Document:

EXHIBIT 10.39

 Exhibit 10.39 
  
 HOST MARRIOTT CORPORATION 
 SEVERANCE PLAN FOR EXECUTIVES 
  
 SECTION 1 — PURPOSE 
  
 The purpose of the
Host Marriott Severance Plan for Executives (“Plan”) is to provide severance pay and benefits to certain Executives of Host Marriott Corporation and its subsidiaries (collectively the “Company”) whose employment is terminated by
the Company or by the Executive. The severance pay and benefits available under this Plan vary depending upon the Participant’s title and the circumstances of his or her termination of employment, and they are contingent upon the execution of a
release in favor of the Company. 
  
 The Plan is intended to be an
“employee welfare benefit plan” as that term is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended. Severance benefits for covered Executives shall be determined exclusively under this Plan. All of
the corporate policies and practices regarding severance, or similar payments upon employment termination, with respect to Executives eligible to participate herein are hereby superseded by this Plan. Benefits under this Plan are in no way
contingent upon retirement under any Company retirement plan. The severance pay and benefits available under this Plan do not represent the payment of income deferred for services performed during employment. 
  
 SECTION 2 — DEFINITIONS 
  
 The following capitalized terms shall have the meanings set forth in this
Section 2 unless the context clearly indicates otherwise: 
  
 2.1    “Administrator” means the Company or its delegees. 
  
 2.2    “Average Bonus” means the sum of the Executive’s actual paid bonus for the three years prior to the Severance
Date divided by three. 
  
 2.2    “Base
Salary” means the Executive’s current annual base salary, excluding the Executive’s annual bonus and all other forms of compensation and allowances. 
  
 2.3    “Company” means Host Marriott Corporation and its subsidiaries. 
  
 2.4    “Cause” means any conduct that in the
reasonable judgment of the Board of Directors is detrimental to the interests of the Company. Such conduct shall include, without limitation: 
  
 (A)    failing to perform assigned duties in a reasonable manner; 

 (B)    failing to perform assigned duties as a result of incompetence
or neglect; 
  
 (C)    engaging in any act of dishonesty or bad faith with respect to the Company or the Company’s affairs; 
  
 (D)    committing any act or crime that reflects unfavorably on the Executive or the Company; or 
  
 (E)    engaging in any other conduct that
in the reasonable judgment of the Board justifies termination. 
  
 A determination
of Cause by the Board of Directors shall be final and binding on the parties for all purposes; provided however that such determination may not be arbitrary or capricious. 
  
 2.5    “Change in Control” means: 
  
 (A)    the acquisition of at least thirty
five percent (35%) of the voting stock of the Company by a third party; 
  
 (B)    the merger, dissolution, liquidation, consolidation, reclassification or other reorganization of the Company in which the Company does not survive or is not the surviving entity; 
  
 (C)    the sale of the Company under circumstances in
which the Company becomes a subsidiary or affiliate of any other individual, partnership, corporation, trust, or other legal entity; 
  
 (D)    the sale of substantially all of the assets of the Company; or 
  
 (E)    a determination by the Company’s Board of Directors, or by a court or administrative agency
with jurisdiction over the Company, that a change of control has occurred. 
  
 The term “Change in Control” shall not include the act of converting the Company to another form of legal entity. 
  
 2.6    “Disability” means a physical or mental infirmity which impairs the Executive’s ability, with or without
reasonable accommodation, to substantially perform his duties as assigned and which continues for a period of at least one hundred eighty (180) days. An Executive on approved Family and Medical leave, worker’s compensation or other medical or
disability related leave will be subject to the appropriate Company leave policy as it applies to returning to work and after returning to work. The Company’s determination as to whether Executive is Disabled for purposes of 

 
this Plan shall be final and binding on all parties concerned. 
  
 2.7    “Effective Date” means             . 
  
 2.8    “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended. 
  
 2.9    “Executive” means any active, full-time Executive of the Company who is listed on Exhibit B hereto, as amended from time to time. These individuals shall include the Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, Chief Development Officer and individuals with the title of Senior Vice President as determined in the sole and absolute discretion of the Company. For purposes of this Plan, “Executive” excludes
any individual who has an individual employment or severance agreement with the Company. 
  
