BHR DEF 14A Report ended July 31, 2019

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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2019 Proxy Statement
Annual Meeting of Stockholders

Wednesday, July 31, 2019
10:30 a.m., Central Time

Dallas Marriott Suites Medical/Market Center
2493 N. Stemmons Freeway
Dallas, Texas 75207

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June 28, 2019

Dear Stockholders of Braemar Hotels & Resorts Inc.:

On behalf of the Board of Directors of Braemar Hotels & Resorts Inc., I cordially invite you to attend the 2019 annual meeting of stockholders of the Company, which will be held at 10:30 a.m., Central Time, on Wednesday, July 31, 2019, at Dallas Marriott Suites Medical/Market Center, which is located at 2493 N. Stemmons Freeway in Dallas, Texas.

During the first half of 2019, we have continued to execute on the Company's strategy of investing in the luxury hotel sector and having the highest quality portfolio among all lodging REITs. This is evidenced by having the highest comparable RevPAR in the sector, which, as of March 31, 2019, stood at $242.75.

In January, we entered into a $50 million strategic funding arrangement with our advisor, Ashford Inc., whereby Braemar receives 10% of the purchase price for all new qualifying hotel acquisitions. The program, known as the Enhanced Return Funding Program, is a funding contribution, rather than a co-investment, and therefore there is no direct cost to Braemar associated with this incremental capital. To put this program to immediate use, also in January of this year we acquired the Ritz-Carlton Lake Tahoe for approximately $103 million (exclusive of approximately $17 million for land and capital reserves), drawing down ERFP funding of approximately $10 million to help fund the purchase. This program should result in attractive incremental returns to Braemar with each new acquisition.

Additionally, our two major Autograph Collection by Marriott conversions of the Courtyard Philadelphia Downtown Hotel and the Courtyard San Francisco Downtown Hotel are on track for completion this year. The Philadelphia property, to be known as The Notary Hotel, will be completed by mid-year, while the San Francisco property is expected to be finished by the end of the year.

Minimizing our cost of capital continues to be a major focus for us. On the financing front, we closed on a $195 million refinancing of our two Hilton properties, the Hilton Torrey Pines in La Jolla, CA and the Capital Hilton in Washington, D.C. The debt markets continue to be constructive, with this five-year loan having a spread of LIBOR plus 170 basis points.

Our business is managed with the oversight and direction of our Board of Directors, which regularly considers the optimal strategy for the strategic advancement and growth of our Company and the long-term interests of our stockholders. When making decisions, our Board of Directors considers the views of our stockholders. To understand our stockholders' perspectives about our Company, our management team conducts outreach and engagement with our stockholders throughout the year and regularly provides our Board with management's summaries of stockholder feedback.

We encourage you to review the proxy statement and to return your proxy card as soon as possible so that your shares will be represented at the meeting.

Thank you.

Sincerely,

Monty J. Bennett
Founder and Chairman of the Board

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Notice of 2019 Annual Meeting of Stockholders

Agenda

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Election of seven directors;



2.

Ratification of the appointment of BDO USA, LLP as our independent auditors for 2019; and



3.

Transaction of any other business that may properly come before the annual meeting.

Record Date

You may vote at the 2019 annual meeting of stockholders the shares of common stock of which you were a holder of record at the close of business on June 3, 2019.

Review your proxy statement and vote in one of four ways:

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In person: Attend the annual meeting and vote by ballot.



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By telephone: Call the telephone number and follow the instructions on your proxy card.



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Via the internet: Go to the website address shown on your proxy card and follow the instructions on the website.



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By mail: Mark, sign, date and return the enclosed proxy card in the postage paid envelope.

		By order of the Board of Directors,
		Deric S. Eubanks Chief Financial Officer

14185 Dallas Parkway, Suite 1100
Dallas, Texas 75254
June 28, 2019

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2019 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 31, 2019.

The Company's Proxy Statement for the 2019 Annual Meeting of Stockholders and the Annual Report to Stockholders for the fiscal year ended December 31, 2018, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as amended, are available at www.bhrreit.com by clicking the "INVESTOR" tab, then the "Financial Reports & SEC Filings" link and then the "Annual Meeting Material" link.

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SUMMARY

This summary highlights selected information contained in this proxy statement, but it does not contain all the information you should consider in determining how to vote your shares of our common stock at the 2019 annual meeting of stockholders of the Company. We urge you to read the entire proxy statement before you vote. This proxy statement was first mailed to stockholders on or about June 28, 2019.

We are providing these proxy materials in connection with the solicitation by the Board of Directors of Braemar Hotels & Resorts Inc. of proxies to be voted at our 2019 annual meeting of stockholders.

In this proxy statement:

•

" we ," " our ," " us ," " Braemar ," and the " Company " each refers to Braemar Hotels & Resorts Inc. (formerly known as Ashford Hospitality Prime, Inc.), a Maryland corporation and real estate investment trust (" REIT "), which has shares of its common stock, par value $0.01 per share, listed for trading on the New York Stock Exchange (" NYSE ") under the ticker symbol "BHR";



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" Annual Meeting " refers to the 2019 annual meeting of stockholders of the Company;



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" Ashford Trust " refers to Ashford Hospitality Trust, Inc. (NYSE: AHT), a Maryland corporation and REIT from which we were spun off in November 2013;



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" Ashford Inc. " refers to Ashford Inc. (NYSE American: AINC), a Maryland corporation that was spun off from Ashford Trust in November 2014;



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" Ashford LLC " refers to Ashford Hospitality Advisors LLC, a Delaware limited liability company and a subsidiary of Ashford Inc.;



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" Board " or " Board of Directors " refers to the Board of Directors of Braemar Hotels & Resorts Inc.;



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" Exchange Act " refers to the Securities Exchange Act of 1934, as amended;



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" Premier " refers to Premier Project Management LLC, a Maryland limited liability company and a subsidiary of Ashford LLC that is our provider of project management services. On August 8, 2018, Ashford Inc. completed its acquisition of Premier, formerly owned by Remington Lodging (as defined below). As a result, Ashford Inc. (through its indirect subsidiary, Premier) provides us with project management services, including construction management, interior design, architectural services, and the purchasing, expediting, warehousing coordination, freight management and supervision of installation of fixtures, furniture, furnishings and equipment and related services.



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" Remington " refers to Remington Holdings, L.P., a Delaware limited partnership, which owns Remington Lodging & Hospitality, LLC, a Delaware limited liability company that is one of our property management companies (" Remington Lodging "). Monty J. Bennett, our Chairman of the Board, and his father, Archie Bennett, Jr., Chairman Emeritus of Ashford Trust, beneficially own, directly or indirectly, 100% of Remington. Monty J. Bennett also serves as the Chief Executive Officer of Remington and Ashford Inc., and Chairman of Ashford Trust and Ashford Inc.;



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" SEC " refers to the U.S. Securities and Exchange Commission; and



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" Securities Act " refers to the Securities Act of 1933, as amended.

