Document:

Exhibit

March 29, 2018

David J. Hegarty
[address]

Dear David:

You and The RMR Group LLC (“RMR”) are entering into this letter agreement (this “Agreement”) to confirm the terms and conditions of your retirement from RMR on September 30, 2018 or such earlier date you elect as provided below (the “Retirement Date”).

I.TRANSITION PERIOD AND RETIREMENT

A.Resignation from RMR.  You will continue to serve as an Executive Vice President of RMR until April 30, 2018 as of which date you will resign as an Executive Vice President of RMR and from any other officer positions you hold within RMR and any of its managed companies, including Senior Housing Properties Trust (“SNH”).  You will continue to serve as an employee of RMR until the Retirement Date in order to transition your duties and responsibilities to your successor(s).

B.Payments until the Retirement Date.  Until April 30, 2018, you will receive base salary from RMR at a rate of $300,000 per annum, payable consistent with past practices.  From May 1, 2018 until the Retirement Date, RMR will pay your base salary at a rate of $10,000 per month.  Subject to any contribution required by you consistent with past practices, RMR will also maintain and provide all your current insurance and employee benefits until the Retirement Date.  

C.Retirement and Transition Responsibilities.  From May 1, 2018 until the Retirement Date, you will work towards the orderly transition of your responsibilities and use all reasonable efforts to assist in training your successor(s).  It is understood that you may not come into the office every day.  You may elect to accelerate the Retirement Date from September 30 to any date after April 30 by giving ten (10) business days prior written notice to RMR.

D.Licensing.  As soon as practicable after this Agreement is executed, RMR will take all reasonable steps and work with its managed companies to the best of its ability to remove you from all healthcare, liquor and other licenses and to notify you of same in writing thereafter.  You agree to cooperate with all such efforts.

E.Payments and Benefits on the Retirement Date. On the Retirement Date, RMR will pay your unpaid wages for the period through the Retirement Date, subject to all usual and applicable taxes and deductions.  Your health insurance on RMR’s group plan and your other employee benefits will 

terminate on the Retirement Date.  To continue any health insurance beyond the Retirement Date, you must complete a continuation of coverage (COBRA) election form and make timely payments for coverage.  Information regarding COBRA will be mailed to you.

F.Retirement Benefits.  Provided you sign and do not revoke the Waivers and Releases of Claims attached as Exhibit A and Exhibit B and you satisfactorily perform your transition responsibilities, you will receive the following additional retirement payments and benefits:

(1)Cash Payments.  RMR will pay you a lump sum payment of $1,250,000, subject to applicable deductions, no later than two business days after the expiration of the revocation period set forth in the Waiver and Release of Claims attached as Exhibit A and a second lump sum payment of $1,250,000, subject to applicable deductions, no later than two business days after the expiration of the revocation period set forth in the Waiver and Release of Claims attached as Exhibit B, which document will be provided to you again on the Retirement Date.

(2)RMR and RMR Managed Company Share Grants.

a.Sometime before the Retirement Date, RMR will recommend to the Board of Directors of RMR Inc. and to the Boards of Trustees and Boards of Directors of Government Properties Income Trust, Hospitality Properties Trust, Select Income REIT, SNH, Travel Centers of America LLC and Five Star Senior Living Inc. (together, the “RMR Managed Companies”) that all of your existing stock grants vest (which vesting includes the lifting of any restrictions) immediately in full upon the Retirement Date and that you be permitted to settle any resulting tax liability with vesting shares, commonly referred to as “net share settlement,” on a company-by-company basis.  RMR will cooperate with you in removing any restrictive legends from your vested shares in the RMR Managed Companies.

b.You agree for the benefit of RMR Inc. or the applicable RMR Managed Company, as the case may be, that, as long as you own the shares referenced above in 2(a) in RMR Inc. and/or the RMR Managed Companies, your shares shall be voted at any meeting of the shareholders of RMR Inc. and/or the RMR Managed Companies or in connection with any consent solicitation or other action by shareholders in favor of all nominees for director and all proposals recommended by the Board of Directors or Trustees in the proxy statement for such meeting or materials for such written consent or other action.  This obligation does not apply to your estate.  If your shares are not voted in accordance with this covenant and such failure continues after notice, you agree to pay liquidated damages to RMR Inc. and/or the applicable RMR Managed Company in an amount equal to the market value of the shares not so voted.  For the avoidance of doubt, this provision is for the benefit of RMR Inc. and each RMR Managed Company only with respect to your shares in such company and is not an agreement with RMR.

c.You understand and agree that, although the RMR Code of Business Conduct and Ethics will no longer apply to you after the Retirement Date, you are subject to all laws and regulations with respect to all of your shares in RMR Inc. and the RMR Managed Companies, including, but not limited to, those applicable to the purchase or sale of securities while in possession of material, non-public information concerning RMR Inc. and the RMR Managed Companies.

(3)Mobile Phone Number.  At your request, RMR agrees to consent to and cooperate with you in the transfer to you of the mobile phone number (No. (617) ***-****), and to pay for any costs associated with such transfer (except that you will be responsible for the cost of replacement equipment and service).  You agree to be responsible for all cell phone payments for service after the Retirement Date.

		
	II.
	TAX PROVISIONS

You agree that you shall be responsible and will pay your own tax obligations and/or liabilities created under state or federal tax laws by this Agreement. 

		
	III.
	INTERNAL ANNOUNCEMENT AND LETTER OF REFERENCE

RMR’s President and Chief Executive Officer will send an email to all employees of RMR regarding your retirement, the timing and content of which shall be subject to your reasonable approval.  Following the Retirement Date and provided you sign, return and do not revoke the Waiver and Release of Claims attached as Exhibit B, RMR further agrees to provide you with a letter of reference from RMR’s President and Chief Executive Officer in the form attached to this Agreement as Exhibit C.

