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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
La Quinta Inns, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
504195 10 0
-----------------------------------
(CUSIP Number)
John F. Schmutz
Vice President and
General Counsel
La Quinta Inns, Inc.
112 E. Pecan Street
San Antonio, TX 78205
(210) 302-6000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
January 3, 1998
-----------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 12 Pages
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CUSIP NO. 504195 10 0
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Gary L. Mead
###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
BK or PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
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7 SOLE VOTING POWER
NUMBER OF
4,556,876
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
4,556,876
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,556,876
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.60%
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14 TYPE OF REPORTING PERSON
IN
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Page 2 of 12 Pages
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Gary L. Mead hereby amends his Schedule 13D regarding La Quinta Inns,
Inc. (formerly La Quinta Motor Inns, Inc.) as set forth below. Because
this is the first electronic amendment to the Schedule 13D, the entire
text of the Schedule 13D has been restated pursuant to Rule 13d-2(c)
of the Securities Exchange Act of 1934, as amended. All share
amounts have been restated to give effect to stock splits.
Item 1. Security and Issuer
Common Stock of La Quinta Inns, Inc. (the "Issuer"), 112 E. Pecan
Street, San Antonio, Texas 78205
Item 2. Identity and Background
a.) Gary L. Mead
b.) 112 E. Pecan Street
San Antonio, Texas 78205
c.) President and Chief Executive Officer
La Quinta Inns, Inc.
112 E. Pecan Street
San Antonio, Texas 78205
d.) No.
e.) No.
f.) U.S.
Item 3. Source and Amount of Funds or Other Considerations
Mr. Mead originally purchased 303,750 shares of Common Stock on March
31, 1992, for $1,042,500, which shares were purchased through the use
of personal funds. On March 3, 1992, Mr. Mead entered into a
Non-Qualified Stock Option Agreement ("Option Agreement") with La
Quinta Inns, Inc. whereby he was to receive the option to acquire an
aggregate of 3,290,625 shares of Common Stock at $2.962963 a share.
Options for 506,250 shares each vested on March 3, 1992, and March 3,
1993, respectively. On June 8, 1993, the remaining 2,278,125 options
vested under a condition contained in the Agreement providing for
immediate vesting when the Issuer's Common Stock traded at a specified
level for a defined number of days.
On March 11, 1994, Mr. Mead was granted an option to acquire an
aggregate of 759,375 shares of Common Stock at $11.96 a share pursuant
to the Issuer's 1984 Stock Option Plan, as amended (the "1984 Plan").
These options vested on April 26, 1995, when the Issuer's Common Stock
traded at a specified level for a defined number of days. On February
22, 1996, pursuant to the 1984 Plan, Mr. Mead was granted an option to
acquire an aggregate of 281,250 shares at $18.42 per share. One-fourth
of these options, or 70,313 shares, vested in February 1997. An
additional 70,313 shares will vest in each of February 1998, February
1999 and February 2000. On February 26, 1997, Mr. Mead was granted an
option to acquire an aggregate of 250,000 shares at $19.88 per share.
These options vest ratably over 4 years. As a result of the Merger (as
defined herein,) all unvested options will accelerate and become
vested. Pursuant to the Merger Agreement, RECO (each as defined
herein) will pay cash to holders of vested options in an amount equal
to the difference between the exercise price of such option and the
cash to be paid by RECO per share of the Issuer's Common Stock in the
Merger.
In the event Mr. Mead elects to exercise his options to acquire
the 4,253,126 shares, the cost to him would be $22,666,424.80. He
would purchase these shares through personal funds and/or a bank loan.
Page 3 of 12 Pages
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Item 4. Purpose of Transaction
The initial purchase of 303,750 shares of Common Stock by Mr. Mead was
for investment purposes. The options to acquire 4,253,126 shares of
Common Stock described herein were acquired for investment purposes in
connection with an employment agreement between Mr. Mead and La Quinta
Inns, Inc. Mr. Mead reserves the right, subject to developments in the
Issuer's business and financial condition, market conditions and
other factors, to acquire additional shares of the Issuer's Common
Stock in the open market, in privately negotiated transactions, and
otherwise, including the acquisition of shares pursuant to exercise of
Mr. Mead's existing options. In addition, although he has no present
intention to do so, Mr. Mead reserves the right, subject to the
foregoing factors, to dispose of shares of Common Stock, which may
include disposition of shares in connection with the exercise of such
options. Other than as set forth herein, Mr. Mead has no plans or
proposals which would be required to be disclosed pursuant to
paragraphs (a) through (j) of Item 4 of Schedule 13D.