Ashford Inc. and Ashford LLC together serve as our external advisor. In this proxy statement, we refer to Ashford Inc. and Ashford LLC collectively as our " advisor ."

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Annual Meeting of Stockholders

Voting Matters

Board Nominees

The following table provides summary information about each director nominee. All directors of the Company are elected annually and, in an uncontested election, by a majority of the votes cast at the Company's annual meeting of stockholders.

						Committee Memberships*
		Director Since												Other U.S. Public Company Boards
Name; Age				Principal Occupation		A		CC		NCG		RPT
Monty J. Bennett, 54		2013		Chairman and CEO of Ashford Inc.; Chairman of Ashford Trust; CEO of Remington										Ashford Inc., Ashford Trust
Stefani D. Carter, 41		2013		Senior Counsel at Estes Thorne & Carr PLLC
Candace Evans, 64		2019		Founder and Publisher of Candysdirt.com
Kenneth H. Fearn, 53		2016		Founder and Managing Partner of Integrated Capital LLC		F
Curtis B. McWilliams, 63(L)		2013		Retired President and CEO of CNL Real Estate Advisors, Inc.		F								Ardmore Shipping Corporation, RW Holdings NNN REIT, Inc.
Matthew D. Rinaldi, 44		2013		General Counsel of Qantas Healthcare Management, LLC and its affiliated medical facilities
Abteen Vaziri, 40		2017		Managing Director of Brevet Capital Management		F

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Summary of Director Diversity and Experience

Our Board embodies a broad and diverse set of experiences, qualifications, attributes and skills. Below is a brief summary of some of the attributes, skills and experience of our director nominees. For a more complete description of each director nominee's qualifications, please see their biographies starting on page 7.

Corporate Governance Highlights

We are committed to the values of effective corporate governance and high ethical standards. Our Board believes that these values are conducive to the strong performance of the Company and creating long-term stockholder value. Our governance framework gives our independent directors the structure necessary to provide oversight, direction, advice and counsel to the management of the Company. This framework is described in more detail in our corporate governance guidelines and codes of conduct, which can be found on our website at www.bhrreit.com by clicking the "INVESTOR" tab, then the "Corporate Governance" link and then the "Governance Documents" link.

Set forth below is a summary of our corporate governance framework.

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PROPOSAL NUMBER ONE—ELECTION OF DIRECTORS

All of our directors are elected annually by our stockholders. Our Nominating and Corporate Governance Committee has recommended, and our Board has nominated, for election seven persons, including all six persons currently serving as directors of the Company. Each of the persons nominated as director who receives a majority vote at the Annual Meeting will serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualified.

Under the terms of our charter and bylaws, in uncontested elections of directors of our Company, a nominee is elected as a director by the affirmative vote of a majority of the votes cast in the election for that nominee (with abstentions and broker nonvotes not counted as a vote cast either for or against that director's election), at the meeting of stockholders at which such election occurs. Under our corporate governance guidelines, if an incumbent director who is a nominee for reelection does not receive the affirmative vote of the holders of a majority of the shares of common stock so voted for such nominee, such incumbent director must promptly tender his or her resignation as a director, for consideration by the Nominating and Corporate Governance Committee of the Board and ultimate decision by the Board. The Nominating and Corporate Governance Committee will promptly consider any such tendered resignation and will make a recommendation to the Board as to whether such tendered resignation should be accepted or rejected, or whether other action should be taken with respect to such offer to resign. Any incumbent director whose tendered resignation is under consideration may not participate in any deliberation or vote of the Nominating and Corporate Governance Committee or the Board regarding such tendered resignation. The Nominating and Corporate Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept, reject or take other action with respect to any such tendered resignation. Within 90 days after the date on which certification of the stockholder vote on the election of directors is made, the Board will publicly disclose its decision and rationale regarding whether to accept, reject or take other action with respect to the tendered resignation. If any incumbent director's tendered resignation is not accepted by the Board, such director will continue to serve until the next annual meeting of stockholders and until his or her successor is elected and qualified or his or her earlier death or resignation.

Set forth below are the names, principal occupations, committee memberships, ages, directorships held with other companies, and other biographical data for each of the seven nominees for director, as well as the month and year each nominee first began his or her service on the Board. For a discussion of such person's beneficial ownership of our common stock, see the "Security Ownership of Management and Certain Beneficial Owners" section of this proxy statement.

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If any nominee becomes unable to stand for election as a director, an event that the Board does not presently expect, the Board reserves the right to nominate substitute nominees prior to the Annual Meeting. In such a case, the Company will file an amended proxy statement that will identify the substitute nominees, disclose whether such nominees have consented to being named in such revised proxy statement and to serve, if elected, and include such other disclosure relating to such nominees as may be required under the Securities Exchange Act of 1934, as amended (the " Exchange Act ").

The Board unanimously recommends a vote FOR all nominees.

Nominees for Election as Directors

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Summary of Director Qualifications, Skills, Attributes and Experience

Our Nominating and Corporate Governance Committee and the full Board believe a complementary mix of diverse qualifications, skills, attributes and experiences will best serve the Company and its stockholders. The summary of our directors' qualifications, skills, attributes and experiences that appears below, and the related narrative for each director nominee appearing in the directors' biographies above, notes some of the specific experience, qualifications, attributes and skills for each director that the Board considers important in determining that each nominee should serve on the Board in light of the Company's business, structure and strategic direction. The absence of a checkmark for a particular skill does not mean the director in question is unable to contribute to the decision-making process in that area.

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CORPORATE GOVERNANCE

The Board is committed to corporate governance practices that promote the long-term interests of our stockholders. The Board regularly reviews developments in corporate governance and updates the Company's corporate governance framework, including its corporate governance policies and guidelines, as it deems necessary and appropriate. Our policies and practices reflect corporate governance initiatives that comply with the listing requirements of the NYSE and the corporate governance requirements of the Sarbanes-Oxley Act of 2002. We maintain a corporate governance section on our website, which includes key information about our corporate governance initiatives including our corporate governance guidelines, charters for the committees of the Board, our code of business conduct and ethics and our code of ethics for the chief executive officer, chief financial officer and chief accounting officer. The corporate governance section can be found on our website at www.bhrreit.com by clicking the "INVESTOR" tab and then the "Corporate Governance" link.

