Awards, each executive is eligible to vest in a number of RSUs ranging from 0% to 200% of the target number of RSUs granted, based on the Company’s total shareholder return (“TSR”) during a three-year performance period (with respect to the Annual Performance RSU Awards) or a two-year performance period (with respect to the Transition Performance RSU Awards), in each case commencing on January 1, 2022 (each, a “Performance Period”), measured relative to the total shareholder returns of the companies included in the FTSE Nareit Lodging/Resort Index as of the grant date during the Performance Period, subject to the executive’s continued service with the Company.
Performance Vesting. The Performance RSU Awards vest based on the Company’s TSR performance over the applicable Performance Period (the “Company TSR”) as compared to the TSR percentages of the companies included on the FTSE Nareit Lodging/Resort Index that have a minimum equity market capitalization of $500,000,000 (the “Index Relative Performance”). In the event the Index Relative Performance is achieved at the “threshold,” “target” or “maximum” level as specified in the applicable award agreement, the award will become vested with respect to the percentage of RSUs set forth below:
| | | |
| | Relative TSR |
| | Vesting Percentage |
Below "Threshold Level" | | 0 | % |
"Threshold Level" | | 50 | % |
"Target Level" | | 100 | % |
"Maximum Level" | | 200 | % |
If the Index Relative Performance falls between the levels specified as “threshold” and “target” or between the levels specified as “target” and “maximum”, the percentage of RSUs subject to the Performance RSU Awards that will vest will be determined using straight-line linear interpolation between such levels.
Notwithstanding the foregoing, in the event that Company TSR is negative over the applicable Performance Period, the percentage of RSUs subject to the Performance RSU Awards that vest will be reduced by 25%.
Change in Control. In the event that a change in control of the Company occurs prior to the completion of the applicable Performance Period, the executive has not incurred a termination of service prior to such change in control and the Performance RSU Awards are not converted, assumed or replaced by the surviving entity in such change in control, the Performance RSU Awards will vest with respect to a number of RSUs equal to the number of RSUs which would have vested based on actual performance levels as of, and assuming the completion of, the applicable Performance Period as of the date of such change in control. Any such RSUs that have not fully vested as of the date on which the change in control occurs will be cancelled and forfeited by the executive.
Certain Terminations of Service. If an executive’s service is terminated by the Company other than for “cause,” by the executive for “good reason,” or due to the executive’s death or “disability” (each as defined in the applicable award agreement), in any case, prior to the completion of the applicable Performance Period, the Performance RSU Awards will vest with respect to a number of RSUs equal to the number of RSUs which would have vested based on actual performance as of and assuming the completion of the applicable Performance Period as of the date of such termination prorated based on the number of days during the applicable Performance Period through and including the date of such termination upon the administrator’s determination, within 45 days following the date of the executive’s termination of service. Any such RSUs that do not become fully vested in accordance with the preceding sentence upon the administrator’s determination will be cancelled and forfeited by the executive.
Payment. Any RSUs that become vested will be paid to the executive in whole shares of Company common stock within twenty (20) days after the applicable vesting date.
Dividend Equivalents. Each Performance RSU Award is granted in tandem with a corresponding dividend equivalent. Each dividend equivalent entitles the executive to receive payments equal to the amount of the dividends paid on the share of common stock underlying the RSU to which the dividend equivalent relates. Any dividend equivalent payments that would have been made prior to the date on which the RSU becomes vested (plus or minus the amount of gain or loss on such amounts had they been reinvested in common stock on the date that they were paid) will be paid within forty-five (45) days following the date on which the RSU becomes vested (the “Dividend Payment Date”). Upon the executive’s termination of service for any reason, the executive will not be entitled to any dividend equivalent payments with respect to any RSUs that do not become vested.
