EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made and entered into this __th day of October, 2002, by and
between Fresenius Medical Care North America ("FMC" or the "EMPLOYER"), with
principal offices located at 95 Hayden Avenue, Lexington, MA 02420 and Mats
Wahlstrom ("EMPLOYEE") currently residing at 3301 Oak Street, Wheat Ridge, CO
80033.
WITNESSETH:
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. Effective February 24, 2003, FMC shall employ EMPLOYEE as
Senior Vice President and President of Fresenius Medical Services, and
EMPLOYEE hereby accepts the employment upon the terms and conditions of
this Agreement.
2. TERM. The following terms of this Agreement shall be effective as of
February 24, 2003 for a period of one (1) year from that date ("Initial
Term"), and continue thereafter, unless terminated in accordance with the
provisions hereinafter stated. THE INITIAL TERM SHALL BE RENEWED BY
SUCCESSIVE ONE (1) YEAR PERIODS UNLESS EMPLOYEE GIVES WRITTEN NOTICE OF
NON-RENEWAL TO FMC 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 FMC's
Senior Vice President and President of Fresenius Medical Services and will
have full management responsibility for the dialysis services organization
in North America. EMPLOYEE shall report directly to Ben J. Lipps,
President and Chief Executive Officer of Fresenius Medical Care NA.
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.
EMPLOYEE shall be permitted to continue to serve as a member of the Board
of Directors for the following organizations: Prosta Lund Corporation,
Getinge Corporation, and the Colorado Venture Center. EMPLOYEE may
continue to serve on these boards so long as it does not interfere with
his responsibilities to Fresenius Medical Care North America. Further,
EMPLOYEE shall be permitted to provide assistance to Gambro Healthcare
Inc. with respect to the current governmental investigation of its
activities during the term of his employment with Gambro Healthcare, Inc.
4. COMPENSATION AND BENEFITS.
(a) Base Salary. EMPLOYER shall pay EMPLOYEE for all services rendered a
base salary of Six Hundred Fifty Thousand Dollars and No Cents
($650,000.00) 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 FMC Management
Bonus Plan at a target level bonus of fifty percent (50%) and the
maximum bonus is one hundred percent (100%) 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 the terms of
that Plan.
Bonus payment is based on the following schedule:
1. Performance Year Budget Year
2. Measurement FMC EBIT
3. Payout Schedule 95% EBIT 0% of annual salary
100% EBIT 50% of annual salary
110% EBIT 100% of annual salary
EBIT performance above 95% would have a graduated payout of bonus up
to 100% of base salary at 110% EBIT.
(c) Retention Incentive Plan. EMPLOYEE shall be eligible to receive a
retention bonus in the amount of Fifty Thousand Dollars and No Cents
($50,000.00) per year for a period of five (5) years. Payment of
retention bonus is subject to customary withholding and employment
taxes and would occur in March of 2004, 2005, 2006, 2007 and 2008.
EMPLOYEE must be active in status and performing all duties and
responsibilities of his position to receive this bonus.
(d) Stock Plan. EMPLOYEE shall be eligible to participate in the current
Fresenius Medical Care AG 2001 Stock Incentive Plan, (the "Stock
Plan"), subject to IRS approval of such respective Stock Plans.
Preference Shares are traded on the Frankfort Stock Exchange.
EMPLOYEE will be recommended to receive 48,000.00 Preference Share
Options. A vesting schedule will be recommended to the Fresenius
Medical Care AG Management Board such that 16,000 shares will vest
two (2) years from the date of approval by the Management Board and
16,000 will vest on each of the next two (2) anniversaries of the
grant. Option price will be recommended to be determined by the
average Preference Share price over the previous 30-day full
calendar month before the month in which the
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grant is approved. EMPLOYEE will be recommended to be fully vested
in the 48,000 Preference Share options at the end of four (4) years
from date of grant. EMPLOYEE shall be eligible to receive additional
option grants if approved by the Fresenius Medical Care AG
Management Board.
(e) Benefits Program. EMPLOYEE shall continue to be eligible to
participate in the group benefits program at the senior executive
level as now established or which subsequently become available.
(f) Life Insurance. EMPLOYER 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.
(g) Automobile. EMPLOYEE will be provided with a company car allowance
of Seven Hundred Dollars ($700) paid monthly and treated as ordinary
income.
(h) Financial Planning/Tax Preparation. EMPLOYEE will be provided with
an allowance of Three Thousand Dollars ($3,000) 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.
(i) 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.
(j) 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.
(k) Relocation Assistance. As this position is located in Lexington, MA,
EMPLOYEE shall be eligible for FMCNA relocation benefits. Under
FMC's policy, all reasonable costs of purchasing and selling a house
and moving of household goods are paid by the EMPLOYER. In addition,
EMPLOYER will identify temporary housing for EMPLOYEE and dependents
for whatever period is necessary. During the period of temporary
housing, EMPLOYER will cover costs for return home trips to primary
residence and will provide financial assistance with regard to taxes
associated with IRS relocation policies.
(i) Secondary Office Space - EMPLOYER will make available office
space in geographic proximity to permanent residence located
in the Denver, Colorado area.
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(l) Indemnification. EMPLOYER agrees to indemnify EMPLOYEE with respect
to certain matters as provided in "Exhibit A", which is attached
hereto and incorporated herein.
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 for a period one hundred eighty (180) days out of any
twelve (12) months period. 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, a physician mutually acceptable to
EMPLOYEE and FMC may make such determination in accordance with the
terms of this sub-section.
(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.
