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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made and entered into this 1st day of January, 2001, by and
between Fresenius Medical Care North America ("FMC" or the "EMPLOYER"), with
principal offices located at 95 Hayden Avenue, Lexington, MA 02420 and E. Craig
Dawson ("EMPLOYEE") currently residing at 45 Anselm Way, Sudbury, MA 01776.
WITNESSETH:
WHEREAS, FMC desires to employ EMPLOYEE as Senior Vice President, Fresenius
Medical Care NA and President, Spectra Renal Management, 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 of
Fresenius Medical Care NA and President, Spectra Renal Management, 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 January 15, 2001 and
shall terminate as of January 1, 2003 in accordance with the provisions
hereinafter stated. THE INITIAL TERM SHALL BE RENEWED BY A SUCCESSIVE TWO
(2) 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 Senior Vice
President of Fresenius Medical Care NA and President of Spectra Renal
Management and in this position, EMPLOYEE will have full p & l and
management responsibilities for Spectra Renal Management and the FMCNA
Information Services Group. EMPLOYEE shall report directly to the
President and Chief Executive Officer of FMCNA. 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 Two Hundred Sixty Thousand Dollars ($260,000) 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
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 II, 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.
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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
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.
f) Automobile. EMPLOYEE will be provided with a company car allowance of Five
Hundred Dollars ($500) paid monthly and treated as ordinary income.
g) Financial Planning/Tax Preparation. EMPLOYEE will be provided with an
allowance of One Thousand Dollars ($1,000) 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 EMPLOYER at least thirty
(30) days written notice if he wishes to terminate his employment pursuant
to this provision. EMPLOYEE is employed as a Senior Vice President of
FMCNA with the P&L responsibility of Spectra Renal Management and the
Information Services Group. Any reduction in this level of management
responsibility or reduction of base salary can be determined by the
EMPLOYEE to be a breach of this contract, and at his option, be
terminated. If the EMPLOYEE elects to terminate this contract, the company
would compensate the EMPLOYEE under Section 6.
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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.
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 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:
(i) A payment equal to twenty-four (24) months Base Salary, 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
(ii) A pro-rated portion of the EMPLOYEE's annual bonus based upon
termination of work date.
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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 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
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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.
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.
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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
95 Hayden Avenue
Lexington, MA 02420-9192
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.
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/Brian O'Connell By: /s/Ben J. Lipps 4/20/00
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Ben J. Lipps (DATE)
Chief Executive Officer
WITNESS E. CRAIG DAWSON
/s/Lorraine Gettings /s/E.Craig Dawson 4/1/00
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(Employee Signature) (DATE)
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