Apple Hospitality REIT Inc

The performance goals upon which the payment or vesting of a Performance-Based Award to a Covered Employee may be conditioned may include, but shall not be limited to, the following Performance Measures, with or without adjustment (including pro forma adjustments) and in any combination or derivation thereof:

(a)

Funds from operations, including modified or adjusted funds from operations and FFO per share;

(b)

RevPar, including same-store or comparable RevPar;

(c)

net earnings or net income;

(d)

operating earnings;

(e)

pretax earnings;

(f)

earnings per share;

(g)

share price, including growth measures and relative and/or total stockholder return;

(h)

earnings before interest and taxes;

(i)

earnings before interest, taxes, depreciation and/or amortization;

(j)

earnings before interest, taxes, depreciation and/or amortization as adjusted to exclude any one or more of the following:

•

stock-based compensation expense;

•

income from discontinued operations;

•

gain on cancellation of debt;

•

debt extinguishment and related costs;

•

restructuring, separation and/or integration charges and costs;

•

reorganization and/or recapitalization charges and costs;

•

impairment charges;

•

merger-related events;

•

gain or loss related to investments;

•

sales and use tax settlement; and

•

gain on non-monetary transaction.

(k)

sales or revenue growth;

(l)

gross or operating margins;

(m)

return measures, including return on assets, capital, investment, equity, sales or revenue;

(n)

cash flow, including:

•

operating cash flow;

•

free cash flow, defined as earnings before interest, taxes, depreciation and/or amortization (as adjusted to exclude any one or more of the items that may be excluded pursuant to the Performance Measure specified in clause (h) above) less capital expenditures;

•

levered free cash flow, defined as free cash flow less interest expense;

•

cash flow return on equity; and

•

cash flow return on investment;

(o)

productivity ratios;

(p)

expense targets;

(q)

capital expenditures;

(r)

balance sheet management;

(s)

market share;

(t)

financial ratios as provided in credit agreements of the Company and its subsidiaries;

(u)

working capital targets;

(v)

completion of acquisitions of businesses or companies;

(w)

completion of divestitures and asset sales;

(x)

customer satisfaction; or

(y)

any combination of the foregoing business criteria or any other criteria determined by the Committee, including any financial reporting measures contained in the Company’s public filings.

Performance under any of the foregoing Performance Measures (a) may be used to measure the performance of (i) the Company and its Subsidiaries and other Affiliates as a whole, (ii) the Company, any Subsidiary, and/or any other Affiliate or any combination thereof, or (iii) any one or more business units of the Company, any Subsidiary, and/or any other Affiliate, as the Committee, in its sole discretion, deems appropriate and (b) may be compared to the performance of one or more other companies or one or more published or special indices designated or approved by the Committee for such comparison, as the Committee, in its sole discretion, deems appropriate. In addition, the Committee, in its sole discretion, may select performance under the Performance Measure specified in clause (e) above for comparison to performance under one or more stock market indices designated or approved by the Committee. The Committee also shall have the authority to provide for accelerated vesting of any Performance-Based Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Section 14.

14.6.4