EXHIBIT 10.2
AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into on October 6, 1999 by and
between Victor M.G. Chaltiel ("Mr. Chaltiel") and Total Renal Care Holdings,
Inc., a Delaware corporation (the "Company").
R E C I T A L S:
A. Mr. Chaltiel has tendered his resignation as an employee and as an officer
of the Company and all of its subsidiaries and affiliated entities effective as
of August 4, 1999 (the "Effective Date").
B. The Company and Mr. Chaltiel desire to provide for certain payments in
connection with his resignation and to provide for certain other agreements
between them as set forth herein.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants
contained herein, the parties agree as follows:
1. Confirmation of Resignation. Mr. Chaltiel hereby confirms his resignation as
an employee and as an officer of the Company and all of its subsidiaries and
affiliated entities effective as of the Effective Date. Mr. Chaltiel's
resignation as an employee and officer of the Company shall not affect his
status as a member of the Board of Directors of the Company.
2. Termination of Employment Agreement. The Company and Mr. Chaltiel
acknowledge and agree that, effective as of the Effective Date, all of their
respective rights and obligations under that certain Employment Agreement dated
as of August 11, 1994, as amended through the date hereof, between the Company
and Mr. Chaltiel (the "Employment Agreement"), shall be deemed to have
terminated and to be of no further force or effect.
3. Payment by the Company; Termination of Benefits. The Company shall pay (i)
separation pay by issuing a check in the amount of Seven Hundred and Sixty Six
Thousand Five Hundred and Eighty Dollars and No Cents ($766,580.00) made
payable to Victor M.G. Chaltiel, which check shall be delivered to Mr. Chaltiel
one business day after the expiration of the recission period referred to in
Section 16(k) below at such address as he may request (the "Separation
Payment"), and (ii) Mr. Chaltiel's legal fees in connection with the
negotiation of this Agreement and related matters by issuing a check in the
amount of Nine Thousand Dollars and No Cents ($9,000.00) made payable to
"Munger, Tolles & Olson LLP" for attorneys' fees and costs (the "Attorneys'
Fees Portion"), which check shall be delivered to Munger, Tolles & Olson LLP
one business day after the expiration of the recission period referred to in
Section 16(k) below at 355 South Grand Avenue, Thirty Fifth Floor, Los Angeles,
California 90071-1560. The Company shall report the Separation Payment on a
Form 1099 for federal income tax purposes for Mr. Chaltiel and the Attorneys'
Fees Portion on a Form 1099 for federal income tax purposes for Munger, Tolles
& Olson. Mr. Chaltiel shall be responsible for the payment of any all federal,
state and local taxes due with respect to the Separation Payment and shall
indemnify and hold the Company harmless from any cost, expense or liability
resulting from any failure to pay any such taxes. The Company acknowledges and
agrees that the payments provided for in this Section 3 are being made pursuant
to a negotiated agreement with Mr. Chaltiel and not pursuant to any provision
of the Employment Agreement. Mr. Chaltiel acknowledges and agrees that, except
for the payment to be made as provided in this Section 3 and the expense
reimbursements to be paid as provided in Section 4 below, he has received all
salary and other payments of any kind to which he was entitled through the
Effective Date, including, without limitation, all accrued vacation pay and
similar payments to which he was entitled as an officer or an employee of the
Company. From and after the Effective Date, Mr. Chaltiel shall not be entitled
to participate in any of the Company's employee benefit plans, including but
not limited to its 401(k) plan and its health, disability and life insurance
programs, except to the extent required by law (e.g., pursuant to COBRA) and
except to the extent he is entitled to participate in any such plan by virtue
of his status as a director of the Company.
4. Expense Reimbursement. Notwithstanding any other provision of this
Agreement, Mr. Chaltiel may submit requests for reimbursement of business
related expenses for which he may be entitled to reimbursement pursuant to
Section 4.6 of the Employment Agreement or otherwise pursuant to any Company
policy (including any payments related to his private use of the Company's
airplane); provided, however, that any and all such reimbursement requests must
be submitted no later than October 29, 1999 in order to be considered for
reimbursement.
