<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 13th day of July, 2000, by
and between RENAL CARE GROUP, INC., a Delaware corporation (the "Company"), and
SAM A. BROOKS, JR. (hereinafter "Employee").
WITNESSETH:
WHEREAS, Employee is currently Chairman of the Board, President and
Chief Executive Officer of the Company, employed under an Employment Agreement
dated January 15, 1998 (the "Prior Agreement"); and
WHEREAS, the Company desires to continue to retain the services of
Employee following the scheduled expiration of the Prior Agreement and
WHEREAS, Employee is willing to remain employed by the Company on the
terms and conditions contained herein; and
NOW, THEREFORE, in consideration of the compensation payable to
Employee by the Company pursuant to this Agreement, and the mutual promises,
covenants, representations and warranties contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do agree as
follows:
1. Employment.
The Company employs Employee and Employee accepts employment
with the Company under the terms of this Agreement effective as of July 1, 2000
(the "Effective Date"). The parties hereby agree that the Prior Agreement is
hereby terminated by mutual consent effective as of the Effective Date. The
parties further agree that this Agreement shall govern the employment
relationship between the Company and Employee from and after the Effective Date
and shall supersede the Prior Agreement in all respects from and after the
Effective Date.
2. Term.
The term of this Agreement shall begin on the Effective Date
and shall continue for an initial term of three years, ending on June 30, 2003
(the "Initial Period"), subject to earlier termination by Employee or the
Company as hereinafter provided. Unless one party gives the other notice of
non-renewal not less than sixty (60) days prior to the expiration of the Initial
Period or an additional term, this Agreement shall renew for additional terms of
twelve (12) months each, subject to earlier termination as hereinafter provided,
on the same terms and conditions (subject to mutually agreeable modifications,
if any).
3. Compensation and Benefits.
(a) Base Compensation: The Company shall pay Employee a
base salary at an annual rate of (i) Six Hundred Thousand Dollars ($600,000)
from the Effective Date through March 31, 2001 (the "Base Compensation"). Such
Base Compensation may be adjusted as provided herein. The Base Compensation is
payable according to the pay periods of the Company as may be in effect from
time to time. Such payments shall be prorated for periods less than a full pay
period. The Base Compensation shall be subject to withholding for federal,
<PAGE> 2
state and local payroll and all other taxes or withholdings applicable to
Employee. Any increases of the Base Compensation shall be at the discretion of
the Company, provided that any decreases to the then current Base Compensation
shall require the consent of Employee. The Base Compensation and target
percentage for the Annual Bonus (as defined below) will be reviewed annually by
the Compensation Committee of the Company.
(b) Benefits: During the term of this Agreement, Employee
shall also be entitled to participate in the insurance and other fringe benefits
made available generally to similar employees of the Company, as such benefits
may be determined from time to time by the Company, provided that Employee shall
have at least four (4) weeks of paid vacation time. In addition, during the term
of this Agreement, the Company will provide term life insurance coverage of Four
Million Dollars ($4,000,000) on Employee's life with the death benefit to be
payable to Employee's estate or as otherwise directed in writing by Employee.
(c) Bonuses: In addition to the Base Compensation,
Employee will be entitled to an annual bonus, with a target amount equal to
seventy-five percent (75%) of the Base Compensation for such year and a maximum
amount of one hundred twelve and one-half percent (112.5%) of the Base
Compensation for such year, payment of which will be based on the Company's and
Employee's achievement of performance goals reasonably established by the
Compensation Committee of the Company and, in the case of performance goals
established specifically for Employee, agreed to by Employee (the "Annual
Bonus"). The Company agrees that the Company-related performance goals for
Employee shall be substantially similar to those established for other members
of senior management.
(d) Expenses: The Company shall reimburse Employee for
any and all expenses reasonably incurred by employee incident to the performance
of the duties imposed upon Employee hereunder.
4. Duties, Extent of Services.
Employee shall continue to serve as Chairman of the Board,
President and Chief Executive Officer of the Company. As Chairman of the Board,
President and Chief Executive Officer, Employee shall perform such duties and
responsibilities as are typically incident thereto and shall perform in a
faithful and competent manner such additional duties as may be reasonably
assigned from time to time by the Company. Throughout the term of this
Agreement, Employee shall report to the Board of Directors of the Company. Such
duties shall be performed on a full-time basis for the Company at the Company's
offices in Nashville, Tennessee. Employee may be required, from time to time, to
perform his duties temporarily hereunder at such other place or places as the
Company shall reasonably require, provided that such period does not exceed
thirty (30) consecutive days without Employee's consent and that during any such
period Employee is able to return to Nashville, Tennessee at the Company's
expense for weekends.
