EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 1st day of March,
1996 by and between RENAL TREATMENT CENTERS, INC. ("Company"), and XXXX XXXXXXX
("Employee").
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
of which the parties hereby acknowledge, the parties hereto, intending to be
legally bound hereby, agree as follows:
Section 1. Employment and Duties. Company shall employ Employee and
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Employee accepts such employment for the Term set forth in Section 3 hereof, on
the terms and conditions set forth in this Agreement. During the Term Employee
shall serve as Vice President of Reimbursement Programs and Managed Care of
Company and shall perform such duties as are normally associated with such
position, as well as such other duties as shall be assigned to Employee from
time to time during the continuance of this Agreement by the President and Chief
Executive Officer and/or the Executive Vice President and Chief Financial
Officer of Company. Employee shall devote Employee's best efforts and skills to
the business and interests of Company. Employee shall not engage in any other
business activity during the term of this Agreement; provided that nothing
herein shall restrict the Employee from owning five percent (5%) or less of the
issued and outstanding stock of a public company.
Section 2. Compensation. In consideration of the services to be performed
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by Employee hereunder, Employee shall receive:
2.1 Salary. A salary ("Salary") at the rate of One Hundred Thirty
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Thousand Dollars ($130,000) per year effective as of March 1, 1996. Employee's
salary shall be payable in installments consistent with Company's payroll
schedule. Employee's salary shall be reviewed each year on or about the
anniversary of Employee's employment and Company may in its sole discretion
increase Employee's salary.
2.2 Benefits. Such medical, disability and other similar benefits as are
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provided to other officers of the Company. The Company hereby waives any
waiting period with respect to such benefits effective March 1, 1996. In
addition, the Company agrees to reimburse employee up to $10,000 for Internal
Revenue Service defined moving expenses upon delivery of invoices reflecting
such expenses.
2.3 Bonuses. Such bonuses as are approved by the unanimous affirmative
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vote of the entire membership of the Compensation Committee ("Compensation
Committee") of the Board of Directors of the Company ("Committee Approval");
provided
that the potential bonus amount for 1996 is hereby established as follows: for
calendar year 1996, an Incentive Bonus (the "1996 Incentive Bonus") will be paid
if the applicable Financial Target for 1996 (as set forth below) shall be
attained or exceeded. The amount of the 1996 Incentive Bonus a maximum of 40%
of Salary; 20% to be paid if the Financial Target for 1996 is achieved and
another 20% if certain goals are attained as determined by the President and
Chief Executive Officer of Company. The Financial Target for 1996 shall be
earnings per share of $0.81. In calculating whether Employer has attained the
Financial Target for 1996 the amount of the 1996 Incentive Bonus shall be
included and items of extraordinary gain and loss shall be excluded. Nothing in
this Agreement shall prevent the Compensation Committee from awarding an
Incentive Bonus for 1996 if the Financial Target is not met or from awarding an
Incentive Bonus in excess of 40% of Salary for 1996. Incentive Bonuses in
calendar years after 1996 need not be determined in a similar manner as the 1996
Incentive Bonus; provided however, that in the event that the Financial Target
and/or certain goals applicable to each calendar year after 1996 is met, the
percentage applicable to that year shall not be less than the percentage
applicable to the immediately preceding year. Such bonus, if any, as determined
in accordance with the provisions of this Section 2.3 shall be paid no later
than fifteen (15) days following the Compensation Committee's review and
approval that such Financial Targets have been attained.
2.4 Acceleration of Retirement Benefits. In the event Company terminates
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this Agreement for any reason other than under Section 3.2 hereof or if
Employee's employment terminates by reason of death or disability as described
in Section 3.3 hereof, then in addition to amounts otherwise payable to
Employee, Company shall pay Employee, within thirty (30) days of the effective
date of termination, an amount equal to the portion of Company's contributions
for the benefit of Employee under Company's Savings Plan, or any other qualified
retirement plan of Company then in effect, that has not vested as of the date of
Employee's termination, if any, plus an additional amount sufficient to satisfy
Employee's federal or state income tax liability with respect to the foregoing
payment and any additional amount payable pursuant to this Section 2.4, it being
Company's intention that Employee's net after tax position be identical to that
which would have been obtained had Employee not been subject to any federal or
state income tax liabilities with respect to payments made under this Section
2.4.
2.5 Acceleration of Exercisability of Stock Options. In the event
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Employee is terminated for any reason other than under Section 3.2 hereof, or if
Employee's employment terminates by reason of death or disability as described
in Section 3.3 hereof, or in the event of a Constructive Discharge, as defined
below, then all unexer cised options granted to Employee under Company's stock
option plans which would otherwise have vested within twelve (12) months from
the date of Employee's termination or which would otherwise have vested during
the full Term of this Agreement, whichever is greater, shall be deemed fully
vested and exercisable immediately upon Employee's termination. In determining
which options shall become immediately exercisable hereunder, the then
unexercisable options under each grant of options to Employee shall
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become exercisable. The foregoing benefit shall be in addition to, and not in
lieu of, any similar benefit contained in the Executive Severance Agreement
between Company and Employee, dated as of March 1, 1996 (the "Executive
Severance Agreement"). For purposes of this Agreement, the term "Constructive
Discharge" means a termination of Employee's employment by Employee due to a
failure of Company or its successors, without the prior written consent of
Employee, to fulfill Company's obligations under this Agreement in any material
respect, including any material change by Company in the functions, duties, or
responsibilities of Employee's position with Company which would reduce the
ranking, level, dignity, responsibility, importance or scope of such position.