5. Amendment of Stock Options. Pursuant to authorization of the Board of
Directors of the Company, the non-qualified stock option held by Mr. Chaltiel
to purchase up to 166,667 shares of common stock of the Company (the "Stock
Option") is hereby amended to provide that the unvested portion of the Stock
Option (covering 55,555 shares) shall be deemed fully vested as of the
Effective Date. The Stock Option shall be exercisable at any time prior to
August 4, 2002, and shall expire on such date to the extent not exercised prior
thereto.
6. No Effect on Indemnification Agreement. This Agreement shall have no effect
on, and shall not limit in any way, the obligations of the Company pursuant to
the terms of that certain Indemnification Agreement dated as of October 25,
1995 by and between the Company and Mr. Chaltiel, a copy of which is attached
hereto as Exhibit A (the "Indemnification Agreement").
7. Assistance and Cooperation. Mr. Chaltiel shall assist the Company and
cooperate in preparing for any and all litigation, arbitration proceedings,
investigations and other legal proceedings (collectively, "Legal Proceedings")
relating to matters which occurred during his tenure with the Company and as to
which the Company may reasonably request his assistance. Without limiting the
generality of the foregoing, Mr. Chaltiel shall (i) make himself available at
such times as may reasonably be requested for depositions in connection with
any Legal Proceedings, (ii) make himself available to testify in any Legal
Proceedings and (iii) assist the Company in preparing responses to requests for
written discovery in any Legal Proceedings. Mr. Chaltiel shall be reimbursed
for all of his out-of pocket expenses in providing such assistance to the
Company.
8. Confidentiality.
(a) Mr. Chaltiel shall not at any time disclose or use for his own benefit
or purposes or for the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise other than the Company and any of its
subsidiaries or affiliates, any trade secrets, information, data, or other
confidential information relating to customers, development programs,
costs, marketing , trading, investment, sales activities, promotion, credit
and financial data, financing methods, plans, or the business and affairs
of the Company generally, or any subsidiary or affiliate of the Company;
provided that the foregoing shall not apply when such information is
lawfully obtainable from other sources and the information is not unique to
the Company or is generally known to the industry or the public other than
as a result of Mr. Chaltiel's breach of this Section 8(a). Mr. Chaltiel
shall not retain or use for his account at any time any trade names,
trademark or other proprietary business designation used or owned in
connection with the business of the Company or its affiliates.
Notwithstanding the foregoing, Mr. Chaltiel shall not be prohibited from
complying with any applicable law, rule or regulation (including complying
with any oral or written questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process to which he is subject).
(b) The Company shall give Mr. Chaltiel written notice of an event or
circumstances constituting a breach of Section 8(a) and thirty (30) days
from the date of such notice to cure such event or circumstances, if
curable.
(c) Mr. Chaltiel acknowledges and agrees that the Company's remedies at law
for a breach of any of the provisions of Section 8(a) would be inadequate
and, in recognition of this fact, Mr. Chaltiel agrees that, in the event of
such a breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form
of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be
available.
