CHANGE IN CONTROL AND TERMINATION AGREEMENT

Exhibit 10.21

CHANGE IN CONTROL AND TERMINATION AGREEMENT

THIS AMENDED AND RESTATED CHANGE IN CONTROL AND TERMINATION AGREEMENT (the "Agreement"), to be effective as of the 1 ^st day of January 2007, is made and entered into by and between EQUITY INNS SERVICES, INC. (the "Company"), a corporation organized and existing under the laws of the State of Tennessee, EQUITY INNS, INC. (the "Parent"), a corporation organized and existing under the laws of the State of Tennessee, and Phillip H. McNeill, Sr., (the "Executive"). This amended and restated agreement supersedes all previous employment agreements with the Executive.

R E C I T A L S :

The Company provides management services to the Parent pursuant to a management services agreement dated as of December 30, 1994.

The Company and the Parent acknowledge that Executive’s contributions to the past and future growth and success of the Company and the Parent have been and will continue to be substantial. As a wholly-owned subsidiary of a publicly held corporation, the Company recognizes that there exists a possibility of a Change in Control (as defined herein) of the Company or its Parent. The Company and the Parent also recognize that the possibility of such a Change in Control may contribute to uncertainty on the part of senior management and may result in the departure or distraction of senior management from their operating responsibilities.

Outstanding management of the Company is always essential to advancing the best interests of the Company’s and the Parent’s shareholders. In the event of a threat or occurrence of a bid to acquire or change control of the Parent or to effect a business combination, it is particularly important that the Company’s and the Parent’s businesses be continued with a minimum of disruption. The Company and the Parent believe that the objective of securing and retaining outstanding management will be achieved if the Company’s key management employees are given assurances of employment security so they will not be distracted by personal uncertainties and risks created by such circumstances.

NOW, THEREFORE, in consideration of the mutual covenants and obligations herein and the compensation the Parent and the Company, jointly and severally, agree herein to pay to the Executive, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parent, the Company and the Executive agree as follows:

ARTICLE 1.     TERM; CERTAIN DEFINITIONS .

1.1   Term . This Agreement is effective from the date of its execution by the Company ("Effective Date") for a term of three years (the "Initial Term"). This Agreement automatically continues in effect from year to year after expiration of the Initial Term unless the Company notifies the Executive in writing ninety (90) days before any anniversary of the Effective Date following the Initial Term that the Agreement will terminate as of that anniversary date. Notwithstanding the foregoing, no notice of termination of this Agreement

under the preceding sentence shall be effective during an Employment Period as defined in section 2.1 below.

1.2   Certain Definitions . As used in this Agreement:

(a)   Acquiring Person means that a Person, considered alone or together with all Control Affiliates and Associates of that Person, is or becomes directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing at least twenty percent (20%) of (i) the Parent’s then outstanding securities entitled to vote generally in the election of the Parent’s Board; or (ii) the Company’s then outstanding securities entitled to vote generally in the election of the Company’s Board.

(b)   Annual Base Salary means the Executive’s gross annual salary before any taxes, deductions, exclusions or any deferrals or contributions under any plan or program of the Company or the Parent, but excluding bonuses, incentive compensation, employee benefits or any non-salary form of compensation (determined without regard to any reduction in Annual Base Salary that results in Executive’s voluntary termination with Good Reason, under sections 1.2(n) and 2.3).

(c)   Associate , with respect to any Person, is defined in Rule 12b-2 under the Exchange Act; provided , however , that an Associate shall not include the Parent or a majority-owned subsidiary of the Parent.

(d)   Bonus means the Executive’s bonus or other similar payment from the Company or the Parent, whether paid in cash or shares of the Parent’s common stock or otherwise, that is based on the performance of the Company, the Parent, or the Executive during a fiscal year or years, even if paid after the close of the fiscal year. The term "Bonus" shall include, without limitation, for 1996, restricted stock awards granted in 1996 in lieu of amounts paid under the bonus pool (which awards shall be deemed to have a value, solely for this purpose, equal to the Fair Market Value on the date of grant of all shares subject to the award, whether or not such shares were vested on the date of grant); and for 1997, amounts paid under the Company’s annual bonus pool.

