COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement (‘‘CD&A”) with management of the Company. Based on the Compensation Committee’s review of the CD&A and the Compensation Committee’s discussions of the CD&A with management, the Compensation Committee recommended to the Board of Trustees (and the Board of Trustees has approved) that the CD&A be included in the Company’s Proxy Statement on Schedule 14A prepared in connection with the Annual Meeting.

Submitted by the Compensation Committee of the Board of Trustees

Michael J. Schall (Chairperson)

Cydney C. Donnell

Ron E. Jackson

Bonny W. Simi

COMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)

This CD&A describes the Company’s compensation program and compensation decisions for our NEOs for 2020. However, we note that, except for a special retention award, we use the same compensation program for all of our employees, not just for our NEOs. We compensate our other employees with annual cash base salaries, annual cash incentive bonuses and long-term equity-based awards with the same performance metrics and payout percentages as for our NEOs. It is our belief that using this same program throughout the Company serves to align the interests of all of our employees to the interests of our shareholders.

In deciding how to structure the Company’s compensation program each year, the Compensation Committee and the Board consider the results of the say-on-pay proposal made at the prior year’s annual meeting of shareholders. The average approval rate since inception of this advisory proposal is approximately 96%. In 2020, shareholders continued their significant support with approximately 97% of the votes cast for approval of the “say on pay” proposal at the 2020 annual meeting of shareholders. The Compensation Committee and the Board believe this strong level of support reflects a high degree of shareholder confidence that the Company’s compensation program is rewarding our executives appropriately.

Performance Highlights

In 2020, the NEOs faced the hospitality industry’s greatest year of dislocation to date, driven almost exclusively by the COVID-19 pandemic, and overcame the seemingly endless challenges through swift action to mitigate expenses, manage through operational changes and safety protocols, and maintain its balance sheet through multiple capital markets and asset transactions. Performance highlights for 2020 include the following:

•COVID-19 pandemic-related expense mitigation – The management team immediately took action to implement dramatic cost savings in March 2020, as the COVID-19 pandemic took hold in the United States, saving approximately $50 million in 2020. Measures included:

◦the temporary suspension of operations at many of our hotels;

◦the implementation of strict cash controls across our portfolio of hotels;

◦dramatic reductions in base salaries for our NEOS for April through December (Mr. Bortz’s was eliminated entirely and Mr. Martz’s and Mr. Fisher’s were reduced by 30%);

◦dramatic reductions in base salaries for our other employees for April through December (reduced by up to 20%);

◦dramatic reduction in our independent Trustees’ compensation for their service on the Board for all of 2020 (reduced by 30%);

◦a meaningful reduction on the Company’s capital expenditure budget; and

◦a halt of all major redevelopment projects that had not yet started.

•Launched Curator Hotel & Resort Collection – The Company transformed its portfolio wide initiatives efforts into a new company, which was successfully launched as a distinct owner-centric platform to offer an alternative for independent lifestyle hotels looking to strengthen their performance, providing them with best-in-class agreements, services, and technology, while allowing them to retain their unique identity.

•Successfully completed three property dispositions – Generated $387.0 million in gross proceeds from the sales of three hotel properties in 2020, at a weighted-average hotel-level EBITDA multiple of 13.0x and a weighted-average net operating income capitalization rate of 6.9% (after an assumed annual capital reserve of 4.0% of total hotel revenues), in each case based on the 2018 operating performance of the hotel properties.

•Negotiated a successful covenant waiver agreement and extended the Company’s debt maturities – In June 2020, the Company amended its loan agreements to allow for the extension of its near-term maturities, the flexibility to complete new acquisitions and other investments during the waiver period, the ability to complete capital improvements and redevelopment projects, and other favorable terms to allow for the Company to navigate through the year.

•Executed a $500 million convertible notes offering – Launched and closed on an underwritten public offering of $500 million aggregate principal amount of convertible senior notes with a 1.75% yield, improving the Company’s liquidity by $250 million, with equity dilution protection up to $33.02 per Common Share.

•Successfully achieved other objectives to enhance shareholder value – Completed the transformational redevelopments of Donovan Hotel to Hotel Zena Washington DC, Mason & Rook Hotel to Viceroy Hotel DC and renovations at Embassy Suites San Diego Downtown, Westin San Diego Gaslamp Quarter, Le Parc Suite Hotel, San Diego Mission Bay Resort, Chaminade Resort & Spa, Viceroy Hotel Santa Monica, and the Treehouses at Skamania Lodge.

•Maintained and strengthened financial controls and risk management – The audit of our internal controls and procedures again found no material weaknesses and no significant deficiencies, as set forth in the audit reports filed as part of our Annual Report on Form 10-K for the year ended December 31, 2020.

Compensation Highlights

In February 2020, the Compensation Committee chose to maintain the same structure of the 2019 compensation program for the 2020 compensation program. The Compensation Committee established the following program components for our NEOs:

•2020 annual base salary: no increase from 2019 for any of our NEOs;

•2020 target cash incentive bonus: no increase from 2019 for any of our NEOs;

•2020 awards of time-based and performance-based equity: no increase as percentage of target total compensation for any of our NEOs; and

•a special retention equity award to vest over four years beginning on January 1, 2023.

However, following the Compensation Committee’s decisions, COVID-19 was declared by the World Health Organization to be a pandemic, and the pandemic began to have a significantly adverse impact on the Company’s operations and financial performance. In response, the Company began to suspend operations at its hotel properties, reduced its capital investments and began to implement other expense-reduction measures.

As part of the expense-reduction measures, the Company’s executive officers voluntarily offered and recommended to the Board that the Board (i) effective April 1, 2020, and for the remainder of 2020, reduce the 2020 cash base salaries of Mr. Bortz to zero and of Messrs. Martz and Fisher by 30%; (ii) pay Common Shares in lieu of any cash that may be earned based on performance under the cash bonus incentive award for 2020; and (iii) terminate the special retention equity award.

In response, on March 22, 2020, the Compensation Committee and the Board took the following actions:

•reduced Mr. Bortz’s annual cash base salary to zero for April through December of 2020;

•reduced Mr. Martz’s annual cash base salary by 30% for April through December of 2020;

•reduced Mr. Fisher’s annual cash base salary by 30% for April through December of 2020;

•determined that Common Shares would be paid in lieu of any cash that may be earned under the 2020 cash incentive bonus award; and

•terminated the special retention equity award (and the equity granted pursuant to it was forfeited).

With regard to the performance-based components of the 2020 compensation program, the Compensation Committee determined the following in February 2021:

•payment of actual cash incentive bonus earned for 2020 performance against revised Annual Objectives (as described further below): 75% of target (although actual performance was at 153% of target); and

•vesting of performance-based equity awarded in February 2018 after the three-year measurement period ended December 31, 2020: 0% of target (i.e., no equity vested).

