General Counsel Employment Agreement

Exhibit 10.13


Michael D. Schecter

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the " Agreement" ) is made this 4th day of June 2004, by DiamondRock Hospitality Company, a Maryland corporation (the " REIT" ), with its principal place of business at 10400 Fernwood Road, Bethesda, Maryland and Michael D. Schecter, residing at 920 Independence Avenue, S.E., Washington, D.C. (the " Executive" ).

WHEREAS, the parties desire to enter into this agreement to reflect the Executive' s executive capacities in the REIT' s business and to provide for the REIT' s employment of the Executive; and

WHEREAS, the parties wish to set forth the terms and conditions of that employment;


NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows:

1. Term of Employment

The REIT hereby employs the Executive, and the Executive hereby accepts employment with the REIT, upon the terms and conditions set forth in this Agreement. Unless terminated earlier pursuant to Section 5, the Executive' s employment pursuant to this Agreement shall be for the period commencing on the date hereof (the " Commencement Date" ) and ending on the second anniversary of the Commencement Date (the " Initial Term" ). The Initial Term shall be extended for an additional 12 months at the end of the Initial Term unless the REIT or the Executive provides written notice to the contrary at least six months before such date. The Initial Term, together with any such extension, shall be referred to herein as the " Employment Period." In the event that the Board of Directors of the REIT (the " Board of Directors" ) determines that active efforts to complete the closing of the REIT' s Rule 144A Offering (the " 144A Offering" ) have been abandoned, this Agreement shall become null and void.

2. Title; Duties

During the Employment Period, the Executive shall be employed in the business of the REIT and its affiliates. The Executive shall serve as General Counsel and Secretary of the REIT and, upon the reasonable request of the Board of Directors, as a director and/or officer of any of the REIT' s affiliates, including DiamondRock Hospitality Limited Partnership (the " Company" ). The Executive shall report to the Chief Executive Officer, who shall have the authority to direct, control and supervise the activities of the Executive. The Executive shall perform such services consistent with his position and as may be assigned to him from time to time by the Chief Executive Officer .

3. Extent of Services

The Executive agrees not to engage in any business activities during the Employment Period except those which are for the sole benefit of the REIT and the Company and their subsidiaries (the REIT and the Company are hereinafter referred to as the " Company Group" ),


Michael D. Schecter


and to devote his entire business time, attention, skill and effort to the performance of his duties under this Agreement. Notwithstanding the foregoing, the Executive may, without impairing or otherwise adversely affecting the Executive' s performance of his duties to the Company Group, (i) engage in personal investments and charitable, professional and civic activities, and (ii) with the prior approval of the Board of Directors, serve on the boards of directors of corporations other than the REIT, provided, however, that no such approval shall be necessary for the Executive' s continued service on any board of directors on which he was serving on the date of this Agreement, all of which have been previously disclosed to the Board of Directors in writing and provided further, that in no event shall the Executive be permitted to serve on the board of directors of any other entity that owns, operates, acquires, sells, develops and/or manages any hotel or similar asset in the lodging industry.

4. Compensation and Benefits

(a) Salary . The REIT shall pay the Executive an initial gross base annual salary (" Base Salary" ) of $210,000. The Base Salary shall be payable (minus such deductions as may be required by law or reasonably requested by the Executive) in accordance with the REIT' s regularly scheduled payroll dates but in no event less frequently than monthly. The REIT' s Compensation Committee (the " Compensation Committee" ) shall review the Executive' s Base Salary annually and may increase (but not decrease) the Executive' s Base Salary as in effect from time to time as the Compensation Committee shall deem appropriate.


(b) Incentive Compensation . The Executive shall be entitled to receive an annual cash incentive bonus (the " Incentive Bonus" ) for each calendar year during the Term of this Agreement based on the level of accomplishment of management and performance objectives as established by the Compensation Committee. The Executive' s initial maximum target Incentive Bonus shall be 75% of the Executive' s Base Salary.


