Document:

10.1 Class B Unit Vesting Agmt

Exhibit 10.1

LTIP CLASS B UNIT VESTING AGREEMENT

Under the Pebblebrook Hotel Trust
2009 Equity Incentive Plan, as amended and restated
(Officers and Employees)

Name of Grantee:                            
No. of LTIP Units:                            
Grant Date:                December 13, 2013        
Final Acceptance Date:        December 13, 2013        

Pursuant to the Pebblebrook Hotel Trust 2009 Equity Incentive Plan, as amended and restated (the “Plan”) and the Second Amended and Restated Agreement of Limited Partnership, dated December 13, 2013 (the “Partnership Agreement”), of Pebblebrook Hotel, L.P., a Delaware limited partnership (the “Partnership”), Pebblebrook Hotel Trust, a Maryland real estate investment trust and the general partner of the Partnership (the “Company”), and for the provision of services to or for the benefit of the Partnership in a partner capacity or in anticipation of being a partner, hereby grants to the Grantee named above an Other Equity-Based Award (as defined in the Plan) (an “Award”) in the form of, and by causing the Partnership to issue to the Grantee named above, a number of LTIP Class B Units (as defined in the Partnership Agreement) specified above having the rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption and conversion set forth herein and in the Partnership Agreement.  Upon acceptance of this LTIP Class B Unit Vesting Agreement (this “Agreement”), the Grantee shall receive, effective as of the Grant Date, the number of LTIP Class B Units specified above, subject to the restrictions and conditions set forth herein and in the Partnership Agreement.

1.    Acceptance of Agreement.  The Grantee shall have no rights with respect to this Agreement unless he or she shall have accepted this Agreement prior to the close of business on the Final Acceptance Date specified above by (i) signing and delivering to the Partnership a copy of this Agreement and (ii) unless the Grantee is already a Limited Partner (as defined in the Partnership Agreement), signing, as a Limited Partner, and delivering to the Partnership a counterpart signature page to the Partnership Agreement (attached hereto as Annex A).  Upon acceptance of this Agreement by the Grantee, the Partnership Agreement shall be amended to reflect the issuance to the Grantee of the LTIP Class B Units so accepted, effective as of the Grant Date.  Thereupon, the Grantee shall have all the rights of a Limited Partner of the Partnership with respect to the number of LTIP Class B Units specified above, as set forth in the 

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Partnership Agreement, subject, however, to the restrictions and conditions specified in Section 2 below.

2.    Restrictions and Conditions.

(a)    The records of the Partnership evidencing the LTIP Class B Units granted herein shall bear an appropriate legend, as determined by the Partnership in its sole discretion, to the effect that such LTIP Class B Units are subject to restrictions as set forth herein and in the Partnership Agreement.

(b)    LTIP Class B Units granted herein may not be sold, transferred, pledged, exchanged, hypothecated or otherwise disposed of by the Grantee prior to vesting.

(c)    Subject to the provisions of Section 4, any LTIP Class B Units subject to this Award that have not become vested on or before the date that the Grantee’s employment with the Company and its Affiliates terminates shall be forfeited as of the date that such employment terminates.

3.    Vesting of LTIP Class B Units.  The restrictions and conditions in Section 2 of this Agreement shall lapse with respect to the number of LTIP Class B Units specified below on the Vesting Dates specified below, so long as the Grantee remains an employee of the Company or an Affiliate (as defined in the Plan) from the Closing Date until such Vesting Date or Dates.

      Number of LTIP                
  Class B Units Vested            Vesting Dates

January 1, 2016
January 1, 2017
January 1, 2018
January 1, 2019
January 1, 2020

Subsequent to such Vesting Date or Dates, the LTIP Class B Units on which all restrictions and conditions have lapsed shall no longer be deemed restricted.

4.    Acceleration of Vesting in Special Circumstances.  All restrictions on all LTIP Class B Units subject to this Award shall be deemed waived by the Committee (as defined in the Plan) and all LTIP Class B Units granted hereby shall automatically become fully vested on the date specified below if the Grantee remains in the continuous employ of the Company or an Affiliate on such date:

(a)    the date that the Grantee’s employment with the Company and its Affiliates ends on account of the Grantee’s termination of employment by the Company without Cause (as defined below);

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(b)    the date that the Grantee’s employment with the Company and its Affiliates ends on account of the Grantee’s death or total and permanent disability (as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”));

(c)    a Control Change Date (as defined in the Plan); 

