 	 the Company’s 8.125% Senior debentures due 2035; 

 

	 	•	 	 the Company’s 7.625% Senior debentures due 2013; 

 

	 	•	 	 the Company’s 7.45% Senior debentures due 2016; 

  

	 	•	 	 the Company’s 7.50% Senior debentures due 2015; 

  

	 	•	 	 the Company’s 10.25% Senior debentures due 2021; 

 

	 	•	 	 the Company’s 7.6% Senior debentures due 2025; 

  

	 	•	 	 the Company’s 9.5% amortizing debentures due 2021; 

 

	 	•	 	 the Company’s 9.75% amortizing debentures due 2021; 

 

	 	•	 	 the Company’s 3.875% Senior Notes due 2022; 

  

	 	•	 	 the Company’s 5.125% Senior Notes due 2042; 

  

	 	•	 	 the Company’s 4.30% Senior Notes due 2043; 

  

	 	•	 	 Capital Lease Obligations of the Company and its Restricted Subsidiaries existing on the date of issuance of the Senior Notes; and

  

	 	•	 	 the other secured Indebtedness of the Company or secured or unsecured Indebtedness of its Restricted Subsidiaries existing on the date of issuance of
the Senior Notes. 

 “Fitch” means Fitch Ratings, Inc. or its successor. 

“Indebtedness” means, as applied to any Person, without duplication: 

(a) all obligations of such Person for borrowed money; 
 (b) all obligations of such Person for the deferred purchase price of property or services (other than property and services purchased, and expense accruals and deferred compensation items arising, in the
ordinary course of business); 
 (c) all obligations of such Person evidenced by notes, bonds, debentures, mandatorily redeemable
preferred stock or other similar instruments (other than performance, surety and appeals bonds arising in the ordinary course of business); 
 (d) all payment obligations created or arising under any conditional sale, deferred price or other title retention agreement with respect to property acquired by such Person (unless the rights and
remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); 
 (e) any capital lease obligation of such Person; 

  
 11 

 (f) all reimbursement, payment or similar obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities (other than letters of credit in support of trade obligations or incurred in connection with public liability insurance, workers’ compensation, unemployment insurance, old-age
pensions and other social security benefits other than in respect of employee benefit plans subject to ERISA); 
 (g) all
obligations of such Person, contingent or otherwise, under any guarantee by such Person of the obligations of another Person of the type referred to in clauses (a) through (f) above; and 

(h) all obligations referred to in clauses (a) through (f) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any mortgage or security interest in property (including without limitation accounts, contract rights and general intangibles) owned by such Person and as to which such Person has not
assumed or become liable for the payment of such obligations other than to the extent of the property subject to such mortgage or security interest; except that Indebtedness of the type referred to in clauses (g) and (h) above will be
included within the definition of “Indebtedness” only to the extent of the least of (a) the amount of the underlying Indebtedness referred to in the applicable clause (a) through (f) above; (b) in the case of
clause (g), the limit on recoveries, if any, from such Person under obligations of the type referred to in clause (g) above; and (c) in the case of clause (h), the aggregate value (as determined in good faith by the Company’s Board of
Directors) of the security for such Indebtedness. 
 “Investment” means, with respect to any Person, any direct
or indirect loan or other extension of credit or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such
Person of any capital stock, bonds, notes, debentures, or other securities or evidences of Indebtedness issued by any other Person. The amount of any Investment shall be the original cost thereof, plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, write-ups, write-downs, or write-offs with respect to such Investment. 

“Investment Grade Rating” means a rating equal to or higher than BBB- (or the equivalent) by Fitch, Baa3 (or the
equivalent) by Moody’s and BBB- (or the equivalent) by S&P. 
 “Lien” means any mortgage, deed of
trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), security interest, or preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever intended to
assure payment of any Indebtedness or other obligation, including without limitation any conditional sale, deferred purchase price, or other title retention agreement, the interest of a lessor under a Capital Lease Obligation, any financing lease
having substantially the same economic effect as any of the foregoing, and the filing, under the Uniform Commercial Code or comparable law of any jurisdiction, of any financing statement naming the owner of the asset to which such Lien relates as
debtor. 
 “Moody’s” means Moody’s Investors Service, Inc. or its successor. 

