1
EXHIBIT 10.17
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made and entered into this 15th day of March, 2000, by and
between Fresenius Medical Care North America ("FMC" or the "EMPLOYER"), with
principal offices located at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 and J.
Xxxxxxx Xxxxxxx ( "EMPLOYEE") currently residing at 00 Xxx Xxxxxx Xxxx,
Xxxxxxxxx, XX 00000.
WITNESSETH:
WHEREAS, FMC desires to employ EMPLOYEE as Medical Director and Senior Vice
President at FMC and its affiliated corporations in North America, 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 Medical Director and Senior 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 March 15, 2000 and
shall terminate as of March 15, 2003 in accordance with the provisions
hereinafter stated. THE INITIAL TERM SHALL BE RENEWED BY A SUCCESSIVE THREE
(3) YEAR PERIOD UNLESS EITHER PARTY GIVES WRITTEN NOTICE OF NON-RENEWAL TO
THE OTHER PARTY AT LEAST THIRTY (30) DAYS PRIOR TO ANY TERMINATION DATE.
THE INITIAL TERM AND ANY SUBSEQUENT RENEWAL PERIODS SHALL BE CALLED THE
"EMPLOYMENT TERM."
3. DUTIES AND RESPONSIBILITIES. EMPLOYEE shall serve full time as FMC's
Medical Director and Senior Vice President and will be responsible for
supervising and overseeing all matters pertaining to Clinical Quality and
the Medical Department. EMPLOYEE shall report directly to 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, in conducting business in the
interest of the EMPLOYER, he will not engage in, knowingly permit others
under his control to carry on, or induce others to engage in any practice
or commit any acts in violation of any federal or state or local law or
ordinance.
4. COMPENSATION AND BENEFITS.
a) BASE SALARY. EMPLOYER shall pay EMPLOYEE for all services rendered a base
salary of Five Hundred Five Thousand, Six Hundred Twenty Dollars ($505,620)
per year, (the "Base Salary"), payable in accordance with FMC'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 FMC, EMPLOYEE
shall be entitled to participate in FMC'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 FMC. EMPLOYEE
will be in the senior executive eligibility Level I, wherein the target
level bonus is forty percent (40%) and the maximum bonus is eighty percent
(80%) 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
2
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 FMC'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.
Additionally, this Agreement may be terminated by Employee, if there is a
reduction in Employee's responsibilities 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
that 50 percent (50%) of the voting power of FMC; 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.
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 under the
Executive Vacation Policy 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.
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
2
3
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 written notice
to EMPLOYEE. For purposes of this Agreement, the term "Cause" shall mean,
with respect to the EMPLOYEE, any of the following: (i) commission by
EMPLOYEE of a felony or of any criminal act involving moral turpitude which
results in an arrest or indictment; (ii) deliberate and continual refusal
to satisfactorily perform employment duties reasonably requested by the
EMPLOYER after 20 days' written notice by certified mail of such failure to
perform, specifying that the failure constitutes cause (other than as a
result of vacation, sickness, illness or injury); (iii) fraud or
embezzlement determined in accordance with the EMPLOYER's normal, internal
investigative procedures consistently applied in comparable circumstances
to EMPLOYEES; (iv) gross misconduct or gross negligence in connection with
the business of the EMPLOYER which has substantial effect on the EMPLOYER;
(v) failure to obtain and maintain in good order any licenses required for
EMPLOYEE to perform his duties under this Agreement; or (vi) a breach of
any of the covenants set forth in Section 7 below. EMPLOYEE will be
considered to have been terminated for "Cause" if the EMPLOYER determines
that EMPLOYEE engaged in an act constituting "Cause," regardless of whether
the individual terminates employment voluntarily or is terminated
involuntarily, and regardless of whether the individual's termination
initially was considered to have been for "Cause." The determination of
"Cause" shall be made by the EMPLOYER in its sole discretion, and shall be
final and binding on all parties.
e) TERMINATION BY EMPLOYEE FOR CAUSE. This Agreement may be terminated by
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 there is a
reduction in Employee's responsibilities 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
that 50 percent (50%) of the voting power of FMC; 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.