Employee shall devote all of Employee's business time,
attention, knowledge, and skill solely to the business and interest of the
Company, and the Company shall be entitled to all the benefits, profits, and
other issues arising from, or incident to, all work, services, and advice of
Employee; provided, however, that the Company acknowledges and agrees that
Employee may continue to serve as a member of the boards of directors of other
companies and may continue to devote a reasonable amount of time to such service
without violating the terms of this Agreement.
-2-
<PAGE> 3
5. Termination.
This Agreement may be terminated by the parties in the manners
specified below:
(a) Termination without Cause. Either the Company or
Employee may terminate Employee's employment under this Agreement at any time
for any reason or no reason upon thirty (30) days' prior written notice to the
other party.
(b) Termination for Cause. The Company may terminate this
Agreement on written notice at any time for "Cause". For purposes of this
Agreement, "Cause" shall mean: (i) Employee is convicted of, pleads guilty to,
or confesses to a felony or any crime involving any act of dishonesty, fraud,
misappropriation, embezzlement or moral turpitude, in which event the Company
may terminate this Agreement immediately, (ii) the misconduct or gross
negligence by Employee in connection with the performance of Employee's duties
hereunder, (iii) the engaging by Employee in any fraudulent, disloyal or
unprofessional conduct which results in an injury to the Company, its affiliates
or any of its or their centers, monetarily or otherwise, (iv) Employee breaches
any provision of Section 6 of this Agreement, or (v) the material failure by
Employee otherwise substantially to perform his duties with the Company (other
than any such failure resulting from the disability of Employee under Section
5(d)(i)) or the breach of any provision of this Agreement other than Section 6.
If the Company terminates this Agreement for Cause pursuant to the provisions of
(ii), (iii), (iv) or (v) of this subsection (b), then the Company shall give
Employee written notice prior to such termination detailing the specific acts,
actions, failures, or events upon which the forecast termination is based.
Employee shall have fifteen (15) days after such written notice to cease such
actions or otherwise correct any such failure or breach. If Employee does not
cease such action or otherwise correct such failure or breach within such
fifteen (15)-day time period, or having once received such written notice and
ceased such actions or corrected such failure or breach, Employee at any time
thereafter again so acts, fails or breaches, the Company may terminate this
Agreement immediately.
(c) Termination for Good Reason. Employee may terminate
this Agreement on written notice at any time for "Good Reason". For purposes of
this Agreement, "Good Reason" shall mean: (i) without the express written
consent of Employee, a material diminution of his position, duties,
responsibilities and status with the Company as in effect as of the Effective
Date, a change in Employee's reporting responsibilities, a material reduction of
Employee's titles or offices as in effect on the date of this Agreement, or the
removal of Employee from, or failure to re-elect Employee to, any position
referred to in Section 4 of this Agreement, except in connection with the
termination of this Agreement for Cause; (ii) any reduction of the Base
Compensation; (iii) the requirement that Employee relocate outside of the
Nashville, Tennessee metropolitan area; (iv) the material breach by the Company
of any material provision of this Agreement, which breach continues uncorrected
and uncured for fifteen (15) days after Employee gives notice of such breach to
the Company; or (v) the termination of this Agreement by written notice from
Employee to the Company during the thirty (30) day period immediately following
the first anniversary of a Change in Control (as defined below).
(d) Involuntary Termination. The employment of Employee
hereunder shall be automatically terminated by the death or disability of
Employee as outlined below.
(i) Disability. The Company may terminate this
Agreement at the time Employee shall have been Disabled for a continuous period
of six (6) months during any
-3-
<PAGE> 4
continuous twelve (12) month period. For purposes of this Paragraph 5(d)(i), the
term "Disabled" shall mean Employee's inability to perform the essential
functions of his duties, with or without reasonable accommodation. During
Employee's six month period of Disability, the Company agrees to continue to pay
Employee's Base Compensation (less regular withholdings for payroll or other
taxes and other required or proper items, and less proceeds from all disability
insurance policies or plans provided or made available by the Company). In the
event of a termination of Employee on account of Disability, the Company shall
be obligated to pay Employee's Base Compensation for a period of six (6) months
following the effective date of termination (less regular withholdings for
payroll or other taxes and other required or proper times, and less proceeds
from all disability insurance policies or plans provided or made available by
the Company). In addition, any provisions in the relevant stock option
agreements notwithstanding, all outstanding stock options granted to Employee by
the Company shall vest immediately upon termination pursuant to this Section
5(d)(i).