“Notice” means, with respect to an Offer to Purchase, a written notice stating: 

(a) the Section of this Supplemental Indenture pursuant to which such Offer to Purchase is being made; 

(b) the applicable Purchase Amount (including, if less than all the Senior Notes, the calculation thereof pursuant to the Section hereof
requiring such Offer to Purchase); 
 (c) the applicable Purchase Date; 

(d) the purchase price to be paid by the Company for each $1,000 principal amount at maturity of Senior Notes accepted for payment (as
specified in this Supplemental Indenture); 
 (e) that the Holder of any Senior Note may tender for purchase by the Company all
or any portion of such Senior Note equal to $2,000 principal amount or an integral multiple of $1,000 in excess thereof; 

  
 12 

 (f) the place or places where Senior Notes are to be surrendered for tender pursuant to such
Offer to Purchase; 
 (g) any Senior Note not tendered or tendered but not purchased by the Company pursuant to such Offer to
Purchase shall continue to accrue interest as set forth in such Senior Note and this Supplemental Indenture; 
 (h) that on the
Purchase Date the purchase price shall become due and payable upon each Senior Note (or portion thereof) selected for purchase pursuant to such Offer to Purchase and that interest thereon shall cease to accrue on and after the Purchase Date;

 (i) that each Holder electing to tender a Senior Note pursuant to such Offer to Purchase shall be required to surrender such
Senior Note at the place or places specified in the Notice prior to the close of business on the fifth Business Day prior to the Purchase Date (such Senior Note being, if the Company or the Trustee so requires, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or its attorney duly authorized in writing); 
 (j) that (i) if Senior Notes (or portions thereof) in an aggregate principal amount less than or equal to the Purchase Amount are duly tendered and not withdrawn pursuant to such Offer to Purchase,
the Company shall purchase all such Senior Notes and (ii) if Senior Notes in an aggregate principal amount in excess of the Purchase Amount are duly tendered and not withdrawn pursuant to such Offer to Purchase, (A) the Company shall
purchase Senior Notes having an aggregate principal amount equal to the Purchase Amount and (B) the particular Senior Notes (or portions thereof) to be purchased shall be selected by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for purchase of portions (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of the principal amount of Senior Notes of a denomination larger than $2,000; 

(k) that, in the case of any Holder whose Senior Note is purchased only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Senior Note without service charge, a new Senior Note or Senior Note of any authorized denomination as requested by such Holder in an aggregate principal amount equal to and in exchange for the
unpurchased portion of the Senior Note so tendered; and 
 (l) any other information required by applicable law to be included
therein. 
 “Offer to Purchase” means an offer to purchase Senior Notes pursuant to and in accordance with a
Notice, in the aggregate Purchase Amount, on the Purchase Date, and at the purchase price specified in such Notice (as determined pursuant to this Supplemental Indenture). Any Offer to Purchase shall remain open from the time of mailing of the
Notice until the Purchase Date, and shall be governed by and effected in accordance with, and the Company and the Trustee shall perform their respective obligations specified in, the Notice for such Offer to Purchase. 

“Permitted Liens” means: (a) Liens (other than Liens on inventory) securing (A) Existing Indebtedness;
(B) Indebtedness under the Bank Facilities in an aggregate principal amount at any one time not to exceed $2,800.0 million, less (i) principal payments actually made by the Company on any term loan facility under such Bank Facilities
(other than principal payments made in connection with or pursuant to a refinancing of the Bank Facilities in compliance with clause (a)(I) below) and (ii) any amounts by which any revolving credit facility commitments under the Bank Facilities
are permanently reduced (other than permanent reductions made in connection with or pursuant to a refinancing of the Bank Facilities in compliance with clause (a)(I) below), except that under no circumstances shall the total allowable indebtedness
under this clause (a)(B) be less than $1,750 million (subject to increase from and after the date hereof at a rate, compounded annually, equal to 3% per annum) if incurred for the purpose of providing the Company and its Subsidiaries with
working capital, including without limitation, bankers’ acceptances, letters of credit, and similar assurances of payment whether as part of the Bank Facilities or otherwise; (C) Indebtedness existing as of the date hereof of any
Subsidiary of the Company engaged primarily in the business of owning or leasing real property; (D) Indebtedness incurred for the purpose of financing store construction and remodeling or other capital expenditures; (E) Indebtedness in
respect of the deferred purchase price of property or arising under any conditional sale or other title retention agreement; (F) Indebtedness of a Person acquired by the Company or a Subsidiary of the Company at the time of such acquisition;
(G) to the extent deemed to be “Indebtedness”, obligations under swap agreements, cap agreements, collar agreements, insurance agreements, or 

