EXHIBIT 10.6
EMPLOYMENT AGREEMENT
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This Employment Agreement (this "Agreement") is entered into effective
November 29, 1999, by and between Total Renal Care Holdings, Inc. (the
"Employer") and Gary Beil (the "Employee").
1. TERM OF AGREEMENT.
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Employer hereby agrees to employ Employee, and Employee hereby accepts
employment, upon the terms and conditions hereinafter set forth. Employee's
employment with Employer is "at will," which means that Employee may terminate
his employment at any time, with or without cause, and with or without notice,
and, similarly, that Employer may terminate Employee's employment at any time,
with or without cause, and with or without notice.
2. DUTIES OF EMPLOYEE.
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(a) Employee shall be the Vice President-Controller of Employer and
shall perform the duties of such office, as well as such other
duties that may be assigned to him by the Vice President & Chief
Accounting Officer or other senior level executive of Employer.
(b) Employee agrees to devote substantially all of his time, energy,
and ability to the business of Employer. Employee shall at all
times observe and abide by Employer's policies and procedures as
in effect from time to time.
(c) Unless otherwise agreed, Employee shall report to the Vice
President and Chief Accounting Officer of Employer or his
designee. Employee shall work in Employer's Tacoma, Washington
Business Office.
3. COMPENSATION.
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Employer shall pay to Employee in full consideration of all services
to be rendered by Employee:
(a) Salary: Employer will pay to Employee a base salary of $150,000
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annually. Such salary shall be earned bi-weekly and shall be
payable in periodic installments consistent with Employer's
payroll schedule. Amounts payable shall be reduced by standard
withholdings and authorized deductions. Employer may, in its
discretion, increase Employee's salary.
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(b) Bonus. Employee shall be eligible to receive a bonus of up to 50%
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of his current salary, payable in a manner consistent with
Employer's practices and procedures. The amount of the bonus, if
any, will be decided by Employer in its sole discretion and based
on the criteria used to determine the bonus, if any, payable to
similarly-situated executives.
(c) Benefits. Employee and/or his family, as the case may be, shall
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be eligible for participation in and shall receive all benefits
under Employer's health and welfare benefit plans (including,
without limitation, medical, prescription, dental, disability,
and life insurance) under the same terms and conditions
applicable to executives at similar level of compensation and
responsibility.
(d) Vacation. Employee shall receive 26 days of PTO per year.
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(e) Relocation Expenses. Employee shall receive relocation payments
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not to exceed $40,000.00.
(f) Stock Options. Employee will receive options to purchase 60,000
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shares of Employer stock, vesting ratably over four (4) years and
expiring on the fifth anniversary of the grant. The vesting
period will accelerate upon a Change In Control, as that term is
defined by the Stock Option Agreement.
(g) Employer reserves the right to modify, suspend, or discontinue
any and all of its health and welfare benefit plans, practices,
policies, and programs at any time without recourse by Employee
so long as such action is taken generally with respect to all
other similarly-situated peer executives and does not single out
Employee.
4. TERMINATION.
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(a) Death or disability. Employee's employment shall automatically
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terminate upon Employee's death. If Employer determines in good
faith that a Disability of has occurred (pursuant to the
definition of Disability set forth below), it may give Employee
written notice of its intention to terminate Employee's
employment. In such event, Employee's employment with Employer
shall terminate effective on the 30th day after receipt of such
notice by Employee, provided that, within the 30 days after
receipt of such notice, Employee shall not have returned to
full-time performance of his duties. For purposes of this
Agreement, "Disability" shall mean a physical or mental
impairment that renders Employee unable to perform the essential
functions of his position, even with reasonable accommodation
that does not impose an undue hardship on Employer. Employer
reserves the right, in good faith, to make the determination of
Disability under this Agreement based upon the
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information supplied by Employee and/or his medical personnel, as
well as information from medical personnel (or others) selected
by Employer or its insurers.
(b) Cause. Employer may terminate Employee's employment for Cause.
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"Cause" shall mean that employer, acting in good faith based upon
the information then known to Employer, determines that Employee
has engaged or committed: (1) a felony that is likely to and
which does in fact have the effect of injuring the reputation,
business, or a business relationship of Employer; (2) an act of
fraud or dishonesty resulting in or intended to result directly
or indirectly in personal enrichment at the expense of Employer;
(3) repeated refusal to perform his duties, which goes
uncorrected for a period of thirty (30) days after written notice
has been provided to Employee; (4) act of willful misconduct or
gross negligence; (5) an act of unlawful discrimination,
including sexual harassment; or (6) a violation of his duty of
loyalty or of any fiduciary duty.
(c) Obligations of Employer Upon Termination.
