INN DEF 14A Report ended Dec. 31, 2019

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•	Election of the six director nominees named in this proxy statement (Proposal 1);

•	Ratification of Ernst & Young, LLP (“EY”), as our independent registered public accounting firm for 2020 (Proposal 2); and

•	An advisory (non-binding) resolution to approve executive compensation (Proposal 3).

•	By telephone;

•	By Internet; or

•	By completing and signing your proxy card and mailing it in time to be received prior to the annual meeting.

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•	Notifying our Secretary in writing that you are revoking your proxy;

•	Providing another signed proxy that is dated after the proxy you wish to revoke;

•	Using the telephone or Internet voting procedures; or

•	Attending the annual meeting and voting in person. Attendance at the annual meeting will not, by itself, revoke a duly executed proxy.

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we now have a majority-voting standard in uncontested elections of directors; and stockholders of the Company now have the right to amend certain Articles of the Bylaws by the affirmative vote of the holders of a majority of the outstanding shares of common stock pursuant to a binding proposal properly submitted to the stockholders for approval at a duly called annual or special meeting of stockholders by any stockholder that satisfies the ownership requirements specified in Rule 14(a)-8 under the Exchange Act of 1934, as amended.

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•	All of our directors must be elected annually by majority vote.

•	Our directors are subject to a director resignation policy as part of our policy on voting procedures with respect to the election of directors in uncontested elections.

•	Eighty-three percent (83%) of our directors are independent.

•	Seventeen percent (17%) of our directors are female.

•	All members of the three standing committees of the Board are independent.

•	Our independent directors meet regularly without the presence of any of our officers or employees.

•	Our independent directors designate an independent, non-employee director to serve as our Lead Independent Director.

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•	Section 3-803 - requiring classification of the board of directors into three classes;

•	Section 3-804(a) - requiring that stockholders may remove any director by the affirmative vote of two-thirds of all the votes entitled to be cast by the stockholders generally in the election of directors;

•	Section 3-804(b) - requiring that the number of directors be fixed only by vote of the board of directors;

•	Section 3-804(c) - requiring any vacancy on the board of directors be filled only by the majority vote of the remaining directors and for the remainder of the full term in which the vacancy occurred and until a successor is elected and qualifies; and

•	Section 3-805 - requiring that a special meeting may only be called upon stockholder request only on the written request of stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting.

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•	whether the individual meets the requirements for independence;

•	the individual’s general understanding of the various disciplines relevant to the success of a publicly-traded company in today’s business environment;

•	the individual’s understanding of the Company’s business;

•	the individual’s professional expertise and educational background; and

•	other factors that promote diversity.

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•	Annual Cash Retainer. We paid an annual cash retainer of $50,000 to each non-employee director.

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Additional Committee Membership Fee. We paid an additional fee for membership on each of our standing committees, as follows: each member of the Audit Committee was paid $12,500, each member of the Compensation Committee was paid $10,000 and each member of the Nominating and Corporate Governance Committee was paid $7,500. The chair of each respective committee is not paid a committee membership fee.

•	Additional Committee Chairperson Fee. In lieu of the applicable committee membership fee, we paid the Chairs of each of our standing committees fees, as follows: the Chair of the Audit Committee was paid $25,000, the Chair of the Compensation Committee was paid $20,000 and the Chair of the Nominating and Corporate Governance Committee was paid $15,000.

•	Lead Independent Director Fee. We paid our Lead Independent Director a $20,000 Lead Independent Director Fee.

•	Non-Executive Chairman Fee .   Because in 2019 our Chairman was an executive officer, a Non-Executive Chairman Fee was not paid in 2019 .

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Annual Equity Award. Following the 2019 annual meeting of stockholders, we granted each non-employee director an equity award consisting of 8,091 shares of our common stock with an aggregate value of approximately $100,000 (the number of shares awarded to each non-employee director was determined by dividing $100,000 by the VWAP of our common stock on the NYSE for the ten trading days preceding the grant date). These shares were granted on May 16, 2019, pursuant to our Equity Incentive Plan and were fully vested on the grant date.

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Election to Receive Stock in Lieu of Cash Fees. Non-employee directors have the option to elect to receive all or any part of the cash fees we are required to pay them in fully vested shares of our common stock issued under our Equity Incentive Plan based upon the VWAP of our common stock on the NYSE for the ten trading days preceding the grant date. In 2019 , no director elected to receive his or her fees in shares of our common stock in lieu of cash.

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(1)	Amounts reflect the aggregate grant date fair value, calculated in accordance with Accounting Standards Codification (“ASC”) 718, of the stock awards granted to our non-employee directors in 2019 . These stock awards are further described in the table appearing below.

