Exhibit 10.19
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“Agreement”) is entered into effective March 3,
2008 (the “Effective Date”), by and between DaVita Inc.
(“Employer”) and David Shapiro
(“Employee”).
In consideration of the mutual
covenants and agreements hereinafter set forth and for other good
and valuable consideration, the parties hereto, intending to be
legally bound hereby, agree as follows:
Section 1. Employment and
Duties . Employer hereby employs Employee to serve initially as
Deputy Chief Compliance Officer. Employee accepts such employment
on the terms and conditions set forth in this Agreement. Subject to
the provisions of Section 2.5(b) , below, Employee
shall perform the duties of Deputy Chief Compliance Officer or any
additional or different duties or jobs as the Company deems
appropriate. Employee shall work out of Employer’s El
Segundo, California headquarters. Employee agrees to devote
substantially all of his time, energy, and ability to the business
of Employer on a full-time basis and shall not engage in any other
business activities during the term of this Agreement, provided
however , Employee may pursue normal charitable activities so
long as such activities do not require a substantial amount of time
and do not interfere with his ability to perform his duties.
Employee agrees that he shall not serve on the board of directors
of any not-for-profit or for-profit company without the express
written approval of the Chief Executive Officer or the Board of
Directors. Employee shall at all times observe and abide by the
Employer’s policies and procedures as in effect from time to
time.
Section 2. Compensation
. In consideration of the services to be performed by Employee
hereunder, Employee shall receive the following compensation and
benefits:
2.1 Base Salary . Employer
shall pay Employee a base salary of $310,000 per annum, less
standard withholdings and authorized deductions. Employee shall be
paid consistent with Employer’s payroll schedule. The base
salary will be reviewed annually. Employer, in its sole discretion,
may increase the base salary as a result of any such
review.
2.2 Benefits . Employee
and/or his family, as the case may be, shall be eligible for
participation in and shall receive all benefits under
Employer’s health and welfare benefit plans (including,
without limitation, medical, prescription, dental, disability, and
life insurance) under the same terms and conditions applicable to
most executives at similar levels of compensation and
responsibility.
2.3 Performance Bonus
.
(a) Employee shall be eligible to
receive a discretionary performance bonus (the “Bonus”)
between zero and $100,000, payable in a manner consistent with
Employer’s practices and procedures. The amount of the Bonus,
if any, will be decided by the Chief Executive Officer and/or the
Board of Directors or the Compensation Committee of the Board in
his/her/its sole discretion. With respect to the Bonus to be paid
in March 2009 for work performed in 2008, Employee shall receive a
non-discretionary guaranteed minimum Bonus of $80,000, less
standard withholdings and authorized deductions; however, the
amount of the Bonus paid in 2009 shall be reduced by the amount of
the Sign-on Bonus, set forth in Section 2.4 , below.
The Performance Bonus range will be reviewed annually. Employer, in
its sole discretion, may increase the base salary as a result of
any such review.
(b) Employee must be employed by
Employer (or an affiliate) on the date any Bonus is paid on a
Company wide basis to be eligible to receive such Bonus and, if
Employee is not employed by Employer (or an affiliate) on the date
any Bonus is paid on a Company wide basis for any reason
whatsoever, Employee shall not be entitled to receive such
Bonus.
2.4 Sign-on Bonus . On or
about the Effective Date, Employer shall pay Employee a sign-on
bonus of $25,000, less standard withholdings and authorized
deductions.
2.5 Relocation .
(a) During the first five months of
his employment, Employee may commute from his home in Philadelphia
in order to assist Employee sell his house and relocate to
California. Employer will reimburse Employee for all reasonable
commuting expenses.
(b) Beginning with the first pay
period after Employee relocates to California, Employer shall
provide Employee with a housing allowance of $5,000 per month,
which will be grossed up for taxes. This benefit will cease upon
either the sale of Employee’s Philadelphia home or 12 months
after Employer began to provide this benefit, whichever comes
first.
(c) Employer shall pay certain of
Employee’s reasonable relocation costs. Relocation costs
include the cost of packing and moving your personal property,
including a car, 60 days of lodging while house hunting, and all
trips by you and/or your spouse to find a house. Relocation costs
do not include the costs for purchasing a house, including points,
closing fees, and attorneys’ fees (i.e., the cost of a real
estate attorney or an attorney to review the contract). In
consideration for Employer’s agreement to pay these expenses
(the “Relocation Costs”), Employee agrees that if he
voluntarily terminates his employment after one (1) year of
the Effective Date, and before the second anniversary of the
Effective Date, Employee shall repay Employer fifty percent
(50%) of the amount of the Relocation Costs. If Employer
terminates Employee, Employee does not have an obligation to repay
the Relocation Costs.
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(d) Once Employee has successfully
purchased a home in California, Employer shall pay Employee a
relocation bonus of $15,000, less standard deductions and
authorized withholdings.
(e) To assist Employee with the cost
of housing in California, so long as Employee is employed by
Employer, Employer shall pay Employee a Housing Bonus of $40,000
per year, less standard withholdings and authorized deductions, for
the first two years after he has purchased a home in California.
This payment shall be paid in equal installments over each pay
period during the year. Employee agrees that if he voluntarily
terminates his employment after one (1) year of the Effective
Date, and before the second anniversary of the Effective Date,
Employee shall repay Employer 75% of the Housing Bonus received in
equal installments on a monthly basis.
2.6 Vacation . Employee shall
have vacation, subject to the approval of the Chief Executive
Officer.
2.7 Stock
Appreciation Rights . Employer shall issue a grant to Employee
of stock-settled Stock Appreciation Rights (“SSARS”) on
a base number of 20,000 shares of DaVita common stock, upon
approval. This grant shall have a five-year term and vest 25% on
the first anniversary date of the grant, 8.33% on the 20
th
month of the grant,
and 8.33% every 4 months thereafter. The exercise price shall be
the closing price as reported on the New York Stock Exchange on the
Effective Date, the date on which Employee has begun his employment
with Employer and has begun to perform the services set forth
within this Agreement, or on the date that appropriate approval has
been obtained, whichever is later. The terms of the SSARS grant
will be reflected in a separate agreement to be signed by Employer
and Employee.
2.8 Restricted Stock Units .
On the Effective Date, on the date on which Employee has begun his
employment with Employer and has begun to perform the services set
forth within this Agreement, or on the date appropriate approval
has been given, whichever date is later, Employee will receive
1,000 shares of Employer’s restricted stock units, entitling
Employee to the same number of full shares of DaVita common stock,
subject to the following vesting conditions: such restricted stock
units shall vest over a five-year period, one-third vesting on the
third anniversary date of the grant, 11.11% at 40th month of the
grant, then 11.11% every 4 months thereafter until the 60th month.
The terms of the restricted stock units will be reflected in a
separate Restricted Stock Units Agreement to be signed by Employer
and Employee.
2.9 Management Share Ownership
Policy . Employee shall review and understand the terms of the
Management Share Ownership Policy with respect to all equity-based
awards.
2.10 Indemnification .
Employer agrees to indemnify Employee against and in respect of any
and all claims, actions, or demands, to the extent permitted by the
Company’s By-laws and applicable law. The terms of
Employer’s ag