		
	IV.
	CONFIDENTIALITY 

You agree that, unless otherwise agreed, on or before the Retirement Date, you will return to RMR all property of RMR including, but not limited, to all documents, records, materials, software, equipment, personal service devices, building keys or entry cards, and other physical property that have come into your possession or been produced by you in connection with your employment with RMR.  You may retain the iPhone issued to you by RMR.  You agree that RMR may delete all information related to any RMR Managed Company from the cell phone immediately after the Retirement Date, unless we otherwise agree.

In addition, you shall not at any time reveal to any person or entity, except to employees of RMR who need to know such information for purposes of their employment or as otherwise authorized by RMR in writing, any confidential information of RMR or any RMR Managed Company, including, but not limited to confidential information regarding (i) the marketing, business and financial activities and/or strategies of RMR or any RMR Managed Company and their respective affiliates, (ii) the costs, sources of supply, financial performance, projects, plans, branding, acquisition or dispositions, proposals and strategic plans of RMR or any RMR Managed Company and their respective affiliates, and (iii) information and discussions concerning any past or present lawsuits, arbitrations or other pending or threatened disputes in which RMR or any RMR Managed Company or their respective affiliates is or was a party.

Nothing in this Agreement prohibits you from reporting possible violations of federal law or regulation to any government agency or entity, including, but not limited, to the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law.  You do not need prior authorization of RMR to make any such reports or disclosures and you are not required to notify RMR that you have made such reports or disclosures.

		
	V.
	NON-DISPARAGEMENT

You agree not to make harmful or disparaging remarks, written or oral, concerning RMR or any of the RMR Managed Companies, or any of its or their respective directors, officers, trustees, employees, agents or service providers.  RMR agrees to instruct its executive officers not to make any harmful or disparaging remarks, written or oral, concerning you.  Nothing in this provision shall prevent you or RMR from testifying truthfully in connection with any litigation, arbitration or administrative proceeding when 

compelled by subpoena, regulation or court order.

		
	VI.
	NON-SOLICITATION

You agree that for five (5) years following the Retirement Date, you will not directly or indirectly, without the prior written consent of RMR, solicit, attempt to solicit, assist others to solicit, hire, or assist others to hire for employment any person who is, or within the preceding six (6) months was an employee of RMR or any RMR Managed Company.  Nothing herein shall prevent you from providing performance references for current or former employees of RMR when requested to do so.

		
	VII.
	BREACH OF SECTIONS IV, V OR VI 

The parties agree that any material breach of Sections IV, V or VI of this Agreement will cause irreparable damage to the non-breaching party and that, in the event of such a material breach or threatened material breach, the non-breaching party shall have, in addition to any and all remedies at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of any obligations hereunder.  The parties agree that, in the event that any provision of Section IV, V, or VI shall be determined by any court of competent jurisdiction or arbitration panel to be unenforceable, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law.

		
	VIII.
	COOPERATION 

After the Retirement Date and until September 30, 2019, upon the request of RMR, you agree to make yourself reasonably available to provide any additional transitional services at a rate of $250 per hour, plus reimbursement of any approved out-of-pocket expenses.  However, nothing herein shall unreasonably interfere with any of your obligations to a future employer. Any such services shall be deemed a consultancy and you shall perform such services as an independent contractor, assuming all applicable tax obligations.  You acknowledge that as an independent contractor you will not be eligible for any benefits afforded employees of RMR.

Without limitation as to time, you further agree to cooperate with RMR, at reasonable times and places, with respect to all matters arising during or related to your continuing or past employment, including, without limitation, all formal or informal matters in connection with any government investigation, internal investigation, litigation, regulatory or other proceeding which may have arisen or which may arise.  RMR will reimburse you for all reasonable out-of-pocket expenses (not including lost time or opportunity).  RMR will provide appropriate legal representation for you in a manner reasonably determined by RMR.

		
	IX.
	INDEMNIFICATION AND DEFENSE

Any and all indemnification agreements you have from RMR and any RMR Managed Companies continue to provide for the respective parties’ rights and obligations with respect to the matters set forth therein.  Further, you will maintain any rights you have to indemnification and defense under any bylaws or insurance policies by RMR as well as any rights you have under the common law.

		
	X.
	NON-WAIVER

Any waiver by a party of a breach of any provision of this Agreement shall not operate or be 

construed as a waiver of any subsequent breach of such provision or any other provision hereof.

		
	XI.
	NON-ADMISSION

The parties agree and acknowledge that the considerations exchanged herein do not constitute and shall be not construed as constituting an admission of any sort on the part of either party.

		
	XII.
	NON-USE IN SUBSEQUENT PROCEEDINGS

The parties agree that this Agreement may not be used as evidence in any subsequent proceeding of any kind except one in which one of the parties alleges a breach of the terms of this Agreement or the Waivers and Releases of Claims or one in which one of the parties elects to use this Agreement as a defense to any claim.

		
	XIII.
	ENTIRE AGREEMENT

This Agreement, together with the Waivers and Releases of Claims, constitutes the entire agreement between the parties concerning the terms and conditions of your separation of employment from RMR and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the parties, except for any indemnification agreements as noted above, any applicable equity agreements and the Mutual Agreement to Resolve Disputes and Arbitrate Claims effective April 16, 2012, all of which remain in full force and effect.  You agree that RMR has not made any warranties, representations, or promises to you regarding the meaning or implication of any provision of this Agreement other than as stated herein. 

		
	XIV.
	No Oral Modification  

Any amendments to this Agreement shall be in writing and signed by you and an authorized representative of RMR.

		
	XV.
	Severability  

In the event that any provision hereof becomes or is declared by a court of competent jurisdiction or an arbitrator or arbitration panel to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision.

