Exhibit 10.1
DaVita Voluntary Deferral Plan
(formerly Gambro Healthcare
Voluntary Deferral Plan)
Article 1. Establishment, Purpose, and
Duration
1.1 Establishment of the
Plan. Gambro Healthcare,
Inc. establishes this compensation deferral plan known as the
Gambro Healthcare Voluntary Deferral Plan (the “Plan”),
effective the day before the closing of the sale of Gambro
Healthcare, Inc. to DaVita Inc. This Plan is a spinoff of the
Gambro Voluntary Deferral Plan (“VDP”). Effective the
day of assumption of sponsorship of the Plan by DaVita Inc. in
accordance with the closing of the sale of Gambro Healthcare, Inc.
to DaVita Inc., DaVita Inc. shall adopt the Plan and become the
Plan Sponsor and this Plan is renamed the DaVita Voluntary Deferral
Plan (also known as the “Plan”).
Except as otherwise provided herein,
the provisions of this Plan apply to amounts deferred after
December 31, 2004 into this Plan and amounts deferred after
December 31, 2004, into the VDP, pursuant to Section 409A
of the Code (as defined below in Section 2(d)). Amounts
deferred after December 31, 2004 shall include any Deferral
(as defined below in Section 2(h)) to this Plan or the VDP,
including Deferrals of a Participant’s Annual Incentive (as
defined below in Section 2(a)) for which a deferral election
was entered into in 2003 and which was earned in 2004 but paid in
2005. The provisions of this Plan shall be construed and
administered in accordance with Code Section 409A, and shall
be deemed to be modified to the extent necessary to comply with
Code Section 409A.
The Plan provides for the deferral
of compensation, subject to the terms set forth herein.
1.2 Purpose of the
Plan. The purpose of the
Plan is to (a) provide employees with the opportunity to defer
pay and taxes, (b) promote the achievement of long-term
objectives of the Employer by attracting and retaining key
employees of outstanding competence, and (c) provide
competitive compensation opportunities. This Plan is an unfunded
deferred compensation plan for a select group of management, highly
compensated employees, and persons who have been part of a select
group of management and/or highly compensated employees. It is
intended that the Plan constitute an unfunded “top hat
plan” for purposes of the Employee Retirement Income Security
Act of 1974, as amended.
1.3 Duration of the
Plan. The Plan remains in
effect indefinitely, subject to the right of the Board of Directors
to terminate the Plan at any time pursuant to
Article 7.
Article 2. Definitions
Whenever used in this Plan, the
following terms shall have the meanings set forth below and, when
the defined meaning is intended, the initial letter of the word is
capitalized:
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(a)
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“Annual Incentive”
means an Employee’s annual
bonus payment, if any, which is earned in the same year as the
Participant’s Base Salary but is payable (if not deferred
under this Plan) in the following year.
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(b)
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“Base
Salary” means an
Employee’s total annual base salary, including any
commissions that may be paid to the Employee.
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(c)
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“Board” or “Board of Directors” means
the Board of Directors of the Company.
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(d)
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“Code” means the Internal Revenue Code of 1986, as
amended, Treasury Regulations and administrative guidance issued
thereunder.
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(e)
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“Company” means Gambro Healthcare, Inc., a Tennessee
corporation, effective the day before the closing of the sale of
Gambro Healthcare, Inc. to DaVita Inc. Effective the day of
assumption of sponsorship of the Plan by DaVita Inc. in accordance
with the closing of the sale of Gambro Healthcare, Inc. to DaVita
Inc., Company means DaVita Inc., a Delaware corporation.
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(f)
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“Compensation”
means an Employee’s
(1) Base Salary, (2) Annual Incentive, and (3) other
compensation, as determined by the Company.
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(g)
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“Deferral Account”
means an account established and
maintained by the Participant’s Employer for each Participant
which shall include the following sub-accounts:
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(1)
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Post-2004 Base
Pay Contributions Sub-Account;
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(2)
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Post-2004
Annual Incentive Contributions Sub-Account;
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(3)
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Post-2004 Other
Compensation Contributions Sub-Account;
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(4)
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Pre-2005 VDP
Base Pay Contributions Sub-Account;
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(5)
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Pre-2005 VDP
Annual Incentive Contributions Sub-Account; and
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(6)
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Pre-2005 VDP
Other Compensation Contributions Sub-Account.