 2.10    “Good Reason” means the occurrence of any of the following events or conditions: 
  
 (A)    a materially adverse change in the Executive’s title, position or level of responsibility without the Executive’s
written consent or the assignment to the Executive of any duties or responsibilities which are inconsistent with his title, position or level of responsibility, except in connection with the termination of his employment for Disability, Cause, as a
result of his death, or by the Executive other than for Good Reason; 
  
 (B)    failure to pay the Executive any compensation or benefits to which he is entitled within fifteen days of the date due; or 
  
 (C)    the occurrence of any of the following events or conditions in the year immediately following a Change in Control: 

 
 (i)    a reduction in the Executive’s Base Pay;

  
 (ii)    the failure by the Company to
provide the Executive with compensation (including Base Salary and bonus compensation) and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under compensation or employee
benefit plans, programs and practices as in effect prior to the Change in Control. 
  
 (iii)    the Company requiring the Executive to be based at any place outside a 50-mile radius from the work location at which the Executive was based on the Effective Date or such other place as
the Executive is assigned prior to the Change in Control, except for reasonably required travel on the Company’s business which is not greater than such travel requirements prior to the Change in Control; 
  
 (iv)    any purported termination of the
Executive’s 

 
employment for Cause by the Company which does not comply with the terms of Section 2.4; 
  
 (v)    the failure of the Company to obtain an agreement, satisfactory to the Executive, from any
successor or assign of the Company to assume and agree to adopt this Plan for a period of at least one year from the Change in Control; 
  
 (vi)    the failure by the Company to provide equivalent or greater vacation, holiday and sick leave to that available to the
Executive immediately prior to the Change in Control. 
  
 (vii)    any event or condition described in this Section which occurs prior to a Change in Control but which the Executive demonstrates (a) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control (a “Third Party”), or (b) otherwise arose in connection with, or in anticipation of a Change in Control, notwithstanding that the event or condition occurred prior to the Change in
Control; provided that this subsection 2.10(C)(iv) shall apply only if the Change in Control giving rise to such events or conditions is actually consummated. 
  

2.11    “Participant” means an Executive who is notified by the Company in writing that he is listed on Exhibit B hereto.

  
 2.12    “Plan” means the Host
Marriott Corporation Severance Plan for Executives. 
  
 2.13    “Plan Year” means the calendar year. 
  
 2.14    “Pro Rata Bonus” means the amount equal to the Executive’s full target bonus for the current fiscal year of the Company, determined in accordance with the applicable
incentive compensation plan, multiplied by a fraction the numerator of which is the number of days in the incentive plan year through the Severance Date and the denominator of which is 365. 
  
 2.15    “Release Agreement” means the Severance
Agreement and Release in the substantially form hereto as Exhibit A and as acceptable to the Company, which shall include a general release given by the Participant to the Company regarding employment-related claims, covenants against competition
and the solicitation of employees and customers of the Company, and other matters as stated therein. The Release Agreement shall bind the Participant and the Company. 
  
 2.16    “Severance Date” means the date established by the Company or the Executive, as
applicable, as a Participant’s last day of employment. If the Executive’s employment is terminated by the Company for Cause or due to Disability, the Company 

 
shall provide the Executive is at least thirty (30) days notice of the Severance Date. If the Executive is terminating his employment, the Executive shall
provide the Company with thirty (30) days notice of the Severance Date. 
  
 2.17    “Successor” means any employer (whether or not the employer is affiliated with the Company) which acquires (through merger, consolidation, reorganization, transfer, sublease, assignment, or otherwise)
all or substantially all of the business or assets of the Company, or of a division of the Company. 
  
 SECTION 3 — ELIGIBILITY AND PAYMENT 
  
 3.1    Subject to Sections 3.2, 3.3, and 3.4 of this Plan, an Executive shall become a Participant if, on or after the Effective Date,
the Executive is notified by the Company that he or she is a Participant. 
  