		
	XVI.
	Governing Law, JURISDICTION AND SUCCESSOR AND ASSIGNS

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without reference to any conflict of law principles, and shall be binding upon and inure to the benefit of you and your heirs, successors, and beneficiaries, and RMR and its agents, affiliates, representatives, successors, and assigns.  If you die before receiving the payments stated herein, the remaining payments will be made to your spouse.  If your spouse is not alive at the time, the remaining payments will be made to your estate.

The parties irrevocably agree that any dispute regarding this Agreement shall be settled by binding arbitration in accordance with the Mutual Agreement to Resolve Disputes and Arbitrate Claims.

XVII.    Voluntary Act

By signing this Agreement, you acknowledge and agree that you are doing so knowingly and voluntarily in order to receive the payments and benefits provided for herein.  By signing this Agreement, you represent that you fully understand your right to review all aspects of this Agreement, that you have carefully read and fully understand all the provisions of this Agreement, that you had an opportunity to ask questions and consult with an attorney of your choice before signing this Agreement; and that you are freely, knowingly, and voluntarily entering into this Agreement.

If you determine to accept this Agreement, understand it, and consent to it, please sign in the space provided below and return a copy so signed to us.

                    	
	
	Very truly yours,

	 

	 

	 /s/ Eileen Kiley

	Eileen Kiley

	Senior Vice President & Chief Human Resources Officer

AGREED TO AND ACCEPTED:
	
	
	 

	 

	 /s/ David J. Hegarty

	David J. Hegarty

	 

	 

	Dated: March 29, 2018

Exhibit A

Waiver and Release of Claims

You, your heirs, executors, legal representatives, successors and assigns, individually and in their beneficial capacity, hereby unconditionally and irrevocably release and forever discharge The RMR Group Inc. and The RMR Group LLC (together, “RMR”), Government Properties Income Trust, Hospitality Properties Trust, Select Income REIT, Senior Housing Properties Trust, Tremont Mortgage Trust, Industrial Logistics Properties Trust, Five Star Senior Living Inc. and TravelCenters of America LLC and any other companies managed by RMR from time to time, and its and their past, present and future officers, directors, trustees, employees, representatives, shareholders, attorneys, agents, consultants, contractors, successors, and affiliates - hereinafter referred to as the “Releasees” - or any of them of and from any and all suits, claims, demands, interest, costs (including attorneys’ fees and costs actually incurred), expenses, actions and causes of action, rights, liabilities, obligations, promises, agreements, controversies, losses and debts of any nature whatsoever which you, your heirs, executors, legal representatives, successors and assigns, individually and/or in their beneficial capacity, now have, own or hold, or at any time heretofore ever had, owned or held, or could have owned or held, whether known or unknown, suspected or unsuspected, from the beginning of the world to the date of execution of this Waiver and Release of Claims including, without limitation, any claims arising at law or in equity or in a court, administrative, arbitration, or other tribunal of any state or country arising out of or in connection with your employment by RMR; any claims against the Releasees based on statute, regulation, ordinance, contract, or tort; any claims against the Releasees relating to wages, compensation, benefits, retaliation, negligence, or wrongful discharge; any claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as amended, the Older Workers’ Benefit Protection Act, as amended, the Equal Pay Act, as amended, the Fair Labor Standards Act, as amended, the Employment Retirement Income Security Act, as amended, the Americans with Disabilities Act of 1990 (“ADA”), as amended, The ADA Amendments Act, the Lilly Ledbetter Fair Pay Act, the Worker Adjustment and Retraining Notification Act, the Genetic Information Non-Discrimination Act,  the Civil Rights Act of 1991, as amended, the Family Medical Leave Act of 1993, as amended, and the Rehabilitation Act, as amended; The Massachusetts Fair Employment Practices Act (Massachusetts General Laws Chapter 151B), The Massachusetts Equal Rights Act, The Massachusetts Equal Pay Act, the Massachusetts Privacy Statute, The Massachusetts Civil Rights Act, the Massachusetts Payment of Wages Act (Massachusetts General Laws Chapter 149 sections 148 and 150), the Massachusetts Overtime regulations (Massachusetts General Laws Chapter 151 sections 1A and 1B), the Massachusetts Meal Break regulations (Massachusetts General Laws Chapter 149 sections 100 and 101) and any other claims under any federal or state law for unpaid or delayed payment of wages, overtime, bonuses, commissions, incentive payments or severance, missed or interrupted meal periods, interest, attorneys’ fees, costs, expenses, liquidated damages, treble damages or damages of any kind to the maximum extent permitted by law and any claims against the Releasees arising under any and all applicable state, federal, or local ordinances, statutory, common law, or other claims of any nature whatsoever except for unemployment compensation benefits or, in Massachusetts, workers’ compensation benefits.  

Nothing in this Waiver and Release of Claims shall affect the EEOC’s rights and responsibilities to enforce the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, the National Labor Relations Act or any other applicable law, nor shall anything in this Waiver and Release of Claims be construed as a basis for interfering with your protected right to file a timely charge with, or participate in an investigation or proceeding conducted by, the EEOC, the National Labor Relations Board (the “NLRB”), or any other state, federal or local government entity; provided, however, if the EEOC, the NLRB, or any other state, federal or local government entity commences an investigation on your behalf, 

you specifically waive and release your right, if any, to recover any monetary or other benefits of any sort whatsoever arising from any such investigation or otherwise, nor will you seek or accept reinstatement to your former position with RMR.

Nothing in this Waiver and Release of Claims prohibits you from reporting possible violations of federal law or regulation to any government agency or entity, including, but not limited to, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law.  You do not need prior authorization of RMR to make any such reports or disclosures and you are not required to notify RMR that you have made such reports or disclosures.  Further, notwithstanding anything to the contrary in this Waiver and Release of Claims, you are not releasing your rights or claims to vested benefits, your rights or claims to indemnification and defense, and your rights or claims in the letter, dated March __, 2018 between you and RMR (the “Letter Agreement”) and any relevant plan documents.  Finally, RMR agrees not to contest any application for unemployment benefits you file after your Retirement Date. 