  
 13 

 
any other agreement or arrangement, in each case designed to provide protection against fluctuations in interest rates, the cost of currency or the cost of goods (other than inventory);
(H) other Indebtedness in outstanding amounts not to exceed, in the aggregate, the greater of $750.0 million and 12.5% of Consolidated Net Tangible Assets of the Company and the Restricted Subsidiaries at any particular time; and
(I) Indebtedness incurred in connection with any extension, renewal, refinancing, replacement or refunding (including successive extensions, renewals, refinancings, replacements or refundings), in whole or in part, of any Indebtedness of the
Company or the Restricted Subsidiaries; provided that the principal amount of the Indebtedness so incurred does not exceed the sum of the principal amount of the Indebtedness so extended, renewed, refinanced, replaced or refunded, plus all interest
accrued thereon and all related fees and expenses (including any payments made in connection with procuring any required lender or similar consents); (b) Liens incurred and pledges and deposits made in the ordinary course of business in
connection with liability insurance, workers’ compensation, unemployment insurance, old-age pensions and other social security benefits other than in respect of employee benefit plans subject to the Employee Retirement Income Security Act of
1974, as amended; (c) Liens securing performance, surety and appeal bonds and other obligations of like nature incurred in the ordinary course of business; (d) Liens on goods and documents securing trade letters of credit; (e) Liens
imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and vendors’ Liens, incurred in the ordinary course of business and securing obligations which are not yet due or which are being contested in good
faith by appropriate proceedings; (f) Liens securing the payment of taxes, assessments and governmental charges or levies, either (i) not delinquent or (ii) being contested in good faith by appropriate legal or administrative
proceedings and as to which adequate reserves shall have been established on the books of the relevant Person in conformity with GAAP; (g) zoning restrictions, easements, rights of way, reciprocal easement agreements, operating agreements,
covenants, conditions or restrictions on the use of any parcel of property that are routinely granted in real estate transactions or do not interfere in any material respect with the ordinary conduct of the business of the Company and its
Subsidiaries or the value of such property for the purpose of such business; (h) Liens on property existing at the time such property is acquired; (i) purchase money Liens upon or in any property acquired or held in the ordinary course of
business to secure Indebtedness incurred solely for the purpose of financing the acquisition of such property; (j) Liens on the assets of any Subsidiary of the Company at the time such Subsidiary is acquired; (k) Liens with respect to
obligations in outstanding amounts not to exceed $100.0 million at any particular time and that (i) are not incurred in connection with the borrowing of money or obtaining advances or credit (other than trade credit in the ordinary course of
business) and (ii) do not in the aggregate interfere in any material respect with the ordinary conduct of the business of the Company and its Subsidiaries; and (l) without limiting the ability of the Company or any Restricted Subsidiary to
create, incur, assume or suffer to exist any Lien otherwise permitted under any of the foregoing clauses, any extension, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses; provided that any such extension,
renewal or replacement Lien is limited to the property or assets covered by the Lien extended, renewed or replaced or substitute property or assets, the value of which is determined by the Board of Directors of the Company to be not materially
greater than the value of the property or assets for which the substitute property or assets are substituted. 

“Purchase Amount” means the aggregate outstanding principal amount of the Senior Notes required to be offered to be
purchased by the Company pursuant to an Offer to Purchase. 
 “Purchase Date” means, with respect to any Offer
to Purchase, a date specified by the Company in such Offer to Purchase not less than 30 calendar days or more than 60 calendar days after the date of the mailing of the Notice of such Offer to Purchase (or such other time period as is necessary for
the Offer to Purchase to remain open for a sufficient period of time to comply with applicable securities laws). 