 3.2    A Participant shall be entitled to the severance pay set forth in Section 4 hereof, if: 
  
 (A)    he or she returns and does not revoke a completed and executed Release Agreement to the Company within the time period
specified in the Release Agreement after such person’s Severance Date; and 
  
 (B)    he or she is not and does not become disqualified from receiving severance pay pursuant to Section 3.3 hereof at any time prior to such person’s Severance Date; provided, that a
Participant shall be disqualified from receiving or retaining any severance pay hereunder if he breaches the Release Agreement. 
  
 3.3    A Participant shall not be entitled to receive or retain the severance pay set forth in Section 4 hereof, if the Executive:

  
 (A)    fails to return a properly signed
Release Agreement to the Company within the time period specified in the Release Agreement after that person’s Severance Date; 
  
 (B)    revokes such Release Agreement within the time period specified in the Release Agreement; 
  
 (C)    prior to his or her Severance Date, the Executive:

  
 (i)    terminates voluntarily his or her
employment; 
  
 (ii)    fails to show up and
properly attend work; or 
  
 (iii)    fails
to adequately perform his or her employment duties as established by the Company in its reasonable judgment; 

 (D)    begins employment or provides services as an independent contractor with or
for the Company or any of its affiliates within 6 months following his or her Severance Date; 
  
 (E)    rejects an offer or fails to accept an offer of another position from a Successor or from any affiliate of the Company on or before his or her Severance Date; provided, however, that an
Executive may still receive his or her severance benefits despite rejecting such offer if the rejection or failure to accept is for Good Reason; or 
  
 (F)    prior to the Severance Date, the Company terminates the employment of the Executive and: 
  
 (i)    the termination is for Cause, as determined by
the Company in its reasonable judgment; or 
  
 (ii)    the Company determines after such termination that the Executive had engaged in conduct that would have constituted Cause had such conduct been known to the Company prior to such termination. 
  
 3.4    Prior to the Severance Date, such Participant will
receive a Release Agreement, substantially in the form attached to this Plan as Exhibit A. If the Participant accepts and agrees to his or her severance pay and benefits as determined, he shall execute the Release Agreement and return it to the Vice
President, Human Resources within the time period specified in the Release Agreement following his Severance Date. Such Release Agreement must be timely and appropriately executed by its terms for the Participants to qualify for payments and
benefits under Section 4. 
  
 SECTION 4 — AMOUNT AND
PAYMENT OF SEVERANCE PAY 
  
 4.1    If the
Executive’s employment with the Company is terminated by the Company for Cause or Disability, or by reason of the Executive’s death, or by the Executive without Good Reason, then Company shall pay the Executive all amounts earned or
accrued through the Severance Date but not paid as of the Severance Date, including: 
  
 (A)    Base Salary; and 
  
 (B)    reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Severance Date; (collectively, “Accrued
Compensation”). 
  
 In addition to the foregoing, if the Executive’s
employment is terminated by the Company because of Disability or Death, the Company shall pay to the Executive or his 

 
beneficiaries an amount equal to the Executive’s Pro Rata Bonus. 
  
 4.2    Except as otherwise provided in Section 4.3, if the Executive’s employment with the Company
is terminated by the Company without Cause, or by the Executive for Good Reason, the Executive shall be entitled to the following: 
  
 (A)    the Company shall pay the Executive all Accrued Compensation; 
  
 (B)    the Company shall pay the Executive as severance pay and in lieu of any further compensation for
periods subsequent to the Severance Date an amount (the “Severance Amount”) in cash equal to: 
  
 (i)    two (2) times the sum of the Executive’s Base Salary and the Executive’s Average Bonus if the Participant is the
Chief Executive Officer of the Company; or 
  
 (ii)    one (1) times the sum of the Executive’s Base Salary and the Executive’s Average Bonus if the Executive is any other Participant. 
  
 4.3    If during the one year immediately following a Change in Control, the Executive’s employment
with the Company is terminated by the Company without Cause, or by the Executive for Good Reason, the Executive shall be entitled to the following: 
  
 (A)    the Company shall pay the Executive all Accrued Compensation; and 
  
 (B)    the Company shall pay the Executive as severance pay and in lieu of any further compensation for
periods subsequent to the Severance Date an amount (the “Severance Amount”) in cash equal to: 
  
 (i)    three (3) times the sum of the Executive’s Base Salary and the Executive’s Average Bonus if the Participant is the
Chief Executive Officer of the Company; or 
  
 (ii)    two (2) times the sum of the Executive’s Base Salary and the Executive’s Average Bonus if the Executive is any other Participant. 
  
