EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 15th day of
December 2003, by and between RENAL CARE GROUP, INC., a Delaware corporation
(the "Company"), and XXXXXXX X. XXXXX, M.D., Ph.D. (hereinafter "Employee").
WITNESSETH:
WHEREAS, Employee is currently Executive Vice President and Chief
Medical Officer of the Company under an Employment Agreement effective as of
July 1, 2000 (the "Old Agreement"), and the Company desires to employ and retain
Employee to continue to act as its Executive Vice President and Chief Medical
Officer; and
WHEREAS, Employee desires to remain an employee of the Company on the
terms and conditions contained in this Agreement; and
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.
The Company employs Employee and Employee accepts employment
with the Company under the terms of this Agreement effective as of December 15,
2003 (the "Effective Date").
2. Term.
The term of this Agreement shall begin on the Effective Date
and shall continue for an initial term of approximately three years, ending on
December 31, 2006 (the "Initial Period"), subject to earlier termination by
Employee or the Company as hereinafter provided. Unless one party gives the
other notice of non-renewal not less than 60 days prior to the expiration of the
Initial Period or an additional term, this Agreement shall renew for additional
terms of 12 months each, subject to earlier termination as hereinafter provided,
on the same terms and conditions (subject to mutually agreeable modifications,
if any).
3. Compensation and Benefits.
(a) Base Compensation. The Company shall pay Employee a
base salary at an annual rate of $400,000 from the Effective Date through March
31, 2004 (the "Base Compensation"). Such Base Compensation may be adjusted as
provided herein. The Base Compensation is payable according to the pay periods
of the Company as may be in effect from time to time. Such payments will be
prorated for periods less than a full pay period. The Base Compensation will be
subject to withholding for federal, state and local payroll and all other taxes
or withholdings applicable to Employee. Any increases of the Base Compensation
will be at the discretion of the Company, provided that the Company may not
decrease the then current Base Compensation without the consent of Employee. The
Base Compensation and target percentage for the Annual Bonus (as defined below)
will be reviewed annually by the Compensation Committee of the Company.
(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 senior management 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 weeks of paid vacation time. In addition,
during the term of this Agreement, the Company will reimburse Employee an amount
equal to the cost of the policy of whole life insurance with a face value of
$1,000,000 maintained by Employee as of the date of this Agreement, such
insurance being payable to one or more beneficiaries designated by Employee from
time to time.
(c) Annual Bonuses. In addition to the Base Compensation,
Employee will be entitled to an annual bonus (the "Annual Bonus"), with a target
amount equal to 75% of the Base Compensation for such year. The actual amount of
the Annual Bonus paid will be determined based on the Company's and Employee's
achievement of performance goals reasonably established by the Compensation
Committee of the Company and, in the case of performance goals established
specifically for Employee, agreed to by Employee. The Company agrees that the
Company-related performance goals for Employee shall be substantially similar to
those established for other members of senior management.
(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.
(e) Restricted Stock. In addition to the compensation and
benefits described above, the Company will grant Employee 26,667 restricted
shares of Common Stock of the Company. The restrictions on such shares shall
lapse as to one-third of such shares on December 15, 2004, one-third of such
shares on May 1, 2005 and the remaining one-third of such shares on May 1, 2006.
These restrictions will lapse earlier upon a change in control of the Company
(as defined below) or the death or permanent disability of Employee.
(f) Signing Bonus. In addition to the compensation and
benefits described above, the Company will pay Employee a bonus equal to $30,000
with the Company's regular payroll that includes December 15 of each of 2003,
2004 and 2005 if Employee remains employed by the Company as of such date. This
bonus is in addition to the Annual Bonus described above and is conditioned only
upon Employee being an employee of the Company as of such date.
4. Duties, Extent of Services.
Employee is employed as Executive Vice President and Chief
Medical Officer of the Company. As such, Employee will perform such duties and
responsibilities as are typically incident thereto and will perform in a
faithful and competent manner such additional duties as may be reasonably
assigned from time to time by the Company. Throughout the term of this
Agreement, Employee will report to the Chief Executive Officer and President of
the Company. Employee's duties for the Company will be performed on a full-time
basis at the Company's corporate 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 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.
