Document:

exv10w6

Exhibit 10.6

SUMMIT HOTEL PROPERTIES, INC.

Stock Option Agreement

     THIS AGREEMENT dated as of the __ day of _______, 2010, between SUMMIT HOTEL PROPERTIES, INC.,
a Maryland corporation (the “Company”) and _____________ (the “Participant”), is made pursuant to
and subject to the provisions of the Summit Hotel Properties, Inc. 2010 Equity Incentive Plan (the
“Plan”), a copy of which has been made available to the Participant. All terms used herein that
are defined in the Plan have the same meaning given them in the Plan.

     1. Grant of Option. Pursuant to the Plan, effective as of ________ __, 2010, (the “Date of
Grant”), the Company granted to the Participant, subject to the terms and conditions of the Plan
and subject further to the terms and conditions of this Agreement, the right and Option to purchase
from the Company _________ shares of Common Stock at the option price of ________ dollars ($____)
per share, being not less than the Fair Market Value on the Date of Grant. This Option is not
intended to be an “incentive stock option” under Section 422 of the Code.

     2. Expiration Date. This Option shall expire at 11:59 p.m. on the day before the tenth
anniversary of the Date of Grant (the “Expiration Date”).

     3. Exercisability. This Option shall become exercisable in accordance with the provisions of
the following subparagraph 3(a), subject to acceleration of the exercisability of this Option under
the following subparagraphs 3(b), 3(c) and 3(d).

          (a) Installments. This Option shall be exercisable with respect to the number of whole shares
of Common Stock that most nearly equals, but does not exceed, one-fifth of the number of shares
subject to this Option on each of the first, second, third and fourth anniversaries of the Date of
Grant if the Participant remains in the continuous employ of the Company or an Affiliate from the
Date of Grant until the applicable anniversary of the Date of Grant. This Option shall be
exercisable with respect to the remaining shares of Common Stock subject to this Option on the
fifth anniversary of the Date of Grant if the Participant remains in the continuous employ of the
company or an Affiliate from the Date of Grant until the fifth anniversary of the Date of Grant.

          (b) Acceleration Upon Death. This Option, if not sooner exercisable, shall be exercisable
with respect to all of the shares of Common Stock that remain subject to this Option on the date of
the Participant’s death if the Participant remains in the continuous employ of the Company or an
Affiliate from the Date of Grant until the date of the Participant’s death.

          (c) Acceleration Upon Disability. This Option, if not sooner exercisable, shall be
exercisable with respect to all of the shares of Common Stock that remain subject to this

 

 

Option on the date that the Participant’s employment with the Company and its Affiliates ends on
account of Disability if the Participant remains in the continuous employ of the Company or an
Affiliate from the Date of Grant until the date the Participant’s employment with the Company and
its Affiliates ends on account of Disability.

          (d) Acceleration For Certain Terminations. This Option, if not sooner exercisable, shall be
exercisable with respect to all of the shares of Common Stock that remain subject to this Option on
the date that the Participant’s employment with the Company and its Affiliates ends if (i) the
Participant’s employment is terminated by the Company or an Affiliate without Cause or the
Participant resigns with Good Reason, (ii) the Participant remains in the continuous employ of the
Company or an Affiliate from the Date of Grant until the date of such termination without Cause or
resignation with Good Reason and (iii) the Participant executes a waiver and release of claims, in
a form reasonably satisfactory to the Company, in favor of the Company and its Affiliates (the
“Release”) and the Release becomes effective.

Once this Option has become exercisable in accordance with the preceding subparagraphs, it shall
continue to be exercisable with respect to the shares of Common Stock that remain subject to this
Option until the earlier of the Expiration Date or the termination of the right to exercise this
Option pursuant to paragraph 4. A partial exercise of this Option shall not affect the
Participant’s right to exercise this Option with respect to the shares of Common Stock that remain
subject to this Option.

     4. Right to Exercise Option. Once this Option has become exercisable in accordance with
paragraph 3, it may be exercised, in whole or in part, during the Participant’s continued
employment with the Company or an Affiliate; provided, however, that this Option may not be
exercised after the Expiration Date. Except as provided in subparagraphs 4(a), 4(b) and 4(c),
after the Participant ceases to be employed by the Company and its Affiliates, this Option may be
exercised until the earlier of the ninetieth (90th) day following the cessation of such
employment or the Expiration Date; provided, however, that this Option may not be exercised on or
after the date that the Participant’s employment with the Company and its Affiliates is terminated
with Cause.

          (a) Exercise Following Death. If the Participant dies during employment with the Company or
an Affiliate, this Option may be exercised by the Participant’s estate, or the person or persons to
whom the Participant’s rights under this Option pays by will or the laws of descent and
distribution. In that event, the Participant’s estate or such persons may exercise this Option
until the earliest of the first anniversary of the Participant’s death or the Expiration Date and
the Participant’s estate or such persons may exercise this Option for all or part of the number of
shares of Common Stock that the Participant was entitled to purchase under this Option on the date
of the Participant’s death and any additional shares for which this Option becomes exercisable
under subparagraph 3(b). If the Participant dies after ceasing to be an employee of the Company or
an Affiliate, this Option may be exercised by the Participant’s estate, or the person or persons to
whom the Participant’s rights under this Option pass by will or the laws of descent and
distribution for all or part of the shares of Common Stock that the Participant was entitled to
purchase on the date of the Participant’s death and during the remainder the period that the
Participant was entitled to exercise this Option on the date of the Participant’s death.