(d)    the date of the acquittal described below, if the Grantee’s employment with the Company and its Affiliates was ended on account of the Grantee’s termination of employment by the Company for Cause (as defined below) solely on the basis of the Grantee having been charged by the United States or a State or political subdivision thereof with conduct which is a felony under the laws of the United States or any State or political subdivision thereof and the Grantee is subsequently acquitted of the act or acts referred to in such charge; i.e., to the effect that the Grantee shall be deemed for purposes of this Agreement to have been terminated without Cause if the Grantee is subsequently acquitted of a felony charge following termination of employment based on that charge notwithstanding that the LTIP Class B Units may have been previously forfeited due to the termination of the Grantee’s employment for Cause based on such charge; or

(e)    the date that the Grantee’s employment with the Company and its Affiliates ends on account of the Grantee’s termination of employment by the Grantee for Good Reason (as defined in, and in accordance with the terms of, that certain Change-in-Control Severance Agreement entered into as of ___________, 20__ by and between the Company and the Grantee).

For purposes of the Award, the term “Cause” means that the Board concludes, in good faith and after reasonable investigation, that (i) the Grantee has been charged by the United States or a State or political subdivision thereof with conduct which is a felony under the laws of the United States or any State or political subdivision thereof; (ii) the Grantee engaged in conduct relating to the Company constituting material breach of fiduciary duty, willful misconduct (including acts of employment discrimination or sexual harassment) or fraud; (iii) the Grantee breached the Grantee’s obligations or covenants under Section 4 of the Grantee’s Change in Control Severance Agreement in any material respect; or (iv) the Grantee materially failed to follow a proper directive of the Board within the scope of the Grantee’s duties (which shall be capable of being performed by the Grantee with reasonable effort) after written notice from the Board specifying the performance required and the Grantee’s failure to perform within thirty days after such notice.  No act or failure to act on the Grantee’s part shall be deemed “willful” unless done, or omitted to be done, by the Grantee not in good faith or if the result thereof would be unethical or illegal.

5.    Merger-Related Action.  In contemplation of and subject to the consummation of a consolidation or merger or sale of all or substantially all of the assets of the Company in which outstanding common shares are exchanged for securities, cash, or other property of an unrelated corporation or business entity or in the event of a liquidation of the Company (in each case, a “Transaction”), the Board of Trustees of the Company, or the board of trustees or directors of any corporation assuming the obligations of the Company (the “Acquiror”), may, in its 

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discretion, take any one or more of the following actions, as to the outstanding LTIP Class B Units subject to this Award:  (i) provide that such LTIP Class B Units shall be assumed or equivalent awards shall be substituted, by the acquiring or succeeding entity (or an affiliate thereof), and/or (ii) upon prior written notice to the LTIP Class B Unitholders (as defined in the Partnership Agreement) of not less than 30 days, provide that such LTIP Class B Units shall terminate immediately prior to the consummation of the Transaction.  The right to take such actions (each, a “Merger-Related Action”) shall be subject to the following limitations and qualifications:  

(a)    if all LTIP Class B Units awarded to the Grantee hereunder are eligible, as of the time of the Merger-Related Action, for conversion into Common Units (as defined and in accordance with the Partnership Agreement) and the Grantee is afforded the opportunity to effect such conversion and receive, (A) in consideration for the Common Units into which the Grantee’s LTIP Class B Units shall have been converted, the same kind and amount of consideration as other holders of Common Units in connection with the Transaction, or (B) the kind and amount of consideration payable to holders of the number of common shares into which such Common Units could be exchanged (including the right to make elections as to the type of consideration), then Merger-Related Action of the kind specified in (i) or (ii) of the first paragraph of Section 5 above shall be permitted and available to the Company and the Acquiror;

(b)    if some or all of the LTIP Class B Units awarded to the Grantee hereunder are not, as of the time of the Merger-Related Action, so eligible for conversion into Common Units (in accordance with the Partnership Agreement), and the acquiring or succeeding entity is itself, or has a subsidiary which is organized as a partnership or limited liability company (consisting of a so-called “UPREIT” or other structure substantially similar in purpose or effect to that of the Company and the Partnership), then Merger-Related Action of the kind specified in clause (i) of this Section 5 above must be taken by the Acquiror with respect to all LTIP Class B Units subject to this Award which are not so convertible at the time, whereby all such LTIP Class B Units covered by this Award shall be assumed by the acquiring or succeeding entity, or equivalent awards shall be substituted by the acquiring or succeeding entity, and the acquiring or succeeding entity shall preserve with respect to the assumed LTIP Class B Units or any securities to be substituted for such LTIP Class B Units, as far as reasonably possible under the circumstances, the distribution, special allocation, conversion and other rights set forth in the Partnership Agreement for the benefit of the LTIP Class B Unitholders; and