-2-
Employee will devote all of Employee's business time,
attention, knowledge, and skill solely to the business and interest of the
Company, and the Company will be entitled to all the benefits, profits, and
other issues arising from, or incident to, all work, services, and advice of
Employee.
5. Termination.
This Agreement may be terminated by the parties in the manners
specified below:
(a) Termination without Cause. Either the Company or
Employee may terminate Employee's employment under this Agreement at any time
for any reason or no reason upon 30 days' 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" means: (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 material failure by
Employee otherwise substantially to perform his duties with the Company (other
than any such failure resulting from the disability of Employee under Section
5(d)(i)) or the breach of any provision of this Agreement other than Section 6.
If the Company terminates this Agreement for Cause pursuant to the provisions of
(ii), (iii), (iv) or (v) of this subsection (b), then the Company will give
Employee written notice prior to such termination detailing the specific acts,
actions, failures, or events upon which the forecast termination is based.
Employee will have 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 15-day 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) Termination for Good Reason. Employee may terminate
this Agreement on written notice at any time for "Good Reason". For purposes of
this Agreement, "Good Reason" means: (i) without the express written consent of
Employee, a material diminution of his position, duties, responsibilities and
status with the Company as in effect as of the Effective Date, a change in
Employee's reporting responsibilities, a material reduction of Employee's titles
or offices as in effect on the date of this Agreement, or the removal of
Employee from, or failure to re-elect Employee to, any position referred to in
Section 4 of this Agreement, except in connection with the termination of this
Agreement for Cause; (ii) any reduction of the Base Compensation; (iii) the
requirement that Employee relocate outside of the Nashville, Tennessee
metropolitan area; (iv) the material breach by the Company of any material
provision of this Agreement, which breach continues uncorrected and uncured for
15 days after Employee gives notice of such breach to the Company; or (v) the
termination of this Agreement by written notice from Employee to the Company
during the 30-day period immediately following the first anniversary of a Change
in Control (as defined below).
(d) Involuntary Termination. The employment of Employee
hereunder will be automatically terminated by the death or disability of
Employee as outlined below.
(i) Disability. The Company may terminate this
Agreement at such time as Employee shall have been Disabled (as defined below)
for a continuous period of six months during any
-3-
continuous 12-month period. For purposes of this Section 5(d)(i), the term
"Disabled" means Employee's inability to perform the essential functions of his
duties, with or without reasonable accommodation. During Employee's six-month
period of Disability, the Company will continue to pay Employee's Base
Compensation (less regular withholdings for payroll or other taxes and other
required or proper items, and less proceeds from all disability insurance
policies or plans provided or made available by the Company). In the event of a
termination of Employee on account of Disability, the Company will pay
Employee's Base Compensation for a period of six months following the effective
date of termination (less regular withholdings for payroll or other taxes and
other required or proper times, and less proceeds from all disability insurance
policies or plans provided or made available by the Company). In addition, any
provisions in the relevant stock option agreements notwithstanding, all
outstanding stock options granted to Employee by the Company will vest
immediately upon termination pursuant to this Section 5(d)(i).
(ii) Death. If Employee dies 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. In addition, any
provisions in the relevant stock option agreements notwithstanding, all
outstanding stock options granted to Employee by the Company will vest
immediately upon termination pursuant to this Section 5(d)(i).
(e) Post-Termination Compensation. Except as provided in
Section 5(d) 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 or with Good
Reason. If the Company terminates Employee's employment hereunder without Cause
under Section 5(a) above or if Employee terminates Employee's employment
hereunder with Good Reason under Section 5(c) above or if this Agreement expires
as a result of the Company's giving notice of non-renewal as contemplated by
Section 2 above, then the Company will pay to Employee, after the effective date
of such termination, as Employee's sole and exclusive remedy, (A) an amount
equal to the Base Compensation (as then in effect) plus an amount of Annual
Bonus equal to the target percentage of Base Compensation (as then in effect),
and (B) any unpaid bonus payable for the most recently completed calendar year.