Section 3. Term.
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3.1 Commencement. The term ("Term") of this Agreement shall commence
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("Commencement Date") on the date hereof and unless sooner terminated as
provided herein, shall continue thereafter until February 28, 1998; provided
that the Term shall automatically renew for an additional period of two (2)
years unless either party shall deliver written notice to the other of its
intention not to renew the Term not later than ninety (90) days prior to the
applicable renewal date.
3.2 Termination for Material Cause. Company may terminate this Agreement
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for material cause, provided that, before Company may terminate this Agreement
for material cause, Company must give Employee at least 30 days' advance written
notice of its intention to terminate, specifying in detail the cause for
termination and the intended termination date. For purposes hereof, the term
"for material cause" shall mean: (a) conviction of a felony involving moral
turpitude relating to the business of Company and which does, in fact, adversely
and directly affect the business of Company; (b) the adjudication by a court of
competent jurisdiction that Employee has committed any act of fraud or
dishonesty resulting or intended to result directly or indirectly in personal
enrichment at the expense of Company; (c) repeated failure or refusal by
Employee to follow policies or directives reasonably established by the
President and Chief Executive Officer of Company that goes uncorrected for a
period of thirty (30) consecutive days after written notice has been provided to
Employee; (d) persistent willful failure by Employee to fulfill his duties
hereunder that goes uncorrected for a period of thirty (30) consecutive days
after written notice has been provided to Employee; or (e) intentional breach by
Employee of Sections 4.1(1), 4.1(2), or Section 4.2 of this Agreement.
3.3 Death and Disability. This Agreement shall automatically terminate
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upon the death of Employee. Upon thirty (30) days' notice (which notice may be
given prior to the completion of the periods described herein), Company may
terminate this Agreement in the event that Employee has for the preceding six
(6) month period been subject to a physical or mental disability that prevented
Employee from adequately performing Employee's regular duties; provided that
either: (i) immediately upon the effective date of such termination, Employee
shall be eligible to receive full disability
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benefits under the disability insurance, if any, provided to him by Company, or
(ii) Company shall continue to pay the Salary to Employee until the first to
occur of: (A) full disability benefits are received or (B) one year.
3.4 Rights and Obligations Upon Termination. Upon termination, this
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Agreement shall be of no further force and effect and neither party shall have
any further right or obligation hereunder; provided however, no termination
shall modify or affect the rights and obligations of the parties which have
accrued prior to termination; and further provided however, the rights and
obligations of the parties under Section 4 shall survive termination of this
Agreement.
Section 4. Information and Competition.
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4.1(1) Information. Employee recognizes and acknowledges that: (i) in
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the course of Employee's employment or continued employment by Company, it will
or may be necessary for Employee to create, use or have access to (A) technical,
business, or customer information, materials, or data relating to Company's
present or planned business which has not previously been released to the public
with Company's authorization, including, but not limited to, confidential
information, materials or proprietary data belonging to Company or relating to
Company's affairs (collectively, the "Confidential Information") and (B)
information and materials that concern Company's business that come into
Employee's possession by reason of employment with Company (collectively,
"Business Related Information"); (ii) the Confidential Information and Business
Related Information are the property of Company; (iii) the use, misappropriation
or disclosure of the Confidential Information or the Business Related
Information would constitute a breach of trust and could cause serious and
irreparable injury to Company; and (iv) it is essential to the protection of
Company's good will and to the maintenance of Company's competitive position
that the Confidential Information and Business Related Information be kept
secret and that Employee not disclose the Confidential Information or the
Business Related Information to others or use same to Employee's own advantage
or the advantage of others.
4.1(2) Non-Disclosure. In recognition of the acknowledgments contained in
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Section 4.1(1) above, Employee agrees during the Term and thereafter: (i) to
hold and safeguard the Confidential Information and Business Related Information
in trust for Company, its successors and assigns; (ii) not to appropriate or
disclose or make available to anyone for use outside of Company's organization
at any time, either during employment with Company or subsequent to the
termination of employment with Company for any reason, any of the Confidential
Information or Business Related Information, whether or not developed by
Employee, except as required in the performance of Employee's duties to Company;
(iii) to keep in strictest confidence, both during Employee's employment and
subsequent to termination of employment, any Confidential Information or
Business Related Information; and (iv) not to disclose or divulge, or allow to
be disclosed or divulged by any person within Employee's control,
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to any person, firm or corporation, or use directly or indirectly, for
Employee's own benefit or the benefit of others, any Confidential Information or
Business Related Information.