You acknowledge that you have carefully read and fully understand this Waiver and Release of Claims.  You acknowledge that you have not relied on any statement, written or oral, which is not set forth in this Waiver and Release of Claims.  You further acknowledge that you are hereby advised in writing to consult with an attorney prior to executing this Waiver and Release of Claims; that you are not waiving or releasing any rights or claims that may arise after the date of execution of this Waiver and Release of Claims; that you are releasing claims under the Age Discrimination in Employment Act (ADEA); that you execute this Waiver and Release of Claims in exchange for monies in addition to those to which you are already entitled; that RMR gave you a period of at least twenty-one (21) days within which to consider this Waiver and Release of Claims and a period of seven (7) days following your execution of this Waiver and Release of Claims to revoke your ADEA waiver as provided below; that if you voluntarily execute this Waiver and Release of Claims prior to the expiration of the 21st day, you will voluntarily waive the remainder of the 21 day consideration period; that any changes to this Waiver and Release of Claims by you once it has been presented to you will not restart the 21 day consideration period; and you enter into this Waiver and Release of Claims knowingly, willingly and voluntarily in exchange for the release payments and benefits. To receive the retirement payments and benefits provided in the Letter Agreement, this Waiver and Release of Claims must be signed and returned to Eileen Kiley, at RMR, at Two Newton Place, Suite 300, 255 Washington Street, Newton, MA 02458, or at, if by email delivery, ekiley@rmrgroup.com, on, and not before, April 30, 2018.  Nothing in this Waiver and Release of Claims constitutes a waiver any rights you have under the Letter Agreement.

You may revoke your release of your ADEA claims up to seven (7) days following your signing this Waiver and Release of Claims.  Notice of revocation must be received in writing by Eileen Kiley, at RMR, Two Newton Place, Suite 300, 255 Washington Street, Newton, MA 02458, no later than the seventh day (excluding the date of execution) following the execution of this Waiver and Release of Claims.  The ADEA release is not effective or enforceable until expiration of the seven day period.  However, the ADEA release becomes fully effective, valid and irrevocable if it has not been revoked within the seven day period immediately following your execution of this Waiver and Release of Claims.  The parties agree that if you exercise your right to revoke this Waiver and Release of Claims, then you are not entitled to any of the retirement payments and benefits set forth in Section I.F. of the Letter Agreement.  This Waiver and Release of Claims shall become effective eight (8) days after your execution if you have not revoked your signature as herein provided.

I hereby provide this Waiver and Release of Claims as of the date indicated below and acknowledge that the execution of this Waiver and Release of Claims is in further consideration of the 

benefits set forth in Section I.F. of the Letter Agreement, to which I acknowledge I would not be entitled if I did not sign this Waiver and Release of Claims.  I intend that this Waiver and Release of Claims become a binding agreement by and between me and RMR if I do not revoke my acceptance within seven (7) days.

	
	
	 

	 

	 

	David J. Hegarty

	 

	 

	Dated: 

Exhibit B

Waiver and Release of Claims

You, your heirs, executors, legal representatives, successors and assigns, individually and in their beneficial capacity, hereby unconditionally and irrevocably release and forever discharge The RMR Group Inc. and The RMR Group LLC (together, “RMR”), Government Properties Income Trust, Hospitality Properties Trust, Select Income REIT, Senior Housing Properties Trust, Tremont Mortgage Trust, Industrial Logistics Properties Trust, Five Star Senior Living Inc. and TravelCenters of America LLC and any other companies managed by RMR from time to time, and its and their past, present and future officers, directors, trustees, employees, representatives, shareholders, attorneys, agents, consultants, contractors, successors, and affiliates - hereinafter referred to as the “Releasees” - or any of them of and from any and all suits, claims, demands, interest, costs (including attorneys’ fees and costs actually incurred), expenses, actions and causes of action, rights, liabilities, obligations, promises, agreements, controversies, losses and debts of any nature whatsoever which you, your heirs, executors, legal representatives, successors and assigns, individually and/or in their beneficial capacity, now have, own or hold, or at any time heretofore ever had, owned or held, or could have owned or held, whether known or unknown, suspected or unsuspected, from the beginning of the world to the date of execution of this Waiver and Release of Claims including, without limitation, any claims arising at law or in equity or in a court, administrative, arbitration, or other tribunal of any state or country arising out of or in connection with your employment by RMR; any claims against the Releasees based on statute, regulation, ordinance, contract, or tort; any claims against the Releasees relating to wages, compensation, benefits, retaliation, negligence, or wrongful discharge; any claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as amended, the Older Workers’ Benefit Protection Act, as amended, the Equal Pay Act, as amended, the Fair Labor Standards Act, as amended, the Employment Retirement Income Security Act, as amended, the Americans with Disabilities Act of 1990 (“ADA”), as amended, The ADA Amendments Act, the Lilly Ledbetter Fair Pay Act, the Worker Adjustment and Retraining Notification Act, the Genetic Information Non-Discrimination Act,  the Civil Rights Act of 1991, as amended, the Family Medical Leave Act of 1993, as amended, and the Rehabilitation Act, as amended; The Massachusetts Fair Employment Practices Act (Massachusetts General Laws Chapter 151B), The Massachusetts Equal Rights Act, The Massachusetts Equal Pay Act, the Massachusetts Privacy Statute, The Massachusetts Civil Rights Act, the Massachusetts Payment of Wages Act (Massachusetts General Laws Chapter 149 sections 148 and 150), the Massachusetts Overtime regulations (Massachusetts General Laws Chapter 151 sections 1A and 1B), the Massachusetts Meal Break regulations (Massachusetts General Laws Chapter 149 sections 100 and 101) and any other claims under any federal or state law for unpaid or delayed payment of wages, overtime, bonuses, commissions, incentive payments or severance, missed or interrupted meal periods, interest, attorneys’ fees, costs, expenses, liquidated damages, treble damages or damages of any kind to the maximum extent permitted by law and any claims against the Releasees arising under any and all applicable state, federal, or local ordinances, statutory, common law, or other claims of any nature whatsoever except for unemployment compensation benefits or, in Massachusetts, workers’ compensation benefits.  

