Document:

Exhibit

EXHIBIT 10.4

DaVita Inc.
Performance Stock Units Agreement under the 
DaVita HealthCare Partners Inc. 2011 Incentive Award Plan
and Long-Term Incentive Program

This Performance Stock Units Agreement (this “Agreement”) is entered into effective as of the Grant Date indicated below by and between DaVita Inc., a Delaware corporation (formerly known as DaVita HealthCare Partners Inc., and referred to herein as the “Company”) and the Grantee pursuant to the DaVita HealthCare Partners Inc. 2011 Incentive Award Plan, as amended and restated (the “Plan”).

Primary Terms
	
			
	Grantee:
	 
	«Grantee»

	 
	 
	 

	Address:
	 
	«Address_1»

	 
	 
	«City», «State» «Zip»

	 
	 
	 

	Grant Date:
	 
	«Grant_Date»

	 
	 
	 

	Performance Conditions:
	 
	As indicated on Exhibit B

	 
	 
	 

	Vesting Conditions:
	 
	As indicated on Exhibit B

	 
	 
	 

	Vesting Dates:
	 
	As indicated on Exhibit B

	 
	 
	 

	Number of Units:
	 
	«PSU_Award»

	 
	 
	 

	Plan Name:
	 
	2011 Incentive Award Plan

	 
	 
	 

	Plan ID#:
	 
	FVA3

    
This Agreement includes this cover page and the following Exhibits, which are expressly incorporated by reference in their entirety herein:

Exhibit A – General Terms and Conditions
Exhibit B – Performance and Vesting Conditions
Exhibit C – Calculation of Relative Total Shareholder Return
    
Grantee hereby expressly acknowledges and agrees that he or she is an employee at will and may be terminated by the Company or its applicable Affiliate at any time, with or without cause.  By signing below, Grantee hereby acknowledges he or she has a copy of the Plan, and accepts and agrees to the terms and provisions of this Agreement and the Plan. Capitalized terms that are used but not defined in this Agreement shall have the meanings set forth in the Plan.

IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement effective as of the Grant Date.
	
			
	DaVita Inc.
	 
	Grantee

	 
	 
	 

	Eric Severson
	 
	«Grantee»

	Chief People Officer
	 
	 

Note:  Please mark and initial any correction to the Grantee’s name and/or Address shown on this page before returning a signed copy of this Agreement to Michelle Burkart, Manager, Compensation (the “Stock Plan Administrator”).

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DaVita Inc.
Performance Stock Units Agreement 
Exhibit A – General Terms and Conditions

For valuable consideration, the receipt of which is acknowledged, the parties hereto agree as follows:

1. Grant of Performance Stock Units.  The Company hereby grants to Grantee this award (the “Award”) «PSU_Award» performance-based restricted stock units (“Performance Stock Units” or “Units”) under the Plan, subject to adjustment, forfeiture and the other terms and conditions set forth below.  This Award represents Grantee’s right to receive shares of common stock of the Company (“Common Stock”), subject to Grantee’s fulfillment of the performance and vesting conditions set forth in this Agreement.  The number of Performance Stock Units specified in this Agreement reflects the target number of Units that may be earned by Grantee.

2. Performance and Vesting Conditions.  The number of Units that may be earned by and for which shares of Common Stock (“Shares”) become issuable to Grantee (the “Earned Units”) shall be based upon the achievement of the performance criteria as reviewed and approved by the Committee and reflected in Exhibit B (the “Performance Goals”) over the performance periods reflected in Exhibit B (the “Performance Periods”) and the remaining terms of this Agreement (the “Vesting Conditions”).  The determination by the Committee with respect to the achievement of the Performance Goals shall be made as soon as administratively practicable following the Performance Period after all necessary Company information is available.  The specific date on which such determination is formally made and approved by the Committee is referred to as the “Determination Date.”

3. Conversion of Performance Stock Units and Stock Issuance.  To the extent that the Committee determines on the Determination Date that some or all of the Performance Goals have been achieved, then as of each Vesting Date specified on Exhibit B (each, a “Vesting Date”) that Grantee satisfies the Vesting Conditions or as soon as administratively practicable thereafter  (but in any event no later than 60 days following the applicable Vesting Date or the vesting event, subject to Section 13 below and Exhibit B), the Company shall issue the number of Shares issuable to Grantee (the “Shares”), for the Earned Units determined by the Committee on the Determination Date pursuant to its determination of the level of achievement of the Performance Goals, subject to Section 6 below.

4. Termination of Employment.  Except as set forth in Exhibit B or pursuant to the terms of any written employment agreement between the Grantee and the Company or a Subsidiary thereof in effect on the Grant Date, Performance Stock Units will cease vesting upon the date Grantee’s employment with the Company or any Affiliate is terminated for any reason.  Upon the date that Grantee ceases being an Employee for any reason other than as expressly contemplated in Exhibit B or pursuant to the terms of any written employment agreement between the Grantee and the Company or a Subsidiary thereof in effect on the Grant Date, Grantee will forfeit his or her right to any unvested Performance Stock Units.

5. Rights to Shares.    Grantee shall not have any rights to the Shares subject to the Award, including without limitation, voting rights and rights to dividends, unless and until the Shares shall have been issued by the Company and held of record by or for the benefit of Grantee.

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	6.
	 Taxes

(a)    Generally.  Grantee is ultimately liable and responsible for all taxes owed in connection with the Award, regardless of any action the Company or any of its subsidiaries or affiliates takes with respect to any tax withholding obligations that arise in connection with the Award.  Neither the Company nor any of its Affiliates makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant or vesting of the Award or the subsequent sale of Shares issuable pursuant to the Award.  The Company and its subsidiaries and affiliates do not commit and are under no obligation to structure the Award to reduce or eliminate Grantee’s tax liability.

(b)    Payment of Withholding Taxes.  If the Company determines in its sole discretion that the vesting of the Award may result in any domestic or foreign tax withholding obligation, whether federal, state or local, including any social tax obligation (the “Tax Withholding Obligation”), Grantee must arrange for the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to the Company.  Grantee may choose to satisfy Grantee’s tax obligation in either of the following manners:

(i)  By Sale of Shares.  Unless Grantee chooses to satisfy the Tax Withholding Obligation by some other means in accordance with clause (ii) below, Grantee’s acceptance of this Award constitutes Grantee’s instruction and authorization to the Company and any brokerage firm determined acceptable to the Company for such purpose to withhold or sell on Grantee’s behalf a whole number of Shares from those Shares issuable to Grantee as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the Tax Withholding Obligation.  Such Shares will be sold on the day the tax Withholding Obligation arises or as soon thereafter as practicable.  Grantee will be responsible for all broker's fees and other costs of sale, and Grantee agrees to indemnify and hold the Company and its subsidiaries and affiliates harmless from any losses, costs, damages, or expenses relating to any such sale.  To the extent the proceeds of such sale exceed Grantee’s Tax Withholding Obligation, the Company agrees to pay such excess in cash to Grantee through payroll or otherwise as soon as practicable.  Grantee acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy Grantee’s Tax Withholding Obligation.  Accordingly, Grantee agrees to pay to the Company or any of its subsidiaries or affiliates as soon as practicable, including through additional payroll withholding, any amount of Tax Withholding Obligation that is not satisfied by the sale of Shares described above.

