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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On December 17, 2020, Summit Hotel Properties,
Inc. (the “Company”) announced the appointment of Jonathan P. Stanner to be President and Chief Executive Officer
of the Company effective January 15, 2021. The Company’s current Chairman, President and Chief Executive Officer, Daniel
P. Hansen will transition to the role of Executive Chairman of the Board effective January 15, 2021.
On December 17, 2020, the Board of Directors
of the Company (the “Board”) adopted a resolution that increased the size of the Board from 6 to 7 members effective
January 15, 2021 with Mr. Stanner being elected a Director to fill the newly created directorship. Mr. Stanner will not receive
any separate compensation for his service as a Director of the Company and will not sit on any of the committees of the Board.
Mr. Stanner does not have any family relationship with the Company’s executive officers or directors, nor has he engaged
in any related party transaction with the Company that would be required to be disclosed pursuant to Item 404 of Regulation S-K.
Mr. Stanner, 39 years
old, has served as Executive Vice President, Chief Financial Officer and Treasurer of the Company since April 1, 2018 and served
as Executive Vice President and Chief Investment Officer of the Company from April 17, 2017, when he joined the Company, to March
31, 2018. Prior to joining the Company, Mr. Stanner held various roles at Strategic Hotels & Resorts, Inc., the formerly publicly
traded lodging REIT and affiliate of Blackstone Real Estate Partners.
On December 17, 2020, in connection with
his appointment as President and Chief Executive Officer, the Company entered into an employment agreement with Mr. Stanner, that
will become effective on January 15, 2021 (the “Stanner Agreement”). The Stanner Agreement has an initial term that
will commence on January 15, 2021 and will expire on January 14, 2024 and provides for automatic one-year extensions unless either
party provides at least 30 days’ notice of non-renewal. The Stanner Agreement provides for: (i) an annual base salary of
$600,000, which is subject to increases approved by the Board or its Compensation Committee; (ii) an annual bonus opportunity with
a target amount equal to 150% of Mr. Stanner’s then current base salary, with the actual bonus amount based upon achievement
of Company and individual performance targets; and (iii) eligibility to participate in the Company’s 2011 Equity Incentive
Plan as Amended and Restated. Mr. Stanner is further entitled to the standard benefits available to the Company’s executives
generally, including health insurance, life and disability coverage and the option to participate in the Company’s 401(k)
Savings Plan.
The Stanner Agreement also (i) sets
forth Mr. Stanner’s right to severance payments and/or benefits upon his termination of employment and (ii) contains
non-competition and non-solicitation covenants that apply during the term and for 12 months following the expiration
or termination of Mr. Stanner’s employment.
A copy of the Stanner Agreement is attached
to this report as Exhibit 10.1 and incorporated herein by reference. The summary set forth above is qualified in its entirety
by reference to Exhibit 10.1.
Mr. Hansen, 51 years old, has served President
and Chief Executive Officer of the Company since the Company’s initial public offering in 2011 and as the Chairman of the
Board of the Company since January 2017.
On December 16, 2020, in connection with
his appointment as Executive Chairman of the Board, the Company entered into an amended and restated employment agreement with
Mr. Hansen, that will become effective on January 15, 2021 (the “Hansen Agreement”). The Hansen Agreement has an initial
term that will commence on January 15, 2021 and will expire on December 31, 2021. The term may be extended until December 31, 2022
by the Company by providing written notice to Mr. Hansen no later than December 1, 2021. The Hansen Agreement provides for: (i)
an annual base salary of $500,000; and (ii) a time-based equity award with a grant date value of $1,500,000 to be made at the same
time equity grants are made to Company senior executives in 2021. If the Hansen Agreement is extended, Mr. Hansen will receive
a time-based equity award with a grant date value of $500,000 to be made at the same time equity grants are made to Company senior
executives in 2022. Mr. Hansen will not receive any additional compensation during the term of the Hansen Agreement for serving
as a member of the Board. Mr. Hansen is further entitled to the standard benefits available to the Company’s executives generally,
including health insurance, life and disability coverage and the option to participate in the Company’s 401(k) Savings Plan.
The Hansen Agreement also (i) sets
forth Mr. Hansen’s right to severance payments and/or benefits upon his termination of employment and (ii) contains
non-competition and non-solicitation covenants that apply during the term and for 12 months following the expiration
or termination of Mr. Hansen’s employment.
A copy of the Hansen Agreement is attached
to this report as Exhibit 10.2 and incorporated herein by reference. The summary set forth above is qualified in its entirety
by reference to Exhibit 10.2.