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          (b) Exercise Following Disability. If the Participant’s employment with the Company and its
Affiliates ends on account of the Participant’s Disability, the Participant may exercise this
Option until the earlier of the first anniversary of the date that the Participant’s employment
ends on account of Disability or the Expiration Date. The Participant may exercise this Option for
all or part of the number of shares of Common Stock that the Participant was entitled to purchase
on the date the Participant’s employment ends on account of Disability and any additional shares
for which this Option becomes exercisable under subparagraph 3(c).

          (c) Exercise After Termination Without Cause; Resignation with Good Reason. This subparagraph
4(c) applies if (i) the Participant’s employment with the Company and its Affiliates is terminated
without Cause or on account of a resignation by the Participant with Good Reason and (ii) the
Participant executes the Release and the Release becomes effective. If the requirements of the
preceding sentence are satisfied, the Participant may exercise this Option until the Expiration
Date. The Participant may exercise this Option for all or part of the number of shares of Common
Stock that the Participant was entitled to purchase on the date that the Participant’s employment
ends as described in the preceding sentences and any additional shares for which this Option
becomes exercisable under subparagraph 3(d).

     5. Method of Exercise and Payment for Shares. This Option shall be exercised by written
notice delivered to the attention of the Company’s Secretary at the Company’s principal executive
office. The exercise date shall be (i) the date of postmark if the notice is given by mail or (ii)
the date of delivery if delivered in person. Such notice shall be accompanied by payment of the
option price in full, in cash or cash equivalent acceptable to the Committee. All or part of the
option price may be paid by the surrender (either by actual surrender or attestation of ownership)
of shares of Common Stock with an aggregate Fair Market Value which, together with any cash or cash
equivalent paid by the Participant, is not less than the option price for the number of shares of
Common Stock for which the Option is being exercised.

     6. Transferability This Option may be transferred by will or the laws of descent and
distribution. During the Participant’s lifetime, this Option may be transferred by the Participant
to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such
family members or a partnership in which such family members are the only partners in accordance
with the Plan.

     7. Definitions. For purposes of this Agreement, the terms Cause, Disability and Good Reason
are defined in this paragraph 7.

          (a) Cause. The term “Cause” means (i) the Participant’s failure to perform a material duty or
the Participant’s material breach of an obligation set forth in a written agreement with the
Company or a breach of a material and written Company policy other than by reason of mental or
physical illness or injury, (ii) the Participant’s breach of the Participant’s fiduciary duties to
the Company, (iii) the Participant’s conduct that is demonstrably and materially injurious to the
Company, monetarily or otherwise or (iv) the Participant’s conviction of, or plea of guilty or nolo
contendre to, a felony or crime involving moral turpitude or fraud or dishonesty involving assets
of the Company and that in all cases is described in a written notice from the

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Board and that is not cured, to the reasonable satisfaction of the Board, within thirty days after
such notice is received by the Participant.

          (b) Disability. The term “Disability” means that the Participant is “disabled” within the
meaning of Code section 409A(a)(2)(C).

          (c) Good Reason. The term “Good Reason” means (i) the Company’s material breach of the terms
of a written agreement with the Participant or a direction from the Board that the Participant act
or refrain from acting which in either case would be unlawful or contrary to a material and written
Company policy, (ii) a material diminution in the Participant’s duties, functions and
responsibilities to the Company and its Affiliates without the Participant’s consent or the Company
preventing the Participant from fulfilling or exercising the Participant’s material duties,
functions and responsibilities to the Company and its Affiliates without the Participant’s consent,
(iii) a material reduction in the Participant’s annual base salary or annual bonus opportunity or
(iv) a requirement that the Participant relocate the Participant’s employment more than fifty miles
from the location of the Participant’s principal office on the Date of Grant, without the consent
of the Participant [(other than a relocation to Sioux Falls, South Dakota)]. The Participant’s
resignation shall not be deemed to be with Good Reason unless the Participant gives the Board
written notice (delivered within thirty days after the Participant knows of the event, action, etc.
that the Participant asserts constitutes Good Reason), the event, action, etc. that the Participant
asserts constitutes Good Reason is not cured, to the reasonable satisfaction of the Participant,
within thirty days after such notice and the Participant resigns effective not later than thirty
days after the expiration of such cure period.

     8. Fractional Shares. Fractional shares shall not be issuable under this Option and when any
provision hereof may entitle the Participant to a fractional share, such fraction shall be
disregarded.

     9. Change in Capital Structure. The terms of this Option, including the price and the number
and type of securities subject to this Option, shall be adjusted in accordance with the provisions
of the Plan in the event that the Company effects one or more stock dividends, stock split-ups,
subdivisions or consolidation of shares or other similar changes in capitalization as provided in
the Plan.

     10. Governing Law. This Agreement shall be governed by the laws of the State of South Dakota,
other than those provisions of South Dakota law that would require the application of the law of
another State.

     11. Conflicts. In the event of any conflict between the provisions of the Plan as in effect
on the Date of Grant and the provisions of this Agreement, the provisions of the Plan as in effect
on the Date of Grant shall govern.

     12. Participant Bound by Plan. The Participant hereby acknowledges that a copy of the Plan
has been made available to the Participant and the Participant agrees to be bound by all the terms
and provisions thereof.

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     13. No Right to Continued Employment. This Agreement and the grant of the Option do not
confer upon the Participant any right with respect to continuance of employment with the Company or
an Affiliate and do not interfere with the right of the Company or an Affiliate to terminate the
Participant’s employment.

     14. Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement
shall be binding upon and inure to the benefit of the legatees, distributees and personal
representatives of the Participant and the successors of the Company.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized
officer and the Participant has affixed the Participant’s signature as of the date first written
above.