If the Company terminates Employee's employment without Cause or if Employee
terminates Employee's employment hereunder with good reason or if this Agreement
expires as a result of the Company's giving notice of non-renewal, Employee
shall be under no duty to seek or accept other employment; but if he shall do
so, any compensation he shall receive from such other employment will not
diminish the Company's obligation to make payments required to the Employee
hereunder.
(ii) Termination without Good Reason. If Employee
terminates his employment under Section 5(a) above, then the Company's
obligation to pay Employee's Base Compensation will terminate as of the date of
termination.
(iii) Termination for Cause. If the Company
terminates Employee's employment with Cause under Section 5(b) above, then the
Company will pay Employee, after the effective date of such termination, the
Base Compensation (as then in effect) for a period of one month after the
termination date.
(iv) Termination following Change in Control. If,
within twelve (12) months following a Change in Control, either (A) the Company
terminates the employment of Employee
-4-
hereunder without Cause under Section 5(a) above or (B) Employee terminates his
employment for Good Reason under Section 5(c) above (except for a termination
under clause (v) of Section 5(c)), then, in lieu of any other compensation that
may be specified in this Agreement, the Company will pay Employee (A) an amount
equal to (i) the Base Compensation (as then in effect) plus an amount of Annual
Bonus equal to the target percentage of Base Compensation (as then in effect)
multiplied by (ii) three (3), plus (B) any unpaid portion of the retention bonus
described in Section 3(f) above as if Employee remained employed by the Company
through May 1, 2006. If Employee terminates his employment for Good Reason under
clause (v) of Section 5(c) above, then, in lieu of any other compensation that
may be specified herein, the Company will pay Employee (X) an amount equal to
(i) the Base Compensation (as then in effect) plus an amount of Annual Bonus
equal to the target percentage of Base Compensation (as then in effect)
multiplied by (ii) two (2), plus (Y) any unpaid portion of the retention bonus
described in Section 3(f) above as if Employee remained employed by the Company
through May 1, 2006. The Company will make any payment due under this clause
(iv) in a single lump-sum payment not later than 30 days after termination. If
any payment obligation under this Section 5(e) arises, no compensation received
from other employment (or otherwise) will reduce the Company's obligation to
make the payment(s) described in this paragraph.
(f) 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 or 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 l3d-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) will 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 a
reorganization, merger, share exchange or consolidation with respect to which
those persons who were the beneficial owners, immediately prior to such
reorganization, merger, share exchange or consolidation, of 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.
-5-
6. Nondisclosure, Confidentiality; Competition.
(a) Subject to Section 6(f) below, Employee agrees that,
during the term of this Agreement and of Employee's employment by the Company,
and for a period 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 within a geographic territory defined as a 75-mile radius of any
renal dialysis center, unit or facility owned or operated by the Company or an
affiliate of the Company. For purposes of this Section, the "business of the
Company or its affiliates" means owning or operating a renal dialysis center,
unit or facility. Notwithstanding any provision of this Section 6(a) to the
contrary, nothing in this Section 6(a) shall be deemed to prevent Employee from
providing services to (1) any dialysis operation owned or operated by an
academic medical center or an affiliate of an academic medical center,
including, without limitation, Vanderbilt Medical Center or Vanderbilt
University or any of their affiliates, (whether as an employee or independent
contractor of any such party or otherwise); provided that such academic medical
center or affiliate does not operate dialysis facilities outside of its
principal service or catchment area; or (2) up to three outpatient dialysis
facilities, if Employee is engaged in the private practice of medicine following
the termination of Employee's employment with the Company.
(b) Employee further agrees that, for a period of three
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 Employee. Employee 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 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 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" means owning or operating a renal dialysis
center, unit or facility.
(c) Subject to Section 6(f) below, Employee further
agrees that, for a period of three 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) at 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.
-6-
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) Subject to Section 6(f) below, Employee further
agrees that, for a period of three 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
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) The Company agrees that the forgoing covenants in
subsections (a), (c) and (d) of this Section 6 shall be null and void as to any
period following termination of Employee's employment if such termination occurs
within 13 months following a Change in Control through either (A) a termination
by the Company without Cause under Section 5(a) above or (B) a resignation by
Employee for any reason.