We also provide various health and welfare benefits to our NEOs that are generally the same as provided to all of our employees. These benefits are competitive with those offered by companies that we compete with for talent and provide another tool that allows us to attract and retain talented executives.

The Compensation Committee and the Board have structured the program so that a significant portion of each NEO’s overall compensation: (i) is earned and paid over a period of more than one year; (ii) depends on the Company’s performance relative to that of peer lodging REITs; (iii) is, at target levels of compensation, measured against total target compensation paid by peer lodging REITs; and (iv) depends on the Company’s total absolute and relative shareholder returns and other absolute and relative performance measurements. In this compensation framework, if the Company has poor relative performance and/or poor total shareholder returns, our NEOs could receive incentive compensation below established target amounts (potentially as low as zero) and lower total compensation. In return, our NEOs should have an opportunity, in the event of superior relative performance and superior total shareholder returns, to earn overall compensation packages significantly greater than established target amounts.

The following two charts show the composition of the total 2020 target regular compensation for our NEOs by form and by type. For each chart, (i) the center four “slices” show the percentages of the total represented by each form of compensation set forth in the table above; (ii) the inner partial ring shows the percentage of the total compensation that is “at-risk” and may only be earned based on the level of attainment of our performance goals; and (iii) the outer partial ring shows the percentage of the total composed of long-term equity awards. The charts do not account for the reductions in the NEOs’ base salaries for the April through December period of 2020 or the Compensation Committee decision to issue Common Shares in lieu of any cash incentive bonus earned. (Percentages may not total 100% due to rounding.)

Target Compensation Mix

            

         Chief Executive Officer                                          Other Two NEOs       

For 2020, the Compensation Committee and the Board determined that executive compensation would consist of the same components that comprised the 2019 compensation program as described above.

Base Salary – Fixed, Not “At-Risk”

Base salary is the only fixed component of the compensation paid to our NEOs. For 2020, base salary as a percentage of target total compensation for each NEO comprised only 16% for Mr. Bortz and 23% for each of Mr. Martz and Mr. Fisher. After taking into consideration the reductions in the NEOs’ base salaries for the April through December period of 2020, the percentages were 4% and 19%, respectively.

Because base salaries are just one component of total pay, we do not target base salaries to any specific level but do confirm that the base salaries for our NEOs are within market parameters using publicly available data, reports of compensation consultants (if retained by the Compensation Committee) and market knowledge. All base salary decisions for our NEOs are made at the first Compensation Committee meeting of the year and take effect as of January 1 of that year.

In 2020, the Compensation Committee and the Board decided not to increase the annual base salaries of our NEOs above the 2019 amounts, having determined, among other things, that the amounts were sufficient as part of the target compensation to retain and motivate them.

In March 2020, at the voluntary request of Messrs. Bortz, Martz and Fisher in furtherance of the Company’s efforts to mitigate the financial impact on the Company of the COVID-19 pandemic, the Board reduced the base salaries of our NEOs for the months of April through December of 2020. For each of those months, Mr. Bortz’s salary was zero and the salaries of Messrs. Martz and Fisher were reduced by 30%.

The 2020 annual base salaries for the NEOs are set forth in the Summary Compensation Table located elsewhere in this Proxy Statement.

Annual Cash Incentive Bonus – At-Risk / Performance-Based Compensation

The Compensation Committee emphasizes the importance of incentive cash compensation as a component of total compensation for our NEOs. The Company believes this component of the Company’s compensation program is an investment in high-quality, successful employees who can improve the operational performance of the Company’s hotels and generate new business and transaction opportunities that create value for shareholders.

The annual cash incentive bonus program is intended to compensate our NEOs for achieving our annual goals at both the corporate and hotel property levels, as well as for implementing long-term plans and strategies. However, we do not guarantee any bonuses, and actual amounts paid may range from 0% to 200% of the target amounts.

For 2020, the Compensation Committee and the Board decided not to increase the amount of target cash incentive bonus for our NEOs above the 2019 amounts, having determined, among other things, that the amounts were sufficient as part of the target compensation to retain and motivate them.

As a result, the Compensation Committee and the Board established target cash incentive bonuses for 2020 for Messrs. Bortz, Martz and Fisher of $1,203,750, $500,000 and $500,000, respectively. The target cash incentive bonus amounts as a percentage of annual base salary for Mr. Bortz and each of Messrs. Martz and Fisher were 161% and 100%, respectively. The target cash incentive bonus amounts as a percentage of target total compensation for Mr. Bortz and each of Messrs. Martz and Fisher were 25% and 23%, respectively.

For each executive, the 2020 target cash incentive bonus was based on the Company meeting the target levels of certain annual objectives established by the Board (the “Annual Objectives”), which were initially set in February 2020 and were designed to align the incentives of the Company’s employees and management with the interests of the Company’s shareholders.

Initially, the Annual Objectives were based on the percentage growth of the Company’s hotel-level EBITDA compared to the same measure for a group of six full-service lodging REITs and were comprised of, the growth of the Company’s Adjusted FFO per Common Share compared to the same measure provided in the Company’s budget for 2020, the growth in the Company’s RevPAR penetration index compared to the competitive sets for the Company’s hotel properties portfolio, the amount of annualized hotel-level EBITDA improvements that could be made based on portfolio-wide asset management enhancements identified during 2020, the degree to which certain asset management objectives were achieved, and the degree to which particular business objectives, including asset management initiatives, acquisition/disposition goals, corporate finance and balance sheet goals and internal controls and compliance, were executed and met.

However, as the crisis in the lodging industry caused by the COVID-19 pandemic wore on in 2020, the Compensation Committee and the Board determined that the Annual Objectives should be modified to focus our NEOs and all other employees on the Company’s emergent needs and investments for success following the COVID-19 pandemic. Therefore, the Compensation Committee and the Board revised the Annual Objectives for 2020 to be as follows:

•50% of the target bonus, up to a maximum of 100%, was based on the degree of success in managing through the crisis of the COVID-19 pandemic, including taking strategic and tactical actions to mitigate operating losses at both the hotel and the corporate level and to enhance liquidity (the “Crisis Management Objective”);

•20% of the target bonus, up to a maximum of 40%, was based on achieving certain asset management initiatives, including completing 11 major hotel renovations, completing three hotel transitions, and identifying annualized hotel-level EBITDA improvements that could be made based on portfolio-wide asset management enhancements (the “Asset Management Objective”); and

•30% of the target bonus, up to a maximum of 60%, was based on the degree to which particular business objectives, including acquisition/disposition goals, corporate finance and balance sheet goals and internal controls and compliance, were executed and met (the “Investment Objective”).