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(h)
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“Deferrals” mean, individually or collectively, amounts
deferred under this Plan.
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(i)
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“Disabled” refers to a Participant who ceases service with
the Employer because he or she:
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(1)
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is unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months;
or
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(2)
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is, by reason
of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than
three (3) months under an accident and health plan covering
employees of the Participant’s Employer.
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This definition shall be construed
and administered in accordance with the requirements of Code
Section 409A(a)(2)(C).
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(j)
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“Employee” means any regular status, nonunion, salaried
employee of the Employer.
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(k)
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“Employer” means Gambro Healthcare, Inc., a Tennessee
corporation, effective the day before the closing of the sale of
Gambro Healthcare, Inc. to DaVita Inc. Effective the day of
assumption of sponsorship of the Plan by DaVita Inc. in accordance
with the closing of the sale of Gambro Healthcare, Inc. to DaVita
Inc., Employer means DaVita Inc., a Delaware corporation, together
with any and all Subsidiaries, listed in
Appendix I.
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(l)
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“Minimum Executive Salary
Potential” means an
amount equal to the minimum Base Salary as set by the
Company.
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(m)
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“Participant”
means an Employee of the Employer
who has been notified by the Plan Administrator of his or her
selection to participate in the Plan.
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(n)
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“Plan
Administrator” means an individual designated by the Company to
administer this Plan.
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(o)
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“Retirement” means that an Employee has voluntarily
terminated employment with the Employer on or after his or her
attainment of age fifty-nine and one-half (59
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/ 2 ), and does not continue to provide
services to the Employer.
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(p)
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“Separation from Service”
means the cessation of an
Employee’s service with the Employer.
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This definition shall be construed
and administered in accordance with the requirements of Code
Section 409A(a)(2)(A)(i).
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(q)
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“Specified Employee”
means a key employee as described in
Code Section 416(i), without regard to paragraph
(5) thereof, of:
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(1)
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Gambro AB
(prior to the closing of the sale of Gambro Healthcare, Inc., to
DaVita Inc.); and
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(2)
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DaVita Inc. (on
or after the closing of the sale of Gambro Healthcare, Inc. to
DaVita Inc.)
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for so long as any of the applicable
corporation’s stock is publicly traded on an established
securities market or otherwise.
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This definition shall be construed
and administered in accordance with the requirements of Code
Section 409A(a)(2)(B)(i).
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(r)
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“Subsidiary” means any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least fifty
percent (50%) of the total combined voting power of all
classes of stock, or any other entity (including, but not limited
to, partnerships and joint ventures) of which the Company owns at
least fifty percent (50%) of the combined equity.
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(s)
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“Termination of Service”
means that an Employee ceases to be
employed by the Employer for any reason.
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(t)
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“Unforeseeable Emergency”
means a severe financial hardship to
the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, or a dependent (as
defined in Code Section 152(a)) of the Participant, loss of
the Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant.
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This definition shall be construed
and administered in accordance with the requirements of Code
Section 409A(a)(2)(B)(ii).
Article 3. Administration
3.1 General.
The Plan Administrator shall
administer the Plan. The Plan Administrator shall be appointed by,
and shall serve at the discretion of, the Company. The Board may
delegate to the Plan Administrator any or all of the administration
of the Plan. To the extent that the Board has delegated to the Plan
Administrator any authority and responsibility under the Plan, all
applicable references to the Board in the Plan shall be to the Plan
Administrator.
3.2 Administration by the Plan
Administrator. The Plan
Administrator shall have the full power, discretion, and authority
to interpret and administer the Plan in a manner which is
consistent with the Plan’s provisions. However, in no event
shall the Plan Administrator have the power to determine Plan
design.