(ii)  By Check, Wire Transfer or Other Means.  At any time not less than ten (10) business days before any Tax Withholding Obligation arises, Grantee may notify the Company of Grantee’s intent to make a separate cash payment to satisfy Grantee’s Tax Withholding Obligation.  If Grantee elects to satisfy Grantee’s Tax Withholding Obligation in this manner, Grantee will be asked to remit to the Company an amount that the Company determines is sufficient to satisfy the Tax Withholding Obligation within ten (10) business days after the Vesting Date by (a) delivery of a certified check payable to DaVita Inc. at: DaVita Inc. Attn: Dan Chandler, Director, Compensation, P.O. Box 2076, Tacoma, Washington 98401-2076, or such other address as the Company may from time to time direct, (b) wire transfer to such account as the Company may direct, or (c) such other means as the Company may establish or permit.  If Grantee does not remit this amount to the Company within twenty (20) business days after the Vesting Date, the Company reserves the right to satisfy Grantee’s Tax Withholding Obligation in the manner set out under paragraph (i) above in its sole discretion. Notwithstanding the foregoing, with respect to any Tax Withholding Obligation that occurs during a period when transactions in the Company’s stock cannot be initiated except pursuant to a trading plan in accordance with Rule 10b5-1 created under the Securities and Exchange Act of 1934 (e.g., a Company designated blackout period), no election pursuant to this clause (ii) may be made and the Tax Withholding Obligation shall automatically be settled pursuant to the procedure described in clause (i) above.

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(c)    Right to Retain Shares.  The Company will have the right to defer the issuance of any Shares to Grantee until Grantee satisfies the Tax Withholding Obligation.

7. Assignment.  Grantee’s interest in this Award may not be assigned or alienated, whether voluntarily or involuntarily.

8. Meaningful Reduction in Responsibilities.  If there is a meaningful reduction, determined in the Company’s sole discretion, in both Grantee’s duties and responsibilities and the level of Grantee’s regular cash compensation for an extended or indefinite period of time, the Company reserves the right to unilaterally revoke some or all of the unvested portion of this Award. 

9. Clawback Provision.  Notwithstanding any other provision in this Agreement to the contrary, Grantee shall be subject to the written policies of the Company’s Board of Directors as well as laws and regulations applicable to Company executives, including without limitation any Board policy relating to recoupment or “clawback” of compensation arising from this Award, and rules adopted pursuant to the Dodd-Frank Act, and any other Board policy, law or regulation relating to recoupment or “clawback” of compensation that may exist from time to time during Grantee’s employment by the Company and thereafter.  Without limiting the generality of the foregoing, Grantee and this Award shall be subject to the Company’s Incentive Compensation Clawback Policy approved by the Company’s Board of Directors on December 5, 2014 as the same may be amended from time to time, including certain provisions thereof that would allow the Company to recover any value conferred upon Grantee by this Award and/or cancel all or a part of this Award in the event of any “significant misconduct “ (as defined in such policy) by Grantee or a subordinate employee of Grantee, if Grantee is at the level of Senior Vice President or above in the Company’s domestic dialysis business, or in a role that provides support to the Company’s domestic dialysis business.  The provisions of this Section 9 are in addition to and not in lieu of any other remedies available to the Company in the event Grantee violates the Policies (as defined herein below), or any laws or regulations.

10. Amendments.  Except as otherwise provided in Section 8, this Agreement and the Award may be amended only by means of a written document signed by both Grantee and the Company.

11. Change of Control of the Company.  In the event of a Change of Control, the number of Earned Units that are assigned to each Performance Goal issuable shall be determined as specified in the Relative Total Shareholder Return performance condition, as set forth in Exhibit B. 

12. [Non-Competition/]Non-Solicitation/Non-Disclosure

[(a)    Non-Competition.  Grantee acknowledges and recognizes the highly competitive nature of the business of the Company and accordingly agrees that while Grantee is an Employee, and for the 12 month period following termination of such relationship for any reason (whether voluntary or involuntary) (the “Restricted Period”), Grantee shall not, as an employee, independent contractor, consultant, or in any other form, prepare to provide or provide any of the same or similar services that Grantee performed during his/her employment with or service to the Company for any other individual, partnership, limited liability company, corporation, independent practice association, management services organization, or any other entity (collectively, “Person”) that competes in any way with the area of business of the Company, or any of its subsidiaries or affiliates, in which Grantee worked and/or performed services.  For purposes of the above, preparing to provide any of the same or similar services includes, but is not limited to, planning with any Person on how best to compete with the Company or any of its subsidiaries or affiliates, or discussing the Company’s, or any of its subsidiaries’ or affiliates’ business plans or strategies with any Person. 

Grantee further agrees that during the Restricted Period, Grantee shall not own, manage, control, operate, invest in, acquire an interest in, or otherwise engage in, act for, or act on behalf of any Person (other than the Company and its subsidiaries and affiliates) engaged in any activity that Grantee was 

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responsible for during Grantee’s employment with or engagement by the Company where such activity is similar to or competitive with the activities carried on by the Company or any of its subsidiaries or affiliates.

Grantee acknowledges that during the Restricted Period, Grantee may be exposed to confidential information and/or trade secrets relating to business areas of the Company or any of its subsidiaries or affiliates that are different from and in addition to the areas in which Grantee primarily works for the Company (the “Additional Protected Areas of Business”).  As a result, Grantee agrees he/she shall not own, manage, control, operate, invest in, acquire an interest in, or otherwise act for, act on behalf, or provide the same or similar services to, any Person that engages in the Additional Protected Areas of Business. 

Grantee acknowledges and agrees that the geographical limitations and duration of this covenant not to compete are reasonable.

To the extent that the provisions of this Section 12(a) conflict with any other agreement signed by Grantee relating to non-competition, the provisions that are most protective of the Company’s, and any of its subsidiaries’ or affiliates’, interests shall govern.]1 

(b)    Non-Solicitation.  Grantee agrees that during the term of his/her employment and/or service to the Company or any of its subsidiaries or affiliates and for the one-year period following the termination of his/her employment and/or service for any reason (whether voluntary or involuntary), Grantee shall not (i) solicit any of the Company’s or any of its subsidiaries’ or affiliates’ employees to work for any Person; (ii) hire any of the Company’s or any of its subsidiaries’ or affiliates’ employees to work (as an employee or an independent contractor) for any Person; (iii) take any action that may reasonably result in any of the Company’s or any of its subsidiaries’ or affiliates’ employees going to work (as an employee or an independent contractor) for any Person; (iv) induce any patient or customer of the Company or any of its subsidiaries or affiliates, either individually or collectively, to patronize any competing business; (v) request or advise any patient, customer, or supplier of the Company or any of its subsidiaries or affiliates to withdraw, curtail, or cancel such person’s business with the Company, or any of its subsidiaries or affiliates; (vi) enter into any contract the purpose or result of which would benefit Grantee if any patient or customer of the Company, or any of its subsidiaries or affiliates, were to withdraw, curtail, or cancel such person’s business with the Company, or any of its subsidiaries or affiliates; (vii) solicit, induce, or encourage any physician (or former physician) affiliated with the Company or any of its subsidiaries or affiliates, or induce or encourage any other person under contract with the Company or any of its subsidiaries or affiliates, to curtail or terminate such person’s affiliation or contractual relationship with the Company, or any of its subsidiaries or affiliates; or (viii) disclose to any Person the names or addresses of any patient or customer of the Company or any of its subsidiaries or affiliates.
(c)    Non-Disclosure.  In addition, Grantee agrees not to disclose or use for his or her own benefit or purposes or for the benefit or purposes of any Person other than the Company and any of its subsidiaries or affiliates, any trade secrets, information, data, or other confidential information relating to customers, development, programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, financing methods, plans, or the business and affairs of the Company or any of its subsidiaries or affiliates (“Information”); provided, however, the foregoing shall not apply to 
(i) Information which is not unique to the Company or any of its subsidiaries or affiliates; (ii) Information which is generally known to the industry or the public other than as a result of Grantee’s breach of this covenant; or (iii) disclosure that is required by any applicable law, rule or regulation.  If Grantee receives such a request to produce Information in his or her possession, Grantee shall provide the Company reasonable advance notice, in writing, prior to producing said Information, so as to give the Company reasonable time to object to Grantee producing said Information.  Grantee also agrees that Grantee will not become employed by or enter into service with any Person other than the Company and any of its subsidiaries or affiliates in which Grantee will be obligated to disclose or use any Information, or where such disclosure would be inevitable because of the nature of the position. Grantee shall not be held 

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criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (1) is made (a) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Disclosures to attorneys, made under seal, or pursuant to court order are also protected in certain circumstances under 18 U.S.C. § 1833.