Code of Business Conduct and Ethics

Our code of business conduct and ethics applies to each of our directors and officers (including our chief executive officer, chief financial officer, chief accounting officer, chief operating officer, chief strategy officer, executive vice president, general counsel and secretary (or their respective successors)) and employees. The term "officers and employees" includes individuals who: (i) are employed directly by us, if any (we do not currently employ any employees); or (ii) are employed by our advisor or its subsidiaries and: (a) have been named one of our officers by our Board; or (b) have been designated as subject to the code of business conduct and ethics by the legal department of our advisor. Among other matters, our code of business conduct and ethics is designed to deter wrongdoing and to promote:

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honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;



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full, fair, accurate, timely and understandable disclosure in our reports filed with the SEC and our other public communications;



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compliance with applicable governmental laws, rules and regulations;



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prompt internal reporting of violations of the code to appropriate persons identified in the code;



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protection of Company assets, including corporate opportunities and confidential information; and



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accountability for compliance to the code.

Any waiver of the code of business conduct and ethics for our executive officers or directors may be made only by the Board or one of the Board committees and will be promptly disclosed if and to the extent required by law or stock exchange regulations.

Board Leadership Structure

The Board regularly considers the optimal leadership structure for the Company and its stockholders. In making decisions related to our leadership structure, the Board considers many factors, including the specific needs of the Company in light of its current strategic initiatives and the best interests of stockholders.

Mr. Monty J. Bennett served as Chairman of the Board as well as our Chief Executive Officer from November 2013 until November 14, 2016, when the Board decided to separate those roles and appointed Mr. Richard J. Stockton to serve as our Chief Executive Officer. Mr. Monty J. Bennett has continued to serve as Chairman of the Board since that time.

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To further minimize the potential for future conflicts of interest, our bylaws and our corporate governance guidelines, as well as the NYSE rules applicable to its listed companies, require that the Board must maintain a majority of independent directors at all times, and our corporate governance guidelines require that if the Chairman of the Board is not an independent director, at least two-thirds of the directors must be independent. Currently, all of our directors other than Mr. Monty J. Bennett are independent directors. The Board must also comply with each of our conflict of interest policies discussed in "Certain Relationships and Related Person Transactions—Conflict of Interest Policies." Our bylaw provisions, governance policies and conflicts of interest policies are designed to provide a strong and independent Board and ensure independent director input and control over matters involving potential conflicts of interest.

In 2018, the Board re-appointed Mr. Curtis B. McWilliams to serve as the lead independent director for a one-year term. Under our corporate governance guidelines, the Lead Director has the following duties and responsibilities:

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preside at all executive sessions of the independent or non-employee directors of the Company;



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advise the Chairman of the Board and the Chief Executive Officer of decisions reached and suggestions made at meetings of independent directors or non-employee directors of the Company;



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serve as liaison between the Chairman of the Board and the independent directors;



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approve information sent to the Board;



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approve meeting agendas for the Board;



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approve meeting schedules to assure that there is sufficient time for discussion of all agenda items;



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authorize the calling of meetings of the independent directors; and



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if requested by major stockholders, be available for consultation and direct communication.

The Board believes that our leadership structure provides a very well-functioning and effective balance between strong company leadership and appropriate safeguards and oversight by independent directors.

Board Role

Subject to the advisory agreement entered into by the Company, Ashford Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation and Ashford LLC, as amended from time to time (the " advisory agreement "), the business and affairs of the Company are managed by or under the direction of the Board in accordance with Maryland law. The Board provides direction to, and oversight of, management of the Company. In addition, the Board establishes the strategic direction of the Company and oversees the performance of the Company's business, management and the employees of our advisor who provide services to the Company. Subject to the Board's supervision, our advisor is responsible for the day-to-day operations of the Company and to make available appropriate personnel with sufficient experience to serve as executive officers of the Company. The management of the Company is responsible for presenting business objectives, opportunities and/or strategic plans to our Board for review and approval and for implementing the Company's strategic direction and the Board's directives.

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Strategy

The Board recognizes the importance of ensuring that our overall business strategy is designed to create long-term value for our stockholders and maintains an active oversight role in formulating, planning and implementing the Company's strategy. The Board regularly considers the progress of, and challenges to, the Company's strategy and related risks throughout the year. At each regularly-scheduled Board meeting, the management and the Board discuss strategic and other significant business developments since the last meeting and the Board considers, recommends and approves changes in strategies for the Company.

Risk Oversight

Our full Board has ultimate responsibility for risk oversight, but the committees of our Board help oversee risk in areas over which they have responsibility. The Board does not view risk in isolation. Risks are considered in virtually every business decision and as part of the Company's business strategy. The Board and the Board committees receive regular updates related to various risks for both our Company and our industry. The Audit Committee regularly receives and discusses reports from members of management who are involved in the risk assessment and risk management functions of our Company. The Compensation Committee annually reviews the overall structure of our equity compensation programs to ensure that those programs do not encourage executives to take unnecessary or excessive risks.

Succession Planning

The Board, acting through the Nominating and Corporate Governance Committee, has reviewed and concurred in a management succession plan, developed by our advisor in consultation with the Chairman, to ensure continuity in senior management. This plan, on which the Chief Executive Officer is to report from time to time, addresses:

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emergency Chief Executive Officer succession;



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Chief Executive Officer succession in the ordinary course of business; and



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succession for the other members of senior management.

The plan also includes an assessment of senior management experience, performance, skills and planned career paths.

Board Refreshment

In addition to ensuring the Board reflects an appropriate mix of experiences, qualifications, attributes and skills, the Nominating and Corporate Governance Committee also focuses on director succession and tenure. For example, our bylaws and corporate governance guidelines provide that individuals who would be 70 years of age at the time of their election may not serve on our Board unless the Board waives such limitation. Upon attaining age 70 while serving as a director of the Company and annually thereafter, an individual must tender a letter of proposed retirement from our Board effective at the expiration of such individual's current term, and our Board may accept the retirement of the director or request such director to continue to serve as a director. Over the last two years, our Board has undergone significant refreshment, resulting in lower average tenure, younger average age and broadened diversity of background.

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Director Nomination Procedures by the Company

The Nominating and Corporate Governance Committee recommends qualified candidates for Board membership based on the following criteria:

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integrity, experience, achievements, judgment, intelligence, competence, personal character, expertise, skills, knowledge useful to the oversight of the Company's business, ability to make independent analytical inquiries, willingness to devote adequate time to Board duties and likelihood of a sustained period of service on the Board;



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business or other relevant experience; and



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the extent to which the interplay of the candidate's expertise, skills, knowledge and experience with that of other Board members will build a Board that is effective, collegial and responsive to the needs of the Company.