(c)    if some or all of the LTIP Class B Units awarded to the Grantee hereunder are not, as of the time of the Merger-Related Action, so eligible for conversion into Common Units (in accordance with the Partnership Agreement), and after exercise of reasonable commercial efforts the Company or the Acquiror is unable to treat the LTIP Class B Units in accordance with Section 5(b), then Merger-Related Action of the kind specified in clause (ii) of this Section 5 above must be taken by the Company or the Acquiror, in which case such action shall be subject to a provision that the settlement of the terminated award of LTIP Class B Units which are not convertible into Common Units requires a payment of the same kind and amount of consideration payable in connection with the Transaction to a holder of the number of Common Units into which the LTIP Class B Units to be terminated could be converted or, if 

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greater, the consideration payable to holders of the number of common shares into which such Common Units could be exchanged (including the right to make elections as to the type of consideration) if the Transaction were of a nature that permitted a revaluation of the Grantee’s capital account balance under the terms of the Partnership Agreement, as determined by the Committee in good faith in accordance with the Plan.  

6.    Distributions.  Distributions on the LTIP Class B Units shall be paid currently to the Grantee in accordance with the terms of the Partnership Agreement.  The right to distributions set forth in this Section 6 shall be deemed a Dividend Equivalent Right for purposes of the Plan.  

7.    Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Agreement shall be subject to and governed by all the terms and conditions of the Plan.  Capitalized terms used in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

8.    Covenants.  The Grantee hereby covenants as follows:
    
(a)    So long as the Grantee holds any LTIP Class B Units, the Grantee shall disclose to the Partnership in writing such information as may be reasonably requested with respect to ownership of LTIP Class B Units as the Partnership may deem reasonably necessary to ascertain and to establish compliance with provisions of the Code applicable to the Partnership or to comply with requirements of any other appropriate taxing authority.

(b)    The Grantee hereby agrees to make an election under Section 83(b) of the Code with respect to the LTIP Class B Units awarded hereunder, and has delivered with this Agreement a completed, executed copy of the election form attached hereto as Annex B.  The Grantee agrees to file the election (or to permit the Partnership to file such election on the Grantee’s behalf) within thirty (30) days after the Grant Date with the IRS Service Center at which such Grantee files his or her personal income tax returns, and to file a copy of such election with the Grantee’s U.S. federal income tax return for the taxable year in which the LTIP Class B Units are awarded to the Grantee.

(c)    The Grantee hereby agrees that it does not have the current intention to dispose of the LTIP Class B Units subject to this Award within two years of receipt of such LTIP Class B Units.  The Partnership and the Grantee hereby agree to treat the Grantee as the owner of the LTIP Class B Units from the Grant Date.  The Grantee hereby agrees to take into account the distributive share of Partnership income, gain, loss, deduction, and credit associated with the LTIP Class B Units in computing the Grantee’s income tax liability for the entire period during which the Grantee has the LTIP Class B Units.

(d)    The Grantee hereby recognizes that the IRS has proposed regulations under Sections 83 and 704 of the Code that may affect the proper treatment of the LTIP Class B Units for federal tax purposes.  In the event that those proposed regulations are finalized, the Grantee hereby agrees to cooperate with the Partnership in amending this Agreement and the 

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Partnership Agreement, and to take such other action as may be required, to conform to such regulations. 

(e)    The Grantee hereby recognizes that the U.S. Congress is considering legislation that could change the federal tax consequences of owning and disposing of LTIP Class B Units.

9.    Transferability.  This Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution, without the prior written consent of the Company.

10.    Amendment.  The Grantee acknowledges that the Plan may be amended or terminated in accordance with Article XV thereof and that this Agreement may be amended or canceled by the Committee, on behalf of the Partnership, for the purpose of satisfying changes in law or for any other lawful purpose, provided that no such action shall adversely affect the Grantee’s rights under this Agreement without the Grantee’s written consent.  The provisions of Section 5 of this Agreement applicable to the termination of the LTIP Class B Units covered by this Award in connection with a Transaction (as defined in Section 5 of this Agreement) shall apply, mutatis mutandi to amendments, discontinuance or cancellation pursuant to this Section 10 or the Plan.

11.    No Obligation to Continue Employment.  Neither the Company nor any affiliate of the Company is obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any affiliate of the Company to terminate the employment of the Grantee at any time.

12.    Notices.  Notices hereunder shall be mailed or delivered to the Partnership at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Partnership or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

13.    Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, applied without regard to conflict of law principles.  The parties agree that any action or proceeding arising directly, indirectly or otherwise in connection with, out of , related to or from this Agreement, any breach hereof or any action covered hereby, shall be resolved within the State of Delaware and the parties hereto consent and submit to the jurisdiction of the federal and state courts located within the District of Delaware.  The parties hereto further agree that any such action or proceeding brought by either party to enforce any right, assert any claim, obtain any relief whatsoever in connection with this Agreement shall be brought by such party exclusively in federal or state courts located within the District of Delaware.

