EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made and entered into this 1st day of June, 2003, by and
between Fresenius Medical Care North America ("FMCNA" or the "EMPLOYER"), with
principal offices located at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 and Xxxxxxx
Xxxxxxx ("EMPLOYEE") currently residing at 00 Xxxx Xxxx Xxxx, Xxxxxxxx, XX
00000.
WITNESSETH:
WHEREAS, FMCNAdesires to employ EMPLOYEE as Senior Vice President and Chief
Financial Officer, 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. FMCNA hereby employs EMPLOYEE as Senior Vice President and
Chief Financial Officer, 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 June 1, 2003 and
continue thereafter, unless terminated in accordance with the provisions
hereinafter stated.
3. DUTIES AND RESPONSIBILITIES. EMPLOYEE shall serve full time as Senior Vice
President and Chief Financial Officer and will report directly to the
Chief Executive Officer of FMCNA. 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. Duties and responsibilities will
include the following areas:
a) EMPLOYEE will have the following Finance and Accounting functions
reporting to him: Treasury, Tax, Internal Audit and Corporate
Finance.
b) All Senior Finance Personnel (Vice President of Finance) reporting
to the staff of the FMCNA Chief Executive Officer will have a strong
dotted line reporting responsibility to the FMCNA Senior Vice
President and Chief Financial Officer. Other, lower level, finance
personnel may be added to this list at the EMPLOYEE's discretion.
c) EMPLOYEE, in cooperation with Division Presidents, will discuss and
agree on Divisional Vice President of Finance's annual objectives
and performance evaluation.
d) EMPLOYEE will be a part of the decision process, with Division
Presidents, on the appointment to and removal of the divisional vice
president finance position. EMPLOYEE must approve the requisition to
hire for all other finance positions in FMCNA prior to the
commencement of interviewing. EMPLOYEE must approve the final
candidate and offering package prior to an offer being extended.
EMPLOYEE must approve any material changes to, or abolishing of,
finance positions within the divisions and corporate staffs.
e) EMPLOYEE will need to request direct support from divisional finance
personnel on time sensitive projects and this work will take
preference over other divisional requirements.
f) EMPLOYEE will have final approval on all FMCNA financial statements,
disclosures and reports to FMCAG.
g) EMPLOYEE will have Final Approval on all financial policies of
FMCNA.
h) EMPLOYEE will have a role with Security Analysts.
4. COMPENSATION AND BENEFITS.
a) Base Salary. EMPLOYER shall pay EMPLOYEE for all services rendered a base
salary of Three Hundred Seventy Five Thousand Dollars and No Cents
($375,000.00) per year (the "Base Salary"), payable in accordance with
FMCNA's payroll procedures, subject to customary withholding and
employment taxes. At
the end of each year of employment hereunder, EMPLOYEE's performance for
the prior year shall be reviewed and evaluated. If EMPLOYEE's performance
is satisfactory, EMPLOYEE shall receive an increase in his base salary
commensurate with level of achievement.
b) Incentive Compensation. During EMPLOYEE's employment with FMCNA, EMPLOYEE
shall be entitled to participate in FMCNA's Management Bonus Plan and any
other such incentive compensation plans as are now available or may become
available to other similarly positioned senior executives of FMCNA.
EMPLOYEE will be in the FMCNA Management Bonus Plan at a target level
bonus of fifty percent (50%) and the maximum bonus is one hundred percent
(100%) of base salary. Funding for the plan is based upon attainment of
specific individual and company financial objectives. EMPLOYEE's
entitlement to a bonus under the Management Bonus Plan will be governed by
terms of that Plan.
c) Stock Plan. EMPLOYEE shall be eligible to participate in the current
Fresenius Medical Care AG Stock Incentive Plan, and any future stock
incentive plan (individually a "Stock Plan" and collectively, the "Stock
Plans"), subject to IRS approval of such respective Stock Plans. In
addition to the existing options to purchase Fresenius Medical Care AG
Preference Shares previously granted to EMPLOYEE (the "Existing Options"),
EMPLOYEE shall be eligible to receive additional option grants in amounts
as and if approved by the Fresenius Medical Care AG Managing Board.
d) Benefit Programs. EMPLOYEE shall continue to be eligible to participate in
the group employee benefits programs at the senior executive level as now
established or which subsequently become available.
e) Life Insurance. EMPLOYEE will be provided with life insurance in
accordance with FMCNA's policy, currently capped at Four Hundred Thousand
Dollars ($400,000). EMPLOYEE will be provided with the opportunity to
purchase supplemental life insurance of an additional Six Hundred Thousand
Dollars ($600,000) beyond the current policy of coverage at his own
expense, with proof of good health.
f) Automobile. EMPLOYEE will be provided with a company car allowance of
Seven Hundred Dollars ($700) paid monthly and treated as ordinary income.
g) Financial Planning/Tax Preparation. EMPLOYEE will be provided with an
allowance of Two Thousand Dollars ($2,000) to be paid based upon submitted
documentation of expenses incurred as a result of financial planning
assistance or income tax preparation. Reimbursement will be treated as
ordinary income.
h) Expenses. EMPLOYEE will be reimbursed for travel and other expenses
related to the performance of his duties under the Agreement and in
accordance with the EMPLOYER's policies.
i) Vacation/PTO. EMPLOYEE shall be allowed to carry-over up to two hundred
(200) hours from year-to-year without losing such time. EMPLOYEE shall
also accrue PTO days at the maximum available to senior executives which
currently provides for thirty (30) days of PTO per year.
5. TERMINATION OF EMPLOYMENT. EMPLOYEE's employment hereunder may be
terminated under the following circumstances:
a) Death. EMPLOYEE's employment hereunder shall terminate upon his death.
b) Total Disability. The EMPLOYER may terminate EMPLOYEE's employment
hereunder upon EMPLOYEE becoming "Totally Disabled." For purposes of this
Agreement, EMPLOYEE shall be "Totally Disabled" if EMPLOYEE is physically
or mentally incapacitated so as to render EMPLOYEE incapable of performing
EMPLOYEE's usual and customary duties under this Agreement. EMPLOYEE's
receipt of Social Security disability benefits or disability benefits
under a Company-sponsored long-term disability plan shall be deemed
conclusive evidence of Total Disability for purpose of this Agreement;
provided, however, that in the absence of EMPLOYEE's receipt of such
Social Security or long-term disability benefits, the Company's Board of
Directors may, in its reasonable discretion (but based upon medical
evidence), determine that EMPLOYEE is Totally Disabled.
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c) Voluntary Termination. EMPLOYER or EMPLOYEE may terminate EMPLOYEE's
employment hereunder at any time after providing written notice to the
other party. The EMPLOYEE is required to give the EMPLOYER at least thirty
(30) days written notice if he wishes to terminate his employment pursuant
to this provision.
d) Termination by the EMPLOYER for Cause. The EMPLOYER may terminate
EMPLOYEE's employment for Cause at any time after providing thirty (30)
days' written notice to EMPLOYEE. Such notice shall specify in reasonable
detail the nature of the Cause, and during such thirty (30) day period,
EMPLOYEE shall have the opportunity to cure the stated Cause, if at all
possible. If EMPLOYEE fails to cure a stated Cause, or if such Cause
cannot be cured, EMPLOYEE's employment hereunder shall terminate at the
end of the thirty (30) day period, but without prejudice to EMPLOYEE's
right to contest the existence of any stated Cause or to contest the fact
that the Cause has not been cured. For purposes of this Agreement, the
term "Cause" shall mean, with respect to the EMPLOYEE, any of the
following: (i) conviction of EMPLOYEE of a felony; (ii) deliberate and
continual refusal to satisfactorily perform employment duties reasonably
requested by the EMPLOYER; (iii) fraud or embezzlement determined in
accordance with the EMPLOYER's normal, internal investigative procedures
consistently applied in comparable circumstances to EMPLOYEES; (iv)
failure to obtain and maintain in good order any licenses required for
EMPLOYEE to perform his duties under this Agreement; or (v) a breach of
any of the covenants set forth in Section 7 below.
e) Termination by EMPLOYEE for Cause. This Agreement may be terminated by
EMPLOYEE in the event of a breach by FMCNA of any of its obligations under
this Agreement, provided EMPLOYEE gives FMCNA written notice specifying
the manner in which he believes FMCNA has breached this Agreement and
FMCNA 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.
f) Notice of Termination. Any termination by the EMPLOYER or the EMPLOYEE
under this Agreement shall be communicated by notice of termination to the
other party hereto. For purposes of this Agreement, a Notice of
Termination shall mean a notice in writing which shall indicate the
specific termination provision in this Agreement relied upon to terminate
EMPLOYEE's employment and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of EMPLOYEE's
employment under the provision so indicated.
6. COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT.
a) Under all circumstances, upon termination the EMPLOYEE shall be entitled
to receive:
(i) Any accrued but unpaid Base Salary for services rendered to
the date of termination;
(ii) Accrued PTO; and
(ii) Any benefits to which EMPLOYEE may be entitled upon
termination pursuant to the plans, policies and arrangements
referred to in Section 4 hereof shall be determined and paid
in accordance with the terms of such plans, policies and
arrangements. Upon any such termination, EMPLOYEE shall have
the right to exercise his Vested Stock Options in accordance
with the terms of the plan. Should EMPLOYEE fail to exercise
these options within this period, they will be forfeited at
the end of said period.
b) In the event that EMPLOYEE's employment hereunder is voluntarily
terminated by the EMPLOYER in accordance with Section 5(c), or in the
event that EMPLOYEE's employment hereunder is terminated by the EMPLOYEE
in accordance with Section 5(e), the EMPLOYEE shall also be entitled to
receive:
(i) A payment equal to twenty-four (24) months Base Salary, at the
rate in effect on the date of termination of employment, such
amount to be paid as salary continuation with benefits.
EMPLOYEE may request and FMCNA will agree that any remaining
salary continuation be paid
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in a lump sum. If a lump sum is selected, all benefits
entitlement will cease as of the date of such payment; and
(ii) A pro-rated portion of the EMPLOYEE's annual bonus based upon
termination of work date.
c) Any stock options or other awards will continue to vest in accordance with
the terms of the award and the plan pursuant to which it was made. If the
terms of any award and governing plan are silent with respect to
termination of employment, such award will lapse immediately upon such
termination.
7. NON-DISCLOSURE/NON COMPETITION AGREEMENT. EMPLOYEE acknowledges that
during the term of employment with EMPLOYER, he will have access to and
become acquainted with Confidential Information of the EMPLOYER.
Confidential Information means all information related to the present or
planned business of FMCNA that has not been released publicly by
authorized representatives of FMCNA, and shall include but not be limited
to, trade secrets and know-how, inventions, marketing and sales programs,
employee, customer, patient and supplier information, information from
patient medical records, financial data, pricing information, regulatory
approval and reimbursement strategies, data, operations and clinical
manuals.
EMPLOYEE agrees not to use or disclose, directly or indirectly, any
Confidential Information of FMCNA at any time and in any manner, except as
required in the course of his employment with FMC or with the express
written authority of FMCNA.
EMPLOYEE understands that his non-disclosure obligations will continue
following his termination of employment.
EMPLOYEE agrees that during the term of his employment, and for a period
of one (1) year immediately after he leaves the employment of FMCNA for
any reason or the end of the period during which EMPLOYEE continues to
receive salary continuation after leaving the employment of FMCNA,
whichever is greater, EMPLOYEE will not directly or indirectly for his own
benefit or the benefit of others:
a) render services for a competing organization in connection
with competing products as an employee, officer, agent,
broker, consultant, partner, stockholder (except that EMPLOYEE
may own three percent (3%) or less of the equity securities of
any publicly-traded company);
b) hire or seek to persuade any employee of FMC to discontinue
employment or to become employed in any competing organization
or seek to persuade any independent contractor or supplier to
discontinue its relationship with FMCNA; and
c) solicit, direct, take away or attempt to take away any
business or customers of FMCNA.
Nothing in this Agreement would preclude EMPLOYEE from working for a
competitor of FMCNA's subsequent to termination of EMPLOYEE's employment
provided EMPLOYEE will not be engaged, directly or indirectly, in any
business in which FMCNA is actively engaged at the time of EMPLOYEE's
termination or in any new business which FMCNA is in the process of
setting up in which EMPLOYEE had direct involvement while employed by
FMCNA. EMPLOYEE also agrees to inform FMC of any such employment with a
competitor before beginning such employment.
