Document:

Exhibit 10.1

 

AMENDMENT NO. 1

TO

DIVIDEND EQUIVALENT RIGHTS

AGREEMENT

UNDER THE

DIAMONDROCK HOSPITALITY COMPANY

2004 STOCK OPTION AND INCENTIVE PLAN

 

Name
of Holder:

No. of
Dividend Equivalent Rights:

Grant
Date:  March 4, 2008

Amendment
Date: December 30, 2008

Original
Expiration Date:  March 4, 2018

Amended
Expiration Date: March 4, 2016

 

Pursuant
to the DiamondRock Hospitality Company Stock Option and Incentive Plan (the “Plan”) as amended through the date
hereof, DiamondRock Hospitality Company (the “Company”)
granted to the Holder named above certain Dividend Equivalent Rights (each, a “DER”) described in a DER Agreement
dated March 4, 2008 (the “Award Agreement”).

 

The
Company has been advised that the structure of the DER may have adverse tax
consequences under Section 409A of the Internal Revenue Code of 1986, as
amended.  As a result of that advice, the
Company and the Holder wish to amend the DER Agreement in order to reflect the
understandings of the parties.

 

For
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.             The introductory sentence of
Section 3 of the Award Agreement shall be amended and restated as follows:

 

3.     Termination. A DER shall
terminate on the date (such date shall be referred to as the “DER  Termination
Date”) that is the earlier of (i) the Amended Expiration
Date set forth above, or (ii) a termination event specified below.

 

2.             Section 3(a) of
the Award Agreement shall be deleted in its entirety

 

3.             Section 3(b) of
the Award Agreement shall be renumbered as Section 3(a).

 

4.             Except as
otherwise expressly amended hereby, all of the terms and provisions of the
Award Agreement remain unmodified and in full force and effect.

 

1

 

DIAMONDROCK
HOSPITALITY COMPANY

 

 

	
  By:

  	
   

  	
   

  
	
  Name:
  Michael Schecter

  	
   

  
	
  Title:
  Executive Vice President, General Counsel and Corporate Secretary

  

 

 

The
foregoing Amendment is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

 

 

	
  Date:
  December 30, 2008

  	
  By:

  	
   

  
	
   

  	
  Name:

  

 

2Exhibit 10.1

 

THIRD
AMENDMENT

TO THE

TELEPHONE
AND DATA SYSTEMS, INC.

2004
LONG-TERM INCENTIVE PLAN

 

WHEREAS,
Telephone and Data Systems, Inc., a Delaware corporation (the “Corporation”)
has adopted and maintains the Telephone and Data Systems, Inc. 2004 Long-Term
Incentive Plan (the “Plan”) for the benefit of certain employees;

 

WHEREAS,
pursuant to Section 8.2 of the Plan, the Board of Directors of the
Corporation (the “Board”) may amend the Plan as it deems advisable, subject to
any requirement of shareholder approval;

 

WHEREAS,
the Board desires to amend the Plan (i) to comply with requirements of
section 409A of the Internal Revenue Code of 1986, as amended, which governs
the taxation of nonqualified deferred compensation arrangements and (ii) in
certain other minor respects; and

 

WHEREAS,
such amendments to the Plan are not material and are not required to be
submitted for approval by shareholders of the Corporation.

 

NOW,
THEREFORE, BE IT RESOLVED, that effective as of January 1,
2009, the Plan hereby is amended as follows:

 

1.             Article II
hereby is amended to insert the following new Section 2.1 therein, and to
renumber the Plan’s sections and section references accordingly:

 

2.1           “Account
Balance Plan” shall mean an “account balance plan” within the meaning of
Treasury Regulation §1.409A-1(c)(2)(i)(A) (whether elective or
non-elective in nature) maintained by an Employer or any affiliate
thereof.  “Affiliate” for this purpose
shall mean (i) a corporation that is a member of the same controlled group
of corporations (within the meaning of section 414(b) of the Code) as an
Employer or (ii) a trade or business (whether or not incorporated) under
common control (within the meaning of section 414(c) of the Code) with an
Employer.  An Account Balance Plan shall
include, without limitation, (i) the deferral program set forth in Article VII,
(ii) the interest-bearing deferral arrangements maintained by the Company
and TDS Telecommunications Corporation; (iii) the Company’s Supplemental
Executive Retirement Plan; (iv) the
United States Cellular Corporation Executive Deferred Compensation Interest
Account Plan and (v) the deferral arrangement maintained by United
States Cellular Corporation under its Long-Term Incentive Plan.