(d) Termination by the EMPLOYER for Cause. The EMPLOYER may terminate
EMPLOYEE's employment for Cause at any time after providing thirty
(30) days' written notice to EMPLOYEE. Such notice shall specify in
reasonable detail the nature of the Cause, and during such thirty
(30) day period, EMPLOYEE shall have the opportunity to cure the
stated Cause, if at all possible. If EMPLOYEE fails to cure a stated
Cause or if such Cause cannot be cured, EMPLOYEE's employment
hereunder shall terminate at the end of the thirty (30) day period,
but without prejudice to EMPLOYEE's right to contest the existence
of any stated Cause or to contest the fact that the Cause has not
been cured. For purposes of this Agreement, the term "Cause" shall
mean, with respect to the EMPLOYEE, any of the following: (i)
conviction of EMPLOYEE of a felony; (ii) deliberate and continual
refusal to satisfactorily perform material employment duties
reasonably requested by the EMPLOYER; (iii) fraud or embezzlement
determined in accordance with the EMPLOYER's normal, internal
investigative procedures consistently applied in comparable
circumstances to employees; (iv) failure to obtain and maintain in
good order any licenses required for EMPLOYEE to perform his duties
under this Agreement; or (v) a breach of any of the covenants set
forth in Section 7 below.
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(e) Termination of EMPLOYEE for Cause. This Agreement may be terminated
by EMPLOYEE in the event of a breach of FMC or any of its
obligations under this Agreement, or in the event that EMPLOYEE's
duties and responsibilities or his Base Salary and Incentive
Compensation terms are diminished or reduced, provided EMPLOYEE
gives FMC written notice specifying the manner in which EMPLOYEE
believes FMC has breached this Agreement, or reduced or diminished
his duties and responsibilities or his Base Salary and Incentive
Compensation terms, 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. Upon any such termination, EMPLOYEE shall have
the right to exercise his Vested Stock Options in accordance
with the terms of the plan. 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), EMPLOYER
fails to employ EMPLOYEE as provided in Section 1, 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 eighteen (18) months Base Salary, at the
rate in effect on the date of termination of employment, such
amount to be paid as salary continuation with benefits.
EMPLOYEE may request and FMC will agree that any remaining
salary continuation be paid in a lump sum.
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If a lump sum is selected, all benefits entitlement will cease
as of the date of such payment; and
(ii) Executive outplacement if EMPLOYEE's position is eliminated or
materially reduced in scope as a result of restructuring or a
change of control of the company; and
(iii) A pro-rated portion of the EMPLOYEE's annual bonus as of the
termination of work date calculated based on the greater of
the current annual target bonus and the previous year's actual
annual bonus.
(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.
Notwithstanding anything to the contrary herein, the following shall not
be considered Confidential Information: (i) information which, at the time
of disclosure, is in the public domain; (ii) information which, after
disclosure, becomes part of the public domain through no fault of
EMPLOYEE; (iii) information which, at the time of disclosure, can be shown
by written documentation to have been in possession of EMPLOYEE, free of
any obligation to keep it confidential; (iv) information which can be
shown to have been independently developed by EMPLOYEE; and (v)
information which can be shown to have been acquired after disclosure from
a third party who did not receive it directly or indirectly from EMPLOYER
and who did not require that such information be held in confidence.
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, except as hereinafter provided, 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
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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 it is determined that EMPLOYEE has
materially breached any of the covenants referenced in Section
5(d)(v) hereof during EMPLOYEE's employment, the EMPLOYER shall have
the right to terminate EMPLOYEE's employment for "Cause."
(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 of the covenants set forth in this section by EMPLOYEE,
EMPLOYEE and the EMPLOYER agree that the EMPLOYER shall be entitled
to seek the following particular forms of relief, in addition to
remedies otherwise available to it at law or equity: injunctions,
both preliminary and permanent, enjoining or restraining such breach
and EMPLOYEE hereby consents to the issuance thereof forthwith and
without bond by any court of competent jurisdiction.
(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
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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,s 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.
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
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To Employee:
At the address for Employee set forth above or such
other address as supplied by EMPLOYER to FMC.
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
WITNESS NORTH AMERICA, EMPLOYER
/s/Ronald J. Kuerbitz By:/s/Ben J. Lipps 10/15/02
- --------------------- ----------------------- --------
Ben J. Lipps (DATE)
President and
Chief Executive Officer
WITNESS MATS WAHLSTROM
/s/Ronald J. Kuerbitz /s/Mats Wahlstrom 10/15/02
- --------------------- ----------------- --------
(DATE)
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EXHIBIT "A"
INDEMNIFICATION
EMPLOYER agrees to indemnify EMPLOYEE up to a maximum aggregate amount of
Two Hundred Fifty Thousand Dollars ($250,000) with respect to any loss or
claim arising from the failure or refusal of Gambro Healthcare Inc., or
its affiliates, (hereinafter collectively "Gambro") to meet any obligation
to pay, or any obligation to indemnify EMPLOYEE with respect to the
payment of, legal fees and related expenses incurred by EMPLOYEE in
connection with the pending investigation of Gambro by the Office of
Inspector General Department of Health and Human Services and the United
States Justice Department.
Further, EMPLOYER agrees to indemnify, defend and hold harmless EMPLOYEE
with respect to any loss, liability or claim by Gambro, including damages,
attorneys fees and costs, arising out of EMPLOYEE's relationship or
dealings with EMPLOYER, including EMPLOYER's offer of employment to
EMPLOYEE, EMPLOYEE's acceptance of such offer of employment, EMPLOYEE's
preparation for and performance of the duties of his employment with
EMPLOYER, except such acts as are outside the scope of his employment with
EMPLOYER and are performed without the knowledge of EMPLOYER.
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