Exhibit 10.25

Highland Hospitality Corporation

Compensation for Non-Employee Directors

Annual Fees

The Chairman of our Board is paid a fee of $250,000 annually. Each of our
directors (other than the Chairman and President and Chief Executive Officer)
who does not serve as the chairman of one of our committees is paid a director’s
fee of $20,000 annually. Each director who serves as a committee chairman, other
than our Audit Committee chairman, is paid a director’s fee of $25,000 annually.
The director who serves as our Audit Committee chairman is paid a director’s fee
of $30,000 annually.

Effective with the completion of our initial public offering, we granted our
Chairman a restricted common stock award for 175,000 shares of restricted common
stock, which vest at the rate of one-third of the number of shares of restricted
common stock on each of the first three annual anniversary dates of the
completion of our initial public offering. The vesting of those shares of
restricted common stock will accelerate if the Chairman’s service as a director
terminates for death or disability, by reason of the failure of the Chairman to
be re-nominated by our Board or re-elected by the stockholders (other than his
voluntary withdrawal from the Board or a removal for cause and in accordance
with our charter) or by reason of a change in control of our Company. Each of
our other non-employee directors serving at the time of our 2005 Annual Meeting
of Stockholders received a grant of 2,000 vested shares of common stock at the
time of the meeting of the Board immediately following that Annual Meeting of
Stockholders. Assuming each of our current non-employee directors (other than
our Chairman) continues service on the Board, each will receive a grant of an
additional 2,000 vested shares of common stock at the time of the meetings of
the Board immediately following our 2006 Annual Meeting of Stockholders and each
subsequent annual meeting of our stockholders.

Meeting Fees

Each director, other than our Chairman and President and Chief Executive
Officer, is also paid $1,500 per Board or committee meeting attended (or $500
per telephonic meeting), except that committee chairpersons are paid $2,500 per
committee meeting attended.

Expenses

Directors are reimbursed for their reasonable expenses of attending board and
committee meetings.