The Company’s Board of Directors currently consists of eight directors, whoall of whom are divided into three classes with staggered terms.  At the Annual Meeting, three (3) directors will be elected. As part of Proposal 4, the Company is proposing an amendment to the Company’s amended and restated articles of incorporation (the “Charter”), to declassify the Board and providestanding for the annual election of directors.  See “Proposals to be Voted Upon—Proposal 4—Approval and Adoption of an Amendment to the Company’s Amended and Restated Articles of Incorporation to Declassify the Board and Provide for Annual Elections of Directors” for additional information regarding the amendment to the Charter to declassify the Board.  If Proposal 4 is approved, the term of office of each director electedre-election at the Annual Meeting will expire atMeeting. The Board of Directors recommends their re-election to the 2019 annual meetingBoard of shareholders and if Proposal 4 is not approved, the term of office of each director elected at the Annual Meeting will expire atDirectors to serve as directors until the 2021 annual meeting of shareholders and in each case,or until a successor istheir successors are duly elected and qualified, except in the event of prior resignation, death or removal.

Unless otherwise specified, all Common Shares represented by proxies will be voted FOR the election of the nominees listed below. If a nominee ceases to be available for election as a director, discretionary authority may be exercised by each of the proxies named on the attached proxy card to vote for a substitute. No circumstances are presently known that would cause any nominee to be unavailable for election as a director. The nominees are now members of the Board of Directors, have been nominated by action of the Board of Directors, and have indicated their willingness to serve if elected. If a quorum is present at the Annual Meeting, threethe positions on the Board of Directors will be filled by the election of the three properly nominated candidates who receive the greatest number of votes at the Annual Meeting, even if thea nominee does not receive a majority of all votes represented and entitled to be cast. Under the Company’s Corporate Governance Guidelines, if an incumbent director fails to receive at least a majority of the votes cast, such director will tender his or her resignation from the Board of Directors. The Nominating and Corporate Governance Committee of the Board will consider, and determine whether to accept, such resignation and make a recommendation to the Board of Directors. Within 90 days of the certification of the election results, the Board of Directors must act on the resignation, taking into consideration any recommendation by the Nominating and Corporate Governance Committee and any additional relevant factors. A director who tenders his or her resignation does not participate in the decisions of the Nominating and Corporate Governance Committee or the Board relating to the resignation.

A shareholder who wishes to abstain from voting on the election of a director may do so by specifying, as provided on the proxy, that authority to vote for any or all of the nominees is to be withheld. Withheld votes and broker non-votes will have no effect on the election of a director. A broker non-vote occurs when the entity holding shares in street name has not received voting instructions from the beneficial owner and either chooses not to vote those shares on a routine matter at the shareholders meeting or is not permitted to vote those shares on a non-routine matter.

In accordance with Section 14A of the Exchange Act, the Company is providing its shareholders with the opportunity to approve, on a non-binding, advisory basis, the compensation paid to the Company’s named executive officers as disclosed in this proxy statement. The Board of Directors has adopted a policy, which shareholders approved by a non-binding advisory vote, of providing for an annual “say-on-pay” advisory vote. The Company encourages shareholders to read the disclosure under “Compensation Discussion and Analysis” for more information concerning the Company’s compensation philosophy, programs and practices, the compensation and governance-related actions taken in fiscal 20172019 and the compensation paid to the named executive officers.

Accordingly, the Company is asking you to approve the adoption of the following resolution:

RESOLVED: That the shareholders of the Company approve, on a non-binding, advisory basis, the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion in the proxy statement.

The affirmative vote of a majority of the votes cast will be necessary to approve this proposal. Abstentions and broker non-votes will have no effect on the outcome of this proposal. The shareholder vote on this proposal is advisory and non-binding and serves only as a recommendation to the Board of Directors. Although the vote is non-binding, the Compensation Committee and the Board of Directors value the opinions of shareholders and will consider the outcome of the vote when making future compensation decisions.

The firm of Ernst & Young LLP served as the independent registered public accounting firm for the Company in 2017.2019.  A representative of Ernst & Young LLP is expected to be present at the Annual Meeting. The representative will have an opportunity to make a statement if he or she so desires and will be available to answer appropriate questions from shareholders. The Board of

Directors has approved the retention of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2018,2020, based on the recommendation of the Audit Committee. Independent accounting fees for the last two fiscal years are shown in the table below:

All services rendered by Ernst & Young LLP are permissible under applicable laws and regulations, and the annual audit of the Company was pre-approved by the Audit Committee, as required by applicable law. The nature of each of the services categorized in the preceding table is described below:

Audit Fees. These are fees for professional services rendered for the audit of the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K, reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q, filings, or services normally provided by the independent auditor in connection with statutory or regulatory filings or engagements, and other accounting and financial reporting work necessary to comply with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and fees for services that only the Company’s independent auditor can reasonably provide.

Audit-Related Fees. These are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements. Such services include accounting consultations, internal control reviews, audits in connection with acquisitions, attest services related to financial reporting that are not required by statute or regulation and required agreed-upon procedure engagements.

Tax Fees. Such services include tax compliance, tax advice and tax planning.  Effective in December 2017, the Company has engaged Ernst & Young LLP to perform tax compliance and advisory services.

All Other Fees. These are fees for other permissible work that does not meet the above category descriptions.  Such services include information technology and technical assistance provided to the Company. Generally, this category would include permitted corporate finance assistance, advisory services and licenses to technical accounting research software.

These accounting services are actively monitored (as to both spending level and work content) by the Audit Committee to maintain the appropriate objectivity and independence in the core area of accounting work performed by Ernst & Young LLP, which is the audit of the Company’s consolidated financial statements.

Pre-Approval Policy for Audit and Non-Audit Services. In accordance with the Sarbanes-Oxley Act of 2002, all audit and non-audit services provided to the Company by its independent auditors must be pre-approved by the Audit Committee. As authorized by that act, the Audit Committee has delegated to the Chair of the Audit Committee the authority to pre-approve up to $25,000 in audit and non-audit services. This authority may be exercised when the Audit Committee is not in session. Any decisions by the Chair of the Audit Committee under this delegated authority will be reported at the next meeting of the Audit Committee. All services reported in the preceding fee table for fiscal years 20162018 and 20172019 were pre-approved by the full Audit Committee, as required by then applicable law.

The Company is asking you to vote on the adoption of the following resolution:

RESOLVED: That the shareholders of the Company ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018.2020.

CorporateResponsibility Overview

Alignment with the best interests of the Company’s shareholders is at the forefront of Apple Hospitality’s values. Through strong governance practices, sustainability efforts and social engagement, the Company is committed to aligning its governance practices with the best interests of its shareholders and operating in a manner that minimizes its shareholders.  A copyenvironmental footprint and increases its social impact. Below are some highlights of the proposed amendment to the Charter (the “Charter Amendment”) is attached to this proxy statement as Exhibit A, with deletions indicated by strikethroughsCompany’s initiatives.

Corporate Governance, Risk Oversight and Procedures for Shareholder Communications

Board of Directors. The Company’s Board of Directors has determined that all of the Company’s directors (and nominees for director), except Messrs.Mrs. Kristian M. Gathright, Mr. Glade M. Knight and Mr. Justin G. Knight, are “independent” within the meaning of the rules of the New York Stock Exchange (“NYSE”)., including Mr. Bruce H. Matson, who retired in December 2019. In making this determination, the Board considered all relationships between the applicable director and the Company, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships.

The Board has adopted a categorical standard that a director is not independent (a) if he or she receives any personal financial benefit from, on account of or in connection with a relationship

between the Company and the director (excluding directors’ fees and equity-based awards); (b) if he or she is a partner, officer, employee or managing member of an entity that has a business or professional relationship with, and that receives compensation from, the Company; or (c) if he or she is a non-managing member or shareholder of such an entity and owns 10% or more of the membership interests or common stock of that entity. The Board may determine that a director with a business or other relationship that does not fit within the categorical standard described in the immediately preceding sentence is nonetheless independent, but in that event, the Board is required to disclose the basis for its determination in the Company’s then current annual proxy statement.  

In order to optimize the effectiveness and independence of the Board, in February 2017, the Board establishedindependent directors have designated an independent, non-employee director to serve as the position ofCompany’s Lead Independent Director, which currently is held by Jon Fosheim. See “Committees of the Board and Board Leadership.”

Code of Ethics. The Board has adopted a Code of Business Conduct and Ethics for the Company’s officers, directors and employees, which is available at the Company’s website, www.applehospitalityreit.com. The purpose of the Code of Business Conduct and Ethics is to promote (a) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest; (b) full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by the Company; and (c) compliance with all applicable rules and regulations that apply to the Company and its officers, directors and employees. Any waiver of the Code of Business Conduct and Ethics for the Company’s executive officers or Board may be made only by the Board or one of the Board’s committees. The Company anticipates that any waivers of the Code of Business Conduct and Ethics will be posted on the Company’s website.

Risk Oversight.Oversight. The Board believes that risk oversight is a key function of a Board of Directors. It administers its oversight responsibilities through its Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee. All members of each of these committees are independent directors. The entire Board is kept abreast of and involved in the Company’s risk oversight process. It is through the approval of officers and compensation plans, andas well as management updates on property performance, industry performance, financing strategy, acquisitions and dispositions strategy and capital improvements, that the Board has input to manage the Company’s various risks. Additionally, through the Audit Committee, the Board reviews management’s and independent auditors’ reports on the Company’s internal controls and any associated potential risks of fraudulent activities. Through the Nominating and Corporate Governance Committee, the Board reviews the Company’s Corporate Governance Guidelines and related risks. Through the Compensation Committee, the Board oversees risk related to compensation practices with the objective of balancing risk/rewards to overall business strategy. Risk oversight is also one of the factors considered by the Board in establishing its leadership structure. The Company has separated the roles of Chairman and Chief Executive Officer to create a leadership structure that the Board believes strikes the appropriate balance between the authority of those who oversee the Company and those who manage it on a day-to-day basis and also has a Lead Independent Director to optimize the effectiveness and independence of the Board.

Shareholder Communications.Communications. Shareholders and other interested parties may send communications to the Board or to specified individual directors. Any such communications should be directed to the attention of the Lead Independent Director at Apple Hospitality REIT, Inc., 814 East Main Street, Richmond, Virginia 23219. The Lead Independent Director will decide what

action should be taken with respect to the communication, including whether such communication should be reported to the full Board.

Share Ownership Guidelines. The Board believes that equity ownership by directors and executive officers will align their interests with shareholders’ interests. To that end, the Company has adopted formal share ownership guidelines, included in the Company’s Corporate Governance Guidelines, applicable to all of its directors and executive officers. On an annual basis, the Company evaluates the ownership status of the directors and executive officers. Directors and executive officers are required to own securities of the Company with a value equal to the following multiple of their annual base cash retainer (for directors) or their annual base salary (for executive officers):

New directors or executive officers are required to comply with the ownership requirements within two years of becoming a member of the Board or an executive officer. All current directors and executive officers currently comply with the ownership guidelines.

The Nominating and Corporate Governance Committee may waive the stock ownership requirements in the event of financial hardship or other good cause.

HedgingHedging and Pledging of Company Securities. The Company’sInsider Trading Policy prohibits directors and employees, including the executive officers, from hedging their ownership of the Company’s stock, including a prohibition on engaging in the following transactions: (i) trading in call or put options involving the Company’s securities and other derivative securities; (ii) engaging in short sales of the Company’s securities; (iii) holding the Company’s securities in a margin account; (iv) other hedging or monetization transactions related to the Company’s securities, including the use of financial instruments such as prepaid variable forwards, equity swaps, collars and (iv)exchange funds; and (v) pledging more than 50% of the number of the Company’s securities held individually to secure margin or other loans.

Director Qualifications. The Company believes the Board should encompass a diverse range of talent, skill and expertise sufficient to provide sound and prudent guidance with respect to the Company’s operations and interests. Each director also is expected to exhibit high standards of integrity, practical and mature business judgment, including the ability to make independent analytical inquiries, and be willing to devote sufficient time to carrying out their duties and responsibilities effectively.

The Board has determined that the Board of Directors as a whole must have the right mix of characteristics and skills for the optimal functioning of the Board in its oversight of the Company. The Board believes it should be comprised of persons with skills in areas such as finance, real estate, investment, banking, strategic planning, human resources, leadership of business

organizations, and legal matters. Although it does not have a diversity policy, the Board believes it is desirable for the Board to be composed of individuals who represent a mix of viewpoints, experiences and backgrounds. 

In addition to the targeted skill areas, the Board looks for a strong record of achievement in key knowledge areas that it believes are critical for directors to add value to the Board, including:

Nomination Procedures.Procedures. The Board has established a Nominating and Corporate Governance Committee that oversees the nomination process and recommends nominees to the Board. As outlined above, in selecting a qualified nominee, the Board considers such factors as it deems appropriate, which may include the current composition of the Board; the range of talents of the nominee that would best complement those already represented on the Board; the extent to which the nominee would diversify the Board; the nominee’s standards of integrity, commitment and independence of thought and judgment; and the need for specialized expertise. Applying these criteria, the Board considers candidates for Board membership suggested by its members, as well as management and shareholders. Shareholders of record may nominate directors in accordance with the Company’s bylaws which require, among other items, notice sent to the Company’s Secretary not less than 60 days prior to a shareholder meeting that will include the election of Board members. No nominations other than those proposed by the Nominating and Corporate Governance Committee were received for the Annual Meeting.

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CommitteesCommittees of the Board and Board Leadership

SummarySummary.. The Board of Directors has four standing committees, which are specified below. The following table shows each committee’s function, membership and the number of meetings held during 2017:

2019:

Committee		Responsibilities		Members(1)		Number Number of Meetings During 20172019
Executive		Has all powers vested in the Board of Directors, except powers specifically withheld under the Company’s bylaws or by law.		Glade M. Knight* Knight(2) Glenn W. Bunting Jon A. Fosheim Justin G. Knight Bruce H. Matson Daryl A. Nickel		0
Audit		Responsibilities are outlined in its written charter that is available at the Company’s website, www.applehospitalityreit.com, and include oversight responsibility relating to the integrity of the Company’s consolidated financial statements and financial reporting processes. A report by the Audit Committee appears in a following section of this proxy statement.		L. Hugh Redd*^ Redd(2)(3) Glenn W. Bunting Jon A. Fosheim^ Fosheim(3)		5
Compensation		Responsibilities are outlined in its written charter that is available at the Company’s website, www.applehospitalityreit.com, and include administration of the Company’s compensation and incentive plans for the Company’s executive officers and oversight of the Company’s compensation practices.		Glenn W. Bunting* Bunting(2) Daryl A. Nickel L. Hugh Redd		12
Nominating and Corporate Governance		Responsibilities are outlined in its written charter that is available at the Company’s website, www.applehospitalityreit.com, and include oversight of all aspects of the Company’s corporate governance, director compensation, and nominations process for the Board of Directors and its committees.		Bruce H. Matson* Blythe J. McGarvie(2) Jon A. Fosheim Daryl A. Nickel		54

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(1)	Until his retirement in December 2019, Bruce H. Matson served as Chair of the Nominating and Corporate Governance Committee and as a member of the Executive Committee. In conjunction with Mr. Matson’s retirement, Mr. Fosheim became a member of the Executive Committee and Ms. McGarvie became the Chair of the Nominating and Corporate Governance Committee.
(2)						Indicates the Committee Chair.
* Indicates Committee Chair ^ (3)	Indicates Audit Committee Financial Expert				Expert.

Ms. Blythe J. McGarvie was appointed to the Board in February 2018 by the vote of the remaining directors.  Ms. McGarvie does not currently serve on a committee of the Board, but is expected to be appointed to one or more committees in connection with the Annual Meeting, assuming she is re-elected to the Board at the Annual Meeting.