(g) 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. The
obligations of Employee to indemnify and hold the Company harmless include any
and all costs of defense of any such claim or threatened claim, including
reasonable attorneys' fees.
7. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, if any payment or distribution by
the Company to or for the benefit of Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 7) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by
Employee with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Company will make an additional payment (a "Gross-Up
Payment") to Employee in an amount such that after payment by Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 7(c), all
determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, will be made
by Ernst & Young LLP or such other certified public accounting firm as may be
designated by Employee (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Employee within 15 business days
of the receipt of notice from Employee that there has
-7-
been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, Employee shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 7, shall be paid by the Company to Employee within five business
days of the receipt of the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company and Employee. It is
possible (due to the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder) that
Gross-Up Payments will not have been made by the Company which it is ultimately
determined should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. Consequently, if the Company
exhausts its remedies pursuant to Section 7(c) and Employee thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and the Company will
promptly pay any such Underpayment to or for the benefit of Employee.
(c) Employee will notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than 10 business days after Employee is
informed in writing of such claim, and such notification will apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. Employee will not pay such claim prior to the expiration
of the 30-day period following the date on which Employee gives such notice to
the Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies Employee in writing
prior to the expiration of such period that it desires to contest such claim,
Employee will:
(i) Give the Company any information reasonably
requested by the Company relating to such claim,
(ii) Take such action in connection with
contesting such claim as the Company reasonably requests in writing from time to
time, including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) Cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) Permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company will bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and will indemnify and hold Employee harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation of the foregoing provisions of this Section
7(c), the Company will control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Employee to pay
the tax claimed and xxx for a refund or contest the claim in any permissible
manner, and Employee agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company may determine; provided, however, that if
the Company directs
-8-
Employee to pay such claim and xxx for a refund, the Company will advance the
amount of such payment to Employee, on an interest-free basis and will indemnify
and hold Employee harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; provided, further, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of Employee with respect to
which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest will be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Employee will be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by Employee of an
amount advanced by the Company pursuant to Section 7(c), Employee becomes
entitled to receive any refund with respect to such claim, Employee will
(subject to the Company's complying with the requirements of Section 7(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by Employee of an amount advanced by the Company pursuant to Section
7(c), a determination is made that Employee is not entitled to any refund with
respect to such claim and the Company does not notify Employee in writing of its
intent to contest such denial of refund prior to the expiration of thirty (30)
days after such determination, then such advance will be forgiven and Employee
shall not be required to repay and the amount of such advance will offset, to
the extent thereof, the amount of Gross-Up Payment required to be paid.
8. 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 will be in violation of the laws of
any state where applicable, such paragraph, sentence, clause or the combination
of the same will 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 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 will be fully
enforceable.
9. Entire Agreement; Modification.
This Agreement constitutes the entire agreement between the
parties and supersedes any and all prior understandings or agreements,
specifically including the Old Agreement. Any changes or additions to this
Agreement must be in writing and signed by both parties. If there is any
conflict between the terms of this Agreement and any stock option agreement or
other agreement between Employee and the Company (including any agreement
entered into after the date of this Agreement), then this Agreement will control
unless there is specific reference to superseding this Agreement in such other
agreement or in this Agreement.
-9-
10. 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 are not 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 merges or effects a consolidation or share exchange with or into, or
sells or otherwise transfers 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 and provided, further,
that the provisions of Section 5 remain in full force and effect following such
assignment.
11. Notice.
Unless otherwise specifically provided, references to notice
periods of a certain number of "days" contained in this Agreement are references
to 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: General Counsel.
12. Waiver.
The waiver by any party to this Agreement of a breach of any
of the provisions contained herein will not operate or be construed as a waiver
of any subsequent breach.
13. 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, will 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 11. The
parties will thereafter attempt in good faith to resolve their differences
within 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 Commercial Arbitration
Rules 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
judgment 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 and
-10-
Employee are parties to an Indemnification Agreement effective as of August 13,
2002, which the parties specifically ratify and confirm by this reference.
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/ Xxxx X. Xxxxxxxx
------------------------------------
Title: President and CEO
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxx
----------------------------------------
XXXXXXX X. XXXXX, M.D., Ph.D.
-11-