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(1) Death or Disability. If Employee's employment is
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terminated by reason of Employee's death or Disability
(as that term is defined above), this Agreement shall
terminated without further obligation to Employee or his
legal representative under this Agreement, other than for
(a) payment of the sum of (i) Employee's annual base
salary through the date of termination to the extent not
theretofore paid and (ii) any compensation previously
deferred by Employee (together with any accrued interest
or earnings thereon) and any accrued but unused PTO (the
sum of the amounts described in (i) and (ii) shall
hereinafter be referred to as the "Accrued Obligations"),
which shall be paid to Employee or his estate or
beneficiary, as applicable, in a lump sum upon
termination and in a manner consistent with Employer's
payroll practices; and (b) payment to Employee or his
estate or beneficiary, as applicable, any amounts due
pursuant to the terms of any applicable welfare benefit
plans. Nothing herein shall affect Employee's rights
under any existing stock option agreement.
(2) Cause. If Employee's employment is terminated for Cause
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(as that term is defined above), this Agreement shall
terminate without further Obligations to Employee other
than for the timely payment of Accrued Obligations.
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(3) Other than Cause, Death, or Disability. If, within two
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(2) years of the date of this Agreement, Employee's
employment is terminated for other than Cause, death, or
Disability, this Agreement shall terminate without
further obligations to Employee other than (a) the timely
payment of Accrued Obligations and (b) the continued
payment of his then-current base salary, less standard
withholdings and authorized deductions, for a period of
twelve (12) months following the termination of his
employment. During this twelve-month period, Employee
will use his best efforts to obtain employment or
consulting arrangements. Employer may offset,
dollar-for-dollar, any amount Employee earns from any
subsequent employment or consulting arrangement, less
relocation and other costs associated with the change of
employment. Employee will advise Employer in writing as
to his earnings.
5. CHANGE OF CONTROL.
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(a) For purposes of this Agreement, a "Change of Control" shall mean:
(1) any transaction or series of transactions in which any person
or group (within the meaning of Rule 13d-5 under the Exchange Act
and Sections 13(d) and 14(d) of the Exchange Act) becomes the
direct or indirect "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), by way of a stock issuance, tender
offer, merger, consolidation, other business combination or
otherwise, of greater than 50% of the total voting power (on a
fully diluted basis as if all convertible securities had been
converted and all warrants and options had been exercised)
entitled to vote in the election of directors of Employer
(including any transaction in which Employer becomes a wholly
owned or majority owned subsidiary of another corporation); (2)
any merger or consolidation or reorganization in which Employer
does not survive; (3) any merger or consolidation in which
Employer survives, but the shares of Employer's common stock
outstanding immediately before such merger or consolidation
represent 50% or less of the voting power of Employer after such
merger or consolidation; or (4) any transaction in which more
than 50% of Employer's assets are sold.
(b) For purposes of this Agreement, "Constructive Discharge" shall
mean the occurrence of any of the following after a Change of
Control: (1) Employee is no longer the Vice President-Controller
and his position has been significantly downgraded; (2) the scope
of Employee's authority, duties, and responsibilities have been
materially diminished; or (3) there has been a material reduction
in Employee's base salary, bonus, or benefits as in effect on the
date of a Change of Control.
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(c) If Employee resigns following a Constructive Discharge following
a Change of Control, this Agreement shall terminate without
further obligations to Employee other than (a) the timely payment
of Accrued Obligations and (b) the continued payment of his
then-current base salary, less standard withholdings and
authorized deductions, for a period of twelve (12) months
following the termination of his employment. During this
twelve-month period, Employee will use his best efforts to obtain
employment or consulting arrangements. Employer may offset,
dollar-for-dollar, any amount Employee earns from any subsequent
employment or consulting arrangement, less relocation and other
costs associated with the change of employment. Employee will
advise Employer in writing as to his earnings.
6. INDEMNIFICATION.
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Employer agrees to indemnify Employee against and in respect of any
and all claims, demands in accordance with all applicable laws.
7. ARBITRATION.
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Except as provided below, any controversy or claim arising out of,
relating to, or in any way connected with this Agreement, any alleged breach
thereof, or Employee's employment shall be settled by arbitration in accordance
with the rules of the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association. Without limiting the general nature of
the foregoing, such claims include, but are not limited to: wage and benefit
claims; contract claims; tort claims; defamation claims; claims for employment
discrimination (statutory or nonstatutory) based on age, race, sex, national
origin, color, religion, disability (perceived, actual, or record of), medical
condition, sexual orientation, and marital status; claims for harassment; and
claims for a violation of federal, state, local, or other government law,
constitution, statute, regulation, or ordinance. The arbitrator shall apply the
appropriate federal or state law, shall have the authority to interpret this
Agreement (but does not have the power to amend, change, delete, or add any
terms), and shall have the power to determine the appropriate legal or equitable
remedy, if any. The arbitrator's decision, which must be in writing, will be
final and binding, and the arbitrator's award may be entered in any court having
jurisdiction thereof.
8. NON-COMPETITION.
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(a) During the term of this Agreement, Employee shall not, directly
or indirectly, either as an employee, employer, consultant,
agent, principal, partners, stockholder, corporate officer,
director, or in any other individual or representative capacity,
engage or participate in any business that is in competition in
any manner whatsoever with the business of Employer, its
subsidiaries, or affiliates.