On January 3, 1998, the Issuer entered into an Agreement and Plan of
Merger (the "Merger Agreement"), by and among the Issuer, Meditrust
Corporation ("RECO") and Meditrust Operating Company ("OPCO"),
pursuant to which the Issuer will merge (the "Merger") with and into
RECO, upon the terms and subject to the conditions set forth in the
Merger Agreement.
Concurrently with the execution of the Merger Agreement, the Issuer,
RECO, OPCO, Gary L. Mead, and certain other shareholders of the Issuer
entered into a Shareholders Agreement pursuant to which such
shareholders agreed, during the Proxy Term: (i) to vote all of their
shares in favor of the Merger and against any other merger or
acquisition proposal, (ii) not to sell any of their shares and (iii)
to appoint RECO the irrevocable proxy for such shareholders. "Proxy
Term" means the period from the date of the Shareholders Agreement
until the earlier of (A) twelve months after the termination of the
Merger Agreement (after the termination of the Merger Agreement,
clauses (i) and (iii) above shall apply only to an aggregate number of
shares owned by such shareholders equal to ten percent of the number
of outstanding shares of the Issuer's Common Stock), and (B) the
effectiveness of the Merger. In addition, such shareholders granted to
RECO an option to purchase their shares at the price to be paid in the
Merger in the event that RECO believes in good faith that the exercise
of such option is necessary to avoid certain unfavorable tax events or
a violation of RECO's charter or bylaws.
At the request of RECO, such shareholders also agreed to elect to
receive all cash in the Merger. This election, however, will be
subject to the pro-ration procedures set forth in the Merger
Agreement and, accordingly, Mr. Mead believes that he will likely
receive a significant amount of stock in the Merger.
Concurrently with the execution of the Merger Agreement, the Issuer,
RECO, OPCO, Gary L. Mead and certain other shareholders of the Issuer
entered into a Registration Rights Agreement pursuant to which RECO
and OPCO have agreed to file a shelf registration statement for the
benefit of such shareholders and the shares of RECO and OPCO stock
received by such shareholders in the Merger. Pursuant to the
Registration Rights Agreement, such shelf registration statement will
be filed within 60 days of the effectiveness of the Merger and shall
be declared effective within 90 days of the effectiveness of the
Merger.
The foregoing description of the Shareholders Agreement and the
Registration Rights Agreement is qualified in its entirety by
reference to the Shareholders Agreement and the Registration Rights
Agreement, copies of which are attached hereto as Exhibits 10.2 and
10.3, respectively.
Item 5. Interest in Securities of the Issuer
a.) 4,556,876 shares of Common Stock, of which 303,750 are owned
outright by Mr. Mead and the remainder of which Mr. Mead has the
right to acquire. In the aggregate this represents 5.60% of the
total number of shares of Common Stock outstanding as of January
3, 1998.
b.) Mr. Mead has the sole power to vote or to direct the vote and to
dispose or to direct the disposition of, such shares of the
Issuer.
c.) Not Applicable.
d.) Not Applicable.
e.) Not Applicable.
Page 4 of 12 Pages
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Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer
The initial purchase of 303,750 shares of Common Stock by Mr. Mead was
for investment purposes. The options to acquire 4,253,126 shares of
Common Stock described herein were acquired for investment purposes in
connection with an employment agreement between Mr. Mead and La Quinta
Inns, Inc. Mr. Mead reserves the right, subject to developments in the
Issuer's business and financial condition, market conditions and
other factors, to acquire additional shares of the Issuer's Common
Stock in the open market, in privately negotiated transactions, and
otherwise, including the acquisition of shares pursuant to exercise of
Mr. Mead's existing options. In addition, although he has no present
intention to do so, Mr. Mead reserves the right, subject to the
foregoing factors, to dispose of shares of Common Stock, which may
include disposition of shares in connection with the exercise of such
options. Other than as set forth herein, Mr. Mead has no plans or
proposals which would be required to be disclosed pursuant to
paragraphs (a) through (j) of Item 4 of Schedule 13D.
On January 3, 1998, the Issuer entered into an Agreement and Plan of
Merger (the "Merger Agreement"), by and among the Issuer, Meditrust
Corporation ("RECO") and Meditrust Operating Company ("OPCO"),
pursuant to which the Issuer will merge (the "Merger") with and into
RECO, upon the terms and subject to the conditions set forth in the
Merger Agreement.