	 	 	 	 	 	 	 	 	 

	SUMMIT HOTEL PROPERTIES, INC.	 	 	 	[NAME OF PARTICIPANT]	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 

5exv10w7

Exhibit 10.7

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT, effective as of _______ ___, 2010, between SUMMIT HOTEL PROPERTIES,
INC., a Maryland corporation (the “Company”), and KERRY W. BOEKELHEIDE (the “Executive”), recites
and provides as follows:

W I T N E S S E T H:

          WHEREAS, the Company desires to employ the Executive to devote a substantial portion of his
business time, attention and efforts to the business of the Company and to serve as the Executive
Chairman of the Board of the Company; and

          WHEREAS, the Executive desires to be so employed on the terms and subject to the conditions
hereinafter stated.

          NOW, THEREFORE, in consideration of the premises and mutual obligations hereinafter set forth,
the parties agree as follows:

          1. RECITALS. The above recitals are incorporated by reference herein and made a part
hereof as set forth verbatim.

          2. EMPLOYMENT. The Company shall employ the Executive, and the Executive agrees to be
so employed, in the capacity of the Company’s Executive Chairman of the Board to serve for the Term
(as hereinafter defined) hereof, subject to earlier termination as hereinafter provided.

          3. TERM. The Initial Term of the Executive’s employment hereunder (the “Initial
Term”) shall be for a period of three (3) years commencing on _______ __, 201__ (the “Effective
Date”), and continuing until _________ __, 201__, unless terminated earlier as provided herein. If
neither the Company nor the Executive has provided the other with written notice of an intention to
terminate this Agreement at least thirty (30) days before the end of the Initial Term (or any
subsequent renewal period), this Agreement will automatically renew for a twelve (12) month period.
For purposes of this Agreement, the word “Term” means the Initial Term and the period of any
extension of the Initial Term pursuant to the preceding sentence.

          4. SERVICES. The Executive shall devote substantially all of his business time,
attention and effort to the Company’s affairs. The Company further agrees that the Executive may
engage in civic and community activities and endeavors provided that such activities do not
interfere with the performance of the Executive’s duties hereunder. The Executive shall have full
authority and responsibility for formulating policies and administering the Company in all
respects, subject to the general direction, approval and control of the Company’s Board of
Directors.

 

 

          5. COMPENSATION.

               (a) Base Salary. During the Term, the Company shall pay the Executive for his services an
annual Base Salary equal to Three Hundred Eighty Thousand Dollars ($380,000), subject to any
increases approved by the Board of Directors (the “Board”) or its Compensation Committee (the
“Committee”). Such Base Salary shall be paid in accordance with the Company’s payroll schedule.
Any increase in Base Salary shall not serve to limit or reduce any other obligations to the
Executive under this Agreement.

               (b) Annual Bonus. In addition to his annual Base Salary, for performance in calendar year
2011 and thereafter during the Term, the Executive shall have the opportunity to earn an Annual
Bonus as provided in this Section 5(b).

                    (i) For performance in calendar year 2011, the Executive will be entitled to receive an Annual
Bonus (which may be granted in the form of an Incentive Award under the Company’s 2010 Equity
Incentive Plan) equal to Three Hundred Eighty Thousand Dollars ($380,000) if the 2011 hotel-level
earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the 65 hotel
properties identified in the Company’s Registration Statement on Form S-11 for the Company’s
initial public offering (the “Initial Portfolio”) is at least Fifty-five Million Dollars
($55,000,000). For purposes of this Agreement, hotel-level EBITDA will be calculated by
subtracting total hotel operating expenses of the hotels comprising the Initial Portfolio from
total revenues of the Initial Portfolio hotels for the year ending December 31, 2011. If the
Company sells one or more of the hotels in the Initial Portfolio during 2011, the Company will
reduce the $55 million target number in a manner that the Committee determines is equitable and
appropriate to reflect the absence of the sold hotel or hotels for all, or the remaining portion,
of 2011, in assessing whether the target was met. If the 2011 Annual Bonus is earned, it shall be
paid in a single lump sum payment no later than April 15, 2012.

                    (ii) For performance in calendar year 2012 and subsequent years during the Term, the Executive
shall have the opportunity to earn an Annual Bonus of up to one hundred percent (100%) of Base
Salary to the extent that individual and corporate goals established by the Committee are achieved.
Any Annual Bonus that is earned pursuant to the preceding sentence shall be paid in a single lump
sum payment no later than April 15 following the calendar year in which the Annual Bonus is earned.

For the avoidance of doubt, the Executive shall not be entitled to any Annual Bonus for

performance in calendar year 2010.

          6. BENEFITS. The Company agrees to provide the Executive with the following benefits:

               (a) Vacation. The Executive shall be entitled each calendar year to a vacation, during which
time his compensation shall be paid in full. The time allotted for such vacation shall be an
aggregate of four (4) weeks. In the year Executive terminates employment, he shall be entitled to
receive a prorated paid vacation based upon the amount of time that he has worked during the year
of termination. In the event that he has not taken his vacation time

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computed on a prorated basis, he shall be paid, at his regular rate of pay, for unused
vacation. In the event Executive has taken more vacation time than allotted for the year of
termination, there shall be no reduction in compensation otherwise payable hereunder.

