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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made and entered into this 23rd day October, 1998, by and
between National Medical Care, Inc. d/b/a Fresenius Medical Care North America
("FMC") or the "EMPLOYER"), with principal offices located at 00 Xxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000 and Xxxxx X. Xxxxx (`EMPLOYEE") currently residing at 000
Xxxxxxxxx Xxxx, Xxx Xxxxxx, XX 00000.
WITNESSETH:
WHEREAS, FMC desires to employ EMPLOYEE as Executive Vice President of Fresenius
Medical Care North America ("FMC"), and
WHEREAS, the parties hereto desire to express the terms and conditions of such
employment.
NOW THEREFORE, it is understood and agreed to between the parties as follows:
1. EMPLOYMENT. FMC hereby employs EMPLOYEE as its Executive Vice President,
and EMPLOYEE hereby accepts the employment upon the terms and conditions of
this Agreement.
2. TERM. The term of this Agreement shall commence as of the date EMPLOYEE
begins employment at FMC's Lexington, Massachusetts headquarters but no
later than October 5, 1998 and shall continue thereafter, unless terminated
in accordance with the provisions hereinafter stated.
3. DUTIES AND RESPONSIBILITIES. EMPLOYEE shall serve full-time as FMC's
Executive Vice President and will be responsible for business activities,
including full P&L responsibilities, for the company's Renal Products and
Laboratory and Diagnostic Services businesses and Corporate Information
Services. EMPLOYEE will also assume responsibility for future activities as
mutually agreed upon by EMPLOYEE and Xxx Xxxxx. EMPLOYEE shall report
directly to Xxx Xxxxx, the Chief Executive Officer of FMC. EMPLOYEE shall
to the best of his ability and experience competently, loyally, diligently
and conscientiously perform all of the duties and obligations expressly or
implicitly required under this Agreement. EMPLOYEE further agrees that he
will not in conducting business in the interest of the EMPLOYER engage in,
or knowingly permit others under his control to carry on, or induce others
to engage in any practice or commit acts in violation of any federal, state
or local law, ordinance, or in any material respect, any written company
policy or procedure. During the term of his employment, Xxxxx may continue
to serve on the Boards of Directors of St. Jude Medical, Inc. and Ribogene,
Inc.
4. COMPENSATION AND BENEFITS.
a) BASE SALARY. EMPLOYER shall pay EMPLOYEE for all services rendered a
base salary of $541,000 per year, (the "Base Salary"), payable in
accordance with FMC's payroll procedures, subject to customary
withholding and employment taxes. Salary will be reviewed annually.
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b) INCENTIVE COMPENSATION. During EMPLOYEE'S employment with FMC,
EMPLOYEE shall be entitled to participate in FMC's Management Bonus
Plan ("MBP") and such other incentive compensation plans as are now
available or may become available to other similarly positioned
officers of FMC. For executives, the target level bonus is forty
percent (40%) and the maximum bonus is one hundred percent (100%) of
base salary, pro-rated for the date employment commences. Funding for
the plan is based upon attainment of specific individual and company
financial objectives.
c) STOCK PLAN. EMPLOYEE shall be entitled to participate in the Fresenius
Medical Care AG ("Fresenius") 1998 Stock Incentive Plan (the "Stock
Plan"), subject to IRS approval of the Stock Plan. EMPLOYEE shall be
recommended to receive options to purchase 90,000 Preference Shares
(equivalent to 270,000 American Depository shares) constituting a
grant under that non-qualified stock plan for employees of Fresenius'
United States subsidiaries. Preference Shares are traded on the
Frankfort Stock Exchange and are Deutsche Xxxx denominations. A
vesting schedule will be recommended such that 15,000 shares vest on
the date of grant and 15,000 vest on each of the next five
anniversaries of the grant. In the event the 1998 Stock Plan does not
receive IRS approval, Xxxxx will be recommended to receive options
under the 1996 Stock Plan, as amended, subject to IRS approval of that
Plan. In the event the 1996 Stock Plan, as amended, does not receive
IRS approval, Xxxxx will be recommended to receive options under the
original 1996 Stock Plan which has been approved by the IRS.
d) BENEFIT PROGRAMS. EMPLOYEE shall be eligible to participate in the FMC
group employee benefits program as now established or which
subsequently becomes available, including all executive benefits.
e) LIFE INSURANCE. EMPLOYEE will be provided with life insurance in
accordance with FMC's policy, currently capped at $400,000. EMPLOYEE
will be provided with the opportunity to purchase supplemental life
insurance in excess of $400,000 but not to exceed $2,000,000 of
coverage at his own expense.
f) AUTOMOBILE. EMPLOYEE will be provided with a company car.
g) TAX PREPARATION. EMPLOYEE will be reimbursed annually for expenses
associated with individual income tax preparation up to a total of Two
Thousand Dollars ($2,000) each year.
h) VACATION. EMPLOYEE shall be eligible to participate in FMC's Paid Time
Off program which provides for thirty-five (35) days of Paid Time-Off
per year.
i) EXPENSE REIMBURSEMENT. EMPLOYEE will be reimbursed for all business
related expenses in accordance with FMC's Reimbursement policy.
5. RELOCATION. EMPLOYEE will relocate from New Canaan, CT to the Lexington, MA
area promptly upon commencement of employment. Relocation will be covered
under existing FMC policy and will include all costs of sale of his
existing residence and purchase of a new residence, all costs for packing,
moving and unpacking of household goods, househunting trips for EMPLOYEE
and his wife, travel to and from New Canaan during any transition
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period, and other miscellaneous relocation costs. Temporary housing will be
provided if needed for up to six (6) months.