[Remainder of page left blank intentionally]

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The foregoing LTIP Class B Unit Vesting Agreement is hereby agreed to by the Company, the Partnership and the Grantee on the date shown below.

Date:      December 13, 2013                    PEBBLEBROOK HOTEL TRUST
  a Maryland real estate investment trust

By:    _                    
Name:    _         ___________        
Title:    
                            

PEBBLEBROOK HOTEL, L.P.
 a Delaware limited partnership

           By:  PEBBLEBROOK HOTEL TRUST,
          general partner

By:    _                    
Name:    _         ___________        
Title:    
                            

_                            
Grantee

Grantee’s name and address:

________________________________

________________________________

________________________________10.2 Form of Performance Share Agmt

Exhibit 10.2

PEBBLEBROOK HOTEL TRUST
Performance Unit Retention Award Agreement for Executive Officers

THIS PERFORMANCE UNIT AWARD AGREEMENT (this “Agreement”), dated as of the 13th day of December 2013, governs the Performance Unit Retention Award granted by PEBBLEBROOK HOTEL TRUST, a Maryland real estate investment trust (the “Company”), to [______________] (the “Participant”), in accordance with and subject to the provisions of the Company’s 2009 Equity Incentive Plan, as amended and restated (the “Plan”).  A copy of the Plan has been made available to the Participant.  All terms used in this Agreement that are defined in the Plan have the same meaning given them in the Plan.
1.Grant of Performance Unit Award.  In accordance with the Plan, and effective as of December 13, 2013 (the “Date of Grant”), the Company granted to the Participant, subject to the terms and conditions of the Plan and this Agreement, a Performance Unit Retention Award (the “Award”) with respect to [____________] Performance Units, of which [__________] Performance Units are referred herein as the “Target Performance Units”.  The Award represents the right to receive one Common Share for each Performance Unit that is earned in accordance with, and subject to, the terms of this Agreement.  Subject to the terms and conditions of this Agreement, the number of Performance Units that may be earned may range from a minimum of 0% of the Target Performance Units to a maximum of 200% of the Target Performance Units.  The Award includes Dividend Equivalent Rights as described in Section 6.
2.Performance Vesting.  The Participant shall earn Performance Units, i.e., the Performance Units shall become vested and nonforfeitable (“Vested”), as of January 1 immediately following the end of the applicable Measurement Period to the extent provided in paragraphs 2(a) and 2(b) as determined by the Committee, provided that the Participant remains employed by the Company or an Affiliate from the Date of Grant until the end of the applicable Measurement Period.  No more than 40% of the Target Performance Units can become Vested in any Measurement Period pursuant to the calculations set forth in paragraphs 2(a) and 2(b) below.  This Agreement shall be interpreted in a manner consistent with the examples of the calculations set forth on Exhibit A attached hereto.
(a)Relative TSR Measurement.  The Participant’s interest in a number of Performance Units, not to exceed 20% of the Target Performance Units in any Measurement Period, shall become Vested based on Company TSR relative to Peer Group TSR as set forth in this paragraph 2(a).  The number of Performance Units, if any, which shall become Vested under this paragraph 2(a) shall in no event exceed 100% of the Target Performance Units for all Measurement Periods or be less than zero and shall for each Measurement Period be calculated according to the following mathematical formula:
(10% + 1.67 * [Company TSR – Peer Group TSR]) * (the Target Performance Units).

For the avoidance of doubt, in each Measurement Period:
		
	i.
	if Company TSR is less than Peer Group TSR by 600 or more basis points, then none of the Performance Units shall become Vested under this paragraph 2(a); and

		
	ii.
	if Company TSR exceeds Peer Group TSR by 600 basis points or more, then a number of Performance Units equal to 20% of the Target Performance Units shall become Vested under this paragraph 2(a).

(b)Absolute TSR Measurement.  The Participant’s interest in a number of Performance Units, not to exceed 20% of the Target Performance Units in any Measurement Period, shall become Vested based on Company TSR as set forth in this paragraph 2(b).  The number of Performance Units, if any, which shall become Vested under this paragraph 2(b) shall in no event exceed 100% of the Target Performance Units for all Measurement Periods or be less than zero and shall for each Measurement Period be calculated according to the following mathematical formula:
(10% + 2.5 * [Company TSR – 9% 1]) * (the Target Performance Units).
For the avoidance of doubt, in each Measurement Period:
		
	i.
	if Company TSR is more than 400 basis points less than 9% 1, then none of the Performance Units shall become Vested under this paragraph 2(b); and

		
	ii.
	if Company TSR is more than 400 basis points more than 9% 1, then a number of Performance Units equal to 20% of the Target Performance Units shall become Vested under this paragraph 2(b).