In connection with the merit-based selection of nominees for director, the Board has regard for the need to consider director candidates from different and diverse backgrounds, including sex, race, color, ethnicity, age and geography. Consideration will also be given to the Board's desire for an overall balance of professional diversity, including background, experience, perspective, viewpoint, education and skills. In early 2018, our Board approved specific amendments to the "Selection of Directors" section of the corporate governance guidelines to more specifically include diversity of sex, race, color, ethnicity, age and geography when considering director candidates. The Board, taking into consideration the recommendations of the Nominating and Corporate Governance Committee, is responsible for selecting the director nominees for election by the stockholders and for appointing directors to the Board between annual meetings to fill vacancies, with primary emphasis on the criteria set forth above. The Board and the Nominating and Governance Committee assess the effectiveness of the Board's diversity efforts as part of the annual Board evaluation process.

Stockholder Nominations

Our bylaws permit stockholders to nominate candidates for election as directors of the Company at an annual meeting of stockholders. Stockholders wishing to nominate director candidates can do so by providing a written notice to Corporate Secretary, Braemar Hotels & Resorts Inc., 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254. Stockholder nomination notices and the accompanying certificate, as described below, must be received by the Corporate Secretary not earlier than May 2, 2020 and not later than 5:00 p.m., Eastern time, on June 1, 2020 for the nominated individuals to be considered for candidacy at the 2020 annual meeting of stockholders. Such nomination notices must include all information regarding the proposed nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the proposed nominee as a director in an election contest pursuant to the SEC's proxy rules under the Exchange Act, as well as certain other information regarding the proposed nominee, the stockholder nominating such proposed nominee and certain persons associated with such stockholder, and must be accompanied by a certificate of the nominating stockholder as to certain matters, all as prescribed in the Company's bylaws. A detailed description of the information required to be included in such notice and the accompanying certificate is included in the Company's bylaws. You may contact the Corporate Secretary at the address above to obtain a copy of the relevant bylaw provisions regarding the requirements for making stockholder nominations. Failure of the notice and certificate to comply fully with the requirements of the Company's bylaws in such regard will result in the stockholder nomination being invalid and the election of the proposed nominee as a director of the Company not being voted on at the pertinent annual meeting of stockholders.

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Since August 3, 2016, our bylaws have provided that if a holder or a group of up to 20 holders having held at least 3% of the Company's common stock outstanding as of the most recent date for which such amount has been given in any filing by the Company with the SEC prior to the submission of the nomination notice, as described below, continuously for a period of at least three consecutive years immediately preceding the submission of the nomination notice may nominate an individual for election at any annual meeting of stockholders in accordance with such bylaw provision and the Company will include such nominated individual in the Company's proxy statement for that annual meeting and on the Company's form of proxy and the ballot for that annual meeting as a nominee for election as a director of the Company at an annual meeting. The Company will not, however, be required to include in its proxy statement or on its proxy card or a ballot more stockholder nominees under this provision of the bylaws than the greater of (i) two nominees and (ii) that number of nominees equaling 20% of the total number of directors of the Company on the last day of which a nomination notice under such provision may be submitted to the Company (rounded down to the nearest whole number). Our bylaws set forth procedures for choosing among stockholder nominees if the number of stockholder nominees validly nominated under such provision of the bylaws exceeds the maximum number of nominees as described above. The nomination notices nominating stockholder nominees must contain all information regarding the proposed nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the proposed nominee as a director in an election contest pursuant to the SEC's proxy rules under the Exchange Act, as well as certain other information regarding the proposed nominee, the stockholder or stockholders nominating such proposed nominee and certain persons associated with such persons and contain certain representations and warranties of such stockholder or stockholders in a nominating group, all as set forth in the Company's bylaws, and be accompanied by written agreements of the nominating stockholder or stockholders and the stockholder nominee containing provisions as prescribed by the Company's bylaws. The Company's bylaws describe in detail the information required to be included, and the representations and warranties to be made, in such nomination notice and the provisions to be contained in the accompanying agreements. In addition, a stockholder or the stockholders in a group proposing to nominate an individual to stand for election pursuant to this bylaw provision must file a Schedule 14N with the SEC in accordance with the SEC's proxy rules. Stockholder nomination notices and the accompanying agreements must be received by the Corporate Secretary, Braemar Hotels & Resorts Inc., 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254, not earlier than May 2, 2020 and not later than 5:00 p.m., Eastern time, on June 1, 2020 for the nominated individuals to be eligible for inclusion in the Company's proxy statement and on its proxy card and the ballot for the 2020 annual meeting of stockholders. You may contact the Corporate Secretary at the address above to obtain a copy of the relevant bylaw provisions regarding the requirements for making stockholder nominations. Failure of a nomination notice and the accompanying agreements to comply fully, or of a relevant party to otherwise comply fully, with the applicable requirements of the Company's bylaws will result in the stockholder nomination being invalid and the proposed nominee not being to be eligible for inclusion in the Company's proxy statement and on its proxy card and the ballot for the 2020 annual meeting of stockholders.

Stockholder and Interested Party Communication with Our Board of Directors

Stockholders and other interested parties who wish to contact any of our directors either individually or as a group may do so by writing to them c/o the Corporate Secretary, Braemar Hotels & Resorts Inc., 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254. Stockholders' and other interested parties' letters are reviewed by Company personnel based on criteria established and maintained by our Nominating and Corporate Governance Committee, which includes filtering out improper or irrelevant topics such as solicitations.

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Director Orientation and Continuing Education

The Board and senior management conduct a comprehensive orientation process for new directors to become familiar with our vision, strategic direction, core values including ethics, financial matters, corporate governance policies and practices and other key policies and practices through a review of background material and meetings with senior management. The Board also recognizes the importance of continuing education for directors and is committed to providing education opportunities in order to improve both the Board's and its committees' performance. Senior management will assist in identifying and advising our directors about opportunities for continuing education, including conferences provided by independent third parties.

Director Retirement Policy

Upon attaining the age of 70 and annually thereafter, as well as when a director's principal occupation or business association changes substantially from the position he or she held when originally invited to join the Board, a director will tender a letter of proposed retirement or resignation, as applicable, from the Board to the chair of our Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee will review the director's continuation on the Board, and recommend to the Board whether, in light of all the circumstances, the Board should accept such proposed resignation or request that the director continue to serve.

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BOARD OF DIRECTORS AND COMMITTEES

Our business is managed through the oversight and direction of the Board. Members of the Board are kept informed of our business through discussions with the Chairman of the Board, Chief Executive Officer, Lead Director and other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees.

The Board has retained Ashford Inc. and Ashford LLC to manage our operations and asset manage our portfolio of hotels, subject to the Board's overfsight and supervision and the terms and conditions of the advisory agreement. Because of the conflicts of interest created by the relationships among us, Ashford Trust, Ashford Inc., Remington and any other related party, and each of their respective affiliates, many of the responsibilities of the Board have been delegated to our independent directors, as discussed below and under "Certain Relationships and Related Person Transactions—Conflict of Interest Policies."