Board Leadership.  The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. The Board understands that there is no single generally accepted approach to providing Board

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leadership and the right Board leadership structure may vary as circumstances warrant. Consistent with this understanding, the independent directors periodically consider the Board’s leadership structure. Currently, the roles of Chairman and Chief Executive Officer are held by different directors. Mr. Glade M. Knight serves as Executive Chairman and Mr. Justin G. Knight serves as President and Chief Executive Officer. The Board believes that this structure provides the appropriate balance between the authority of those who oversee the Company and those who manage it on a day-to-day basis. The Executive Chairman of the Board presides at all meetings of the shareholders and of the Board as a whole. The Executive Chairman performs such other duties, and exercises such powers, as from time to time shall be prescribed in the bylaws or by the Board.

Additionally, the Board has aappointed Mr. Jon A. Fosheim to serve as Lead Independent Director, Jon Fosheim.Director. The Lead Independent Director’s responsibilities include, among other things, presiding at meetings or executive sessions of the independent directors and non-employee directors, serving as a liaison to facilitate communications between the Chairman, the President and Chief Executive Officer and other members of the Board, without inhibiting direct communications between and among such persons, and serving as a liaison to shareholders who request direct communications and consultations with the Board.

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Audit Committee Independence. The Board of Directors has determined that each current member of the Audit Committee is, and Ms. Blythe J. McGarvie during her term on the Audit Committee was, “independent,” as defined in the listing standards of the NYSE. To be considered independent, a member of the Audit Committee must not (other than in his or her capacity as a director or committee member, and subject to certain other limited exceptions) either (a) accept directly or indirectly any consulting, advisory, or other compensatory fee from the Company or any subsidiary; or (b) be an affiliate of the Company or any subsidiary. The Audit Committee currently has two members, Mr. Jon A. Fosheim and Mr. L. Hugh Redd, who are “financial experts” within the meaning of the regulations issued by the Securities and Exchange Commission. The Company’s management believes that the combined experience and capabilities of the Audit Committee members are sufficient for the current and anticipated operations and needs of the Company.In this regard, the Board has determined that each Audit Committee member is “financially literate” and that at least two members have “accounting or related financial management expertise,” as all such terms are defined by the rules of the NYSE.

Board Meetings, Attendance and Related Information. The Board held a total of fourseven meetings during 20172019 (including regularly scheduled and special meetings). It is the policy of the Company that directors should attend each annual meeting of shareholders. All seven directors at the time of the meeting attended the 2017 annual meeting of shareholders.2019 Annual Meeting. The Company also expects directors to attend each regularly scheduled and special meeting of the Board, but recognizes that, from time to time, other commitments may preclude full attendance. In 2017,2019, each director attended at least 75% of the aggregate of (a) the total number of meetings of the Board of Directors that were held during the period in which he or she was a director, and (b) the total number of meetings held by all committees of the Board on which he or she served during the period in which he or she served.

Executive Sessions. The independent members of the Board of Directors meet independentindependently of management and the non-independent Directorsdirectors in executive sessions on a regular basis, presided by the Lead Independent Director.

2019 CompensationCompensation of Directors

The compensation of the directors is reviewed and approved annually by the Board of Directors. During 2017,2019, the directors of the Company were compensated as follows:

ReimbursementsReimbursements to Directors in 20172019. All directors were reimbursed by the Company for travel and other out-of-pocket expenses incurred by them to attend meetings of the directors and committee meetings and in conducting the business of the Company. 

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CompensationCompensation of Independent Non-Employee Directors. In 2017,2019, the independentnon-employee directors (classified by the Company as all directors other than Mrs. Kristian M. Gathright, Mr. Glade M. Knight and Mr. Justin G. Knight) received the following directors’ fees: (i) a $140,000$165,000 annual retainer, with $60,000$65,000 paid in cash and $80,000$100,000 paid in vested stock grants, paid in quarterly installments, and (ii) a $1,000 fee for each meeting of the Board of Directors or any committee of the Board of Directors in excess of eight meetings per year for each of the Board or applicable committee (measured from June 1 through May 31 of the following year).  Additionally, the Chair of the Audit Committee is entitled to receive an additional annual retainer fee of $7,000 (in addition to $1,000 per meeting for service on the Company’s Disclosure Committee) and the Chair of the Compensation Committee and the Nominating and Corporate Governance Committee are each entitled to receive an additional annual retainer fee of $5,000, each paid in cash in quarterly installments.

In January 2018, the Nominating and Corporate Governance Committee engaged FPL Associates L.P. (“FPL”) to evaluate the independent directors’ compensation.  Utilizing the same peer group as the report prepared for executive compensation discussed below under “Compensation Discussion and Analysis,” the independent directors’ 2017 compensation was in the 9^th percentile of the peer group’s 2016 compensation.  After reviewing the report and considering FPL’s recommendations, the Nominating and Corporate Governance Committee recommended to the Board of Directors a change to the independent directors’ compensation to bring the compensation close to the median of the peer group.  The Nominating and Corporate Governance Committee believes the change was important to continue to attract and retain superior board members.  Upon review and discussion of the Nominating and Corporate Governance Committee’s recommendation, the Board of Directors approved the following independent director compensation effective in February 2018: (i) an annual retainer of $165,000 ($100,000 paid in vested stock grants and $65,000 paid in cash) paid in quarterly installments, (ii) an annual retainer for the Chair of the Audit Committee of $15,000 (in addition to fees for service on the Company’s Disclosure Committee) paid in cash in quarterly installments, and (iii) an annual retainer for the Chair of the Compensation Committee, the Chair of the Nominating and Corporate Governance Committee and the Lead Independent Director of $10,000 each, paid in cash in quarterly installments.  There will no longer be

In March 2020, as a result of the coronavirus (COVID-19) situation and associated economic impact to the Company, non-employee directors volunteered to reduce their annual fee rate. The aggregate reduction in fees paid for meetings ofthe group totals approximately 17%.

Non-Employee Director Deferral Program. Effective June 1, 2018, the Board of Directors adopted the Non-Employee Director Deferral Program (the “Director Deferral Program”) under the Apple Hospitality REIT, Inc. 2014 Omnibus Incentive Plan (the “2014 Omnibus Incentive Plan”) for the purpose of providing non-employee members of the Board the opportunity to elect to defer receipt of all or anya portion of the annual retainer payable to them for their service on the Board, including the portion of the annual retainer amounts payable in cash (including for service as a Chair of a committee of the Board or Lead Independent Director) and the portion of the annual retainer amounts payable in fully vested Common Shares. As specified by the director, the receipt of payment may be deferred until either (i) the date that his or her service on the Board has ended, (ii) a specified date, or (iii) the earlier of the specified date or the date that his or her service on the Board has ended. The deferred amounts will also be paid if, prior to the time specified by the director, the Company experiences a change in control or upon death of the director. For the portion of the director fees payable in shares, the director may elect to defer his or her fees in the form of deferred stock units, and for the portion of the director fees payable in cash, the director may elect to defer his or her fees either in the form of deferred stock units or as deferred cash fees.

Under the Director Deferral Program, the Company has established a notional deferral account (for bookkeeping purposes only) for each non-employee director who has elected to participate and all deferred fees are credited to this account, whether in cash or stock, as of the date the fee otherwise would have been paid to the director (the “Quarterly Deferral Date”). Deferred fees converted into deferred stock units are credited to the deferral account based on the fair market value of the Company’s Common Shares on the Quarterly Deferral Date. On each Quarterly Deferral Date, dividends earned on deferred stock units are credited to the deferral account in the form of additional deferred stock units based on dividends declared by the Company on its outstanding Common Shares during the quarter and the fair market value of the stock on such date. Additionally, on each Quarterly Deferral Date, deferred cash fees are credited with an additional deferred cash amount based on the dividends declared by the Company during the quarter on its outstanding Common Shares and the share equivalent, as defined in the Director Deferral Program, of the deferred cash balance from the preceding quarter. Upon the applicable payment date, as described above in the preceding paragraph, any deferred stock units credited to a director’s deferral account will be settled solely by delivering an amount of the Company’s Common Shares equal to the number of such deferred stock units, and, with respect to any deferred cash fees credited to the director’s deferral account, such fees will be paid solely in the form of cash. Directors have no rights as shareholders of the Company with respect to deferred stock units credited to their deferral accounts.

During 2019, four of the non-employee directors elected to participate in excessthe Director Deferral Program by deferring all or a portion of eight meetings per year.

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Tabletheir annual retainer fees in the form of Contentsdeferred stock units and/or deferred cash fees.

Employee Directors

Non-Independent Directors in 2017.  Mr. Glade M. Knight and Mr. Justin G. Knight are employee directors of the Company and through March 31, 2020, Mrs. Gathright was an employee director of the Company. Accordingly, during 2019, they received no compensation from the Company for their services as a director.directors.

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Director Summary Compensation

Director		Year		Fees Earned or Paid in Cash				Share Awards(1)				Total
Glenn W. Bunting		2017		$	65,000			$	80,008			$	145,008
Jon A. Fosheim		2017			60,000				80,008				140,008
Glade M. Knight		2017			—				—				—
Justin G. Knight		2017			—				—				—
Bruce H. Matson		2017			65,000				80,008				145,008
Blythe J. McGarvie (2)		2017			—				—				—
Daryl A. Nickel		2017			60,000				80,008				140,008
L. Hugh Redd		2017			71,000				80,008				151,008

. The following table shows the amounts earned in 2019 by the Company’s non-employee directors.

Director		Fees Earned or Paid in Cash (1)				Share Awards (2)				All Other Compensation (3)				Total
Glenn W. Bunting		$	75,000			$	100,015			$	-			$	175,015
Jon A. Fosheim			75,000				100,004				10,927				185,931
Bruce H. Matson (4)			69,986				101,645				12,349				183,980
Blythe J. McGarvie			65,687				100,015				-				165,702
Daryl A. Nickel			65,000				99,984				10,843				175,827
L. Hugh Redd			84,000				100,000				6,566				190,566

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(1)										The amounts in this column include any cash fees that non-employee directors elected to defer in the form of deferred stock units or deferred cash fees under the Director Deferral Program.
(2)										The amounts in this column reflect the grant date fair value determined in accordance with FASB ASC Topic 718. Each non-employee director that was a member of the Board of Directors in 2017, except Mr. Glade M. Knight and Mr. Justin G. Knight, received 4,214during 2019 was awarded approximately 6,000 fully vested Common Shares.Shares (or deferred stock units if so elected). No share options were granted in 2017.2019.

(2) (3)										Ms. Blythe J. McGarvie was appointed toThis column represents earnings on deferred stock unit and deferred cash fee accounts under the Director Deferral Program.
(4)										Mr. Matson retired from the Board in February 2018December 2019 and, therefore did not receive any compensation for service in 2017.as a result, received cash fees and share awards through the date of his retirement.

Outstanding Stock Option Awards

. In 2008, the Company adopted the Apple REIT Nine, Inc. 2008 Non-Employee Directors Stock Option Plan (the “Directors’ Plan”). The Directors’ Plan provided for automatic grants of options to acquire Common Shares. The Directors’ Plan applied to directors of the Company who were not employees or executive officers of the Company. In May 2015, theThe Directors’ Plan was terminated effective upon the listing of the Company’s Common Shares on the NYSE on May 18, 2015 (the “Listing”). No further grants can be made under the Directors’ Plan, provided however, the termination did not affect any outstanding director option awards previously issued under the Directors’ Plan. Following the termination of the Directors’ Plan, all awards to directors are made under the Apple Hospitality REIT, Inc. 2014 Omnibus Incentive Plan (the “2014 Omnibus Incentive Plan”).

Since adoption of the Directors’ Plan, none of the current directors have exercised any of their options to acquire Common Shares.  Plan.

See “Ownership of Certain Beneficial Owners and Management” for the number of outstanding options that were granted to certain directorsMr. Glenn W. Bunting under the Directors’ Plan, which are all fully vested, as of the Record Date. Since adoption of the Directors’ Plan, Mr. Bunting has not exercised any of his options to acquire Common Shares. There were no other outstanding option awards granted to directors as of the Record Date.

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Table Mr. Bruce H. Matson had 141,465 fully vested options to acquire Common Shares at the date of Contents

Executive Officers

Each executive officer is appointed annually by the Board of Directors at its meeting prior to the annual meeting of shareholders.  Thehis retirement which, if not exercised, will expire no later than 36 months following table sets forth biographical information regarding the Company’s executive officers who held positions during 2017, other than Glade M. Knight, Executive Chairman, and Justin G. Knight, President and Chief Executive Officer, whose information is provided above in the section titled “Proposals to be Voted Upon—Proposal 1. Election of Directors”:

Name and Title		Business Experience (1)
David P. Buckley Executive Vice President and Chief Legal Officer Age: 50		Mr. Buckley has served as Executive Vice President, Chief Legal Officer and Secretary for the Company since its inception. In addition, Mr. Buckley held various senior management positions with the former Apple REIT Companies (as described in Note 1 below) (from 2005 for Apple Two, Apple Five and Apple Six and from inception for Apple Seven, Apple Eight and Apple Ten) until the companies were sold to a third party or merged with the Company. Prior to his service with these companies, from 1999 to 2005, Mr. Buckley served as an Associate, specializing in commercial real estate, with McGuireWoods, a full-service law firm headquartered in Richmond, Virginia. Mr. Buckley holds a Juris Doctor degree, Cum Laude, from the University of Richmond, Richmond, Virginia, a Master of Urban and Regional Planning degree from Virginia Commonwealth University, Richmond, Virginia, and a Bachelor of Science degree in Industrial Technology from the University of Massachusetts Lowell, Lowell, Massachusetts. Mr. Buckley is a member of the Virginia State Bar and the Richmond Bar Association.
Kristian M. Gathright Executive Vice President and Chief Operating Officer Age: 45		Mrs. Gathright has served as Executive Vice President and Chief Operating Officer for the Company since its inception. In addition, Mrs. Gathright held various senior management positions with the former Apple REIT Companies (as described in Note 1 below) from inception until the companies were sold to a third party or merged with the Company. Prior to her service with these companies, Mrs. Gathright served as Assistant Vice President and Investor Relations Manager for Cornerstone Realty Income Trust, Inc., a REIT that owned and operated apartment communities in Virginia, North Carolina, South Carolina, Georgia and Texas. From 1996 to 1998, she was an Asset Manager and Regional Controller of the Northern Region Operations for United Dominion Realty Trust, Inc., a REIT. From 1994 to 1996, she served as a Senior Staff Accountant at Ernst & Young LLP. Mrs. Gathright serves on the Consumer Innovation Forum of the American Hotel and Lodging Association, on the Marriott and Hilton Distribution Councils, and as President of the Courtyard Franchise Advisory Council. Mrs. Gathright holds a Bachelor of Science degree, Graduate with Distinction, in Accounting from the McIntire School of Commerce at the University of Virginia, Charlottesville, Virginia. Mrs. Gathright passed the Virginia CPA Exam in 1994.
Nelson G. Knight Executive Vice President and Chief Investment Officer Age: 36		Mr. Knight has served as Executive Vice President and Chief Investment Officer for the Company since May 2014. Prior to his current position, Mr. Knight held various senior management positions with the Company and the former Apple REIT Companies (as described in Note 1 below) until the companies were sold to a third party or merged with the Company. Mr. Knight joined the Apple REIT Companies in 2005.  Mr. Knight serves on the Home2 Suites Owner Advisory Committee, the TownePlace Suites Franchise Advisory Council, as an advisory member of the Hunter Hotels Investment Conference and chairs the TownePlace Suites System Marketing Committee. Mr. Knight also serves on the National Advisory Council for Southern Virginia University in Buena Vista, Virginia. Mr. Knight holds a Master of Business Administration from Texas Christian University, as well as a Bachelor of Arts degree, Cum Laude, in History with a minor in Business from Southern Virginia University in Buena Vista, Virginia. Nelson G. Knight is the son of Glade M. Knight, the Company’s Executive Chairman, and the brother of Justin G. Knight, the Company’s President and Chief Executive Officer.