3.Termination of Employment.  Except as provided in paragraphs 3(a), 3(b), 3(c), 3(d) and 3(e), the Participant’s interest in all of the Performance Units that have not Vested on or before the date on which the Participant’s employment with the Company or an Affiliate terminates or is terminated will be forfeited on the date of such termination.
(a)    Change in Control.  If a Control Change Date occurs before January 1, 2020, and if the Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until the Control Change Date, the Participant shall be Vested in 20% of the Target Performance Units for each of the then-current Measurement Period and any remaining Measurement Periods.

________________
1 This threshold shall be compounded annually.

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(b)    Death or Disability.  If the Participant’s employment by the Company or its Affiliates terminates before January 1, 2020, on account of death or disability (as defined in Code section 22(e)(3)) and if the Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until the date of such termination, the Participant shall be Vested in 20% of the Target Performance Units for each of the then-current Measurement Period and any remaining Measurement Periods.
(c)    Termination of Employment Without Cause.  If the Participant’s employment by the Company or its Affiliates ends before January 1, 2020, on account of a termination of the Participant’s employment by the Company or an Affiliate without Cause and if the Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until the date of such termination, the Participant shall be Vested in 20% of the Target Performance Units for each of the then-current Measurement Period and any remaining Measurement Periods.
(d)    Termination of Employment for Cause.  If the Participant’s employment by the Company or its Affiliates ends before January 1, 2020, on account of a termination of the Participant’s employment by the Company or an Affiliate for Cause and if the Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until the date of such termination, the Participant’s interest in all of the Performance Units that have not earlier Vested shall be forfeited; provided, however, that in the event the Participant is terminated for Cause as defined in paragraph (7)(a)(i) and the Participant is subsequently acquitted of the act or acts referred to therein, then the Participant shall be deemed for purposes of this Agreement to have been terminated without Cause as of the date of the termination and the Participant shall be Vested in the number of Performance Units determined in accordance with paragraph 3(c) notwithstanding that a number of Performance Units may have been previously forfeited due to the termination of the Participant’s employment for Cause based on such charge.
(e)    Termination of Employment by the Participant for Good Reason.  If the Participant’s employment by the Company or its Affiliates ends before January 1, 2020, on account of a termination of the Participant’s employment by the Participant for Good Reason (as defined in, and in accordance with the terms of, that certain Change-in-Control Severance Agreement entered into as of [___________, 20__] by and between the Company and the Participant) and if the Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until the date of such termination, the Participant shall be Vested in 20% of the Target Performance Units for each of the then-current Measurement Period and any remaining Measurement Periods.
4.    Transferability.  The Performance Units evidenced by this Agreement cannot be transferred; provided, however, that, subject to the requirements of applicable securities laws, the Participant’s rights in the Performance Units evidenced by this Agreement may be transferred by will or the laws of descent and distribution. 
5.    Settlement of Performance Units.  As soon as practicable after the end of each Measurement Period, but in all events no later than March 15 of the year following the end of 

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such Measurement Period, the Committee shall determine and certify the extent to which the performance objectives described herein have been achieved and the number of Performance Units that have become Vested for such Measurement Period (which may only be greater than 40% of the Target Performance Units pursuant to Section 3).  As soon as practicable after the Committee’s certification in accordance with the preceding sentence, but in all events no later than March 15 of the year following the end of each Measurement Period, the Company shall issue Common Shares to the Participant in a number equal to the number of Performance Units that the Committee certified have become Vested; provided, however, that only whole Common Shares shall be issued and a cash payment shall be issued in settlement of any fractional Common Share that the Participant otherwise is entitled to receive.
6.    Dividend Equivalent Rights.  No later than March 15 following the end of a Measurement Period, the Company shall make a single sum cash payment to the Participant equal to the cumulative amount of dividends paid during such Measurement Period on the number of Common Shares equal to the number of Performance Units that the Committee certified have become Vested.  No cash amount will be paid as Dividend Equivalent Rights with respect to Performance Units that do not become Vested.
7.    Definitions.  For purposes of this Agreement, the terms Cause, Company TSR, Measurement Period and Peer Group TSR shall have the following meanings:
(a)    “Cause” means that the Board concludes, in good faith and after reasonable investigation, that: (i) the Participant has been charged by the United States or a State or political subdivision thereof with conduct which is a felony under the laws of the United States or any State or political subdivision thereof; (ii) the Participant engaged in conduct relating to the Company constituting material breach of fiduciary duty, willful misconduct (including acts of employment discrimination or sexual harassment) or fraud; (iii) the Participant breached in any material respect the Participant’s obligations or covenants, if any, restricting the recruitment of employees of the Company or an Affiliate to work for another employer set forth in an agreement with the Company; or (iv) the Participant materially failed to follow a proper directive of the Board within the scope of the Participant’s duties (which shall be capable of being performed by the Participant with reasonable effort) after written notice from the Board specifying the performance required and the Participant’s failure to perform within 30 days after such notice.  For this purpose, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith or if the result thereof would be unethical or illegal.
(b)    “Company TSR” means the average annual total shareholder return (Common Share price appreciation/depreciation during the applicable Measurement Period plus dividends paid on Common Shares during the applicable Measurement Period) (the “TSR”) of the Company over the term of the applicable Measurement Period, expressed as a percentage.  For purposes of calculating Common Share price appreciation/depreciation, the Common Share prices for the beginning and end of each period in the applicable Measurement Period are to be determined by averaging the closing prices for Common Shares as reported on the New York Stock Exchange (the “NYSE”) or other applicable principal securities exchange in which 

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Common Shares are traded for each of the trading days during the last thirty calendar days preceding the start or end, as applicable, of the applicable Measurement Period. For purposes of calculating Company TSR, dividends for the period shall be treated as reinvested. If, before January 1, 2020, (A) a Change in Control occurs, (B) the Participant’s employment by the Company or its Affiliates terminates on account of death or disability, or (C) the Participant’s employment by the Company or its Affiliates terminates without Cause as contemplated by paragraph 3(c), the TSR of the Company for the period from the most recent fiscal year end to the end of the applicable Measurement Period shall be annualized for purposes of calculating Company TSR.
(c)    “Measurement Period” means the first, second, third, fourth or fifth, as applicable, of the five time periods beginning on December 13, 2013 and ending on: (i) December 31, 2015,  (ii) December 31, 2016, (iii) December 31, 2017, (iv) December 31, 2018 and (v) December 31, 2019, respectively; provided, however, that in the event that during such time period (A) a Change in Control occurs, (B) the Participant’s employment by the Company or its Affiliates terminates on account of death or disability, or (C) the Participant’s employment by the Company or its Affiliates terminates without Cause as contemplated by paragraph 3(c), the Measurement Period shall end on the date of the event described in clause (A), (B) or (C) above.
(d)    “Peer Group TSR” means the arithmetic average of the TSRs (each as determined using data provided by Bloomberg) of Ashford Hospitality Trust, Chesapeake Lodging Trust, DiamondRock Hospitality Company, Host Hotel & Resorts, Inc., LaSalle Hotel Properties, Strategic Hotels & Resorts, Inc. and Sunstone Hotel Investors, Inc. (the “Peer Group”) over the term of the applicable Measurement Period, expressed as a percentage. If the common stock of any of these companies ceases to be publicly traded during the applicable Measurement Period, such company shall be excluded from the calculation of Peer Group TSR for any year or quarter during the applicable Measurement Period in which its common stock is not publicly traded.  For purposes of calculating common stock price appreciation/depreciation, the common stock prices for the beginning and end of each period in the applicable Measurement Period are to be determined by averaging the closing prices for the Peer Group members’ common stock as reported on the NYSE or other applicable principal securities exchange in which the Peer Group members’ common stock is traded for each of the trading days during the last thirty calendar days preceding the start or end, as applicable, of the applicable Measurement Period.  For purposes of calculating Company TSR, dividends for the period shall be treated in the same manner as described in paragraph 5(c) with regard to the treatment of dividends when calculating Company TSR.  If, before January 1, 2020, (A) a Change in Control occurs, (B) the Participant’s employment by the Company or its Affiliates terminates on account of death or disability, or (C) the Participant’s employment by the Company or its Affiliates terminates without Cause as contemplated by paragraph 3(c), the arithmetic average of the TSRs of the Peer Group for the period from the most recent fiscal year end to the end of the applicable Measurement Period shall be annualized for purposes of calculating Peer Group TSR.
8.    Shareholder Rights.  Participant shall not have any rights as a shareholder of the Company with respect to the Performance Units.  Upon the issuance of Common Shares in 

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settlement of Performance Units that have Vested, the Participant shall have all of the rights of a shareholder of the Company with respect to those shares, including the right to vote the shares and to receive dividends on the shares.
9.    No Right to Continued Employment.  The grant of the Award does not give the Participant any rights with respect to continued employment by the Company or an Affiliate.
10.    Governing Law.  This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Maryland without reference to principles of conflict of laws.
11.    Conflicts.  The Participant agrees that in the event of any conflict between the provisions of the Plan as in effect on the Date of Grant and this Agreement, the provisions of the Plan shall govern.  All references herein to the Plan shall mean the Plan as in effect on the Date of Grant.
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 of the Plan.
13.    Binding Effect.  Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon the Participant and the Participant’s successors in interest and the Company and any successors of the Company.
[Signatures appear on following page.]

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IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement as of the date first set forth above.

PEBBLEBROOK HOTEL TRUST                [NAME OF PARTICIPANT]

 _________________________                  _________________________

By:        Name:    

Title:    

	
							
	EXHIBIT A - ILLUSTRATIVE EXAMPLES  - Per Measurement Period

	assuming an award of 100 Target Performance Units (the "TPUs")

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	I. Relative TSR Measurement (paragraph 2(a))
	 
	 

	Formula: Vested TPUs= TPUs x (10% + (1.67 x (Company TSR - Peer Group TSR))

	subject to a maximum of 20% of the TPUs and a minimum of 0.

	 
	 
	 
	 
	 
	 
	 

	Example A
	 
	 
	 
	 
	 

	Peer Group TSR: 5%
	 
	 
	 
	 

	Company TSR: 7%
	 
	 
	 
	 

	=
	TPUs x (10% + (1.67 x (Company TSR - Peer Group TSR))

	=
	100 x (10% + (1.67 x (7% - 5%))

	=
	100 x (10% + 3.34%)

	=
	100 x 13.34%

	=
	13.34 Performance Units à Common Shares + A cash amount equal to 0.34 Common Shares

	 
	 
	 
	 
	 
	 
	 

	Example B
	 
	 
	 
	 
	 

	Peer Group TSR: 5%
	 
	 
	 
	 

	Company TSR: 5%
	 
	 
	 
	 

	=
	TPUs x (10% + (1.67 x (Company TSR - Peer Group TSR))

	=
	100 x (10% + (1.67 x (5% - 5%))

	=
	100 x (10% + 0%)

	=
	100 x 10%

	=
	10 Performance Units à Common Shares

	 
	 
	 
	 
	 
	 
	 

	Example C
	 
	 
	 
	 
	 

	Peer Group TSR: -1%
	 
	 
	 
	 

	Company TSR: -3%
	 
	 
	 
	 

	=
	TPUs x (10% + (1.67 x (Company TSR - Peer Group TSR))

	=
	100 x (10% + (1.67 x (-3% -  -1%))

	=
	100 x (10% + 3.34%)

	=
	100 x 6.66%

	=
	6.66 Performance Units à Common Shares + A cash amount equal to 0.66 Common Shares

	
																								
	 
	Relative TSR (paragraph 2(a))

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	Company TSR

	 
	 
	 
	-3.00
	 %
	 
	-1.00
	 %
	 
	0.00
	%
	 
	3.00
	%
	 
	5.00
	%
	 
	7.00
	%
	 
	10.00
	%

	P
e
e
r

T
S
R
	-3.00
	 %
	 
	10
	

	 
	13
	

	 
	15
	

	 
	20
	

	 
	20
	

	 
	20
	

	 
	20
	

	-1.00
	 %
	 
	6
	

	 
	10
	

	 
	11
	

	 
	16
	

	 
	20
	

	 
	20
	

	 
	20
	

	0.00
	 %
	 
	5
	

	 
	8
	

	 
	10
	

	 
	15
	

	 
	18
	

	 
	20
	

	 
	20
	

	3.00
	 %
	 
	—
	

	 
	3
	

	 
	5
	

	 
	10
	

	 
	13
	

	 
	16
	

	 
	20
	

	5.00
	 %
	 
	—
	

	 
	—
	

	 
	1
	

	 
	6
	

	 
	10
	

	 
	13
	

	 
	18
	

	7.00
	 %
	 
	—
	

	 
	—
	

	 
	—
	

	 
	3
	

	 
	6
	

	 
	10
	

	 
	15
	

	10.00
	 %
	 
	—
	

	 
	—
	

	 
	—
	

	 
	—
	

	 
	1
	

	 
	5
	

	 
	10
	

	
							
	II. Absolute TSR Measurement (paragraph 2(b))
	 
	 

	Formula: Vested TPUs= TPUs x (10% + (2.5 x (Company TSR - 9.0%))

	subject to a maximum of 20% of the TPUs and a minimum of 0.