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In July, we entered into a joint venture with GIC, Singapore's sovereign wealth fund, to acquire assets that align with our current investment strategy and criteria.  The Company serves as general partner and asset manager of the joint venture and intends to invest 51% of the equity capitalization of the limited partnership, with GIC investing the remaining 49%.  The Company earns fees for providing services to the joint venture and will have the potential to earn incentive fees based on the joint venture achieving certain return thresholds.

•	Through our joint venture with GIC, we acquired the five hotels listed below containing 798 guestrooms and two adjacent land parcels for an aggregate purchase price of $276.9 million. The hotels had an average revenue per available room ("RevPAR") of $159.00 in 2019, which is 25% greater than the Company's pro forma portfolio average RevPAR for 2019.

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Through our joint venture with GIC, we successfully closed on a new $200 million credit facility comprised of a $125 million revolving line of credit and a $75 million term loan.  The credit facility includes an accordion feature which will allow commitments to be increased up to a total of $500 million and has an initial four-year term with a maturity date of October 2023 that can be extended for one year, subject to certain conditions.  The interest rate on the credit facility is based on LIBOR plus a credit spread of 215 basis points for the revolving line of credit and LIBOR plus 210 basis points for the term loan.

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We disposed of ten hotels containing 1,170 guestrooms in various markets for an aggregate gross sales price of $168.4 million. The aggregate gross sales price, including estimated foregone capital expenditures, represented an average trailing twelve-month capitalization rate of 6.7 percent at the time of sale. The hotels had an average RevPAR of $103.00 in 2018, which is 19% under the Company's pro forma portfolio average RevPAR during the same period.

•	Pro Forma RevPAR increased 1.0% to $127.82 from the same period in 2018 compared to the STR upscale average of -0.5%.

•	We achieved a 5-year total shareholder return (“TSR”) of 26.1% compared to a TSR of 2.2% for the SNL U.S. REIT Hotel Index (“REIT Index”).

•	We strategically invested approximately $59 million into our portfolio in 2019, which included 9 significant renovation projects.

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Our newly developed Hyatt House Across From Orlando Universal Resort™ was the recipient of the 2018 Opening Hotel Performance Award by Hyatt.  The annual award recognizes an opening hotel sales team that delivered outstanding performance during the opening process for its hotel.  Criteria for the award are the shortest time period to achieve 100+ RevPAR Index and the length of time maintained for hotels open for less than 24 months.

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•	Assist in attracting and retaining talented and well-qualified executives by offering compensation opportunities competitive with other lodging REITs;

•	Motivate our executives to manage our business to meet our near-, medium- and long-term objectives and reward them for meeting these objectives;

•	Align the interest of our executives and stockholders by motivating executives to increase stockholder value and rewarding executives when stockholder value increases; and

•	Maintain high standards of corporate governance.

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(1)	This reflects the “target” level payout of our annual cash incentive award program.

(2)

This reflects the “target” level value of long-term incentive awards consisting 60% of performance share awards and 40% of time based awards. The Compensation Committee determines the intended target dollar value. The number of shares issued to each executive is determined by dividing the intended value of the award by the average of the trailing 10-day VWAP of our common stock prior to the date of grant.

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The amount earned, if any, under the Individual Performance component was determined by the Compensation Committee, in its sole discretion, based on the Compensation Committee’s evaluation of the executive’s performance against quantitative and qualitative objectives set forth at the beginning of the year, as well as assessment of the individual’s contributions to the Company during 2019 . In determining whether the Individual Performance component had been earned, the Compensation Committee did not rely on any one particular objective or formula but rather on a holistic evaluation of the individual’s performance. No executive officer was guaranteed an award under the Individual Performance component. Payouts under the Individual Performance component could range from 15% of base salary to 60% of base salary for Mr. Hansen; 10% of base salary to 40% of base salary for Messrs. Aniszewski, Stanner and Eng; and 7% of base salary to 28% of base salary for Mr. Ruiz.

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•	Mr. Hansen’s objectives primarily involved enhancing the Company’s strategic planning process, succession planning and organizational development programs;

•	Mr. Aniszewski’s objectives primarily involved maintaining a RevPAR index of 113%, integrating new project management software to create efficiencies and leveraging available data platforms to develop a corporate data analytics plan to improve future operating results;

•	Mr. Stanner’s objectives primarily involved enhancing the strategic planning process, providing strategic direction and reviewing and prioritizing risks within the corporate enterprise risk management program and implementing risk mitigation strategies on high-priority items;

•	Mr. Eng’s objectives primarily involved reviewing and prioritizing risks within the corporate enterprise risk management program and implementing risk mitigation strategies on high-priority items and analyzing legal constraints of strategic growth initiatives; and

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Mr. Ruiz's objectives primarily involved reviewing and prioritizing risks within the corporate enterprise risk management program and implementing risk mitigation strategies on high-priority items, overseeing the transition of the Company's internal audit department and developing an approach to eliminate unremediated deficiencies, significant deficiencies or risk of material weakness in financial controls, if any.