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his retirement.

Table of ContentsAudit

Bryan F. Peery Executive Vice President and Chief Financial Officer Age: 53		Mr. Peery has served as Executive Vice President and Chief Financial Officer for the Company since its inception. In addition, Mr. Peery held various senior management positions with the former Apple REIT Companies (as described in Note 1 below) (from 2003 for Apple Two and Apple Five and from inception for Apple Six, Apple Seven, Apple Eight and Apple Ten) until the companies were sold to a third party or merged with the Company. Prior to his service with these companies, Mr. Peery served as President (2000-2003), Vice President-Finance (1998-2000) and Controller (1997-1998) of This End Up Furniture Company. Mr. Peery was with Owens & Minor, Inc., a medical and surgical supplies distributor, from 1991 until 1997, where he last served as Director and Assistant Controller-Financial Reporting. Mr. Peery’s experience also includes five years of service with KPMG LLP. Mr. Peery holds a Bachelor of Business Administration degree in Accounting from the College of William and Mary, Williamsburg, Virginia. Mr. Peery is a Certified Public Accountant. On February 12, 2014, Mr. Peery, Apple Seven, Apple Eight, Apple Nine and their related advisory companies entered into settlement agreements with the SEC. Along with Apple Seven, Apple Eight, Apple Nine and their advisory companies, and without admitting or denying the SEC’s allegations, Mr. Peery consented to the entry of an administrative order, under which Mr. Peery and the noted companies each agreed to cease and desist from committing or causing any violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), 14(a), and 16(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, 13a-14, 14a-9, and 16a-3 thereunder.

(1)       Below are the “former Apple REIT Companies” that were sold to a third party or merged with the Company.  All of the Apple REIT Companies, founded by Glade M. Knight, were REITs focused on the ownership of Marriott and/or Hilton branded select-service hotels.

Company		Formation Date		Sale/Merger Description
Apple Suites		1999		Merged with Apple Hospitality Two, Inc. in January 2003
Apple Two		2001		Sold to an affiliate of ING Clarion in May 2007
Apple Five		2002		Sold to Inland American Real Estate Trust, Inc. in October 2007
Apple Six		2004		Sold to an affiliate of Blackstone Real Estate Partners VII in May 2013
Apple Seven		2005		Merged with the Company in March 2014
Apple Eight		2007		Merged with the Company in March 2014
Apple Nine		2007		Original name of the Company.  Name changed to Apple Hospitality REIT, Inc. in March 2014
Apple Ten		2010		Merged with the Company in September 2016

Audit Committee Report

The Audit Committee of the Board of Directors is currently composed of three directors. All three directors are independent directors as defined under “Committees of the Board and Board Leadership—Audit Committee Independence.” The Audit Committee operates under a written charter that was adopted by the Board of Directors and is annually reassessed and updated, as needed, in accordance with applicable rules of the Securities and Exchange Commission. The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. In fulfilling its oversight duties, the Audit Committee reviewed and discussed the audited financial statements for fiscal year 20172019 with management and the Company’s independent auditors, Ernst & Young LLP, including the quality and acceptability of the accounting principles, the reasonableness of significant judgments, any critical audit matters identified during the audit and the clarity of disclosure in the financial statements. The Audit Committee also reviewed management’s report on its assessment of the effectiveness of the Company’s internal control over financial reporting and Ernst & Young LLP’s report on the effectiveness of the Company’s internal control over financial reporting. Management is responsible for the preparation, presentation and integrity of the Company’s financial statements,

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accounting and financial reporting principles, internal controls, and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Ernst & Young LLP is responsible for performing an independent audit of the consolidated financial statements and the notes thereto in accordance with generally accepted auditing standards.

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The Audit Committee also has discussed with the independent auditors the matters required to be discussed pursuant to the applicable requirements of the PCAOB Auditing Standard No. AU 380, “Communication with Audit Committees.”and the Securities and Exchange Commission. Additionally, the Audit Committee has received the written disclosures and letter from the independent auditors required by the applicable requirements of the PCAOB Ethics and Independence Rule 3526, “Communicationsregarding the independent auditor’s communications with the Audit Committees Concerning Independence,”Committee concerning independence and has discussed, with the independent auditors, the independent auditors’ independence.    

Based on the review and discussions described in this Report, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20172019 for filing with the Securities and Exchange Commission.

	Current Members of the Audit Committee:
	L. Hugh Redd, Chair
	Glenn W. Bunting Jon A. Fosheim

The Audit Committee Report above does not constitute “soliciting material” and will not be deemed “filed” or incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, that might incorporate SEC filings by reference, in whole or in part, notwithstanding anything to the contrary set forth in those filings.

CertainCertain Relationships and Agreements

The Company has, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed to be at arm’s length and the results of the Company’s operations may be different if these transactions were conducted with non-related parties. The Company’s independent members of the Board of Directors oversee and annually review the Company’s related party relationships (including the relationships discussed in this section) and are required to approve any significant modifications to the existing relationships, as well as any new significant related party transactions. The Board of Directors is not required to approve each individual transaction that falls under the related party relationships. However, under the direction of the Board of Directors, at least one member of the Company’s senior management team approves each related party transaction. 

Mr. Glade M. Knight, Executive Chairman of the Company, owns Apple Realty Group, Inc. (“ARG”), which receives support services from the Company and reimburses the Company for the cost of these costsservices as discussed below. Also, an entity controlled by Mr. Knight is also currently a partnermember of and Mr. Knight is Chief Executive Officer of Energy 11 GP, LLC and Energy Resources 12 GP, LLC, which are the respective general partners of Energy 11, L.P. and Energy Resources 12, L.P., each of which receive support services from ARG.

Cost Sharing with Related Entities

The Company provides support services, including the use of the Company’s employees and corporate office, to ARG and is reimbursed by ARG for the cost of these costs.services. Under this cost sharing structure, amounts reimbursed to the Company include both compensation for personnel and office-related costs (including office rent, utilities, office supplies, etc.) used by ARG. The amounts reimbursed to the Company are based on the actual costs of the services and a good faith estimate of the proportionate amount of time incurred by the Company’s employees on behalf of ARG. Total reimbursed costs receivedallocated by the Company fromto ARG for 20172019 totaled approximately $0.7$1.3 million.

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As part of the cost sharing arrangement, certain day-to-day transactions may result in amounts due to or from the Company and ARG. To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under this cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies. As of December 31, 2017,2019, total amounts due from ARG for reimbursements under the cost sharing structure totaled approximately $0.3$0.5 million.

The Company, through its wholly-owned subsidiary, Apple Air Holding, LLC, (“Apple Air”), owns a Learjet used primarily for acquisition, asset management, renovation and public relations purposes. The aircraft is also leased to affiliates of the Company based on third party rates, which leasing activity was not significant during 2017.2019. The Company also utilizes aircraft, owned through two entities, one of which is owned by the Company’s Executive Chairman, and the other, by its President and Chief Executive Officer, for acquisition, asset management, renovation and public relations purposes, and reimburses these entities at third party rates. Total costs incurred for the use of these aircraft during 20172019 were approximately $0.1 million.

Executive Officers

During 2019 and 2020, in connection with planned retirements and the Company’s broader succession planning, the Company had the following changes in executive officers:

●

On April 15, 2019, Mr. David P. Buckley, the Company’s former Executive Vice President and Chief Legal Officer, retired from all positions that he held with the Company. In connection with Mr. Buckley’s retirement, Mr. Matthew P. Rash joined the Company as Senior Vice President and General Counsel in March 2019, and in March 2020 was appointed Senior Vice President and Chief Legal Officer effective as of April 1, 2020.

●

From July 1, 2019 until her resignation effective December 6, 2019, Ms. Rachael S. Rothman served as Executive Vice President and Chief Financial Officer of the Company. Effective with Ms. Rothman’s resignation, Mr. Bryan F. Peery, the Company’s Executive Vice President and Chief Accounting Officer was appointed to the position of Executive Vice President and Chief Financial Officer. Mr. Peery had previously served as Executive Vice President and Chief Financial Officer through June 30, 2019, at which time he was appointed Executive Vice President and Chief Accounting Officer.

●

On March 31, 2020, Mrs. Kristian M. Gathright retired as Executive Vice President and Chief Operating Officer of the Company and all other officer positions she held with the Company and Mr. Peery retired as Executive Vice President and Chief Financial Officer and from all other officer positions that he held with the Company. Mr. Peery continues to be employed by the Company in an advisory role to support the transition of responsibilities.

●

Effective April 1, 2020, the following officer appointments became effective as part of a reallocation of responsibilities among the senior leadership team. Each of the appointed officers has previous experience with the Company, including Mr. Nelson G. Knight whose title and role changed from Executive Vice President and Chief Investment Officer to President, Real Estate and Investments.

o

Jeanette A. Clarke – Senior Vice President and Chief Capital Investments Officer

o

Karen C. Gallagher – Senior Vice President and Chief Operating Officer

o

Nelson G. Knight – President, Real Estate and Investments

o

Rachel S. Labrecque – Senior Vice President and Chief Accounting Officer

o

Elizabeth S. Perkins – Senior Vice President and Chief Financial Officer

o

Matthew P. Rash – Senior Vice President and Chief Legal Officer

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In addition to the appointments described above, the Board approved a change to the title, but not the roles and responsibilities, of Mr. Justin G. Knight. Effective April 1, 2020, Mr. Justin Knight’s title became Chief Executive Officer.

Each executive officer is appointed annually by the Board of Directors at its meeting prior to the annual meeting of shareholders. The following table sets forth biographical information regarding the Company’s executive officers, other than Mr. Glade M. Knight, Executive Chairman and Mr. Justin G. Knight, Chief Executive Officer, who also serve as directors and whose information is provided above in the section titled “Proposals to be Voted Upon—Proposal 1. Election of Directors”:

Name and Title		Business Experience (1)
Jeanette A. Clarke Senior Vice President and Chief Capital Investments Officer Age: 38		Ms. Clarke was appointed Senior Vice President and Chief Capital Investments Officer effective April 1, 2020. Ms. Clarke previously served as Senior Vice President of Capital Investments for the Company since March 2019, and has held various management and senior management positions with the Apple REIT Companies (as described in Note 1 below) since 2012. Ms. Clarke joined the Apple REIT Companies in 2008. Ms. Clarke has been instrumental in the development of the Company’s capital investments team, fostering valuable relationships with brand, manager and supplier teams, leading strategic capital reinvestment initiatives, and overseeing the Company’s energy efficiency and sustainability programs. Prior to joining the Apple REIT Companies, Ms. Clarke served as a Senior Financial Analyst at Genworth Financial, and from 2003 until 2008, she served in various roles at Circuit City Stores, Inc., including Accounting Manager of Expense, Service and Advertising Payables. Within the industry, Ms. Clarke serves on the Marriott Owner & Franchise Technology Advisory Council. Ms. Clarke holds a Master of Business Administration degree from Virginia Commonwealth University and a Bachelor of Science degree, Magna Cum Laude, in Business Administration with a concentration in Finance and minor in Economics from Longwood University.
Karen C. Gallagher Senior Vice President and Chief Operating Officer Age: 43		Ms. Gallagher was appointed Senior Vice President and Chief Operating Officer effective April 1, 2020. Ms. Gallagher previously served as Senior Vice President of Asset Management for the Company since January 2012, and has held various management and senior management positions with the Apple REIT Companies (as described in Note 1 below) since 2005. Ms. Gallagher joined the Apple REIT Companies in 2003. Ms. Gallagher’s leadership of the asset management team has been instrumental in fostering relationships with brand and management company teams and developing the Company’s analytical and benchmarking of property-level performance methodology, each helping to maximize profitability. Prior to joining the Apple REIT Companies, from 2000 to 2003, Ms. Gallagher served as Senior Assurance Associate with Ernst & Young, LLP, where she specialized in real estate clients. Within the industry, Ms. Gallagher serves as a member of the Hampton by Hilton Ownership Advisory Council, as well as the Global Finance Committee for the lodging industry sponsored by the Hospitality Financial and Technology Professionals and American Hotel and Lodging Association. Ms. Gallagher holds a Master of Science degree in Accounting and a Bachelor of Science degree in Commerce from the McIntire School of Commerce at the University of Virginia, and a second major in Economics from the School of Arts and Sciences at the University of Virginia. Ms. Gallagher is a Certified Public Accountant.

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Name and Title		Business Experience (1)
Nelson G. Knight President, Real Estate and Investments Age: 38		Mr. Knight was appointed President, Real Estate and Investments effective April 1, 2020. Mr. Knight previously served as Executive Vice President and Chief Investment Officer for the Company since May 2014. Prior to serving in that position, Mr. Knight held various senior management positions with the Apple REIT Companies (as described in Note 1 below). Mr. Knight joined the Apple REIT Companies in 2005. Mr. Knight executes on the Company’s capital deployment strategies, including oversight of the Company’s capital reinvestment team. Mr. Knight serves on the Marriott Capital Asset Planning and Execution (CAPE) Board, on Hilton’s Product Advisory Council, on the Home2 Suites by Hilton Owners Advisory Committee, on the TownePlace Suites by Marriott Franchise Advisory Council, as an advisory member of the Hunter Hotels Investment Conference, and as chair of the TownePlace Suites by Marriott System Marketing Committee. Mr. Knight also serves on the National Advisory Council for Southern Virginia University in Buena Vista, Virginia. Mr. Knight holds a Master of Business Administration degree from Texas Christian University, as well as a Bachelor of Arts degree, Cum Laude, in History with a minor in Business from Southern Virginia University. Nelson G. Knight is the son of Glade M. Knight, the Company’s Executive Chairman, and the brother of Justin G. Knight, the Company’s Chief Executive Officer.
Rachel S. Labrecque Senior Vice President and Chief Accounting Officer Age: 41		Ms. Labrecque was appointed Senior Vice President and Chief Accounting Officer effective April 1, 2020. Ms. Labrecque previously served as Senior Vice President of Accounting for the Company since January 2019, and since joining the Apple REIT Companies (as described in Note 1 below) in 2015, has held various management and senior management positions. Ms. Labrecque oversees accounting, financial reporting, treasury operations and taxation for the Company. Prior to joining the Apple REIT Companies, Ms. Labrecque served as Senior Vice President of Finance and Corporate Controller (2011-2015), Vice President and Corporate Controller (2008-2011) and Director of Financial Reporting (2006-2008) of Bowlero Corporation, formerly BowlmorAMF Corporation. Ms. Labrecque also held various financial reporting, accounting and auditing roles with The Mills Corporation (a publicly traded REIT), AOL Time Warner, and Arthur Andersen, LLP. Ms. Labrecque holds a Bachelor of Science degree in Accounting from the Virginia Tech Pamplin College of Business. Ms. Labrecque is a Certified Public Accountant.