(d)    Nothing in this Agreement (including with respect to Confidential Information, Trade Secrets, and other obligations) is intended to be or will be construed to prevent, impede, or interfere with Grantee’s right to respond accurately and fully to any question, inquiry, or request for information regarding Grantee’s employment with the Company when required by legal process by a Federal, State or other legal authority, or from initiating communications directly with, or responding to any inquiry from, or providing truthful testimony and information to, any Federal, State, or other regulatory authority in the course of an investigation or proceeding authorized by law and carried out by such agency.  Grantee is not required to contact the Company regarding the subject matter of any such communications before Grantee engages in such communications.  In addition, nothing in this Agreement is intended to restrict  Grantee’s legally protected right to discuss wages, hours or other working conditions with co-workers or in any way limit Grantee’s rights under the National Labor Relations Act or any whistleblower act.

(e)    If, at any time (a) while Grantee is an employee of the Company or any of its subsidiaries or affiliates, or (b) within one (1) year after termination of Grantee’s employment with the Company or any of its subsidiaries or affiliates for any reason (whether voluntary or involuntary), whichever is the latest, Grantee (i) breaches the [non-competition provision of Section 12(a); (ii) breaches the]1 non-solicitation provision of Section 12(b); (iii) breaches the non-disclosure provision of Section 12(c); (iv) is convicted of a felony; (v) has been adjudicated by a court of competent jurisdiction of having committed an act of fraud or dishonesty resulting or intending to result directly or indirectly in personal enrichment at the expense of the Company or any of its subsidiaries or affiliates, or (vi) is excluded from participating in any federal health care program, then (1) this Agreement and the Award shall terminate effective on the date on which Grantee enters into such activity and (2) the Company may seek temporary, preliminary, and permanent injunctive relief to prevent any actual or threatened breach or continuation of any breach of this Agreement without the necessity of proving actual damages or posting a bond or other security (which Grantee hereby agrees to) and/or an order requiring Grantee to repay the Company any value, gain or other consideration received or realized by Grantee as a result of this Award or any Shares received pursuant to the Award.  In the event of any conflict between the language of this Section 12(e), on the one hand, and the language of Section 9 of this Award or of the Company’s Incentive Compensation Clawback Policy as the same may be amended from time to time, on the other hand, the language of Section 9 of this Award and of the Company’s Incentive Compensation Clawback Policy shall be controlling. The provisions of this Section 12(e) are in addition to and not in lieu of any other remedies available to the Company in the event Grantee violates the Policies (as defined herein below), or any laws or regulations.

13. Section 409A of the Code.  This Agreement and the Award are intended to meet the requirements of or be exempt from Section 409A of the Code, as applicable, and shall be interpreted and construed consistent with that intent.  Notwithstanding any other provisions of this Agreement, to the extent that the right to any issuance of Shares or payment to Grantee hereunder provides for the non-exempt “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code that is subject to Section 409A of the Code, the issuance or payment shall be made in accordance with the following:
    
If Grantee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of Grantee’s “separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code (the “Separation Date”), then no such issuance of Shares or payment shall be made during the period beginning on the Separation Date and ending on the date that is six months following the Separation Date or, if earlier, on the date of Grantee’s death, if the earlier making of such issuance of Shares or payment 

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would result in tax penalties being imposed on Grantee under Section 409A of the Code.  The amount of any issuance of Shares or payment that would otherwise be made during this period shall instead be made on the first business day following the date that is six months following the Separation Date or, if earlier, the date of Grantee’s death.  If the Grantee is subject to an employment or other agreement that specifies a time and form of payment that differs from the time and form of payment set forth in Exhibit B, then this Award shall be settled in accordance with such employment or other agreement to the extent required to comply with Section 409A of the Code.

14. Compliance.  It is understood and agreed upon that at all times Grantee will act in full compliance with the Company’s Code of Conduct, Policies and Procedures, JV Compliance Handbook, MDA Compliance Handbook, Gift Policy and the credentialing process (collectively, the “Policies”).  

Grantee may not improperly use something of value to attempt to induce or actually induce, either directly or indirectly, a patient to switch to, or continue to receive, treatment at a Company facility center in violation of the Policies.  Inducement may include paying a patient, providing gifts, or otherwise providing something of value to a patient to switch to, or continue to receive treatment at a Company facility center.  Grantee also may not attempt to induce or actually induce a referral source with something of value to obtain referrals in violation of the Policies.
If Grantee’s conduct, whether related to the Award granted under this Agreement or otherwise, violates the requirements of the immediately preceding two paragraphs, then Grantee will forfeit any unvested portion of the Award granted under this Agreement and be subject to immediate disciplinary action, up to and including termination. The provisions of this Section 14 are in addition to and not in lieu of any other remedies available to the Company in the event Grantee violates the Policies, or any laws or regulations.
 
If at any time Grantee has questions or concerns about the provisions in this Section 14, or suspects any improper conduct related to this initiative, Grantee should immediately contact his or her supervisor or Team Quest.  Grantee also may anonymously and confidentially call the Company’s Compliance Hotline at 888-458-5848.

15.    Compliance with Law.  No shares of Common Stock shall be issued and delivered pursuant to a Unit unless and until all applicable registration requirements of the Securities Act of 1933, as amended, all applicable listing requirements of any national securities exchange on which the Common Stock is then listed, and all other requirements of law or of any regulatory bodies having jurisdiction over such issuance and delivery, shall have been complied with.  In particular, the Committee may require certain investment (or other) representations and undertakings in connection with the issuance of securities in connection with the Plan in order to comply with applicable law.
If any provision of this Agreement is determined to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted by applicable law, and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required under applicable law.  Furthermore, if any provision of this Agreement is determined to be illegal under any applicable law, such provision shall be null and void to the extent necessary to comply with applicable law, but the other provisions of this Agreement shall remain in full force and effect.
16.    Electronic Delivery and Execution.  This Agreement and the Award may be considered null and void at the discretion of the Company if a signed copy is not returned to the Stock Plan Administrator no later than «Agmt_Deadline». The Company may, in its sole discretion, decide to deliver any documents related to this Award or future awards made under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means.  Participant hereby consents to receive such 

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documents by electronic delivery and, if requested, agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

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DaVita Inc.
Performance Stock Units Agreement 
Exhibit B – Performance and Vesting Conditions
Shares issuable under this Performance Share Units award will be determined based on the level of performance achieved on specified performance conditions.  Except as set forth in this Exhibit B or the terms of any written employment agreement between the Grantee and the Company or a Subsidiary thereof in effect on the Grant Date, vesting in the right to receive the number of Shares so determined shall be contingent on Grantee’s continued employment by the Company on the Vesting Date indicated for each performance condition listed below.