4.2 Competition. During the Term and thereafter Employee:
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(a) for a period of one (1) year shall not solicit for employment or
employ for his own or for another's benefit any employee, former employees,
officer, director or consultant of Company; and
(b) for a period of one (1) year shall not directly or indirectly, (on
his own behalf or as an officer, director, consultant, partner, owner,
stockholder, employee, creditor, agent, trustee or advisor of any individual,
partnership or corporation or other entity (hereinafter a "Person") or in any
other capacity) own, manage, control, operate, invest or acquire an interest in
or otherwise engage in or act for or on behalf of any Person other than Company
engaged in any activity, in those states within the United States and those
countries outside the United States in which Company or any of its subsidiaries
during his employment had conducted any business, where such activity is similar
to and competitive with the activities carried on by Company or any of its
subsidiaries during his employment by Company or is, directly or indirectly,
concerned with soliciting, serving or catering to any of the customers,
patients, physicians or hospitals served by Company or its subsidiaries during
his employment by Company for the provision of products or services of a nature
offered by Company during the Term; provided that nothing herein shall restrict
the Employee from owning five percent (5%) or less of the issued and outstanding
stock of a public company. Employee acknowledg es that the nature of Company's
activities is such that competitive activities could be conducted effectively
regardless of the geographic distance between Company's place of business and
the place of any competitive business.
4.3 Enforcement. In the event that any part of this Section 4 shall be
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held unenforceable or invalid, the remaining parts thereof shall nevertheless
continue to be valid and enforceable as though the invalid portions had not been
a part hereof. In the event that the area, period of restriction, activity or
subject established in accordance with this Section 4 shall be deemed to exceed
the maximum area, period of restriction, activity or subject that a court of
competent jurisdiction deems enforceable, said area, period of restriction,
activities or subjects shall, for the purpose of this Section 4, be reduced to
the extent necessary to render them enforceable.
4.4 Equitable Relief. Employee agrees that any violation by him of any
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covenant in Section 4 may cause such damage to Company as will be serious and
irreparable and the exact amount of which will be difficult to ascertain, and
for that reason, Employee agrees that Company shall be entitled, as a matter of
right, to a temporary, preliminary and/or permanent injunction and/or other
injunctive relief, ex parte or otherwise, from any court of competent
jurisdiction, restraining any further violations
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by Employee. Such injunctive relief shall be in addition to and in no way in
limitation of, any and all other remedies Company shall have in law and equity
for the enforcement of such covenants and provisions.
4.5 Indemnification and Payment. In the event of Employee's violation of
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any covenant in Section 4, Employee shall indemnify and hold harmless Company
from any loss, liability, cost or expense (including reasonable attorney's fees)
arising out of such violation and shall pay over to Company any benefit received
by Employee in connection with such violation.
4.6 Documents. Upon the termination of Employee's employment with Company
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for any reason, Employee shall promptly deliver to Company all materials and
documents belonging to or concerning Company or relating to its affairs and,
without limiting the foregoing, will promptly deliver to Company any and all
other documents or materials containing or constituting Confidential Information
or Business Related Information.
Section 5. Entire Agreement. This Agreement supersedes any and all prior
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agreements between the parties and represents the entire understanding of the
parties hereto with respect to the employment of Employee and there are no other
agreements, warranties or representations except as herein provided. The
parties acknowledge that this Agreement shall not affect any prior, subsequent,
or contemporaneous agreements between the parties respecting Confidential
Information or Business Related Information. This Agreement including this
Section 5 may not be altered or amended except in writing executed by both
parties hereto. Notwithstanding the execution and delivery of this Agreement
and anything herein to the contrary, the Executive Severance Agreement shall
remain in full force and effect as of the date hereof.
Section 6. Assignment; Benefit. This Agreement is personal and may not be
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assigned by Employee. This Agreement may be assigned by Company and shall inure
to the benefit of and be binding upon the successors and assigns of Company.
Section 7. Applicable Law. This Agreement shall be governed by the
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internal laws of the Commonwealth of Pennsylvania, without regard to conflicts
of laws provisions.
Section 8. Notice. Any notice required or permitted to be given hereunder
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shall be sufficient if in writing and if sent by certified or registered mail to
the last address as shall appear on the records of Company in the case of
Employee or to its principal office in the case of Company.
Section 9. Waiver. The waiver by any party of a breach of any provision
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of this Agreement by the other shall not operate or be construed as a waiver of
any other or subsequent breach of such or any provision.
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Section 10. Jurisdiction. Employee hereby submits to the jurisdiction of
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the courts of the Commonwealth of Pennsylvania or of the United States Court for
the Eastern District of Pennsylvania in any action or dispute arising out of
this Agreement, its interpretation or implementation. With respect to the
undersigned submitting to said courts of the Commonwealth of Pennsylvania or of
said United States court, Employee agrees that personal jurisdiction over
Employee may be obtained by the mailing of a summons or complaint (postage
prepaid) to Employee at the last address of Employee as shall appear on the
records of Company.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals as of the day and year set forth above.
RENAL TREATMENT CENTERS, INC.
By:/s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.,
President and Chief
Executive Officer
Witness:/s/ Xxxxxx X. Xxxx /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
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