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Name and Title		Business Experience (1)
Elizabeth S. Perkins Senior Vice President and Chief Financial Officer Age: 37		Ms. Perkins was appointed Senior Vice President and Chief Financial Officer effective April 1, 2020. Ms. Perkins previously served as Senior Vice President of Corporate Strategy and Reporting for the Company since April 2015, and has held various management and senior management positions with the Apple REIT Companies (as described in Note 1 below) since 2008. Ms. Perkins joined the Apple REIT Companies in 2006. Ms. Perkins has been a key part of the leadership team at the Company, fostering valuable relationships, aiding in strategic investment decisions, directing corporate strategy and reporting initiatives, and overseeing the Company’s investor relations, risk management and internal audit functions. Prior to joining the Apple REIT Companies, from 2004 to 2006, Ms. Perkins served as Assurance Associate with Ernst & Young, LLP, where she specialized in insurance clients. Within the industry, Ms. Perkins currently serves on the Homewood Suites by Hilton Owners Advisory Council, the Residence Inn by Marriott System Marketing Fund Council, the American Hotel and Lodging Association Consumer Innovation Forum, and the distribution advisory councils for Marriott and Hilton. Ms. Perkins holds a Bachelor of Business Administration degree in Accounting from the J.M. Tull School of Accounting within the Terry College of Business at the University of Georgia.
Matthew P. Rash Senior Vice President and Chief Legal Officer Age: 41		Mr. Rash was appointed Senior Vice President and Chief Legal Officer effective April 1, 2020. Mr. Rash previously served as Senior Vice President and General Counsel since joining the Company in March 2019. Mr. Rash oversees all legal matters for the Company. Prior to joining the Company, Mr. Rash served as a Partner (2016-2019) and Associate (2005-2015) at McGuireWoods LLP, a full-service law firm in Richmond, Virginia, where he specialized in commercial real estate transactions, including acquisitions, dispositions and lending, working on numerous transactions with the Apple REIT Companies. From 2004 to 2005, he was a law clerk with the United States District Court for the Eastern District of Virginia, for the Honorable James R. Spencer. Mr. Rash holds a Juris Doctor degree from the University of Richmond and a Bachelor of Arts degree in Government and Foreign Affairs from the University of Virginia.

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(1)	See Note 1 to the Director Nominees table above in the section titled “Proposals to be Voted Upon – Proposal 1. Election of Directors” for a description of the “Apple REIT Companies.”

Compensation Discussion and Analysis

The below Compensation Discussion and Analysis reflects the compensation practices and activity prior to the effects of the COVID-19 situation and associated economic impact to the Company. As a result of the dramatic decline in operations of the Company’s hotels in late March 2020, in addition to the volunteered reduction in annual fees to non-employee directors discussed above, each of the following adjustments to planned 2020 compensation were made:

●

Mr. Glade M. Knight, the Company’s Executive Chairman, volunteered to forego his base salary for six months.

●

Mr. Justin G. Knight, the Company’s Chief Executive Officer, volunteered to reduce his target compensation for 2020 by 60%.

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●

Mrs. Kristian M. Gathright, who retired as Executive Vice President and Chief Operating Officer on March 31, 2020, volunteered to defer receipt of her separation payment under the “Separation Agreements” discussed below. Mrs. Gathright continues with the Company as a non-employee director.

●

Mr. Bryan F. Peery, who retired as Executive Vice President and Chief Financial Officer on March 31, 2020, volunteered to defer receipt of his separation payment under the “Separation Agreements” discussed below. Mr. Peery continues with the Company in an advisory role.

Key Executive Compensation Practices

The following is a summary of the Company’s key practices to align executive compensation with the interests of its shareholders:

What the Company Does ●     Annual advisory vote on executive compensation; ●     Approximately 80% of average executive target compensation for 2019 is incentive-based; ●     Approximately 75% of executive target incentive-based compensation for 2019 is payable in Common Shares of the Company; ●     50% of target incentive-based compensation for 2019 is based on shareholder return metrics; ●     50% of target incentive-based compensation for 2019 is based on operational performance metrics; ●     Compensation Committee comprised entirely of independent directors; ●     The Compensation Committee retains FPL Associates L.P. (“FPL”), an independent compensation consultant who advises the committee on a regular basis; ●     Limited perquisites that are generally on the same terms as other employees and which represent only a small portion of total executive officer compensation; ●     Stock ownership requirements for executive officers; ●     Maximum amounts payable for executive incentive compensation awards; and ●     Market-aligned severance policy for executives with a double trigger for any change in control payments.

What the Company Doesn’t Do ●     No employment contracts with executive officers; ●     Company Insider Trading Policy prohibits directors and employees from engaging in hedging of Company securities; ●     No dividends paid on restricted stock awards unless they vest; ●     No grants of stock options; and ●     No supplemental retirement plans.

Advisory Vote on Executive Compensation

The Company provides its shareholders annually with the opportunity to cast an advisory vote on executive compensation, and in 20172019 approximately 97%93% of the shares voted were in support of the 20162018 compensation of the executive officers. The Compensation Committee viewed this advisory vote as an expression by the shareholders of their general satisfaction with the Company’s

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executive compensation program. Consistent with the advisory vote of the shareholders at the 2017 annual meeting of shareholders, the Company will hold advisory votes on executive compensation annually until the next say-on-frequency vote is conducted, which will be no later than 2023.

Executive CompensationCompensation Summary

This Compensation Discussion and Analysis describes the Company’s executive compensation arrangements for the Company’s named executive officers for 20172019 and explains the structure and rationale associated with each material element of the 20172019 compensation arrangements. The named executive officers for 20172019 are as follows:

	Glade M. Knight	Executive Chairman
	Justin G. Knight	President and Chief Executive Officer and Former President(from the Company’s inception through March 31, 2020)
	Bryan F. Peery	Former Executive Vice President and Chief Financial Officer(from the Company’s inception through June 30, 2019 and fromDecember 6, 2019 through March 31, 2020) Former Executive Vice President and Chief Accounting Officer (from July 1, 2019 through December 5, 2019)
	Kristian M. Gathright	Former Executive Vice President and Chief Operating Officer (from the Company’s inception through March 31, 2020)
	David P. Buckley	Executive Vice President, Chief Legal Officer and Secretary
	Nelson G. Knight	President, Real Estate and Investments and Former Executive Vice President and Chief Investment Officer(from May 15, 2014 through March 31, 2020)
	Rachael S. Rothman	Former Executive Vice President and Chief Financial Officer (from July 1, 2019 through December 6, 2019)

The Company believes that a significant portion of each named executive officer’s total compensation should be incentive-based to best align their interest with those of its shareholders. As a result, for 2017,2019, the average target compensation for the named executive officers had the following incentive/base compensation mix:

Average Named Executive Officer 2019 Target Pay Mix

All incentive compensation is performance based:

50% on shareholder return metrics

50% on operational performance metrics

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The 2019 incentive compensation was 100% objective and was based on three key operational performance metrics and foursix shareholder return metrics. To further align interests with its shareholders, 75% of the target incentive compensation was paidpayable in Common Shares of the Company, of which one-third iswas restricted and subject to a one-year vesting period.

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Tableperiod and the remaining two-thirds being vested at issuance. Based on FPL’s peer group report discussed below, as of Contents

2018 the Company had the highest percentage of target executive compensation based on objective share and operating performance targets compared to its peer group. Also, based on FPL’s report, the amount of the Company’s executive compensation had the highest correlation to the level of shareholder return over the previous three years as compared to the peer group.

Shareholder Return

Since the listing of its shares on the NYSE on May 18, 2015, the Company has delivered strongabove average cumulative total shareholder returns as compared to its peer group (consisting of Ashford Hospitality Trust, Inc., Chatham Lodging Trust, Hersha Hospitality Trust, RLJ Lodging Trust and Summit Hotel Properties, Inc.) and key indices,the SNL U.S. REIT Hotel Index, as shown below. The graph below assumes the reinvestment of dividends for the period from May 18, 2015, the date of the Listing, to December 31, 2017,2019, for the two yearthree-year period ended December 31, 2017, or2019, for the two-year period ended December 31, 2019, and for the full year of 2017,2019, as applicable. The SNL USU.S. REIT Hotel Index is comprised of publicly traded REITs which focus on investments in hotel properties.

 

General Philosophy and Objectives

The Company’s executive compensation philosophy continues to focus on attracting, motivating and retaining a superior management team that can maximize shareholder value. The compensation arrangements are designed to reward performance relative to financial and other metrics that the Company believes are key metrics that will enhance shareholder value and to reward executive officers for performance at levels that the Compensation Committee believes to be competitive with other public hospitality REITs. The compensation arrangements consist of both base salary and annual incentive compensation which is intended to incentivize executive officers to manage the Company in a prudent manner without encouraging unnecessary risk-taking. In establishing the compensation arrangements, the Compensation Committee believes the best way to maintain the alliancealignment of management and shareholder objectives is to have a larger variable component tied to key metrics. The incentive goals in the annual incentive compensation program are set at competitive levels which require stretch performance but are believed to be achievable. As a result, on average approximately 80% of target compensation of the named executive officers is variable.was variable in 2019. The Compensation Committee also reviews and considers the management team’s overall compensation. The Company has not adopted a formal policy or guideline for allocating compensation between

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long-term and short-term compensation, between cash and non-cash compensation or among different forms of non-cash compensation.

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Table of ContentsRole

Role of the Compensation Committee

Pursuant to the Compensation Committee’s charter, the Compensation Committee assists the Board of Directors in discharging the Board of Directors’ responsibilities relating to compensation of the Company’s officers. The Compensation Committee’s duties and responsibilities include, among other things, the following:

· ●

annually review and approve corporate goals and objectives relevant to the compensation of the Chief Executive Officer, and after evaluating performance in light of those goals and objectives, approve compensation of the Chief Executive Officer;

· ●

annually review corporate goals and objectives relevant to the compensation of the executive management officers of the Company, and after evaluating performance in light of those goals and objectives, approve compensation of the executive management officers, other than the Chief Executive Officer; and

· ●

review and make periodic recommendations to the Board of Directors with respect to the general compensation, benefits and perquisites policies and practices of the Company.

The Compensation Committee’s charter permits it to delegate its functions to one or more subcommittees as permitted by law.

The Company’s current executive compensation structure was initially developed in 2014 by the Compensation Committee and has been reviewed and modified (as necessary) by the Compensation Committee each year thereafter. 

In reviewing the Company’s executive compensation structure, the Compensation Committee evaluatedevaluates data regarding executive compensation paid by and executive compensation plans of other public hospitality REITs and other peer group information which has been provided every two years since 2014 by FPL, most recently in 2016.2018. The Compensation Committee utilizes FPL’s recommendations in conjunction with market data to determine annual executive compensation. CompensationTarget compensation for 20172019 for each named executive officer was approved by the Compensation Committee after consideration of each individual’s experience in their position and the industry, the risks and deterrents associated with their positions, the anticipated difficulty to replace the individual, and total compensation paid to each named executive officer in prior years.

RoleRole of the Chief Executive Officer

In connection with determining compensation of executive officers other than the Chief Executive Officer, the Compensation Committee may seek input from the Company’s Chief Executive Officer. Any recommendations given by the Chief Executive Officer will be based upon the Chief Executive Officer’s assessment of the Company’s overall performance, each executive officer’s individual performance and employee retention considerations. The Compensation Committee reviews the Chief Executive Officer’s recommendations, and in its sole discretion determines all executive officer compensation. The Chief Executive Officer will not provide any recommendations to the Compensation Committee regarding his or her own compensation.

Compensation Consultant

The Compensation Committee periodically consults with FPL as its independent executive compensation consultant regarding compensation arrangements, most recently in 2016.arrangements. The Compensation Committee’s charter authorizes the Compensation Committee to retain or obtain the advice of a compensation consultant to advise it in the evaluation of executive officer compensation. In connection with developing the executive compensation structure and making executive compensation decisions, the Compensation Committee reliedrelies upon FPL to:

· ●

advise the Compensation Committee on the principal aspects of the executive compensation program;

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· ●

assist in the selection of a group of peer companies (based on, among other things, industry, size and asset type);

· ●

provide information on the compensation structures of and the compensation paid to executive officers by peer companies to their executive officers;companies; and

· ●

advise on appropriate levels of compensation.

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Table

The Company paid FPL approximately $3,000 in 2019 to advise the Company regarding executive compensation. Subsequent to FPL’s last compensation study in 2018 and in connection with the Company’s search for a Chief Financial Officer in 2019, the Company paid Ferguson Partners L.P., an affiliate of Contents

FPL, approximately $174,000 in 2019 and $101,000 in 2018. The engagement of Ferguson Partners L.P. for these additional services was recommended by management and approved by the Compensation Committee.

Peer Group Information

In connection with its comprehensive review of the executive compensation arrangements for all of the Company’s executive officers, the Compensation Committee reliedrelies upon FPL to provide, among other things, compensation information and data regarding executive officers in the Company’s peer group, as listed below.group. The peer group compensation information and data wasare one factor the Compensation Committee consideredconsiders in establishing the Company’s executive compensation arrangements for 2017.  Thearrangements. At the time of FPL’s 2018 report, the peer group consisted of the following 10 public company REITs in the hospitality industry and three public company REITs with similar market capitalization to the Company, and with an overall median market capitalization of approximately $2.6$3.2 billion at the time of the 2016FPL’s 2018 report (the Company’s market capitalization at the time of the report was $4.4$4.0 billion):

	DiamondRock Hospitality Company	EPR Properties
	FelCor Lodging Trust Incorporated(1)	Gramercy Property Trust, Inc.
	Hersha Hospitality Trust
Host Hotels and& Resorts, Inc.
	LaSalle Hotel Properties	Lexington Realty Trust(1)
Park Hotels & Resorts, Inc.	Pebblebrook Hotel Trust(1)
RLJ Lodging Trust(1)
	Summit Hotel Properties, Inc.
Sunstone Hotel Investors, Inc.
	Xenia HotelHotels & Resorts, Inc.

⁽¹⁾ FelCor Lodging Trust Incorporated merged with RLJ Lodging Trust in 2017.

(1)	LaSalle Hotel Properties merged with Pebblebrook Hotel Trust in 2018.

The Company believes the peer group above represents companies with which the Company competes for talent and business. The Compensation Committee used data from this peer group to provide the Compensation Committee with a context in which to make base salary determinations and decisions regarding appropriate payout levels for incentive compensation.

ElementsElements of Executive Compensation

The Company’s executive compensation arrangements consist of base salary and incentive compensation. 

Annual Base Salary

Annual base salary is a fixed level of compensation that reflects each named executive officer’s position and individual performance and comprises, on average, approximately 20% of each named executive officer’s target compensation. Base salary is designed to serve as a retention tool throughout the executive’s career. In determining base salaries, the Compensation Committee consideredconsiders the salary information and data obtained for the executive officers in the peer group of companies identified above, each executive officer’s role and responsibility, unique skills, future potential with the Company, and internal pay equity considerations. After evaluating these factors, the Compensation Committee approved the following annual base salary of each named executive officer for 2017, which has not changed since 2014.  For 2018, the Compensation Committee has approved a 5% increase to theofficer. 2019 annual base salarysalaries were the same as 2018 base salaries for eachthe named executive officer.

		2016 Annual Base Salary				2017 Annual Base Salary
Glade M. Knight		$	350,000			$	350,000
Justin G. Knight			500,000				500,000
Bryan F. Peery			472,500				472,500
Kristian M. Gathright			472,500				472,500
David P. Buckley			446,250				446,250
Nelson G. Knight			315,000				315,000

officers.

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		2019 Annual Base Salary(1)
Glade M. Knight		$	367,500
Justin G. Knight			525,000
Bryan F. Peery (2)			496,125
Kristian M. Gathright (2)			496,125
Nelson G. Knight			330,750
Rachael S. Rothman (3)			350,000

(1)	Annual base salary represents the annual base salary rate approved by the Compensation Committee.
(2)	On March 31, 2020, Mrs. Gathright retired as Executive Vice President and Chief Operating Officer of the Company and Mr. Peery retired as Executive Vice President and Chief Financial Officer and from all other officer positions that he held with the Company.
(3)	Effective December 6, 2019, Ms. Rothman resigned from all positions that she held with the Company.

Incentive Compensation

The named executive officers are eligible to earn variable incentive compensation awards designed to reward the achievement of annual operational/financial performance measures and annual/multi-year total shareholder return measures. For 2017, theThe Compensation Committee establishedestablishes target annual incentive award opportunities for each named executive officer, consisting of an annual cash bonus award and an equity compensation award opportunity, following an analysis of market information and data for executive officers in the peer group of companies identified above, each executive officer’s role and responsibility, unique skills, future potential with the Company, and internal pay equity considerations. The Compensation Committee considers all relevant facts and circumstances when evaluating performance, including changing market conditions and broad corporate strategic initiatives, along with overall responsibilities and contributions, and retains the ability to exercise its judgment and discretion to adjust an incentive compensation award.