For purposes of this Exhibit, the following terms shall have the respective meanings set forth below:
		
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	Change of Control: Change of Control shall mean:

(i) any transaction or series of transactions in which any person or group (within the meaning of Rule 13d-5 under the Exchange Act and Sections 13(d) and 14(d) under the Exchange Act) becomes the direct or indirect "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), by way of a stock issuance, tender offer, merger, consolidation, other business combination or otherwise, of greater than 50% of the total voting power (on a fully diluted basis as if all convertible securities had been converted and all warrants and options had been exercised) entitled to vote in the election of directors of the Company (including any transaction in which the Company becomes a wholly owned or majority-owned subsidiary of another corporation);
(ii) any merger or consolidation or reorganization in which the Company does not survive;
(iii) any merger or consolidation in which the Company survives, but the shares of the Company's Common Stock outstanding immediately prior to such merger or consolidation represent 40% or less of the voting power of the Company after such merger or consolidation; or 
(iv) any transaction in which more than 40% of the Company's assets are sold;
provided, however, that no transaction contemplated by clauses (i) through (iv) above shall constitute a Change of Control if both (x) the person acting as the Chief Executive Officer of the Company for the six months prior to such transaction becomes the Chief Executive Officer or the Executive Chairman of the Board of Directors of the entity that has acquired control of the Company as a result of such transaction (the "Acquiror") immediately after such transaction and remains the Chief Executive Officer or Executive Chairman of the Board of Directors for not less than one year following the transaction and (y) a majority of the Acquiror's board of directors immediately after such transaction consists of persons who were directors of the Company immediately prior to such transaction.

		
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	Cause:  Cause shall mean:  (1) a material breach by Grantee of his or her duties and responsibilities which do not differ in any material respect from the duties and responsibilities of Grantee during the ninety (90) days immediately prior to a Change of Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on Grantee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; (2) willful misconduct or gross negligence which results in material harm to the Company; (3) the conviction of Grantee of, or a plea of nolo contendere by Grantee to, a felony or other crime involving fraud or dishonesty; or (4) willful violation of Company policies which results in material harm to the Company. 

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Change of Control Vesting 
In the event of a “Change of Control” (defined herein), this Award shall automatically vest in its entirety upon the earlier of the following two events: (i) immediately prior to the effective date of a Change of Control if the “Acquiror” (defined herein) fails to assume, convert or replace this Award, or (ii) as of the date of termination of Grantee’s employment if such termination occurs within twenty-four (24) months following a Change of Control by the Company (or the Acquiror) (a) other than for “Cause” (defined below) or (b) if applicable, by Grantee in accordance with the termination for “Good Reason” provisions of Grantee’s employment agreement, if any; provided, however, that if the Award constitutes nonqualified deferred compensation within the meaning of Section 409A, then in the case of clause (i), if the Award is not effectively assumed, converted or replaced and the Change of Control was not a “change in control event” within the meaning of Section 409A of the Code or to the extent distribution would not be permissible under Section 409A of the Code without adverse tax consequences, then the vested Award shall be settled upon its normal Vesting Dates or, if earlier and to the extent permitted by Section 409A of the Code, Grantee’s termination of employment, provided that the Grantee has not satisfied the age and service requirements for Rule of 65 Vesting as of the date of such termination, and in the case of clause (ii), if the Change of Control was not a “change in control event” within the meaning of Section 409A of the Code and the Grantee satisfies the age and service requirements for Rule of 65 Vesting, then the vested Award shall be settled, to the extent required by Section 409A of the Code, upon the Vesting Dates on which the vested Award is scheduled to be settled under the Rule of 65.  In the event of such accelerated vesting due to a Change of Control, the number of Shares issuable for the Condition Target PSUs assigned to the performance conditions described in Section A. shall be determined as specified in the Relative Total Shareholder Return performance condition described in Section B. below. 

Rule of 65 Vesting

In the event that (i) the Grantee has remained continuously employed with the Company for at least one year from the Grant Date, (ii) the Grantee has satisfied the Rule of 65 (as defined below) at the time of his or her termination of employment and such termination of employment is not for Cause, and (iii) the Grantee is an “officer” under Section 16 of the Exchange Act at the time of such termination of employment, then the Award shall vest and shall be settled on its normal Vesting Dates; provided, however, that if following the Grantee’s termination of employment under this paragraph, there is a Change of Control and the Award is not effectively assumed, converted or replaced and the Change of Control is a “change in control event” within the meaning of Section 409A of the Code, then the vested Award shall be settled upon such Change of Control to the extent permitted without adverse tax consequences by Section 409A of the Code, with the number of Shares issuable as determined above under Change of Control Vesting.  If the Grantee satisfies the requirements of the preceding sentence but the Grantee’s termination of employment occurs prior to the first anniversary of the Grant Date, then the number of Condition Target PSUs eligible for vesting shall be prorated based on the number of full months from the Grant Date to the Grantee’s termination of employment divided by 12.

“Rule of 65” means that the sum of the Grantee’s age and years of service equals or exceeds 65, with a minimum age of 55 and a minimum of five years of continuous service.

Death or Disability

In the event of the Grantee’s death or Disability while employed by the Company and the Grantee is an “officer” under Section 16 of the Exchange Act at the time of such death or Disability, the Condition Target PSUs shall vest and be settled within 60 days following such death or Disability (or, if later and to the extent permitted under Section 409A of the Code, within 60 days following the conclusion of the performance period applicable to the underlying performance goals).

Disability mean that the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

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[INSERT PERFORMANCE CONDITIONS]

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DaVita Inc.
Performance Stock Units Agreement
Exhibit C – Calculation of Relative Total Shareholder Return
		
	•
	“TSR” means the Company’s total shareholder return, which will be calculated by dividing (i) the Closing Average Share Value by (ii) the Opening Average Share Value.

		
	•
	“Index Total Return” means the total return of the Standard & Poor’s 500 Stock Index, which will be calculated by dividing (i) the Closing Average Index Value by (ii) the Opening Average Index Value.

Example:  An illustrative example of TSR and Index Total Return calculations for a hypothetical company and performance period is attached at the end of this Exhibit.

		
	•
	“Opening Average Share Value” means the average, over the trading days in the Opening Average Period, of the closing price of a company’s stock multiplied by the Accumulated Shares for each trading day during the Opening Average Period.

		
	•
	“Opening Average Index Value” means the average, over the trading days in the Opening Average Period, of the closing price of the S&P 500 Total Return Stock Index (S&P Capital IQ symbol ^SP500TR).

		
	•
	“Opening Average Period” means the trading days during the three months ended March 31, 2018.

		
	•
	“Accumulated Shares” means, for a given trading day, the sum of (i) one (1) share and (ii) a cumulative number of shares of the company’s common stock purchased with dividends declared on a company’s common stock, assuming same day reinvestment of the dividends in the common stock of a company at the closing price on the ex-dividend date, for ex-dividend dates between the first day of the Opening Average Period and the trading day.

		
	•
	“Closing Average Share Value” means the average, over the trading days in the Closing Average Period, of the closing price of the company’s stock multiplied by the Accumulated Shares for each trading day during the Closing Average Period.

		
	•
	“Closing Average Index Value” means the average, over the trading days in the Closing Average Period, of the closing price of the S&P 500 Total Return Stock Index (S&P Capital IQ symbol ^SP500TR).

		
	•
	“Closing Average Period” means (i) in the absence of a Change of Control, (a) for the First Tranche, the trading days during the three months ended March 31, 2021 or (b) for the Second Tranche, the trading days during the three months ended March 31, 2022; or (ii) in the case of a Change of Control, the trading days during the period beginning thirty (30) calendar days prior to the Change of Control and ending on the Accelerated End Date. 

		
	•
	“Accelerated End Date” means the date five (5) calendar days (or such shorter period as may be established by the Compensation Committee in its sole discretion) prior to the Change of Control.

The following example illustrates the calculation of TSR for a hypothetical company with only quarterly dividends and the calculation of the Index Total Return with a performance period beginning January 1, 2014 and ending March 31, 2014.  For the purposes of the example, the Opening Average Period is the trading days in December 2013 and the Closing Average Period is the trading days in March 2014.