(1)

In determining the amount paid to executives under the 2019 Individual Performance component, the Compensation Committee considered the stated objectives of each executive and each executive’s contribution to the execution of the Company’s strategic plan of achieving long-term shareholder value accretion including acquisitions, capital recycling, capital raising and overall balance sheet management.

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(1)

Amounts in this column represent the aggregate grant date fair value, computed in accordance with ASC 718, of time-based and performance-based stock awards granted under our Equity Incentive Plan. The assumptions used in calculating these amounts are discussed in Note 2 (“Basis of Presentation and Significant Accounting Policies – Equity-Based Compensation”) and Note 12 (“Equity-Based Compensation”) to our audited consolidated financial statements included in our Annual Report.

(2)	Amounts in this column represent aggregate cash payouts pursuant to the Corporate Performance components and the Individual Performance component of the cash incentive awards granted to our named executive officers under our Equity Incentive Plan.

(3)

For 2019 , 2018 and 2017 , the amounts in the “All Other Compensation” column for Messrs. Hansen, Aniszewski, Eng and Ruiz reflect contributions made by us to each of our named executive officers’ 401(k) accounts. For 2017, amounts in the “All Other Compensation” column for Mr. Stanner reflect moving expenses in the amount of $106,556 reimbursed by us to Mr. Stanner in connection with his relocation to Austin, Texas.

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(1)

Represents the Corporate Performance measure and Individual Performance component of the incentive award granted in 2019 to each named executive officer under our Equity Incentive Plan. For each executive, the incentive award earned was paid out in cash in March 2020 , except as otherwise detailed below. For more information, see “Compensation Discussion and Analysis — Compensation Elements—Cash Incentive Compensation Program.”

(2)	Represents performance-based restricted stock awards granted to our named executive officers under our Equity Incentive Plan.

(3)	Represents time-based restricted stock awards granted to our named executive officers under our Equity Incentive Plan. The time-based restricted stock awards vest over a three year period.

(4)

Represents the aggregate grant date fair value of the performance-based stock awards and the time-based stock awards granted to our named executive officers under our Equity Incentive Plan. The amounts have been computed in accordance with ASC 718. For more information regarding our assumptions made in the valuation of these stock awards, see Note 2 and Note 11 to our audited consolidated financial statements included in our Annual Report.

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(1)	The closing sale price of our common stock on the NYSE on December 31, 2019, was $12.34.

(2)	Time-Based Shares. Vesting dates for unvested time-based shares listed in the above table are as follows:

(3)	Performance-Based Shares. Potential vesting dates for unvested performance-based shares issued at target level listed in the above table are as follows:

(4)	Based on the Company’s relative TSR for the three-year period starting March 6, 2017 and ending March 6, 2020 as compared to certain constituents of the REIT Index, all of these shares were completely forfeited as a result of performance metrics not being met.

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(1)

A termination of the executive officer’s employment due to death or disability entitles the executive officer to benefits under our life insurance and disability insurance plans. In addition, outstanding stock awards that have not yet vested, immediately vest upon the executive officer’s termination of employment due to death or disability. The unvested stock award figure in the table reflects 543,265 , 218,943 , 195,442 , 89,108 and 64,649 restricted shares for Messrs. Hansen, Aniszewski, Stanner, Eng and Ruiz, respectively, based on the closing common stock price of $12.34 on the NYSE as of December 31, 2019.

(2)

Pursuant to the terms of each executive officer's employment agreement, if the executive's employment with the Company is terminated by the Company without cause or by the executive for good reason, the severance payment is the sum of the following: (A)(1) earned but unpaid base salary, (2) accrued by unpaid vacation pay through the date of termination, and (3) any vested amounts due under any plan, program or policy of the Company, to the extent not previously paid (if any) (together, the "Accrued Obligations"); and (B) a severance amount equal to: (i) one and one-half (three for Mr. Hansen) times the executive's base salary in effect on the date of termination ( $700,000, $450,000, $450,000, $375,000 and $300,000 for Messrs. Hansen, Aniszewski, Stanner, Eng and Ruiz, respectively), plus (ii) one and one-half (three for Mr. Hansen) times the executive's target annual cash bonus for the year of termination ( $1,050,000, $450,000, $450,000, $375,000 and $210,000 for Messrs. Hansen, Aniszewski, Stanner, Eng and Ruiz, respectively), plus (iii) a pro rata portion of the annual cash bonus for the partial fiscal year in which the date of termination occurs equal to the product of the annual cash bonus earned by the executive for the fiscal year of the Company ended immediately before the date of termination ( $973,875, $417,375, $428,188, $345,625 and $194,775 for Messrs. Hansen, Aniszewski, Stanner, Eng and Ruiz, respectively) and a fraction, the numerator of which is the number of days the executive was employed by the Company during the fiscal year that includes the date of termination and the denominator of which is 365. The cash severance payment amounts in the table do not include any Accrued Obligations.