Nothing in this Waiver and Release of Claims shall affect the EEOC’s rights and responsibilities to enforce the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, the National Labor Relations Act or any other applicable law, nor shall anything in this Waiver and Release of Claims be construed as a basis for interfering with your protected right to file a timely charge with, or participate in an investigation or proceeding conducted by, the EEOC, the National Labor Relations Board (the “NLRB”), or any other state, federal or local government entity; provided, however, if the EEOC, the NLRB, or any other state, federal or local government entity commences an investigation on your behalf, 

you specifically waive and release your right, if any, to recover any monetary or other benefits of any sort whatsoever arising from any such investigation or otherwise, nor will you seek or accept reinstatement to your former position with RMR.

Nothing in this Waiver and Release of Claims prohibits you from reporting possible violations of federal law or regulation to any government agency or entity, including, but not limited to, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law.  You do not need prior authorization of RMR to make any such reports or disclosures and you are not required to notify RMR that you have made such reports or disclosures.  Further, notwithstanding anything to the contrary in this Waiver and Release of Claims, you are not releasing your rights or claims to vested benefits, your rights or claims to indemnification and defense, and your rights or claims in the letter, dated March __, 2018 between you and RMR (the “Letter Agreement”) and any relevant plan documents.  Finally, RMR agrees not to contest any application for unemployment benefits you file after your Retirement Date. 

You acknowledge that you have carefully read and fully understand this Waiver and Release of Claims.  You acknowledge that you have not relied on any statement, written or oral, which is not set forth in this Waiver and Release of Claims.  You further acknowledge that you are hereby advised in writing to consult with an attorney prior to executing this Waiver and Release of Claims; that you are not waiving or releasing any rights or claims that may arise after the date of execution of this Waiver and Release of Claims; that you are releasing claims under the Age Discrimination in Employment Act (ADEA); that you execute this Waiver and Release of Claims in exchange for monies in addition to those to which you are already entitled; that RMR gave you a period of at least twenty-one (21) days within which to consider this Waiver and Release of Claims and a period of seven (7) days following your execution of this Waiver and Release of Claims to revoke your ADEA waiver as provided below; that if you voluntarily execute this Waiver and Release of Claims prior to the expiration of the 21st day, you will voluntarily waive the remainder of the 21 day consideration period; that any changes to this Waiver and Release of Claims by you once it has been presented to you will not restart the 21 day consideration period; and you enter into this Waiver and Release of Claims knowingly, willingly and voluntarily in exchange for the release payments and benefits.  To receive the retirement payments and benefits provided in the Letter Agreement, this Waiver and Release of Claims must be signed and returned to Eileen Kiley, at RMR, at Two Newton Place, Suite 300, 255 Washington Street, Newton, MA 02458, or at, if by email delivery, ekiley@rmrgroup.com, on, and not before, the last day of your employment with RMR.  Nothing in this Waiver and Release of Claims constitutes a waiver any rights you have under the Letter Agreement.

You may revoke your release of your ADEA claims up to seven (7) days following your signing this Waiver and Release of Claims.  Notice of revocation must be received in writing by Eileen Kiley, at RMR, Two Newton Place, Suite 300, 255 Washington Street, Newton, MA 02458, no later than the seventh day (excluding the date of execution) following the execution of this Waiver and Release of Claims.  The ADEA release is not effective or enforceable until expiration of the seven day period.  However, the ADEA release becomes fully effective, valid and irrevocable if it has not been revoked within the seven day period immediately following your execution of this Waiver and Release of Claims.  The parties agree that if you exercise your right to revoke this Waiver and Release of Claims, then you are not entitled to any of the retirement payments and benefits set forth in Section I.F. of the Letter Agreement.  This Waiver and Release of Claims shall become effective eight (8) days after your execution if you have not revoked your signature as herein provided.

I hereby provide this Waiver and Release of Claims as of the date indicated below and acknowledge that the execution of this Waiver and Release of Claims is in further consideration of the 

benefits set forth in Section I.F. of the Letter Agreement, to which I acknowledge I would not be entitled if I did not sign this Waiver and Release of Claims.  I intend that this Waiver and Release of Claims become a binding agreement by and between me and RMR if I do not revoke my acceptance within seven (7) days.

__________________________________
David J. Hegarty

Dated:  

 

EXHIBIT C
[Letter of Reference]

[RMR Stationery]

To Whom It May Concern:

The purpose of this note is to introduce David J. Hegarty.  

The RMR Group LLC ("RMR") is an alternative asset manager founded in 1986.  David Hegarty worked for RMR and its predecessor company from 1987 until 2018.  For the last 15 years, David reported directly to me, with his responsibilities focused on all healthcare real estate acquisitions, dispositions and asset management activities at RMR.

When David started with the Company, RMR managed one publicly traded real estate investment trust, or REIT, which was focused upon buying and operating nursing homes and rehabilitation facilities.  Since then, RMR has grown into an alternative asset management company with, as of December 31, 2017, over $30 billion of assets under management, including $8.7 billion of senior living communities, medical office buildings, biotech research buildings and wellness centers.  David has been a highly respected leader and a key contributor to the development and success of RMR.

Throughout our long association, I have had high regard for David’s dedication, hard work and honesty.  I would strongly recommend David to any organization that desires to add a key player to its senior management or Board.  I am also available to discuss David further by telephone if desired.