“Rating Agencies” means (1) each of Fitch, Moody’s and S&P; and (2) if any of Fitch, Moody’s or
S&P ceases to rate the Senior Notes or fails to make a rating of the Senior Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning
of Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), selected by the Company (as certified by a resolution of its Board of Directors) as a replacement agency for Fitch, Moody’s
or S&P, or all of them, as the case may be. 
 “Rating Event” means the rating on the Senior Notes is
lowered by at least two of the three Rating Agencies and the Senior Notes are rated below an Investment Grade Rating by at least two of the three Rating Agencies, on any day during the period (which period will be extended so long as the rating of
the applicable Senior Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) commencing 60 days prior to the first public notice of the occurrence of a Change of Control or the intention of the
Guarantor to effect a Change of Control and ending 60 days following consummation of such Change of Control. 

  
 14 

 “Restricted Subsidiary” means any Subsidiary of the Company other than an
Unrestricted Subsidiary. 
 “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or its successor. 
 “Sale and Leaseback Transaction” means, with respect to any
Person, an arrangement with any bank, insurance company, or other lender or investor or to which such lender or investor is a party providing for the leasing pursuant to a Capital Lease by such Person or any Subsidiary of such Person of any property
or asset of such Person or such Subsidiary which has been or is being sold or transferred by such Person or such Subsidiary to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the
security of such property or asset. 
 “Senior Indebtedness” means any Indebtedness of the Company or its
Subsidiaries other than Subordinated Indebtedness. 
 “Significant Subsidiary” means any Subsidiary that
accounts for (a) 10.0% or more of the total consolidated assets of any Person and its Subsidiaries as of any date of determination or (b) 10.0% or more of the total consolidated revenues of any Person and its Subsidiaries for the most
recently concluded fiscal quarter. 
 “Subordinated Indebtedness” means any Indebtedness of the Company which
is expressly subordinated in right of payment to the Senior Notes or any Indebtedness of the Guarantor which is expressly subordinated in right of payment to the Guarantee. 
 “Unrestricted Subsidiary” means (a) Macy’s Credit and Customer Services, Inc., (b) any Subsidiary of the Company the primary business of which consists of, and is
restricted by the charter, partnership agreement, or similar organizational document of such Subsidiary to, financing operations on behalf of the Company and its Subsidiaries, and/or purchasing accounts receivable or direct or indirect interests
therein, and/or making loans secured by accounts receivable or direct or indirect interests therein (and business related to the foregoing), or which is otherwise primarily engaged in, and restricted by its charter, partnership agreement, or similar
organizational document to, the business of a finance company (and business related thereto), which, in accordance with the provisions of this Supplemental Indenture, has been designated by Board Resolution of the Company as an Unrestricted
Subsidiary, in each case unless and until any of the Subsidiaries of the Company referred to in the foregoing clauses (a) and (b) is, in accordance with the provisions of this Supplemental Indenture, designated by a Board Resolution of the
Company as a Restricted Subsidiary, and (c) any Subsidiary of the Company of which, in the case of a corporation, more than 50% of the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation has or might have voting power upon the occurrence of any contingency), or, in the case of any partnership or other
legal entity, more than 50% of the ordinary equity capital interests, is at the time directly or indirectly owned or controlled by one or more Unrestricted Subsidiaries and the primary business of which consists of, and is restricted by the charter,
partnership agreement, or similar organizational document of such Subsidiary to, financing operations on behalf of the Company and its Subsidiaries, and/or purchasing accounts receivable or direct or indirect interests therein, and/or making loans
secured by accounts receivable or direct or indirect interests therein (and business related to the foregoing), or which is otherwise primarily engaged in, and restricted by its charter, partnership agreement or similar organizational document to,
the business of a finance company (and business related thereto). 
 “Voting Stock” means, with respect to any
specified “Person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital stock of such Person that is at the time entitled to vote generally in the election of the board of directors of such
Person. 

  
 15 

 ARTICLE III CERTAIN COVENANTS. 

The following covenants shall be applicable to the Company for so long as any of the Senior Notes are Outstanding. Nothing in this
paragraph will, however, affect the Company’s rights or obligations under any other provision of the Indenture or this Supplemental Indenture. 
 Section 3.1 Liens. 
 The Company shall not, and shall not permit any
Restricted Subsidiary to, create, incur, assume, or suffer to exist any Liens upon any of their respective assets, other than Permitted Liens, unless the Senior Notes are secured by an equal and ratable Lien on the same assets. 