Annual Objective			Target Performance			Minimum Payout(1) (% of Target)			Target Payout (% of Target)			Maximum Payout (% of Target)
Crisis Management			Score of 3 on a scale of 1 to 5			—%			50.0%			100.0%
Asset Management			Score of 3 on a scale of 1 to 5			—%			20.0%			40.0%
Investment			Score of 3 on a scale of 1 to 5			—%			30.0%			60.0%
Maximum Total Payout (% of Target)						—%			100.0%			200.0%

(1)The Compensation Committee did not establish a threshold level of performance for any of the performance objectives. Rather, the Compensation Committee established a minimum payout level of zero for each performance objective, and the minimum payout level for all performance objectives in the aggregate is zero.

For 2020, the Company’s actual performance against each of the Annual Objectives was as follows:

The Company’s performance relative to the Annual Objectives resulted in a formula-based achievement level of 153.2% of target. In February 2021, the Compensation Committee and the Board took into account the following particular areas of achievement when determining the amount of cash bonus to award each executive:

•COVID-19 pandemic-related expense mitigation – The management team immediately took action to implement dramatic cost savings in March 2020, as the COVID-19 pandemic took hold in the United States, saving approximately $50 million in 2020. Measures included:

◦the temporary suspension of operations at many of our hotels;

◦the implementation of strict cash controls across our portfolio of hotels;

◦dramatic reductions in base salaries for our NEOs for April through December (Mr. Bortz’s was eliminated entirely and Mr. Martz’s and Mr. Fisher’s were reduced by 30%);

◦dramatic reductions in base salaries for our other employees for April through December (reduced by up to 20%);

◦dramatic reduction in our independent Trustees’ compensation for their service on the Board for all of 2020 (reduced by 30%);

◦a meaningful reduction on the Company’s capital expenditure budget; and

◦a halt of all major redevelopment projects that had not yet started.

•Launched Curator Hotel & Resort Collection – The Company transformed its portfolio wide initiatives efforts into a new company, which was successfully launched as a distinct owner-centric platform to offer an alternative for independent lifestyle hotels looking to strengthen their performance, providing them with best-in-class agreements, services, and technology, while allowing them to retain their unique identity.

•Successfully completed three property dispositions – Generated $387.0 million in gross proceeds from the sales of three hotel properties in 2020, at a weighted-average hotel-level EBITDA multiple of 13.0x and a weighted-average net operating income capitalization rate of 6.9% (after an assumed annual capital reserve of 4.0% of total hotel revenues), in each case based on the 2018 operating performance of the hotel properties.

•Negotiated a successful covenant waiver agreement and extended the Company’s debt maturities – In June 2020, the Company amended its loan agreements to allow for the extension of its near-term maturities, the flexibility to complete new acquisitions and other investments during the waiver period, the ability to complete capital improvements and redevelopment projects, and other favorable terms to allow for the Company to navigate through the year.

•Executed a $500 million convertible notes offering – Launched and closed on an underwritten public offering of $500 million aggregate principal amount of convertible senior notes with a 1.75% yield, improving the Company’s liquidity by $250 million, with equity dilution protection up to $33.02 per Common Share.

•Successfully achieved other objectives to enhance shareholder value – Completed the transformational redevelopments of Donovan Hotel to Hotel Zena Washington DC, Mason & Rook Hotel to Viceroy Hotel DC and renovations at Embassy Suites San Diego Downtown, Westin San Diego Gaslamp Quarter, Le Parc Suite Hotel, San Diego Mission Bay Resort, Chaminade Resort & Spa, Viceroy Hotel Santa Monica, and the Treehouses at Skamania Lodge.

•Maintained and strengthened financial controls and risk management – The audit of our internal controls and procedures again found no material weaknesses and no significant deficiencies, as set forth in the audit reports filed as part of our Annual Report on Form 10-K for the year ended December 31, 2020.

Although the Company significantly exceeded the target level of performance of the Annual Objectives, the NEOs recommended that the Compensation Committee reduce the payout percentage from the calculated 153.2% to a lower amount. The named executive officers made this recommendation in light of the performance of the Company’s total shareholder return in 2020 and in recognition of the exceptional toll the COVID-19 pandemic has taken on the lodging industry. Taking into account both this recommendation and the actual results for each of the Annual Objectives, the Compensation Committee

determined, in its sole discretion, that it would reduce the payout percentage to 75.0% of the target cash incentive bonuses for 2020. As a result, Mr. Bortz and each of Messrs. Martz and Fisher were awarded $902,813 and $375,000, respectively. Pursuant to the Board’s decision in March 2020, these amounts were paid in the form of Common Shares in lieu of cash.

Long-Term Equity Incentive Awards – At-Risk / Performance-Based Compensation and Time-Based Vesting

The largest portion of compensation for our NEOs comes from long-term equity incentive awards. For 2020, the aggregate target value of both forms of long-term equity incentive award as a percentage of target total compensation was 59% for our Chief Executive Officer and 53% for each of our Chief Financial Officer and our Chief Investment Officer.

The 2009 Equity Incentive Plan allows for long-term incentives to our executive officers, key employees and consultants and other service providers to the Company, its subsidiaries and advisors through grants of option rights, appreciation rights, restricted share awards, performance-based equity awards, LTIP units in our operating partnership and other forms of equity incentive awards. Awards granted to NEOs and other employees under the incentive plan are designed to provide grantees with an incentive to promote the long-term success of the Company in line with our shareholders’ interests. The awards align the recipients’ interests with the interests of shareholders by providing each recipient with an ownership interest in the Company and a stake in the Company’s success. The 2009 Equity Incentive Plan is administered by the Compensation Committee, which has discretion to determine those individuals or entities to whom awards will be granted, the number of shares subject to such rights and awards and other terms and conditions of the option rights, appreciation rights and restricted share awards. Awards may have a vesting period that is tied to each NEO’s or employee’s continued service to the Company or a specifically identified set of performance measures.

Long-term equity incentive awards for the NEOs with respect to a fiscal year are typically issued near the beginning of such fiscal year.

Awards of Performance-Based Equity

In February 2020, each of Messrs. Bortz, Martz and Fisher received awards of performance-based equity, in the form of performance units, which will vest in the form of Common Shares if, and to the degree that, the long-term performance criterion established by the Board is met, provided that the recipient remains employed by the Company through the end of the applicable measurement period (or as otherwise described below under ‘‘—Change in Control Severance Agreements, Equity Award Vesting and Other Termination Policies—Vesting of Long-Term Equity Incentive Awards”).