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; 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
3
4
accordance with the terms of such plans, policies and
arrangements. ** EMPLOYEE shall have three (3) years from any
such termination to exercise his Vested Stock Options. Should
he fail to exercise these options within this period, they
will be forfeited at the end of that 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:
(iii) The balance of the salary payments equivalent to the number of
months remaining in the term of the Employment Agreement. At a
minimum, the number of months for salary continuance would be
eighteen (18) at the rate in effect on the date of termination
of employment, such amount to be paid in a lump sum as soon as
is practicable thereafter; and
(iv) 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 FMC that has not been released publicly by authorized
representatives of FMC, 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 FMC 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 FMC.
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 FMC for any
reason or the end of the period during which EMPLOYEE continues to receive
salary continuation after leaving the employment of FMC, 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 FMC; and
c) solicit, direct, take away or attempt to take away any business
or customers of FMC.
Nothing in this Agreement would preclude EMPLOYEE from working for a
competitor of FMC's subsequent to termination of EMPLOYEE's employment
provided EMPLOYEE will not be engaged, directly or indirectly, in any
business in which FMC is actively engaged at the time of EMPLOYEE's
termination or in any new business which FMC is in the process of setting
up in which EMPLOYEE had direct involvement while
4
5
employed by FMC. EMPLOYEE also agrees to inform FMC of any such employment
with a competitor before beginning such employment.
8. ENFORCEMENT OF COVENANTS.
a) TERMINATION OF EMPLOYMENT AND FORFEITURE OF COMPENSATION. EMPLOYEE agrees
that in the event that the EMPLOYER determines that EMPLOYEE has breached
any of the covenants set forth in Section 7 hereof during EMPLOYEE's
employment, the EMPLOYER shall have the right to terminate EMPLOYEE's
employment for "Cause." For purposes of this Agreement, the term "Cause"
shall mean, with respect to the EMPLOYEE, any of the following: (i)
commission by EMPLOYEE of a felony or of any criminal act involving moral
turpitude which results in an arrest or indictment; (ii) deliberate and
continual refusal to satisfactorily perform employment duties reasonably
requested by the EMPLOYER after 20 days' written notice by certified mail
of such failure to perform, specifying that the failure constitutes cause
(other than as a result of vacation, sickness, illness or injury); (iii)
fraud or embezzlement determined in accordance with the EMPLOYER's normal,
internal investigative procedures consistently applied in comparable
circumstances to EMPLOYEES; (iv) gross misconduct or gross negligence in
connection with the business of the EMPLOYER which has substantial effect
on the EMPLOYER; (v) failure to obtain and maintain in good order any
licenses required for EMPLOYEE to perform his duties under this Agreement;
or (vi) a breach of any of the covenants set forth in Section 7 above.
EMPLOYEE will be considered to have been terminated for "Cause" if the
EMPLOYER determines that EMPLOYEE engaged in an act constituting "Cause,"
regardless of whether the individual terminates employment voluntarily or
is terminated involuntarily, and regardless of whether the individual's
termination initially was considered to have been for "Cause." The
determination of "Cause" shall be made by the EMPLOYER in its sole
discretion, and shall be final and binding on all parties.
In addition, 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.
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: (i) injunctions, both preliminary and permanent, enjoining or
retraining such breach or anticipatory breach and EMPLOYEE hereby consents
to the issuance thereof forthwith and without bond by any court of
competent jurisdiction; and (ii) recovery of all reasonable sums expended
and costs, including reasonable attorney's fees, incurred by the EMPLOYER
to enforce the covenants set forth in this section.
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.
5
6
9. FMC DOCUMENTS AND EQUIPMENT. All documents and equipment relating to the
business of FMC, whether prepared by EMPLOYEE or otherwise coming into
EMPLOYEE's possession, are the exclusive property of FMC, and must not be
removed from the premises of FMC except as required in the course of
employment. Any such documents and equipment must be returned to FMC when
EMPLOYEE leaves the employment of FMC.
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
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.
6
7
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, INC. d/b/a
FRESENIUS MEDICAL CARE
NORTH AMERICA,
WITNESS EMPLOYER
/s/ Xxxxx X'Xxxxxxx By: /s/ Xxx Xxxxx 4/20/00
------------------------ ---------------------------- --------
Xxx X. Xxxxx (DATE)
Chief Executive Officer
WITNESS J. XXXXXXX XXXXXXX
/s/ Xxxxxxxx Xxxxxxxx /s/ J. Xxxxxxx Xxxxxxx, M.D. 4/6/2000
------------------------ ---------------------------- --------
(Employee Signature) (DATE)