 4.4    Participants shall have the right to continue medical and dental benefits under the continuation
health coverage provisions of Title X of the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) after his or her Severance Date, if otherwise eligible. To the extent that the Participant is eligible for and elects COBRA coverage, the
Company shall cover the premium cost of such coverage on a monthly basis for the lesser of (I) 18 months; or (ii) until Participant no longer qualifies to participate. 

 
The Company’s obligation to cover this premium cost is limited to Participants who are eligible to receive severance payments pursuant to Section 4.2 or
Section 4.3 of the Plan and further to the extent that such an Executive becomes eligible to obtain any such benefits under a subsequent employer’s benefit plans. At the end of the Executive’s Company paid COBRA coverage, the Executive may
continue COBRA coverage at the Executive’s expense and to the extent eligible under the terms of such Plan. In no event shall any Participant be entitled to a cash payment in lieu of health coverage. 
  
 4.5    The severance pay provided for in this Section 4
shall be paid as soon as practicable after the Participant’s Severance Date. The Company may determine, in its sole and absolute discretion, to pay such amounts in one lump sum or in installments; provided that the Severance Amount shall be
paid in full within twenty-four (24) months of the Severance Date. 
  
 4.6    The severance pay and benefits provided for in this Section 4 shall be in lieu of any other severance pay to which the Executive may be entitled under any Company severance plan, program or arrangement.

  
 4.7    Employment taxes and all other
deductions required by law or by any other Company plan, program or policy, shall be withheld from all severance payments. In addition, any amount payable under this Section 4, shall be reduced (but not below zero) by any payment made as required by
government-mandated programs that require payment of wages and fringe benefits in lieu of notice of closing, layoffs or termination of employment. 
  
 4.8    Participants shall be paid for normal termination vacation pay and any other earned pay (if any) pursuant to existing Company
policy and applicable state law. 
  
 4.9    Benefits under any other employee benefit plans, including but not limited to, restricted stock grants, stock awards, tax-qualified retirement plans, retiree health care plans, fringe benefit plans, incentive
compensation plans, stock option plans and nonqualified deferred compensation plans, and life insurance plans, policies or programs sponsored by the Company are governed solely by the terms of those plans, programs or policies. Participants may
exercise stock options, to the extent that such options are exercisable under their terms. This Plan does not change the eligibility, termination or other provisions for those benefits. 
  
 4.10    The Company may, in its sole and absolute discretion, offer additional benefits or programs
which, if offered, shall be described in appendices to this Plan. 
  
 4.11    The Company reserves the right to offset the benefits payable under Section 4, by any advance, loan or other monies the Participant owes the Company. 

 SECTION 5 — DEATH BENEFITS 
  
 5.1    If a Participant dies before receiving all of his or her severance pay due under this Plan, such
pay will be distributed in one lump sum cash payment to the Executive’s executor or administrator, as applicable. 
  
 5.2    The Administrator may require that any individual or entity purporting to represent a Participant’s estate provide such
proof of such status as the Administrator may deem appropriate, including but not limited to letters testamentary or letters of administration. The Administrator may also require that such individual, as a condition to receiving severance pay, agree
in a provision to be incorporated in the Release Agreement, to indemnify and hold harmless the Administrator and such other persons deemed appropriate by the Administrator for any financial responsibility, liability or expense arising out of a claim
by another party or parties asserting entitlement to all or part of the benefit payable hereunder. In addition, the Company reserves the right to offset the benefits payable under this Section 5 by any advance, loan or other monies the Participant,
with respect to whom the severance pay is being paid, owes the Company. 
  