Very truly yours,
                            

__________________________________
Adam Portnoy
President and Chief Executive OfficerExhibit

Exhibit 10.1

    
    

Senior Executive 
Short Term Incentive Plan (STIP)

As Adopted by the Compensation Committee on March 22, 2018
Objectives
The Senior Executive Short-Term Incentive Plan (the “Plan”) is designed to align executives’ interests with Berkshire Bank’s (the “Bank”) and Berkshire Hill Bancorp, Inc.’s (the “Company”) strategic plan and critical annual performance goals by providing meaningful “pay-at-risk” that is earned each year based on performance results. The Plan is intended to motivate, recognize and reward senior executives for their individual and collective contributions to the growth and profitability of the Company and Bank.  The Plan serves as a component of a competitive total compensation package that enables the Company and the Bank to attract and retain talent needed to drive the Company and the Bank’s future success. 
Participants
Participants are executives of the Bank who are recommended by the Chief Executive Officer and approved by the Compensation Committee of the Company (the “Committee”) to participate in the Plan.  The Chief Executive Officer, President, Chief Operating Officer and Senior EVPs are eligible to participate in the Plan, and such other executives as may be approved by the Committee.
Performance Period
The performance period and the Plan operate on a calendar year basis (January 1 through December 31) (the “Plan Year”).
Incentive Opportunity
Each participant will have an annual target incentive opportunity.  At the start of each Plan Year, the Committee will define the corporate measures and goals which will serve as the basis for funding the incentive pool.  Additionally, the Committee will approve the individual goals which will be used to determine the individual annual cash award (the “Award”).    
Trigger/Performance Gate
The Committee may determine, in its sole discretion, that bonuses will not be paid to some or all Participants under the Plan for a particular Plan Year if certain corporate performance metrics are not satisfied by setting a trigger/performance gate.  Once the trigger/performance gate is achieved, the plan payouts will be determined based on performance measures (corporate and individual) as outlined below. 
Performance Measures 
Payment of Awards in any Plan Year is contingent upon the performance objectives specified by the Committee for any Participant being met by that Participant.  The specific goals are determined annually by the Committee and are subject to change by the Committee, and will be based on any one or more of the following, unless the Committee elects other criteria: 

		
	(1)
	basic earnings per share;

		
	(2)
	basic cash earnings per share;

		
	(3)
	diluted earnings per share;

		
	(4)
	core earnings per share;

		
	(5)
	diluted cash earnings per share;

		
	(6)
	net income or core net income;

		
	(7)
	cash earnings or dividend generation;

		
	(8)
	net interest income;

		
	(9)
	non-interest income;

		
	(10)
	general and administrative expense to average assets ratio;

		
	(11)
	cash general and administrative expense to average assets ratio;

		
	(12)
	efficiency ratio;

		
	(13)
	cash efficiency ratio;

		
	(14)
	return on average assets or return on assets;

		
	(15)
	return on tangible average assets or return on tangible assets;

		
	(16)
	core return on average assets;

		
	(17)
	cash return on average assets;

		
	(18)
	return on average stockholders’ equity (total, common or preferred);

		
	(19)
	cash return on average stockholders’ equity;

		
	(20)
	core return on stockholders’ equity;

		
	(21)
	return on average tangible stockholders’ equity;

		
	(22)
	cash return on average tangible stockholders’ equity;

		
	(23)
	core earnings;

		
	(24)
	operating income;

		
	(25)
	operating efficiency;

		
	(26)
	core operating efficiency ratio;

		
	(27)
	net interest margin (which may be with purchased loan accretion and FTE adjustments);

		
	(28)
	growth in assets, loans (including home equity lines of credit), or deposits;

		
	(29)
	loan production volume;

		
	(30)
	non-performing loans, non-accruing loans to total loans, non-accruing and delinquent loans to total loans, all loans to total loans;

		
	(31)
	cash flow;

		
	(32)
	capital preservation (core or risk-based);

		
	(33)
	interest rate risk exposure-net portfolio value;

		
	(34)
	interest rate risk-sensitivity;

		
	(35)
	liquidity parameters, loans to deposits, excess borrowing capacity;

		
	(36)
	strategic business objectives, consisting of one or more objectives based upon meeting specified cost targets, business/product expansion goals, and goals relating to acquisitions or divestitures, or goals relating to capital raising and capital management;

		
	(37)
	stock price (including, but not limited to, growth measures and total shareholder return);

		
	(38)
	operating expense as a percentage of average assets;

		
	(39)
	core deposits as a percentage of total deposits;

		
	(40)
	net charge-off percentage;

		
	(41)
	average percentage past due;

		
	(42)
	classified assets to total assets;

		
	(43)
	compliance/audit exam findings;

		
	(44)
	capital ratio, total capital to risk-weighted assets, common equity tier 1 to risk weighted assets, tier 1 capital to risk weighted assets, tier 1 capital to assets;

(45)    management achievement of strategic plan goals;
		
	(46)
	system knowledge & utilization of core applications;

		
	(47)
	customer service survey; 

		
	(48)
	expense management; 

		
	(49)
	asset quality; 

		
	(50)
	book value per share;

		
	(51)
	tangible book value per share;

		
	(52)
	non-performing loans to loans;

		
	(53)
	non-performing assets to assets;

		
	(54)
	net-charge off to average loans;

		
	(55)
	fee income to net interest and fee income;

		
	(56)
	fee income to revenue; 

		
	(57)
	total revenue;

		
	(58)
	yield to cost by product;

		
	(59)
	yield to cost by asset/liability class;

		
	(60)
	net interest spread;

		
	(61)
	cost of funds;

		
	(62)
	dividend payout ratio; or

		
	(63)
	any combination of the foregoing.