The number of performance units that may vest in each measurement period will be determined by the “Relative TSR Objective,” which is the Company’s total shareholder return (Common Share price appreciation/depreciation plus paid dividends) (“TSR”) compared to the TSR of each member of a group of 13 publicly listed hospitality REITs, collectively referred to as the TSR Peer Group. The following companies comprise the “TSR Peer Group”: Apple Hospitality REIT, Inc., Ashford Hospitality Trust, Inc., Braemar Hotels & Resorts Inc., Chatham Lodging Trust, DiamondRock Hospitality Company, Hersha Hospitality Trust, Host Hotels & Resorts, Inc., Park Hotels & Resorts Inc., RLJ Lodging Trust, Ryman Hospitality Properties, Inc., Summit Hotel Properties, Inc., Sunstone Hotel Investors, Inc. and Xenia Hotels & Resorts, Inc.

There are four measurement periods of the Relative TSR Objective under the awards, and the percentage of the target number of performance units that may vest based on performance during that period varies, as follows:

•50% (up to a maximum of 125%) of the target number of performance units will be determined by the Relative TSR Objective measured for the three-year period from December 31, 2019 through December 31, 2022;

•16.7% (up to a maximum of 41.8%) of the target number of performance units will be determined by the Relative TSR Objective measured for the one-year period from December 31, 2019 through December 31, 2020;

•16.7% (up to a maximum of 41.7%) of the target number of performance units will be determined by the Relative TSR Objective measured for the one-year period from December 31, 2020 through December 31, 2021; and

•16.6% (up to a maximum of 41.5%) of the target number of performance units will be determined by the Relative TSR Objective measured for the one-year period from December 31, 2021 through December 31, 2022.

The level of performance against the Relative TSR Objective will be measured relative to a target. The payout level varies by level of performance achieved for each measurement period, from a minimum of 0% up to target and a maximum of 250%, as shown in the following table (and a payout level between the minimum and target, or between target and the maximum, will be interpolated):

2020-2023 Long-Term Objective			Target Performance			Minimum Payout(1) (% of Target)			Target Payout (% of Target)			Maximum Payout (% of Target)
Relative TSR			TSR 50th percentile of Peer Group			—			100%			200%
Maximum Payout per Period (% of Target)						—			100%			200%

(1)The Compensation Committee did not establish a threshold level of performance for the performance objective. Rather, the Compensation Committee established a minimum payout level of zero.

If the Company’s TSR is greater than 0% for the three-year measurement period ending December 31, 2022, then the maximum percentage of the target number of performance units will be capped at 200%, regardless of the degree of the Company’s out-performance, if any, against the Relative TSR Objective. If the Company’s TSR is less than 0% for the three-year measurement period ending December 31, 2022, then the maximum percentage of the target number of performance units will be capped at 100%, regardless of the degree of the Company’s out-performance, if any, against the Relative TSR Objective.

The minimum, target and maximum number of performance units subject to the 2020 performance-based equity incentive awards for the Company’s three executive officers are as follows:

(1)The Compensation Committee did not establish a threshold level of performance for the performance objective. Rather, the Compensation Committee established a minimum payout level of zero.

(2)The amounts in this column show the dollar values of the performance-based equity awards assuming that on the grant date of the awards the highest level of performance was probable, the maximum value of the awards would be earned and the value per performance unit was assumed to be the closing price per Common Share on the NYSE on the date of grant, February 12, 2020. The values of the performance-based equity awards are dependent in part on the Company’s performance over a three-year period and there is no assurance that the maximum value of the awards will be earned.

For each NEO, the actual amount of performance units that will vest (and be settled in the form of Common Shares) after the end of each measurement period will depend on the Company’s performance against the Relative TSR Objective as determined by the Compensation Committee and requires that the recipient remains employed by the Company through the end of such measurement period or as otherwise described below. The performance units will, prior to vesting, not be entitled either to receive dividends or to be voted, but dividends will, in effect, accrue on the performance units and will be paid if, but only if, and to the extent the performance units vest and are settled in the form of Common Shares.

For 2020, the target value of the awards of performance-based equity as a percentage of target total compensation for each NEO was 35% for Mr. Bortz and 32% for each of Mr. Martz and Mr. Fisher.

Awards of Time-Based Vesting Equity

In February 2020, each of Messrs. Bortz, Martz and Fisher received awards of restricted Common Shares subject to pro rata time-based vesting over three years on January 1, 2021, January 1, 2022 and January 1, 2023, provided that the recipient remains employed by the Company on each vesting date (or as otherwise described below under ‘‘—Change in Control Severance Agreements, Equity Award Vesting and Other Termination Policies—Vesting of Long-Term Equity Incentive Awards”).

Messrs. Bortz, Martz and Fisher received restricted Common Shares in the amounts of 45,658, 18,752 and 18,752, respectively. The shares were granted pursuant to the 2009 Equity Incentive Plan and were intended as part of the 2020 compensation program. These awards are included in the Summary Compensation Table located elsewhere in this Proxy Statement. The grant date fair values of the awards, calculated in accordance with FASB ASC 718, were $1,165,649, $478,739 and $478,739, respectively. The grant date fair value of these time-based vesting equity awards as a percentage of 2020 target total compensation for each NEO was 23%, 21% and 21%, respectively.

Special Retention Awards – Cash and Equity

2020 Special Retention Equity Award - terminated; no benefits received

In February 2020, in recognition of the importance of retaining our three executive officers and the increasing marketability and competition for their respective skills, the Compensation Committee and the Board granted a special retention equity award of LTIP Class B Units to our executive officers. The Compensation Committee and the Board intended for the award to provide an additional incentive to our executive officers to remain at the Company and to strengthen further the alignment of the officers’ interests with those of the Company’s other shareholders. The LTIP Class B Units were to vest pro rata over a four-year period on January 1, 2023, January 1, 2024, January 1, 2025 and January 1, 2026, provided that the recipient remained employed by the Company through the applicable vesting date or as otherwise described below. Messrs. Bortz, Martz and Fisher were each awarded 138,606 LTIP Class B Units. This special retention equity award is not treated as a recurring component of the executive officers’ annual compensation packages.

However, in March 2020, at the voluntary request of Messrs. Bortz, Martz and Fisher in furtherance of the Company’s efforts to mitigate the financial impact on the Company of the COVID-19 pandemic, the Board terminated this special retention equity award and the LTIP Class B Units granted pursuant to it were forfeited.