During the year ended December 31, 2018, the Board held nine regular meetings and held four executive sessions of our non-management directors. The non-management directors must hold at least two regularly scheduled meetings per year without management present. All of our incumbent directors standing for re-election attended, in person or by telephone, at least 75% of all meetings of the Board and committees on which such director served, held during the period for which such person was a director or was a member of such committees, as applicable, in 2018.

Board Member Independence

The Board determines the independence of our directors in accordance with our corporate governance guidelines and Section 303A.02 of the NYSE Listed Company Manual, which requires an affirmative determination by our Board that the director has no material relationship with us that would impair his or her independence. In addition, Section 303A.02(b) of the NYSE Listed Company Manual sets forth certain tests that, if any of them is met by a director automatically disqualifies that director from being independent from management of our Company. Moreover, our corporate governance guidelines provide that if any director receives, during any 12-month period within the last three years, more than $120,000 per year in direct compensation from the Company, exclusive of director and committee fees, he or she will not be considered independent. Our corporate governance guidelines also provide that at all times that the chairman of the Board is not an independent director, at least two-thirds of the members of the Board should consist of independent directors. The full text of our Board's corporate governance guidelines can be found on our website at www.bhrreit.com by clicking the "INVESTOR" tab, then the "Corporate Governance" link and then the "Governance Documents" link.

Following deliberations, the Board has affirmatively determined that, with the exception of Mr. Monty J. Bennett, our Chairman, each nominee for election as a director of the Company is independent of Braemar and its management and has been such during his or her term as a director commencing with the annual meeting of stockholders of the Company held on July 3, 2018 under the standards set forth in our corporate governance guidelines and the NYSE Listed Company Manual, and our Board has been since that date and is comprised of a majority of independent directors, as required by Section 303A.01 of the NYSE Listed Company Manual. Any reference to an independent director herein means such director satisfies both the standards set forth in our corporate governance guidelines and the NYSE independence tests.

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In addition, each current member of our Audit Committee and our Compensation Committee has been determined by the Board to be independent and to have been independent at all pertinent times under the heightened independence standards applicable to members of audit committees of board of directors and to members of compensation committees of board of directors of companies with equity securities listed for trading on the NYSE and under the rules of the SEC under the Exchange Act and that each nominee for election as a director of the Company at the Annual Meeting is independent under those standards.

In making the independence determinations with respect to our current directors, the Board examined all relationships between each of our directors or their affiliates and Braemar or its affiliates. The Board determined that none of these transactions impaired the independence of the directors involved.

Board Committees and Meetings

Historically, the standing committees of the Board have been the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. In 2016, the Board added the Related Party Transactions Committee as a standing committee of the Board. Each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee is governed by a written charter that has been approved by the Board. A copy of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee charters can be found on our website at www.bhrreit.com by clicking the "INVESTOR" tab, then the "Corporate Governance" link and then the "Governance Documents" link. The committee members of each active committee and a description of the principal responsibilities of each such committee follows:

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Audit Committee

Each of Mr. McWilliams, Mr. Fearn and Mr. Vaziri qualifies as an "audit committee financial expert," as defined by the applicable rules and regulations of the Exchange Act. All of the members of our Audit Committee on and after January 1, 2018 are "financially literate" under the NYSE listing standards.

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Compensation Committee

The Compensation Committee has the authority to retain and terminate any compensation consultant to assist it in the evaluation of officer compensation, or to delegate its duties and responsibilities to one or more subcommittees as it deems appropriate. In 2018, the Compensation Committee retained Gressle & McGinley LLC (" Gressle & McGinley ") as its independent compensation consultant. Gressle & McGinley provided competitive market data to support the Compensation Committee's decisions on the value of equity to be awarded to our named executive officers. Gressle & McGinley has not performed any other services for the Company and performed its services only on behalf of, and at the direction of, the Compensation Committee. Our Compensation Committee reviewed the independence of Gressle & McGinley in light of SEC rules and NYSE listing standards regarding compensation consultant independence and has affirmatively concluded that Gressle & McGinley is independent from management of the Company and has no conflicts of interest relating to its engagement by our Compensation Committee.

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Nominating and Corporate Governance Committee

Related Party Transactions Committee

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Director Compensation

Each of our non-employee directors (other than Mr. Monty J. Bennett) is paid an annual base cash retainer of $55,000, and an additional fee of $2,000 for each Board or committee meeting that he or she attends in person (in a non-committee chairman capacity), $3,000 for each committee meeting that he or she attends as committee chairman, and $500 for each Board or committee meeting that he or she attends (in a non-committee chairman capacity) via teleconference. Non-employee directors (other than Mr. Monty J. Bennett) serving in the following capacities also receive the additional annual cash retainers set forth below:

Non-employee directors may also be paid additional cash retainers from time to time for service on special committees. Officers receive no additional compensation for serving on the Board. In addition, we reimburse all directors for reasonable out-of-pocket expenses incurred in connection with their services on the Board.

In addition, on the date of the first meeting of the Board of Directors following each annual meeting of stockholders at which a non-employee director is initially elected or re-elected to our Board of Directors or as soon as reasonably practicable thereafter, each non-employee director (other than Mr. Monty J. Bennett) receives a grant of shares of our common stock or, at the election of each director, long-term incentive partnership units (" LTIP units ") in Braemar Hospitality Limited Partnership (" Braemar OP "), which are issued under our Second Amended and Restated 2013 Equity Incentive Plan (the " 2013 Equity Incentive Plan ") and are fully vested immediately. Vested LTIP units, upon achieving parity with the common units of Braemar OP, are convertible into common partnership units of Braemar OP at the option of the grantee. Common partnership units are redeemable for cash or, at our option, convertible into shares of our common stock on a one-for-one basis.

Beginning in fiscal 2018, we adopted a new policy that sets the size of the shares/units grant in three-year cycles by establishing a grant size in the first year of the cycle as a fixed number of shares/units to be granted annually. In 2018, the Board established an annual grant amount for the 2018-2020 cycle of 5,700 shares/units, worth approximately $60,000 as of the date of determination in 2018. Therefore, in fiscal 2018, each non-employee director received a grant of 5,700 shares of fully vested common stock or LTIP units. This is the same number of shares/units that will be granted to non-employee directors in 2019 and 2020; in 2021, the annual grant will be "reset" by establishing a new annual grant size that will apply for the 2021-2023 three-year cycle.

