CRESTLINE CAPITAL CORP
EXHIBIT 10.12
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<TYPE>EX-10.12
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<FILENAME>dex1012.txt
<DESCRIPTION>EXHIBIT 10.12
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                                                                   Exhibit 10.12

                          CRESTLINE CAPITAL CORPORATION
                     1998 COMPREHENSIVE STOCK INCENTIVE PLAN
                        1999 EXECUTIVE LOAN AWARD PROGRAM
                                 FIRST AMENDMENT

Purpose             The Compensation Policy Committee (the "Committee") of the
                    Board of Directors (the "Board") of Crestline Capital
                    Corporation (the "Company") has approved this First
                    Amendment (this "First Amendment") to the 1999 Executive
                    Award Loan Program (the "Awards") in order to provide
                    additional incentive for participating executives to
                    continue employment with the Company and promote the
                    interests of stockholders.

Effective Date      The effective date of this First Amendment is September
                    27, 2001, and it shall apply to interest payments on the
                    Loans (as defined below) otherwise due on or after such
                    date.

Amendment of        The secured promissory notes (collectively, the "Notes")
Interest Payment    evidencing the loans to the Terms participants
Terms               (collectively, the "Loans") shall continue to have interest
                    accrue at the current rate of 5.5% per annum, but such Notes
                    shall be amended and restated (in the form of replacement
                    secured promissory notes from the respective participants to
                    the Company) to provide that interest shall be payable as of
                    the due date of the principal amount of the corresponding
                    Loans.

Forgiveness of      If a participant remains continuously employed by the
Indebtedness;       Company or its subsidiary, the outstanding principal and
Bonus Payments      accrued interest of the participant's Loans will be forgiven
                    as follows:

                    ------------------------------------------------------------
                    Continuous         Percentage of then-outstanding principal
                    Employment to:     and accrued interest forgiven:
                    ------------------------------------------------------------
                    January 1, 2003                      33.3%
                    ------------------------------------------------------------
                    January 1, 2004                        50%
                    ------------------------------------------------------------
                    January 1, 2005                       100%
                    ------------------------------------------------------------

                    In addition, if within twelve (12) months after completion
                    of a Change in Control of the Company, (1) a participant
                    gives at least thirty (30) days (ten days for the Company's
                    or its subsidiary's failure to pay Base Salary) advance
                    written notice of resignation as a result of Good Reason and
                    resigns at the conclusion of such notice period (or earlier,
                    if the Company agrees in writing to an earlier termination
                    date) or (2) the Company or its subsidiary terminates the
                    participant's employment

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                    without Cause, then unless the Company or its subsidiary
                    concurrently gives or has previously given the participant
                    notice of Cause for termination, the participant shall have
                    100% of the then-outstanding principal balance and accrued
                    interest on his or her Loans forgiven. "Base Salary",
                    "Cause", "Change of Control" and "Good Reason" shall have
                    the meanings provided in the Crestline Capital Corporation
                    Change in Control Separation Pay Plan as in effect on the
                    effective date of this First Amendment and without regard to
                    the termination date of such plan; provided that if the
                    participant is as of the effective date of this First
                    Amendment subject to a written employment agreement with the
                    Company or its subsidiary, defining a termination for
                    "Cause", the definition of "Cause" in such employment
                    agreement shall apply to such participant. Further provided
                    that if the participant is subject to such an employment
                    agreement which provides for termination of employment
                    following a Change in Control, then in lieu of the twelve
                    (12) month, thirty (30) day and ten (10) day time periods
                    provided in this paragraph, the time periods designated in
                    such employment agreement for similar purposes shall apply.

                    At the time of the Company's forgiveness of any principal or
                    interest on any Loan, it will notify the participant of the
                    dollar amount of forgiveness as of such time.

Additional Bonus    At the time of each forgiveness of principal and interest on
Payments            a Loan, the Company shall also pay to each participant
                    receiving such forgiveness a bonus amount (the "Additional
                    Bonus Amount") so that after payment of federal, state or
                    local income taxes and employment taxes due on the
                    forgiveness of principal and interest and any imputed income
                    recognized under Section 7872 of the Internal Revenue Code
                    of 1986, as amended (the "Code") with respect to such
                    interest on the Notes, the participant shall have received
                    compensation equal to the benefit the participant would have
                    received if such Loan forgiveness had been tax-free and no
                    imputed income had been recognized.

                    Furthermore, if any Loan forgiveness and Additional Bonus
                    Amount, would when combined with any other payment or
                    benefit payable to participant (1) constitute a "parachute
                    payments" within the meaning of Section 280G (as it may be
                    amended or replaced) of the Code ("Parachute Payments") and
                    (2) be subject to the excise tax imposed by Section 4999 (as
                    it may be amended or replaced) of the Code (the "Excise
                    Tax"), then the Company shall pay to the participant an
                    additional amount (the "280G Gross-Up Amount") such that the
                    net benefits retained by the executive after the deduction
                    of the Excise Tax (including interest and penalties) and any
                    federal, state or local income taxes and employment taxes
                    (including interest and penalties) upon the Gross-Up Amount
                    shall be equal to the benefits that would have been

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                    delivered hereunder had the Excise Tax not been applicable
                    and the Gross-Up Amount not paid. For purposes of
                    determining the payments due under this paragraph: (1) the
                    Additional Bonus Payment shall be determined by the Company
                    (or its designee) in good faith, and (2) the determination
                    of whether the Excise Tax is payable, the amount thereof,
                    and the amount of any 280G Gross-Up Amount shall be made in
                    writing in good faith by a nationally recognized independent
                    certified public accounting firm appointed by the Company.
                    If the determination of the 280G Gross-Up Amount is not
                    finally accepted by the Internal Revenue Service (or state
                    or local revenue authorities) on audit, then appropriate
                    adjustments shall be computed based upon the amount of
                    Excise Tax and any interest or penalties so determined;
                    provided, however, that the participant in no event shall
                    owe Company on any portion of the 280G Gross-Up Amount that
                    is returned to the Company.

                    For purposes of making the calculations required by this
                    Section, to the extent not otherwise specified herein,
                    reasonable assumptions and approximations may be made with
                    respect to applicable taxes and reasonable, good faith
                    interpretations of the Code may be relied upon. The
                    participant shall furnish such information and documents as
                    may be reasonably requested by the Company (or its designee)
                    or the accounting firm in connection with the performance of
                    the calculations under this Section. The Company shall bear
                    all costs incurred in connection with the performance of the
                    calculations contemplated by this Section. The Company shall
                    pay the 280G Gross-Up Amount no later than sixty (60) days
                    following receipt of the accounting firm's determination of
                    the 280G Gross-Up Amount.

     IN WITNESS WHEREOF, the undersigned officer of the Company certifies that
this Amendment has been authorized and directed by the Compensation Policy
Committee of the Board of Directors of the Company on September 27, 2001.

                                      CRESTLINE CAPITAL CORPORATION


_______________________________       By:_________________________________

Secretary                             Name:_______________________________
                                      Title: Executive Vice President

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