Exhibit 10.1

THIRD AMENDMENT TO THE

SUNSTONE HOTEL INVESTORS, INC.

2004 LONG-TERM INCENTIVE PLAN

THIS THIRD AMENDMENT (this “Third Amendment”) to the Sunstone Hotel Investors,
Inc. 2004 Long-Term Incentive Plan, as amended and restated effective May 1,
2007, and as amended by the First Amendment thereto effective December 31, 2008
and the Second Amendment thereto effective May 5, 2010 (the “Plan”), is made by
Sunstone Hotel Investors, Inc. (the “Company”) to be effective as of
February 16, 2012 (the “Effective Date”).

WHEREAS, the Company maintains the Plan for the benefit of certain participants;

WHEREAS, the Company desires to amend certain provisions of the Plan in order to
revise the Plan’s share counting provisions; and

WHEREAS, pursuant to Section 3.1(a) of the Plan, the Board of Directors of the
Company (the “Board”) has reserved the right to amend the Plan.

NOW, THEREFORE, the Plan is hereby amended as follows, effective as of the
Effective Date:

1. Section 1.6(a) of the Plan is hereby amended and restated in its entirety as
follows:

“(a) “Total shares available. The total number of shares of Common Stock, which
may be transferred pursuant to Awards granted under the Plan shall not exceed
six million fifty thousand (6,050,000) shares. Such shares may be authorized but
unissued Common Stock or authorized and issued Common Stock held in the
Company’s treasury or acquired by the Company for the purposes of the Plan. The
Committee may direct that any stock certificate evidencing shares issued
pursuant to the Plan shall bear a legend setting forth such restrictions on
transferability as may apply to such shares pursuant to the Plan. If any Award
is forfeited or otherwise terminates or is canceled without the delivery of
shares of Common Stock, then the shares covered by such forfeited, terminated or
canceled Award shall again become available for transfer pursuant to Awards
granted or to be granted under this Plan. Notwithstanding anything to the
contrary contained herein, any shares of Common Stock tendered or withheld to
satisfy the grant or exercise price or tax withholding obligation with respect
to any Award shall not again become available for transfer pursuant to Awards
granted or to be granted under this Plan. For purposes of determining the number
of shares available for Awards under this Plan, the number of shares of Common
Stock taken into account with respect to stock appreciation rights exercisable
for shares of Common Stock shall be the number of shares underlying the stock
appreciation rights upon grant (i.e., not the final number of shares of Common
Stock delivered upon exercise of the stock appreciation right). Any shares of
Common Stock delivered by the Company, any shares of Common Stock with respect
to which Awards are made by the Company and any shares of Common Stock with
respect

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to which the Company becomes obligated to make Awards, through the assumption
of, or in substitution for, outstanding awards previously granted by an acquired
entity, shall not be counted against the shares available for Awards under this
Plan.”

2. This Third Amendment shall be and, as of the Effective Date, is hereby
incorporated in and forms a part of the Plan.

3. All other terms and provisions of the Plan shall remain in full force and
effect except as specifically modified herein.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Board has caused this Third Amendment to the Plan to be
duly executed on this 16th day of February, 2012.

 

SUNSTONE HOTEL INVESTORS, INC. /s/ Kenneth E. Cruse

Kenneth E. Cruse

President and Chief Executive Officer

 

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