Page 12        Award ID: «Award_ID»

Hypothetical company
Opening Average Share Value (12/1/2013 – 12/31/2013)        $50.09
Closing Average Share Value (3/1/2014 – 3/31/2014)            $51.69
TSR                                103.19%
	
											
	 
	 
	 
	Accum.
	Share
	 
	 
	 
	 
	Accum.
	Share

	Date
	Close
	Ex-Div.
	Shares
	Value
	 
	Date
	Close
	Ex-Div.
	Shares
	Value

	12/31/2013
	$51.05
	$           -
	1.002055
	$51.15
	 
	3/31/2014
	$52.01
	$           -
	1.004439
	$52.24

	12/30/2013
	$51.11
	$           -
	1.002055
	$51.22
	 
	3/28/2014
	$51.83
	$           -
	1.004439
	$52.06

	12/27/2013
	$51.18
	$           -
	1.002055
	$51.29
	 
	3/27/2014
	$51.31
	$           -
	1.004439
	$51.54

	12/26/2013
	$51.00
	$           -
	1.002055
	$51.10
	 
	3/26/2014
	$51.55
	$           -
	1.004439
	$51.78

	12/24/2013
	$51.28
	$           -
	1.002055
	$51.39
	 
	3/25/2014
	$52.01
	$           -
	1.004439
	$52.24

	12/23/2013
	$51.24
	$           -
	1.002055
	$51.35
	 
	3/24/2014
	$51.46
	$           -
	1.004439
	$51.69

	12/20/2013
	$51.03
	$           -
	1.002055
	$51.13
	 
	3/21/2014
	$51.72
	$           -
	1.004439
	$51.95

	12/19/2013
	$50.36
	$           -
	1.002055
	$50.46
	 
	3/20/2014
	$52.03
	$           -
	1.004439
	$52.26

	12/18/2013
	$50.25
	$           -
	1.002055
	$50.35
	 
	3/19/2014
	$51.33
	$           -
	1.004439
	$51.56

	12/17/2013
	$49.36
	$           -
	1.002055
	$49.46
	 
	3/18/2014
	$51.31
	$           -
	1.004439
	$51.54

	12/16/2013
	$50.28
	$           -
	1.002055
	$50.38
	 
	3/17/2014
	$50.42
	$           -
	1.004439
	$50.64

	12/13/2013
	$49.73
	$           -
	1.002055
	$49.83
	 
	3/14/2014
	$50.04
	$           -
	1.004439
	$50.26

	12/12/2013
	$49.42
	$           -
	1.002055
	$49.52
	 
	3/13/2014
	$50.14
	$           -
	1.004439
	$50.36

	12/11/2013
	$48.70
	$           -
	1.002055
	$48.80
	 
	3/12/2014
	$51.28
	$           -
	1.004439
	$51.51

	12/10/2013
	$49.30
	$           -
	1.002055
	$49.40
	 
	3/11/2014
	$51.83
	$           -
	1.004439
	$52.06

	12/9/2013
	$49.56
	$           -
	1.002055
	$49.66
	 
	3/10/2014
	$52.27
	$           -
	1.004439
	$52.50

	12/6/2013
	$49.55
	$           -
	1.002055
	$49.65
	 
	3/7/2014
	$52.45
	$0.125
	1.004439
	$52.68

	12/5/2013
	$48.19
	$           -
	1.002055
	$48.29
	 
	3/6/2014
	$52.41
	$           -
	1.002055
	$52.52

	12/4/2013
	$48.94
	$           -
	1.002055
	$49.04
	 
	3/5/2014
	$51.99
	$           -
	1.002055
	$52.10

	12/3/2013
	$48.65
	$0.100
	1.002055
	$48.75
	 
	3/4/2014
	$51.30
	$           -
	1.002055
	$51.41

	12/2/2013
	$49.71
	$           -
	1.000000
	$49.71
	 
	3/3/2014
	$50.45
	$           -
	1.002055
	$50.55

	 
	 
	Opening average
	$50.09
	 
	 
	 
	Closing average
	$51.69

S&P 500 Total Return
Opening Average Index Value (12/1/2013 – 12/31/2013)        3,240.19
Closing Average Index Value (3/1/2014 – 3/31/2014)            3,357.65
Index Total Return                        103.63%

Page 13        Award ID: «Award_ID»

	
					
	 
	Index
	 
	 
	Index

	Date
	Value
	 
	Date
	Value

	12/31/2013
	3,315.59
	 
	3/31/2014
	3,375.51

	12/30/2013
	3,302.30
	 
	3/28/2014
	3,348.83

	12/27/2013
	3,302.66
	 
	3/27/2014
	3,333.23

	12/26/2013
	3,303.15
	 
	3/26/2014
	3,339.00

	12/24/2013
	3,287.55
	 
	3/25/2014
	3,362.44

	12/23/2013
	3,277.62
	 
	3/24/2014
	3,347.36

	12/20/2013
	3,259.79
	 
	3/21/2014
	3,363.72

	12/19/2013
	3,244.15
	 
	3/20/2014
	3,373.60

	12/18/2013
	3,245.59
	 
	3/19/2014
	3,353.29

	12/17/2013
	3,192.33
	 
	3/18/2014
	3,373.98

	12/16/2013
	3,202.22
	 
	3/17/2014
	3,349.71

	12/13/2013
	3,182.07
	 
	3/14/2014
	3,317.81

	12/12/2013
	3,182.33
	 
	3/13/2014
	3,327.11

	12/11/2013
	3,193.52
	 
	3/12/2014
	3,366.07

	12/10/2013
	3,229.72
	 
	3/11/2014
	3,364.17

	12/9/2013
	3,239.99
	 
	3/10/2014
	3,381.22

	12/6/2013
	3,233.99
	 
	3/7/2014
	3,382.57

	12/5/2013
	3,197.76
	 
	3/6/2014
	3,380.49

	12/4/2013
	3,211.59
	 
	3/5/2014
	3,374.10

	12/3/2013
	3,214.95
	 
	3/4/2014
	3,373.64

	12/2/2013
	3,225.06
	 
	3/3/2014
	3,322.85

	Opening average
	3,240.19
	 
	Closing average
	3,357.65

Based on the above TSR and Index Total Return calculations, the Percent of Condition Target PSUs is calculated as follows:
Percent of Condition Target PSUs = 100% + 2x(Hypothetical Company TSR – Index Total Return)
= 100% + 2x(103.19% - 103.63%)
=100% + 2x(-0.44%)
=100% - 0.88%
Percent of Condition Target PSUs = 99.12%

Page 14        Award ID: «Award_ID»Exhibit

EXHIBIT 10.5

TRANSITION AGREEMENT
This Transition Agreement (the “Agreement”) is entered into on this 31st  day of July, 2018, by and between DaVita Inc. a Delaware corporation, and James Hilger (“Executive”).  Unless the context indicates otherwise, the term “Company” means and includes DaVita Inc., its successors, assigns, parents, subsidiaries, divisions and/or affiliates (whether incorporated or unincorporated), all of its related entities, and all of the past and present directors, officers, trustees, agents and employees of each.
WHEREAS, Executive currently serves as the Chief Accounting Officer of the Company; and
WHEREAS, the Company and Executive desire to set forth herein their mutual agreement with respect to all matters relating to Executive’s retirement from the position of Chief Accounting Officer of the Company.
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the adequacy and sufficiency of which are hereby acknowledged, the Company and Executive hereby agree as follows:
1.  Transition.
(a)      Transition Period.  Executive shall continue in his current position of Chief Accounting Officer of the Company through the earlier of (i) March 31, 2020 (the “CAO Retirement Date”) and (ii) the termination of Executive’s employment in accordance with Section 3 of the Employment Agreement, effective September 22, 2005, between the Company and Executive, as amended (the “Employment Agreement”). The period prior to the Executive’s termination of employment hereunder shall be referred to as the “Transition Period.”  On the CAO Retirement Date or, if applicable, the earlier termination of Executive’s employment, the Executive shall relinquish the duties of Chief Accounting Officer of the Company and any other position Executive holds with the Company or any of its affiliates or subsidiaries. 
(b)      Transition Services.  During the Transition Period, Executive shall continue to serve as the Company’s Chief Accounting Officer and shall provide support to, and collaborate with, the Company in its search for Executive’s successor.  Notwithstanding anything herein to the contrary, the Company and Executive agree that the services to be provided by Executive during the Transition Period are expected to exceed more than 20% of the average level of services performed by Executive for the Company and its affiliated “service recipients” (within the meaning of Treasury regulation §1.409A-1(h)(3)) over the immediately preceding 36-month period.