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(3)	The amounts shown in this row are estimates of cash payments for twelve months of COBRA premiums for the executive and eligible dependents to be paid by us pursuant to each executive officer's employment agreement.

(4)

Assumes outstanding stock awards that have not yet vested will immediately vest in the event the executive's employment with the Company is terminated by the Company without cause or by the executive for good reason. The unvested stock award figure in the table reflects 543,265 , 218,943 , 195,442 , 89,108 , and 64,649 restricted shares for Messrs. Hansen, Aniszewski, Stanner, Eng and Ruiz, respectively, based on the closing common stock price of $12.34 on the NYSE as of December 31, 2019.

(5)

The employment agreements with our named executive officers do not provide an indemnification or gross-up payment for the parachute payment excise tax under Sections 280G and 4999 of the Code. The employment agreements instead provide that the severance and any other payments or benefits that are treated as parachute payments under the Code will be reduced to the maximum amount that can be paid without an excise tax liability. The parachute payments will not be reduced, however, if the executive will receive greater after-tax benefits by receiving the total or unreduced benefits (after taking into account any excise tax liability payable by the executive). The amounts shown in the table assume that the executive officer will receive the total or unreduced benefits.

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(1)

The number of shares of common stock beneficially owned is reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. The number of shares of our common stock held by the stockholders who filed statements of beneficial ownership pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13D thereunder, as described in other footnotes to this table, is current as of the date of the filing of each such stockholder’s statement.

(2)	Percentages calculated on the basis of the amount of outstanding common stock, excluding securities held by or for the account of the Company or our subsidiaries, plus common stock deemed outstanding pursuant to Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended.

(3)	Based on a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”), with the SEC on February 4 , 2020. BlackRock had sole voting power over 19,459,449 shares and sole dispositive power over 20,059,012 shares. BlackRock has its principal business office at 55 East 52 nd Street, New York, NY 10055.

(4)

Based on a Schedule 13G/A filed by The Vanguard Group, Inc. (“Vanguard Group”), with the SEC on February 11, 2020. Vanguard Group has sole voting power over 207,211 shares, shared voting power over 112,466 shares, sole dispositive power over 13,987,957 shares and shared dispositive power over 199,602 shares. Vanguard Fiduciary Trust Company (“VFTC”), a wholly owned subsidiary of Vanguard Group, is the beneficial owner of 87,136 shares as a result of VFTC serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd. (“VIA”), a wholly-owned subsidiary of Vanguard Group, is the beneficial owner of 232,541 shares as a result of VIA serving as investment manager of Australian investment offerings. Vanguard Group has its principal business office at 100 Vanguard Blvd., Malvern, PA 19355.

(5)	Based on a Schedule 13G filed by State Street Corporation ("State Street"), with the SEC on February 14, 2020. State Street has shared voting power over 4,581,753 shares and shared dispositive power over 5,585,516 shares. State Street has its principal business office at One Lincoln Street, Boston, MA 02111.

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*	Represents less than one percent of the outstanding shares of common stock.

(1)	Unless otherwise indicated in the following footnotes, each person has sole voting and investment power with respect to all of the shares of common stock shown as beneficially owned by such person. The address of each named person is Summit Hotel Properties, Inc., 13215 Bee Cave Parkway, Suite B-300, Austin, Texas 78738.

(2)

Based on shares of our common stock issued and outstanding as of March 25, 2020. The total number of shares of our common stock outstanding used in calculating this percentage assumes that all shares of our common stock that each person has the right to acquire within 60 days of March 25, 2020, (pursuant to the exercise of stock options or upon the redemption of common units) are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the ownership percentage of any other person.

(3)	Includes (i) 235,000 shares of our common stock issuable upon the exercise of stock options granted to Mr. Hansen upon completion of our initial public offering, (ii) unvested restricted shares of our common stock issued under our Equity Incentive Plan, and (iii) 305,000 shares held through family company. No shares noted herein are pledged as security.

(4)	Includes unvested restricted shares of our common stock issued under our Equity Incentive Plan. No shares noted herein are pledged as security.

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