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EXHIBIT 10.17
SEPARATION AGREEMENT
This Agreement, by and between National Medical Care, Inc., d/b/a Fresenius
Medical Care North America ("FMC"), a corporation having its principal place of
business at Two Ledgemont Center, 95 Hayden Avenue, Lexington, MA 02173 and
Geoffrey W. Swett ("Swett"), an individual residing at 42 Kings Way, Waltham,
Massachusetts 02154.
The parties agree as follows:
1. TERMINATION OF EMPLOYMENT. Swett's employment as President of Fresenius
Dialysis Services Division and Executive Vice President of FMC shall
terminate effective June 22, 1998. From that date, Swett will continue
to be employed as a consultant to the Chief Executive Officer of FMC
assisting in the transition of the Dialysis Services Division until the
July 31, 1998 termination of Swett's employment with FMC.
2. GUARANTEED SALARY CONTINUATION. Swett will continue to be paid
bi-weekly for a period of fifty two (52) weeks, beginning August 1,
1998 and ending July 31, 1999 ("Guaranteed Salary Continuation
Period").
3. CONTINGENT ADDITIONAL SALARY CONTINUATION. Despite his good faith best
efforts to do so, if Swett has not secured full-time employment by the
end of the Guaranteed Salary Continuation Period, FMC will provide him
with additional salary continuation for up to an additional fifty two
(52) week period or until he finds full-time employment, whichever
occurs first, provided he continues to make good faith best efforts to
do so. If Swett obtains full-time employment at any time during this
additional fifty two (52) week period, he will promptly notify FMC of
that fact and the date of his initial employment with his new employer,
and FMC's obligation to pay such additional salary continuation shall
cease as of such initial employment date, such salary obligation being
pro-rated on a daily basis.
4. MANAGEMENT BONUS PLAN PROGRAM. Swett will be eligible for a pro-rata
award, based upon his months of service in 1998, under the 1998
Management Bonus Plan. If funding is available for the Plan, Swett will
be paid at fifty-eight percent (58%) of the bonus payment he would have
received as an active, full-time employee of FMC. Payment will be made
on the same date as payment to active FMC executives.
5. PAID-TIME-OFF PAY. Swett will receive a lump sum payment for his
accrued but unused accrued Paid-Time-Off on or promptly after July 31,
1998.
6. BENEFITS.
MEDICAL AND DENTAL COVERAGE: For as long as Swett is receiving
Guaranteed Salary Continuation or Contingent Additional Salary
Continuation Payments, he is eligible to
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continue any coverage under FMC's medical and dental plans on the same
basis and to the same extent as currently covered and as may be
available to similarly situated employees in the event that
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changes are subsequently made to such plans. At the end of the
Guaranteed Salary Continuation Period or Contingent Additional Salary
Continuation Period, he may elect to continue these health and dental
benefits under COBRA. FMC will send Swett the documents necessary to
elect to do so under separate cover near the end of his Salary
Continuation Period.
LIFE INSURANCE: Swett's life insurance benefits will continue during
the Guaranteed Salary Continuation or Contingent Additional Salary
Continuation Period. Any conversion of life insurance at the end of
that period may be arranged through the Corporate Human Resources
Department.
Payment by FMC for medical, dental and life insurance benefits will
continue through the period of Guaranteed Salary Continuation or
Contingent Additional Salary Continuation on the same basis as though
Swett were still employed.
LONG AND SHORT TERM DISABILITY BENEFITS: Swett's long and short term
disability benefits will cease as of July 31, 1998.
401(k) PLAN: Contributions to FMC's 401(k) Plan may be withdrawn from
the plan following Swett's termination of employment in accordance with
Internal Revenue Service regulations. Swett may not make contributions
to the Plan during the Guaranteed Salary Continuation Period or
Contingent Additional Salary Continuation Period. Swett is 100 percent
vested in matching company contributions made to the plan on his behalf
Corporate Human Resources will provide Swett with information on how to
withdraw his funds from the Plan.
PENSION PLAN: Swett will stop accruing benefit service under the
Pension Plan and the Supplemental Executive Retirement Plan effective
July 31, 1998. He is fully vested in both Plans. He will receive a
separate letter including a benefit calculation after that date.
DEFERRED COMPENSATION PLAN. Swett's account balance under the Deferred
Compensation Plan will be paid to him within thirty (30) days of July
31, 1998.
7. FRESENIUS MEDICAL CARE. AG 1998 STOCK INCENTIVE PLAN. Pending approval
of the Fresenius Medical Care AG Management Board, 13,889 of Swett's
stock options for Preference Shares, equivalent to approximately 41,667
ADS's, will be vested July 31, 1998. Swett will have one (1) year from
that date to exercise these options. Should he fail to exercise these
options, they will be forfeited at the end of the one (1) year period.