1

2.      Compensation and Benefits.
(a)      General.  Subject to Executive’s execution, non-revocation and compliance with this Agreement, during the Transition Period: 
		
	(i)
	    Executive’s annual base salary shall remain at $375,000 (“Base Salary”); 

		
	(ii)
	    Executive shall remain eligible to receive an annual incentive bonus for the 2018 performance year (the “2018 Bonus”), 2019 performance year (the “2019 Bonus”) and 2020 performance year (but prorated to reflect service prior to CAO Retirement Date) (the “Prorated 2020 Bonus”), with a maximum annual opportunity for each period equal to $350,000 (the “Maximum Bonus Potential”) and actual payout for each year no less than the same percentage of Maximum Bonus Potential as the weighted average percentage of Maximum Bonus Potential generally paid as an annual incentive bonus to Company teammates with respect to 2018 and 2019, respectively, under the Company’s broad-based program, subject to reductions in payout levels after applying negative discretion for significant underperformance by the Executive, as determined by the Compensation Committee of the Company’s Board of Directors (the “Committee”), provided that the actual payout for the Prorated 2020 Bonus shall equal the actual payout percentage of the Maximum Bonus Potential paid to the Executive with respect to the 2019 performance year, but subject to a reduction in payout level after applying negative discretion for significant underperformance by the Executive during the 2020 period, as determined by the Committee, provided further that (x) Executive shall forfeit the 2018 Bonus and/or 2019 Bonus if his employment with the Company terminates prior to the applicable payment date for any reason other than as set forth in Section 2(b) of this Agreement and (y) Executive shall forfeit the Prorated 2020 Bonus if his employment with the Company terminates prior to the CAO Retirement Date for any reason other than as set forth in Section 2(b) of this Agreement; 

		
	(iii)
	    subject to Executive’s employment with the Company through the grant date of the 2019 annual equity awards to senior executive officers of the Company, Executive shall be eligible to receive an annual equity grant, with a grant date fair value of $400,000 for the 2019 grant year, to be delivered in the same equity vehicles as, and with vesting terms consistent with, the Executive’s 2018 equity awards from the Company; and 

		
	(iv)
	    subject to (x) the Executive’s continued employment through the CAO Retirement Date, (y) Executive’s compliance with this Agreement and (z) Executive’s execution and non-revocation of the Supplemental Release (as defined herein), with such release to become effective no later than the 30th day following the Executive’s termination of employment, (I) Executive’s time-based restricted stock units that are outstanding as of the date of such termination of employment, shall become fully vested and shall be settled 

2

within 60 days following such termination of employment and (II) Executive’s stock appreciation rights outstanding as of the date of such termination of employment shall continue to vest and become exercisable in accordance with the vesting schedules set forth in the underlying agreements and shall remain exercisable until the normal expiration date set forth in such agreements (the accelerated and continued vesting of equity awards outstanding as of the CAO Retirement Date shall be referred to as the “Equity Benefits”).
(b)      Termination of Employment.  Subject to Executive’s compliance with this Agreement and Executive’s execution and non-revocation of the Supplemental Release, with such release to become effective no later than the 30th day following the Executive’s termination of employment, if the Company terminates Executive’s employment prior to the CAO Retirement Date in accordance with Section 3.3 of the Employment Agreement (a “Qualifying Separation”), then, in lieu of the severance benefits provided for under Section 3.3 of the Employment Agreement:  (i) Executive shall receive Base Salary continuation through March 31, 2020, payable in accordance with the Company’s normal payroll practices; (ii) Executive shall be eligible to receive the 2018 Bonus, 2019 Bonus and Prorated 2020 Bonus, to the extent unpaid at the time of such Qualifying Separation, and payable by March 15th following the conclusion of the applicable bonus year or, in the case of the 2020 Bonus, payable at the same time the 2019 Bonus is paid to Executive or, if later, within 30 days following the Executive’s termination of employment; (iii) Executive shall receive as an additional monthly payment through March 31, 2020, an amount equal to the employer-portion of the Executive’s health insurance benefits, payable in accordance with the Company’ normal payroll practices; (iv) if such Qualifying Termination occurs prior to the grant of the 2019 annual equity awards, Executive shall receive, in lieu of the 2019 equity grant described in Section 2(a), a lump sum cash payment of $400,000, payable within 60 days following the Qualifying Separation; and (v) Executive shall receive the Equity Benefits.  If Executive’s employment terminates prior to the CAO Retirement Date for any reason other than a Qualifying Separation, (i) Executive shall only be entitled to receive his Base Salary through the effective date of his termination of employment and to participate in the Company’s benefit programs in which he then participates through the effective date of his termination of employment, (ii) Executive’s equity awards shall be subject to the terms of the underlying equity award agreements and (iii) Executive shall not be entitled to any benefits hereunder or under his Employment Agreement in connection with such termination of employment.  For the avoidance of doubt, Executive expressly acknowledges that the only severance benefits that he shall be entitled to are set forth in this Section 2(b) and he shall not be entitled to receive any severance benefits under the Employment Agreement and if the Company and Executive agree to extend Executive’s services with the Company beyond the CAO Retirement Date, the Executive shall not be entitled to any severance benefits under his Employment Agreement in connection with any subsequent termination of such employment. 
3.      Company Property.  On the expiration of the Transition Period, Executive shall return to the Company all documents and other property belonging to the 

3

Company, including items such as keys, phone, credit cards and computers or other devices that have not already been returned by Executive, with receipt acknowledged by the Company.  Executive agrees not to make or retain any copies, electronic or otherwise, of the Company’s Confidential Information and Business Related Information, as defined in the Employment Agreement.
4.      Cooperation in Investigations and Litigation.  In consideration for the payments and agreements set forth in the Transition Agreement, following the expiration of the Transition Period, Executive agrees, upon request of the Company, to cooperate with the Company and its subsidiaries and affiliates with reasonable advance notice to provide information to and assist the Company, and its subsidiaries and affiliates in the investigation, defense, or prosecution of any suspected claim against or by the Company and its/their subsidiaries and affiliates or any Releasee (as defined herein).  Such assistance will include, but is not limited to, participating in interviews with representatives of the Company, attending, as a witness, depositions, trials, or other similar proceedings without requiring a subpoena, and producing and/or providing any documents or names of other persons with relevant information. Executive further agrees that he will provide full, complete and truthful information and testimony in all interviews, meetings, and/or testimony. Executive understands that Company will reimburse the Executive for reasonable out-of-pocket expenses incurred as a result of such cooperation.  Executive will act in good faith to furnish the information and cooperation required by this Section 4 and the Company will act in good faith so that the requirement to furnish such information and cooperation does not create a hardship for the Executive.  Following the expiration of the Transition Period, if the time incurred to comply with this Section 4 exceeds 40 hours, then Executive and Company shall engage in good faith negotiations to enter into a consulting agreement with a reasonable per diem or per hour rate as to be mutually determined between the Executive and the Company.
5.      Certain Covenants of Executive.  As a condition of the Executive’s employment by the Company and the payment of compensation and receipt of benefits referred to above, the Executive agrees to continue to be bound, and will continue to be bound following Executive’s termination of employment in accordance with Section 4 of the Employment Agreement, to the covenants contained in Section 4 of the Employment Agreement.  The Executive acknowledges that the Company would not provide the compensation and/or benefits set forth above if Executive was not willing to be bound by the terms of such Employment Agreement and Executive further acknowledges and agrees that if he breaches the covenants contained in Section 4 of the Employment Agreement or the other terms of this Agreement, then, to the fullest extent permitted by law, (a) the Company will be entitled to apply for and receive an injunction to restrain any violation of such covenants or this Agreement, (b) the Company will not be obligated to make any additional payments or provide any additional benefits, (c) Executive will be obligated to pay to the Company its costs and expenses in enforcing the covenants contained in Section 4 of the Employment Agreement and this Agreement and defending against such lawsuit (including court costs, expenses and reasonable legal fees) if Company is the prevailing party, and (d) at the Company’s option, the Executive’s vested 