2021 Special Retention Equity Award

In February 2021, in recognition of the increased importance of retaining our three executive officers, their increased marketability and competition for their respective skills, the Compensation Committee and the Board granted a special retention equity award of LTIP Class B Units to our executive officers. The Compensation Committee and the Board intended for the award to provide an additional incentive to our executive officers to remain at the Company and to strengthen further the alignment of the officers’ interests with those of the Company’s other shareholders. The LTIP Class B Units will vest pro rata over a four-year period on January 1, 2023, January 1, 2024, January 1, 2025 and January 1, 2026, provided that the recipient remains employed by the Company through the applicable vesting date or as otherwise described below. Mr. Bortz was awarded 216,035 LTIP Class B Units and Messrs. Martz and Fisher were each awarded 192,031 LTIP Class B Units. This special retention equity award for our NEOs is not treated as a recurring component of the executive officers’ annual compensation packages.

Other Benefits

We provide other health and welfare benefits to our NEOs on the same basis as we provide those benefits to all employees. The Compensation Committee does not view benefits and perquisites as a key component of the Company’s compensation program and their total value remains a small percentage of each NEO’s base salary.

Other Compensation Considerations

Share Ownership Guidelines for Named Executive Officers

In 2010, the Board established share ownership guidelines for our NEOs. The Board believes that encouraging each NEO to maintain a meaningful ownership interest in the Company relative to the NEO’s annual base salary is in the best interest of the Company and its shareholders and is likely to further encourage the NEO to act in a manner that creates value for the Company’s shareholders. Pursuant to the guidelines, the Board recommends that each of our executive officers should own shares in the Company having an aggregate value equal to or greater than the multiple of his base salary as shown in the following table.

(1)Amounts are based on each executive officer’s base salary as originally established for 2020 and do not take into account the reductions made for the April through December period of 2020.

(2)Amounts are based on the closing price per Common Share on the NYSE on March 25, 2021 (which was $24.46) and the total number of Common Shares and LTIP units (which, when vested and after reaching parity with common units of our operating partnership (“OP units”), may be exchanged for an equal number of OP units and subsequently redeemed for cash or an equal number of Common Shares, at our option) owned by the executive.

Compensation Risk Assessment

The Compensation Committee considers at least annually whether our compensation program encourages our executive officers to manage risk prudently across the Company and whether our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.

The Company’s compensation program, management team and the culture they foster encourage value creation for our shareholders over the long-term and discourage a focus on maximizing short-term value at the long-term’s expense. We evaluate performance using both quantitative and qualitative measures and many elements of our compensation program serve to mitigate excessive and inappropriate risk-taking. For example, we seek to compensate our executives with a well-balanced mix of base salary, performance-based annual cash incentive bonuses and long-term equity incentive awards. Our executive officers’ base salaries provide assured levels of income that do not vary with the executives’ or the Company’s performance. We balance the certainty of the base salary with the potential for additional cash based on one-year performance metrics that are both quantitative and qualitative. The long-term equity incentive awards are themselves balanced between equity awards that will vest based on time and service over three years (five years in the case of a special retention award) and awards that may vest, if at all, based on performance over multi-year periods, usually three years. In this way, we seek to motivate our executives to consider the impact of their decisions over the short, medium and long terms.

The Company believes that its compensation policies and practices embodied in the compensation programs for 2020 appropriately align management’s incentives with the interests of our shareholders. As a result, the Company believes its compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

In addition, our clawback policy, share ownership guidelines (which have been met by every executive officer and Trustee) and prohibition against hedging further mitigate the possibility of excessive and inappropriate risk-taking. Finally, we have never granted stock options.

Payments Upon Termination and Vesting of Equity Awards Upon A Change in Control

We have a change in control severance agreement in place with each NEO providing for various payments and benefits to be made to him if there is a change in control or his employment with us is terminated for certain reasons. The circumstances in which payments may be made and the potential amounts of those payments are described in more detail in the “—Change in Control Severance Agreements, Equity Vesting and Other Termination Policies” and “—Termination Payments Table” sections below. We believe that the payments provided for in these agreements are reasonable and appropriate as part of the total compensation packages available for our NEOs.

In addition, the Compensation Committee considers the effect of accelerated vesting of certain equity awards upon a termination of an named executive officer or a change in control of the Company. The Compensation Committee approves of the terms of the time-based restricted share award agreements and the performance-based equity award agreements, including the immediate vesting of time-based restricted Common Shares (and, in the case of performance-based equity awards, the immediate vesting of at least the target number of Common Shares) upon a change in control of the Company, upon a NEO’s resignation for good reason or upon a named executive officer’s termination without cause. The Compensation Committee believes that the terms of the time-based restricted share award agreements and the performance-based equity award agreements are competitive with those of other lodging REITs, promote stability among the Company’s NEOs, which is important to the Company’s overall performance, and provide appropriate incentive to align the interests of management with shareholders’ interests in evaluating potential acquisitions. For more information on the vesting terms of the NEO’s time-based restricted Common Shares and performance-based equity awards, see “Change in Control Severance Agreements, Equity Award Vesting and Other Termination Policies—Vesting of Long-Term Equity Incentive Awards.”

Tax Deductibility of Executive Compensation

Section 162(m) of the Code provides that the Company may not deduct compensation in excess of $1 million paid in any fiscal year to any of certain executive officers (who are referred to as “covered employees” in Section 162(m)). As amended by the Tax Cut and Jobs Act, or the TCJA, and subject to a transition rule that preserves the pre-TCJA rules for written binding contracts in effect on November 2, 2017, the Company’s “covered employees” are our Chief Executive Officer, our Chief Financial Officer and our Chief Investment Officer. An individual who is a “covered employee” of the Company in any year after 2016 will remain a “covered employee” under Section 162(m) regardless of the individual’s officer status or level of compensation.

In December 2020, final regulations under Section 162(m) were issued. Among other things, the regulations provide that the Company’s distributive share of any compensation deduction for amounts paid to a “covered employee” by our operating partnership after December 18, 2020 will be subject to Section 162(m)’s deduction limit, i.e., as if that compensation was paid by the Company. The treatment of amounts paid by our operating partnership under the regulations is subject to a transition rule for compensation paid under a binding written contract that was in effect on December 20, 2019 and that is not materially modified.

The Compensation Committee assesses, and will continue to assess, the impact of Section 162(m), including changes enacted under the TCJA and described in the final regulations, in considering the design of the Company’s executive compensation practices. However, in order to maintain flexibility in compensating our NEOs in a manner designed to promote our corporate goals, including retaining and providing incentives to our NEOs, the Compensation Committee has not adopted a policy that all compensation must be deductible.

