Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 5, 2021, Genesis Healthcare, Inc., a Delaware corporation (the
"Company" or "Genesis") issued a press release announcing that the Company's
Board of Directors (the "Board") appointed Robert H. Fish as Chief Executive
Officer of the Company, effective as of January 5, 2021, to succeed George V.
Hager, Jr., who retired as Chief Executive Officer of the Company and resigned
as a member of the Board, in each case as of that date. Mr. Fish will continue
to serve as the Chairman of the Board. The Company also announced that John F.
DePodesta, a current member of the Board, has been appointed Lead Independent
Director of the Company, effective as of January 5, 2021. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Mr. Fish, age 70, has a long history with Genesis and its predecessor companies
Genesis HealthCare Corp. and Genesis Health Ventures, Inc. He has served on its
current Board since 2013 when he joined Skilled Healthcare Group, Inc. as CEO
until its merger with Genesis in 2015. Additionally, from 2003 to 2007, he
served as Lead Director of Genesis HealthCare Corp., and from 2002 to 2003 he
served as Chairman and Chief Executive Officer of Genesis Health Ventures, Inc.
During his career, Mr. Fish has served as Chairman, President or CEO of several
other healthcare companies. Most recently, from 2018 to July 2020, he served as
President, CEO and Director of Quorum Health Corporation, a publicly held
operator of general acute care hospitals and outpatient services. From 2008 to
2012, he served as Chairman of REACH Medical Holdings, a regional air medical
transport company, from 2005 to 2006 he served as Executive Chairman of Coram,
Inc., a large home infusion provider. Previously, Mr. Fish served as President
and Chief Executive Officer of St. Joseph Health System-Sonoma County and
Valleycare Health System, both regional hospital systems in Northern California.
The Company has entered into an employment agreement with Mr. Fish, effective
January 5, 2021 (the "Employment Agreement") with a term running through
December 31, 2022, with automatic one-year extensions absent notice of
nonrenewal by either party. The Employment Agreement provides, among other
things, for a base salary of $1,150,000, an annual incentive bonus opportunity
of 115% of base salary, a signing bonus of $350,000, a special bonus of
$1,000,000 if certain corporate transactions should occur during the first six
months of employment and, subject to a release of claims and compliance with
certain noncompete and other restrictive covenants and other than in
circumstances in which the special one million dollar bonus is payable, a
lump-sum cash severance benefit equal to two times the sum of base salary and
bonus payable upon nonrenewal of the employment term by the Company or a
qualifying termination of employment (a termination by the Company without
"Cause" or by Mr. Fish for "Good Reason" as those terms are defined in the
Employment Agreement, which in the case of Good Reason includes among other
circumstances any termination within 30 days following a change in control of
the Company that occurs at least six months after employment commencement)
together with a pro-rata annual bonus for the year of termination, vesting of
any equity awards that may have been granted and continuation of employee
benefits for two years. Mr. Fish will be eligible for additional long-term
incentive compensation as may be determined by the Company's Compensation
Committee, and Mr. Fish will be eligible to participate in any additional other
incentive compensation plans made available to the other Company executives
generally as well as the benefit plans made available to the other Company
executives generally.
While Mr. Hager became eligible for severance benefits under his employment
agreement upon his departure, subject to his execution and nonrevocation of a
release of claims, the severance is offset by the retention benefit provided to
him in November 2020, provided that, to mitigate certain adverse tax
consequences, Mr. Hager repaid to the Company an amount of the retention benefit
equal to the value of the severance benefits that are subject to Internal
Revenue Code (IRC) Section 409A, and such amounts will be paid by the Company
(commencing at various times during 2022) when due under the employment
agreement severance provisions; moreover the value of continued health coverage
that is not subject to IRC Section 409A (approximately $9,000) is being provided
to Mr. Hager in a cash lump sum. The Company also awarded Mr. Hager a special
cash bonus of $650,000 in recognition of his exemplary leadership during the
COVID-19 pandemic during 2020. Mr. Hager has agreed to provide consulting
services to the Company following his departure. In exchange for an up-front
cash fee of $300,000, Mr. Hager has agreed to provide such services for at least
three months, though the Company and Mr. Hager may mutually agree to extend the
arrangement. This consulting arrangement secures Mr. Hager's services to the
Company during an extraordinary time and while federal and state authorities are
considering material and critical financial support for the Company and industry
and thereby facilitates his continued participation in industry-led efforts in
which he has taken a leadership role. Mr. Hager also is being
paid his full 2020 annual incentive payment, and Mr. Hager has agreed not to
assert entitlement to any additional 2020 annual incentive.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Description
99.1 Press Release, dated January 5, 2021
104 Cover Page Interactive Data File (embedded within the Inline
XBRL document).
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