(ii) Death. In the event Employee shall die
during the term of this Agreement, this Agreement shall terminate and Employee's
estate shall receive the remainder of the Base Compensation set forth in Section
3(a) hereof accrued to the last day of the month in which death occurs. In
addition, any provisions in the relevant stock option agreements
notwithstanding, all outstanding stock options granted to Employee by the
Company shall vest immediately upon termination pursuant to this Section
5(d)(i).
(e) Post-Termination Compensation. Except as provided in
Section 5(d) above, upon termination of this Agreement, the Company shall be
relieved of all of its obligations hereunder notwithstanding any period of time
remaining under the initial or any renewal term, subject to the following:
(i) Termination without Cause or with Good
Reason. If the Company terminates Employee's employment hereunder without Cause
under Section 5(a) above or if Employee terminates Employee's employment
hereunder with Good Reason under Section 5(c) above or if this Agreement expires
as a result of the Company's giving notice of non-renewal as contemplated by
Section 2 above, then Employee shall, after the effective date of such
termination, as Employee's sole and exclusive remedy, receive (A) an amount
equal to (i) the Base Compensation (as then in effect) plus an amount of Annual
Bonus equal to the target percentage of Base Compensation (as then in effect)
multiplied by (ii) two (2), and (B) any unpaid bonus payable for the most
recently completed calendar year. If the Employee's employment is terminated by
the Company without Cause or by Employee for good reason or if this Agreement
expires as a result of the Company's giving notice of non-renewal, Employee
shall be under no duty to seek or accept other employment; but if he shall do
so, any compensation he shall receive therefrom shall not diminish the Company's
obligation to make payments required to the Employee hereunder.
(ii) Termination without Good Reason. In the
event that Employee terminates his or her employment under Section 5(a) above,
the Company's obligation to pay Employee's Base Compensation shall terminate as
of the date of termination.
(iii) Termination for Cause. In the event that the
Company terminates Employee's employment hereunder with Cause under Section 5(b)
above, then Employee shall, after the effective date of such termination,
receive the Base Compensation (as then in effect) for a period of one (1) month
after the termination date.
-4-
<PAGE> 5
(iv) Termination following Change in Control. If,
within twelve (12) months following a Change in Control, either (A) the Company
terminates the employment of Employee hereunder without Cause under Section 5(a)
above or (B) Employee terminates his employment for Good Reason under Section
5(c) above (except for a termination under clause (v) of Section 5(c)), then, in
lieu of any other compensation that may be specified herein, the Company shall
pay Employee an amount equal to (i) the Base Compensation (as then in effect)
plus an amount of Annual Bonus equal to the target percentage of Base
Compensation (as then in effect) multiplied by (ii) three (3). If Employee
terminates his employment for Good Reason under clause (v) of Section 5(c)
above, then, in lieu of any other compensation that may be specified herein, the
Company shall pay Employee an amount equal to (x) the Base Compensation (as then
in effect) plus an amount of Annual Bonus equal to the target percentage of Base
Compensation (as then in effect) multiplied by (y) two (2). The Company will
make any payment due under this clause (iv) in a single lump-sum payment not
later than thirty (30) days after termination. In the event any payment
obligation under this Section 5(e) arises, no compensation received from other
employment (or otherwise) shall reduce the Company's obligation to make the
payment(s) described in this paragraph.