 SECTION 6 — BENEFIT LIMITATIONS 
  
 6.1    In the event that the Severance Amount and other benefits provided for in this Plan (i) would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”) and (ii) but for this Section, would be subject to the excise tax imposed by Section 4999 of the Code, then such severance benefits shall be either (i) delivered in full, or (ii) delivered as to the maximum extent
which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by the Executive on an after-tax basis, of the greatest amount of severance benefits under this Plan, notwithstanding that all or some portion of such severance benefits may be taxable under Section
4999 of the Code. 
  
 6.2    A determination
as to whether a reduction of Severance Payments will be made pursuant to Section 6.1 shall be made by the Company or at the Company’s expense by an accounting firm selected by the Company (the “Accounting Firm”). The Company shall
provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Executive within five days of the Severance Date if applicable, or such other time as requested by the Company or by
the Executive (provided the Executive reasonably believes that any of the Payments may be subject to the Excise Tax). For purposes of making the calculations required by this paragraph, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the 

 Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in
order to make a determination under this Section. Within ten days of the delivery of the Determination to the Executive, the Executive shall have the right to dispute the Determination (the “Dispute”), which shall be subject to the claims
procedures in Section 8. If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and the Executive subject to the application of Section 6.3 below. 
  
 6.3    In the event the Company shall determine that
payments pursuant to this Plan would constitute an “excess parachute payments” thereby necessitating that Severance Payments be reduced in part if consistent with Section 6.1, the Executive may consult with the Company in determining the
priority in which any benefit payment shall be reduced. Any such joint determination must be made no later than seven (7) days prior to the next regular full-pay cycle, otherwise the Company’s decision of which benefits shall be reduced or
eliminated shall be final. 
  
 SECTION 7 — ADMINISTRATION

  
 7.1    The Company shall have sole
discretionary authority to interpret, apply and administer the terms of the Plan and to determine eligibility for and the amounts of benefits under the Plan, including interpretation of ambiguous Plan provisions, determination of disputed facts or
application of Plan provisions to unanticipated circumstances. The Company’s decision on any such matter shall be final and binding. 
  
 7.2    The Company shall be the administrator of the Plan for purposes of Section 3(16) of ERISA and shall have responsibility for
complying with any ERISA reporting and disclosure rules applicable to the Plan for any Plan Year. The Administrator may at any time delegate to any other named person or body, or reassume therefrom, any of its fiduciary responsibilities (other than
trustee responsibilities as defined in Section 405(c)(3) of ERISA) or administrative duties with respect to this Plan. 
  
 7.3    The Administrator may contract with one or more persons to render advice or services with regard to any responsibility it has
under this Plan. 
  
 7.4    Subject to the
limitations of this Plan, the Administrator shall from time to time establish such rules for the administration of this Plan as the Administrator may deem desirable. 
  
 SECTION 8 — CLAIMS PROCEDURE 
  
 8.1    If a Participant believes he or she has not been provided with severance pay benefits due under
the Plan, then the Participant may file a request for benefits under this Plan with the Human Resources Department or its delegate within ninety (90) days after the date the Participant believes he or she should have received 

 such benefits. If a Participant makes such a request for benefits under the Plan and that claim is denied, in whole or in
part, the Administrator shall notify the Participant of the adverse determination within ninety (90) calendar days unless the Administrator determines that special circumstances require an extension of time for processing. If the Administrator
determines that an extension of time is necessary, written notice shall be furnished to the claimant prior to the end of the initial ninety-day period and the extension shall not exceed ninety days from the original ninety-day period. The extension
notice shall indicate the special circumstances requiring an extension and the date by which the Administrator expects to render a determination. The Administrator shall notify the Participant of the specific reasons for the denial with specific
references to pertinent Plan provisions on which the denial is based and shall notify the Participant of any additional material or information that is needed to perfect the claim and explanation of why such material or information is necessary. At
that time the Participant will be advised of his or her right to appeal that determination, and given an explanation of the Plan’s review and appeal procedure including time limits, and a statement regarding the Participant’s right to
bring a civil action under ERISA section 502(a) following an adverse determination or appeal. 
  
 8.2    A Participant may appeal the determination or denial by submitting to the Administrator within sixty (60) calendar days after receiving a denial notice by: (a) requesting a review by the
Administrator of the claim; (b) setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and (c) setting forth any issues or comments which the Participant deems relevant to the claim. The
Participant may submit written comments, documents, records and other information relating to his claim. Upon request, the Participant may obtain free of charge, copies of all documents and records relevant to his claim. 
  