Section 3.2 Sale And Leaseback Transactions. 
 The Company shall not, and shall not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction unless the net cash proceeds therefrom are applied as follows: to the extent that
the aggregate amount of net cash proceeds (net of all legal, title, and recording tax expenses, commissions, and other fees and expenses incurred, and all federal, state, provincial, foreign, and local or other taxes and reserves required to be
accrued as a liability, as a consequence of such Sale and Leaseback Transaction, net of all payments made on any Indebtedness that is secured by the assets subject to such Sale and Leaseback Transaction in accordance with the terms of any Liens upon
or with respect to such assets or which must by the terms of such Lien, or in order to obtain a necessary consent to such Sale and Leaseback Transaction or by applicable law be repaid out of the proceeds from such Sale and Leaseback Transaction, and
net of all distributions and other payments made to minority interest holders in Subsidiaries or joint ventures as a result of such Sale and Leaseback Transaction) from such Sale and Leaseback Transaction that shall not have been reinvested in the
business of the Company or its Subsidiaries or used to reduce Senior Indebtedness of the Company or its Subsidiaries within 12 months of the receipt of such proceeds (with Cash Equivalents being deemed to be proceeds upon receipt of such Cash
Equivalents and cash payments under promissory notes secured by letters of credit or similar assurances of payment issued by commercial banks of recognized standing being deemed to be proceeds upon receipt of such payments) shall exceed $100.0
million (“Excess Sale Proceeds”) from time to time, the Company shall offer to repurchase pursuant to an Offer to Purchase Senior Notes with such Excess Sale Proceeds (on a pro rata basis with any other Senior Indebtedness of the
Company or its Subsidiaries required by the terms of such Indebtedness to be repurchased with such Excess Sale Proceeds, based on the principal amount of such Senior Indebtedness required to be repurchased) at 100% of principal amount, plus accrued
and unpaid interest, and to pay related costs and expenses. Such Offer to Purchase shall be made by mailing of a Notice to the Trustee and to each Holder of Senior Notes at the address appearing in the Security Register, by first class mail, postage
prepaid, by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company, on a date selected by the Company not later than 12 months from the date such Offer to Purchase is required to be made pursuant
to the immediately preceding sentence. To the extent that the aggregate purchase price for Senior Notes or other Senior Indebtedness tendered pursuant to such offer to repurchase is less than the aggregate purchase price offered in such offer, an
amount of Excess Sale Proceeds equal to such shortfall shall cease to be Excess Sale Proceeds and may thereafter be used for general corporate purposes. On the Purchase Date, the Company shall (i) accept for payment Senior Notes or portions
thereof tendered pursuant to the Offer to Purchase in an aggregate principal amount equal to the Purchase Amount (selected by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for purchase of portions
(equal to $2,000 or an integral multiple of $1,000 in excess thereof) of the principal amount of Senior Notes of a denomination larger than $2,000), (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Senior
Notes or portions thereof so accepted, and (iii) deliver to the Trustee Senior Notes so accepted. The Paying Agent shall promptly mail to the Holders of Senior Notes so accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail to such Holders a new Senior Note equal in principal amount to any unpurchased portion of each Senior Note surrendered. 
 Election of the Offer to Purchase by a Holder of Senior Notes shall (unless otherwise provided by law) be irrevocable. The payment of accrued interest as part of any repurchase price on any Purchase Date
shall be subject to the right of Holders of record of Senior Notes on the relevant Regular Record Date to receive interest due on an Interest Payment Date that is on or prior to such Purchase Date. 

  
 16 

 If an Offer to Purchase Senior Notes is made, the Company shall comply with all tender offer
rules, including but not limited to Section 14(e) of the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such Offer to Purchase. To the extent that the provisions of any securities laws or regulations conflict with the
provisions of the Indenture related to limitations on Sale and Leaseback Transactions, the Company shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the provisions of the
Indenture related to limitations on Sale and Leaseback Transactions by virtue of such conflicts. 
 Section 3.3 Permitting Unrestricted
Subsidiaries To Become Restricted Subsidiaries. 
 The Company shall not permit any Unrestricted Subsidiary to be designated
as a Restricted Subsidiary unless such Subsidiary is otherwise in compliance with all provisions of the Indenture and this Supplemental Indenture that apply to Restricted Subsidiaries. 
 Section 3.4 Payment Office. 
 The Company shall cause a Payment Office
for the Senior Notes to be maintained at all times in New York, New York. 
 ARTICLE IV ADDITIONAL EVENTS OF DEFAULT.