(e)   "Cause," means (i) willful, deliberate and continued failure by the Executive (other than for reason of mental or physical illness or Disability) to perform his duties as established by the Company’s Board, or fraud or dishonesty in connection with such duties, in either case, if such conduct has a materially detrimental effect on the business operations of the Company; (ii) a material breach by the Executive of his fiduciary duties of loyalty or care to the Company or the Parent; (iii) conviction of any crime (or upon entering a plea of guilty or nolo contendere to a charge of any crime) constituting a felony; (iv) misappropriation of funds or property; or (v) willful, flagrant, deliberate and repeated infractions of material published policies and regulations of the Company of which the Executive has actual knowledge.

(f)   Change in Control means (i) a Person is or becomes an Acquiring Person; (ii) holders of the securities of the Parent entitled to vote thereon approve any agreement with a Person (or, if such approval is not required by applicable law and is not solicited by the Parent, the closing of such an agreement) that involves the transfer of at least fifty percent (50%) of the Parent’s and its subsidiaries’ total assets on a consolidated basis, as reported in the Parent’s consolidated financial statements filed with the Securities and Exchange Commission; (iii) holders of the securities of the Parent entitled to vote thereon approve a transaction (or, if such approval is not required by applicable law and is not solicited by the Parent, the closing of such a transaction) pursuant to which the Parent will undergo a merger, consolidation, or statutory share exchange with a Person, regardless of whether the Parent is intended to be the surviving or resulting entity after the merger, consolidation, or statutory share exchange, other   than a transaction that results in the voting securities of the Parent carrying the right to vote in elections of persons to the Parent’s Board outstanding immediately prior to the closing of the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 66 2/3% (sixty-six and two-thirds percent) of the Parent’s voting securities carrying the right to vote in elections of persons to the Parent’s Board, or such securities of such surviving entity, outstanding immediately after the closing of such transaction; (iv) the Continuing Directors cease for any reason to constitute a majority of the Parent’s Board; (v) holders of the securities of the Parent entitled to vote thereon approve a plan of complete liquidation of the Parent or an agreement for the sale or liquidation by the Parent or its subsidiaries of substantially all of the assets of the Parent and its subsidiaries (or, if such approval is not required by applicable law and is not solicited by the Parent, the commencement of actions constituting such a plan or the closing of such an agreement); or (vi) the Parent’s Board adopts a resolution to the effect that, in its judgment, as a consequence of any one or more transactions or events or series of transactions or events, a Change in Control of the Company or the Parent has effectively occurred. The Parent’s Board shall be entitled to exercise its sole and absolute discretion in adopting any such resolution pursuant to subparagraph (vi) above and in determining whether or not any such transaction(s) or event(s) might be deemed, individually or collectively, to constitute a Change in Control of the Company or the Parent.

(g)   Company’s Board means the Board of Directors of the Company.

(h)   Continuing Director means any member of the Parent’s Board, while a member of the Parent’s Board and (i) who was a member of the Parent’s Board on the date hereof or (ii) whose nomination for or election to the Parent’s Board was recommended or approved by a majority of the Continuing Directors.

(i)   Control Affiliate , with respect to any Person, means an affiliate as defined in Rule 12b-2 under the Exchange Act.

(j)   Control Change Date means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the "Control Change Date" is the date of the last of such transactions.

(k)   Disability means a complete physical or mental inability, confirmed by an independent licensed physician, to perform substantially all of the services required of an employee in Executive’s position with the Company immediately before Executive first became unable to perform those services, that continues for a period of two hundred forty (240) consecutive days, provided that the Company has given advance written notice to Executive of its determination of such Disability, and Executive has not resumed performance of such services within thirty (30) days of such notice.

(l)   Exchange Act means the Securities Exchange Act of 1934, as amended.

(m)   Fair Market Value has the same meaning given that term in the Parent’s 1994 Stock Incentive Plan, as amended and in effect from time to time.