 8.3    The Administrator shall act upon the appeal taking
into account all comments, documents, records and other information submitted by the Participant without regard to whether such information was submitted or considered in the initial benefit determination and shall render a decision within sixty
(60) days or one hundred twenty (120) days in special circumstances after its receipt of the appeal. If the Administrator determines that an extension of time is necessary, written notice of the extension shall be furnished to the Participant prior
to the end of the initial sixty-day period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Administrator expects to render a determination. The Administrator shall review the
claim and all written materials submitted by the Participant, and may require him or her to submit, within ten (10) days of its written notice, such additional facts, documents, or other evidence as the Administrator in its sole discretion deems
necessary or advisable in making such a review. On the basis of its review, the Administrator shall make an independent determination of the Participant’s eligibility for benefits and the amount of such benefits under the Plan. The decision of
the Administrator on any claim shall be final and conclusive upon all persons if supported by substantial evidence. If the Administrator denies a claim on review in whole or in part, it shall give the Participant written notice of 

 its decision setting forth the following: (a) the specific reasons for the denial and specific references to the
pertinent Plan provisions on which its decision was based; (b) notice that the Participant may obtain free of charge, copies of all documents, records and other information relevant to the Participant’s claim; and (c) a statement of the
Participant’s right to bring a civil action under section 502(a) of ERISA. 
  
 8.4    A Participant or his or her legal representative may appeal any final decision by filing an action in a federal court of competent jurisdiction, provided that such action is filed no later
than 90 days after receipt of a final decision by the Participant or his or her legal representative. 
  
 SECTION 9 — GENERAL 
  
 9.1    The benefits and costs of this Plan shall be paid by the Company out of its general assets. 
  
 9.2    This Plan is intended to be an “employee welfare benefit plan”, as defined in Section 3(1), Subtitle A of Title 1 of
ERISA. The Plan will be interpreted to effectuate this intent. Notwithstanding any other provision of this Plan, no Executive in the event of termination shall receive hereunder any payment exceeding three times that Officer’s annual
compensation during the year immediately preceding the termination of his service, within the meaning of 29 C.F.R. Section 2510.3-2, as the same was in effect on the effective date of this Plan. 
  
 9.3    The Executive and the Company acknowledge that the
employment of the Executive by the Company is “at will” and, prior to the Effective Date, may be terminated by either the Executive or the Company at any time. If prior to the Effective Date, the Executive’s employment with the
Company terminates, the Executive shall have no rights under this Plan. Nothing in this Plan shall be construed to create for any Participant a right of continued employment with the Company. 
  
 SECTION 10 — AMENDMENT AND TERMINATION 
  
 The Company reserves the right to amend this Plan, in whole or in part, or
discontinue or terminate the Plan; provided, however, that any such amendment, discontinuance or termination shall not affect any right of any Participant to claim benefits under the Plan or as in effect prior to such amendment, discontinuance or
termination, for events occurring prior to the date of such amendment, discontinuance or termination. An amendment to this Plan, and/or resolution of discontinuance or termination, may be made by the Administrator, to the extent permitted by
resolution of the Board of Directors. 
  
 [REMAINDER OF PAGE
INTENTIONALLY BLANK] 

 IN WITNESS WHEREOF, the Company has caused its officer, duly authorized by its Board of Directors to
execute the Plan effective as of the 6th day of March, 2003. 
  