3.3 Decisions Binding.
All determinations and decisions
made by the Plan Administrator pursuant to the Plan, and all
related orders or resolutions of the Plan Administrator, shall be
final, conclusive, and binding on all persons, including the
Employer, its shareholders, Employees, Participants, and their
estates and beneficiaries.
Article 4. Eligibility and
Participation
4.1 Eligibility.
Persons eligible to participate in
the Plan include only Employees who are designated by the Company
and whose annualized Base Salary equals or exceeds the estimated
Minimum Executive Salary Potential for the relevant year of
deferral.
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4.2
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Actual
Participation.
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For any amounts deferred after
December 31, 2004, participation in the Plan shall be
determined at least annually by the Plan Administrator, in its sole
discretion, based upon the criteria set forth in Section 4.1
herein or other relevant considerations. Employees who are chosen
to participate in the Plan in any given year shall be so notified
in writing.
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(b)
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Post-2004
Deferrals Under VDP
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For any amounts deferred after
December 31, 2004, participation in the VDP was determined
annually by the Plan Administrator, in its sole discretion based
upon the criteria set forth in Section 4.1 of the VDP or other
relevant considerations. Employees who were chosen to participate
in the Plan in any given year were so notified in
writing.
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(c)
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Pre-2005
Deferrals Under VDP
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For amounts deferred prior to 2005
under the VDP (which were earned and vested as of December 31,
2004), participation in the VDP was determined annually by the Plan
Administrator, in its sole discretion based upon the criteria set
forth in Section 4.1 of the VDP or other relevant
considerations. Employees who were chosen to participate in the
Plan in any given year were so notified in writing.
Article 5. Deferrals
5.1 Deferral of Base Salary,
Annual Incentive, and Other Compensation. Effective prior to January 1, 2006, a
Participant may elect to defer all or a portion of his or her
Annual Incentive and up to fifteen percent (15%) of his or her
Base Salary into the Participant’s Deferral Account as
described in Section 6.1. Effective January 1, 2006, a
Participant may elect to defer all or a portion of his or her
Annual Incentive and up to fifty percent (50%) of his or her
Base Salary into the Participant’s Deferral Account as
described in Section 6.1. Moreover, a Participant may also
elect to defer all or a portion of his or her other compensation,
as defined and determined by the Company. Such election to defer
any compensation under this Section 5.1 shall be subject to
the provisions of this Article 5.
5.2 Deferral
Elections. Any deferral
election under Section 5.1 shall be made by a date designated
by the Plan Administrator prior to the calendar year in which the
services to which the Compensation to be deferred relates, are
performed. If an Employee first becomes eligible to participate in
the Plan during the calendar year, the Employer may allow such
Employee to make a deferral election with respect to services to be
performed subsequent to the election within thirty (30) days
of becoming eligible to participate in the Plan. Such thirty
(30) day period shall commence when the Employee is first
eligible to participate in this Plan (or the VDP) or in the Gambro
Healthcare, Inc. Executive Retirement Plan (or the Gambro, Inc.
Executive Retirement Plan); provided, however, this provision shall
be construed and interpreted
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in accordance with Treasury Regulations and
other guidance issued by the Treasury and/or the Internal Revenue
Service under Code Section 409A. Notwithstanding the preceding
sentence, a Participant may elect to defer all or a portion of his
or her Annual Incentive based on services performed over a period
of at least twelve (12) months, into the Participant’s
Deferral Account as described in Section 6.1, only if such
deferral election is made no later than June 30. An Employee
is eligible to participate in the Plan when determined to be so by
the Plan Administrator, which shall not be before the Employee is
entered into the Employer’s payroll system. The Participant
must complete a new election for each and every year. All deferral
elections shall be irrevocable, and shall be made in accordance
with the election procedures established by the Plan Administrator.
The administrative documents completed by VDP Participants
(including the deferral election for the 2005 Deferral of a
Participant’s Base Salary, and the Deferral of a
Participant’s Annual Incentive, for which a deferral election
was entered into in 2004 and which is earned in 2005 but paid in
2006), and other administrative forms, shall be deemed for
pur
