Equity Inns, Inc. Executive Officer Compensation Summary and Restricted Stock Award Terms (2006)

Contract Categories: Human Resources › Compensation Agreements
Summary

This agreement outlines the 2006 compensation package for executive officers of Equity Inns, Inc., including annual salaries, performance-based bonuses, and restricted stock awards. Bonuses are tied to company financial goals and individual performance, with specific targets set for each officer. Restricted stock awards will vest at the end of 2008 based on the company's shareholder return compared to a hotel industry index, with additional provisions for vesting upon a change of control. The agreement also modifies vesting terms for prior years' stock grants, accelerating some vesting based on performance.

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EX-10.1 2 exh101-3q06.txt SUMMARY OF EXECUTIVE OFFICER COMPENSATION Exhibit 10.1 On February 7, 2006, the Compensation Committee of the Board of Directors (the "Committee") of Equity Inns, Inc. (the "Company") approved 2005 performance bonuses, 2006 annual salaries, 2006 bonus ranges and 2006 awards of restricted common stock for each of the Company's executive officers. These grants and awards are summarized in the following table:
2006 Restricted Stock Awards --------------------------- 2005 2006 2006 Fair Bonus Annual Salary Bonus Range Shares Market Value(1) -------- ------------- ------------- ------ --------------- Howard A. Silver President and Chief Executive $503,475 $450,000 $0 -- 900,000 59,041 $951,151 Officer J. Mitchell Collins Executive Vice President and Chief Financial Officer $222,500 $285,000 $0 -- 342,000 28,044 $451,789 Phillip H. McNeill, Jr. Executive Vice President $101,250 $225,000 $0 -- 225,000 16,236 $261,562 of Development Richard F. Mitchell Senior Vice President of Asset $87,500 $225,000 $0 -- 225,000 16,236 $261,562 Management Edwin F. Ansbro Senior Vice President of Real $87,500 $200,000 $0 -- 200,000 16,236 $261,562 Estate J. Ronald Cooper Vice President and Controller $99,225 $185,000 $0 -- 185,000 13,333 $214,795
(1) Fair market value on date of grant, based on the last reported sale price of the Company's common stock on the grant date. Cash Bonuses Bonus amounts will be determined by the Committee at the end of the 2006 fiscal year. The Committee set goals upon which 2006 bonuses will be based for all executive officers. The goals for the 2006 bonus awards generally will be based on the Company's actual annual adjusted funds from operations (AFFO) (as defined by the Company) as a percentage of the Company's AFFO budgeted targets and certain acquisition, disposition, strategic, finance and general corporate goals set by the Committee for each executive officer. Mr. Silver will have a target bonus of 100% of his annual base salary and 75% of his bonus will be based on achievement of the AFFO targets and 25% will be based on achievement of certain individual and corporate goals. Mr. Collins will have a target bonus of 60% of his annual base salary and 75% of his bonus will be based on achievement of the AFFO targets and 25% will be based on achievement of certain individual and corporate goals. Messrs. McNeill, Jr., Mitchell, Ansbro and Cooper will have a target bonus of 50% of their annual base salary and 50% of each of their bonuses will be based on achievement of the AFFO targets and 50% will be based on achievement of certain individual and corporate goals. Additionally, executive officers that accept shares of the Company's stock in lieu of cash will receive a 25% premium to the above bonus targets. 2006 Restricted Stock Awards The 2006 restricted stock awards will vest at the end of 2008. Vesting will occur based on the Company's total shareholder return ("Total Return") for that three-year period as a percentile of the National Association of Real Estate Investment Trusts (NAREIT) Hotel Index (the "Index") for the same period. The vesting schedule is based on a graded scale from the 40th percentile to the 75th percentile of the Company's Total Return as compared to the total return of the Index. If the Company has achieved a Total Return equal to the median percentile of the total return of the Index, then 100% of the restricted shares listed above will vest. If the Company has achieved a Total Return equal to or greater than the 75th percentile of the total return of the Index, then 150% of the restricted shares listed above will vest. None of the shares listed above will vest if the Company has achieved a Total Return of less than the 40th percentile of the total return of the Index or if the executive officer is no longer employed by the Company at the end of 2008. These shares will also vest if there is a change of control of the Company, as defined. 2004 and 2005 Restricted Stock Awards The Committee also agreed to modify certain vesting terms related to its 2004 and 2005 restricted stock grants. Before the modification, these grants were to vest at the end of five and four year respective terms based on certain AFFO targets and the Company's total shareholder return, as defined, as compared to certain hotel REIT peers. For these grants, 60% of the grants will now vest after three years based on AFFO and Total Return targets for the respective cumulative period, 20% will now vest based on AFFO and Total Return targets in the fourth year and the remaining 20% will now vest based on AFFO and Total Return targets in the fifth year. No other modifications were made to the 2004 and 2005 grants. The changes affected grants to all executive officers of the Company.