(f) Change in Control. "Change in Control" means a change
in control of the Company of a nature that would be required to be reported
(assuming such event has not been "previously reported") in response to Item
1(a) of a Current Report on Form 8-K pursuant to Section 13 or 15(d) of the
Exchange Act of 1934 (the "Exchange Act"); provided that, without limitation, a
Change in Control shall also be deemed to have occurred at such time as:
(i) Any "person" within the meaning of Section
14(d) of the Exchange Act, other than the Company; a subsidiary, or any employee
benefit plan(s) sponsored by the Company or any Subsidiary, is or has become the
"beneficial owner," as defined in rule l3d-3 under the Exchange Act, directly or
indirectly, of 25% or more of the combined voting power of the outstanding
securities of the Company ordinarily having the right to vote at the election of
directors, or
(ii) Individuals who constitute the Board
immediately prior to any meeting of stockholders (the "Incumbent Board") have
ceased for any reason to constitute at least a majority thereof, provided that
any person becoming a director whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least three-quarters (3/4)
of the directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director without objection to such nomination) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) Upon approval by the Company's stockholders
of a reorganization, merger, share exchange or consolidation, other than a
reorganization, merger, share exchange or consolidation with respect to which
those persons who were the beneficial owners, immediately prior to such
reorganization, merger, share exchange or consolidation, of outstanding
securities of the Company ordinarily having the right to vote in the election of
directors own, immediately after such transaction, more than 75% of the
outstanding securities of the resulting corporation ordinarily having the right
to vote in the election of directors; or
(iv) Upon approval by the Company's stockholders
of a complete liquidation and dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company other than
to a Subsidiary.
-5-
<PAGE> 6
6. Nondisclosure, Confidentiality; Competition.
(a) Subject to Section 6(f) below, Employee agrees that,
during the term of this Agreement and of Employee's employment by the Company,
and for a period twelve (12) months after the termination of Employee's
employment with the Company, Employee will not in any manner, directly or
indirectly, by himself or in conjunction with any other person, (i) conduct any
of the activities or perform any of the responsibilities or duties that Employee
provided the Company during his employment by the Company for any business
entity that is competitive with the business of the Company or its affiliates or
(ii) establish or own any financial, beneficial or other interest in (other than
an interest consisting of less than one percent (1%) of a class of publicly
traded security), make any loan to or for the benefit of, or render any
managerial, marketing or other business advice, to any entity that is then
conducting activities that are competitive with those of the business of the
Company or its affiliates, in either case within a geographic territory defined
as the greater of (I) a seventy-five (75) mile radius of any renal dialysis
center, unit or facility owned or operated by the Company or an affiliate of the
Company (an "RCG Center"), or (II) the geographic area, as narrowly construed as
is practicable, from which the Company received patients at each of the RCG
Centers. For purposes of this Section, the "business of the Company or its
affiliates" shall mean owning or operating a renal dialysis center, unit or
facility.
(b) Subject to Section 6(f) below, Employee further
agrees that, for a period of three (3) years after the termination of Employee's
employment with the Company, Employee will keep confidential and not directly
divulge, or allow through a lack of reasonable care to be divulged to anyone, or
use or otherwise appropriate for Employee's own benefit or for the benefit of
others, any knowledge or information of a confidential nature with respect to
the Company's and its affiliates' current business, the Company itself, or any
of its affiliates, including all trade secrets, pricing information, marketing
information or technical information (hereinafter referred to as the
"Confidential Data"), except for (i) a disclosure that is required by law; or
(ii) information that has been made generally available to the public by the act
of one who has the right to disclose such information; or (iii) information that
has become part of the public domain through no fault of the Employee; and (iv)
was known to the Employee prior to June 1995. Employee hereby acknowledges and
agrees that the prohibitions against disclosure of Confidential Data recited
herein are in addition to, and not in lieu of, any rights or remedies which the
Company may have available pursuant to the laws of any jurisdiction or at common
law to prevent the disclosure of confidential information, and the enforcement
by the Company of its rights and remedies pursuant hereto shall not be construed
as a waiver of any other rights or available remedies which the Company may
possess in law or equity. Employee acknowledges that the Company has taken
reasonable and appropriate steps to ensure the confidentiality and
non-disclosure of all such Confidential Data. For purposes of this Section the
Company's and its affiliates' "current business" shall mean owning or operating
a renal dialysis center, unit or facility.
(c) Subject to Section 6(f) below, Employee further
agrees that, for a period of three (3) years after the termination of Employee's
employment with the Company, Employee will not, for his own benefit or the
benefit of others, solicit any person or entity that has or has had, or disrupt
or attempt to disrupt, any relationship, contractual or otherwise, with the
Company or an affiliate of the Company (including any patient, payor, physician,
provider, managed care organization or supplier) at any time during Employee's
employment with the Company, for the purpose of assisting, or creating such a
relationship for, any business entity that is competitive with the Company or an
affiliate of the Company. For purposes of this Section, a business entity is
competitive with the Company or an affiliate of the Company if it
-6-
<PAGE> 7
provides or offers any renal dialysis service that is provided by the Company or
an affiliate of the Company.