               (b) Employee Benefits. During the Term, the Executive and/or the Executive’s family, as the
case may be, shall be eligible to participate in all Company employee benefit plans in which other
executive level employees of the Company and/or the members of their families, as the case may be,
are eligible to participate including, but not limited to, any retirement, pension, profit-sharing,
insurance, or other plans which may now be in effect or which may hereafter be adopted by the
Company. If during the Term the Executive loses the “Exec-U-Care” supplemental health benefits
provided by The Summit Group or The Summit Group fails to maintain the Exec-U-Care health plan for
any reason, including due to the Company’s failure to reimburse The Summit Group for the costs
thereof, the Company, if permitted by applicable law, shall establish a medical reimbursement plan
that provides the Executive and the Executive’s family health benefits that are not less (but
without regard to the possible taxation of benefits) than the benefits provided under such
supplemental health plan on the Effective Date. Regarding life insurance, the Executive shall have
the right to name the beneficiary of such life insurance policy.

               (c) Equity Plan Participation. The Executive shall be eligible to participate in the
Company’s 2010 Equity Incentive Plan and any subsequent equity incentive plan established during
the Term and shall receive awards, in such amounts and subject to such terms, as determined by the
Committee. Notwithstanding the preceding sentence, effective as of the completion of the initial
public offering of the Company’s common stock the Executive shall receive a grant of options to
purchase Three Hundred Seventy-Six Thousand (376,000) shares of the Company’s common stock under
the Company’s 2010 Equity Incentive Plan (which shall be governed solely by the terms of the option
agreement prescribed by the Committee and the terms of the Company’s 2010 Equity Incentive Plan).

          7. EXPENSES. The Company recognizes that the Executive will have to incur certain
out-of-pocket expenses related to his services and the Company’s business, and the Company agrees
to promptly reimburse the Executive for all reasonable expenses necessarily incurred by him in the
performance of his duties to the Company upon presentation of a voucher or documentation indicating
the amount and business purposes of any such expenses. These expenses include, but are not limited
to, travel, meals and entertainment. Expenses that are reimbursable to the Executive under this
Section 7 shall be paid to the Executive in accordance with the Company’s expense reimbursement
policy but in no event later than March 15 following the calendar year in which the expense is
incurred.

          8. TERMINATION.

               (a) Grounds. This Agreement shall terminate in the event of the Executive’s death. In the
case of the Executive’s Disability, the Company may elect to terminate the Executive’s employment
as a result of such Disability. Where appropriate, the Company also may terminate the Executive’s
employment pursuant to a Termination With Cause. Finally, the Executive may terminate his
employment with the Company pursuant to either a Voluntary Termination or a Voluntary Termination
for Good Reason. For purposes of this Agreement, the

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terms Disability, Voluntary Termination, Voluntary Termination for Good Reason, and
Termination With Cause are defined in Section 11 of this Agreement.

               (b) Notice of Termination. Any termination by the Company or the Executive (other than upon
death) shall be communicated by Notice of Termination to the Executive or the Company, as
applicable. For purposes of this Agreement, a “Notice of Termination” means a written notice which
(i) indicates the specific termination provision in this Agreement relied upon and the specific
ground for termination; (ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for such termination; and (iii) the date of termination in accordance with Section
8(c) below.

               (c) Date of Termination. For the purposes of this Agreement, “Date of Termination” means (i)
if the Company intends to treat the termination as a termination based upon the Executive’s
Disability, the Executive’s employment with the Company shall terminate effective on the thirtieth
day after the date of the Notice of Termination (which may not be given before the Executive has
been absent from work on account of a physical or mental illness or physical injury for at least
one hundred fifty (150) days) provided that, before such date, the Executive shall not have
returned to full-time performance of the Executive’s duties; (ii) if the Executive’s employment is
terminated by reason of Death, the Date of Termination shall be the date of death of the Executive;
(iii) if the Executive’s employment is terminated by reason of Voluntary Termination, the Date of
Termination shall be thirty (30) days from the date of the Notice of Termination (and the Executive
shall be deemed to have terminated his employment by Voluntary Termination if the Executive
voluntarily refuses to provide substantially all the services described in Section 4 hereof for a
period greater than four (4) consecutive weeks (excluding periods in which the Executive is not
performing services on account of vacation in accordance with Section 6(a) hereof and periods in
which the Executive is not performing services on account of the Executive’s illness or injury; in
such event, the Date of Termination shall be the day after the last day of such four-week period);
(iv) if the Company intends to treat the termination as a Termination With Cause, the Company shall
provide the Executive written notice of such grounds for termination and the Executive shall have a
period of thirty (30) days to cure such cause to the reasonable satisfaction of the Board, failing
which the Date of Termination shall be the end of such thirty (30) day period; or (v) if the
Executive’s employment is terminated by reason of Voluntary Termination for Good Reason, the Date
of Termination shall be thirty (30) days after the end of the thirty (30) day cure period.

          9. COMPENSATION UPON TERMINATION WITH CAUSE, VOLUNTARY TERMINATION, DEATH OR
DISABILITY. This Section 9 applies in the event that the Executive’s employment ends upon a
Termination With Cause, a Voluntary Termination, Death or Disability or any reason other than a
Termination Without Cause or a Voluntary Termination With Good Reason. In any of those events, the
Executive (or the Executive’s estate in the event of his death) shall be entitled to receive the
Standard Termination Benefits. The Standard Termination Benefits are the benefits or amounts
described in the following subsections (a) and (b):

               (a) The Executive shall be entitled to receive any compensation (including Base Salary and
Annual Bonus and accrued but unused vacation) that is earned but unpaid as of the Date of
Termination.

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               (b) The Executive shall be entitled to receive any benefits due him under the terms of any
employee benefit plan maintained by the Company and under the terms of any option, restricted stock
or similar equity award; which benefits shall be paid in accordance with the terms of the
applicable plan and any award agreement between the Executive and the Company.

