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SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

Employee Retention Agreement

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT | Document Parties: DAVITA INC You are currently viewing:
This Employee Retention Agreement involves

DAVITA INC

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Title: SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
Date: 2/27/2009
Industry: Healthcare Facilities     Sector: Healthcare

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT, Parties: davita inc
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Exhibit 10.5

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

This document is to amend the Employment Agreement (the “Agreement”) entered into as of August 16, 2004, by and between DaVita Inc. (“Employer”) and Thomas Usilton (“Employee”), as well as the first amendment to the Employment Agreement, dated December 15, 2006. Specifically, effective December 12, 2008, the parties agree to amend the Agreement as follows:

 

 

1.

Section 2.8 is hereby deleted in its entirety and replaced with the following:

Employer Plane . Employee shall have the right to use the Employer’s airplane, for business purposes, up to 30 hours per year. If Employee is using an airplane other than Encore, then the Chief Executive Officer must approve the use of the plane by Employee in advance. Employee must keep track of all hours and report it annually and may not exceed the allotted hours in any given year. If Employee does not use all of the allotted hours in any given calendar year, Employer will pay Employee a bonus calculated as follows: Employee shall receive one half of the hourly or the variable costs that would have been incurred by Employer had he used an Encore airplane for the allotted hours not used. This payment shall be paid in the following calendar year.”

 

 

2.

Section 3.3 is hereby deleted in its entirety and replaced with the following:

Other Involuntary Termination . Employer may terminate the employment of Employee for any reason or for no reason at any time upon at least thirty (30) days’ advance written notice. Except following a Change of Control, as set forth below, or a termination following a Change in Management, as set forth below, if Employer terminates the employment of Employee for reasons other than for death, Material Cause, or Disability, Employee shall (i) be entitled to receive the Base Salary and benefits as set forth in Section 2.1 and Section 2.2 , respectively, through the effective date of such termination, (ii) be entitled to receive a lump-sum payment equal to the Base Salary in effect as of the date of the termination payable within 90 days after the effective date of Employee’s termination of employment; (iii) be entitled to continue to receive during the one-year period following the effective date of such termination (the “Severance Period”) the employee health insurance benefits set forth in Section 2.2 (to the extent Employee can continue to receive such benefits under Employer’s health insurance policies and programs in effect at the effective time of such termination through the exercise of his rights under COBRA, Employee shall elect to receive COBRA benefits, and Employer shall pay Employee’s insurance premiums for COBRA coverage during the Severance Period; provided , however , to the extent such benefits cannot be provided under such policies and programs, Employer shall purchase for Employee reasonably equivalent health insurance benefits during the Severance Period; Employer’s obligation to provide this benefit is subject to the limitation set forth below and subject to the limitation set forth in Section 2.13 ; and (iv) not be entitled to receive any other compensation, benefits, or payments of any kind, except as otherwise required by law or by the terms of any benefit or retirement plan or other arrangement that would, by its terms, apply. The foregoing notwithstanding, in the event Employee accepts employment (as an employee


or as an independent contractor) with another employer during the Severance Period, (x) Employee shall immediately notify Employer of such employment and (y) Employer’s obligation to continue to provide certain health insurance benefits pursuant to clause (iv) of the immediately preceding sentence shall terminate at such time as Employee is insured with reasonably equivalent health benefits under such successor employer’s health benefit plan, so long as Employee uses his best effort to obtain such insurance.

“During the Severance Period, Employee agrees to make himself available to answer questions and to cooperate in the transition of his duties. In addition, Employee agrees to cooperate with Employer in the prosecution and/or defense of any claim, including making himself available for any interviews, appearing at depositions, and producing requested documents. Employer shall reimburse Employee for any out-of-pocket expenses he may incur, including travel costs. To the extent that Employee is required to travel, he is required to work with Employer’s travel department to arrange his travel plans.

“For purposes of this provision, an Employee’s employment has been terminated when Employee is no longer providing services for Employer after a specific date or the level of bona fide services that Employee would perform (as an employee or independent contractor) after a specific date would permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding thirty-six month period (or the full period of service if Employee was employed for less than thirty-six months).”

 

 

3.

Sections 3.8 is hereby deleted in its entirety and replaced with the following:

Disability . Upon thirty (30) days’ advance notice (which notice may be given before the completion of the periods described herein), Employer may terminate Employee’s employment for Disability (as defined below).”

 

 

4.

Section 3.9(b) is hereby deleted in its entirety and replaced with the following:

“Constructive Discharge” shall mean the occurrence of any of the following events after the date of a Change of Control without Employee’s express written consent: (i) the scope of Employee’s authority, duties and responsibilities are materially diminished or are not (A) in the same general level of seniority, or (C) of the same general nature as Employee’s authority, duties, and responsibilities with Employer immediately before such Change of Control; (ii) a material change in the geographic location at which the Employee must perform his or her services; or (iii) a material reduction in Employee’s base compensation as in effect on the date of such Change of Control. Notwithstanding the above, the occurrence of any such condition shall not constitute Constructive Discharge unless the Employee provides notice to Employer of the existence of such condition not later than 90 days after the initial existence of such condition, and Employer shall have failed to remedy such condition within 30 days after receipt of such notice.”

 

2


 

5.

Section 3.12 is hereby added, which provides the following:

Key Employee . Notwithstanding any provision herein to the contrary, in the event that any payment to be made to Employee hereunder (whether pursuant to this Section 3 or any other Section) as a result of Employee’s termination of employment is determined to constitute “deferred compensation” subject to Section 409A of the Internal Revenue Code, and Employee is a “Key Employee” under the DaVita Inc. Key Employee Policy for 409A Arrangements at the time of Employee’s termination of employment, all such deferred compensation payments payable during the first six (6) months following Employee’s termination of employment shall be delayed and paid in a lump sum during the seventh calendar month following the calendar month during which Employee’s termination of employment occurs.”

 

 

6.

Section 5 is hereby deleted in its entirety and replaced with the following:

Excess Parachute Payment . In the event that any payment or benefit received or to be received by Employee in connection with a Change of Control, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement by Employer, any predecessor or successor to Employer or any corporation affiliated (within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the “Code”)) with Employer or which becomes so affiliated pursuant to the transactions resulting in a Change of Control (collectively all such payments are hereinafter referred to as the “Total Payments”), is deemed to be an “Excess Parachute Payment” (in whole or in part) to Employee w


 
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