(d) Subject to Section 6(f) below, Employee further
agrees that, for a period of three (3) years after the termination of Employee's
employment with the Company, Employee shall not induce, nor attempt to induce,
any employee of the Company, or any of its affiliates, to terminate such
employee's association with the Company or any of its affiliates.
(e) These post-employment covenants are considered by the
parties hereto to be fair, reasonable and integral for the protection of the
Company. The parties mutually agree that if a violation of any of these
covenants occurs, such violation or any threatened violation will cause
irreparable injury to the Company and the remedy at law for any such violation
or threatened violation will be inadequate. The parties acknowledge that these
covenants will survive, and remain in effect and enforceable after, termination
of this Agreement.
(f) The Company agrees that the forgoing covenants in
paragraphs 6(a) through (d) shall be null and void as to any period following
termination of Employee's employment if such termination occurs within thirteen
(13) months following a Change in Control through either (A) a termination by
the Company without Cause under Section 5(a) above or (B) a resignation by
Employee for any reason.
(g) Employee agrees to indemnify and hold harmless
the Company from and against any and all claims, causes of action, damages
and/or any other losses suffered or incurred by the Company as a result of any
breach or purported breach by Employee of any agreement applicable to Employee
which existed prior to the time of the entering into of this Agreement. Such
obligations of Employee to indemnify and hold the Company harmless shall include
any and all costs of defense of any such claim or threatened claim, including
reasonable attorneys' fees.
7. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, if any payment or distribution by
the Company to or for the benefit of Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 7) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by
Employee with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Employee shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after payment by Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 7(c), all
determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Ernst & Young LLP or such other certified public accounting firm as may be
designated by Employee (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Employee within fifteen (15)
business days of
-7-
<PAGE> 8
the receipt of notice from Employee that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, Employee shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 7, shall be paid by
the Company to Employee within five (5) days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be binding
upon the Company and Employee. It is possible (due to the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder) that Gross-Up Payments will not have been made
by the Company which it is ultimately determined should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. Consequently, in the event that the Company exhausts its remedies
pursuant to Section 7(c) and Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of Employee.
(c) Employee shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten (10) business days after Employee
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. Employee
shall not pay such claim prior to the expiration of the thirty (30)-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies Employee in writing prior to the expiration of
such period that it desires to contest such claim, Employee shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim,
(ii) Take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company,
(iii) Cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) Permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this Section 7(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
-8-
<PAGE> 9
option, either direct Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and Employee agrees to prosecute
such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company
shall determine; provided, however, that if the Company directs Employee to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to Employee, on an interest-free basis and shall indemnify and hold
Employee harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Employee with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
Employee shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Employee of an amount
advanced by the Company pursuant to Section 7(c), Employee becomes entitled to
receive any refund with respect to such claim, Employee shall (subject to the
Company's complying with the requirements of Section 7(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Employee of an
amount advanced by the Company pursuant to Section 7(c), a determination is made
that Employee shall not be entitled to any refund with respect to such claim and
the Company does not notify Employee in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
8. Severability.
The parties hereto hereby expressly agree and contract that it
is not the intention of either party to violate any public policy, or any
statutory or common law, and that if any paragraph, sentence, clause or
combination of the same of this Agreement shall be in violation of the laws of
any state where applicable, such paragraph, sentence, clause or the combination
of the same shall be void in the jurisdictions where it is unlawful, and the
remainder thereof shall remain binding on the parties hereto. It is the
intention of the parties to make the covenants of this Agreement binding only to
the extent that they may be lawfully done under existing applicable laws. In the
event that any part of any term or covenant of this Agreement is determined by a
court of law or equity to be overly broad or otherwise unenforceable, the
parties hereto agree that such court shall be empowered to substitute, and it is
the intent of the parties hereto that such court substitute, a reasonably
judicially enforceable term or limitation in the place of such unenforceable
term or covenant, and that as so modified this Agreement shall be fully
enforceable.