(n)   Good Reason means the Executive’s resignation from the Company’s employment on account of one or more of the following events:

(i)   the failure by the Parent’s Board or the Company’s Board (as applicable) to reelect the Executive to Executive’s current position with the Company and the Parent (as of the Control Change Date), provided the Executive elects to leave the Company’s or Parent’s employment within six (6) months of such failure to so reelect or reappoint the Executive;

(ii) a material diminution by the Parent’s Board or the Company’s Board (as applicable) of the duties, functions and responsibilities of the Executive as the Chairman of the Board of the Parent without his consent within six (6) months of such diminution of duties, responsibilities or functions; provided, however, that the Parent, the Company and the Executive agree that Good Reason will exist under this section 1.2(ii) solely because the Executive continues to have the same duties, functions and responsibilities as in effect immediately before the Change in Control but for an entity that does not have common stock or shares that are publicly traded.

(iii) the failure of the Company or the Parent to permit the Executive to exercise such responsibilities as are consistent with the Executive’s position and are of such a nature as are usually associated with such offices of a corporation engaged in substantially the same business as the Company or the Parent;

(iv)   the Company’s or the Parent’s causing the Executive to relocate his employment more than fifty (50) miles from Memphis, Tennessee, without the consent of the Executive;

(v)   the Parent’s or the Company’s failure to make (or the Parent’s failure to cause the Company to make) a payment when due to the Executive;

(vi)   the Company’s reduction, during the Employment Period, of the Executive’s (A) Annual Base Salary, as such may be increased from time to time after the date of this Agreement; (B) Bonus, such that the aggregate threshold, target, or maximum Bonus projected for Executive for a fiscal year are lower than the greater of (1) the aggregate threshold, target, or maximum Bonus, respectively, projected for the Executive for the immediately preceding fiscal year or (2) the aggregate threshold, target, or maximum Bonus, respectively, projected most recently prior to the Employment Period for the Executive; (C) employee welfare, fringe or pension benefits, other than reductions determined to be necessary to comply with the Employee Retirement Income Security Act of 1974, as amended, or to retain the tax-qualified or tax-favored status of the benefit under the Code, which determination shall be made by the Parent’s Board in good faith or (D) incentive compensation (other than Bonus levels that are subject to restrictions on reductions under section 1.2(n)(vi)(B)) such that the aggregate threshold, target or maximum value is less than the average incentive compensation (including any restricted stock, options and similar awards) for the two year period preceding the Control Change Date.

(vii)   the Company, the Company’s Board, the Parent or the Parent’s Board directs Executive to engage in unlawful or unethical conduct or conduct contrary to the Company’s or the Parent’s good business practices.

(o)   Parent’s Board means the Board of Directors of the Parent.

(p)   Person means any human being, firm, corporation, partnership, or other entity. "Person" also includes any human being, firm, corporation, partnership, or other entity as defined in sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term "Person" does not include the Company, the Parent or any Related Entity, and the term Person does not include any employee-benefit plan maintained by the Parent, the Company or any Related Entity, and any person or entity organized, appointed, or established by the Parent, the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan, unless the Parent’s Board or the Company’s Board determines that such an employee-benefit plan or such person or entity is a "Person".

(q)   Potential Change in Control means that (i) the Parent’s Board approves a transaction or series of transactions that, if consummated, would result in a Change in Control; (ii) any Person, the Company, or the Parent makes a public announcement of its intention to take or consider taking actions that would result in a Change in Control; (iii) any Person initiates a tender offer which, if consummated, would result in a Change in Control; or (iv) the Parent’s Board adopts a resolution to the effect that, in its judgment, as a consequence of any one or more transactions or events or series of transactions or events, a Potential

Change in Control of the Company or the Parent has effectively occurred. The Parent’s Board shall be entitled to exercise its sole and absolute discretion in adopting any such resolution pursuant to subparagraph (iv) above and in determining whether or not any such transaction(s) or event(s) might be deemed, individually or collectively, to constitute a Potential Change in Control of the Company or the Parent.

(r)   Related Entity means any entity that is part of a controlled group of corporations or is under common control with the Parent within the meaning of section 1563(a), 414(b) or 414(c) of the Internal Revenue Code of 1986, as amended (the "Code").

ARTICLE 2.   TERMINATION OF EMPLOYMENT .