 Section 4.1 Additional Events Of Default. 
 In addition to the Events of Default set forth in the Indenture, the term “Event of Default,” whenever used in the Indenture or this Supplemental Indenture with respect to the Senior
Notes, means any one of the following events (whatever the reason for such Event of Default and whether it may be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree, or order of any court or any order,
rule, or regulation of any administrative or governmental body): 
 (a) the failure to redeem the Senior Notes when required
pursuant to the terms and conditions thereof or to pay the repurchase price for Senior Notes to be repurchased in accordance with Section 3.2 of this Supplemental Indenture; 

(b) any nonpayment at maturity or other default under any agreement or instrument relating to any other Indebtedness of the Company or any
of its Restricted Subsidiaries (the unpaid principal amount of which is not less than $100.0 million), and, in any such case, such default (i) continues beyond any period of grace provided with respect thereto and (ii) results in such
Indebtedness becoming due prior to its stated maturity or occurs at the final maturity of such Indebtedness; provided, however, that, subject to the provisions of Section 9.01 and 8.08 of the Indenture, the Trustee shall not be deemed to have
knowledge of such nonpayment or other default unless either (1) a Responsible Officer of the Trustee has actual knowledge of nonpayment or other default or (2) the Trustee has received written notice thereof from the Company, from any
Holder, from the holder of any such Indebtedness or from the trustee under the agreement or instrument, relating to such Indebtedness; 
 (c) the entry of one or more final judgments or orders for the payment of money against the Company, the Guarantor or any of their respective Restricted Subsidiaries, which judgments and orders create a
liability of $100.0 million or more in excess of insured amounts and have not been stayed (by appeal or otherwise), vacated, discharged, or otherwise satisfied within 60 calendar days of the entry of such judgments and orders; 

  
 17 

 (d) the Guarantee ceases to be in full force and effect (except as contemplated by the terms
of the Indenture) or is declared in a judicial proceeding to be null and void, or the Guarantor denies or disaffirms in writing its obligation under the Guarantee; and 
 (e) Events of Default of the type and subject to the conditions set forth in clauses (vii) and (viii) of Section 8.01(a) of the Indenture in respect of any Significant Subsidiary or, in
related events, any group of Subsidiaries of the Company or Guarantor which, if considered in the aggregate, would be a Significant Subsidiary of the Company or Guarantor. 
 ARTICLE V DEFEASANCE. 
 Section 5.1 Applicability Of Article V Of The Indenture.

 (a) The Senior Notes shall be subject to Defeasance and Covenant Defeasance as provided in Article V of the Indenture;
provided, however, that no Defeasance or Covenant Defeasance shall be effective unless and until: 
 (i) there shall have been
delivered to the Trustee the opinion of a nationally recognized independent public accounting firm certifying the sufficiency of the amount of the moneys, U.S. Government Obligations, or a combination thereof, placed on deposit to pay, without
regard to any reinvestment, the principal of and any premium and interest on the Senior Notes on the Stated Maturity thereof or on any earlier date on which the Senior Notes shall be subject to redemption; 

(ii) there shall have been delivered to the Trustee the certificate of a Responsible Officer of the Company certifying, on behalf of the
Company, to the effect that such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any agreement to which the Company is a party or violate any law to which the Company is subject; and

 (iii) No Event of Default or event that (after notice or lapse of time or both) would become an Event of Default shall have
occurred and be continuing at the time of such deposit or, with regard to any Event of Default or any such event specified in Sections 8.01(a)(vii) and (viii), at any time on or prior to the 124th calendar day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until after such 124th calendar day). 
 (b) Upon the exercise
of the option provided in Section 5.01 of the Indenture to have Section 5.03 of the Indenture applied to the Outstanding Senior Notes, in addition to the obligations from which the Company shall be released specified in the Indenture, the
Company shall be released from its obligations under Article III hereof. 
 ARTICLE VI REDEMPTION OF SENIOR NOTES.

 Section 6.1 Right Of Redemption. 
 The Senior Notes may be redeemed by the Company in accordance with the provisions of the form of Senior Note set forth herein. 