Concurrently with the execution of the Merger Agreement, the Issuer,
RECO, OPCO, Gary L. Mead, and certain other shareholders of the Issuer
entered into a Shareholders Agreement pursuant to which such
shareholders agreed, during the Proxy Term: (i) to vote all of their
shares in favor of the Merger and against any other merger or
acquisition proposal, (ii) not to sell any of their shares and (iii)
to appoint RECO the irrevocable proxy for such shareholders. "Proxy
Term" means the period from the date of the Shareholders Agreement
until the earlier of (A) twelve months after the termination of the
Merger Agreement (after the termination of the Merger Agreement,
clauses (i) and (iii) above shall apply only to an aggregate number of
shares owned by such shareholders equal to ten percent of the number
of outstanding shares of the Issuer's Common Stock), and (B) the
effectiveness of the Merger. In addition, such shareholders granted to
RECO an option to purchase their shares at the price to be paid in the
Merger in the event that RECO believes in good faith that the exercise
of such option is necessary to avoid certain unfavorable tax events or
a violation of RECO's charter or bylaws.
At the request of RECO, such shareholders also agreed to elect to
receive all cash in the Merger. This election, however, will be
subject to the pro-ration procedures set forth in the Merger
Agreement and, accordingly, Mr. Mead believes that he will likely
receive a significant amount of stock in the Merger.
Concurrently with the execution of the Merger Agreement, the Issuer,
RECO, OPCO, Gary L. Mead and certain other shareholders of the Issuer
entered into a Registration Rights Agreement pursuant to which RECO
and OPCO have agreed to file a shelf registration statement for the
benefit of such shareholders and the shares of RECO and OPCO stock
received by such shareholders in the Merger. Pursuant to the
Registration Rights Agreement, such shelf registration statement will
be filed within 60 days of the effectiveness of the Merger and shall
be declared effective within 90 days of the effectiveness of the
Merger.
The foregoing description of the Shareholders Agreement and the
Registration Rights Agreement is qualified in its entirety by
reference to the Shareholders Agreement and the Registration Rights
Agreement, copies of which are attached hereto as Exhibits 10.2 and
10.3, respectively.
Item 7. Material to be Filed as Exhibits
10.1 Non-Qualified Stock Option Agreement dated as of March 3, 1992,
between La Quinta Motor Inns, Inc. and Gary L. Mead.
10.2 Shareholders Agreement, dated as of January 3, 1998 by and among
La Quinta Inns, Inc., Meditrust Corporation, Meditrust Operating
Company, Gary L. Mead and the shareholders of La Quinta Inns,
Inc. named on the signature pages thereto (incorporated herein by
reference from Exhibit 10.1 to the Current Report on Form 8-K of
La Quinta Inns, Inc. filed with the Securities and Exchange
Commission on January 8, 1998).
10.3 Registration Rights Agreement, dated as of January 3, 1998 by and
among La Quinta Inns, Inc., Meditrust Corporation, Meditrust
Operating Company, Gary L. Mead and the shareholders of La Quinta
Inns, Inc. named on the signature pages thereto (incorporated
herein by reference from Exhibit 10.2 to the Current Report on
Form 8-K of La Quinta Inns, Inc. filed with the Securities and
Exchange Commission on January 8, 1998).
Page 5 of 12 Pages
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 15, 1998 /s/ GARY L. MEAD
-----------------------
Gary L. Mead
Page 6 of 12 Pages
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EXHIBIT INDEX
10.1 Non-Qualified Stock Option Agreement dated as of March 3, 1992,
between La Quinta Motor Inns, Inc. and Gary L. Mead.
10.2 Shareholders Agreement, dated as of January 3, 1998 by and among La
Quinta Inns, Inc., Meditrust Corporation, Meditrust Operating Company,
Gary L. Mead and the shareholders of La Quinta Inns, Inc. named on the
signature pages thereto (incorporated herein by reference from Exhibit
10.1 to the Current Report on Form 8-K of La Quinta Inns, Inc. filed
with the Securities and Exchange Commission on January 8, 1998).
10.3 Registration Rights Agreement, dated as of January 3, 1998 by and
among La Quinta Inns, Inc., Meditrust Corporation, Meditrust Operating
Company, Gary L. Mead and the shareholders of La Quinta Inns, Inc.
named on the signature pages thereto (incorporated herein by reference
from Exhibit 10.2 to the Current Report on Form 8-K of La Quinta
Inns, Inc. filed with the Securities and Exchange Commission on
January 8, 1998).
Page 7 of 12 Pages
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EXHIBIT 10.1
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED OPTION AGREEMENT ("Agreement") is made and entered into
as of the 3rd day of March, 1992, by and between La Quinta Motor Inns, Inc., a
Texas Corporation ("Optionor") and Gary L. Mead, ("Optionee").