Except for the Standard Termination Benefits, the Executive shall not be entitled to receive any
compensation after the Date of Termination on account of a Termination With Cause, a Voluntary
Termination, death, Disability or any reason other than a Termination Without Cause or a Voluntary
Termination With Good Reason.

          10. COMPENSATION UPON TERMINATION WITHOUT CAUSE OR VOLUNTARY TERMINATION WITH GOOD
REASON. This Section 10 applies in the event that the Executive’s employment ends upon a
Termination Without Cause or a Voluntary Termination With Good Reason. In any of those events, the
Executive shall be entitled to receive the benefits and amounts described in the following
subsections (a), (b), (c) and (d):

               (a) The Company shall pay or provide the Standard Termination Benefits as defined in Section 9
except that all outstanding options, shares of restricted stock and other equity awards, shall be
vested and exercisable as of the Date of Termination and outstanding options, stock appreciation
rights and similar equity awards shall remain exercisable thereafter until their stated expiration
date as if the Executive’s employment had not terminated.

               (b) The Company shall pay an amount equal to three (3.0) times the Executive’s Base Salary at
the rate in effect on the Date of Termination (or, in the case of a Voluntary Termination for Good
Reason, at the rate in effect before a reduction in Base Salary that constitutes Good Reason for
resignation), such payment to be made in a single cash payment.

               (c) The Company shall pay an amount equal to three (3.0) times the greater of (x) the highest
annual bonus paid to the Executive for the three (3) fiscal years of the Company ended immediately
before the Date of Termination or (y) one hundred percent (100%) of the Executive’s Base Salary at
the rate in effect on the Date of Termination (or in the case of a Voluntary Termination for Good
Reason, at the rate in effect before a reduction in Base Salary that constitutes Good Reason for
resignation), such payment to be made in a single cash payment.

               (d) The Company shall pay an amount equal to the product of (x) the Annual Bonus paid to the
Executive for the fiscal year of the Company ended immediately before the Date of Termination and
(y) a fraction, the numerator of which is the number of days the Executive was employed by the
Company during the fiscal year that includes the Date of Termination and the denominator of which
is 365, such payment to be made in a single cash payment.

               (e) The Company shall pay an amount equal to three (3.0) times the annual premium or cost paid
by the Company for the health, dental and vision insurance coverage for the Executive and the
Executive’s eligible dependents as in effect on the Date of

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Termination plus an amount equal to three (3.0) times the annual premium or cost paid by the
Company for the disability and life insurance coverage for the Executive as in effect on the Date
of Termination, such payment to be made in a single cash payment.

No benefits will be paid or provided to, or on behalf of, the Executive under this Section 10
unless the Executive has signed a release and waiver of claims in a form reasonably prescribed by
the Company, releasing the Company and its officers, directors and affiliates from all claims the
Executive has or may have against such parties, and such release and waiver of claims has become
binding and irrevocable on or before the forty-fifth (45th) day after the date the
Executive’s employment ends upon a Termination Without Cause or a Voluntary Termination for Good
Reason. Subject to the Executive’s satisfaction of the requirements of the preceding sentence and
subject to Section 13, the cash benefits payable under this Section 10 shall be paid on the
sixtieth (60th) day after the Executive’s employment ends upon a Termination Without
Cause or a Voluntary Termination for Good Reason.

          11. DEFINITIONS. For the purposes of this Agreement, the following terms shall have
the following definitions:

               (a) “Change in Control” for purposes of this Agreement, has the same meaning as such term is
defined in the Company’s 2010 Equity Incentive Plan.

               (b) “Disability” means that the Executive is “disabled” within the meaning of Section
409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the “Code”).

               (c) “Termination With Cause” means the termination of the Executive’s employment by act of the
Company’s Board of Directors on account of (i) the Executive’s failure to perform a material duty
or the Executive’s material breach of an obligation set forth in this Agreement or a breach of a
material and written Company policy other than by reason of mental or physical illness or injury,
(ii) the Executive’s breach of Executive’s fiduciary duties to the Company, (iii) the Executive’s
conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise or
(iv) the Executive’s conviction of, or plea of guilty or nolo contendre to, a felony or crime
involving moral turpitude or fraud or dishonesty involving assets of the Company and that in all
cases is described in a written notice from the Board and that is not cured, to the reasonable
satisfaction of the Board, within thirty (30) days after such notice is received by the Executive.

               (d) “Voluntary Termination” means the Executive’s voluntary termination of his employment
hereunder for any reason other than a Voluntary Termination for Good Reason. For purposes of this
Section 11, the term Voluntary Termination does not include a voluntary refusal to perform services
on account of a vacation taken in accordance with Section 6(a) hereof, the Executive’s failure to
perform services on account of his illness or injury or the illness or injury of a member of his
immediate family, provided such illness is adequately substantiated at the reasonable request of
the Company, or any other absence from service with the written consent of the Board.

               (e) Voluntary Termination for “Good Reason” means the Executive’s termination of his
employment hereunder on account of (i) the Company’s material breach of the

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terms of this Agreement or a direction from the Board that the Executive act or refrain from
acting which in either case would be unlawful or contrary to a material and written Company policy,
(ii) a material diminution in the Executive’s duties, functions and responsibilities to the Company
and its affiliates without the Executive’s consent or the Company preventing the Executive from
fulfilling or exercising his material duties, functions and responsibilities to the Company and its
affiliates without the Executive’s consent, (iii) a material reduction in the Executive’s Base
Salary or Annual Bonus opportunity or (iv) a requirement that the Executive relocate his employment
more than fifty (50) miles from the location of the Executive’s principal office on the date of
this Agreement, without the consent of the Executive. The Executive’s resignation shall not be
deemed a “Voluntary Termination for Good Reason” unless the Executive gives the Board written
notice (delivered within thirty (30) days after the Executive knows of the event, action, etc. that
the Executive asserts constitutes Good Reason), the event, action, etc. that the Executive asserts
constitutes Good Reason is not cured, to the reasonable satisfaction of the Executive, within
thirty (30) days after such notice and the Executive resigns effective not later than thirty (30)
days after the expiration of such cure period.