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Our Chairman, Mr. Monty J. Bennett, instead receives an annual equity grant with a value and vesting schedule that is determined by the Board after review of the Company's prior fiscal year performance, considering the same factors as the Board takes into account in making annual equity grants to our named executive officers (as further described below under "Executive Compensation—2019 Equity Grant Decisions for 2018 Performance"). One-half of Mr. Monty J. Bennett's equity award granted in fiscal 2018 is eligible to vest based on the Company's three-year relative total shareholder return (as further described below under "Executive Compensation—2019 Equity Grant Decisions for 2018 Performance") and the other half is eligible to vest based on continued service in three equal installments on each anniversary of the grant date. Mr. Monty J. Bennett's annual equity award is not granted in respect of his service on the Board, but instead in recognition of the extraordinary service that he provides to the Company indirectly through his employment with our advisor. The Board believes that the size of, and vesting schedule applicable to, Mr. Monty J. Bennett's annual equity grant is appropriate because it reflects the scale of his historical and ongoing contributions to the Company, the depth of his expertise and knowledge of both the Company and our industry generally, and his continuous leadership as a founder of the Company and our advisor.

Each member of our Board should hold an amount of granted common stock or LTIP units having a value in excess of three times his or her annual Board retainer fee (excluding any portion of the retainer fee representing additional compensation for being a committee chairman). Each director is permitted to sell vested shares received in connection with any awards granted under any of the Company's equity plans only if, upon doing so, such director will continue to meet his or her required stock ownership level.

The following table summarizes the compensation paid by us to our non-employee directors for their services as a director for the fiscal year ended December 31, 2018:

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Compensation Committee Interlocks and Insider Participation

During 2018, Ms. Carter and Messrs. Fearn and Rinaldi served on our Compensation Committee. Each of those persons was or is an independent director throughout the period for which they served or have served on our Compensation Committee during 2018 and thereafter. None of these directors was, is or has ever been an officer or employee of our Company. None of our executive officers serves, or during 2018 served, as (i) a member of a Compensation Committee (or Board committee performing equivalent functions) of any entity, one of whose executive officers served as a director on our Board or as a member of our Compensation Committee, or (ii) a director of another entity, one of whose executive officers served or serves on our Compensation Committee. No member of our Compensation Committee has or had in 2018 any relationship with the Company requiring disclosure as a related party transaction under "Certain Relationships and Related Person Transactions."

Attendance at Annual Meeting of Stockholders

In keeping with our corporate governance principles, directors of the Company are expected to attend the annual meeting of stockholders in person. All persons who were directors at the time of our 2018 annual meeting of stockholders attended our annual meeting in person.

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EXECUTIVE OFFICERS AND COMPENSATION

Executive Officers

The following table shows the names and ages of our current executive officers and the positions held by each individual. The executive officers named below were appointed to those positions by the Board and serve in such positions at the pleasure of the Board. A description of the business experience of each for the past five years follows the table.

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Executive Compensation

We are externally advised by Ashford Inc. pursuant to an advisory agreement. Ashford Inc., through its operating company Ashford LLC is responsible for implementing our investment strategies and managing our operations. Our advisor manages the day-to-day operations of our Company and our affiliates in exchange for an advisory fee, the terms of which are described under "Our Relationship and Agreements with Ashford Inc." As a consequence of this management arrangement and although the Company has executive officers, it does not have any employees. Each of the Company's executive officers is, however, an employee of our advisor and is compensated by our advisor in his capacity as such. During all of 2017 and 2018, the cash compensation received by our executive officers was paid to those persons by Ashford Inc. in their capacity as employees of our advisor. However, our executive officers (as well as other employees of our advisor and Remington and their affiliates) continue to be eligible to receive equity awards under our 2013 Equity Incentive Plan and we grant equity compensation to our executive officers under our 2013 Equity Incentive Plan as described below. We do not, however, provide any other compensation or employee benefit plans for our executive officers.

Pursuant to our advisory agreement, we pay Ashford Inc. an advisory fee. In turn, Ashford Inc. uses a portion of the proceeds of such advisory fee to pay the cash compensation it pays its personnel. We do not specifically reimburse Ashford Inc. for any executive officer compensation or benefits costs. The following is a summary of the advisory fees we paid to Ashford Inc. in 2018 and the total 2018 compensation paid to our named executive officers:

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•

Under the terms of our advisory agreement, we incurred a total advisory fee of approximately $20.0 million to Ashford Inc., comprising a base fee of approximately $9.4 million, approximately $2.1 million for reimbursable expenses, equity-based compensation expense of approximately $6.5 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and its affiliates, and an incentive fee of approximately $2.0 million.



•

No specific portion of our advisory fees is allocated to the compensation paid by Ashford Inc. to its employees who are also our executive officers. Our advisor makes all decisions relating to compensation paid by Ashford Inc. to our executive officers who are its employees based on such factors as the terms of their employment agreements with Ashford Inc. and an evaluation of the performance of such employees on behalf of Ashford Inc. and its advisees during the year.



•

For 2018, our named executive officers received total cash compensation of approximately $4.9 million from Ashford Inc. The total cash compensation paid by Ashford Inc. to our named executive officers was comprised of $2.0 million in salaries and approximately $2.9 million in cash bonus awards. In addition, Ashford Inc. granted options to purchase a total of 105,000 shares of Ashford Inc. common stock on February 27, 2019 with a grant date fair value of approximately $2.8 million to Ashford Inc.'s officers and employees who are also our named executive officers, which grant was made in respect of 2018 performance.



•

Not all of the cash compensation received by our named executive officers from Ashford Inc. was attributable to services performed by its employees in their capacity as our executive officers. Based on a review of the proportion that the operations of the Company represents of the total operations managed by Ashford LLC using various measures of size (revenue, assets and total enterprise value), we estimate that approximately 20% of the compensation paid by Ashford Inc. to our named executive officers is attributable to services provided by our named executive officers to us.



•

The cash bonus awards paid by Ashford Inc. to its employees who are our named executive officers pursuant to Ashford Inc.'s non-equity incentive plan represent variable incentive compensation that was earned for achieving specific performance targets. The performance metrics for 2018 included total shareholder return (" TSR ") of Ashford Inc. relative to peers, adjusted earnings per share of Ashford Inc., adjusted EBITDA, increased sell-side analyst coverage, number of investor and analyst meetings, increase in assets under management by Ashford Inc. and its affiliates, and investments in or acquisition of new service businesses at Ashford Inc. or its affiliates.

2019 Equity Grant Decisions for 2018 Performance

In February 2019, under the 2013 Equity Incentive Plan, the Compensation Committee determined to grant equity awards to our named executive officers based on consideration of the Company's and each named executive officer's individual performance during 2018. In determining the size of the performance award grant for each executive, the Compensation Committee considered multiple factors including, but not limited to, the Company's and each named executive officer's individual performance, competitive award opportunities provided to similarly situated executives, and our named executive officers' roles and responsibilities with our Company.