(c) Paid Time Off and Other Benefits . The Executive shall be entitled to paid time off for a minimum of 25 days each calendar year, which shall be accrued ratably during the calendar year, as well as holiday pay in accordance with the REIT' s policies in effect from time to time. The Executive shall be eligible to participate in such life, health, and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits as the Company Group extends, as a matter of policy, to its executive employees. The Company Group shall maintain a disability insurance policy or plan covering the Executive during the Employment Period.

(d) Reimbursement of Business Expenses . The REIT shall reimburse the Executive for all reasonable travel, entertainment and other expenses incurred or paid by the Executive in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by the Executive of documentation, expense statements, vouchers, and/or such other supporting information as the REIT may reasonably request.


(e) Initial Restricted Stock Grant at Closing of 144A Offering . Upon the closing of the 144A Offering, the Executive shall be granted 75,000 shares of common stock of the REIT subject to the terms and restrictions as set forth in a restricted stock agreement


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executed by the REIT and the Executive as of the date hereof, which shares shall vest in three equal installments on each of the first, second and third anniversaries of the closing of the 144A Offering.


(f) D&O Insurance Coverage . During and for a period of at least three years after the Term, the Executive shall be entitled to director and officer insurance coverage for his acts and omissions while an officer and director of the REIT on a basis no less favorable to him than the coverage provided current officers and directors.

5. Termination

(a) Termination by the REIT for Cause . The REIT may terminate the Executive' s employment under this Agreement at any time for Cause, upon written notice by the REIT to the Executive. For purposes of this Agreement, " Cause" for termination shall mean a determination by the Board of Directors in good faith that any of the following events have occurred: (i) the conviction or indictment of the Executive of, or the entry of a plea of guilty or nolo contendere by the Executive to, any felony; (ii) fraud, misappropriation or embezzlement by the Executive; (iii) the Executive' s willful failure or gross negligence in the performance of his assigned duties for the Company Group, which failure or gross negligence continues for more than 15 days following the Executive' s receipt of written notice of such willful failure or gross negligence from the Board of Directors; (iv) any act or omission of the Executive that has a demonstrated and material adverse impact on the Company Group' s reputation for honesty and fair dealing; (v) the breach by the Executive of his duties under this Agreement or any material term of this Agreement; or (vi) a material violation by Executive of the Company Group' s employment policies which continues for more than 15 days following written notice of such violation from the Board of Directors.


(b) Termination by the REIT without Cause or by the Executive without Good Reason . Either party may terminate this Agreement at any time without Cause (in the case of the REIT) or without Good Reason (in the case of the Executive), upon giving the other party 60 days' written notice. At the Company' s sole discretion, it may substitute 60 days' salary in lieu of notice. If either the REIT or the Executive provides the notice specified under Section 1 that such party does not wish to extend the Employment Period as provided therein, such action shall be deemed a notice of termination. Any salary paid to the Executive in lieu of notice shall not be offset against any entitlement the Executive may have to the Severance Payment pursuant to Section 6(c).


(c) Termination by Executive for Good Reason . The Executive may terminate his employment under this Agreement at any time for Good Reason, upon written notice by the Executive to the REIT. For purposes of this Agreement, " Good Reason" for termination shall mean that the Executive has complied with the " Good Reason Process" (hereafter defined) following the occurrence of one of the following events, without the Executive' s consent: (i) the assignment to the Executive of substantial duties or responsibilities inconsistent with the Executive' s position at the REIT, or any other action by the REIT which results in a substantial diminution or other substantive adverse change in the Executive' s duties or responsibilities, including, but not limited to, a substantial diminution in the Executive' s title as set forth in Section 2 hereof; (ii) the failure of the REIT or its affiliates to appoint, nominate or