For 2017,2019, approximately 75% of the target incentive compensation of the named executive officers was intended to be provided through equity awards and the remainder as an annual cash bonus, with one-third of the target equity award being restricted and subject to a one-year vesting period.  Equityperiod and the remaining two-thirds of the target equity award being fully vested. Target incentive compensation awards earned upon the achievement of the performance goals consist of (i) for the shareholder return metrics discussed below, one-half of the total award in restricted Common Shares that vest on the second Friday of December in the year issued, i.e., December 14, 2018,11, 2020, and the remaining one-half in fully vested Common Shares and (ii) for the operating metrics discussed below, one-half of the total award in fully vested Common Shares.

Shares and the other half of the award as the annual cash bonus.

2017 2019Incentive Compensation Award Opportunity and Actual Award Earned

In 2017,2019, each named executive officer was eligible to receive incentive compensation awards to be determined pursuant to a weighted average formula based on the achievement of certain performance measures. The amounts actually payable to the named executive officer were to be determined based upon whether the Company’s performance met certain “threshold,” “target” or “maximum” levels for each of the performance measures. With respect to each performance measure, results below the threshold level resultresulted in a payment of 0% of the target value, results between the threshold and the target levels resultresulted in a payment of 50% to 100% of the target value, results between the target and the maximum levels resultresulted in a payment of 100% to 175%200% of the target value, and results above the maximum level resultresulted in a payment of 175%200% of the target value.

At the time that they arewere set, the incentive goals that the Compensation Committee establishes areestablished were substantially uncertain to be achieved. The “threshold” level can be characterized as “stretch but attainable,” meaning that, although attainment is uncertain, based on historical

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performance, it can reasonably be anticipated that threshold performance may be achieved. The “target” and “maximum” levels represent increasingly challenging and aggressive levels of performance.

The Company’s 20172019 actual results as compared to its established goals are summarized in the table below under “Performance Measures.” The Compensation Committee did not make any adjustments to the incentive compensation payable to the named executive officers based on the achievement of the various performance goals. TheFor 2019, the Company achieved an average of 140% of the target incentive for each of the metrics discussed below and the compensation awards for 2017 were approximately 85% of target incentive compensation and were as follows:

		2017 Target Cash Incentive Compensation Award Opportunity				2017 Target Equity Incentive Compensation Award Opportunity				2017 Total Target Incentive Compensation Award Opportunity				2017 Actual Cash Incentive Compensation Award				2017 Actual Equity Incentive Compensation Award				2017 Total Actual Incentive Compensation Award
Glade M. Knight		$	175,000			$	525,000			$	700,000			$	139,457			$	452,925			$	592,382
Justin G. Knight			875,000				2,625,000				3,500,000				697,287				2,264,631				2,961,918
Bryan F. Peery			413,438				1,240,312				1,653,750				329,468				1,070,038				1,399,506
Kristian M. Gathright			413,438				1,240,312				1,653,750				329,468				1,070,038				1,399,506
David P. Buckley			390,469				1,171,406				1,561,875				311,164				1,010,590				1,321,754
Nelson G. Knight			275,625				826,875				1,102,500				219,645				713,357				933,002

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		2019 Target Cash Incentive Compensation Award Opportunity				2019 Target Equity Incentive Compensation Award Opportunity				2019 Target Total Incentive Compensation Award Opportunity				2019 Actual Cash Incentive Compensation Award				2019 Actual Equity Incentive Compensation Award				2019 Actual Total Incentive Compensation Award
Glade M. Knight		$	183,750			$	551,250			$	735,000			$	208,847			$	821,346			$	1,030,193
Justin G. Knight			918,750				2,756,250				3,675,000				1,044,233				4,106,733				5,150,966
Bryan F. Peery (1)			434,110				1,302,328				1,736,438				493,400				1,216,916				1,710,316
Kristian M. Gathright (1)			434,110				1,302,328				1,736,438				493,400				1,216,916				1,710,316
Nelson G. Knight			289,406				868,219				1,157,625				328,933				1,293,621				1,622,554
Rachael S. Rothman (2)			153,125				459,375				612,500				603,286				-				603,286

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(1)

Mrs. Gathright and Mr. Peery retired as officers effective March 31, 2020 and, as a result, forfeited the unvested portion of their 2019 equity incentive compensation award.

(2)

From July 1, 2019 until her resignation effective December 6, 2019, Ms. Rothman served as Executive Vice President and Chief Financial Officer of the Company. Ms. Rothman’s actual Incentive Compensation Awards were calculated in accordance with her separation agreement with the Company as discussed below under “Separation Agreements,” which represents the amounts she would have earned and that would have vested as of December 31, 2019 under the 2019 Incentive Plan, all paid in cash.

These incentive compensation awards were determined by the Compensation Committee in February 2018,2020, and the cash was paid and the equity grants were issued in March 2018, with approximately one-third of the equity grants subject to vesting on December 14, 2018 and two-thirds in fully vested Common Shares.

2020.

Realized Pay

The tables below, which supplement the Executive Compensation—Summary Compensation Table, shows the value of the 20172019 and 20162018 compensation earned by each named executive officer under the compensation program.

2019 Realized Pay Table (1)
		Salary				Share Awards (2)				Non-Equity Incentive Plan Compensation				All Other Compensation				2019 Total Compensation Realized
Glade M. Knight		$	367,500			$	821,346			$	208,847			$	96,321			$	1,494,014
Justin G. Knight			525,000				4,106,733				1,044,233				417,843				6,093,809
Bryan F. Peery			496,125				1,216,916				493,400				151,328				2,357,769
Kristian M. Gathright			496,125				1,216,916				493,400				151,368				2,357,809
Nelson G. Knight			330,750				1,293,621				328,933				158,449				2,111,753
Rachael S. Rothman (3)			153,125				-				603,286				1,581,033				2,337,444

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(1)											Amounts shown for Salary, Non-Equity Incentive Plan Compensation and All Other Compensation equal the amounts reported in the Summary Compensation Table.
(2)											Amounts shown represent the value of the annual share awards earned for the 2019 performance year.
(3)											All Other Compensation includes the one-time lump sum separation payment of $1,575,000 to Ms. Rothman in connection with her resignation effective December 6, 2019, paid during the first quarter of 2020, in accordance with her separation agreement discussed below under “Separation Agreements.”

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2017 Realized Pay Table (1)
		Salary				Share Awards (2)				Non-Equity Incentive Plan Compensation				All Other Compensation				2017 Total Compensation Realized
Glade M. Knight		$	350,000			$	452,925			$	139,457			$	46,544			$	988,926
Justin G. Knight			500,000				2,264,631				697,287				175,194				3,637,112
Bryan F. Peery			472,500				1,070,038				329,468				102,093				1,974,099
Kristian M. Gathright			472,500				1,070,038				329,468				102,093				1,974,099
David P. Buckley			446,250				1,010,590				311,164				98,134				1,866,138
Nelson G. Knight			315,000				713,357				219,645				80,213				1,328,215
(1) Amounts shown for Salary, Non-Equity Incentive Plan Compensation and All Other Compensation equal the amounts reported in the Summary Compensation Table.
(2) Amounts shown represent the value of the annual share awards earned for the 2017 performance year.

 

2016 Realized Pay Table (1)
		Salary				Share Awards (2)				Non-Equity Incentive Plan Compensation				All Other Compensation				2016 Total Compensation Realized
Glade M. Knight		$	350,000			$	159,005			$	50,505			$	33,148			$	592,658
Justin G. Knight			500,000				795,025				252,525				88,426				1,635,976
Bryan F. Peery			472,500				375,649				119,318				58,507				1,025,974
Kristian M. Gathright			472,500				375,649				119,318				63,239				1,030,706
David P. Buckley			446,250				354,780				112,689				57,253				970,972
Nelson G. Knight			315,000				250,433				79,545				50,694				695,672
(1) Amounts shown for Salary, Non-Equity Incentive Plan Compensation and All Other Compensation equal the amounts reported in the Summary Compensation Table.
(2) Amounts shown represent the value of the annual share awards earned for the 2016 performance year.

2018 Realized Pay Table (1)
		Salary				Share Awards (2)				Non-Equity Incentive Plan Compensation				All Other Compensation				2018 Total Compensation Realized
Glade M. Knight		$	367,500			$	162,855			$	107,607			$	31,594			$	669,556
Justin G. Knight			525,000				814,260				538,033				96,892				1,974,185
Bryan F. Peery			496,125				384,727				254,230				69,345				1,204,427
Kristian M. Gathright			496,125				384,727				254,230				65,714				1,200,796
Nelson G. Knight			330,750				256,490				169,492				56,325				813,057

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(1)											Amounts shown for Salary, Non-Equity Incentive Plan Compensation and All Other Compensation equal the amounts reported in the Summary Compensation Table.
(2)											Amounts shown represent the value of the annual share awards earned for the 2018 performance year.

The Realized Pay Tables differ from the Summary Compensation Table in that the 20172019 and 20162018 Realized Pay Tables show the actual value of the compensation earned based on the achievement of the performance metrics for 20172019 and 2016,2018, while the Summary Compensation Table reflects the estimated grant date fair value of such Common Shares that were to be issued subject to achievement of the performance conditions as determined in accordance with FASB ASC Topic 718. For a detailed description of the grant date fair value of the share awards, see Note 1 to the Executive Compensation—Summary Compensation Table. These tables are not a substitute for the Executive Compensation—Summary Compensation Table and are intended to provide additional information that the Company believes is useful in facilitating an understanding of the 20172019 and 20162018 compensation amounts earned by its named executive officers.

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Performance Measures

The Compensation Committee adopted performance goals for the 20172019 incentive compensation awards following a review of the Company’s business plan and budget for the year. The Compensation Committee determined that the performance measures for 20172019 should be based on objective goals, and the Compensation Committee did not set separate performance goals for individual executive officers. The incentive compensation awards for 20172019 were based on the following operational and shareholder return performance goals:

		Annual Incentive Compensation Award				Established Goals for 2019												2019 Actual				2019 Actual
		Weighting				Threshold				Target				Maximum				Results				Payout
Operational Performance Metrics
Adjusted Hotel EBITDA margin growth			16.7	%		-180 bps				-130 bps				-80 bps				-107 bps					24.3	%
Modified FFO per share			16.7	%		$	1.60			$	1.65			$	1.70			$	1.64				15.0	%
Comparable Hotels RevPAR growth			16.7	%			-1.0	%			0.0	%			1.0	%			0.05	%			17.5	%
Shareholder Return Metrics
Total shareholder one-year return			4.2	%			4.0	%			7.0	%			10.0	%			23.3	%			8.3	%
Total shareholder two-year return			4.2	%			7.0	%			13.0	%			19.0	%			-5.3	%			0.0	%
Total shareholder three-year return			4.2	%			10.0	%			16.0	%			22.0	%			-0.7	%			0.0	%
Total shareholder one-year return relative to peer group			12.5	%		25th percentile				50th percentile				75th percentile				84th percentile					25.0	%
Total shareholder two-year return relative to peer group			12.5	%		25th percentile				50th percentile				75th percentile				91st percentile					25.0	%
Total shareholder three-year return relative to peer group			12.5	%		25th percentile				50th percentile				75th percentile				88th percentile					25.0	%

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		Annual Incentive Compensation Award Weighting				Established Goals for 2017												2017 Actual Results				2017 Actual Payout
						Threshold				Target				Maximum
Operational Performance Metrics
Adjusted Hotel EBITDA margin growth			16.7	%		-90 bps				-40 bps				+10 bps				-80 bps					10.2	%
Modified FFO per share			16.7	%		$	1.70			$	1.78			$	1.86			$	1.74				12.5	%
Comparable Hotels RevPAR growth			16.7	%			0.0	%			1.5	%			3.0	%			1.6	%			17.2	%
Shareholder Return Metrics
Total shareholder one-year return			12.5	%			0.0	%			5.0	%			10.0	%			4.3	%			11.6	%
Total shareholder two-year return			12.5	%			4.0	%			8.0	%			12.0	%			10.6	%			18.6	%
Total shareholder one-year return relative to peer group			12.5	%			0.0	%			+5.0	%			+10.0	%			6.1	%			14.6	%
Total shareholder two-year return relative to peer group			12.5	%			0.0	%			+5.0	%			+10.0	%			-6.8	%			0.0	%

 

The Compensation Committee believes that each of these metrics are key measurements of the Company’s operational, financial and shareholder return performance. The following summarizes how the Company measures each metric:

· ●

Adjusted Hotel EBITDA margin growth – The year-over-year change in the Company’s adjusted earnings before interest, income taxes, depreciation and amortization, further adjusted to exclude actual corporate-level general and administrative expense as a percent of total revenue. For this goal, the Company calculates Adjusted Hotel EBITDA margin as (a) net income excluding (i) interest, income taxes and depreciation and amortization, (ii) transaction and litigation costs (reimbursements), gains or losses from sales of real estate and the loss on impairment of depreciable real estate assets as these do not represent ongoing operations, (iii) non-cash straight-line ground lease expense as this expense does not reflect the underlying performance of the related hotels and (iv) actual corporate-level general and administrative expense, divided by (b) total revenues.revenue. Additionally, the accounting effect of the adoption of the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-02, Leases (Topic 842) by the Company on January 1, 2019 (“the new lease accounting standard”), was excluded to maintain comparability to 2018.

· ●

Modified FFO per share – The Company used Modified FFO as defined in itson page 41 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017,2019 and adjusted to exclude the accounting effect of the adoption of the new lease accounting standard, divided by the Company’s weighted average common sharesCommon Shares outstanding for the year ended December 31, 2017.2019.

· ●

Comparable Hotels RevPAR growth – The Company used Comparable Hotels revenue per available room, as defined in its Annual Report on Form 10-K for the year ended December 31, 2017,2019, compared to the year ended December 31, 2016.2018.

· ●

Total shareholder return – The Company used shareholder returns over a one-year period (measured from January 1, 20172019 to December 31, 2017) and2019), a two-year period (measured from January 1, 20162018 to December 31, 2017)2019) and a three-year period (measured from January 1, 2017 to December 31, 2019), measuring the benefit to shareholders of holding the Company’s Common Shares over a period of time. Shareholder return includes the change in the share price as well as the payment of distributions during the periods noted.

· ●

Shareholder Total shareholder return relative to a peer group – The Company used relative shareholder returns compared to the Company’s peers over a one-year period (measured from January 1, 20172019 to December 31, 2017) and2019), a two-year period (measured from January 1, 20162018 to December 31, 2017)2019) and a three-year period (measured from January 1, 2017 to December 31, 2019), measuring the benefit to shareholders of holding the Company’s Common Shares relative to that of its peer companies. For this performance goal, the Company’s peer group consisted of Ashford Hospitality Trust, Inc., Chatham Lodging Trust, Hersha Hospitality Trust, RLJ Lodging Trust and Summit Hotel Properties, Inc.

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Table of ContentsPerquisites

Perquisites and Other Benefits

The named executive officers participate in other benefits plans on the same terms as other employees. These plans include medical insurance, dental insurance, life insurance, disability insurance and a 401(k) plan. Under the 401(k) plan, employees are eligible to defer a portion of their salary and the Company, at its discretion, may make a matching contribution. In 2017,2019, the Company made a matching contribution of up to $10,800$11,200 of each participant’s annual salary, determined by the individual’s contribution and as restricted by statutory limits. As noted in the Summary Compensation Table below, the Company provided limited perquisites to its named executive officers in 2017,2019, which included parking benefits. The emphasis in the compensation program for named executive officers is on the pay-for-performance elements.

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In addition, the named executive officers are also entitled to receive accrued dividends on the share incentive compensation awards, which are payable in cash upon vesting.if the awards vest. Such amounts are included under the column, “All Other Compensation,” in the Summary Compensation Table.