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9. Release by Mr. Chaltiel. As a material inducement to the Company to enter
into this Agreement, Mr. Chaltiel hereby irrevocably and unconditionally
releases, acquits and forever discharges the Company and each of the Company's
past, present and future owners, stockholders, predecessors, successors,
assigns, agents, directors, officers, employees, representatives, attorneys,
divisions, subsidiaries and affiliates (and all past, present and future
owners, stockholders, predecessors, successors, assigns, agents, directors,
officers, employees, representatives and attorneys of such divisions,
subsidiaries and affiliates), and all persons acting by, through, under or in
concert with any of them (collectively, the "Company Releasees"), from any and
all charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies and expenses (including attorneys' fees and costs
actually incurred) of any nature whatsoever, known or unknown, suspected or
unsuspected, including, but not limited to, any charges, complaints, claims,
liabilities, obligations, controversies and expenses arising out of alleged
violations of any contracts, express or implied, any covenant of good faith and
fair dealing, express or implied, any obligation for compensation, lost wages,
lost benefits, accrued vacation pay, or any other expectation of remuneration
or benefit on the part of Mr. Chaltiel, including but not limited to, any
defamation, intentional or negligent infliction of emotional distress, or any
other tort, or any legal restrictions on the Company's right to terminate
employees, or any federal state or other governmental statute, regulation, or
ordinance (including, without limitation: (i) Title VII of the Civil Rights Act
of 1964 (race, color, religion, sex and national origin discrimination); (ii)
42 U.S.C. (P) 1981 (discrimination); (iii) 29 U.S.C. (P) 206(d)(1) (equal pay);
(iv) the California Fair Employment and Housing Act (discrimination, including
race, color, national origin, ancestry, physical handicap, medical condition,
marital status, sex or age); (v) the California Workers' Compensation Act; (vi)
the California Labor Code; (vii) Executive Order 11246 (race, color, religion,
sex and national origin discrimination); (viii) Executive Order 11141 (age
discrimination); (ix) (P) 503 and (P) 504 of the Rehabilitation Act of 1973
(disability discrimination); (x) the Employee Retirement Income Security Act
(employee benefits); (xi) the Fair Labor Standards Act; (xii) the Americans
with Disabilities Act (discrimination against individuals with a disability);
(xiii) the Age Discrimination in Employment Act (age discrimination), and (xiv)
the Civil Rights Act of 1991), which Mr. Chaltiel now has, owns or holds, or
claims to have, own or hold, or which Mr. Chaltiel at any time heretofore had,
owned, or held, or claimed to have, own or hold, against the Company or any
other Company Releasee; provided, however, that the foregoing shall not release
the Company or any other Company Releasee from any (1) obligations under this
Agreement (including the obligation to make the payments provided for herein
and to reimburse Mr. Chaltiel for business expenses as provided in Section 4)
or under the Indemnification Agreement, (2) claims arising after October 6,
1999 or (3) charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies and expenses arising out of any conduct by the
Company or such other Company Releasee which was knowingly fraudulent or
deliberately dishonest (provided, however, that under no circumstances may Mr.
Chaltiel pursue any claim which would be released in this Section 9 absent this
proviso on the basis that an action taken by any member of the Board of
Directors of the Company on or after the Effective Date and on or prior to
October 6, 1999 was knowingly fraudulent or deliberately dishonest). Mr.
Chaltiel agrees that as of October 6, 1999, he does not know, claim, suspect or
have any evidence whatsoever of facts which would give rise to the assertion
that the Company or any Company Releasee has engaged in any knowingly
fraudulent or deliberately dishonest conduct.
10. Release by the Company. As a material inducement to Mr. Chaltiel to enter
into this Agreement, the Company, on its own behalf and on behalf of the
subsidiaries and affiliated entities which it controls, hereby irrevocably and
unconditionally releases, acquits and forever discharges Mr. Chaltiel, his
personal and legal representatives, executors, administrators, heirs,
distributees, devisees and legatees (collectively, the "Chaltiel Releasees")
from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies and expenses (including attorneys' fees and
costs actually incurred) of any nature whatsoever, known or unknown, suspected
or unsuspected, including, but not limited to, any charges, complaints, claims,
liabilities, obligations, controversies and expenses arising out of alleged
violations of any contracts, express or implied, or any covenant of good faith
and fair dealing, express or implied, which the Company or any of such
subsidiaries or affiliated entities now has, owns or holds, or claims to have,
own or hold, or which the Company or any of such subsidiaries or affiliated
entities at any time heretofore had, owned, or held, or claimed to have, own or
hold, against Mr. Chaltiel or any other Chaltiel Releasee relating to the
performance of
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Mr. Chaltiel's duties as an officer, director or employee of the Company or any
of its divisions, subsidiaries or affiliates; provided, however, that the
foregoing shall not release Mr. Chaltiel or any Chaltiel Releasee from any (1)
obligations under this Agreement or under the Indemnification Agreement, (2)
claims arising after October 6, 1999 or (3) charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies and expenses
arising out of any conduct by Mr. Chaltiel which was knowingly fraudulent or
deliberately dishonest. The Company agrees that as of October 6, 1999, neither
it nor any Company Releasee knows, claims, suspects or has any evidence
whatsoever of facts which would give rise to the assertion that Mr. Chaltiel
has engaged in any knowingly fraudulent or deliberately dishonest conduct.