8. OUTPLACEMENT. FMC will provide Swett with executive-level outplacement
at Manchester Partners or a reasonably comparable firm of his choosing.
9. REFERENCE. Prior to July 31, 1998, FMC will provide Swett with a
mutually acceptable letter of reference.
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10. UNEMPLOYMENT BENEFITS. If Swett is unemployed at the end of the period
of Guaranteed Salary Continuation and Contingent Additional Salary, FMC
agrees it will not protest any claim he may file for unemployment
compensation.
11. COMPANY PROGRAM. Swett affirms that he will return all Company
property, including but not limited to, all keys, files and computer
hardware, software and data, in his possession.
12. RELEASE. As a material inducement to FMC to enter into this agreement,
and in consideration of the Guaranteed Salary Continuation and the
Contingent Additional Salary Continuation Payments and benefits and
other consideration to be provided by FMC to Swett, all as is provided
in the Agreement, Swett hereby irrevocably and unconditionally
releases, acquits and forever discharges FMC, its parents, subsidiaries
and affiliates, successors and assigns, officers, employees, directors,
and representatives, and all persons related thereto, from any and all
charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes or action, suits,
rights, demands, costs, losses, debts and expenses (including
attorney's fees and costs actually incurred), of any nature whatsoever,
known or unknown, which he has, or might claim to have, against any of
them and which arises out of or is related to the termination of his
employment with FMC. This Release includes but is not limited to, all
such claims under applicable state or federal law, including without
limitation, any claims under the Age Discrimination in Employment Act,
29 U.S.C.ss.621, et seq.
13. CONFIDENTIALITY-DISCLOSURE/NONDISPARAGEMENT. Swett acknowledges his
continuing obligation under the Non-Disclosure/Non-Competition
Agreement dated September 15, 1992 and further acknowledges that the
non-competition obligation remains in effect for one year after he
stops receiving guaranteed salary continuation or contingent additional
salary continuation. Swett and FMC also agree not to disclose anything
about this Agreement except to those who have a reasonable need to know
about it. FMC and Swett agree not to say or do anything which would
disparage or present unfairly the other, and as to FMC would include,
its employees, officers, directors, agents, or affiliates.
14. COOPERATION AND ASSISTANCE Swett and FMC acknowledge that Swett may
have information and knowledge which may be useful to FMC in connection
with certain legal, regulatory, and corporate administrative
proceedings, including but not limited to, various litigation matters,
certain regulatory submissions, resignation activities with respect to
officerships and directorships, and the Office of the Inspector General
investigation. As a material inducement to FMC to enter into this
Agreement, and in consideration of the Guaranteed Salary Continuation
and the Contingent Additional Salary Continuation Payments and benefits
and other consideration to be provided by FMC to Swett, all as provided
in the Agreement, Swett acknowledges and confirms that he shall, during
the periods of Guaranteed Salary Continuation and Contingent Additional
Salary Continuation, cooperate fully with FMC in connection with any
such proceeding. Swett and FMC acknowledge that, as used in this
paragraph, full cooperation shall mean that Swett will, at the request
of FMC, make available to FMC all time, information and assistance
reasonably requested of him in connection with these proceedings and,
further
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that Swett shall maintain the confidentiality of information and
communications he shares with FMC in connection with providing such
assistance consistent with the attorney-client privilege, and the
provisions of paragraph 12 of this Agreement and the governing law.
15. CONSULTING. During the Guaranteed Salary Continuation or Contingent
Additional Salary Continuation period, Swett may from time to time be
requested to consult on operating matters, by the CEO of FMC. For such
time requested by the CEO and such services performed, Swett will be
compensated at a rate of $200 per hour plus out-of-pocket expenses. All
such services
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are to be presented for payment monthly, invoice to include description
of services performed, dates and hours. Invoices submitted to the Vice
President of Human Resources and approved by the CEO will be paid
within thirty (30) days of receipt.
16. REVIEW PERIOD. Swett understands that he has twenty-one (21) days to
review this Agreement, and has the right to retain counsel to review it
and to represent him in his discussions with FMC if he wishes to do so.
After he executes it, he has seven (7) days to revoke the Agreement, so
it will not be effective until seven (7) days have expired after he
signs the Agreement and returns it to FMC.
17. ENTIRE AGREEMENT, GOVERNING LAW. This Agreement sets forth the entire
agreement of the parties with respect to the subject matter hereof and
shall be governed by the law of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed this Separation Agreement to take
effect as a sealed instrument, as of the 21st of July, 1998.
FRESENIUS MEDICAL CARE NORTH AMERICA
/s/ Ben Lipps /s/ Geoffrey W. Swett
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Ben J. Lipps Geoffrey W. Swett
President and Chief Executive Officer