Table below.

Ownership Requirements

The Board of Directors adopted share ownership guidelines that require executive officers to maintain a minimum share ownership in the Company. See “Corporate Governance, Risk Oversight and Procedures for Shareholder Communications—Share Ownership Guidelines.”

LimitsLimits on Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), prohibits publicly held corporations from taking a tax deduction for annual compensation in excess of $1 million paid to any of the corporation’s “covered employees.employees,” Prior to the enactment of the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017 (the “Act”), a publicly held corporation’s covered employees includedinclude its chief executive officer, its chief financial officer and its three other most highly compensated executive officers (other than the chief financial officer), and certain “performance-based compensation”(as well as any person who ever was excluded from the $1 million cap.  The Act made certain changes to Section 162(m), effectivea covered employee for any prior taxable yearsyear beginning after December 31, 2017.  These changes include, among others, expanding the definition of “covered employees” to include the chief financial officer and repealing the performance-based compensation exception to the $1 million cap, subject to a transition rule for remuneration provided pursuant to a written binding contract which was in effect on November 2, 2017, and which was not modified in any material respect on or after that date.

2016). Since the Company qualifies as a REIT under the Internal Revenue Code and is generally not subject to U.S. federal income taxes other than through its taxable REIT subsidiaries, if compensation did not qualify for deduction under Section 162(m), the payment of compensation that fails to satisfy the requirements of Section 162(m) woulddoes not have a material adverse consequence to the Company, provided the Company continues to distribute 100% of its taxable income.  Based on the Company’s current taxable income and distributions, the Company does not believe that it will be required to increase its rate of distributions in order to maintain its status as a REIT (or to avoid paying corporate or excise taxes at the entity level) if the Company’s payment of compensation fails to satisfy the requirements of Section 162(m).  However, in that case, a larger portion of shareholder distributions that would otherwise have been treated as a return of capital will be subject to U.S. federal income tax as dividend income.  In the future, if the Company makes compensation payments subject to Section 162(m) limitations on deductibility, the Company may be required to make additional distributions to shareholders to comply with REIT distribution requirements and eliminate U.S. federal income tax liability at the entity level. Any such compensation allocatedapplicable to the Company’s taxable REIT subsidiaries whose income is subject to U.S. federal income tax would result in an increase in income taxes due to the inability to deduct such compensation.Company. Although the Company is mindful of the limits on deductibility imposed by Section 162(m), even if it is determined that Section 162(m) applies or may apply to certain compensation packages, the Company nevertheless reserves the right to structure the compensation packages and awards in a manner that may exceed the limitation on deduction imposed by Section 162(m).

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Table of Contents2020 Incentive

2018 Incentive Compensation

In February 2018,March 2020, the Compensation Committee established the performance metrics for the incentive compensation of the named executive officers for 2018.2020. The incentive compensation structure for 20182020 is substantially the same as the structure of 20172019 described above, consisting of an annual cash incentive award opportunity and an additional share award opportunity, both of which are based on similar operational performance metrics used for the 20172019 incentive compensation—Adjusted Hotel EBITDA margin growth, Modified FFO per share, and Comparable Hotels RevPAR growth—and shareholder return metrics—shareholder return relative to a peer group and total shareholder return except that shareholder return metrics will include three measurement periods instead of two: returns over one-year, two-year and three-year periods. The operational performance metrics will be equally weighted and will account for 50% of the total target incentive compensation. The shareholder return metrics will be equally weighted 75% for relative shareholder return metrics and 25% for total shareholder return metrics and account for 50% of the total target incentive compensation. It is the Compensation Committee’s intention on a going forward basis, to pay approximately 75% of the annual incentive awards, if any, in equity under the 2014 Omnibus Incentive Plan and to have approximately 80%70-90% of each named executive officer’s total target compensation be incentive compensation.

As discussed above, in March 2020, as a result of the COVID-19 situation and associated economic impact to the Company, Mr. Glade M. Knight, the Company’s Executive Chairman volunteered to forego his salary for six months. In addition, Justin G. Knight, the Company’s President and Chief Executive Officer, volunteered to reduce his target compensation for 2020 by 60%.

Special Note Regarding Non-GAAP Financial Measures

This Compensation Discussion and Analysis contains certain non-GAAP financial measures which are described in more detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 20172019 in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Non-GAAP Financial Measures.” It also references the new lease accounting

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standard, the effects of which were excluded from certain non-GAAP financial measures included in this proxy statement, which is described in more detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 in Item 8, “Financial Statements and Supplementary Data.”

Compensation Committee Report

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Current Members of the Compensation Committee:

Glenn W. Bunting, Chair

Daryl A. Nickel 

L. Hugh Redd

The Compensation Committee Report above does not constitute “soliciting material” and will not be deemed “filed” or incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, that might incorporate SEC filings by reference, in whole or in part, notwithstanding anything to the contrary set forth in those filings.

CompensationCompensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are Glenn W. Bunting, Daryl A. Nickel and L. Hugh Redd. No member of the Compensation Committee is or has ever been an officer or employee of the Company, and no member of the Compensation Committee had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. No executive officer serves or has served as a member of a compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of the Board of Directors or Compensation Committee and no executive officer serves or has served as a director of another entity, one of whose executive officers serves on the Compensation Committee. Accordingly, during 20172019 there were no interlocks with other companies within the meaning of the SEC’s proxy rules.

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Table of Contents

Executive Compensation

The following table sets forth certain compensation information for each of the Company’s named executive officers for 2017.

2019.

Summary CompensationCompensation Table

The Summary Compensation Table reflects compensation under the executive compensation arrangements discussed above under “Compensation Discussion and Analysis.”

Name		Principal Position		Year		Salary				Share Awards(1)				Non-Equity Incentive Plan Compensation(2)				All Other Compensation(3)				Total
Glade M. Knight		Executive Chairman		2017		$	350,000			$	447,160			$	139,457			$	46,544			$	983,161
				2016			350,000				438,253				50,505				33,148				871,906
				2015			350,000				358,750				380,194				42,440				1,131,384
Justin G. Knight		President and		2017			500,000				2,235,800				697,287				175,194				3,608,281
		Chief Executive Officer		2016			500,000				2,191,267				252,525				88,426				3,032,218
				2015			500,000				2,070,500				912,466				173,756				3,656,722
Bryan F. Peery		Executive Vice President		2017			472,500				1,056,415				329,468				102,093				1,960,476
		Chief Financial Officer		2016			472,500				1,035,374				119,318				58,507				1,685,699
				2015			472,500				968,625				513,262				99,688				2,054,075
Kristian M. Gathright		Executive Vice President		2017			472,500				1,056,415				329,468				102,093				1,960,476
		Chief Operating Officer		2016			472,500				1,035,374				119,318				63,239				1,690,431
				2015			472,500				968,625				513,262				99,688				2,054,075
David P. Buckley		Executive Vice President		2017			446,250				997,726				311,164				98,134				1,853,274
		Chief Legal Officer		2016			446,250				977,853				112,689				57,253				1,594,045
				2015			446,250				914,812				484,748				96,071				1,941,881
Nelson G. Knight		Executive Vice President		2017			315,000				704,277				219,645				80,213				1,319,135
		Chief Investment Officer		2016			315,000				690,249				79,545				50,694				1,135,488
				2015			315,000				645,750				342,174				77,805				1,380,729

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(1)   The amounts in this column reflect the estimated grant date fair value of the Common Shares to be issued subject to achievement of performance conditions as determined in accordance with FASB ASC Topic 718.  As discussed above under “Compensation Discussion and Analysis—Elements of Executive Compensation—2017 Incentive Compensation Award Opportunity and Actual Award Earned” and “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance Measures,” each named executive officer participated in an incentive plan which included three Company performance-based metrics for all years, four market-based metrics for 2017 and two market-based metrics for 2016 and 2015.  The table below summarizes the estimated fair value of the share incentive awards as of February 16, 2017, February 11, 2016 and March 2, 2015, the dates the Compensation Committee approved the plans for the performance-based incentives, and February 16, 2017, February 11, 2016 and July 7, 2015, which were the dates at which the market-based incentives were approved for 2017, 2016 and 2015, respectively.  The market-based metric approved by the Compensation Committee for 2015 was subject to the Company’s Listing and completion of its tender offer, which closed on June 24, 2015.

Name		Principal Position		Year		Salary				Share Awards(1)				Non-Equity Incentive Plan Compensation(2)				All Other Compensation(3)				Total
Glade M. Knight		Executive Chairman		2019		$	367,500			$	520,307			$	208,847			$	96,321			$	1,192,975
				2018			367,500				384,295				107,607				31,594				890,996
				2017			350,000				447,160				139,457				46,544				983,161
Justin G. Knight(4)		Chief Executive Officer		2019			525,000				2,601,533				1,044,233				417,843				4,588,609
				2018			525,000				1,921,474				538,033				96,892				3,081,399
				2017			500,000				2,235,800				697,287				175,194				3,608,281
Bryan F. Peery(5)		Former Executive		2019			496,125				1,229,224				493,400				151,328				2,370,077
		Vice President and		2018			496,125				907,897				254,230				69,345				1,727,597
		Chief Financial Officer		2017			472,500				1,056,415				329,468				102,093				1,960,476
Kristian M. Gathright		Former Executive		2019			496,125				1,229,224				493,400				151,368				2,370,117
		Vice President and		2018			496,125				907,897				254,230				65,714				1,723,966
		Chief Operating Officer		2017			472,500				1,056,415				329,468				102,093				1,960,476
Nelson G. Knight(6)		President, Real		2019			330,750				819,483				328,933				158,449				1,637,615
		Estate and		2018			330,750				605,264				169,492				56,325				1,161,831
		Investments		2017			315,000				704,277				219,645				80,213				1,319,135
Rachael S. Rothman(7)		Former Executive Vice President and Chief Financial Officer		2019			153,125				526,566				603,286				1,581,033				2,864,010

(1)

The amounts in this column reflect the estimated grant date fair value of the Common Shares to be issued subject to achievement of performance conditions as determined in accordance with FASB ASC Topic 718. As discussed above under “Compensation Discussion and Analysis—Elements of Executive Compensation—2019 Incentive Compensation Award Opportunity and Actual Award Earned” and “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance Measures,” each named executive officer who held a position at the end of a given year participated in an incentive plan which included three Company performance-based metrics for all years, six market-based metrics for 2019 and 2018 and four market-based metrics for 2017. The table below summarizes the estimated fair value of the share incentive awards as of February 14, 2019, February 15, 2018 and February 16, 2017, the dates the Compensation Committee approved the plans for both the performance-based and market-based incentives. To estimate the fair value of the market-based awards, the Company used a Monte Carlo simulation to estimate the probability of the Company’s relative return to the peer group for the applicable year as of February 16, 2017, February 11, 2016 and July 7, 2015, the effective dates of the incentive.  For the Company used a Monte Carlo simulation to estimate the probability of the Company’s total shareholder return and relative return to the peer group for the applicable year as of February 14, 2019, February 15, 2018 and February 16, 2017, the effective dates of the incentive. For the Company’s operational performance-based incentives, the Company used the target as the probable incentive to be earned. See “Grants of Plan-Based Awards” below for the maximum value as of the grant date of the equity incentive plan awards for 2019 assuming the highest market and performance conditions were met. Ms. Rothman received a cash payment on March 9, 2020 in lieu of a share award per the terms of her separation agreement with the Company as discussed below under “Separation Agreements.”

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Name		Year		Market-Based Incentive				Company Performance- Based Incentive				Total Share Awards
Glade M. Knight		2019		$	336,557			$	183,750			$	520,307
		2018			200,545				183,750				384,295
		2017			272,160				175,000				447,160
Justin G. Knight		2019			1,682,783				918,750				2,601,533
		2018			1,002,724				918,750				1,921,474
		2017			1,360,800				875,000				2,235,800
Bryan F. Peery		2019			795,115				434,109				1,229,224
		2018			473,788				434,109				907,897
		2017			642,977				413,438				1,056,415
Kristian M. Gathright		2019			795,115				434,109				1,229,224
		2018			473,788				434,109				907,897
		2017			642,977				413,438				1,056,415
Nelson G. Knight		2019			530,077				289,406				819,483
		2018			315,858				289,406				605,264
		2017			428,652				275,625				704,277
Rachael S. Rothman		2019			373,441				153,125				526,566

(2)

The annual cash incentive compensation with respect to each year is paid in the following year. See “Compensation Discussion and Analysis—Elements of Executive Compensation—2019 Incentive Compensation Award Opportunity and Actual Award Earned” and “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance Measures.” Ms. Rothman’s Incentive Compensation Awards were calculated in accordance with her separation agreement with the Company as discussed below under “Separation Agreements,” which represents the amounts she would have earned and that would have vested as of December 31, 2019 under the 2019 Incentive Plan, all paid in cash.

(3)

Includes the portion of the health insurance, life and disability insurance, parking, and 401(k) match paid by the Company. Also includes estimated dividends on the share awards in all three years. For 2019, includes the following amounts for estimated dividends (approximately 40% of such amounts will be paid following vesting of the restricted Common Shares, as applicable): Mr. Glade M. Knight—$75,787; Mr. Justin G. Knight—$378,937; Mr. Peery—$112,286; Mrs. Gathright—$112,286; and Mr. Nelson G. Knight —$119,365. Amounts for 2019 also include a one-time lump sum separation payment of $1,575,000 to Ms. Rothman in connection with her resignation effective December 6, 2019, paid during the first quarter of 2020, in accordance with her separation agreement discussed below under “Separation Agreements.”

(4)	Mr. Justin Knight also served as President for all of the years shown through March 31, 2020.

(5)	Mr. Peery served as Executive Vice President and Chief Financial Officer for all of the years shown except from July 1, 2019 until December 5, 2019, when he served as Executive Vice President and Chief Accounting Officer.

(6)	Prior to serving as President, Real Estate and Investments effective April 1, 2020, Mr. Nelson Knight served as Executive Vice President and Chief Investment Officer through March 31, 2020.

(7)	Ms. Rothman served as Executive Vice President and Chief Financial Officer from July 1, 2019 until her resignation effective December 6, 2019.

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Grants of Plan-Based Awards” below for the maximum value as of the grant date of the equity incentive plan awards for 2017 assuming the highest market and performance conditions were met.

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Name		Year		Market-Based Incentive				Company Performance- Based Incentive				Total Share Awards
Glade M. Knight		2017		$	272,160			$	175,000			$	447,160
		2016			263,253				175,000				438,253
		2015			96,250				262,500				358,750
Justin G. Knight		2017			1,360,800				875,000				2,235,800
		2016			1,316,267				875,000				2,191,267
		2015			555,500				1,515,000				2,070,500
Bryan F. Peery		2017			642,977				413,438				1,056,415
		2016			621,936				413,438				1,035,374
		2015			259,875				708,750				968,625
Kristian M. Gathright		2017			642,977				413,438				1,056,415
		2016			621,936				413,438				1,035,374
		2015			259,875				708,750				968,625
David P. Buckley		2017			607,257				390,469				997,726
		2016			587,384				390,469				977,853
		2015			245,437				669,375				914,812
Nelson G. Knight		2017			428,652				275,625				704,277
		2016			414,624				275,625				690,249
		2015			173,250				472,500				645,750

(2)   The annual cash incentive compensation with respect to each year is paid in the following year.  See “Compensation Discussion and Analysis—Elements of Executive Compensation—2017 Incentive Compensation Award Opportunity and Actual Award Earned” and “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance Measures.”

(3)   Includes the portion of the health insurance, life and disability insurance, parking, and 401(k) match paid by the Company. For 2017, 2016 and 2015, also includes estimated dividends on the share awards in the following amounts, of which one-third (for 2017 and 2016) and one-half (for 2015) of such amounts will be paid following vesting of the restricted Common Shares: Mr. Glade M. Knight—$27,716, $9,550 and $24,116; Mr. Justin G. Knight—$138,580, $47,749 and $139,180; Mr. Peery—$65,479, $22,562 and $65,112; Mrs. Gathright—$65,479, $22,562 and $65,112; Mr. Buckley—$61,841, $21,308 and $61,494; and Mr. Nelson G. Knight—$43,653, $15,041 and $43,407.