	 	 	 	 	HOST MARRIOTT CORPORATION
					
	 	 	 	 	 	 	By:	 	 /s/  Elizabeth A. Abdoo

	 	 	 	 	 	 	 	 	 Name: Elizabeth A. Abdoo
 Title:   Executive Vice President, General Counsel
              and Corporate SecretaryEXHIBIT 10.41

 Exhibit 10.41 
  
 SEPARATION AGREEMENT AND RELEASE 
  
 This is a Waiver Agreement and Release (“Agreement”) between Host Marriott L.P., a Delaware limited partnership
(which, together with its affiliates are referred to herein as the “Employer”), and Robert E. Parsons, Jr. (“Executive”). In order to forever resolve and settle any and all disputes regarding the Executive’s employment with
the Employer, including but not limited to his separation from such employment, the parties agree as follows: 
  
 1.    Having determined that it is in the best interests of the Employer and the Executive to terminate the employment relationship,
the Executive’s last day of employment will be May 30, 2003 (“Separation Date”). On the first regularly scheduled payday after the Separation Date, the Executive will receive the balance of all accrued and unused Paid Time Off
(“PTO”) to which he was entitled (not to exceed 240 hours) less applicable tax withholdings. 
  
 2.    The Executive shall receive severance in an aggregate amount of $1,700,000. Payment of this amount to Executive shall be made in
quarterly installments on June 30, 2003, October 31, 2003, February 27, 2004, and June 30, 2004. On each such date, Executive shall receive a check in the amount of $425,000, less applicable tax withholdings. 
  
 3.    The Executive will have continued use of the
Platinum Card benefits through January 5, 2004, although costs (including reimbursement for taxes) for such services between his Separation Date and January 5, 2004 shall not exceed $40,000. 
  
 4.    Beginning on May 1, 2003, the Employer will provide
the Executive with outplacement support through a vendor of the Employer’s choice through May 30, 2004 or until the Executive finds comparable employment, whichever occurs first. During this period, the Employer will pay the reasonable travel
expenses of the Executive and his spouse incurred to meet with the vendor. The Executive acknowledges that the payments made pursuant to Paragraphs 1 through 4 of this Agreement are not employment benefits to which the Executive is already entitled.

  
 5.    (a).    On the
Separation Date, any unvested shares of the Restricted Stock Award made to Executive on August 1, 2002, shall vest and all restrictions shall be removed in accordance with Section 5 of the Restricted Stock Agreement. The shares shall be issued based
on the average of the high and low trading prices of Host Marriott Stock on the NYSE on the Separation Date. Employer has received Board approval to have the exercise period for Executive’s vested stock options extended through May 30, 2004,
provided that it is not beyond the expiration date of the option. 

 (b).    The Employer shall distribute to Executive his 750 shares of Retirement Stock
in accordance with the terms of that stock agreement. 
  
 6.    The Executive agrees that, in consideration of the benefits described in Paragraphs 1 through 4 above, he will, and hereby does knowingly and voluntarily, forever and irrevocably release and discharge the Employer,
its parent, subsidiaries and affiliates and each of its and their respective officers, directors, employees, agents, predecessors, successors, purchasers, assigns, representatives and benefit plans, of any and all actions, causes of action,
grievances, demands, rights, claims for damages, indemnity, costs, interest, loss or injury whatsoever which he now has, has had, or may have, whether the same be at law, in equity, or mixed, in any way arising from or relating to the
Executive’s employment with Employer or the termination of that employment. The Executive expressly acknowledges that this release specifically includes, but is not limited to, any claim of age, race, sex, religion, national origin or any other
claim of employment discrimination under the Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.), Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 1001 et seq.), the American with Disabilities Act (42 U.S.C. § 12101
et seq.), the Family and Medical Leave Act (29 U.S.C. § 2601 et seq.), and any other federal, state and local law prohibiting employment discrimination. The Executive is not waiving any rights or claims that may arise after the date of
execution of this Agreement, or that cannot otherwise be waived by law. 
  
 7.    The Employer will permit Executive to maintain his voicemail with the Employer through December 31, 2003. In addition, Executive shall maintain his Employer cell phone on its current monthly program through
December 31, 2003 at no cost to Executive. Additionally, Executive will maintain his electronic mail (“email”), Blackberry, and email address at Employer through July 31, 2003. Thereafter, the Employer will maintain and program
Executive’s email account to forward email to an email address designated by Executive through December 31, 2003. 
  
 8.    The Executive agrees that absent compulsion of court order, he will not sue, or directly or indirectly bring, assist, join in,
or participate in any way, in any claim, suit, or proceeding of any kind by any non-governmental third party against the Employer or any other person identified in Paragraph 6, that in any way relates to or results from any matter, action or
inaction that occurred on or before the date of this Agreement. 
  