9. Entire Agreement; Modification.
This Agreement constitutes the entire agreement between the
parties and supersedes any and all prior understandings or agreements, and any
changes or additions hereto must be in writing and signed by both parties. If
there is any conflict between the terms of this Agreement and any stock option
agreement or other agreement between Employee and the Company (including any
agreement entered into after the date of this Agreement), then this
-9-
<PAGE> 10
Agreement shall control unless there is specific reference to superseding this
Agreement in such other agreement.
10. Assignment.
(a) The rights and benefits of Employee under this
Agreement, other than accrued and unpaid amounts due under Section 3(a) hereof,
are personal to Employee and shall not be assignable.
(b) This Agreement may not be assigned by the Company
except to an affiliate of the Company, provided that such affiliate assumes the
Company's obligations under this Agreement; provided, further, that if the
Company shall merge or effect a consolidation or share exchange with or into, or
sell or otherwise transfer substantially all its assets to, another business
entity, the Company may assign its rights hereunder to that business entity
without the consent of the Employee provided that it causes such business entity
to assume the Company's obligations under this Agreement and provided, further,
that the provisions of Section 5 remain in full force and effect following such
assignment.
11. Notice.
The references to the notice periods of certain "days"
contained in this Agreement shall mean calendar days. Any notice provided for in
this Agreement shall be delivered to Employee at the most recent address of
Employee listed in the Company's then current employment records. Notice to the
Company shall be delivered to the following address: c/o Renal Care Group, Inc.,
2100 West End Avenue, Suite 800, Nashville, Tennessee 37203, Attention: Chief
Financial Officer and General Counsel.
12. Waiver.
The waiver by any party to this Agreement of a breach of any
of the provisions contained herein shall not operate or be construed as a waiver
of any subsequent breach.
13. Disputes and Governing Law.
The Company and Employee agree that any dispute arising in
connection with, or relating to, this Agreement or the termination of this
Agreement, to the maximum extent allowed by applicable law, shall be subject to
resolution through informal methods and, failing such efforts, through
arbitration. Either party may notify the other party of the existence of a
dispute by written notice to the address indicated above in Section 11. The
parties shall thereafter attempt in good faith to resolve their difference
within thirty (30) days after the receipt of such notice. If the dispute cannot
be resolved within such 30-day period, either party may file a written demand
for arbitration with the other party. The arbitration shall proceed in
accordance with the terms of the Federal Arbitration Act and the Commercial
Arbitration Rules for Expedited Procedures of the American Arbitration
Association. A single arbitrator shall be appointed through the American
Arbitration Association's procedures to resolve the dispute.
The parties agree that in the event arbitration is necessary,
the laws of the State of Tennessee and any applicable federal law shall apply.
The place of the arbitration shall be Nashville, Tennessee.
-10-
<PAGE> 11
The award of the arbitrator shall be binding and conclusive
upon the parties. Either party shall have the right to have the award made the
judgment of a court of competent jurisdiction in the State of Tennessee.
In the event of a dispute arising under this Agreement, the
prevailing party shall be entitled to all reasonable attorneys' fees incurred in
connection with such dispute. The Company agrees, to the maximum extent
permitted by law and the Bylaws and Certificate of Incorporation of the Company,
to defend and indemnify the Employee against and to hold the Employee harmless
from any and all claims, suits, losses, liabilities, and expenses (including
disputes arising under this Agreement and including reasonable attorneys' fees
and payment of reasonable expenses incurred in defending against such claim or
suit as such expenses are incurred) asserted against the Employee for actions
taken or omitted to be taken by the Employee in good faith and within the scope
of his responsibilities as an officer or employee of the Company. If requested
by the Employee, the Company shall advance to the Employee, promptly following
the Company's receipt of any such request, any and all expenses for which
indemnification is available hereunder, subject to the requirements of
applicable law and the Company's Bylaws and Certificate of Incorporation.
[the remainder of this page is intentionally left blank]
-11-
<PAGE> 12
IN WITNESS WHEREOF, the Company and Employee have executed
this Agreement on the day and year first above written.
COMPANY:
RENAL CARE GROUP, INC.
By: /s/ GARY BRUKARDT
------------------------
Gary Brukardt
Executive Vice President and Chief
Operating Officer
EMPLOYEE:
/s/ SAM A. BROOKS (Seal)
----------------------------
SAM A. BROOKS, JR.
-12-