6. TERMINATION OF EMPLOYMENT.
a) TERMINATION BY FMC. This Agreement may be terminated by FMC for cause
immediately upon notice to EMPLOYEE. FMC shall have cause for termination
in the event of:
i) A refusal by EMPLOYEE to perform duties incident to his employment
responsibilities, or violation of any written policy of FMC in any
material respect or failure to abide by the covenants set forth in
Paragraph 3 of this Agreement.
ii) EMPLOYEE'S death.
iii) The final, unappealable conviction of EMPLOYEE of any felony.
No severance benefits are due to EMPLOYEE in the event he is terminated for
cause.
b) TERMINATION BY FMC FOR DISABILITY. FMC may also terminate this Agreement in
the event of the disability of EMPLOYEE during his employment under this
Agreement through any illness, injury, accident or condition of either a
physical or psychological nature and, as a result in the opinion of a
physician mutually agreeable to the parties is expected to be unable to
perform substantially all of his duties and responsibilities hereunder for
one hundred eighty (180) consecutive calendar days during the year
following the physician's examination of EMPLOYEE.
c) TERMINATION BY EMPLOYEE. This Agreement may be terminated by the EMPLOYEE
in the event of a breach by FMC of any of its obligations under this
Agreement, provided EMPLOYEE gives FMC written notice specifying the manner
in which he believes FMC has breached this Agreement, and FMC has thirty
(30) days from receipt of such notice to cure such breach, or in the case
of other than a non-payment of money breach, if such breach cannot be cured
within thirty (30) days, to commence a good faith effort to cure.
Additionally, this Agreement may be terminated by EMPLOYEE if Xxx Xxxxx is
replaced as CEO by any individual other than EMPLOYEE, if there is a
reduction in EMPLOYEE'S position or responsibilities, if EMPLOYEE suffers a
reduction in salary or significant reduction in benefits or FMC experiences
a change in control defined as any of the following: (i) the transfer
(whether by sale, dividend, exchange, lease, merger, consolidation or
otherwise) of greater than 50 percent of the voting power of FMC, within
any 12 month period, (ii) the transfer (whether by sale, dividend,
exchange, lease, merger, consolidation or otherwise) of all or
substantially all the assets or stock of FMC or (iii) any other action
which results in persons other than the current majority shareholders of
FMC, having the voting power to direct the management of FMC or if FMC
relocates its corporate headquarters more than fifty (50) miles from its
present location in Lexington, Massachusetts.
d) PAYMENT UPON TERMINATION. In the event this Agreement is terminated for any
reason, EMPLOYEE shall be entitled to receive all accrued but unpaid annual
base salary earned by EMPLOYEE to the date of termination. In addition, if
FMC terminates this Agreement for any reason other than a reason set forth
in Section 6(a) or 6(b) or if EMPLOYEE terminates
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this Agreement pursuant to Section 6(c), EMPLOYEE shall also receive (i)
Salary and benefits continuation for a period of two (2) years following
termination of employment. EMPLOYER will at it option pay such severance as
Salary Continuation or in lump sum payment without benefits. If FMC
terminates this Agreement pursuant to Section 6(b), EMPLOYEE shall be
entitled to salary and benefits continuation or an equivalent lump sum
payment without benefits, at EMPLOYER'S option, for a period not to exceed
one and one-half years beginning on the 181st day of disability. In
addition, if EMPLOYEE is terminated other than for reasons set forth in
Section 6(a), EMPLOYER will grant EMPLOYEE one (1) year from date of
termination to exercise any outstanding options and Xxx Xxxxx, or his
successors, with use his best efforts to recommend that EMPLOYEE be granted
up to 10 years from date of grant to exercise any such options.
7. NON-DISCLOSURE/NON-COMPETITION AGREEMENT. EMPLOYEE, as a condition of
employment, agrees to execute a Non-Disclosure/Non-Competition Agreement
which is incorporated by reference herein.
8. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement shall constitute the entire
Agreement between the parties, with the exception of the
Non-Disclosure/Non-Competition Agreement referenced in Paragraph 7 above,
and supersedes all existing agreements between them, whether oral or
written, with respect to the subject matter hereof. Any waiver, alteration,
or modification of any of the provisions of this Agreement, or cancellation
or replacement of this Agreement shall be accomplished in writing and
signed by the respective parities. If subsequent to EMPLOYEE'S employment,
FMC decides to materially modify this Agreement, FMC will reimburse
EMPLOYEE for legal fees he may incur with regard to any such modification
in an amount not to exceed Five Thousand Dollars ($5,000) per occurrence.
9. NOTICES. All notices hereunder shall be in writing and shall be deemed to
be given when sent by certified mail to either party at the address of such
party set forth above or at such other address as shall have been
designated by written notice by such party to the other party.
10. GOVERNING LAW. This Agreement shall be construed in accordance with, and
the rights of the parties shall be governed by, the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the
undersigned duly authorized persons as of the day and year first stated above.
FRESENIUS MEDICAL CARE NORTH AMERICA
BY: /s/ Xxx X. Xxxxx /s/ Xxxxx Xxxxx
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Xxx X. Xxxxx Xxxxx Xxxxx
Chief Executive Officer
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