Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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.
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.