 

2.             Section 2.15 (as
renumbered by this Third Amendment) hereby is amended in its entirety to read
as follows:

 

2.15         “Distributable
Balance” shall mean the portion of an employee’s Deferred Compensation Account
that is nonforfeitable.

 

 

3.             Article II
hereby is amended to insert the following new Section 2.24 therein, and to
renumber the Plan’s sections and section references accordingly:

 

2.24         “Newly
Eligible Employee” shall mean an employee who (i) newly is eligible to
participate in the deferral program set forth in Article VII and (ii) was
not, at any time during the 24-month period ending on the date on which he or
she became eligible to participate in such deferral program, eligible to
participate in an Account Balance Plan (irrespective of whether such employee
in fact elected to participate in such plan). 
For this purpose, an employee is not eligible to participate in an
Account Balance Plan solely on account of the accrual of interest or earnings
on amounts previously deferred thereunder.

 

4.             Section 2.26 (as
renumbered by this Third Amendment) hereby is amended to add the phrase “or by
the By-Laws of the Employer” at the end thereof.

 

5.             The last sentence of Section 2.27
(as renumbered by this Third Amendment) hereby is amended to read as follows:

 

Subject to (i) section
162(m) of the Code with respect to an award that is intended to be
qualified performance-based compensation and (ii) section 409A of the Code
with respect to an award that is subject thereto, the Committee, in its sole
discretion, may amend or adjust the Performance Measures or other terms and
conditions of an outstanding award in recognition of unusual or nonrecurring
events affecting the Company or its financial statements or changes in law or
accounting principles.

 

6.             Section 2.36 (as
renumbered by this Third Amendment) hereby is amended to read as follows:

 

2.36         “Restricted
Stock Unit” shall mean a right which entitles the holder thereof to receive,
upon termination of the Restriction Period, a share of Stock or cash equal to
the Fair Market Value of a share of Stock on the date that the Restriction
Period terminates.

 

7.             Section 2.40 (as
renumbered by this Third Amendment) hereby is amended to delete therefrom the
parenthetical “(which may be Restricted Stock)”.

 

8.             Article II
hereby is amended to insert the following new Section 2.41 therein, and to
renumber the Plan’s sections and section references accordingly:

 

2.41         “Separation
from Service” shall mean a termination of employment with the Employers and
their affiliates within the meaning of Treasury Regulation §1.409A-1(h) (without
regard to any permissible alternative definition thereunder).  “Affiliate” for this purpose shall mean (i) a
corporation that is a member of the same controlled group of corporations
(within the meaning of section 414(b) of the Code) as an Employer or (ii) a
trade or business (whether or not incorporated) under common control (within
the meaning of section 414(c) of the Code) with an Employer, but in each
case substituting a 50% ownership level for the 80% ownership level specified
therein.

 

9.             Article II
hereby is amended to insert the following new Section 2.44 therein, and to
renumber the Plan’s sections and section references accordingly:

 

2

 

2.44         “Specified
Employee” shall have the meaning set forth in the “Section 409A Specified
Employee Policy of Telephone and Data Systems, Inc. and its Affiliates,”
which policy hereby is incorporated herein by reference.

 

10.           Section 2.45 (as
renumbered by this Third Amendment) hereby is amended (i) to replace the
phrase “equity security” set forth therein with the phrase “capital stock of
any class”, (ii) to delete the phrase “Stock Option” set forth therein and
(iii) to insert the phrase “Special Common Stock,” immediately prior to
the phrase “Cellular Group Stock” the second time that it appears therein.

 

11.           Article II hereby
is amended to insert the following new Section 2.49, and to renumber the
Plan’s sections and section references accordingly:

 

2.49         “Unforeseeable
Emergency” shall mean a severe financial hardship to an employee resulting from
(i) an illness or accident of the employee, the employee’s spouse, or the
employee’s dependent (as defined in section 152 of the Code, without regard to
sections 152(b)(1), (b)(2) and (d)(1)(B)), (ii) the loss of the
employee’s property due to casualty (including the need to rebuild a home
following damage to a home not otherwise covered by insurance, irrespective of
whether caused by a natural disaster), or (iii) other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the employee. 
Examples of what may be considered to be “Unforeseeable Emergencies”
include (a) the imminent foreclosure of or eviction from an employee’s
primary residence, (b) the need to pay for medical expenses, including
non-refundable deductibles and the cost of prescription drug medication and (c) the
need to pay for funeral expenses of the employee’s spouse or dependent.  With limited exception, an “Unforeseeable
Emergency” does not include the need to send an employee’s child to college or
the desire to purchase a home.