          12. CODE SECTION 280G. The benefits that the Executive may be entitled to receive
under this Agreement and other benefits that the Executive is entitled to receive under other
plans, agreements and arrangements (which, together with the benefits provided under this
Agreement, are referred to as “Payments”), may constitute Parachute Payments that are subject to
Code Sections 280G and 4999. As provided in this Section 12, the Parachute Payments will be
reduced if, and only to the extent that, a reduction will allow the Executive to receive a greater
Net After Tax Amount than the Executive would receive absent a reduction.

     The Accounting Firm will first determine the amount of any Parachute Payments that are payable
to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to
the Executive’s total Parachute Payments.

     The Accounting Firm will next determine the largest amount of Payments that may be made to the
Executive without subjecting the Executive to tax under Code Section 4999 (the “Capped Payments”).
Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped
Payments.

     The Executive will receive the total Parachute Payments or the Capped Payments, whichever
provides the Executive with the higher Net After Tax Amount. If the Executive will receive the
Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any
benefits under this Agreement or any other plan, agreement or arrangement that are not subject to
Section 409A of the Code (with the source of the reduction to be directed by the Participant) and
then by reducing the amount of any benefits under this Agreement or any other plan, agreement or
arrangement that are subject to Section 409A of the Code (with the source of the reduction to be
directed by the Participant). The Accounting Firm will notify the Executive and the Company if it
determines that the Parachute Payments must be reduced to the Capped Payments and will send the
Executive and the Company a copy of its detailed calculations supporting that determination.

     As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time
that the Accounting Firm makes its determinations under this Section 12, it is possible that

7

 

amounts will have been paid or distributed to the Executive that should not have been paid or
distributed under this Section 12 (“Overpayments”), or that additional amounts should be paid or
distributed to the Executive under this Section 12 (“Underpayments”). If the Accounting Firm
determines, based on either the assertion of a deficiency by the Internal Revenue Service against
the Company or the Executive, which assertion the Accounting Firm believes has a high probability
of success or controlling precedent or substantial authority, that an Overpayment has been made,
the Executive must repay to the Company, without interest; provided, however, that no loan will be
deemed to have been made and no amount will be payable by the Executive to the Company unless, and
then only to the extent that, the deemed loan and payment would either reduce the amount on which
the Executive is subject to tax under Code Section 4999 or generate a refund of tax imposed under
Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or
substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the
Executive and the Company of that determination and the amount of that Underpayment will be paid to
the Executive promptly by the Company.

     For purposes of this Section 12, the term “Accounting Firm” means the independent accounting
firm engaged by the Company immediately before the Change in Control. For purposes of this Section
12, the term “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments,
as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local
income taxes applicable to the Executive on the date of payment. The determination of the Net
After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing
taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable,
in effect on the date of payment. For purposes of this Section 12, the term “Parachute Payment”
means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code
Section 280G and the regulations promulgated or proposed thereunder.

          13. CODE SECTION 409A. This Agreement and the amounts payable and other benefits
provided under this Agreement are intended to comply with, or otherwise be exempt from, Section
409A of the Code (“Section 409A”), after giving effect to the exemptions in Treasury Regulation
section 1.409A-1(b)(3) through (b)(12). This Agreement shall be administered, interpreted and
construed in a manner consistent with Section 409A. If any provision of this Agreement is found
not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be
modified and given effect, in the sole discretion of the Board and without requiring the
Executive’s consent, in such manner as the Board determines to be necessary or appropriate to
comply with, or to effectuate an exemption from, Section 409A; provided, however, that in
exercising its discretion under this Section 13, the Board shall modify this Agreement in the least
restrictive manner necessary and without reducing any payment or benefit due under this Agreement.
Each payment under this Agreement shall be treated as a separate identified payment for purposes of
Section 409A.

     With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, the
Executive, as specified under this Agreement, such reimbursement of expenses or provision of
in-kind benefits shall be subject to the following limitations: (i) the expenses eligible for
reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the
expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable
year, except for any medical reimbursement arrangement providing for the

8

 

reimbursement of expenses referred to in Section 105(b) of the Code; (ii) the reimbursement of an
eligible expense shall be made as specified in this Agreement and in no event later than the end of
the year after the year in which such expense was incurred and (iii) the right to reimbursement or
in-kind benefit shall not be subject to liquidation or exchange for another benefit.

     If a payment obligation under this Agreement arises on account of a Change in Control or the
Executive’s termination of employment and such payment obligation constitutes “deferred
compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect to
the exemptions in Treasury Regulation section 1.409A-1(b)(3) through (b)(12)), it shall be payable
only if the Change in Control constitutes a change in ownership or effective control of the
Company, etc. as provided in Treasury Regulation section 1.409A-3(i)(5) or after the Executive’s
separation from service (as defined under Treasury Regulation section 1.409A-1(h)); provided,
however, that if the Executive is a specified employee (as defined under Treasury Regulation
section 1.409A-1(i)), any payment that is scheduled to be paid within six months after such
separation from service shall accrue without interest and shall be paid on the first day of the
seventh month beginning after the date of the Executive’s separation from service or, if earlier,
within fifteen days after the appointment of the personal representative or executor of the
Executive’s estate following his death.

