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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made and entered into this 11th day of November, 1998, by and
between National Medical Care, Inc., d/b/a Fresenius Medical Care North America
("FMC" or the "EMPLOYER"), with principal offices located at 00 Xxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000 and Xxxxxxx X. Xxxxxx ("EMPLOYEE") currently residing at 000
Xxxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000.
WITNESSETH:
WHEREAS, FMC desires to employ EMPLOYEE as Senior Vice President and General
Counsel of 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 Senior Vice President and
General Counsel, 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 November 11, 1998 and
shall continue thereafter, unless terminated in accordance with the
provisions hereinafter stated.
3. DUTIES AND RESPONSIBILITIES. EMPLOYEE shall serve full time as FMC's Senior
Vice President and General Counsel and will be responsible for the
management and organization of the Law Department and coordination of the
provisions of all legal services, through both in-house counsel reporting
to EMPLOYEE and outside counsel engaged by EMPLOYEE, to FMC and its
affiliated organizations in North America. 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 $450,000 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 consistent with the percent increase available
to other similarly positioned senior executives of FMC.
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b) INCENTIVE COMPENSATION. During EMPLOYEE's employment with FMC, EMPLOYEE
shall be entitled to participate in FMC's Management Bonus Plan 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 1998 senior executive eligibility level, wherein the target
level bonus is forty percent (40%) and the maximum bonus is eighty percent
(80%) per plan of base salary. Although funding for the plan is based upon
attainment of specific individual and company financial objectives,
EMPLOYEE will be treated similarly with other senior executives of FMC.
EMPLOYEE's entitlement to a bonus under the Management Bonus Plan will be
governed by terms of that Plan.
Additionally, in consideration of the extraordinary additional demands and
resulting work load imposed by the current investigation being conducted by
the Office of the United States Attorney for the District of Massachusetts
and other United States Government agencies (the "Investigation"), upon the
successful resolution of the Investigation, EMPLOYEE shall be eligible for
a special bonus consideration based upon his performance throughout the
course of the Investigation and its resolution (the "Special Bonus"). Such
Special Bonus shall be determined by Xxx Xxxxx, as the Chief Executive
Officer, or in whatever capacity he may then be serving the EMPLOYER or any
of its affiliates.
c) STOCK PLAN. EMPLOYEE shall be entitled 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 entitled to receive additional option grants in amounts
and on such terms as granted to other similarly positioned senior
executives of FMC, as 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.
f) AUTOMOBILE. EMPLOYEE will be provided with a company car allowance.
5. TERMINATION OF EMPLOYMENT.
a) TERMINATION BY FMC. This Agreement may be terminated by FMC for cause
immediately upon notice to EMPLOYEE. FMC shall have cause for termination
in the event of:
i) A default by EMPLOYEE in the performance of any material provision of
this Agreement, and such default continues for a period of thirty (30)
days after written notice to EMPLOYEE from EMPLOYER stating the
specific default, unless such default is cured to the reasonable
satisfaction of EMPLOYER within such thirty (30) day period, or if
such failure cannot be cured within thirty (30) days, EMPLOYEE has
commenced a good faith effort to cure in which case
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EMPLOYER, within its sole discretion, may extend such period, in which
case the notice of termination shall not be effective, and this
Agreement shall not be terminated. No severance benefits are due to
EMPLOYEE in the event he is terminated for cause.
ii) EMPLOYEE's death.
iii) The final, unappealable conviction of EMPLOYEE of any felony.
b) TERMINATION BY FMC FOR DISABILITY. The disability of EMPLOYEE during his
employment under this Agreement through any illness, injury, accident or
condition of either a physical or psychological nature and, as a result, in
the opinion of a physician mutually agreeable to the parties, is expected
to be unable to perform substantially all of his duties and
responsibilities hereunder for one hundred eighty (180) consecutive
calendar days during the year following the physician's examination of
EMPLOYEE.
c) TERMINATION BY EMPLOYEE. This Agreement may be terminated by 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, EMPLOYEE shall be entitled to terminate for "Good Reason."