2.1   General . Executive is entitled to receive a Termination Payment according to the remaining provisions of this Article 2 if Executive’s employment with the Company terminates during the term of this Agreement and during an Employment Period (as defined below) because of an event described in either section 2.2 or 2.3. An Employment Period begins on the occurrence of any Potential Change in Control. An Employment Period also begins on the occurrence of a Control Change Date if, with respect to the Change in Control to which such Control Change Date relates, no Potential Change in Control occurred (or a Potential Change in Control did occur, but it was determined by the Parent’s Board to have been unwound, reversed or concluded (as provided in the following sentence)). If an Employment Period begins on the occurrence of a Potential Change in Control, it will end on the earlier of (i) the date (if any) that the events constituting the Potential Change in Control have been unwound, reversed or concluded such that the events are no longer expected to result in a Change in Control, as determined by the Parent’s Board in good faith, or (ii) eighteen (18) months following the Control Change Date to which the Potential Change of Control relates. If an Employment Period begins on a Control Change Date, it will end eighteen (18) months following the Control Change Date. If Executive’s employment terminates during an Employment Period and an event described in section 2.2 or 2.3 has not occurred, or Executive’s employment terminates as a result of his death or Disability, this Agreement terminates.

2.2   Termination by the Company . Executive is entitled to receive a Termination Payment if Executive’s employment is terminated by the Company during an Employment Period without Cause. If the Company desires to discharge the Executive for Cause (the "Cause Exception"), it shall give notice to the Executive as provided in section 2.7 and the Executive shall have thirty (30) days after notice has been given to him in which to cure the reason for the Company’s exercise of the Cause Exception. If the reason for the Company’s exercise of the Cause Exception is timely cured by the Executive (as determined by a majority of the members of the Company’s Board following a hearing), the Company’s notice of discharge shall become null and void.

2.3   Voluntary Termination . Executive is entitled to receive a Termination Payment if Executive voluntarily terminates employment during an Employment Period with Good Reason.

2.4   Termination Payment . The Parent shall pay or shall cause the Company to pay a Termination Payment equal to three (3) times Executive’s Base Period Income (as determined under section 2.5) in a single sum payment, net of any required tax withholding, in cash. Except as provided in the two following sentences, the Termination Payment to Executive shall be made not later than the thirtieth (30 ^th ) business day after Executive’s employment termination in accordance with section 2.2 or 2.3 (the "Payment Date"). If Executive is a "specified employee" (as defined in section 409A of the Code), any portion of the Termination Payment that is subject to section 409A of the Code shall be paid in a single sum payment on the first business day of the seventh month beginning after the day of Executive’s employment termination in accordance with section 2.2 or 2.3. If the amount of the Termination Payment cannot be finally determined on or before the Payment Date, the Parent shall pay or shall cause the Company to pay on the Payment Date an estimate, as determined in good faith by the Company, of the minimum amount of the Termination Payment. Any portion of the Termination Payment that is not made on the Payment Date shall bear interest at a rate equal to one-hundred twenty (120) percent of the monthly compounded applicable federal rate, as in effect under section 1274(d) of the Code for the month in which the Payment Date occurs. In the event that the amount of the estimated payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the payor, payable on the fifth day after demand by the Parent or the Company, as applicable, with interest at the rate provided under section 1274(d) of the Code until paid.

2.5   Base Period Income . Base Period Income for the Executive equals the sum of (a) and (b), as determined below:

(i) twelve times: (A) the monthly rate of Annual Base Salary to which the Executive is entitled on the day prior to his termination (the "Salary Measurement Date"); plus (B) the monthly rate of Annual Base Salary to which the Executive was entitled twelve months prior to the Salary Measurement Date, if Executive was employed by the Company or the Parent on that date; plus (C) the monthly rate of Annual Base Salary to which the Executive was entitled twenty-four months prior to the Salary Measurement Date, if Executive was employed by the Company or the Parent on that date (with Annual Base Salary determined in each case in accordance with section 1.2(b)). Notwithstanding the above, Executive shall be entitled to include the Annual Base Salary for the three highest of the last five completed years for purposes of this calculation;

(ii) divided by: (A) one, if Executive was not employed by the Company or the Parent twelve months prior to the Salary Measurement Date; (B) two, if Executive was employed by the Company or the Parent twe