For purposes of the below, the discussion of our 2018 performance relates to the equity grants made to our named executive officers in February 2019. However, the SEC's rules require disclosure in the tables that follow this Executive Compensation discussion of the equity awards that were granted to our named executive officers in 2018. For a detailed discussion of our 2017 performance, on which the size of our equity awards granted in 2018 was based, please refer to the "2018 Equity Grant Decisions for 2017 Performance" discussion contained in our 2018 proxy statement, filed with the SEC on May 23, 2018.

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One-half of the value of the performance-based equity award is granted in a form that is eligible to vest based on the Company's three-year relative TSR. The other half of the potential award is eligible to vest based on continued service in three equal installments on each anniversary of the grant date. Named executive officers may elect to receive their service-based equity awards in the form of LTIP units of Braemar OP or restricted common stock, and their performance-based equity awards in the form of performance stock units (" PSUs ") or performance LTIP units (" performance LTIPs "), as described in further detail below.

The relevant performance period for the PSUs and performance LTIPs began on January 1, 2019 and ends on December 31, 2021, unless such period is shortened pursuant to the terms of the award agreement. The actual number of shares of our common stock or common units of Braemar OP to be issued upon vesting of the PSUs or performance LTIPs can range from 0% to 200% of the target number, based on continued service through the vesting date and achievement of a specified relative total stockholder return over the performance period, as set forth in the following chart:

The selected peer group used in the performance ranking based on relative stockholder return for the performance period consists of: Chatham Lodging Trust, Chesapeake Lodging Trust, DiamondRock Hospitality Company, Hersha Hospitality Trust, Hospitality Properties Trust, Host Hotels & Resorts, Inc., Park Hotels and Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Inc., Summit Hotel Properties, Inc., Sunstone Hotel Investors, Inc., and Xenia Hotels & Resorts, Inc. This group was the same group referenced for relative TSR purposes with respect to 2017 awards granted in 2018, except that LaSalle Hotel Properties, which was acquired by Pebblebrook Hotel Trust in November 2018, was replaced with Park Hotels and Resorts, Inc.

A summary of the components of the February 2019 equity awards to our named executive officers is as follows:

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The LTIP units are a special class of partnership units in Braemar OP called "long-term incentive partnership units." Grants of LTIP units are designed to offer executives the same long-term incentive as restricted stock, while allowing them more favorable income tax treatment. Each LTIP unit awarded is deemed equivalent to an award of one share of common stock reserved under our stock incentive plan, reducing availability for other equity awards, because LTIP units are convertible into common units of Braemar OP, which may themselves be converted into shares of our common stock based on a conversion ratio of 1:1. As a result, an LTIP unit granted may result in an issuance of one share of our common stock. LTIP units, whether vested or not, receive the same quarterly per unit distributions as common units of our operating partnership, which typically equal per share dividends on our common stock, if any. This treatment with respect to quarterly distributions is analogous to the treatment of time-vested restricted stock. The key difference between LTIP units and restricted stock is that at the time of award, LTIP units do not have full economic parity with common units but can achieve such parity over time. At the time of the award, executives who receive LTIP units make a capital contribution to our operating partnership of $0.05 per LTIP unit. Upon the occurrence of certain corporate events, which are not performance-related events, the capital accounts of our operating partnership may be adjusted, allowing for the LTIP units to achieve parity with the common units over time. If such parity is reached, vested LTIP units become convertible into an equal number of common units. Until and unless such parity is reached, the value that an executive will realize for a given number of vested LTIP units is less than the value of an equal number of shares of our common stock.

Summary Compensation Table

Our named executive officers, who are employees of and compensated by Ashford Inc., did not receive any cash compensation or other compensation or benefits other than certain service-based and performance-based equity awards from us during fiscal year 2018. The following table sets forth information regarding compensation earned by our named executive officers and paid by the Company in fiscal years 2018 and 2017:

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Outstanding Equity Awards at Fiscal Year End Table

The following table sets forth information concerning outstanding equity awards for each of our named executive officers as of December 31, 2018:

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Potential Payments Upon Termination of Employment or Change of Control

We are not a party to any employment agreements with our executive officers. As a result, all payments we would need to make to any named executive officer upon termination of employment or following a change of control are pursuant to awards granted under our equity incentive plan.

Our equity incentive plan provides that equity awards (other than performance awards) generally will fully vest upon: (i) the death or disability of the named executive officer; (ii) the termination or removal of the named executive officer as an employee or consultant of the Company or an affiliate without "cause" (as defined therein) or by the named executive officer for "good reason" (as defined therein); or (iii) the termination, removal, or resignation of the named executive officer as an employee or consultant of the Company or an affiliate for any reason within one year from the effective date of a change in control of the Company; provided however, if a change of control occurs and the executive officer's employment is terminated by the executive officer without "good reason," only unvested restricted equity securities awarded prior to September 13, 2017, will become fully vested and the unvested restricted equity securities awarded on or after September 13, 2017, will be forfeited.

The PSUs and performance LTIPs granted to the named executive officers will be eligible for accelerated vesting upon: (i) the termination or removal of the named executive officer as an employee of the Company by the Company without "cause" (including a termination of the advisory agreement with our advisor) or by the named executive officer for "good reason"; (ii) the death or disability of the named executive officer; (iii) a change of control of the Company; (iv) a change of control of our advisor, if such change in control results in the vesting of the award under the terms of any employment agreement that the named executive officer has with our advisor; and (v) an involuntary termination of employment or the nonrenewal of the employment agreement to the extent such event causes vesting of the award under the employment agreement the named executive officer has with our advisor. (Our advisor is an affiliate under our equity incentive plan.) The number of PSUs or performance LTIPs that vests is generally calculated based on performance at the greater of target or actual performance (based on a truncated performance period), except that in the case of clauses (iii) and (iv), the number is based solely on actual performance (based on a truncated performance period).

For the purposes of the plan, the following definitions apply:

" Cause " has, with respect to a named executive officer, the same definition as in any employment agreement that such named executive officer has with the Company, Ashford Inc., or any of their respective affiliates. In the employment agreements that our named executive officers have with our advisor, "cause" generally means the named executive officer's:

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(i)

conviction of, or entry of a plea of guilty or nolo contendere to, a felony (exclusive of a conviction, plea of guilty, or plea of nolo contendere arising under a statutory provision imposing criminal liability on a per se basis due to any offices held by the named executive officer pursuant to the employment agreement, so long as any act or omission of the named executive officer with respect to such matter was not taken or omitted in contravention of any applicable policy or directive of our advisor's board of directors);



(ii)

willful breach of duty of loyalty which is materially detrimental to our advisor or any entity that it advises, which is not cured within 30 days following written notice thereof;



(iii)

willful failure to perform or adhere to explicitly stated duties or guidelines of employment or to follow the lawful directives of our advisor, which is not cured within 30 days following written notice thereof;



(iv)

gross negligence or willful misconduct in the performance of duties which is not cured within 30 days following written notice thereof;



(v)

willful commission of an act of dishonesty resulting in material economic or financial injury to our advisor or any entity that it advises, or willful commission of fraud; or



(vi)

chronic absence from work for reasons other than illness which is not cured within 30 days following written notice thereof.

