FIVE STAR SENIOR LIVING INC. (NASDAQ: FVE) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

FIVE STAR SENIOR LIVING INC. (NASDAQ: FVE) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

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On December11, 2018, our Board of Directors, or our Board, elected Katherine E. Potter as our President and Chief Executive Officer effective January1, 2019.Ms.Potter, age 42, is and has been our General Counsel since 2012 and one of our Executive Vice Presidents since May2018, and she previously served as one of our Senior Vice Presidents since 2016 and one of our Vice Presidents since 2012. Ms.Potter will continue to serve as our Executive Vice President and General Counsel through December31, 2018. Ms.Potter also serves as a Senior Vice President of The RMR Group LLC, or RMR LLC, our business manager. Prior to joining us, Ms.Potter practiced law for over 10 years, focusing on corporate, securities, mergers and acquisitions, corporate governance and other transactional matters. Ms.Potter was an associate at the law firm of Sullivan& Worcester LLP from 2005 to 2011, and was an attorney at the law firm of Burns& Levinson LLP from 2011 to 2012.Ms.Potter has no family relationships with any of our Directors or executive officers.

Ms.Potter will replaceBruce J. Mackey Jr. as our President and Chief Executive Officer.Mr.Mackey will be stepping down as our President and Chief Executive Officer, effective December31, 2018.

In connection with Mr.Mackey stepping down as our President and Chief Executive Officer, we entered into a letter agreement with Mr.Mackey and RMR LLC, dated December11, 2018. to the letter agreement, Mr.Mackey will continue to serve as our President and Chief Executive Officer through December31, 2018, and thereafter through December31, 2019, if not earlier accelerated, or the separation date, as our non-executive employee in order to continue to assist in transitioning his duties and responsibilities to his successor. Under the letter agreement, Mr.Mackey will receive transition payments at the rate of $10,000 per month from January1, 2019 until the separation date, and, subject to Mr.Mackey signing a customary release, a cash payment from us in the amount of $600,000 and release payments in the aggregate amount of $550,000. RMR LLC will pay 20% and we will pay 80% of the transition payments and release payments payable to Mr.Mackey to the letter agreement. to the letter agreement, the vesting of any shares of our common stock previously granted to Mr.Mackey under our equity compensation plan that remain unvested will be accelerated upon the separation date, and Mr.Mackey will not receive any additional share awards from us. Also to the letter agreement and in accordance with applicable law, Mr.Mackey may revoke certain provisions of the agreement until December18, 2018, in which event Mr.Mackey would not be entitled to any of the release payments and benefits set forth in such agreement.

Mr.Mackey’s letter agreement contains other terms and conditions, including cooperation, confidentiality, non-solicitation and other covenants, and a waiver and release. Mr.Mackey’s letter agreement also contains certain terms relating to RMR LLC and other companies to which RMR LLC or its affiliate provides management services.

The foregoing description of the letter agreement is qualified in its entirety by reference to the full text of the letter agreement, a copy of which is filed as Exhibit10.1 hereto and is incorporated herein by reference.

Information Regarding Certain Relationships and Related Person Transactions

RMR LLC provides management services to us. The RMR Group Inc., or RMR Inc., the managing member of RMR LLC, is controlled by Adam Portnoy as the sole trustee, an officer and the controlling shareholder of ABP Trust. A subsidiary of ABP Trust is our largest stockholder, owning, as of September30, 2018, 17,999,999 of our common shares, or approximately 35.6% of our outstanding common shares. Executive officers of the Company are also officers of RMR LLC. Another subsidiary of ABP Trust is the landlord for our headquarters. For further information about these and other such relationships and related person transactions, please see our Quarterly Report on Form10-Q for the quarter ended September30, 2018, or our Quarterly Report, our Annual Report on Form10-K

for the year ended December31, 2017, or our Annual Report, our definitive Proxy Statement for our 2018 Annual Meeting of Stockholders, or our Proxy Statement, and our other filings with the Securities and Exchange Commission, or the SEC, including Notes 9, 10 and 11 to our condensed consolidated financial statements included in our Quarterly Report and the sections captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward Looking Statements” of our Quarterly Report, Notes 9, 15 and 16 to our consolidated financial statements included in our Annual Report and the sections captioned “Business”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward Looking Statements” of our Annual Report and the section captioned “Related Person Transactions” and the information regarding our Directors and executive officers included in our Proxy Statement. In addition, please see the section captioned “Risk Factors” of our Annual Report for a description of risks that may arise as a result of these and other such relationships and related person transactions. Our filings with the SEC and copies of certain of our agreements with these related parties are publicly available as exhibits to our public filings with the SEC and accessible at the SEC’s website, www.sec.gov.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

FIVE STAR SENIOR LIVING INC. Exhibit
EX-10.1 2 a18-41488_1ex10d1.htm EX-10.1 Exhibit 10.1     December 11,…
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