8-K

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) – July 21, 2014 (July 17, 2014)

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))

Item 5.02 Departure of Directors Certain Officers; Election of Directors; Appointment of Certain Officers;

Compensatory Arrangements of Certain Officers.

On July 17, 2014, Peter Crage, Chief Financial Officer of Extended Stay America, Inc. (the “Corporation”) and ESH Hospitality, Inc. (“ESH REIT” and, together with the Corporation, the “Company”), provided the Company with notice of his resignation, effective as of July 31, 2014. Mr. Crage will serve in an advisory capacity until the end of the year to assist in the transition. Mr. Crage has entered into a consulting agreement with a subsidiary of the Corporation pursuant to which Mr. Crage will provide consulting services to the Company through the end of 2014. A copy of the consulting agreement is attached hereto as Exhibit 10.1. A copy of a press release announcing Mr. Crage’s resignation is attached hereto as Exhibit 99.1.

On July 21, 2014, the board of directors of the Corporation ratified the appointment of Jonathan Halkyard, the Chief Operating Officer of the Corporation, as the Interim Chief Financial Officer of the Corporation and the board of directors of ESH REIT ratified the appointment of Mr. Halkyard as Interim Chief Financial Officer of ESH REIT, each effective as of August 1, 2014 until a permanent replacement for Mr. Crage has been appointed by the Company. During the interim period, Mr. Halkyard will continue to serve as Chief Operating Officer of the Corporation.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Exhibit Description
10.1	Consulting Agreement, dated as of July 21, 2014, between ESA Management LLC and Peter Crage.
99.1	Press release of Extended Stay America, Inc. and ESH Hospitality, Inc., dated July 21, 2014.

SIGNATURE

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: July 21, 2014	By:	/s/ Ross W. McCanless
		Name: Ross W. McCanless
		Title: Chief Legal Officer and General Counsel
	ESH HOSPITALITY, INC.
Date: July 21, 2014	By:	/s/ Ross W. McCanless
		Name: Ross W. McCanless
		Title: Chief Legal Officer

EXHIBIT INDEX

Exhibit Number	Exhibit Description
10.1	Consulting Agreement, dated as of July 21, 2014, between ESA Management LLC and Peter Crage.
99.1	Press release of Extended Stay America, Inc. and ESH Hospitality, Inc., dated July 21, 2014.

EX-10.1

Exhibit 10.1

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”), dated as of July 21, 2014, is entered into between ESA Management, LLC, a Delaware limited liability company (the “Company”), and Peter J. Crage (the “Consultant”).

WHEREAS, the Consultant intends to resign from his position as the Chief Financial Officer of the Company, Extended Stay America, Inc. (the “Parent”) and ESH Hospitality, Inc. effective as of July 31, 2014;

WHEREAS, the Company desires the Consultant to provide certain consulting services to the Company and its affiliates, and the Consultant is willing to provide such services, in each case, on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally and equitably bound hereby, the parties hereto agree as follows:

1. Term. The Consultant shall provide consulting services to the Company hereunder for the period commencing as of August 1, 2014 (the “Effective Date”) and ending on December 31, 2014, unless terminated earlier as provided in Section 6 of this Agreement (the “Consulting Term”).

2. Duties. During the Consulting Term, the Consultant agrees to render services to the Company’s board of directors and its Chief Executive Officer, on such matters as either of them may request, commensurate with the Consultant’s position as the former Chief Financial Officer of the Company (collectively, the “Consulting Services”). In the Consultant’s performance of the Consulting Services, the Consultant shall devote so much of his working time as the Consultant and the Company’s Chief Executive Officer may agree from time to time; provided, however, that the Consultant will not be expected to work more than 10 hours per month. The parties expressly acknowledge and agree that the Consultant may maintain other employment during the Consulting Term.

3. Consulting Fee and Expenses. The Company agrees to pay to the Consultant a monthly consulting fee equal to $20,000 (twenty thousand dollars) a month for the Consulting Services to be rendered pursuant to this Agreement during the Consulting Term (the “Consulting Fee”), with such amount to be paid in equal monthly installments on the last business day of each month during the Consulting Term. In addition, the Company agrees to reimburse the Consultant for reasonable business expenses incurred by the Consultant in connection with the Consultant’s performance of the Consulting Services hereunder in accordance with the Company’s policies as in effect from time to time. To obtain reimbursement of business expenses, the Consultant shall submit for approval to the Chief Executive Officer of the Company or his or her designee an invoice describing the business expenses incurred, along with satisfactory supporting documentation of any expenses for which reimbursement is sought. The Consultant shall submit invoices within 60 days of the incurrence of any such business expenses.

4. Independent Contractor Status.

(a) The Company and the Consultant acknowledge and agree that (i) as an independent contractor, the Consultant alone will be responsible for federal, state, and local taxes, and self-employment taxes, or any other applicable taxes, on the Consulting Fee and (ii) the Company will not withhold any amounts from the Consulting Fee relating to any taxes. The Company shall issue to the Consultant on a timely basis a U.S. Tax Form 1099 reflecting the Consulting Fee paid hereunder. (b) The Consultant acknowledges and agrees that he is not an “employee” (or person of similar status) of the Company or any of its affiliates for purposes of the Internal Revenue Code of 1986, as amended, or for purposes of participation in any and all employee benefit plans of the Company or any of its affiliates. The Consultant further acknowledges and agrees that the Consultant has no right to participate, and shall not participate, in any employee benefit plans, programs or policies of the Company or any of its affiliates.

5. Termination. This Agreement shall terminate and all obligations of the parties hereunder, except for (i) the payment of any Consulting Fee for services already performed and (ii) the reimbursement of any expenses due and owing, shall cease upon the first to occur of the following events:

(a) Upon the expiration of the Consulting Term; or

(b) Upon the mutual agreement in writing to terminate this Agreement.

6. Indemnification. The Company and Parent agree to indemnify Consultant and his heirs, executors, personal representatives, successors and permitted assigns from any and all losses, liabilities, damages, costs, expenses and fees (including, without limitation, reasonable attorneys’ fees) for any causes of action, suits, claims, settlements, awards, judgments, orders and decrees (collectively, “Losses”) arising out of, related to or resulting from the Consulting Services performed by Consultant under this Agreement, except to the extent any such Losses are directly caused by Consultant’s willful misconduct, gross negligence or material breach of this Agreement.

7. Representation. The Consultant represents and warrants that (a) the Consultant is not subject to any contract, arrangement, policy or understanding, or to any statute, governmental rule or regulation, that in any way limits the Consultant’s ability to enter into and fully perform the Consultant’s obligations under this Agreement and (b) the Consultant is not otherwise unable to enter into and fully perform the Consultant’s obligations under this Agreement.

8. Binding Effect; Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, personal representatives, estates, successors and assigns. Notwithstanding the provisions of the immediately preceding sentence, neither party shall assign all or any portion of this Agreement without the prior written consent of the other party.

9. Notices. Unless otherwise provided herein, all communications under this Agreement shall be in writing. Any written communication shall be sent by (a) personal delivery or overnight delivery service or (b) facsimile during normal business hours, with confirmation of receipt, to the following:

If to the Consultant:

Peter J. Crage

2029 Carnoustie CT

Fort Mill, SC 29707

Fax:                                     

Email:                                  

If to the Company:

ESA Management, LLC

11525 N. Community House Road, Suite 100

Charlotte, North Carolina 28277

Attn: General Counsel

Fax:    (980) 345-1665

Email:                                  

All such written communications shall be deemed to have been given when received. Any party may change its facsimile number or its address to which communications hereunder are to be delivered by giving the other party hereto written notice in the manner set forth herein.

10. Amendments; Waivers. This Agreement may not be modified unless such amendment is agreed to in writing and signed by each of the parties hereto. No waiver by either party hereto at any time of any breach by the other party hereto, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

11. Governing Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws (excluding conflict of laws rules and principles) of the State of North Carolina.

12. Jurisdiction. Any action against any party to this Agreement arising out of or in any way relating to this Agreement shall be brought in any federal or state court located in the State of North Carolina and each of the parties hereby submits to the exclusive jurisdiction of such courts for the purpose of any such action; provided, however, that a final judgment in any such action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

13. Severability. If any provision of this Agreement, or any application thereof to any circumstances, is invalid, in whole or in part, such provision or application shall to that extent be severable and shall not affect other provisions or applications of this Agreement.

14. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument. Facsimile or electronically transmitted signatures shall be deemed to be originals.

15. Entire Agreement. This Agreement sets forth the entire agreement between the Consultant and the Company and extinguishes all prior agreements and understandings between the parties with respect to the subject matter hereof.

[signature page follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

ESA MANAGEMENT, LLC
By:	/s/ James L. Donald
Name:	James L. Donald
Title:	President & Chief Executive Officer
CONSULTANT
/s/ Peter J. Crage
Name:	PETER J. CRAGE

[Signature Page to Consulting Agreement]

EX-99.1

Exhibit 99.1

EXTENDED STAY AMERICA ANNOUNCES RESIGNATION OF CHIEF FINANCIAL OFFICER

-Interim CFO Appointed-

CHARLOTTE, N.C. – July 21, 2014 (BUSINESS WIRE) — Extended Stay America, Inc. (NYSE: STAY) (the “Company”) today announced that Peter Crage, Chief Financial Officer since 2011, has notified the Company of his intentions to leave for personal reasons as of July 31, 2014. Mr. Crage will complete the preparation and filing of the Company’s Form 10-Q for the quarter ended June 30, 2014 and will serve in an advisory capacity until the end of the year to assist in the transition.

Jonathan Halkyard has been appointed Interim Chief Financial Officer effective August 1, 2014. Mr. Halkyard will continue in his current role as Chief Operating Officer during this interim period. Mr. Halkyard has been with STAY for nearly a year and served as the Chief Financial Officer of both NV Energy and Caesars Entertainment Corporation prior to his arrival. The Company will engage an executive search firm to identify a successor Chief Financial Officer.

Chief Executive Officer, Jim Donald said, “Peter has made invaluable contributions to the Company through both the IPO process and now our first year as a public company. He has been instrumental in establishing our solid financial standing and building the financial infrastructure of the Company. We are grateful for Peter’s contributions, his ongoing assistance and wish him well in his future endeavors. He leaves us with an experienced financial team in place that will help ensure a seamless transition under Jonathan’s leadership.”

Mr. Crage noted, “I very much appreciated the opportunity to serve as Chief Financial Officer of Extended Stay during this exciting time. We have been successful in building a very strong Company and many of my personal goals for the Company have now been realized. I look forward to watching the Company continue to grow and thrive with the foundation and management team we have in place.”

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, future financial performance, including our 2014 performance, and flexibility, debt reduction and dividend growth, as such, may involve known and unknown risks, uncertainties and other factors that will cause the Company’s actual results or performance to differ from those projected in the forward-looking statements. For a description of factors that may cause the Company’s actual results or

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performance to differ from any forward-looking statements, please review the information under the heading “Risk Factors” included in the Company’s combined annual report on Form 10-K filed with the SEC on March 20, 2014 and other documents of the Company on file with or furnished to the SEC. Any forward-looking statements made in this press release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company or its business or operations. Except as required by law, the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by the Company’s forward-looking statements.

About Extended Stay America

Extended Stay America, Inc., the largest owner/operator of company-branded hotels in North America, owns and operates 684 hotels in the U.S. and Canada comprising approximately 76,200 rooms and employs approximately 10,000 employees in its hotel properties and headquarters. The Company owns and operates hotels under the core brand Extended Stay America^®, which serves the mid-priced extended stay segment, and other brands. Visit www.extendedstay.com for more information about the Company and its services.

Contacts

Investors:

Kay Sharpton

(980) 345-1546

investorrelations@extendedstay.com

Media:

Terry Atkins

(980) 345-1648

tatkins@extendedstay.com

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