A " change of control " of the Company is deemed to have occurred when:

(i)

any person other than (A) the Company or any of its subsidiaries, (B) any employee benefit plan of the Company or any of its subsidiaries, (C) Remington or an affiliate, (D) a Company owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company, or (E) an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the beneficial owner, directly or indirectly, of securities of the Company representing 30% or more of the shares of voting stock of the Company then outstanding;



(ii)

the consummation of any merger, organization, business combination, or consolidation of the Company or one of its subsidiaries with or into any other company, other than a merger, reorganization, business combination, or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding securities which represent immediately after such merger, reorganization, business combination, or consolidation more than 50% of the combined voting power of the voting securities of the Company or the surviving company or the parent of such surviving company;



(iii)

the consummation of a sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition if the holders of the voting securities of the Company outstanding immediately prior thereto hold securities immediately thereafter which represent more than 50% of the combined voting power of the voting securities of the acquiror, or parent of the acquiror, of such assets, or the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company; or



(iv)

individuals who, as of the effective date of the 2013 Equity Incentive Plan, constituted our Board cease for any reason to constitute at least a majority of our Board; provided, however, that any individual becoming a director subsequent to the effective date whose election by our Board was approved by a vote of at least a majority of the directors then comprising the Board is considered as though such individual were a member of the initial Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an election contest with respect to the election or removal of directors or other solicitation of proxies or consents by or on behalf of a person other than our Board.

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" Good reason " has, with respect to a named executive officer, the same definition as in any employment agreement that such named executive officer has with the Company, Ashford Inc., or any of their respective affiliates. In the employment agreements that our named executive officers have with our advisor, "good reason" generally means:

(i)

the assignment to the named executive officer of any duties, responsibilities, or reporting requirements inconsistent with his or her position, or any material diminishment of the named executive officer's duties, responsibilities, or status;



(ii)

a reduction by our advisor in the named executive officer's base salary or target bonus;



(iii)

the requirement that the principal place of business at which the named executive officer performs his or her duties be changed to a location outside the greater Dallas metropolitan area; or



(iv)

any material breach by the advisor of the employment agreement.

On April 30, 2019, Ashford Inc. entered into an Amended and Restated Employment Agreement with Mr. Stockton. The terms of the Amended and Restated Employment Agreement are substantially identical to the employment agreement that was previously in effect between Mr. Stockton and Ashford Inc., except that (i) Mr. Stockton's base salary and annual target bonus (both payable by Ashford Inc.) were updated to current levels, (ii) conforming changes to the definitions of "cause" and "good reason" were made to align with the definitions applicable to our other named executive officers, as described above, and (iii) the severance payable by Ashford Inc. in connection with certain terminations of Mr. Stockton's employment was increased. These changes did not affect the economic terms regarding the acceleration of equity awards granted by the Company upon certain terminations of Mr. Stockton's employment, as described above. The foregoing description is qualified in its entirety by reference to the full text of the Amended and Restated Employment Agreement, which is included as Exhibit 10.28 to our Annual Report on Form 10-K/A filed April 30, 2019 and is incorporated by reference.

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PROPOSAL NUMBER TWO—RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS OUR INDEPENDENT AUDITORS

We are asking our stockholders to ratify our Audit Committee's appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019. BDO USA, LLP has audited our financial statements as of and for the years ended December 31, 2018, 2017 and 2016. Stockholder ratification of the selection of BDO USA, LLP as our independent registered public accounting firm is not required by our bylaws or otherwise. However, the Board is submitting the selection of BDO USA, LLP to our stockholders for ratification as a matter of good corporate governance practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent accounting firm at any time during the year if it determines that such a change would be in the best interests of us and our stockholders.

Our Audit Committee is responsible for appointing, retaining, setting the compensation of, and overseeing the work of our independent registered public accounting firm. Our Audit Committee pre-approves all audit and non-audit services provided to us by our independent registered public accounting firm. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. The Audit Committee has delegated pre-approval authority to its chair when expedition of services is necessary. The independent registered public accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with the pre-approval, and the fees for the services performed to date. The Audit Committee approved all fees paid to BDO USA, LLP since their appointment with no reliance placed on the de minimis exception established by the SEC for approving such services.

Audit Committee Report

The Audit Committee represents and assists the Board in fulfilling its responsibilities for general oversight of the integrity of our Company's consolidated financial statements, our Company's compliance with legal and regulatory requirements, the adequacy of our internal control over financial reporting, our Company's independent registered public accounting firm's qualifications and independence, the performance of our Company's internal audit function and independent registered public accounting firm, and risk assessment and risk management in certain areas. The Audit Committee manages our Company's relationship with its independent registered public accounting firm (which reports directly to the Audit Committee). The Audit Committee has the authority to obtain advice and assistance from outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties and receives appropriate funding, as determined by the Audit Committee, from Braemar for such advice and assistance.

Our Company's management is primarily responsible for our Company's internal control and financial reporting process. Our Company's independent registered public accounting firm, BDO USA, LLP, is responsible for performing an independent audit of our consolidated financial statements and issuing an opinion on the conformity of those audited financial statements with United States generally accepted accounting principles. The Audit Committee monitors Braemar's financial reporting process and reports to the Board on its findings.

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In this context, the Audit Committee hereby reports as follows:

1.

The Audit Committee has reviewed and discussed the audited consolidated financial statements of the Company as of and for the year ended December 31, 2018 with our Company's management.



2.

The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed under the applicable standards of the Public Company Accounting Oversight Board (the " PCAOB ").



3.

The Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm its independence.



4.

Based on the review and discussions referred to in paragraphs (1) through (3) above, the Audit Committee recommended to the Board, and the Board has approved, that the audited consolidated financial statements of the Company as of and for the year ended December 31, 2018 be included in Braemar's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, for filing with the SEC.

The undersigned members of the Audit Committee have submitted this Report to the Board of Directors.

Auditor Fees

Services provided by BDO USA, LLP included the audits of the annual consolidated financial statements of the Company and our subsidiaries. Services also included the review of unaudited quarterly consolidated financial information in accordance with PCAOB standards; review and consultation regarding filings with the SEC and the Internal Revenue Service; and consultation on financial and tax accounting and reporting matters. During the years ended December 31, 2018 and 2017, aggregate fees incurred related to our principal accountants BDO USA, LLP consisted of the following: