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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of February 6, 1996, by and
between RENAL CARE GROUP, INC., a Delaware corporation (the "Company"), and XXX
XXXXX (hereinafter "Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee, and Employee desires to
be employed by the Company, on the terms and conditions contained herein; and
WHEREAS, in serving as an employee of the Company, Employee has and will
participate in the use and development of confidential proprietary information
about the Company, its customers and suppliers, and the methods used by the
Company and its employees in competition with other companies, as to which the
Company desires to protect fully its rights; and
WHEREAS, the Company wishes to enter into an agreement with Employee
whereby Employee shall agree not to compete with the Company in any current or
future business activity conducted or entered into by the Company and to hold
certain information obtained by and through Employee's employment in
confidence.
NOW, THEREFORE, in consideration of the compensation payable to Employee
by the Company pursuant to this Agreement, and the mutual promises, covenants,
representations and warranties contained herein, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do agree as follows:
1. Employment.
Effective on February 6, 1996, the Company hereby employs Employee, and
Employee hereby agrees to accept employment with the Company, upon the terms and
conditions hereinafter set forth.
2. Term.
This Agreement shall begin on February 6, 1996 (the "Effective Date"),
and shall continue for an initial period of thirty-six (36) months (the
"Initial Period"), subject to earlier termination by employee or the Company as
hereinafter provided. This Agreement shall renew for additional terms of
twelve (12) months each, subject to earlier termination hereinafter provided,
on the same terms and conditions (subject to mutually agreeable modifications,
if any).
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3. Compensation and Benefits
(a) Base Compensation: The Company shall pay Employee an annual
salary of One Hundred Seventy-Five Thousand Dollars ($175,000), as may be
adjusted as provided herein (the "Base Compensation"), payable according to the
pay periods of the Company as may be in effect from time to time. Such payment
shall be prorated for periods less than a full pay period. The Base
Compensation shall be subject to withholding for federal, state and local
payroll and all other taxes or withholdings applicable to Employee. Any
increase of the Base Compensation shall be at the discretion of the Company,
provided that any decreases to the then current Base Compensation shall require
the consent of the Employee.
(b) Benefits: During the term of this Agreement, Employee
shall also be entitled to participate in the insurance and other fringe benefits
made available generally to similar employees of the Company, as such benefits
may be determined from time to time by the Company, provided that Employee shall
have at least four (4) weeks of paid vacation time.
(c) Bonuses: In addition to the Base Compensation payable to
the Employee pursuant to the Section 3(a) above, from time to time Employees may
be entitled to an annual bonus as determined in the sole discretion of the
Company.
(d) Expenses: The Company shall reimburse Employee for any and
all expenses reasonably incurred by employee incident to the performance of the
duties imposed upon Employee hereunder.
4. Duties, Extent of Services.
Employee is engaged as Executive Vice President and Chief
Financial Officer and shall perform such duties and responsibilities as are
typically incident thereto, and shall perform in a faithful and competent manner
such additional duties as may be reasonably assigned from time to time by the
Company. Such duties shall be performed on a full-time basis for the Company at
the Company's offices in Nashville, Tennessee. Employee may be required, from
time to time, to perform his duties temporarily hereunder at such other place or
places as the Company shall reasonably require, provided that such period does
not exceed thirty (30) consecutive days without Employee's consent and that
during any such period Employee is able to return to Nashville, Tennessee at the
Company's expense for weekends.
Employee shall devote all of Employee's business time, attention,
knowledge, and skill solely to the business and interest of the Company, and the
Company shall be entitled to all the benefits, profits, and other issues arising
from, or incident to, all work, services, and advice of Employee.
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5. Termination.
This Agreement may be terminated by the parties in the manners
specified below:
(a) Termination without Cause. Either the Company or the
employee may terminate Employee's employment under this Agreement at any time
for any reason upon thirty (30) day's prior written notice to the other party.
(b) Termination for Cause.
The Company may terminate this Agreement on written notice
at any time for "cause". For purposes of this Agreement, "cause" shall mean:
(i) Employee is convicted of, pleads guilty to, or confesses to a felony or any
crime involving any act of dishonesty, fraud, misappropriation, embezzlement or
moral turpitude, in which event the Company may terminate this Agreement
immediately, (ii) the misconduct or gross negligence by Employee in connection
with the performance of Employee's duties hereunder, (iii) the engaging by
Employee in any fraudulent, disloyal or unprofessional conduct which results in
an injury to the Company, its affiliates or any of its or their centers,
monetarily or otherwise, (iv) Employee breaches any provision of Section 6 of
this Agreement, or (v) the failure by Employee to otherwise substantially
perform his duties with the Company (other than any such failure resulting from
the disability of Employee under Section 5(c)(i)) or the breach of any provision
of this Agreement other than Section 6. In the event of any termination for
cause pursuant to the provisions of (ii), (iii), (iv) or (v) of this subsection,
the Company shall give Employee written notice prior to such termination
detailing the specific acts, actions, failures, or events upon which the
forecast termination is based, and Employee shall have fifteen (15) days after
such written notice to cease such actions or otherwise correct any such failure
or breach. If Employee does not cease such action or otherwise correct such
failure or breach within such fifteen day time period, or having once received
such written notice and ceased such actions or corrected such failure or breach,
Employee at any time thereafter again so acts, fails or breaches, the Company
may terminate this Agreement immediately.
(c) Involuntary Termination.
The employment of Employee hereunder shall be automatically
terminated by the death or disability of Employee as outlined below.
(i) Disability. The Company may terminate this
Agreement at the time Employee shall have been Disabled for a continuous period
of six (6) months during any continuous twelve month period. For purposes of
this Paragraph 5(c)(i), the term "Disabled" shall mean Employee's inability to
perform the essential functions of his duties, with or without reasonable
accommodation. During Employee's six month period of Disability or such longer
wait period as may be provided for in any policy of disability that may be
maintained by the Company for the benefit of Employee, the Company agrees to
continue to pay Employee's Base
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Compensation (less regular withholdings for payroll or other taxes and other
required or proper items, and less any payments from all disability plans
provided by the Company). In the event of a termination of Employee on account
of Disability, however, the Company shall be obligated to pay only Employee's
Base Compensation that has been earned through the effective date of termination
(less regular withholdings for payroll or other taxes and other required or
proper times, and less any payments from all disability plans provided by the
Company).
(ii) Death. In the event Employee shall die during the
term of this Agreement, this Agreement shall terminate and Employee's estate
shall receive the remainder of the Base Compensation set forth in Section 3(a)
hereof accrued to the last day of the month in which death occurs.
(d) Post-Termination Compensation. Except as provided in
Section 5(c) above, upon termination of this Agreement, the Company shall be
relieved of all of its obligations hereunder notwithstanding any period of time
remaining under the initial or any renewal term, subject to the following:
(i) Termination without Cause. In the event that the
Company terminates Employee's employment hereunder without Cause under Section
5(a) above, then Employee shall, after the effective date of such termination,
as Employee's sole and exclusive remedy, receive the Base Compensation (as then
in effect) for a period of twelve (12) months after the termination date. If
the Employee's employment is terminated by the Company without Cause, the
Employee shall be under no duty to seek or accept other employment; but if he
shall do so, any compensation he shall receive therefrom shall not diminish the
Company's obligation to make payments required to the Employee hereunder. In
the event that Employee terminates his or her employment under Section 5(a)
above, the Company's obligation to pay Employee's Base Compensation shall
terminate as of the date of termination.
(ii) Termination for Cause. In the event that the
Company terminates Employee's employment hereunder with Cause under Section 5(b)
above, then Employee shall, after the effective date of such termination, as
Employee's sole and exclusive remedy, receive the Base Compensation (as then in
effect) for a period of one (1) month after the termination date.
(iii) Termination following Change in Control. If within
twelve (12) months following a Change in Control (as defined below), either (A)
the Company terminates the employment of Employee hereunder without Cause under
Section 5(a) above or (B) Employee resigns from a declined reassignment of a job
that is not reasonably equivalent in responsibility or compensation or that is
not in the same geographical area, then, in lieu of any other compensation that
may be specified herein, Employee shall continue to receive the Base
Compensation (as then in effect) for a period of thirty-six (36) months from the
date of termination payable in the same manner as it was being paid as of the
date of termination, provided, however, that the salary payment provided for
hereunder may at the option of the Company be paid in a single lump-sum payment,
to be paid not later than thirty (30) days after termination. In the event such
payment obligation arises, no compensation received from other
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employment (or otherwise) shall reduce the obligation to make the payment(s)
described in this paragraph.
(e) Change in Control. "Change in Control" means a change in
control of the Company of a nature that would be required to be reported
(assuming such event has not been "previously reported") in response to Item
1(a) of a Current Report on Form 8-K pursuant to Section 13 of 15(d) of the
Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that, without limitation, a
Change in Control shall also be deemed to have occurred at such time as:
(i) any "person" within the meaning of Section 14(d) of
the Exchange Act, other than the Company; a subsidiary, or any employee benefit
plan(s) sponsored by the Company or any Subsidiary, is or has become the
"beneficial owner," as defined in rule 13d-3 under the Exchange Act, directly or
indirectly, of 25% or more of the combined voting power of the outstanding
securities of the Company ordinarily having the right to vote at the election of
directors, or
(ii) individuals who constitute the Board immediately
prior to any meeting of stockholders (the "Incumbent Board") have ceased for any
reason to constitute at least a majority thereof, provided that any person
becoming a director whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least three-quarters (3/4) of the
directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director without objection to such nomination) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) upon approval by the Company's stockholders of a
reorganization, merger, share exchange or consolidation, other than one with
respect to which those persons who were the beneficial owners, immediately prior
to such reorganization, merger, share exchange or consolidation, or outstanding
securities of the Company ordinarily having the right to vote in the election of
directors own, immediately after such transaction, more than 75% of the
outstanding securities of the resulting corporation ordinarily having the right
to vote in the election of directors; or
(iv) upon approval by the Company's stockholders of a
complete liquidation and dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company other than
to a Subsidiary.
Notwithstanding the occurrence of any of the foregoing, the Board may
determine, if it deems it to be in the best interest of the Company and
consistent with a good faith interpretation of this Agreement, that an event or
events otherwise constituting a Change in Control shall not be so considered.
Such determination shall only be effective (A) if it is made by the Board prior
to the occurrence of an event that otherwise would be or probably will lead to a
Change in Control or after such event if made by the Board a majority of which
is composed of directors who were
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members of the Board immediately prior to the event that otherwise would be or
probably will lead to a Change in Control and 75% or more of such directors vote
in favor of such determination, and (B) if it is made with respect to all
executive officers of the Company. Upon such determination, such event or
events shall not be deemed to be in Change in Control for any purposes
hereunder.
6. Nondisclosure, Confidentiality; Competition.
(a) Employee agrees that, during the term of this Agreement and
of Employee's employment by the Company, and for a period twelve (12) months
after the termination of Employee's employment with the Company, Employee will
not in any manner, directly or indirectly, by himself or in conjunction with any
other person, (i) conduct any of the activities or perform any of the
responsibilities or duties that Employee provided the Company during his
employment by the Company for any business entity that is competitive with the
business of the Company or its affiliates or (ii) establish or own any
financial, beneficial or other interest in (other than an interest consisting of
less than one percent (1%) of a class of publicly traded security), make any
loan to or for the benefit of, or render any managerial, marketing or other
business advice, to any entity that is then conducting activities that are
competitive with those of the business of the Company or its affiliates, in
either case with a geographic territory defined as the greater of (i) a
seventy-five (75) miles radius of any renal dialysis center, unit or facility
owned or operated by the Company or an affiliate of the Company (an "RCG
Center"), or (ii) the geographic area, as narrowly construed as is practicable,
from which the Company received patients at each of the RCG Centers. For
purposes of this Section, the "business of the Company or its affiliates" shall
mean owning or operating a renal dialysis center, unit or facility, and
providing practice management services to nephrologists.