 9.    The parties acknowledge that this agreement may be disclosed in accordance with securities laws and regulations, and other applicable laws. 
  
 10.    The Executive acknowledges that while he was employed by the Employer he was exposed to certain
non-public confidential and proprietary 
  

 2 

 information of the Employer. Such information may include, but is not necessarily limited to, claims and pending
litigation, terms of management agreements, business plans, pricing strategies, financing plans, valuations, capitalization, budgets and other non-public financial information. It is specifically understood and agreed that the Executive will
maintain all such non-public information in strict confidence and will not disclose or use such information for any purpose for five years following the execution of this Agreement. 
  
 11.    The Executive recognizes that for the purposes of continuation coverage requirements of group
health plans under the Consolidated Omnibus Budget and Reconciliation Act of 1985 (“COBRA”), as amended, and the group health provisions of the Maryland Annotated Code, a “qualifying event” and “applicable change in
status” occurs on the Separation Date. The Employer agrees to provide the Executive all notices and information required under such laws. The Employer agrees to pay its health insurance (health and dental) provider directly for the full cost of
Executive’s COBRA continuation coverage for a period of 18 months from the Separation Date or until the Executive begins new employment and is offered health benefit coverage in that employ whichever is sooner. The Executive agrees that,
through November 30, 2004, he will notify the Company’s General Counsel within seven business days of accepting other employment and becoming eligible for health benefits in that employ. The Employer also agrees to provide the Executive with
information regarding other benefit plans in which he is a participant, and any distributions will be made in accordance with those plans. 
  
 12.    Executive agrees that he shall not criticize, disparage, slander, defame or impugn the Company or any of its staff, orally or
in writing. The Company agrees that neither the Chief Executive Officer nor any of the members of senior management that attend the executive staff meeting with the Chief Executive Officer shall criticize, disparage, slander, defame or impugn the
Executive, orally or in writing. If a reference is desired from Employer, the Executive shall direct any prospective employer to either the Chief Executive Officer or the Executive Vice President and General Counsel for such reference. 

 
 13.    The Executive has read and fully reviewed the
terms of this Agreement. The Executive acknowledges that he has been advised to consult with an attorney before signing this Agreement. The Executive acknowledges that he has been given 21 days to consider this Agreement before signing. 

 
 14.    For a period of seven days following the
execution of this Agreement, the Executive may revoke his consent to the Agreement. The Agreement shall not become effective until the revocation period has expired. 
  
  

 3 

 15.    The Executive expressly acknowledges and understands that this Agreement is
not an admission of liability under any statute or otherwise by the Employer, and it does not admit any violation of the Executive’s legal rights. 
  
 16.    The parties agree that this Agreement shall be binding upon and inure to the benefit of the Executive’s assigns, heirs,
executors and administrators as well as the Employer, its parent, subsidiaries and affiliates and each of its and their respective officers, directors, the Executive’s agents, predecessors, successors, purchasers, assigns, representatives and
benefit plans. 
  
 17.    This Agreement
contains the entire agreement and understanding of the parties. There are no additional promises or terms among the parties other than those contained herein. This Agreement shall not be modified except in writing signed by each of the parties. This
Agreement shall in all respects be interpreted, enforced and governed in accordance with the laws of Maryland and, furthermore, any dispute regarding this Agreement shall be subject to the exclusive jurisdiction of any court of competent
jurisdiction located in Montgomery County, Maryland or the southern Division of the United States District Court for the District of Maryland. 
  
 18.    The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not
strictly for or against either party. In the event that one or more provisions of this Agreement shall for any reason be held to be illegal or unenforceable, this Agreement shall be revised only to the extent necessary to make such provision(s)
legal and enforceable. 
  
  
  

	 	 	 	 	 
					
	 	 	 /s/ Pamela Wagoner

	 	 	 	 	 	 /s/ Robert E. Parsons, Jr.

	 	 	 Company Representative
	 	 	 	 Executive

					
	 	 	Date: May 30, 2003	 	 	 	 	 	 Date: May 30, 2003

  

 4

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