          14. TAX WITHHOLDING. All payments to be made under this Agreement shall be reduced by
applicable income and employment tax withholdings.

          15. COVENANTS OF THE EXECUTIVE.

               (a) General Covenants of the Executive. The Executive acknowledges that (i) the principal
business of the Company is acquiring, owning, renovating and developing upscale or mid-scale hotels
without food or beverage facilities (such business, and any and all other businesses that after the
date hereof, and from time to time during the Term, become material with respect to the Company’s
then-overall business, herein being collectively referred to as the “Business”), (ii) the
Company knows of a limited number of persons who have developed the Business; (iii) the Business
is, in part, national in scope; (iv) the Executive’s work for the Company and its subsidiaries has
given and will continue to give the Executive access to the confidential affairs and proprietary
information of the Company and to “trade secrets,” as defined in the South Dakota Uniform Trade
Secrets Act, of the Company and its subsidiaries; (v) the covenants and agreements of the Executive
contained in this Section 15 are essential to the business and goodwill of the Company; and (vi)
the Company would not have entered into this Agreement but for the covenants and agreements set
forth in this Section 15.

               (b) Covenants Against Competition. The covenant against competition herein described shall
apply during the Term and for a period of one (1) year following a termination of the Executive’s
employment with the Company and its subsidiaries for any reason (the “Restriction Period”). During
the Restriction Period the Executive shall not, directly or indirectly, own, manage, control or
participate in the ownership, management, or control of, or be employed or engaged by or otherwise
affiliated or associated with, in an executive, senior management, strategic or professional
capacity, whether as an employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or

9

 

representative capacity, that is similar to an engagement in an executive, senior management,
strategic or professional capacity although otherwise named in any business or venture engaged in
the Business and that owns at least twenty-five (25) hotels, at least one of which is located
within twenty-five (25) miles of any hotel acquired, owned, managed, developed or re-developed by
the Company and its subsidiary, or within twenty-five (25) miles of any hotel the Company is
pursuing to acquire, own, manage, develop or re-develop so long as the pursuit of such began prior
to, and remained ongoing at the time of the termination of the Executive’s employment;
provided, however, that, notwithstanding the foregoing, (i) the Executive may own
or participate in the ownership of any entity which he owned or managed or participated in the
ownership or management of prior to the Effective Date, which ownership, management or
participation has been disclosed to the Company; and (ii) the Executive may invest in securities of
any entity, solely for investment purposes and without participating in the business thereof, if
(A) such securities are traded on any national securities exchange or the National Association of
Securities Dealers, Inc. Automated Quotation System or equivalent non-U.S. securities exchange, (B)
the Executive is not a controlling person of, or a member of a group which controls, such entity
and (C) the Executive does not, directly or indirectly, own one percent (1%) or more of any class
of securities of such entity. Notwithstanding the foregoing, this Section 15(b) shall not apply
after the Executive’s Termination without Cause or Voluntary Termination for Good Reason.

               (c) Confidentiality. During and after the Executive’s employment with the Company and its
affiliates, except in connection with the business and affairs of the Company and its affiliates:
the Executive shall keep secret and retain in strictest confidence, and shall not use for his
benefit or the benefit of others, all confidential matters relating to the Business and the
business of any of its affiliates and to the Company and any of its affiliates, learned by the
Executive heretofore or hereafter directly or indirectly from the Company of any of its
subsidiaries (or any predecessor of either) (the “Confidential Company Information”),
including, without limitation, information with respect to the Business and any aspect thereof,
profit or loss figures, and the Company’s or its affiliates’ (or any of their predecessors)
properties, and shall not disclose such Confidential Company Information to anyone outside of the
Company except with the Company’s express written consent and except for Confidential Company
Information which (i) at the time of receipt or thereafter becomes publicly known through no
wrongful act of the Executive; (ii) is clearly obtainable in the public domain; (iii) was not
acquired by the Executive in connection with the Executive’s employment or affiliation with the
Company; (iv) was not acquired by the Executive from the Company or its representatives or from a
third-party who has an agreement with the Company not to disclose such information; (v) was legally
in the possession of or developed by the Executive prior to the Effective Date; or (vi) is required
to be disclosed by rule of law or by order of a court or governmental body or agency.

               (d) Nonsolicitation. During the Restriction Period, the Executive shall not, without the
Company’s prior-written consent, directly or indirectly, (i) knowingly solicit or knowingly
encourage to leave the employment or other service of the Company or any of its affiliates, any
employee employed by the Company on the Date of Termination or knowingly hire (on behalf of the
Executive or any other person or entity) any employee employed by the Company on the Date of
Termination who has left the employment or other service of the Company or any of its affiliates
(or any predecessor of either) within one (1) year of the termination of such employee’s or
independent contractor’s employment or other service with the Company and its affiliates; or (ii)
whether for the Executive’s own account or for the account

10

 

of any other person, firm, corporation or other business organization, intentionally interfere
with the Company’s or any of its affiliates, relationship with, or endeavor to entice away from the
Company or any of its affiliates, any person who during the Executive’s employment with the Company
is or was a customer or client of the Company or any of its affiliates (or any predecessor of
either). Notwithstanding the above, nothing shall prevent the Executive from soliciting loans,
investment capital, or the provision of management services from third parties engaged in the
Business if the activities of the Executive facilitated thereby do not otherwise adversely
interfere with the operations of the Business.

