Exhibit 10.21
AMENDED AND RESTATED CHANGE IN
CONTROL SEVERANCE AGREEMENT
AMENDED AND RESTATED
AGREEMENT, made and entered into as of the 11
th
day of November
2008, effective January 1, 2009, by and among LaSalle Hotel
Properties , a Maryland real estate investment trust (together
with its successors and assigns permitted under this Agreement (the
“Company”), and Hans S. Weger (the
“Executive”).
WITNESSETH:
WHEREAS, the Company and the
Executive are parties to a Change in Control Severance Agreement
dated January 28, 2002, that provides benefits to the
Executive in the event of certain terminations of the
Executive’s employment with the Company, as amended as of
June 11, 2007 (the “Prior Agreement”);
and
WHEREAS, the Company and the
Executive desire to amend and restate the Prior Agreement for
purposes of complying with or being exempt from Section 409A
of the Internal Revenue Code by entering into this Amended and
Restated Change in Control Severance Agreement, on the terms and
conditions set forth herein (this
“Agreement”);
NOW, THEREFORE, in consideration of
the premises and mutual covenants contained herein and for other
good and valuable consideration, the receipt of which is mutually
acknowledged, the Company and the Executive (individually a
“Party” and together the “Parties”) agree
as follows:
1. Definitions .
(a) “Board” shall mean
the Board of Trustees of the Company.
(b) “Cause” shall mean
that the Board concludes, in good faith and after reasonable
investigation, that: (i) the Executive is accused of engaging
in conduct which is a felony under the laws of the United States or
any state or political subdivision thereof; (ii) the Executive
engaged in conduct relating to the Company constituting material
breach of fiduciary duty, willful misconduct (including acts of
employment discrimination or sexual harassment) or fraud;
(iii) the Executive breached his obligations or covenants
under Section 4 of this Agreement in any material respect; or
(iv) the Executive materially failed to follow a proper
directive of the Board or the Chief Executive Officer of the
Company within the scope of the Executive’s duties (which
shall be capable of being performed by the Executive with
reasonable effort) after written notice from the Board or the Chief
Executive Officer, as applicable, specifying the performance
required and Executive’s failure to perform within 30 days
after such notice. For purposes of Section 1(b), no act, or
failure to act, on the Executive’s part shall be deemed
“willful” unless done, or omitted to be done, by the
Executive not in good faith or if the result thereof would be
unethical or illegal.
(c) “Change in Control”
shall mean a change in control of the Company which will be deemed
to have occurred after the date hereof if:
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(1)
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any “person” as such
term is used in Section 3(a)(9) of the Exchange Act (as
defined below), as modified and used in Sections 13(d) and
14(d)
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thereof except that such term
shall not include (A) the Company or any of its subsidiaries,
(B) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its affiliates,
(C) an underwriter temporarily holding securities pursuant to
an offering of such securities, (D) any corporation owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of the
Company’s common shares, or (E) any person or group as
used in Rule 13d-1(b) under the Exchange Act, is or becomes the
Beneficial Owner, as such term is defined in Rule 13d-3 under the
Exchange Act, directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power or common
shares of the Company;
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(2)
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during
any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new Trustee
(other than (A) a trustee designated by a person who has
entered into an agreement with the Company to effect a transaction
described in clause (1), (3), or (4) of this Section 1(c)
or (B) a trustee whose initial assumption of office is in
connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election
of trustees of the Company) whose election by the Board or
nomination for election by the Company’s shareholders was
approved by a vote of at least two-thirds (2/3) of the
trustees then still in office who either were trustees at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute at least a majority thereof;
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(3)
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there
is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) in combination with
the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any subsidiary of
the Company, more than 50% of the combined voting power and common
shares of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation;
or
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(4)
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there
is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets
(or any transaction having a similar effect) other than a sale or
disposition by the Company of all or substantially all of the
Company’s assets to an entity, more than 50% of the combined
voting power and common shares of which is owned by shareholders of
the Company in substantially the same proportions as their
ownership of the common shares of the Company immediately prior to
such sale.
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(d) “Date of
Termination” shall mean the effective date of the termination
of the Executive’s employment.
(e) “Earned Bonus” shall
mean the average bonus paid for the three most recent fiscal years
pro rated for the portion of the year elapsed. If the calculation
is as of a time after the end of a fiscal year but prior to the
actual payment of the bonus for such fiscal year, then the Earned
Bonus shall mean (i) 100% of the average bonus paid for the
three most recent fiscal years plus (ii) the average bonus
paid for the three most recent fiscal years pro rated for the
portion of the then current year elapsed. For example, if the
calculation is as of February 15, 2008, and the Company has
not then paid a bonus for fiscal year 2007, then the Earned Bonus
would be (i) the average bonus paid for fiscal years 2004,
2005 and 2006 plus (ii) the average bonus paid for fiscal
years 2004, 2005 and 2006 pro rated for the portion of 2008 then
elapsed.