(1)For each NEO for 2018 and 2019, the total of the amounts shown in the Bonus and Non-Equity Incentive Plan Compensation columns equals the amount of the actual annual cash incentive bonus paid in February or March of the following year. Any amount shown in the Bonus column is the discretionary amount of the actual annual cash incentive bonus awarded in excess of the formula-based amount of the actual annual cash incentive bonus for that year. For each NEO for 2020, the amount shown in the Non-Equity Incentive Plan Compensation column equals the amount of the actual annual cash incentive bonus paid in February 2021 for 2020 performance.

(2)For information regarding the Company’s assumptions made in the valuation of time-based restricted share awards, performance-based equity awards and LTIP unit awards, see Note 8 to the financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2020. The table below shows the dollar value of performance-based equity awards for each NEO assuming that (i) on the grant date of the awards the highest level of performance was probable, (ii) the maximum value of the awards would be earned and (iii) the value per Common Share upon maximum vesting is the closing price per Common Share on the NYSE on the date of grant. The values of the performance-based equity awards are dependent on the Company’s performance over a three-year or five-year period, as applicable, and there is no assurance that the maximum value of the awards will be earned.

			Maximum Value of Performance-Based Equity Awards Assuming Highest Performance Level
Year			Bortz			Martz			Fisher
2020			$3,496,997			$1,436,267			$1,436,267
2019			$3,438,863			$1,412,378			$1,412,378
2018			$2,611,752			$1,162,122			$1,162,122

(3)Reflects 45,658 restricted Common Shares that vested or will vest ratably on January 1, 2021, January 1, 2022 and January 1, 2023 and the target amount of Common Shares that may vest pursuant to the February 2020 performance-based equity awards.

(4)Amount includes (i) $24,265 in health insurance premiums, (ii) $9,847 in dental, life and long-term disability insurance premiums, (iii) $11,400 in employer-matching contributions to the Company’s 401(k) plan and (iv) $6,000 in employer-matching charitable contributions.

(5)Reflects 35,055 restricted Common Shares that vested or will vest ratably on January 1, 2020, January 1, 2021 and January 1, 2022 and the target amount of Common Shares that may vest pursuant to the February 2019 performance-based equity awards.

(6)Amount includes (i) $32,214 in health insurance premiums, (ii) $10,025 in dental, life and long-term disability insurance premiums, (iii) $11,200 in employer-matching contributions to the Company’s 401(k) plan and (iv) $9,000 in employer-matching charitable contributions.

(7)Reflects 23,619 restricted Common Shares that vested or will vest ratably on January 1, 2019, January 1, 2020 and January 1, 2021 and the target amount of Common Shares that may vest pursuant to the February 2018 performance-based equity awards.

(8)Amount includes (i) $31,742 in health insurance premiums, (ii) $10,081 in dental, life and long-term disability insurance premiums, (iii) $11,000 in employer-matching contributions to the Company’s 401(k) plan and (iv) $13,500 in employer-matching charitable contributions.

(9)Reflects 18,752 restricted Common Shares that vested or will vest ratably on January 1, 2021, January 1, 2022 and January 1, 2023 and the target amount of Common Shares that may vest pursuant to the February 2020 performance-based equity awards.

(10)Amount includes (i) $25,230 in health insurance premiums, (ii) $9,610 in dental, life and long-term disability insurance premiums, and (iii) $11,400 in employer-matching contributions to the Company’s 401(k) plan.

(11)Reflects 14,398 restricted Common Shares that vested or will vest ratably on January 1, 2020, January 1, 2021 and January 1, 2022 and the target amount of Common Shares that may vest pursuant to the February 2019 performance-based equity awards.

(12)Amount includes (i) $32,904 in health insurance premiums, (ii) $10,012 in dental, life and long-term disability insurance premiums, (iii) $11,200 in employer-matching contributions to the Company’s 401(k) plan and (iv) $1,000 in employer-matching charitable contributions.

(13)Reflects 10,509 restricted Common Shares that vested or will vest ratably on January 1, 2019, January 1, 2020 and January 1, 2021 and the target amount of Common Shares that may vest pursuant to the February 2018 performance-based equity awards.

(14)Amount includes (i) $31,324 in health insurance premiums, (ii) $10,142 in dental, life and long-term disability insurance premiums and (iii) $11,000 in employer-matching contributions to the Company’s 401(k) plan.

(15)Amount includes (i) $29,558 in health insurance premiums, (ii) $9,572 in dental, life and long-term disability insurance premiums, (iii) $11,400 in employer-matching contributions to the Company’s 401(k) plan and (iv) $1,250 in employer-matching charitable contributions.

(16)Amount includes (i) $34,932 in health insurance premiums, (ii) $9,974 in dental, life and long-term disability insurance premiums, (iii) $11,200 in employer-matching contributions to the Company’s 401(k) plan and (iv) $1,500 in employer-matching charitable contributions.

(17)Amount includes (i) $32,735 in health insurance premiums, (ii) $10,104 in dental, life and long-term disability insurance premiums, (iii) $11,000 in employer-matching contributions to the Company’s 401(k) plan and (iv) $250 in employer-matching charitable contributions.

(1)On February 17, 2021, the Board approved, as recommended by the Compensation Committee, actual annual cash incentive bonuses for Messrs. Bortz, Martz and Fisher of $902,813, $375,000 and $375,000, respectively, for 2020 performance.

(2)For each executive, the actual amount of Common Shares that will be issued upon the applicable vesting date pursuant to the performance-based award will depend on our performance against the long-term objectives defined in the agreements and requires that the recipient remain employed by the Company through the vesting date. For more information regarding the performance criteria for these awards, see “—Compensation Discussion and Analysis—Components and Compensation Components—Long-Term Equity Incentive Awards—Performance-Based Vesting.”

(3)The Compensation Committee did not establish a threshold level of performance. Rather, the Compensation Committee established a minimum payout level of zero.

(4)The award is subject to time-based vesting ratably on January 1 of 2021, 2022 and 2023.

(5)The Compensation Committee did not establish a threshold level of performance for any of the performance objectives. Rather, the Compensation Committee established a minimum payout level of zero for each performance objective and the minimum payout level for all performance objectives in the aggregate is zero.

(6)The dollar value is computed assuming that the target number of shares vests.

(7)Amounts shown include a special retention award made on February 12, 2020 that was cancelled by the Board the following month in an effort to mitigate the impact of the lodging industry crisis caused by the COVID-19 pandemic.

Discussion of Summary Compensation and Grants of Plan-Based Awards Tables

Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Tables and the Grants of Plan-Based Awards Table was paid or awarded, are described above under ‘‘— Compensation Discussion and Analysis (“CD&A”).” The terms of change in control severance agreements that we have entered into with our executives are described below under ‘‘— Change in Control Severance Agreements, Equity Award Vesting and Other Termination Policies.”

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

The following table sets forth information with respect to outstanding equity awards held by our NEOs as of December 31, 2020.