Performance measures may be based on the performance of the Company as a whole or on any one or more subsidiaries or business units of the Company or a subsidiary or business unit of the Bank, and may be measured relative to a peer group, an index or a business plan.  The terms of an Award may provide that partial achievement of corporate and/or individual performance goals may result in partial payment.  The Committee may provide for the exclusion of the effects of the following items:  (i) extraordinary, unusual, and/or nonrecurring items of gain or loss; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting principles, regulations or laws; or (iv) expenses incurred in connection with a merger, branch acquisition or similar transaction.  
If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or its subsidiaries conducts its business or other events or circumstances render current performance measures and/or goals to be unsuitable, the Committee may modify such performance measures and/or goals, in whole or in part, as the Committee deems appropriate.  If a Participant is promoted, demoted or transferred to a different business unit during a performance period, the Committee may determine that the selected performance goals or applicable performance period are no longer appropriate, in which case, the Committee, in its sole discretion, may (i) adjust, change or eliminate the performance measures or change the applicable performance period; or (ii) cause a cash payment to be made to the Participant in an amount determined by the Committee.
Incentive Award Formula
Incentive awards paid reflect a combination of the corporate financial performance, strategic plan implementation and individual performance.  This approach supports our desire to foster a collaborative team-oriented culture among our senior leadership team.  Corporate financial results and achievement of the strategic business plan funds the incentive awards as follows, unless determined otherwise by the Committee, and the following formula may be used at the sole discretion of the Committee: 

	
							
	 Incentive Target Opportunities for all Participants
	X
	Corporate Financial Performance
Scorecard
(0% - 150%)
	X
	Strategic Plan Multiplier
(85% - 115%) 
	=
	 Funded Incentive      Pool 

The Committee will establish the Corporate Financial Performance Scorecard measures which will be used to determine the executive incentive pool on an annual basis. Each corporate performance measure is treated independently and performance between threshold, target and stretch will be interpolated to reward incremental performance.  Performance below threshold will result in no award for that component.  Unless determined otherwise by the Committee, the Corporate Financial Performance Scorecard result will be determined formulaically based on achievement of predefined performance goals. 

Strategic Plan Multiplier
The Committee has the discretion to modify the pool +/- 15% based on its assessment of the level of achievement of corporate strategic goals during the year. In addition, the Committee will consider and discuss overall risk and can adjust the pool downward to reflect any risk or regulatory issues. 
Individual performance is measured in a “holistic” approach based on each participant’s individual scorecard, overall achievements and manager discretion.  
Once the pool is determined, the individual awards are allocated to reflect individual performance provided total awards do not exceed the Funded Pool and Individual awards do not exceed 200% of target.

Payout 
Awards will be calculated based on actual performance at the end of the year.  Results of the Corporate Financial Performance Scorecard and Strategic Plan Multiplier will be used to determine the incentive pool funding.  Achievement of strategic goals and overall risk are assessed and determined by the Committee.
The Committee (with input from the Chief Executive Officer for his reports) will determine the incentive awards to reflect individual performance based on achievements of individual goals and a holistic assessment of overall performance.
Total awards should not exceed the pool and individual awards should not exceed 200% of the executive’s original target.  Payouts will be made in cash no later than March 15 after the closing of the Bank’s financials each year.

EXAMPLE    

For the illustration, we assume an executive with $100k target incentive opportunity.
		
	1.
	The first step will evaluate performance based on the Corporate Scorecard and Strategic Plan achievement. The result of the Corporate Scorecard and Strategic Plan Modifier determines the pool of incentives available for distribution to all executives.  

In the illustration below the funding is calculated as:

		
	•
	Core Net Income (25% x 100% performance) + Efficiency Ratio (25% x 115%) + Criticized Assets (25% x130%) + Core ROA (25% x 100%) = 111.25% funding for Corporate Financial Performance.

Upon the Committee’s review of strategic plan achievements and in consideration of overall risk, a Strategic Plan Multiplier is determined to be 108%.

As a result, he total funding of the incentive pool is 111.25% x 108% = 120%.  

	
									
	Corporate Financial Performance Scorecard
	x
	Strategic Plan Multiplier
	=
	120%
Total Incentive Pool 

	Performance Measure
	Performance Goal  
	Weight
	Actual Performance
	Pool Allocation 

	Total Core Net Income
	TBD
	25%
	Target
	100%
	

Upon the Committee’s evaluation of strategic goals achievement and overall risk
(85% - 115%)
 

	Annual Core Efficiency Ratio
	TBD
	25%
	Above target
	115%

	Criticized Assets 
(Tier 1 + ALLL)
	TBD
	25%
	Near Stretch
	130%

	Core ROA
	TBD
	25%
	Target
	100%

	TOTAL
	100%
	111.25% 
	108%

The pool is the sum of all the total incentives for the top executives.

		
	2.
	Individual performance is considered to determine the actual award.  Individual performance can adjust the incentive award up or down, although total awards cannot exceed the pool and no single award should exceed 200% of target (e.g. $200k for our example).  

		
	•
	If the senior executive did not meet all goals, the award may be less than target.

		
	•
	If the senior executive exceeded all goals, the award may be higher than target. 

		
	•
	The senior executive’s award cannot exceed $200k (200% of $100,000 target incentive opportunity)

TERMS AND CONDITIONS

Eligibility/Participation
Participants must be employed or promoted by October 1st of the Plan Year and actively employed on the payout date to receive an award. In the event that an individual, who is due an incentive payout under the plan terminates his employment with the Bank between January 1 of a Plan Year and the date the incentive is paid, that individual’s incentive will be included in the pool and may be allocated to other participants of the plan.  
Payouts
Once the plan funding is known, actual awards will be determined based on individual performance.  Awards are scheduled to be paid no later than March 15 after determining the Company’s financial results for the previous year.  Payouts are pro-rated based on date of hire or promotion after March 31. 
    