WHEREAS, Optionor and Optionee are simultaneously with the execution hereof
entering into an Employment Agreement (the "Employment Agreement") whereby
Optionee will serve as President and Chief Executive Officer of Optionor on
the terms set forth therein;
WHEREAS, it is a condition of Optionee's execution of the Employment
Agreement that Optionor enter into this Agreement;
WHEREAS, the Board of Directors of Optionor has determined that it is in
the best interests of Optionor and its shareholders to encourage ownership in
Optionor by qualified employees and officers of Optionor, thereby providing an
incentive to Optionee to execute the Employment Agreement and providing
additional incentive for him to continue in the employ of Optionor;
NOW, THEREFORE, for and in consideration of the mutual promises contained
herein and in the Employment Agreement, the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Grant of Option; Vesting. Optionor hereby grants to Optionee, on the
terms and subject to the conditions set forth in this Agreement, including,
without limitation, the vesting schedule hereinafter set forth, options
("Options") to purchase at the Purchase Price (as hereinafter defined) up to an
aggregate of 650,000 shares (the "Shares") of Common Stock (the "Stock") of
Optionor. Options with respect to 100,000 of the Shares are vested as of the
date hereof. Options with respect to an additional 100,000 of the Shares shall
vest on each March 3 of the years 1993, 1994, 1995, and 1996. Options with
respect to the remaining 150,000 of the Shares shall vest immediately on the
close of business of the day, if any (the "Value Date"), during the Option
Period (as hereinafter defined) on which the average of the closing prices of
shares of the Stock on the New York Stock Exchange (or in any other securities
market on which shares of the Stock may then be trading) for the twenty trading
days (only taking into account days on which sales of the Stock occur)
immediately preceding and including the Value Date equals or exceeds $30.00 per
share (which dollar amount shall be adjusted appropriately from time to time
pursuant to the
EXHIBIT
Page 8 of 12 Pages
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provisions of Section 4 hereof) (the "Target Price"). Additionally, on the
Value Date, any other of the Options that are not then vested shall immediately
vest. In addition, all Options will immediately vest on the death or Disability
of Optionee (as defined in the Employment Agreement), or upon the termination
of Optionee's employment with Optionor by Optionor without Cause or by Optionee
for Good Reason (each as defined in the Employment Agreement).
2. Terms of Option; Exercise. Options may be exercised, in whole or in
part (but only with respect to such number of Options as have vested in
accordance with Section 1), by Optionee (except as set forth below), by the
service of written notice to Optionor of such exercise ("Exercise Notice"), at
any time on or after the date hereof and until the close of business on the
tenth anniversary of the date hereof (the "Option Period"), unless earlier
terminated in accordance with Section 5 hereof. Any unexercised Options, unless
earlier terminated pursuant to the provisions of Section 5 hereof, shall expire
and terminate on the tenth anniversary of the date hereof. The Exercise Notice
shall state the number of shares of Stock to be purchased hereunder and shall
be accompanied by delivery by Optionee of the Purchase Price. The Options shall
be exercised during Optionee's lifetime only by Optionee or by his guardian, or
legal representative, and after Optionee's death only by the person or entity
entitled to do so under Optionee's last will and testament or applicable
intestate law.
3. Purchase Price. The purchase price ("Purchase Price") for the Shares
upon exercise of Options pursuant to Section 2 hereof shall be $15.00 per share,
without commission or other charges. The Purchase Price may be paid by Optionee
by delivery of one or more of the following: (i) payment in cash or by check;
(ii) Shares duly endorsed for transfer to the Optionor, valued at the Fair
Market Value on the date of delivery; or (iii) a promissory note with a
two-year term and bearing interest at the AFR (as defined in the Employment
Agreement). Such promissory note will be recourse obligation of Optionee and,
in addition, will be secured by the Shares obtained upon exercise of Options.
Interest on such note shall be payable quarterly. The entire principal amount
of such note, together with all accrued and unpaid interest, will be due within
90 days after a termination of the employment of Optionee with Optionor
pursuant to the Employment Agreement by Optionor for Cause or by Optionee
without Good Reason. For purposes of this Section 3, "Fair Market Value" shall
mean the average of the high and low reported sales prices on the New York
Stock Exchange (or in any other securities market on which shares of the Stock
may then be trading) on the last preceding day on which sales occur.
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Page 9 of 12 Pages
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4. Adjustments.