(f) “Effective Date”
shall mean June 11, 2007.
(g) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
(h) “Good Reason” shall
mean the occurrence, without the Executive’s prior written
consent, of any of the following in connection with or within one
year after a Change in Control: (i) any material reduction of
the Executive’s base salary or material reduction of the
Executive’s target bonus as a percentage of base salary;
(ii) any material adverse change in the Executive’s
duties or responsibilities, including assignment of duties
inconsistent with his position, significant adverse alteration of
the nature or status of responsibilities or the conditions of
employment or any material diminution in authority, duties, or
responsibilities, including, without limitation, any such material
adverse change that results from a transaction pursuant to which
the Company ceases to be a Reporting Lodging REIT (as defined
below); (iii) a material diminution in the authority, duties,
or responsibilities of the supervisor to whom the Executive is
required to report including, without limitation, any material
diminution that results from a transaction pursuant to which the
Company ceases to be a Reporting Lodging REIT; or
(iv) relocation of the Company’s headquarters and/or the
Executive’s regular work address to a location which requires
the Executive to travel more than fifty (50) miles from the
Executive’s residence. The parties acknowledge that a
significant part of the duties and responsibilities of the
Executive, and of the supervisor to whom the Executive may be
required to report, as applicable, derives from the fact that the
Company is a reporting company under Section 12 of the
Exchange Act.
(i) “Reporting Lodging
REIT” shall mean a lodging or hospitality company that is
qualified as a real estate investment trust for purposes of federal
income taxation, that is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and that has shares of
common equity listed on a securities exchange registered as a
national securities exchange pursuant to Section 6 of the
Exchange Act.
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2. Term .
The Term of this Agreement shall
commence on the Effective Date and end on the third anniversary of
such Effective Date and shall be automatically renewed on an annual
basis unless the Board provides notice to the Executive six months
prior to the date this agreement is automatically renewed;
provided , however , that (i) if a Change in
Control is initiated during such period, the Term shall end on the
later of such third anniversary of the Effective Date or one day
after the first anniversary of such Change in Control occurs, and
(ii) the Term may be terminated earlier as provided in
Section 3 below. Notwithstanding, in the event the Executive
is entitled to such benefits, such benefits shall be paid
notwithstanding the subsequent expiration of the term of this
Agreement.
3. Termination of Employment
.
(a) Termination of Employment by
the Company for Cause . The Company may terminate the
Executive’s employment for Cause during the Term upon written
notice to the Executive. If the Executive’s employment is so
terminated by the Company, the Term shall end as of the Date of
Termination and the Executive shall thereupon be entitled solely to
the following:
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(1)
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base
salary, and accrued vacation time (if any) earned but not paid
prior to the Date of Termination, payable in a lump sum in
accordance with the regular withholding practices of the Company as
in effect from time to time, within two business days after the
Executive’s termination of employment; and
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(2)
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such
other benefits, if any, as are provided under applicable plans,
programs and/or arrangements of the Company;
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provided; however, that in the event
the Executive is terminated as a result of subsection
(1)(b)(i) and the Executive is subsequently acquitted of the
act or acts referred to therein, then Executive shall be deemed to
have been terminated without Cause as of the date he was originally
terminated.
(b) Termination of Employment by
the Company Without Cause . The Company may terminate the
Executive’s employment without Cause during the Term upon
written notice to the Executive. If the Executive’s
employment is so terminated by the Company in connection with or
within one year after a Change in Control, the Executive shall
thereupon be entitled to the following:
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(1)
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base
salary, Earned Bonus and accrued vacation time (if any) earned but
not paid prior to the Date of Termination, payable in a lump sum in
accordance with the regular withholding practices of the Company as
in effect from time to time, within two business days after the
Executive’s termination of employment;
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(2)
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a cash amount equal to the
product of 2.0 times the sum of (x) the Executive’s
annual base salary (based on the annual base salary in effect on
the Date of Termination), plus (y) the
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average amount of the bonuses
paid to the Executive with respect to the three most recent fiscal
years ending before the Date of Termination, payable in a lump sum
in accordance with the regular withholding practices of the Company
as in effect from time to time, within two business days after the
Executive’s termination
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