(1)Pursuant to SEC rules, for purposes of this table the market value per restricted Common Share is assumed to be $18.80, the closing market price per Common Share at the end of the last completed fiscal year.

(2)This is the number of restricted Common Shares that have not vested from initial award that vested or will vest ratably on January 1 of 2019, 2020 and 2021.

(3)This is the maximum number of performance units that may vest (and settle in the form of Common Shares) from this performance-based equity award.

(4)This is the number of restricted Common Shares that have not vested from initial award that vested or will vest ratably on January 1 of 2020, 2021 and 2022.

(5)This is the number of restricted Common Shares that have not vested from initial award that vested or will vest ratably on January 1 of 2021, 2022 and 2023.

(1)Amounts include vested LTIP Class B units, restricted Common Shares and performance-based equity awards (which were settled in Common Shares).

(2)For purposes of this table, the market value per vested LTIP Class B unit is assumed to be the closing market price per Common Share on the vesting date. For more information regarding the Company’s assumptions made in the valuation of these equity awards, see Note 8 to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

(1)Consists of the 2009 Equity Incentive Plan.

(2)Includes the target amount of all outstanding, unvested performance units awarded under the 2009 Equity Incentive Plan, which, if vested, will be settled in the form of Common Shares, and the amount of all outstanding LTIP units, which, when vested and after reaching parity with OP units, may be exchanged for an equal number of OP units and subsequently redeemed for cash or an equal number of Common Shares, at our option. As of March 22, 2021, the aggregate number of securities to be issued pursuant to LTIP units and the target amount of performance units was 1,140,254.

(3)Performance units and LTIP units have no exercise price.

(4)The aggregate limit of Common Shares available for grant under the 2009 Equity Incentive Plan is 3,672,625. The remaining number available for future issuance assumes 357,709 performance units vest at target. As of March 22, 2021, no securities remain available for future issuance under the 2009 Equity Incentive Plan.

CHANGE IN CONTROL SEVERANCE AGREEMENTS, EQUITY AWARD VESTING AND OTHER TERMINATION POLICIES

Change in Control Severance Agreements of Messrs. Bortz, Martz and Fisher

The Company previously entered into agreements with our NEOs (in connection with our IPO in 2009 in the cases of Messrs. Bortz and Martz and in March 2010 in the case of Mr. Fisher) to provide benefits to each in the event his employment is terminated in certain circumstances. The Compensation Committee reviews the terms of these change in control severance agreements annually. As described in more detail below, because each NEO’s severance payment is derived from his annual base salary and other annual incentive compensation, the effect on severance payments is one of the factors the Compensation Committee considers when annually reviewing each NEO’s total compensation and change in control severance agreement terms.

The change in control severance agreements for Messrs. Bortz and Martz became effective on December 14, 2009 and for Mr. Fisher on March 5, 2010, each for an initial term of three years. The term of each agreement is automatically extended for an additional year on each anniversary date of the effective date of the change in control severance agreement beginning on the third anniversary of the effective date of the change in control severance agreement unless, not less than six months prior to the termination of the then-existing term, the Board provides notice to the executive of its intent not to extend the term further. On December 14, 2020 and March 5, 2021, the term of each change in control severance agreement for Messrs. Bortz and Martz

and for Mr. Fisher, respectively, was automatically extended by one year. Each of our NEOs may terminate his agreement prior to the expiration of the term as described below.

Termination Without Cause (in Connection With, Or Within One Year After, A Change in Control) and Resignation For Good Reason

The agreement provides that upon the termination of the executive either by the Company without “Cause” in connection with, or within one year after, a change in control of the Company or the voluntary resignation by the executive, upon 30 days’ prior written notice to the Company, for “Good Reason,” the executive will be entitled to the following severance payments and benefits:

•a lump sum cash payment equal to the sum of his annual base salary, earned bonus (as defined in the agreement) and accrued vacation time earned but not paid to the date of termination;

•a lump sum cash payment equal to the product of three (in the case of Mr. Bortz) or two (in the case of Messrs. Martz and Fisher) times the sum of (x) his then-current annual base salary plus (y) the greater of (i) the bonus most recently paid to him and (ii) the average of the annual cash incentive bonuses paid to him with respect to the three most recent fiscal years ending before the date of termination;

•a lump sum cash payment equal to three (in the case of Mr. Bortz) or two (in the case of Messrs. Martz and Fisher) times the annual premium or cost (including amounts paid by him) for his health, dental, disability and life insurance benefits; and

•such other or additional benefits, if any, as are provided under applicable plans, programs and/or arrangements of the Company (including accelerated vesting of equity awards as discussed below under ‘‘—Vesting of Long-Term Equity Incentive Awards”).

Termination Without Cause (and Without A Change in Control)

If the executive is terminated without ‘‘Cause” and not in connection with or within one year of a change in control of the Company, the executive will be entitled to the following severance payments and benefits:

•a lump sum cash payment equal to the sum of his annual base salary, earned bonus and accrued vacation time earned but not paid to the date of termination;

•a lump sum cash payment equal to the sum of (x) his then-current annual base salary, plus (y) the greater of (i) the bonus most recently paid to him and (ii) the average of the annual cash incentive bonuses paid to him with respect to the three most recent fiscal years ending before the date of termination;

•a lump sum cash payment equal to the product of one (in the case of Mr. Bortz) or two-thirds (in the case of Messrs. Martz and Fisher) times the annual premium or cost (including amounts paid by him) for his health, dental, disability and life insurance benefits; and

•such other or additional benefits, if any, as are provided under applicable plans, programs and/or arrangements of the Company (including accelerated vesting of equity awards as discussed below under ‘‘—Vesting of Long-Term Equity Incentive Awards”).

Termination For Cause and Resignation Without Good Reason

If the Company terminates the executive for ‘‘Cause” or the executive voluntarily terminates his employment without ‘‘Good Reason,” the executive will be entitled to the following severance payments and benefits:

•a lump sum cash payment equal to the sum of his annual base salary and accrued vacation time earned but not paid to the date of termination; and

•such other or additional benefits, if any, as are provided under applicable plans, programs and/or arrangements of the Company (including accelerated vesting of equity awards as discussed below under ‘‘—Vesting of Long-Term Equity Incentive Awards”).

Other Key Change in Control Severance Agreement Terms

As a condition of any severance payment and related benefits described above, each of Messrs. Bortz, Martz and Fisher has agreed to a general release of any and all claims relating to the NEO’s employment. In addition, each of Messrs. Bortz, Martz and Fisher has agreed that while his change in control severance agreement is in force and for a one-year period following the Company’s termination of the executive for ‘‘cause” or the executive voluntarily terminates his employment without ‘‘good reason,” he will not solicit, hire or recruit employees of, or persons who have worked for, the Company or any of its affiliates either directly or indirectly for his own account or for another party.

