NASDAQfalse0001581164 0001581164 2019-08-09 2019-08-09 0001581164 stay:EshHospitalityIncMember 2019-08-09 2019-08-09
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM
8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) – August 9, 2019
 
EXTENDED STAY AMERICA, INC.
(Exact name of registrant as specified in its charter)
 
         
Delaware
 
001-36190
 
46-3140312
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification Number)
     
11525 N. Community House Road, Suite 100
Charlotte, North Carolina
 
28277
(Address of principal executive offices)
 
(Zip code)
 
 
 
 
 
 
 
 
 
 
 
Registrant’s telephone number, including area code (980)
 345-1600
 
ESH HOSPITALITY, INC.
(Exact name of registrant as specified in its charter)
 
         
Delaware
 
001-36191
 
27-3559821
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification Number)
     
11525 N. Community House Road, Suite 100
Charlotte, North Carolina
 
28277
(Address of principal executive offices)
 
(Zip code)
 
 
 
 
 
 
 
 
 
 
 
Registrant’s telephone number, including area code (980)
 345-1600
 
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
 
 
 
 
 
 
 
 
☐
Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
 
 
 
 
 
 
 
 
 
 
 
☐
Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
 
 
 
 
 
 
 
 
 
 
 
☐
Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4c))
 
 
 
 
 
 
 
 
 
 
 
Securities registered pursuant to Section 12(b) of the Act:
         
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Common Stock, par value $0.01 per share, of Extended Stay America, Inc. and Class B Common Stock, par value
$0.01 per share, of ESH Hospitality, Inc., which are attached and trade together as a Paired Share.
 
STAY
 
Nasdaq Global Select Market
 
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2
of the Securities Exchange Act of 1934 (§
240.12b-2
of this chapter).
Emerging growth company  
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
☐
 
 
 
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Officer
On August 9, 2019, M. Thomas Buoy informed Extended Stay America, Inc. (the “Company”) that he will be resigning from his position as Executive Vice President, Revenue of the Company, effective as of December 31, 2019 (the “Resignation Date”). During the period prior to the Resignation Date, Mr. Buoy will continue to provide services to the Company as the Executive Vice President, Revenue, and following the Resignation Date, the Company will be eliminating the position of Executive Vice President, Revenue.
The Company expects to create a new position of Chief Marketing Officer and has commenced a search process to identify an individual to serve in that role.
Separation Agreement
Mr. Buoy and the Company have entered into a separation letter agreement with the Company, dated August 
9
, 2019 (the “Separation Agreement”). The Separation Agreement provides that as of the Resignation Date, Mr. Buoy’s position of Executive Vice President, Revenue will be eliminated. During the period from January 1, 2020 through March 31, 2020 (the “Transition Services Period”), Mr. Buoy will remain an employee and serve as an advisor to the Company reporting directly to the new Chief Marketing Officer. Following the completion of the Transition Services Period, Mr. Buoy’s employment will be terminated (the “Termination Date”).
During the Transition Services Period, Mr. Buoy will continue to: (i) receive base salary at the annual rate of $459,380 payable
bi-weekly
through the Company’s payroll (subject to applicable taxes and withholdings), (ii) remain eligible to receive the 2019 annual bonus based on actual performance under the Extended Stay America, Inc. Annual Incentive Plan, and (iii) vest in his restricted share units pursuant to the terms of each of the Long Term Incentive Plan Restricted Share Agreements for 2017, 2018 and 2019.
Following the completion of the Transition Services Period, Mr. Buoy’s employment with the Company will terminate and, subject to his execution and
non-revocation
of a release of claims, he will generally be entitled to receive the benefits provided under the Extended Stay America, Inc. Executive Severance Plan (“Severance Plan”), which include cash severance, health plan benefit continuation and outplacement services. However, pursuant to the Separation Agreement, the cash severance that Mr. Buoy will receive will be 75% of his base salary rather than 100% as provided in the Severance Plan and a target bonus equal to 100% of his base salary.
The foregoing summary of the Separation Agreement does not purport to be complete and is subject to, and qualified by its entirety by, the full text of the Separation Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report and is incorporated here by reference.
Item 9.01 Exhibits
(d)
Exhibits
 
 
 
 
 
 
 
         
 
 
 
 
 
 
Exhibit 10.1
 
 
 
 
 
 
 
 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the Registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
             
 
 
EXTENDED STAY AMERICA, INC.
             
Date: August 9, 2019
 
 
By:
 
/s/ Christopher N. Dekle
 
 
Name:
 
Christopher N. Dekle
 
 
Title:
 
General Counsel
         
 
 
ESH HOSPITALITY, INC.
             
Date: August 9, 2019
 
 
By:
 
/s/ Christopher N. Dekle
 
 
Name:
 
Christopher N. Dekle
 
 
Title:
 
General Counsel
 
 
 
 
 
 
 
 
 
 
 

Exhibit 10.1

August 9, 2019

M. Thomas Buoy

Executive Vice President, Revenue

Extended Stay America, Inc.

11525 N. Community House Road, Suite 100

Charlotte, NC 28277

Dear Tom:

Following up on our previous discussion regarding the elimination of the Executive Vice President, Revenue, this letter confirms the terms of your continued employment after your position is eliminated on December 31, 2019. Effective January 1, 2020, the following terms will become effective:

 

New Title

   Advisor, reporting to Chief Marketing Officer. You will be an employee and not an independent contractor.

Length of Assignment

   January 1, 2020 through March 31, 2020

Duties

   Assistance and advice as needed and requested by Chief Marketing Officer to support transition.

Support

   You may work remotely or at HSC at your discretion except as Chief Marketing Officer specifically requests.

Salary

   You will continue to be paid your base salary at the annual rate of $459,380. You will be paid bi-weekly through ESA normal payroll process. Ordinary tax, benefit and other required payroll deductions and withholdings will continue to be taken through your employment period.

Benefits

   You will continue to be eligible to participate in Company’s standard benefits program through your employment. Upon termination, you are eligible to continue benefits coverage through COBRA. This coverage is available to you for up to 18 months.

Annual Incentive

   You will be eligible for your bonus based on 2019 actual results as calculated under the Extended Stay America, Inc. Annual Incentive Plan, consistent with prior years and other members of the Senior Leadership Team.

Time and

Performance RSUs

   Restricted Share Units will continue to vest as scheduled per the terms of the 2017, 2018, and 2019 Long Term Incentive Plan Restricted Share Agreement.

Severance

   At the end of your period of employment , you will be entitled to the benefits under the Extended Stay America, Inc. Executive Severance Plan except salary payment will be at seventy-five percent not one hundred percent, and your target bonus will be deemed to be 100% of your base salary.

Release

   At the end of your period of employment, you will execute a release as provided in Extended Stay America, Inc. Executive Severance Plan.

Please sign below to reflect your agreement to the terms outlined in this memorandum and return to my attention.

 

Sincerely,
/s/ Kevin Henry
Kevin Henry
Chief Human Resource Officer
Accepted and agreed

/s/ M. Thomas Buoy

M. Thomas Buoy
Date: August 9, 2019