 

12.           The first sentence of
the second paragraph of Section 3.2(a) hereby is amended to add the
phrase “and to the extent permitted under section 409A of the Code and regulations
promulgated thereunder in the case of an award that is “deferred compensation”
within the meaning thereof,” immediately after the phrase “subject to the
requirements imposed under section 162(m) of the Code and regulations
promulgated thereunder in the case of an award intended to be qualified
performance-based compensation,”.

 

13.           The first sentence of Section 4.1(a) hereby
is amended to read as follows:

 

The Committee may,
in its discretion, grant options to purchase shares of Stock to such employees
as may be selected by the Committee; provided, however, that an
employee of an Affiliate may be granted an option to purchase shares of Stock
only if the Stock qualifies, with respect to the employee, as “service
recipient stock” within the meaning set forth in section 409A of the Code.

 

14.           The first sentence of Section 4.1(b) hereby
is amended to replace the phrase “an Incentive Stock Option” the first time
that it appears therein with the phrase “a Stock Option”.

 

15.           The first sentence of Section 4.2(a) hereby
is amended to read as follows:

 

3

 

The Committee may,
in its discretion, grant SARs to such employees as may be selected by the
Committee; provided, however, that an employee of an Affiliate may
be granted an SAR only if the underlying Stock qualifies, with respect to the
employee, as “service recipient stock” within the meaning set forth in section
409A of the Code.

 

16.           Section 4.2(c) hereby
is amended (i) to delete the parenthetical “(including shares of
Restricted Stock)” set forth in the first sentence thereof, (ii) to delete
the sixth sentence thereof in its entirety and (iii) to delete the phrase “including
Restricted Stock,” set forth in the last sentence thereof.

 

17.           The last sentence of Section 5.3
hereby is amended to replace the phrase “Company’s right to require” set forth
therein with the phrase “employee’s timely”.

 

18.           Sections 7.1 and 7.2
hereby are amended in their entirety to read as follows:

 

7.1           Annual Bonus
Deferral.  The Committee may, in its
discretion, permit an employee selected by the Committee to make an irrevocable
election (i) not to receive currently any whole percentage of his gross
annual bonus payment and (ii) to have an amount equal to such percentage
credited to the employee’s Deferred Compensation Account (such election, a “deferral
election”); provided, however, that the amount subject to such deferral
election with respect to any Bonus Year shall not exceed $400,000.  An employee’s deferral election shall be made
on or before the last day of the calendar year immediately preceding the Bonus
Year.  Notwithstanding the preceding
sentence, if permitted by the Company, a Newly Eligible Employee may make a
deferral election with respect to a Bonus Year within thirty (30) days
following the date that the employee becomes eligible to make the deferral; provided,
however, that such deferral election shall apply solely to that portion
of the Newly Eligible Employee’s annual bonus equal to the total annual bonus
multiplied by the ratio of the number of days remaining in the Bonus Year after
the date of the deferral election over the total number of days in the Bonus
Year.  Annual bonus amounts credited to
the employee’s Deferred Compensation Account pursuant to this Section 7.1
(as adjusted for deemed investment returns pursuant to Section 7.3) shall
be 100% vested at all times.

 

7.2           Employer
Match Awards.  (a)  In
General.  At the time the Committee
selects an employee for participation in the Plan pursuant to Section 7.1,
the Committee may also decide that such an employee is eligible for an Employer
Match Award.  Employer Match Awards shall
be subject to the terms and conditions set forth in this Section 7.2 and
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Committee shall deem advisable.  As of the date on which an amount (the “deferred
amount”) is credited to an employee’s Deferred Compensation Account pursuant to
Section 7.1, there also shall be credited to the employee’s Deferred
Compensation Account an Employer Match Award equal to a percentage of such
deferred amount specified by the Committee not in excess of 331/3%.