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elect the Executive as the General Counsel and Secretary; (iii) a requirement that the Executive work principally from a location outside the 50 mile radius from the REIT' s address first written above; (iv) the REIT' s failure to pay the Executive any Base Salary or other compensation to which he becomes entitled, other than an inadvertent failure which is remedied by the REIT within 30 days after receipt of written notice thereof from the Executive (or ten days for failure to pay Base Salary); (v) the REIT' s failure to honor the initial equity award granted pursuant to Section 4(e); (vi) any reduction in the Executive' s aggregate Base Salary and any involuntary reduction in the Executive' s other compensation taken as a whole, excluding any reductions caused by the failure to achieve performance targets; or (vii) the REIT' s breach of any of its other obligations under this Agreement. " Good Reason Process" shall mean that (i) Executive reasonably determines in good faith that a " Good Reason" event has occurred; (ii) Executive notifies the REIT in writing of the occurrence of the Good Reason event; (iii) Executive cooperates in good faith with the REIT' s efforts, for a period not less than 30 days following such notice, to modify Executive' s employment situation in a manner acceptable to Executive and REIT; and (iv) notwithstanding such efforts, one or more of the Good Reason events continues to exist and has not been modified in a manner acceptable to Executive. If the REIT cures the Good Reason event in a manner acceptable to Executive during the 30 day period, Good Reason shall be deemed not to have occurred.


(d) Executive' s Death or Disability . The Executive' s employment shall terminate immediately upon his death or, upon written notice as set forth below, his Disability. As used in this Agreement, " Disability" shall mean such physical or mental impairment as would render the Executive eligible to receive benefits under the long-term disability insurance policy or plan then made available by the Company Group to the Executive. If the Employment Period is terminated by reason of the Executive' s Disability, either party shall give 30 days' advance written notice to that effect to the other.


(e) Date of Termination . " Date of Termination" shall mean: (A) if Executive' s employment is terminated by his death, the date of his death; (B) if Executive' s employment is terminated on account of disability under Section 5(d), 30 days after the date on which a notice of termination is given; (C) if Executive' s employment is terminated by the Company for Cause under Section 5(a), the date on which notice of termination is given; (D) if Executive' s employment is terminated under Section 5(b), 60 days after the date on which a notice of termination is given; and (E) if Executive' s employment is terminated by Executive under Section 5(c), 30 days after the date on which a notice of Good Reason is given.

6. Effect of Termination

(a) General . Regardless of the reason for any termination of this Agreement, the Executive (or the Executive' s estate if the Employment Period ends on account of the Executive' s death) shall be entitled to: (i) any unpaid portion of his Base Salary through the Date of Termination; (ii) reimbursement for any outstanding reasonable business expense he has incurred in performing his duties hereunder; (iii) continued insurance benefits to the extent required by law; (iv) payment of any vested but unpaid rights as required independent of this Agreement by the terms of any bonus or other incentive pay or stock plan, or any other employee benefit plan or program of the REIT; and (v) except in the case of " Termination by the Company for Cause," any bonus or incentive compensation that was approved but not paid. The amount


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payable under this Section 6(a) shall be paid to the Executive or the Executive' s estate (in the event of the Executive' s death) in a single lump sum no later than 30 days after the Date of Termination.


(b) Termination by the REIT for Cause or by Executive without Good Reason . If the REIT terminates the Executive' s employment for Cause or the Executive terminates his employment without Good Reason, the Executive shall have no rights or claims against the Company Group except to receive the payments and benefits described in Section 6(a). The REIT shall have no further obligations to Executive except as otherwise expressly provided under this Agreement, provided any such termination shall not adversely affect or alter Executive' s rights under any employee benefit plan of the REIT in which Executive, at the Date of Termination, has a vested interest, unless otherwise provided in such employee benefit plan or any agreement or other instrument attendant thereto. In addition, all vested but unexercised stock options held by Executive as of the Date of Termination must be exercised by Executive within three months following the Date of Termination or by the end of the option term, if earlier. All other stock-based grants and awards held by Executive shall vest or be canceled upon the Date of Termination in accordance with their terms.

(c) Termination by the REIT without Cause or by Executive for Good Reason . Except as provided in Section 6(d), if the REIT terminates ...