Effective Date
The Plan is effective for fiscal years beginning on and after January 1, 2018 and shall continue thereafter until modified by the Committee.  The Committee retains the right as described below to amend, modify or discontinue the Plan at any time during the specified period.  The Plan will remain in effect until earned incentive compensation is paid to participants.
Plan Authorization and Oversight
The Plan is authorized by the Committee of the Board of Directors.  The Committee has the sole authority to interpret the Plan and to make or nullify any rules and procedures, as necessary, for proper administration. Any determination by the Committee and/or Board of Directors will be final and binding.  The Committee may, in its sole discretion, terminate or modify any aspect of the Plan.  However, no Plan amendment or termination will adversely affect an outstanding award.
Plan Changes or Discontinuance
Berkshire has developed the Plan on the basis of existing business, market and economic conditions; current philosophy and staff assignments. If substantial changes occur that affect these conditions, philosophy, assignments, or forecasts, Berkshire may add to, amend, modify or discontinue any of the terms or conditions of the Plan at any time.  The Committee may, at its sole discretion, waive, change or amend any of the Plan features as it deems appropriate.  
Termination of Employment
If a Plan participant is terminated by the Company or resigns, no incentive award will be paid.  (See exception for death, disability and retirement below.)  
Death, Disability, Retirement and Change in Control
In the event of death, disability and retirement, the Committee may, in its sole discretion, approve a pro rata payout to such Participant.  Unless the Committee determines otherwise, in the event of a Participant’s termination of employment on or after a change in control, as defined in the Company’s 2018 Equity Incentive Plan, such Participant’s Award will be paid pro-rata based on the portion of the Plan Year occurring and at the actual level of the performance measures that have been achieved; however, if the performance measurements are not reasonably determinable as of the date of a change in control, such Participant’s Award will be paid pro-rata based on the “target” level.

Ethics and Interpretation
If there is any ambiguity as to the meaning of any terms or provisions of the Plan or any questions as to the correct interpretation of any information contained therein, the interpretation expressed by the Committee will be final and binding.
The altering, inflating, and/or inappropriate manipulation of performance/financial results or any other infraction of recognized ethical business standards will subject a participant to disciplinary action up to and including termination of employment.  In addition, any incentive compensation under the Plan to which the participant would otherwise be entitled will be revoked.
Participants who have willfully engaged in any activity, injurious to the Bank or Company, will upon termination of employment, death, or retirement, forfeit any incentive award or payment earned during the Plan year in which the termination occurred.
Withholding of Taxes
Incentive awards will be subject to applicable federal (including FICA), state and local tax withholding requirements.  The Bank shall have the right to deduct from the incentive awards paid in cash or from other wages paid to the participant any federal, state or local taxes required by law to be withheld with respect to such incentive awards.  In the case of incentive awards paid in Bank stock, the Bank may require the participant or other person receiving such shares to pay to the Bank the amount of any such taxes that the Bank is required to withhold with respect to such awards, or the Bank may deduct from other wages paid by the Bank the amount of any withholding taxes due with respect to such awards.  If the Compensation Committee so permits, a participant may elect to satisfy the Bank’s income tax withholding obligation, with respect to awards paid, in Bank stock by having shares withheld up to an amount that does not exceed the participant’s minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.  The election must be in a form and manner prescribed by the Committee. 
CLAWBACK POLICY ON RECOUPMENT OF INCENTIVE COMPENSATION
The Committee may, in its sole discretion, subject to the terms of this Policy set forth below and to the extent legally permitted, require the return, repayment or forfeiture of any annual or long-term incentive compensation payment or award made or granted to any current or former Executive Officer during the 3-year period preceding a Triggering Event (as defined below).   This policy is applicable to awards made or granted only after the effective date.
A “Triggering Event” is defined as restatement of previously reported financial statements due to the material noncompliance with any financial reporting requirement under the securities laws (a “Restatement”) is filed by the Company with the Securities and Exchange Commission (the “SEC”); or misconduct by an “Executive Officer”.
In the case of a Triggering Event, the amount to be returned, repaid or forfeited shall be limited to the excess of (i) the amount of the Executive Officer’s payment or award for the relevant period which was predicated upon achieving certain financial results that were subsequently the subject of the Restatement, correction or adjustment, over (ii) any lower payment or award that would have been made to the Executive Officer based upon the financial results of the Company contained in the Restatement or corrected or adjusted financial results.   If the Triggering Event results from misconduct without a Restatement of financial statements, the amount to be repaid or forfeited shall be determined by the Committee and approved by the full Board,
For purposes of this Policy, (i) the term “Executive Officer” means those persons designated by resolution of the Board of Directors of the Company as executive officers as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended, and all participants that are designated at or above the executive level, and (ii) “Misconduct” means fraud, commission of a felony, material violation of any written agreement with or policies of the Company, or any other material breach of fiduciary duty injurious to the Company.
The Committee shall make all determinations regarding the application and operation of this policy in its sole discretion, and all such determinations shall be final and binding for purposes of the application of this policy.  Notwithstanding the foregoing, the Committee may amend or change the terms of this Policy at any time for any reason, including as required to comply with the rules of the SEC and the New York Stock Exchange implementing Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Further, the exercise by the Committee of any rights pursuant to this policy shall be without prejudice to any other rights that the Company or the Committee may have with respect to any Executive Officer subject to this policy.

Risk 
In order to help insure the Company's safety and soundness, the Committee reserves the right to modify or adjust payments to reflect material regulatory findings and/or asset quality deterioration. A portion of the Company's strategic plan modifier concerns asset quality soundness. A review/comparison of the Company's asset quality results vs. trends, tolerance level ranges and the peer group will be provided to the Committee prior to payout. 
Miscellaneous
The Plan will not be deemed to give any participant the right to be retained in the employ of the Bank or Company, nor will the Plan interfere with the right of the Bank or Company to discharge any participant at any time.
In the absence of an authorized, written employment contract, the relationship between executives and the Bank or Company is one of at-will employment. The Plan does not alter the relationship.
The Plan and the transactions and payouts hereunder shall, in all respect, be governed by, and construed and enforced in accordance with the laws of the State of Massachusetts.

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