11. Knowing and Voluntary Waiver. The parties expressly waive and relinquish
all rights and benefits afforded by Section 1542 of the Civil Code of the State
of California with respect to the releases provided herein, and do so
understanding and acknowledging the significance of such specific waiver of
Section 1542. Section 1542 of the Civil Code of the State of California states
as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
Thus, notwithstanding the provisions of Section 1542, and for the purpose of
implementing the releases provided herein, the parties expressly acknowledge
that this Agreement is intended to include in its effect, without limitation
other than the express limitations set forth herein, all claims which either
party does not know or suspect to exist in such party's favor at the time of
execution hereof, and that this Agreement contemplates the extinguishment of
any such claims. The parties acknowledge and agree that the foregoing waiver of
the provisions of Section 1542 has been expressly bargained for by each of the
parties in the negotiation of this Agreement.
12. No Claims; Covenant Not to Sue. Mr. Chaltiel represents and covenants that
(i) he has not filed any complaints, charges or lawsuits, nor commenced any
arbitration or similar proceedings, against the Company or any other Company
Releasee in connection with any claim or potential claim released hereunder,
including any claims under the Employment Agreement, and (ii) he will not do so
at any time hereafter; provided, however, that this Section 12 shall not limit
Mr. Chaltiel from commencing appropriate proceedings for the purpose of
enforcing any claims not released hereunder. The Company represents and
covenants that (i) neither it nor any subsidiary or other affiliated entity
which it controls has filed any complaints, charges or lawsuits nor commenced
any arbitration or similar proceedings against Mr. Chaltiel or any other
Chaltiel Releasee in connection with any claim or potential claim released
hereunder, including any claims under the Employment Agreement, and (ii)
neither it nor any such subsidiary or affiliated entity will do so at any time
hereafter; provided, however, that this Section 12 shall not limit the Company
from commencing appropriate proceedings for the purpose of enforcing any claims
not released hereunder.
13. Non-Admission of Liability. This Agreement shall not in any way be
construed as an admission by the Company that it or any subsidiary or
affiliated entity has acted wrongfully with respect to Mr. Chaltiel or that Mr.
Chaltiel has any rights whatsoever against the Company or any other Company
Releasee, and the Company specifically disclaims any liability to or wrongful
acts against Mr. Chaltiel. This Agreement shall not in any way be construed as
an admission by Mr. Chaltiel that he has acted wrongfully with respect to the
Company, or that the Company or any subsidiary or affiliated entity has any
rights whatsoever against Mr. Chaltiel or any other Chaltiel Releasee, and Mr.
Chaltiel specifically disclaims any liability to or wrongful acts against the
Company.
14. Non-Disparagement. From and after the date hereof, the Company shall not
make, and shall not permit any subsidiary or affiliated entity which it
controls to make, any untrue, defamatory or disparaging statements concerning
Mr. Chaltiel, and Mr. Chaltiel shall not make any untrue, defamatory or
disparaging statements concerning the Company or any other Company Releasee.
The foregoing notwithstanding, under no
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circumstances shall testimony given under oath in any lawsuit, deposition or
other legal proceeding be held to constitute disparagement of any person or
entity in violation of this Section 14.
15. No Confidentiality. Mr. Chaltiel acknowledges that the Company intends to
file a copy of this Agreement as an exhibit to a future filing with the
Securities and Exchange Commission. Consequently, Mr. Chaltiel acknowledges and
agrees that the contents of this Agreement will be made publicly available and
confirms that he has no expectation of confidentiality with respect to the
terms hereof.
16. Miscellaneous.
(a) Return of Company Property. Mr. Chaltiel hereby confirms that he has
delivered and returned to the Company any and all memoranda, books, papers,
plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its
affiliates; provided, however, that Mr. Chaltiel may retain personal notes,
notebooks, diaries, Rolodexes and addresses and phone numbers; and provided
further, that, so long as Mr. Chaltiel remains a member of the Board of
Directors of the Company, Mr. Chaltiel may retain such Company property and
related materials as are necessary for him to perform his duties as a
director of the Company or as have been or may be provided to him
specifically in his capacity as a director of the Company.