               (e) Company Property. During and after the Executive’s employment with the Company and its
affiliates, all memoranda, notes, lists, records, property and any other tangible product and
documents (and all copies thereof) made, produced or compiled by the Executive or made available to
the Executive during the Term concerning the Business of the Company and its affiliates shall be
the Company’s property and shall be delivered to the Company at any time on request.
Notwithstanding the above, the Executive’s contacts and contact data base shall not be the
Company’s property. Notwithstanding the above, software, methods and material developed by the
Executive prior to the Term of the Agreement shall not be the Company’s property.

               (f) Rights and Remedies upon Breach. The Executive acknowledges and agrees that any breach by
him of any of the provisions of this section 15 (the “Covenants”) would result in irreparable
injury and damage for which money damages, would not provide an adequate remedy. Therefore, if the
Executive breaches, or threatens to commit a breach of, any of the Covenants, the Company and its
affiliates shall have the right and remedy to have the Covenants specifically enforced (without
posting bond and without the need to prove damages) by any court having equity jurisdiction,
including, without limitation, the right to an entry against the Executive of restraining orders
and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or
actual, and whether or not then continuing, of such covenants. This right and remedy shall be in
addition to, and not in lieu of, any other rights and remedies available to the Company and its
affiliates under law or in equity (including, without limitation, the recovery of damages). The
existence of any claim or cause of action by the Executive, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement of the Covenants. The Company has the
right to cease making the payments or benefits to the Executive in the event of a material breach
of any of the Covenants that, if capable of cure and not willful, is not cured within thirty (30)
days after receipt of notice thereof from the Company.

               (g) Severability. The Executive acknowledges and agrees that the Executive has had an
opportunity to seek advice of counsel in connection with this Agreement; and that the Covenants are
reasonable in geographical and temporal scope and in all other respects. If it is determined that
any of the provisions of this Agreement, including, without limitation, any of the Covenants, or
any part thereof, is invalid or unenforceable, the remainder of the provisions of this Agreement
shall not thereby be affected and shall be given full affect, without regard to the invalid
portions.

               (h) Duration and Scope of Covenants. If any court or other decision maker of competent
jurisdiction determines that any of the Covenants, including, without or any

11

 

part thereof are unenforceable because of the duration or geographical scope of such
provision, then, after such determination has become final and unappealable, the duration or scope
of such provision, as the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be enforced.

               (i) Enforceability of Restrictive Covenants; Jurisdictions. The Company and the Executive
intend to and hereby consent to jurisdiction to enforce the Covenants upon the courts of any
jurisdiction within the geographical scope of the Covenants. If the courts of any one or more of
such jurisdictions hold the Covenants wholly unenforceable by reason of breadth of scope or
otherwise it is the intention of the Company and the Executive that such determination not bar or
in any way affect the Company’s right, or the right of any of its affiliates, to the relief
provided above in the courts of any other jurisdiction within the geographical scope of such
Covenants, as to breaches of such Covenants in such other respective jurisdictions, such Covenants
as they relate to each jurisdiction’s being, for this purpose, severable, diverse and independent
covenants, subject, where appropriate, to the doctrine of res judicata [or, prescribe state for
jurisdiction].

          16. NOTICES. All notices or deliveries authorized or required pursuant to this
Agreement shall be deemed to have been given when in writing and personally delivered or three (3)
days following the date when deposited in the U.S. mail, certified, return receipt requested,
postage prepaid, addressed to the parties at the following addresses or to such other addresses as
either may designate in writing to the other party:

	 	 	 	 	 

	 

	 	To the Company:
	 	Summit Hotel Properties, Inc.
	 

	 	 	 	Attn: Corporate Secretary
	 

	 	 	 	2701 South Minnesota Avenue, Suite 6
	 

	 	 	 	Sioux Falls, South Dakota 57105
	 
	 	 	 	 
	 

	 	To the Executive:
	 	Kerry W. Boekelheide
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

          17. ENTIRE AGREEMENT. This Agreement contains the entire understanding between the
parties hereto with respect to the subject matter hereof and shall not be modified in any manner
except by instrument in writing signed, by or on behalf of, the parties hereto. This Agreement
shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties
hereto.

          18. ARBITRATION. Any claim or controversy arising out of, or relating to, this
Agreement or its breach, shall be settled by arbitration in Sioux Falls, South Dakota in accordance
with the governing rules of the American Arbitration Association. Judgment upon the award rendered
may be entered in any court of competent jurisdiction. In the event one of the parties hereto
requests an arbitration proceeding under this Agreement, such proceeding shall commence within 30
days from the date of such request. The prevailing party shall be entitled to reasonable
attorney’s fees and costs.

12

 

          19. APPLICABLE LAW. This Agreement shall be governed and construed in accordance with
the laws of the State of South Dakota.

          20. NO SETOFF. The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by a setoff,
counterclaim, recoupment, defense or other claim, right or action which the Company may have
against the Executive or others. In no event shall the Executive be obligated to seek other
employment or take other action by way of mitigation of the amounts payable to the Executive under
the provisions of this Agreement.

          21. ASSIGNMENT. The Executive acknowledges that his services are unique and personal.
Accordingly, the Executive may not assign his rights or delegate his duties or obligations under
this Agreement. The Executive’s rights and obligations under this Agreement shall insure to the
benefit of and shall be binding upon the Executive’s successors and assigns.

          22. HEADINGS. Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the ___ day of _______,
2010.

	 	 	 	 	 	 	 	 	 

	 	 	SUMMIT HOTEL PROPERTIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	Title:
	 
 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	KERRY W. BOEKELHEIDE	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

13

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