 

(b)  Vesting of Employer Match Award.  One-third of the Employer Match Award so
credited to the employee’s Deferred Compensation Account pursuant to this Section 7.2
(as adjusted for deemed investment returns pursuant to Section 7.3) shall
become nonforfeitable on each of the first three anniversaries of the last day
of the Bonus Year, 

 

4

 

provided
that the employee remains continuously employed by an Employer or an
Affiliate until such date and the related annual bonus amount credited to his
Deferred Compensation Account has not been withdrawn or distributed before such
date; provided  further, however, that if the employee
experiences a Separation from Service by reason of his Disability or death, all
Employer Match Awards (as adjusted for deemed investment returns pursuant to Section 7.3)
credited to the employee’s Deferred Compensation Account, to the extent not
forfeited previously, shall become nonforfeitable as of the date of such
Separation from Service.  Any Employer
Match Award that is forfeitable as of the date that the employees experiences a
Separation from Service, or as of the date that the related annual bonus amount
is withdrawn or distributed, shall be forfeited as of the date of such
Separation from Service, withdrawal or distribution.  Notwithstanding the foregoing provisions of
this Section 7.2(b) or any other provision herein to the contrary, if
an employee experiences a Separation from Service on account of such employee’s
negligence, willful misconduct, competition with the Company or an Affiliate or
misappropriation of confidential information of the Company or an Affiliate, as
determined by the Company in its sole discretion, then any Employer Match Award
shall be forfeited on the date that the employee experiences a Separation from
Service, unless such Employer Match Award is forfeited earlier pursuant to Section 8.10.  Any Employer Match Awards and any deemed
investment returns credited to an employee’s Deferred Compensation Account
shall be an expense allocated to the employee’s Employer for the related Bonus
Year.

 

19.           Sections 7.4 and 7.5
hereby are amended in their entirety to read as follows:

 

7.4           Payment of Deferred
Compensation Account.  An employee’s
Distributable Balance shall be paid in a lump sum during the seventh calendar
month following the calendar month during which the employee experiences a
Separation from Service; provided, however, that an employee may
irrevocably elect, at the time that the employee makes the deferral election
pursuant to Section 7.1, to receive the employee’s Distributable Balance
in a lump sum at an earlier date specified by the employee that is at least
three calendar years after the calendar year during which the employee’s
deferral election is made.  All payments
of deferred compensation hereunder will be made in whole shares of Stock, and
cash equal to the Fair Market Value of any fractional share.  Notwithstanding the foregoing, if an employee
dies before the employee’s entire Distributable Balance has been paid, then
within sixty (60) days following the employee’s death the Company shall pay the
remainder of the Distributable Balance to the employee’s beneficiary designated
pursuant to Section 8.4.

 

7.5           Unforeseeable
Emergency Withdrawals.  Upon written
request by an employee (other than an employee who has experienced a Separation
from Service) whom the Committee determines has suffered an Unforeseeable
Emergency, the Committee may direct payment to the employee of all or any
portion of the employee’s Distributable Balance.  An employee who has experienced a Separation
from Service shall not be eligible to receive a withdrawal hereunder due to
Unforeseeable Emergency.  The
circumstances that shall constitute an Unforeseeable Emergency will depend upon
the facts of each case, but, in any event, payment shall not exceed an amount
reasonably necessary to satisfy such emergency plus amounts necessary to pay
taxes and penalties 

 

5

 

reasonably
anticipated as a result of such payment after taking into account the extent to
which such emergency is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise; (ii) by liquidation of the
employee’s assets, to the extent the liquidation of such assets would not
itself cause severe financial hardship; or (iii) by cessation of deferrals
under any Account Balance Plan.  In the
event that the Committee approves a withdrawal of all or a portion of the
employee’s Distributable Balance due to an Unforeseeable Emergency, payment
shall be made to the employee in a lump sum as soon as practicable following
such approval, but in no event later than sixty (60) days after the occurrence
of the Unforeseeable Emergency.

 

If an employee receives, either hereunder or from any other
nonqualified deferred compensation arrangement maintained by an Employer or
Affiliate, a withdrawal on account of the employee’s Unforeseeable Emergency,
any deferral election by the employee in effect under this Article VII
shall be cancelled, effective as of the date of such withdrawal.

 

20.           Article VII
hereby is amended to add the following new section 7.6 thereto:

 

7.6           Application.  The
provisions of this Article VII shall apply solely with respect to the
portion of an employee’s Deferred Compensation Account that is subject to
section 409A of the Code.  The portion of
an employee’s Deferred Compensation Account that is not subject to section 409A
of the Code shall not be subject to the provisions of this Article VII and
instead shall be subject to the terms of the Plan as in effect at the time of
the deferral of the compensation and the Agreement applicable thereto.

 

21.           The first sentence of Section 8.2
hereby is amended to read as follows:

 

The Board may
amend the Plan as it shall deem advisable, subject to any requirement of
stockholder approval under applicable law; provided, however, that no amendment
shall be made without stockholder approval
if such amendment would (a) increase the maximum number of shares of any
class of Stock available for issuance under the Plan (except as provided in Section 8.8)
or (b) with respect to any Incentive Stock Option which shall have been
granted under the Plan, effect any change inconsistent with section 422 of the
Code.