  
 18 

 ARTICLE VII CHANGE OF CONTROL 

Section 7.1 Repurchase At The Option Of Holders. 
 If a Change of Control Triggering Event occurs, unless the Company has exercised its right to redeem the Senior Notes, Holders of Senior Notes will have the right to require the Company to repurchase all
or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their Senior Notes pursuant to the offer described below (the “Change of Control Offer”). In the Change of Control Offer, the Company shall offer
payment in cash equal to 101% of the aggregate principal amount of Senior Notes repurchased plus accrued and unpaid interest, if any, on the Senior Notes repurchased, to the date of purchase (the “Change of Control Payment”). Within
30 days following any Change of Control Triggering Event or, at the option of the Company, prior to any Change of Control, but after public announcement of the transaction or transactions that constitute or may constitute the Change of Control, the
Company shall mail a notice to Holders of Senior Notes describing the transaction or transactions that constitute or may constitute the Change of Control Triggering Event and offering to repurchase the Senior Notes on the date specified in the
notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”), pursuant to the procedures required by the Indenture and described in such
notice, which offer will constitute the Change of Control Offer. The notice will, if mailed prior to the date on which the Change of Control occurs, state that the Change of Control Offer is conditioned on the Change of Control Triggering Event
occurring on or prior to the applicable Change of Control Payment Date. 
 On the Change of Control Payment Date, the Company
shall be required, to the extent lawful, to: 
 (a) accept for payment all Senior Notes or portions of Senior Notes properly
tendered pursuant to the Change of Control Offer; 
 (b) deposit with the paying agent an amount equal to the Change of Control
Payment in respect of all Senior Notes or portions of Senior Notes properly tendered; and 
 (c) deliver or cause to be delivered
to the Trustee the Senior Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Senior Notes or portions of Senior Notes being purchased. 

The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a
third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases all Senior Notes properly tendered and not withdrawn under its offer. In
addition, the Company shall not be required to repurchase any Senior Notes if it has given written notice of a redemption in whole of the Senior Notes. 
 The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in
connection with the repurchase of the Senior Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Indenture, the
Company shall be required to comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Article VII by virtue of such compliance. 

ARTICLE VIII MISCELLANEOUS. 
 Section 8.1 Reference To And Effect On The Indenture. 
 This
Supplemental Indenture shall be construed as supplemental to the Indenture and all the terms and conditions of this Supplemental Indenture shall be deemed to be part of the terms and conditions of the Indenture.

  
 19 

 Except as set forth herein, the Indenture heretofore executed and delivered is hereby (i) incorporated
by reference in this Supplemental Indenture and (ii) ratified, approved and confirmed. 
 Section 8.2 Waiver Of Certain Covenants.

 The Company may omit in any particular instance to comply with any term, provision, or condition set forth in Article III
hereof if the Holders of a majority in principal amount of the Outstanding Senior Notes shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision, or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term,
provision, or condition shall remain in full force and effect. 
 Section 8.3 Supplemental Indenture May Be Executed In Counterparts.

 This instrument may be executed in any number of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument. 
 Section 8.4 Effect Of Headings. 

The Article and Section headings herein are for convenience only and shall not affect the construction hereof. 

  
 20 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. 
 [Seal]

  

			
	MACY’S RETAIL HOLDINGS, INC.,
	 as Issuer

		
	 By:
	 	 /s/ Dennis J. Broderick

	 Name:
	 	 Dennis J. Broderick

	 Title:
	 	 President

 

	
	 Attest:

	
	 /s/ Susan P. Storer

	 Name: Susan P. Storer

	 Title: Assistant Treasurer

	 [Seal]

  

			
	MACY’S, INC.,
	as Guarantor
		
	By:	 	/s/ Dennis J. Broderick
	Name:	 	Dennis J. Broderick
	Title:	 	Executive Vice President, General Counsel and Secretary

  

	
	Attest:
	
	/s/ Susan P. Storer
	Name: Susan P. Storer
	Title: Assistant Treasurer
	[Seal]

  
 21 

 
			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
	as Trustee
		
	By:	 	/s/ Julie Hoffman-Ramos
	Name:	 	Julie Hoffman-Ramos
	Title:	 	Vice President

  

	
	 Attest:

	
	 /s/ James J. Prichard

	 Name: James J. Prichard

	 Title: Vice President

  
 22

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