4

but unexercised stock appreciation rights shall be forfeited and Executive shall immediately remit a cash payment to the Company equal to the sum of (i) the difference between (y) the fair market value of a share of Company Common Stock on the date of such breach or the date of Executive’s termination of employment, whichever is greater, and (z) the per share base price, multiplied by the number of shares of Company Common Stock purchased pursuant to the exercise of the stock appreciation rights that vested or continued to vest pursuant to the terms of the Transition Agreement, (ii) the fair market value of a share of Company Common Stock on the date of such breach or the date of Executive’s termination of employment, whichever is greater multiplied by the number of shares of Company Common Stock subject to restricted stock unit awards that vested upon the Executive’s termination of employment pursuant to the terms of the Transition Agreement and (iii) any cash payment received in lieu of the 2019 equity awards.  Notwithstanding the foregoing, nothing in this Agreement nor the Employment Agreement, is intended to limit the Executive’s ability to (i) report possible violations of law or regulation to, or file a charge or complaint with, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Department of Justice, the Congress, any Inspector General, or any other federal, state or local governmental agency or commission (“Government Agencies”), (ii) communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company or (iii) under applicable United States federal law to (A) disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law or (B) disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.  
6.      Indemnification.  Nothing in this Agreement is intended to affect any obligation the Company may have under applicable law, its governing documents, or through an individual agreement to indemnify Executive including, without limitation, the Indemnity Agreement, dated December 10, 2007, between the Executive and the Company.  For the avoidance of doubt, notwithstanding the termination of the Transition Period or any provision herein to the contrary, the Company shall honor its obligations under all indemnification agreements and its charter and bylaw provisions providing for indemnification or advance of expenses to the Executive.
7.      Waiver and Release.
(a)      Release.  Executive, on behalf of himself and his heirs, executors, administrators, family members, attorneys and assigns, hereby waives, releases and forever discharges the Company, together with the Company’s directors, subsidiaries, divisions and affiliates, whether direct or indirect, its and their joint ventures and joint venturers (including each of their respective directors, officers, employees, shareholders, members, partners and agents, past, present, and future), and each of its and their respective successors and assigns (hereinafter collectively referred to as “Releasees”), from any and all known or 

5

unknown actions, causes of action, suits, complaints, contracts (whether oral or written, express or implied from any source), promises and liabilities of any kind, in law or equity, that the Executive ever had, may now have or hereafter can, will or may have against the Releasees as of and including the date of execution of this Agreement, including, but not limited to: 
		
	(i)
	    claims, actions, causes of action or liabilities arising under Title VII of the Civil Rights Act, as amended, the Age Discrimination in Employment Act, as amended, the Equal Pay Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, as amended, the Rehabilitation Act, as amended, the Americans with Disabilities Act, as amended, Section 1981 of the Civil Rights Act, the 1991 Civil Rights Act, the Family and Medical Leave Act, as amended, and/or any other federal, state, municipal or local employment discrimination statutes or ordinances (including, but not limited to, claims based on age, sex, attainment of benefit plan rights, race, religion, national origin, marital status, sexual orientation, ancestry, harassment, parental status, handicap, disability, retaliation, and veteran status); and/or

		
	(ii)
	    claims, actions, causes of action or liabilities arising under any other federal, state, municipal, or local statute, law, ordinance or regulation; and/or

		
	(iii)
	    future causes of action under the federal false claims act and/or any state false claims act relating in any manner to information learned while employed with the Company; and/or

		
	(iv)
	    any other claim whatsoever including, but not limited to, claims for severance pay, sick pay, unpaid wages, unpaid bonuses, unpaid paid time off, claims based upon breach of contract, breach of the covenant of good faith and fair dealing, wrongful termination, defamation, interference with contract, intentional and/or negligent infliction of emotional distress, fraud, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other common law, statutory or other claim whatsoever arising out of or relating to his employment with and/or separation from employment with the Company and/or any of the other Releasees, but excluding any claims which by law the Executive cannot waive, including claims for indemnification, and any claim that the Company has failed to make any payments or to provide any of the payments or benefits described in the Employment Agreement or this Agreement.

(b)      Release of Known and Unknown Claims and Claims Under Age Discrimination in Employment Act.  The Executive understands that this waiver and release includes a release of all known and unknown claims, including claims under the federal Age 

6

Discrimination in Employment Act.  The Executive acknowledges that this waiver and release does not waive any right or claim that he may have under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act that arises after the date of execution of this waiver and release.
(c)      Knowing and Voluntary Waiver.  The Executive further acknowledges and agrees that he has carefully read and fully understands all of the provisions of this waiver and release and that he has been advised to and/or has obtained representation by counsel in connection with his execution of this waiver and release.  The Executive has freely, knowingly and voluntarily elected to execute this waiver and release, in exchange for due consideration, by signing below.
(d)      Time to Consider Waiver and Release; Revocation.  The Executive acknowledges that he has had at least twenty-one (21) calendar days after the receipt of this waiver and release to consider signing this waiver and release, and that he may voluntarily choose to waive this 21-day period.  In addition, the Executive has seven (7) calendar days after signing this Agreement to revoke it, in which case this Agreement shall be null and void. Any such revocation must be in writing and be submitted to Kathleen Waters. The Executive understands that if he signs this Agreement and does not revoke this Agreement within seven (7) calendar days after signing, this waiver and release will become fully effective and enforceable.
(e)      Supplemental Release.  In addition to complying with the terms of this  Agreement, as an additional condition precedent to the Executive’s receipt of the Equity Benefits or, if applicable the benefits set forth in Section 2(b), the Executive also must provide a separately duly signed Waiver and Release Agreement, in the form attached hereto as Exhibit A (the “Supplemental Release”), after the CAO Retirement Date or, earlier Qualifying Separation, and before the expiration of twenty-one (21) calendar days after such date and not revoke it.  The Company shall provide Executive with a copy of the Supplemental Release on or around the CAO Retirement Date or earlier Qualifying Separation.
8.      Miscellaneous.
(a)      Assignment. Neither the Company nor Executive may assign this Agreement, except that the Company’s obligations hereunder shall be binding legal obligations of any successor to all or substantially all of the Company’s business by purchase, merger, consolidation or otherwise.
(b)      Executive Assignment.  The Executive represents and warrants that the Executive has the sole right and exclusive authority to execute this Agreement and the Supplemental Release; that Executive has not sold, signed, transferred, conveyed or otherwise disposed of any claim or demand relating to any matter covered in this Agreement; that the provisions of this Agreement shall be binding upon Executive and Executive’s heirs, executors, administrators and other legal representatives; that Executive has not relied upon any promise or representation that is not contained within 