For purposes of this Agreement, "Good Reason" means the occurrence of any
of the following circumstances: (i) a reduction in salary or significant
reduction in benefits or reduction in EMPLOYEE's position,
responsibilities, duties, or status as a senior executive of FMC; (ii)
change in office location outside of the metropolitan Boston area; (iii)
change in reporting to CEO; (iv) Change in Control of FMC; or (v) change in
reporting to the current CEO. For purposes of this Agreement, a Change in
Control shall be defined as any of the following:
(i) the transfer (whether by sale, dividend, exchange, lease, merger,
consolidation or otherwise) of greater than fifty percent (50%) of the
voting power of FMC, within any twelve (12) month period, (ii) the
transfer (whether by sale, dividend, exchange, lease, merger,
consolidation, or otherwise) of all or substantially all the assets or
stock of FMC, (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 (iv) FMC relocates its corporate
headquarters more than fifty (50) miles from its present location in
Lexington, Massachusetts.
Upon the occurrence of any of the foregoing circumstances which may
constitute Good Reason for termination by EMPLOYEE, EMPLOYEE shall have
twelve (12) months in which to notify FMC of his intention to terminate for
Good Reason. Failure to do so will constitute a waiver of any right
EMPLOYEE may have had to terminate his employment with Good Reason on the
basis of the specific event at issue. Such waiver will not impair
EMPLOYEE's ability to terminate with Good Reason in response to any
subsequent occurrence of any of the events identified.
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d) PAYMENT UPON TERMINATION. In the event this Agreement is terminated for any
reason (including termination for Good Reason by EMPLOYEE), EMPLOYEE shall
be entitled to receive all accrued but unpaid base salary and any manner of
bonus compensation earned by EMPLOYEE as of the date of termination (all
such bonus amounts shall be earned on a pro-rata basis for the portion of
the year that EMPLOYEE is employed prior to termination). In addition, if
FMC terminates this Agreement for any reason, other than a reason set forth
in Section 5(a) or 5(b), or if EMPLOYEE terminates this Agreement pursuant
to Section 5(c) (i)-(iv), EMPLOYEE shall also receive (i) salary and
benefits continuation for a period of two (2) years following termination
of employment; (ii) vesting of any unvested Existing Options and any Future
Options as of the date of termination (together with any previously vested
options, the "Vested Options"), and (iii) payout of any accrued
vacation/PTO time. EMPLOYEE shall have three (3) years from any such
termination to exercise the Vested Options. Should he fail to exercise
these options, they will be forfeited at the end of that three (3) year
period. Additionally, Xxx Xxxxx, or his successor, will use his best
efforts to recommend that EMPLOYEE be granted up to ten (10) years from the
date of grant to exercise the Vested Options.
If EMPLOYEE terminates this Agreement pursuant to Section 5(c)(v), EMPLOYEE
shall be entitled to all of the compensation, benefits and rights
referenced in this Section 5(d), except that he shall be entitled to salary
and benefits continuation for a period of one (1) year on a guaranteed
basis and salary and benefits continuation for up to but not to exceed one
(1) additional year or until EMPLOYEE finds full-time employment provided
EMPLOYEE continues to make good faith effort to do so. If EMPLOYER
terminates this Agreement pursuant to Section 5(b), EMPLOYEE shall be
entitled to salary and benefits continuation for a period not to exceed one
and one half (1 1/2 ) years beginning on the 181st day of disability.
EMPLOYEE may elect to receive salary continuation as a lump sum payment and
to forego benefits.
6. 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.
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
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course of employment. Any such documents and equipment must be returned to
FMC when EMPLOYEE leaves the employment of FMC.
7. 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.
8. VACATION/PTO. In recognition of EMPLOYEE'S previous inability over the past
thirty three (33) months to take advantage of available vacation/PTO time,
EMPLOYER will credit EMPLOYEE's Vacation/PTO account with one hundred
twenty (120) additional hours of time and will pay out one hunderd sixty
(160) additional hours of time in the form of a lump sum payment. 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.
9. 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.
10. NOTICES. All notices hereunder shall be in writing and shall be deemed to
be given when sent by certified mail to either party at the address of such
party set forth above or at such other address as shall have been
designated by written notice by such party to the other party.
11. GOVERNING LAW. This Agreement shall be construed in accordance with, and
the rights of the parties shall be governed by, the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the
undersigned duly authorized persons as of the day and year first stated above.
NATIONAL MEDICAL, INC. d/b/a
FRESENIUS MEDICAL CARE
WITNESS NORTH AMERICA, EMPLOYER
/s/ Xxxxxxx X. Read By: /s/ Xxx X. Xxxxx
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Xxxxxxx X. Read Xxx X. Xxxxx
Chief Executive Officer
WITNESS XXXXXXX X. XXXXXX, EMPLOYEE
/s/ Xxxxx Xxxxxx-Xxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxx Xxxxxx-Xxxx Xxxxxxx X. Xxxxxx
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