8. ENFORCEMENT OF COVENANTS.
a) EMPLOYEE agrees that if the EMPLOYER determines that EMPLOYEE has breached
any of the covenants set forth in Section 7 at any time, the EMPLOYER
shall have the right, notwithstanding anything herein to the contrary, to
discontinue any or all amounts otherwise payable to EMPLOYEE hereunder.
Such termination of employment or discontinuance of payments shall be in
addition to and shall not limit any and all other rights and remedies that
the EMPLOYER may have against EMPLOYEE.
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b) Right to Injunction. EMPLOYEE acknowledges that a breach of the covenants
set forth in Section 7 hereof will cause irreparable damage to the
EMPLOYER with respect to which the EMPLOYER's remedy at law for damages
will be inadequate. Therefore, in the event of breach or anticipatory
breach of the covenants set forth in this section by EMPLOYEE, EMPLOYEE
and the EMPLOYER agree that the EMPLOYER shall be entitled to the
following particular forms of relief, in addition to remedies otherwise
available to it at law or equity: injunctions, both preliminary and
permanent, enjoining or restraining such breach or anticipatory breach and
EMPLOYEE hereby consents to the issuance thereof forthwith and without
bond by any court of competent jurisdiction.
c) Separability of Covenants. The covenants contained in Section 7 hereof
constitute a series of separate covenants, one for each applicable State
in the United States and the District of Columbia, and one for each
applicable foreign country. If in any judicial proceeding, a court shall
hold that any of the covenants set forth in Section 7 exceed the time,
geographic, or occupational limitations permitted by applicable laws,
EMPLOYEE and the EMPLOYER agree that such provisions shall and are hereby
reformed to the maximum time, geographic, or occupational limitations
permitted by such laws. Further, in the event a court shall hold
unenforceable any of the separate covenants deemed included herein, then
such unenforceable covenant or covenants shall be deemed eliminated from
the provisions of this Agreement for the purpose of such proceeding to the
extent necessary to permit the remaining separate covenants to be enforced
in such proceeding. EMPLOYEE and the EMPLOYER further agree that the
covenants in Section 7 shall each be construed as a separate agreement
independent of any other provisions of this Agreement, and the existence
of any claim or cause of action by Employee against the Company whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by the Company of any of the covenants in Section 7.
9. FMCNA DOCUMENTS AND EQUIPMENT. All documents and equipment relating to the
business of FMCNA, whether prepared by EMPLOYEE or otherwise coming into
EMPLOYEE's possession, are the exclusive property of FMCNA, and must not
be removed from the premises of FMCNA except as required in the course of
employment. Any such documents and equipment must be returned to FMCNA
when EMPLOYEE leaves the employment of FMCNA.
10. WITHHOLDING OF TAXES. The EMPLOYER may withhold from any compensation and
benefits payable under this Agreement all applicable federal, state,
local, or other taxes.
11. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement shall constitute the
entire agreement between the parties 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
parties.
12. NOTICES. Any notice, consent, request or other communication made or given
in connection with this Agreement shall be in writing and shall be deemed
to have been duly given when delivered or mailed by registered or
certified mail, return receipt requested, to those listed below at their
following respective addresses or at such other address as each may
specify by notice to the others:
To the Employer:
Fresenius Medical Care North America
Corporate Headquarters
Two Ledgemont Center
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
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Attention: Vice President, Human Resources
To Employee:
At the address for Employee set forth above
13. 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.
14. SEPARABILITY. If any term or provision of this Agreement is declared
illegal or unenforceable by any court of competent jurisdiction and cannot
be modified to be enforceable, such term or provision shall immediately
become null and void, leaving the remainder of this Agreement in full
force and effect.
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.
NATIONAL MEDICAL CARE, INC. D/B/A
FRESENIUS MEDICAL CARE
WITNESS NORTH AMERICA, EMPLOYER
/s/Xxxxxxxx Xxxxx By:/s/Xxx X. Xxxxx 6/20/03
--------------------------- ---------------------------------- -------
Xxx X. Xxxxx (DATE)
Chief Executive Officer
WITNESS XXXXXXX XXXXXXX
/s/Xxxxxxxx Xxxxx /s/Xxxxxxx Xxxxxxx 6/20/03
--------------------------- ------------------------------------ -------
(Employee Signature) (DATE)
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