Under the terms of their change in control severance agreements, each of Messrs. Bortz, Martz and Fisher is entitled to a tax gross-up payment under certain conditions for the parachute payment excise tax in the event that his employment is terminated in connection with a change in control.

Below is a list of terms and their meanings as defined in each NEO’s change in control severance agreement:

•‘‘Cause” shall mean that the Board concludes, in good faith and after reasonable investigation, that:

•the executive has been charged with conduct which is a felony under the laws of the United States or any state or political subdivision thereof;

•    the executive engaged in conduct relating to the Company constituting material breach of fiduciary duty, willful misconduct (including acts of employment discrimination or sexual harassment) or fraud;

•    the executive breached the non-solicitation obligations or covenants of his change in control severance agreement in any material respect; or

•    the executive materially failed to follow a proper directive of the Board within the scope of the executive’s duties (which shall be capable of being performed by the executive with reasonable effort) after written notice from the Board specifying the performance required and the executive’s failure to perform within 30 days after such notice. No act, or failure to act, on the executive’s part shall be deemed ‘‘willful” unless done, or omitted to be done, by the executive not in good faith or if the result thereof would be unethical or illegal.

•‘‘Change in Control” shall mean a change in control of the Company if:

•any ‘‘person” as such term is used in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof except that such term shall not include (A) the Company or any of its subsidiaries, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of the Company’s common shares, or (E) any person or group as used in Rule 13d-1(b) under the Exchange Act, is or becomes the Beneficial Owner, as such term is defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power or common shares of the Company;

•during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new trustee (other than (A) a trustee designated by a person who has entered into an agreement with the Company to effect a transaction described in this definition of ‘‘Change in Control” or (B) a trustee whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of trustees of the Company) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the trustees then still in office who either were trustees at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

•there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, more than 50% of the combined voting power and common shares of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or

•there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect, including a liquidation) other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, more than 50% of the combined voting power and common shares of which is owned by shareholders of the Company in substantially the same proportions as their ownership of the common shares of the Company immediately prior to such sale.

•‘‘Good Reason” shall mean the occurrence, without the executive’s prior written consent, of any of the following in connection with or within one year after a Change in Control:

•    any material reduction of the executive’s base salary or target bonus as a percentage of base salary;

•    any material adverse change in the executive’s duties or responsibilities, including assignment of duties inconsistent with his position, significant adverse alteration of the nature or status of responsibilities or the conditions of employment or any material diminution in authority, duties, or responsibilities, including, without limitation, any such material adverse change that results from a transaction pursuant to which the Company ceases to be a publicly traded lodging or hospitality company that is qualified as a REIT for federal income tax purposes and is subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act;

•    any material diminution in the authority, duties, or responsibilities of the supervisor to whom the executive is required to report; or

•    the relocation of the Company’s headquarters and/or the executive’s regular work address to a location which requires the executive to travel more than 50 miles from the executive’s residence.

Vesting of Long-Term Equity Incentive Awards

The terms of the time-based LTIP unit and restricted Common Share awards granted to each of Messrs. Bortz, Martz and Fisher provide that:

•upon a change in control of the Company, unvested awards vest;

•upon termination of the executive’s employment with the Company because of his death or disability, the unvested awards vest;

•upon resignation of the executive for good reason (which must be in connection with or within one year after a change in control), unvested awards vest;

•upon termination of the executive’s employment with the Company without cause, the unvested awards vest; and

•upon termination of the executive’s employment with the Company for cause, the unvested awards are forfeited.

The terms of the performance-based equity awards granted to each of Messrs. Bortz, Martz and Fisher provide for vesting of up to the greater of (x) the target number of units and (y) the number of units determined by the performance provisions in the case of the first four of the five above-listed scenarios, and forfeiture in the case of the fifth.

Except as described above, any awards that are unvested at the time the executive terminates his employment with the Company are forfeited.

(1)This column assumes that there was neither accrued but unpaid base compensation nor vacation time earned but unpaid as of December 31, 2020.

(2)Amounts in this column reflect accelerated vesting of awards of LTIP units, restricted Common Shares and performance-based equity awards granted pursuant to the 2009 Equity Incentive Plan that were outstanding at December 31, 2020. Additional restricted Common Share awards and performance-based equity awards were made to Messrs. Bortz, Martz and Fisher after December 31, 2020. Pursuant to SEC rules, for purposes of this table the market value per unvested LTIP unit, restricted Common Share and Common Share due upon vesting of a performance-based equity award is assumed to be $18.80, the closing market price per Common Share at the end of the last completed fiscal year. For purposes of this table, performance-based share and unit grants are assumed to vest at the maximum level. The “founders” LTIP Class A units reached parity with Common Shares in April 2011. The LTIP Class B units granted in December 2013 reached parity in July 2014. For more information regarding the Company’s assumptions made in the valuation of the Company’s equity awards, see Note 8 to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

(3)Amounts in this column reflect the estimated payment to the NEO in an amount equal to the federal excise tax on qualifying termination compensation (the “Excise Tax Payment”) plus all federal and state income taxes payable with respect to the Excise Tax Payment. The amounts shown assume tax rates for the NEO of 37.0% federal, 5.75% state, 2.35% Medicare and 20% excise, and do not account for local taxes.

(4)No payments are made and no vesting occurs if the Company terminates the executive for “cause” or the executive resigns without “good reason.” Similarly, because “good reason” requires a change in control to have occurred, no payments are made and no vesting occurs if the executive resigns with “good reason” without a change in control having first occurred.

DOUBLE-TRIGGER CASH STAY BONUS

In order to promote retention of our NEOs following a change in control event, the Company has a program to encourage continued employment following such an event. If, and only if, (i) a change in control event occurs and (ii) an NEO remains employed by the Company on the first anniversary of that change in control event, that NEO is entitled to receive a lump sum cash stay bonus. An NEO cannot receive a cash stay bonus in addition to any of the termination payments described above. For each NEO, the cash stay bonus is equal to the sum of the executive’s base salary plus the greater of (x) the bonus most recently

paid to the executive and (y) the average amount of the bonuses paid to the executive with respect to the three most recent fiscal years. Assuming that a change in control occurred on December 31, 2020 and that each of Messrs. Bortz, Martz and Fisher remained with the Company at least until December 31, 2021, their cash stay bonuses would have been $2,254,688, $1,077,000 and $1,077,000, respectively, based on the amount of their 2020 actual cash incentive bonuses and their 2020 base salaries.