In the event that the outstanding Shares subject to Options are, from time
to time, changed into or exchanged for a different number or kind of securities
of Optionor or of another corporation, by reason of merger, consolidation,
recapitalization, reclassification, split up, distribution or combination of
shares, or otherwise, or in the event of a spin-off or any other dividend or
distribution of cash or assets (other than ordinary cash dividends not
exceeding $.50 per share (if such shares currently are constituted) during any
calendar year). Optionor shall in good faith make an appropriate and equitable
adjustment to the aggregate number and kind of shares as to which Options (or
the portion thereof then unexercised) shall be exercisable and to the Target
Price to the end that after such event Optionee's rights and proportionate
interest and economic benefit shall be maintained as before the occurrence of
such event. Such adjustment in Options shall be made with any necessary
corresponding adjustment in the Purchase Price.
5. Termination of Employment. In the event of the termination of the
employment of Optionee with Optionor by Optionor with Cause or by Optionee
without Good Reason, all Options shall terminate ninety days after the
occurrence of such event, except for Options that have been exercised prior to
the expiration of such ninety-day period.
6. Agreement of Optionee. Optionee, by his acceptance hereof,
represents that he is acquiring Options, for his own account for investment and
not with a view to the distribution thereof or with any present intention of
selling any thereof.
7. Securities Act Compliance.
A. Notice of Transfer: Opinion of Counsel. If Optionee proposes to
transfer all or a portion of the Stock obtained upon exercise of Options (other
than pursuant to a registration statement which has become and is effective
under the Securities Act of 1933, as amended (the "Securities Act")), he shall
give Optionor written notice specifying the securities involved and describing
the manner in which such proposed transfer is to be made, together with either
(i) an opinion reasonably satisfactory to Optionor of counsel reasonably
satisfactory to Optionor (the fees and disbursements of which counsel shall be
paid by Optionee) stating in substance that registration under the Securities
Act is not required with respect to such transfer or (ii) a "no action" letter
from the staff of the Commission, which is reasonably satisfactory to counsel
for Optionor, with respect to such transfer. Following delivery of a notice
accompanied by an opinion of counsel to the effect set forth above or by such a
"no action" letter.
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Page 10 of 12 Pages
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Optionee will have the right to transfer, in a manner consistent with its
notice to Optionor, the securities proposed to be transferred.
8. Assignment. Optionee may not assign or transfer Options or any of
his rights hereunder. Any such purported assignment or transfer shall be null
and void and of no force and effect; provided, that this Section 8 shall not
prevent transfers by will or by the applicable laws of descent and distribution.
9. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed served, if hand delivered,
when so delivered or, if mailed, on deposit in the U.S. Mail, certified or
registered, return receipt request, addressed to the intended party as follows:
(a) If to Optionor:
La Quinta Motor Inns, Inc.
10010 San Pedro Avenue
San Antonio, TX 78216
Attention: Chairman of the Board
with a copy to:
La Quinta Motor Inns, Inc.
10010 San Pedro Avenue
San Antonio, TX 78216
Attention: General Counsel
(b) If to Optionee:
Gary L. Mead
19019 Campbell Road
Dallas, Texas 75252
with a copy to:
Latham & Watkins
633 W. 5th Street, Suite 4000
Los Angeles, California 90071
Attention: James D. C. Barrall
or to such other address as may be stated in written notice furnished by a
party to the other party.
10. Withholding. At the time of exercise of Options granted hereby,
Optionee shall make payment to all relevant federal and state taxing
authorities of any withholding applicable to the exercise of Options.
-4-
Page 11 of 12 Pages
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11. Shares to be Reserved. The Optionor shall at all times during the
---------------------
term of Options reserve and keep available such number of shares of authorized
and unissued Stock as will be sufficient to satisfy the requirement of this
Agreement.
12. Registration Rights. Simultaneously with the execution hereof
-------------------
Optionor and Optionee are entering into the Registration Rights Agreement in
the form of Exhibit "A" attached hereto.
13. Registration on Form S-8. Optionor shall promptly take all action
------------------------
necessary such that the issuance of Options and the issuance of Shares upon
exercise of Options are continuously registered under Form S-8 of the
Securities Act or any successor form.
14. Governing Law. This Agreement shall be governed and construed in
-------------
accordance with the internal laws of the State of Texas without regard to the
conflict of laws.
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original and all of which,
when taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof.
OPTIONOR:
LA QUINTA MOTOR INNS, INC.
By: /s/SAM BARSHOP
---------------------------------
SAM BARSHOP
Title: CHAIRMAN OF THE BOARD
------------------------------
OPTIONEE:
/s/ GARY L. MEAD
------------------------------------
GARY L. MEAD
-5-
Page 12 of 12 Pages