	 
	 
	 
	 
	 
	 
	 

	Example A
	 
	 
	 
	 
	 

	Company TSR: 13%
	 
	 
	 
	 
	 

	=
	TPUs x (10% + (2.5 x (Company TSR - 9%))

	=
	100 x (10% + (2.5 x (13% - 9%))

	=
	100 x (10% + (2.5 x 4%)

	=
	100 x (10% + 10%)

	=
	20 Performance Units à 20 Common Shares 

	 
	 
	 
	 
	 
	 
	 

	Example B
	 
	 
	 
	 
	 

	Company TSR: 9%
	 
	 
	 
	 
	 

	=
	TPUs x (10% + (2.5 x (Company TSR - 9%))

	=
	100 x (10% + (2.5 x (9% - 9%))

	=
	100 x (10% + (2.5 x 0%)

	=
	100 x 10%

	=
	10 Performance Units à 10 Common Shares 

	 
	 
	 
	 
	 
	 
	 

	Example C
	 
	 
	 
	 
	 

	Company TSR: 6%
	 
	 
	 
	 
	 

	=
	TPUs x (10% + (2.5 x (Company TSR - 9%))

	=
	100 x (10% + (2.5 x (6% - 9%))

	=
	100 x (10% + (2.5 x -3%)

	=
	100 x (10%  - 7.5%)

	=
	100 x 2.5%

	=
	2.5 Performance Units à 2 Common Shares + A cash amount equal to 0.5 Common Shares

	
			
	Absolute TSR (paragraph 2(b))

	Company TSR
	 
	Units Vested

	<5.000%
	 
	—

	5.000%
	 
	—

	5.500%
	 
	1

	6.000%
	 
	2

	6.500%
	 
	3

	7.000%
	 
	5

	 
	 
	 

	8.000%
	 
	7

	8.100%
	 
	7

	8.150%
	 
	7

	 
	 
	 

	9.000%
	 
	10

	 
	 
	 

	10.000%
	 
	12

	11.000%
	 
	15

	12.000%
	 
	17

	13.000%
	 
	20

	>13.000%
	 
	20

Percentage of TPUs that become Vested per Measurement Period based on calculations pursuant to paragraphs 2(a) and 2(b) under various hypothetical results of Relative TSR Measurement and Absolute TSR Measurement.
	
																								
	 
	Relative TSR (paragraph 2(a))

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	Company TSR

	 
	 
	 
	-3.00
	 %
	 
	-1.00
	 %
	 
	0.00
	%
	 
	3.00
	%
	 
	5.00
	%
	 
	7.00
	%
	 
	10.00
	%

	P
e
e
r

T
S
R
	-3.00
	 %
	 
	10.0
	 %
	 
	13.0
	 %
	 
	15.0
	%
	 
	20.0
	%
	 
	20.0
	%
	 
	20.0
	%
	 
	20.0
	%

	-1.00
	 %
	 
	6.0
	 %
	 
	10.0
	 %
	 
	11.0
	%
	 
	16.0
	%
	 
	20.0
	%
	 
	20.0
	%
	 
	20.0
	%

	0.00
	 %
	 
	5.0
	 %
	 
	8.0
	 %
	 
	10.0
	%
	 
	15.0
	%
	 
	18.0
	%
	 
	20.0
	%
	 
	20.0
	%

	3.00
	 %
	 
	0.0
	 %
	 
	3.0
	 %
	 
	5.0
	%
	 
	10.0
	%
	 
	13.0
	%
	 
	16.0
	%
	 
	20.0
	%

	5.00
	 %
	 
	0.0
	 %
	 
	0.0
	 %
	 
	1.0
	%
	 
	6.0
	%
	 
	10.0
	%
	 
	13.0
	%
	 
	18.0
	%

	7.00
	 %
	 
	0.0
	 %
	 
	0.0
	 %
	 
	0.0
	%
	 
	3.0
	%
	 
	6.0
	%
	 
	10.0
	%
	 
	15.0
	%

	10.00
	 %
	 
	0.0
	 %
	 
	0.0
	 %
	 
	0.0
	%
	 
	0.0
	%
	 
	1.0
	%
	 
	5.0
	%
	 
	10.0
	%

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Absolute TSR (paragraph 2(b))
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	Company TSR
	 
	% Units Vested
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	<5.000%
	 
	0.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	5.000%
	 
	0.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	5.500%
	 
	1.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	6.000%
	 
	2.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	6.500%
	 
	3.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	7.000%
	 
	5.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	8.000%
	 
	7.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	8.100%
	 
	7.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	8.150%
	 
	7.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	9.000%
	 
	10.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	10.000%
	 
	12.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	11.000%
	 
	15.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	12.000%
	 
	17.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	13.000%
	 
	20.00%
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	>13.000%
	 
	20.00%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00224-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00224-of-00352.parquet"}]]