Grants of Plan-Based Awards

The following table sets forth information with respect to grants of awards made to the named executive officers during the fiscal year ended December 31, 2017.

				Estimated Future Payouts Under Non-Equity Incentive Plan-Awards(1)												Estimated Future Payouts Under Equity Incentive Plan Awards(2)												Grant Date Fair Value of Stock Awards(3)
Name		Grant Date		Threshold ($)				Target ($)				Maximum ($)				Threshold ($)				Target ($)				Maximum ($)
Glade M. Knight		February 16, 2017		$	87,500			$	175,000			$	306,250				—				—				—				—
		February 16, 2017			—				—				—			$	262,500			$	525,000			$	918,750			$	447,160
Justin G. Knight		February 16, 2017			437,500				875,000				1,531,250				—				—				—				—
		February 16, 2017			—				—				—				1,312,500				2,625,000				4,593,750				2,235,800
Bryan F. Peery		February 16, 2017			206,719				413,438				723,517				—				—				—				—
		February 16, 2017															620,156				1,240,312				2,170,546				1,056,415
Kristian M. Gathright		February 16, 2017			206,719				413,438				723,517				—				—				—				—
		February 16, 2017			—				—				—				620,156				1,240,312				2,170,546				1,056,415
David P. Buckley		February 16, 2017			195,234				390,469				683,321				—				—				—				—
		February 16, 2017			—				—				—				585,703				1,171,406				2,049,961				997,726
Nelson G. Knight		February 16, 2017			137,812				275,625				482,344				—				—				—				—
		February 16, 2017			—				—				—				413,438				826,875				1,447,031				704,277

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2019.

				Estimated Future Payouts Under Non-Equity Incentive Plan-Awards(1)												Estimated Future Payouts Under Equity Incentive Plan Awards(2)												Grant Date Fair Value
Name		Grant Date		Threshold ($)				Target ($)				Maximum ($)				Threshold ($)				Target ($)				Maximum ($)				of Stock Awards(3)
Glade M. Knight		February 14, 2019		$	91,875			$	183,750			$	367,500				—				—				—				—
		February 14, 2019			—				—				—			$	275,625			$	551,250			$	1,102,500			$	520,307
Justin G. Knight		February 14, 2019			459,375				918,750				1,837,500				—				—				—				—
		February 14, 2019			—				—				—				1,378,125				2,756,250				5,512,500				2,601,533
Bryan F. Peery		February 14, 2019			217,055				434,110				868,220				—				—				—				—
		February 14, 2019			—				—				—				651,164				1,302,328				2,604,656				1,229,224
Kristian M. Gathright		February 14, 2019			217,055				434,110				868,220				—				—				—				—
		February 14, 2019			—				—				—				651,164				1,302,328				2,604,656				1,229,224
Nelson G. Knight		February 14, 2019			144,703				289,406				578,812				—				—				—				—
		February 14, 2019			—				—				—				434,110				868,219				1,736,438				819,483
Rachael S. Rothman		July 1, 2019			76,563				153,125				306,250				—				—				—				—
		July 1, 2019			—				—				—				229,688				459,375				918,750				526,566

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(1)

These columns show the range of potential payouts for 20172019 performance under the Company’s annual cash incentive compensation for the named executive officers as described in the section titled “Compensation Discussion and Analysis—Elements of Executive Compensation—20172019 Incentive Compensation Award Opportunity and Actual Award Earned” and “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance Measures.” Ms. Rothman’s actual realized Incentive Compensation Awards were calculated in accordance with her separation agreement with the Company as discussed below under “Separation Agreements,” which represents the amounts she would have earned and that would have vested as of December 31, 2019 under the 2019 Incentive Plan, all paid in cash.

(2)

These columns show the range of potential payouts for 20172019 performance under the Company’s share incentive compensation for the named executive officers as described in the section titled “Compensation Discussion and Analysis—Elements of Executive Compensation—20172019 Incentive Compensation Award Opportunity and Actual Award Earned” and “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance Measures.” If the performance conditions are met, the Company pays these awards in Common Shares, with the value of the Common Shares equal to the dollar amount of the payouts as set forth in the table. See “Compensation Discussion and Analysis—Elements of Executive Compensation—Incentive Compensation.”

(3)

The amounts in this column reflect the grant date fair value of the Common Shares to be issued subject to achievement of performance conditions as determined in accordance with FASB ASC Topic 718. See Note 1 to the Summary Compensation Table above for additional information on the determination of the fair value of the Common Shares. The actual value of Common Shares issued is set forth above under “Compensation Discussion and Analysis—Elements of Executive Compensation—20172019 Incentive Compensation Award Opportunity and Actual Award Earned.”

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2019 Option2017 Option Exercises and Stock Vested

The following table sets forth the number of restricted Common Shares that vested for each of the Company’s named executive officers during 20172019 and the value realized by these officers upon such vesting. The Company has not granted any options to its officers.

		Stock Awards
Name		Number of Shares Acquired on Vesting (1)				Value Realized on Vesting (2)
Glade M. Knight			2,841			$	56,394
Justin G. Knight			14,202			$	281,910
Bryan F. Peery			6,711			$	133,213
Kristian M. Gathright			6,711			$	133,213
David P. Buckley			6,338			$	125,809
Nelson G. Knight			4,474			$	88,809

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		Stock Awards
Name		Number of Shares Acquired on Vesting (1)				Value Realized on Vesting (2)
Glade M. Knight			1,676			$	26,431
Justin G. Knight			8,379				132,137
Bryan F. Peery			3,959				62,433
Kristian M. Gathright			3,959				62,433
Nelson G. Knight			2,640				41,633
Rachael S. Rothman			-				-

(1)	Consists of restricted Common Shares issued in March 20172019 (with respect to 20162018 performance) that were earned as of December 31, 20162018 and vested December 15, 2017.13, 2019.

(2)	The value upon vesting is calculated by multiplying the number of Common Shares vested on each vesting date (December 15, 2017)13, 2019) by the closing price of the Common Shares on the NYSE on such date ($19.85)15.77).

Compensation Plans

Executive Change of Control Severance Plan

On May 29, 2014, the Board of Directors, upon recommendation of the Compensation Committee, approved the Apple Hospitality REIT, Inc. Executive Severance Pay Plan (the “Severance Plan”)., which was amended effective March 22, 2019. The Severance Plan was further amended effective April 1, 2020 to include the executive officers appointed on that date as participants under the plan. Each of the named executive officers of the Company arewere participants in the Severance Plan.

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TablePlan at December 31, 2019 except Ms. Rachael S. Rothman. Mr. Bryan F. Peery and Mrs. Kristian M. Gathright ceased to be participants upon their retirement as officers of Contents

the Company effective March 31, 2020.

The Severance Plan generally provides severance or income protection benefits to participants in the event of their termination in connection with certain changes in control of the Company, including (subject to certain exceptions) (i) the acquisition by any person of securities having 20% or more of the combined voting power of the Company’s outstanding securities other than as a result of an issuance of securities initiated by the Company or open market purchases approved by the Board, or (ii) when, as the result of, or in connection with, a cash tender or exchange offer, a merger or other business combination, a sale of assets, a contested election, or any combination of these transactions, the persons who were directors of the Company before such transactions cease to constitute a majority of the Board, or any successor’s board, within two years of the last of such transactions (each such event, a “Change in Control”).

If a participant in the Severance Plan is terminated during the one-year period commencing on the date of a Change in Control by the Company, other than for Cause, (as defined in the Severance Plan), or by a participant for Good Reason, (as defined in the Severance Plan), such participant will be entitled to receive a lump sum cash payment equal to the sum of (i) to the extent not previously paid, his or her salary and any accrued paid time off through the date of termination, (ii) to the extent not previously paid, his or her Annual Bonus, as defined in the Severance Plan, prorated for the number of days he or she worked during the year in which the termination occurred, and (iii) 2.53.0 times the sum of (x) his or her Annual Bonus as defined in the Severance Plan and (y) his or her annualized base salary based on the highest monthly base salary paid or payable in any month of the 12-month period immediately preceding the month in which the Change in Control occurred.Annual Base Salary. Participants will also generally be entitled to receive additional benefits, including the following: (i) accelerated vesting of any and all stock incentive awards, (ii) welfare benefits (including, without limitation, medical, dental, health, disability, individual life and group life insurance benefits) for the participant

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and his or her family for the one-year period following termination, (iii) payment by the Company of the full premium for continuation of insurance benefits under COBRA for up to 12 months following termination, (iv) payment by the Company of life insurance premiums for 12 months if the participant elects to convert any group term life insurance to an individual policy, and (v) payment by the Company of up to $15,000 in reasonable fees and costs charged by a nationally recognized outplacement firm.

Subject to certain exceptions, in the event that, upon or immediately after a Change in Control, a participant is offered a position with a title, responsibilities and compensation reasonably comparable to the title, responsibilities and compensation of such participant with the Company preceding the Change in Control at the successor to the Company, and the participant does not accept such position, the participant will not be entitled to any of the benefits described above. If the participant accepts such position, he or she will conclusively be deemed not to have been terminated.

The Company has also adopted change of control severance plans applicable to all other employees of the Company.

For purposes of the Severance Plan, the terms, “Annual Base Salary,” “Annual Bonus,” “Cause” and “Good Reason” are defined as follows:

“Annual Base Salary” means an amount equal to 12 times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the executive by the Company in respect of the 12-month period immediately preceding the month in which a Change in Control occurs.

“Annual Bonus” means an amount equal to the annual bonus paid to the executive by the Company during the calendar year immediately preceding the year which contains the date on which a Change in Control occurs.

“Cause” means (a) the executive’s continued or deliberate neglect of his or her duties, (b) willful misconduct by the executive injurious to the Company, whether monetary or otherwise, (c) the executive’s violation of any code or standard of ethics generally applicable to employees of the Company, (d) the executive’s active disloyalty to the Company, (e) the executive’s conviction of a felony, (f) the executive’s habitual drunkenness or drug abuse or (g) the executive’s excessive absenteeism unrelated to a disability (as defined in the Company’s long-term disability plan).

“Good Reason” means any action by the Company without the executive’s consent that results in any of the following: (a) a reduction of the executive’s annual salary to an amount which is materially less than the amount of the executive’s Annual Base Salary; (b) a material reduction in the executive’s duties with the Company, provided that a change in title or position shall not be “Good Reason” absent a material reduction in duties; or (c) a relocation of more than 50 miles from the executive’s workplace of 814 East Main Street, Richmond, Virginia 23219, without the consent of the executive.

2014 Omnibus Incentive Plan

In May 2014, the Board of Directors approved the Apple Hospitality REIT, Inc. 2014 Omnibus Incentive Plan, and in May 2015, the shareholders approved the 2014 Omnibus Incentive Plan. The 2014 Omnibus Incentive Plan permits the grant of awards of stock options, stock appreciation rights (“SARs”), restricted stock, stock units, unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards, and cash bonus awards to any employee, officer, or director of the Company or an affiliate of the Company, a consultant or adviser currently providing services to the Company or an affiliate of the Company, or any other person whose participation in the 2014 Omnibus Incentive Plan is determined by the Compensation Committee of the Board of Directors to be in the best interests of the Company.

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In addition to the payments and benefits provided pursuant to the terms of the Severance Plan described above, the named executive officers also receive additional benefits under the 2014 Omnibus Incentive Plan upon a Change in Control as defined under the 2014 Omnibus Incentive Plan. If the Company experiences a Change in Control in which outstanding awards will not be assumed or continued by the surviving entity: (i) all restricted stock and stock units will vest and the underlying shares will be delivered immediately before the Change in Control, and (ii) at the Compensation Committee’s discretion either (x) all options and SARs will become exercisable 15 days before the Change in Control and terminate upon the consummation of the Change in Control, or (y) all options, SARs, restricted stock and stock units will be canceled and cashed out in connection with the Change in Control for an amount in cash or securities having a value, in the case of restricted stock or stock units, equal to the formula or fixed price per share paid to the shareholders pursuant to such Change in Control and, in the case of options or SARs, equal to the product of the number of shares subject to such options or SARs multiplied by the amount, if any, by which the formula or fixed price per share paid to shareholders pursuant to such Change in Control exceeds the exercise price applicable to such shares. In the event the option exercise price or SAR exercise price of an award exceeds the price per share paid to shareholders in the Change in Control, such options and SARs may be terminated for no consideration. In the case of performance-based awards, if at least half of the performance period has lapsed, the Compensation Committee will determine the actual performance to date as of a date reasonably proximal to the date of the consummation of the Change in Control, and such level of performance will be treated as achieved immediately prior to the occurrence of the Change in Control. If less than half of the performance period has lapsed, or if actual performance is not determinable, the performance-based awards will be treated as though target performance has been achieved.

A Change in Control under the 2014 Omnibus Incentive Plan means the occurrence of any of the following:

(a)

a “Person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the total voting power of the voting stock of the Company, on a fully diluted basis;

(b)

individuals who, on the date on which the 2014 Omnibus Incentive Plan was adopted, constitute the Board of Directors (together with any new directors whose election or nomination for election was approved by a vote of at least a majority of the members of such Board of Directors who either were members of such Board of Directors on the date on which the 2014 Omnibus Incentive Plan was adopted or whose election or nomination for election was previously so approved), cease for any reason to constitute a majority of the members of such Board of Directors then in office;

(c)

the Company consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, the Company, other than any such transaction in which the holders of securities that represented one hundred percent (100%) of the voting stock of the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the voting stock of the surviving person in such merger or consolidation transaction immediately after such transaction;

(d)

there is consummated any direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one transaction or a series of related transactions, of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to any “Person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act); or

(e)

the stockholders of the Company adopt a plan or proposal for the liquidation, winding up or dissolution of the Company.

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No Tax Gross-Up Payments

The Company does not provide, and no named executive officer is entitled to receive, any tax gross-up payments in connection with his or her compensation severance or other benefitsseverance provided by the Company.

Potential PaymentsPayments upon Termination or Change in Control

The compensation payable to the Company’s named executive officers upon (i) termination of the executive without Cause or by the executive for Good Reason within one year of a Change in Control pursuant to the Severance Plan and (ii) a Change in Control, regardless of a corresponding termination, pursuant to the 2014 Omnibus Incentive Plan is, in each case, set forth above in the section entitled “Compensation Plans.” The compensation payable to the named executive officers upon such terminations or Change in Control will be paid in a single lump sum. All of the benefits payable upon termination pursuant to the Severance Plan are conditioned upon the executive’s execution of a general release of claims.

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The following table summarizes the cash payments and estimated equivalent cash value of benefits that would have been provided to the named executive officers under the terms of the 2014 Omnibus Incentive Plan and the Severance Plan upon a termination or Change in Control as of December 31, 2017,2019, and thus reflects amounts earned through such time and estimates of the amounts which would be paid to the named executive officer as of December 31, 2017.2019. The actual amounts to be paid can only be determined at the time of the termination or Change in Control.