(b) Arbitration of Disputes. All controversies, claims, disputes and
matters in question arising out of, or relating to, this Agreement or the
breach hereof (but not including controversies, claims, disputes and
matters in question arising out of, or relating to, the Indemnification
Agreement or the breach thereof), shall be decided by binding arbitration
conducted in Los Angeles, California under the applicable rules of the
American Arbitration Association (the "AAA") or its successor in effect at
the time a demand for arbitration is made. The arbitration will be
conducted by a single arbitrator chosen from the AAA's Commercial, Large
Complex Cases panel pursuant to the rules of the AAA then in effect. The
decision of the arbitrator shall be conclusive, final, and binding on the
parties hereto and on their respective heirs, legal representatives,
successors, and assigns. The arbitrator shall have no power to award
punitive, exemplary or similar damages to any party.
(c) Notices. Any notice or demand which, by the provisions hereof, is
required or which may be given to or served upon the parties hereto shall
be in writing and shall be deemed to have been validly served, given or
delivered (i) upon confirmation of transmission, if sent by telecopy, (ii)
upon actual delivery, if delivered by personal delivery, and (iii) three
business days after deposit in the United States mail, as registered or
certified mail, with proper postage prepaid and addressed to the party or
parties to be notified, if sent by mail. All notices shall be sent or
delivered to the following addresses or facsimile numbers (or such other
address(es) or facsimile number(s) as a party may designate by like
notice):
If to the Company: Total Renal Care Holdings, Inc.
21250 Hawthorne Boulevard, Suite 800
Torrance, California 90503
Attention: General Counsel
Facsimile No.: (310) 792-0044
If to Mr. Chaltiel: Victor M.G. Chaltiel
The Estates at Spanish Trail
13 Vintage Court
Las Vegas, NV 89113
Facsimile No.: (702) 247-6454
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties and, in the case of the Company, its
successors and assigns, and, in the case of Mr. Chaltiel, his personal and
legal representatives, executors, administrators, heirs, distributees,
devisees and legatees. The parties hereto acknowledge that the Company
shall have the right to assign, with absolute discretion, any or all of its
rights and obligations under this Agreement to any of its affiliates,
successors and assigns. This Agreement shall be deemed to be personal to
Mr. Chaltiel and shall not be assignable by Mr. Chaltiel.
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(e) Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of California
(without regard to choice of law principles).
(f) Amendment; Waiver. This Agreement may be amended only by an instrument
in writing executed by the parties hereto. No waiver, express or implied,
of any breach of any covenant, agreement or duty shall be held or construed
as a waiver of any other breach of the same or any other covenant,
agreement or duty.
(g) Entire Agreement. This Agreement and the Indemnification Agreement
constitute the entire agreement of the parties hereto and fully supersede
and replace any and all prior agreements (including the Employment
Agreement) and understandings, whether oral or written, express or implied,
between the parties pertaining to the subject matter of this Agreement.
(h) Captions. The captions of the several sections and paragraphs of this
Agreement are used for convenience only and shall not be considered or
referred to in resolving questions of interpretation with respect to this
Agreement.
(i) Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original, and both of which together shall
constitute one and the same Agreement.
(j) Negotiation. Mr. Chaltiel acknowledges that (i) he has had an
opportunity to negotiate the terms of this Agreement and to receive advice
of counsel with regard thereto, (ii) he has carefully read and considered
this Agreement, (iii) he fully understands the extent and impact of the
provisions of this Agreement, and (iv) he has executed this Agreement
voluntarily and without coercion, undue influence, threats, or intimidation
of any kind or type whatsoever.
(k) Time Periods. Mr. Chaltiel understands that he has the right to be
given twenty-one (21) days to consider whether or not to execute this
Agreement and that, if he chooses to execute this Agreement before that
time period expires, he will be deemed to have voluntarily waived and
forfeited such right. Mr. Chaltiel also understands that he has up to seven
(7) days after executing this Agreement to rescind this Agreement by
notifying the Company of such recission in writing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
TOTAL RENAL CARE HOLDINGS, INC.
/s/ Maris Andersons /s/ Victor M.G. Chaltiel
By: ______________________________________ __________________________________________
Maris Andersons Victor M.G. Chaltiel
Director
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