(b) Employee further agrees that, for a period of three (3) years
after the termination of Employee's employment with the Company, Employee will
keep confidential and not directly divulge, or allow through a lack of
reasonable care to be divulged to anyone, or use or otherwise appropriate for
Employee's own benefit or for the benefit of others, any knowledge or
information of a confidential nature with respect to the Company's and its
affiliates' current business, the Company itself, or any of its affiliates,
including all trade secrets, pricing information, marketing information or
technical information (hereinafter referred to as the "Confidential Data"),
except for (i) a disclosure that is required by law; or (ii) information that
has been made generally available to the public by the act of one who has the
right to disclose such information; or (iii) information that has become part
of the public domain through no fault of the Employee; and (iv) was known to
the Employee prior to June 1995. Employee hereby acknowledges and agrees that
the prohibitions against disclosure of Confidential Data recited herein are in
addition to, and not in lieu of, any rights or remedies which the Company may
have available pursuant to the laws of any jurisdiction or at common law to
prevent the disclosure of confidential information, and the enforcement by the
Company of its rights and remedies pursuant hereto shall not be construed as a
waiver of any other rights or available remedies which the Company may possess
in law or equity. Employee acknowledges that the Company has
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taken reasonable and appropriate steps to ensure the confidentiality and
non-disclosure of all such Confidential Data. For purposes of this Section the
Company's and its affiliates' "current business" shall mean owning or opening a
renal dialysis center, unit or facility.
(c) Employee further agrees that, for a period of three (3) years
after the termination of Employee's employment with the Company, Employee will
not, for his own benefit or the benefit of others, solicit any person or entity
that has or has had, or disrupt or attempt to disrupt, any relationship,
contractual or otherwise, with the Company or an affiliate of the Company
(including any patient, payor, physician, provider, managed care organization
or supplier) or any time during Employee's employment with the Company, for the
purpose of assisting, or creating such a relationship for, any business entity
that is competitive with the Company or an affiliate of the Company. For
purposes of this Section, a business entity is competitive with the Company or
an affiliate of the Company if it provides or offers any renal dialysis service
that is provided by the Company or an affiliate of the Company.
(d) Employee further agrees that, for a period of three (3) years
after the termination of Employee's employment with the Company, Employee shall
not induce, nor attempt to induce, any employee of the Company, or any of its
affiliates, to terminate such employee's association with the Company or any of
its affiliates.
(e) These post-employment covenants are considered by the parties
hereto to be fair, reasonable and integral for the protection of the Company.
The parties mutually agree that if a violation of any of these covenants occurs,
such violation or any threatened violation will cause irreparable injury to the
Company and the remedy at law for any such violation will cause irreparable
injury to the Company and the remedy at law for any such violation or threatened
violation will be inadequate. The parties acknowledge that these covenants will
survive, and remain in effect and enforceable after, termination of this
Agreement.
(f) Employee agrees to indemnify and hold harmless the Company from
and against any and all claims, causes of action, damages and/or any other
losses suffered or incurred by the Company as a result of any breach or
purported breach by Employee of any agreement applicable to Employee which
existed prior to the time of the entering into of this Agreement. Such
obligations of Employee to indemnify and hold the Company harmless shall include
any and all costs of defense of any such claim or threatened claim, including
reasonable attorneys' fees.