		Termination				No Termination
Name/Payment of Benefit		Without Cause/ For Good Reason Upon or Within One Year of a Change of Control(1)				Change in Control (2)
Glade M. Knight
Cash Severance		$	2,080,597				—
Acceleration of Equity Awards			—				—
Justin G. Knight
Cash Severance			7,188,166				—
Acceleration of Equity Awards			—				—
Bryan F. Peery
Cash Severance			4,003,260				—
Acceleration of Equity Awards			—				—
Kristian M. Gathright
Cash Severance			4,003,260				—
Acceleration of Equity Awards			—				—
David P. Buckley
Cash Severance			3,782,592				—
Acceleration of Equity Awards			—				—
Nelson G. Knight
Cash Severance			2,679,034				—
Acceleration of Equity Awards			—				—

		Termination				No Termination
Name/Payment of Benefit		Without Cause/ For Good Reason Upon or Within One Year of a Change in Control (1)				Change in Control (2)
Glade M. Knight
Cash Severance		$	3,077,587				—
Acceleration of Equity Awards			—				—
Justin G. Knight
Cash Severance			11,331,130				—
Acceleration of Equity Awards			—				—
Bryan F. Peery (3)
Cash Severance			5,335,107				—
Acceleration of Equity Awards			—				—
Kristian M. Gathright (3)
Cash Severance			5,335,107				—
Acceleration of Equity Awards			—				—
Nelson G. Knight
Cash Severance			4,085,260				—
Acceleration of Equity Awards			—				—
Rachael S. Rothman (4)
Cash Severance			—				—
Acceleration of Equity Awards			—				—

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(1)

Amounts assume that equity awards under the 2014 Omnibus Incentive Plan are not assumed or continued by the surviving entity in the Change in Control and, therefore, that such awards vest in full upon the Change in Control. Amounts also include incentive compensation for 20172019 that had not been paid at December 31, 20172019 (see Summary Compensation Table for further information). Amounts also include a severance payment equal to 3.0 times the sum of (x) the named executive officer’s Annual Bonus and (y) the named executive officer’s Annual Base Salary.

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(2)	Consists solely of acceleration of equity awards if the awards are not assumed or continued by the surviving entity. Amounts assume that equity awards under the 2014 Omnibus Incentive Plan are not assumed or continued by the surviving entity in the Change in Control and, therefore, that such awards vest in full upon the Change in Control. As of December 31, 2017,2019, the named executive officers did not own any restricted Common Shares under the 2014 Omnibus Incentive Plan.
(3)	Mrs. Gathright and Mr. Peery retired from all officer positions held with the Company on March 31, 2020. The amounts Mr. Peery and Mrs. Gathright are entitled to receive upon retirement are described below under “Separation Agreements.”
(4)	Effective December 6, 2019, Ms. Rothman resigned from all positions that she held with the Company. The actual payments received by Ms. Rothman in connection with her resignation pursuant to her separation agreement are described below under “Separation Agreements.”

Separation Agreements

In connection with Mrs. Kristian M. Gathright’s and Mr. Bryan F. Peery’s retirement from each of their respective officer roles with the Company effective March 31, 2020, on March 4, 2020, Mrs. Gathright and Mr. Peery each entered into a separation and general release agreement (each a “Separation Agreement”) with the Company, pursuant to which Mrs. Gathright and Mr. Peery each will receive a one-time lump sum separation payment of $1,225,000, less applicable taxes and withholdings, to be paid within sixty days following the separation date. Pursuant to the Separation Agreements, Mrs. Gathright and Mr. Peery each provided the Company with a general release and waiver of claims, Mrs. Gathright agreed not to serve on the board of a competing lodging-oriented company (“competitor”) for the later of two years after her resignation date or one year after she ceases to serve as a director of the Company, and Mr. Peery agreed not to serve on the board of a competitor for two years after he ceases to be an employee. Mr. Peery agreed to remain employed in an advisory role to support the transition of responsibilities and will receive a salary at an annual rate of $40,000 per year while serving in that capacity.

In March 2020, as a result of the COVID-19 situation and associated economic impact to the Company, Mrs. Gathright and Mr. Peery each volunteered to defer receipt of the separation payment provided for under each Separation Agreement until a mutually agreed-upon date in 2020.

In connection with Ms. Rachael S. Rothman’s resignation from the Company effective December 6, 2019, on December 5, 2019, the Company and Ms. Rothman entered into a Separation Agreement pursuant to which Ms. Rothman received the following separation payments and benefits: (i) a one-time lump sum separation payment of $1,575,000 (which represents one year’s base salary and one year’s total target incentive compensation) which was paid in January 2020 and (ii) payments that would have been earned and vested as of December 31, 2019 under the Company’s 2019 Executive Incentive Plan, which totaled $603,286 and were paid in cash in March 2020, in each case less applicable taxes and withholdings. Pursuant to the Separation Agreement, Ms. Rothman provided the Company with a general release and waiver of claims.

Pay Ratio Disclosure

Presented below is the ratio of the annual total compensation of the Company’s Chief Executive Officer to the annual total compensation of the Company’s median employee (excluding the Chief Executive Officer). The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934.

For the fiscal year ended December 31, 2017,2019, the annual total compensation of the median employee of the Company was $138,897.$145,807. For the fiscal year ended December 31, 2017,2019, the annual total compensation of the Chief Executive Officer, as reported in the “Total” column of the Summary Compensation Table above in the section titled “Executive Compensation – Summary Compensation Table,” was $3,608,281.$4,588,609. For 2017,2019, the annual total compensation of the Chief Executive Officer was 26.031.5 times that of the annual total compensation of the median employee.

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The median employee of the Company was determined by finding the employee with the median total compensation for the fiscal year ended December 31, 2017,2019, based on total gross taxable compensation for 2017.2019. The Company did not apply any cost-of-living adjustments as part of the calculation. The Company selected the median employee based on the 5566 full-time, part-time and temporary workers who were employed by the Company at December 31, 20172019 (excluding the Chief Executive Officer).

Section 16(a) Beneficial Ownership Reporting Compliance

The Company’s directors and executive officers, and any persons holding more than 10% of This is the outstanding Common Shares, have filed reports with the Securities and Exchange Commission with respect to their initial ownership of Common Shares and any subsequent changes in that ownership.  The Company believes that during 2017 each of its officers, directors and holders of more than 10% of the Company’s outstanding Common Shares complied with the applicable filing requirements.

In making this statement,same methodology used by the Company has relied solely on written representations of its directors and executive officers and copies of reports that they have filed within the Securities and Exchange Commission and a review of Statements on Schedule 13G filed with the Securities and Exchange Commission.

Other Matters2019 Proxy Statement for the 2018fiscal year ended December 31, 2018.

Other Matters for the 2020 Annual Meeting of Shareholders

Management knows of no matters, other than those stated above, that are likely to be brought before the Annual Meeting. However, if any matters that are not currently known properly come before the Annual Meeting, the persons named in the enclosed proxy are expected to vote the Common Shares represented by such proxy on such matters in accordance with their best judgment.

Equity CompensationCompensation Plan Information

The Company’s Board of Directors adopted and the Company’s shareholders approved the 2014 Omnibus Incentive Plan, which provides for the issuance of up to 10 million Common Shares, subject to adjustments, to employees, officers, and directors of the Company or affiliates of the Company, consultants or advisers currently providing services to the Company or affiliates of the Company, and any other person whose participation in the 2014 Omnibus Incentive Plan is determined by the Compensation Committee to be in the best interests of the Company.Company. The Company’s Board of Directors previously adopted and the Company’s shareholders approved the Directors’ Plan to provide incentives to attract and retain directors. In May 2015, the Directors’ Plan was terminated effective upon the Listing, and no further grants can be made under the Directors’ Plan, provided however, that the termination did not affect any outstanding director option awards previously issued under the Directors’ Plan.

The following is a summary of securities issued under the Company’s equity compensation plans as of December 31, 2017:

		Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)				Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights				Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)
Equity compensation plans approved by security holders			478,978			$	21.05				11,079,676
Equity compensation plans not approved by security holders			—				—				—
Total equity compensation plans			478,978			$	21.05				11,079,676

2019:

		Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)				Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2)				Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)(3)
Equity compensation plans approved by security holders			297,333			$	21.81				8,992,653
Equity compensation plans not approved by security holders			—				—				—
Total equity compensation plans			297,333			$	21.81				8,992,653

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(1)	Represents 312,937249,895 stock options granted to the Company’s current and former directors under the Directors’ Plan and 166,041Plan. Also includes 47,438 fully vested deferred stock units, including quarterly distributions earned, under the Director Deferral Program that are not included in the calculation of the weighted-average exercise price of outstanding options.
(2)	The weighted-average exercise price of outstanding options relates solely to stock options, grantedwhich are the only currently outstanding exercisable security.
(3)	Does not include remaining Common Shares registered under the 2014 Omnibus IncentiveDirectors’ Plan, in exchange for all of Apple Ten’s outstanding stock options as a result ofno further grants can be made under the Apple Ten merger effective September 1, 2016.Plan.

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MattersMatters to be Presented at the 2019 2021Annual Meeting of Shareholders

Any qualified shareholder who wishes to make a proposal to be acted upon next year at the 20192021 Annual Meeting of Shareholders must submit such proposal for inclusion in the proxy statement and proxy card to the Company at its principal office in Richmond, Virginia, by no later than December 5, 2018.

2, 2020.

In addition, the Company’s bylaws establish an advance notice procedure with regard to certain matters, including shareholder proposals not included in the Company’s proxy statement or nominees to the Board, to be brought before an annual meeting of shareholders. In general, notice must be received by the Secretary of the Company (i) on or after February 1st and before March 1st of the year in which the meeting will be held, or (ii) not less than 60 days before the date of the meeting if the date of such meeting is earlier than May 1st or later than May 31st in such year. The notice must contain specified information concerning the matters to be brought before such meeting and concerning the shareholder proposing such matters. Therefore, assuming the Company’s 20192021 Annual Meeting is held in May 2019,2021, to be presented at such Annual Meeting, a shareholder proposal must be received by the Company on or after February 1, 20192021 but no later than February 28, 2019.

2021.

HouseholdingHouseholding of Proxy Materials

Some banks, brokers and other record holders of Common Shares may participate in the practice of “householding” proxy statements, annual reports and Notices of Internet Availability of those documents. This means that, unless shareholders give contrary instructions, only one copy of the Company’s proxy statement, annual report or Notice of Internet Availability may be sent to multiple shareholders in each household. The Company will promptly deliver a separate copy of any of those documents to you if you write to the Company at Apple Hospitality REIT, Inc., 814 East Main Street, Richmond, Virginia 23219, Attn: Ms. Kelly Clarke, Investor Relations Department or call (804) 344-8121. If you want to receive separate copies of the Company’s proxy statement, annual report or Notice of Internet Availability in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should send your name, the name of your brokerage firm and your account number to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717 (telephone number: 1-866-540-7095) or you may contact the Company at the above address or telephone number.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 17, 2018

14, 2020

This proxy statement and the Annual Report are available at http://materials.proxyvote.com/03784Y.03784Y. In addition, shareholders may access this information, as well as transmit their voting instructions, at www.proxyvote.com by having their proxy card and related instructions in hand.

By Order of the Board of Directors

David Buckley

Matthew P. Rash

Secretary

April , 2018

1, 2020

THE COMPANY DEPENDS UPON ALL SHAREHOLDERS PROMPTLY VOTING TO AVOID COSTLY SOLICITATION.  YOU CAN SAVE THE COMPANY CONSIDERABLE EXPENSE BY PROMPTLY TRANSMITTING YOUR VOTING INSTRUCTIONS ONLINE OR BY PHONE OR BY SIGNING AND RETURNING YOUR PROXY CARD IMMEDIATELY.

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Exhibit A

Proposed Amendment to the Company’s Amended and Restated Articles of Incorporation

If Proposal 4 is approved by the shareholders, Article VII of Apple Hospitality REIT, Inc.’s Amended and Restated Articles of Incorporation would be amended as set forth below. Proposed additions are indicated by underline and proposed deletions are indicated by strike-through.

ARTICLE VII

BOARD OF DIRECTORS

7.1          Terms of Directors. The number of directors of the Corporation shall be fixed in the bylaws determined in accordance with the Bylaws. Until the 2020 annual meeting of shareholders, the The number of directors of the Corporation shall be divided into three classes, each consisting of approximately groups with each group containing one-third of the total, as nearly equal in number of directors.as possible. The terms of the directors in the first group shall expire atAt thefirst2018 annual meeting of shareholders, the directors who shall be elected at the 2018 annual meeting to fill the directorships held by directors whose terms expire at the 2018 annual meeting shall be elected for one-year terms expiring. The terms of the directors in the second group shall expire at the 2019 second annual meeting of shareholders; at the 2019and the terms of directors in the third group shall expire at the third annual meeting of shareholders, the. At each annual meeting of shareholders, one group of directors who shall be elected at the 2019 annual meeting to fill the directorships held by directorsfor a term of three years to succeed those whose terms expire at the 2019 annual meeting shall be elected for one-year terms expiring at the 2020 annual meeting of shareholders; at the 2020 annual meeting of shareholders, the terms of all directors shall expire and at such annual meeting and at each annual meeting thereafter, all directors shall be elected for one-year terms expiring at the next annual meeting. From and after the 2020 annual meeting of shareholders, the directors shall no longer be divided into classes. Each director elected at the 2018 annual meeting of shareholders shall serve a one-year term as provided in this Article VII notwithstanding that the Articles of Amendment effecting these amendments to declassify the Board of Directors as provided herein may be filed with the Virginia State Corporation Commission after the 2018 annual meeting of shareholders at which such director was elected and these amendments were adopted by the shareholders.

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APPLE HOSPITALITY REIT, INC. 814 EAST MAIN STREET RICHMOND, VA 23219

VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up untilinformation. Vote by 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.ET on May 13, 2020. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up untilinstructions. Vote by 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.ET on May 13, 2020. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN  BLUE OR BLACK INK AS FOLLOWS: ☒	KEEP THIS  PORTION FOR YOUR RECORDS
DETACH AND RETURN  THIS  PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

The Board of Directors recommends you vote FOR the following: 1.     Election of directors		For All  ☐	Withhold All ☐	For All Except ☐		To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the  number(s) of the nominee(s) on the line below.
1.     Election of directors Nominees

01 Glenn W. Bunting	02 Jon A. Fosheim	03 Kristian M. Gathright	04 Glade M. Knight	05 Justin G. Knight
01 Bruce H. Matson
0206 Blythe J. McGarvie	07 Daryl A. Nickel
0308 L. Hugh Redd

The Board of Directors recommends you vote FOR proposals 2 through 4:and 3:

For

Against

Abstain

For

Against

Abstain

2.     Approval on an advisory basis of executive compensation paid by the Company.

☐

☐

☐

3.     Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm to serve for 2018. 2020.

☐

☐

☐

4.     Approval of an amendment to the Company’s Charter to declassify the Board of Directors and provide for annual elections of directors.

☐

☐

☐

NOTE: In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign.  If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE  SIGN WITHIN BOX]	Date			Signature  (Joint  Owners)	Date
Signature [PLEASE  SIGN WITHIN BOX]	Date			Signature  (Joint  Owners)	Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement and Annual Report are available at www.proxyvote.com

APPLE HOSPITALITY

Apple Hospitality REIT, INC.

Inc.

Annual Meeting of Shareholders

May 17, 2018 14, 2020 10:00 AM EDT

This proxy is solicited by the Board of Directors

This proxy is solicited by the Board of Directors. The undersigned hereby appoints Bryan PeeryJustin Knight and David BuckleyMatthew Rash as Proxies, each with the power to appoint his substitute, and hereby authorizes each of them to represent and to vote, as designated below, all common shares of Apple Hospitality REIT, Inc. held by the undersigned on March 23, 2018,20, 2020, at the Annual Meeting of Shareholders at the Courtyard and Residence Inn Richmond Downtown, located at 1320 East Cary Street,, Richmond, Virginia 23219, on Thursday, May 17, 201814, 2020 at 10:00 a.m., Eastern Daylight Time, or any adjournment thereof. If one of the director nominees specified below ceases to be available for election as a director, discretionary authority may be exercised by each of the Proxies named herein to vote for a substitute.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE NOMINEES IN PROPOSAL 1, “FOR” PROPOSALS 2 3 AND 4,3, AND ACCORDING TO THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF SHAREHOLDERS.

Continued and to be signed on reverse side