 

22.           Section 8.5 hereby
is amended in its entirety to read as follows:

 

8.5           Transferability.  No Incentive Stock Option shall be
transferable other than to a beneficiary determined pursuant to Section 8.4.  No Restricted Stock Unit Award, Performance
Share Award or Deferred Compensation Account shall be transferable other than (a) to
a beneficiary determined pursuant to Section 8.4 or (b) pursuant to a
court order entered in connection with a dissolution of marriage or child
support.  No other award under the Plan
shall be transferable other than (a) to a beneficiary determined pursuant
to Section 8.4, (b) pursuant to a court order entered in connection
with a dissolution of marriage or child support, or (c) to the extent
permitted under (i) securities laws relating to the registration of
securities subject to employee benefit plans and (ii) the Agreement
evidencing the grant of such award, by transfer to a Permitted Transferee.

 

6

 

Except as
permitted by the preceding provisions of this Section 8.5, no award under
the Plan or Deferred Compensation Account balance may be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether
by operation of law or otherwise) or be subject to execution, attachment or
similar  process.  Upon any such attempt to so sell, transfer,
assign, pledge, hypothecate, encumber or otherwise dispose of any award or
Deferred Compensation Account balance, such award and all rights thereunder
shall immediately become null and void and any Employer Match Awards credited
to such Deferred Compensation Account shall be forfeited.

 

23.           Section 8.8 hereby
is amended (i) to delete from the last sentence thereof the phrase “vesting,
exercise or” the first time that it appears therein, (ii) to replace the
phrase “settlement date” set forth in the last sentence thereof with the phrase
“other date that the award becomes payable,” and (iii) to add the
following new sentence at the end thereof:

 

Any adjustment
pursuant to this Section 8.8 shall be made in compliance with the
requirements of section 409A of the Code (to the extent applicable thereto),
including without limitation, with respect to Stock Options and SARs, the
requirements of Treasury Regulation §1.409A-1(b)(5)(v)(D).

 

24.           The first sentence of Section 8.9(a) hereby
is amended to read as follows:

 

Notwithstanding any other provision of the Plan or any provision of any
agreement, in the event of a Change in Control, (i) any outstanding
Restricted Stock Awards shall become nonforfeitable and the Restriction Periods
applicable thereto shall lapse, (ii) any outstanding Restricted Stock Unit
Awards and Performance Share Awards shall become nonforfeitable, (iii) to
the extent permissible under section 409A of the Code, any Restriction Periods
applicable to outstanding Restricted Stock Unit Awards shall lapse; (iv) to
the extent permissible under section 409A of the Code, any Performance Periods
applicable to outstanding Performance Share Awards shall lapse; (v) any
Performance Measures applicable to outstanding Performance Share Awards,
Restricted Stock Awards or Restricted Stock Unit Awards (if any) shall be
deemed to be satisfied at the target level, (vi) all outstanding options
or SARs shall become immediately exercisable in full and (vii) all amounts
deemed to be held in Deferred Compensation Accounts shall become nonforfeitable.

 

25.           Section 8.9(a) hereby
is amended further to add the following new sentence at the end thereof:

 

Any substitution with respect to an outstanding award hereunder upon a
Change in Control shall be undertaken in compliance with the requirements of section
409A of the Code, to the extent applicable to such award.

 

26.           Article VIII
hereby is amended to add the following new Section 8.16 thereto:

 

8.16         Compliance
with Section 409A of the Code. 
It is intended that the Plan comply with the provisions of section 409A
of the Code, to the extent applicable thereto. 
The Plan shall be administered and interpreted in a manner consistent
with this intent.  Notwithstanding the
foregoing, no particular tax result for an employee with respect to any income
recognized by the employee in connection with the Plan is guaranteed under

 

7

 

the Plan, and the
employee solely shall be responsible for any taxes, interest, penalties or
other amounts imposed on the employee in connection with the Plan.

 

* * * * * *

 

8

 

IN
WITNESS WHEREOF, the undersigned has executed this Third
Amendment as of this
                    
day of December, 2008.

 

 

	
   

  	
  TELEPHONE AND DATA SYSTEMS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  

 

SIGNATURE
PAGE TO

THIRD
AMENDMENT TO

TELEPHONE
AND DATA SYSTEMS, INC.

2004
LONG-TERM INCENTIVE PLAN

 

9

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