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(b) Employee agrees that for a period of one (1) year after the
termination of his employment with Employer, he will not,
directly or indirectly, without the prior written consent of
Employer's Board of Directors, provide consulting services with
or without pay, own, manage, operate, join, control, participate
in, or be connected as a stockholder, partner, or otherwise with
any business, individual, partnership, firm, corporation, or
other entity that is then in competition with Employer's business
or any subsidiary or affiliate of Employer.
(c) It is expressly agreed that Employer will or would suffer
irreparable injury if Employee were to compete with the business
of Employer or any subsidiary or affiliate of Employer in
violation of this Agreement and that Employer would by reason of
such competition be entitled to injunctive relief in a court of
appropriate jurisdiction. Employee consents and stipulates to the
entry of such injunctive relief in such a court prohibiting him
from competing with Employer or any subsidiary or affiliate of
Employer in violation of this Agreement.
9. ANTISOLICITATION.
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Employee promises and agrees that during the term of this Agreement,
he will not influence or attempt to influence any customers of Employer or any
of its present or future subsidiaries or affiliates, either directly or
indirectly, to divert their business to any business, individual, partnership,
firm, corporation, or other entity that is then in competition with Employer's
business or any subsidiary or affiliate of Employer.
10. SOLICITING EMPLOYEES.
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Employee promises and agrees that he will not, for a period of one (1)
year after the termination of his employment, directly or indirectly, solicit
any of Employer's employees to work for any business, individual, partnership,
firm, corporation, or other entity that is then in competition with Employer's
business or any subsidiary or affiliate of Employer.
11. CONFIDENTIAL INFORMATION.
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(a) Employee shall hold in a fiduciary capacity for the benefit of
Employer all secret or confidential information, knowledge, or
data relating to Employer or any of its affiliated companies, and
their respective businesses, which shall have been obtained by
Employee during his employment by Employer or any of its
affiliated companies and which shall not be or become public
knowledge (other than by acts by Employee or his representatives
in violation of this Agreement). After termination of Employee's
employment with Employer,
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Employee shall not, without the prior written consent of
Employer, or as may otherwise required by law or legal process,
communicate or divulge any such information, knowledge, or data
to anyone other than Employer or those designated by it.
(b) Employee agrees that all lists, materials, records, books, data,
plans, files, reports, correspondence, and other documents
("Employer material") used, prepared, or made available to
Employee shall be and remain property of Employer. Upon
termination of employment, Employee shall immediately return all
Employer material to Employer, and Employee shall not make or
retain any copies thereof.
12. ASSIGNMENT.
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Employee may not, without the prior written consent of Employer,
assign this Agreement or any rights or obligations hereunder. Employer may
assign this Agreement and delegate any of its rights and duties, without the
consent of Employee, to any of its subsidiaries or affiliates. In addition, upon
the sale of all or substantially all of the assets, business, and goodwill of
Employer to another corporation, or upon the merger or consolidation of Employer
with another corporation, this Agreement may be assigned to the corporation
purchasing such assets, business, and goodwill, or surviving such merger or
consolidation so long as said corporation expressly assumes in writing the
obligation of Employer herein.
13. INVALIDITY OF PROVISION.
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In the event that any provision of this Agreement is determined to be
illegal, invalid, or void for any reason, the remaining provisions hereof shall
continue in full force and effect.
14. WAIVER.
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No waiver of any breach of any term or provision of this Agreement
shall be construed to be, nor shall be, a waiver of any other breach of this
Agreement. No waiver shall be binding unless in writing and signed by the party
waiving the breach.
15. COMPLETE AGREEMENT.
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This Agreement constitutes and contains the entire agreement and final
understanding concerning Employee's employment with Employer and the other
subject matters addressed herein between the parties. It is intended by the
parties as a complete and exclusive statement of the terms of their agreement.
It supersedes and replaces all prior negotiations and all agreements proposed or
otherwise, whether written or oral, concerning the subject matter hereof. Any
representation, promise, or agreement not specifically included in this
Agreement
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shall not be binding upon or enforceable against either party.
16. CONSTRUCTION.
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Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
17. COMMUNICATIONS.
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All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered or
if mailed by registered or certified mail, postage prepaid, addressed to
Employer at 21250 Hawthorne Blvd., Ste. 800, Torrance, California, 90503, or
addressed to Employee at 1710 20th Street Ct. NW, Gig Harbor, Washington, 98335.
18. EXECUTION.
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This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Photographic copies of such signed counterparts may
be used in lieu of the originals for any purpose.
19. LEGAL COUNSEL.
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Employee and Employer recognize that this is a legally binding
contract and acknowledge and agree that they have had the opportunity to consult
with legal counsel of their choice.
In witness whereof, the parties hereto have executed this Agreement as
of the date first written above.
/s/ KENT THIRY /s/ GARY BEIL
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Total Renal Care Holdings, Inc. Gary Beil
By: Kent Thiry
Its: Chief Executive Officer
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