7. Severability.
The parties hereto hereby expressly agree and contract that it is
not the intention of either party to violate any public policy, or any statutory
or common law, and that if any paragraph, sentence, clause or combination of
the same of this Agreement shall be in violation of the laws of any state where
applicable, such paragraph, sentence, clause or the combination of the same
shall be void in the jurisdictions where it is unlawful, and the remainder
thereof shall remain binding on the parties hereto. It is the intention of the
parties to make the covenants of
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this Agreement binding only to the extent that they may be lawfully done under
existing applicable laws. In the event that any part of any term or covenant
of this Agreement is determined by a court of law or equity to be overly broad
or otherwise unenforceable, the parties hereto agree that such court shall be
empowered to substitute, and it is the intent of the parties hereto that such
court substitute, a reasonably judicially enforceable term or limitation in the
place of such unenforceable term or covenant, and that as so modified this
Agreement shall be fully enforceable.
8. Entire Agreement; Modification.
This Agreement constitutes the entire agreement between the
parties and supersedes any and all prior understandings or agreements, and any
changes or additions hereto must be in writing and signed by both parties.
9. Assignment.
(a) The rights and benefits of Employee under this
Agreement, other than accrued and unpaid amounts due under Section 3(a) hereof,
are personal to Employee and shall not be assignable.
(b) This Agreement may not be assigned by the Company
except to an affiliate of the Company, provided that such affiliate assumes the
Company's obligations under this Agreement; provided, further, that if the
Company shall merge or effect a consolidation or share exchange with or into,
or sell or otherwise transfer substantially all its assets to, another business
entity, the Company may assign its rights hereunder to that business entity
without the consent of the Employee provided that it causes such business
entity to assume the Company's obligations under this Agreement.
10. Notice.
The references to the notice periods of certain "days"
contained in this Agreement shall mean calendar days. Any notice provided for
in this Agreement shall be delivered to Employee at the most recent address of
employee listed in the Company's then current employment records. Notice to
the Company shall be delivered to the following address: c/o Renal Care Group,
Inc., 0000 Xxxx Xxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, Attention:
President.
11. Waiver.
The waiver by any party to this Agreement of a breach of any of the
provisions contained herein shall not operate or be construed as a waiver of
any subsequent breach.
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12. Disputes and Governing Law.
The Company and employee agree that any dispute arising in connection
with, or relating to, this Agreement or the termination of this Agreement, to
the maximum extent allowed by applicable law, shall be subject to resolution
through informal methods and, failing such efforts, through arbitration.
Either party may notify the other party of the existence of a dispute by
written notice to the address indicated above in Section 10. The parties shall
thereafter attempt in good faith to resolve their differences within thirty
(30) days after the receipt of such notice. If the dispute cannot be resolved
within such 30-day period, either party may file a written demand for
arbitration with the other party. The arbitration shall proceed in accordance
with the terms of the Federal Arbitration Act and the rules and procedures of
the American Arbitration Association. A single arbitrator shall be appointed
through the American Arbitration Association's procedures to resolve the
dispute.
The parties agree that in the event arbitration is necessary, the laws
of the State of Tennessee and any applicable federal law shall apply. The
place of the arbitration shall be Nashville, Tennessee.
The award of the arbitrator shall be binding and conclusive upon the
parties. Either party shall have the right to have the award made the
judgement of a court of competent jurisdiction in the State of Tennessee.
In the event of a dispute arising under this Agreement, the prevailing
party shall be entitled to all reasonable attorneys' fees incurred in
connection with such dispute. The Company agrees, to the maximum extent
permitted by law and the By-laws of the Company, to defend and indemnify the
Employee against and to hold the Employee harmless from any and all claims,
suits, losses, liabilities, and expenses (including disputes arising under this
Agreement and including reasonable attorney's fees and payment of reasonable
expenses incurred in defending against such claim or suite as such expenses are
incurred) asserted against the Employee for actions taken or omitted to be
taken by the Employee in good faith and within the scope of his
responsibilities as an officer or employee of the Company. If requested by the
Employee, the Company shall advance to the Employee, promptly following the
Company's receipt of any such request, any and all expenses for which
indemnification is available hereunder.
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IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement on the day and year first above written.
COMPANY:
RENAL CARE GROUP, INC.
By: /s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
President
[Corporate Seal]
EMPLOYEE:
/s/ Xxxxxx Xxxxx (Seal)
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Xxx Xxxxx
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