7

this Agreement; and that the obligations imposed upon Executive in this Agreement shall not prevent Executive from earning a satisfactory livelihood.  If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be carried out as if any such invalid or unenforceable provision were not contained herein.
(c)      Entire Agreement.  This Agreement and the Supplemental Release contain the entire understanding between the Company and Executive relating to the subject matter hereof and supersede any contrary provision in any other document, including any prior employment agreement, offer letter or memorandum of understanding between Executive and the Company, whether written or oral; provided, however, that Executive shall continue to be bound by the restrictive covenants and other restrictions set forth in the Employment Agreement and the Executive’s equity award agreements.  Notwithstanding anything herein to the contrary, if the Transition Period ends on account of the Executive’s death or disability, then the Executive shall remain eligible to exercise Executive’s outstanding stock appreciation rights in accordance with the terms of Executive’s equity award agreements as contemplated under, and only to the extent contemplated by, the Executive’s equity award agreements. 
(d)      Applicable Law.  This Agreement shall be construed and interpreted pursuant to the internal laws of the State of Washington, without regard to principles of conflicts of laws.  In the event of a breach or threatened breach of any of the covenants referenced in Section 5, the Company will be entitled to immediate, temporary or preliminary injunctive relief in any court located in the State of Washington without proof of actual damages.
(e)      Benefits Unfunded.  All rights of the Executive and his spouse or any other beneficiary under this Agreement shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of the Executive for payment of any amounts due hereunder, and neither the Executive nor his spouse or any other beneficiary shall have any interest in or rights against any specific assets of the Company, and the Executive and his spouse or any other beneficiary shall have only the rights of a general unsecured creditor of the Company.
(f)      Waiver.  No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of any other provisions or conditions at the same time or at any prior or subsequent time.
(g)      Section 409A Compliance.  This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be interpreted and construed consistently with such intent.  The payments to the Executive pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible, under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or as 

8

short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4), and for this purpose each payment shall be considered a separate payment.  Any payment made or contemplated hereunder that is treated as deferred compensation subject to Section 409A shall be paid in compliance with Section 409A and shall not be deferred or accelerated in violation of Section 409A.  In the event that the terms of this Agreement would subject Executive to taxes or penalties under Section 409A of the Code (“409A Penalties”), the Company and Executive shall cooperate diligently to amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible; provided that in no event shall the Company be responsible for any 409A Penalties that arise in connection with any amounts payable under this Agreement unless such 409A Penalties arise in connection with the Company’s failure to comply with the terms hereof.  Notwithstanding any other provision in this Agreement, if Executive is a “specified employee,” as defined in Section 409A of the Code, as of the date of Executive’s separation from service (within the meaning of Section 409A of the Code), then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon Executive’s separation from service and (iii) under the terms of this Agreement would be payable prior to the date that is six months after Executive’s separation from service, such payment shall not be made to Executive until the earlier of the date that is six months after Executive’s separation from service or Executive’s death and will be accumulated and paid on the first day of the seventh month following the date of separation from service.  In addition, each payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, which is conditioned upon Executive’s execution of a release and which is to be paid or provided during a designated period that begins in one taxable year and ends in a second taxable year, shall be paid or provided in the later of the two taxable years. Any reimbursement payable to Executive pursuant to this Agreement or otherwise shall be conditioned on the submission by Executive of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Executive within 30 days following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which Executive incurred the reimbursable expense.  Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year.  The right to any reimbursement or in-kind benefit pursuant to this Agreement or otherwise shall not be subject to liquidation or exchange for any other benefit.
(h)       Amendment.  No amendment or modification of the terms of this Agreement shall be binding upon either of the parties hereto unless reduced to writing and signed by each of the parties hereto.
(i)       Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original.

9

(j)      Successors.  This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, representatives and successors.
(k)      Notices.  Notices required under this Agreement shall be in writing and sent by registered U.S. mail, return receipt requested, to the following addresses or to such other address as the party being notified may have previously furnished to the other by written notice:
If to the Company:
DaVita Inc. 
2000 16th Street 
Denver, Colorado 80202
Attention:  Kathleen Waters, Chief Legal Officer

   
If to Executive:

At the most recent address on file with the Company

(l)       Headings. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement. 
(m)      Tax Withholding. All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation.  The Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement.
(n)      Possible Recoupment of Certain Compensation.  Notwithstanding any other provision in this Agreement to the contrary, Executive shall be subject to the written policies of the Board of Directors as well as laws and regulations applicable to executives of the Company, including without limitation the DaVita HealthCare Partners Inc. Incentive Compensation Clawback Policy approved by the Board of Directors on December 4, 2014 and rules adopted pursuant to the Dodd-Frank Act, and any other Board policy, law or regulation relating to recoupment or “clawback” of compensation that may exist from time to time during the Executive’s employment by the Company and thereafter.

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IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the Company has caused these presents to be executed in its name on its behalf, all as of the date first above written.

	
					
	 
	 
	DaVita Inc.

	 
	 
	

	 
	 
	 

	 
	 
	By:
	/s/ Joel Ackerman

	 
	 
	 
	Name:   Joel Ackerman 

	 
	 
	 
	Title:
	Chief Financial Officer

	 
	 
	 
	 
	 

	 
	

	 
	 
	/s/ James Hilger

	 
	 
	 

                                                James Hilger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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EXHIBIT A
SUPPLEMENTAL RELEASE OF CLAIMS
This Waiver and Release Agreement (“Release”) is executed by _____________ (“Executive”) on this ____ day of ________________, 201_.

1.Waiver and Release.  Executive, on behalf of himself and his heirs, executors, administrators, family members, attorneys and assigns, hereby waives, releases and forever discharges DaVita Inc. (the “Company”), together with the Company’s directors, subsidiaries, divisions and affiliates, whether direct or indirect, its and their joint ventures and joint venturers (including each of their respective directors, officers, employees, shareholders, members, partners and agents, past, present, and future), and each of its and their respective successors and assigns (hereinafter collectively referred to as “Releasees”), from any and all known or unknown actions, causes of action, suits, complaints, contracts (whether oral or written, express or implied from any source), promises and liabilities of any kind, in law or equity, that Executive ever had, may now have or hereafter can, will or may have against the Releasees as of and including the date of execution of this Release, including, but not limited to:
		
	a.
	claims, actions, causes of action or liabilities arising under Title VII of the Civil Rights Act, as amended, the Age Discrimination in Employment Act, as amended, the Equal Pay Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, as amended, the Rehabilitation Act, as amended, the Americans with Disabilities Act, as amended, Section 1981 of the Civil Rights Act, the 1991 Civil Rights Act, the Family and Medical Leave Act, as amended, and/or any other federal, state, municipal or local employment discrimination statutes or ordinances (including, but not limited to, claims based on age, sex, attainment of benefit plan rights, race, religion, national origin, marital status, sexual orientation, ancestry, harassment, parental status, handicap, disability, retaliation, and veteran status); and/or

		
	b.
	claims, actions, causes of action or liabilities arising under any other federal, state, municipal, or local statute, law, ordinance or regulation; and/or

		
	c.
	future causes of action under the federal false claims act and/or any state false claims act relating in any manner to information learned while employed with the Company; and/or

		
	d.
	any other claim whatsoever including, but not limited to, claims for severance pay, sick pay, unpaid wages, unpaid bonuses, unpaid paid time off, claims based upon breach of contract, breach of the covenant of good faith and fair dealing, wrongful termination, defamation, interference with contract, intentional and/or negligent infliction of emotional distress, fraud, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other common law, statutory or other claim whatsoever arising out of or relating to his employment with and/or separation from employment with the Company and/or any of the other Releasees, but excluding any claims which by law Executive cannot waive, including claims for indemnification, and any claim that the Company has failed to make any payments or to provide any of the payments or benefits described in the Employment Agreement, dated as of September 22, 2015, between Executive and the Company, as amended (the “Employment Agreement”), and the Transition Agreement, dated as of [___________, between Executive and the Company (the “Transition Agreement”). 

2.Remedies if Executive Breaches Waiver and Release.  Executive further acknowledges and agrees that if he breaches the provisions of the waiver and release, then, to the fullest extent permitted by law, (a) the Company will be entitled to apply for and receive an injunction to restrain any violation of the waiver and release, (b) the Company will not be obligated to make any additional payments or provide any additional benefits, (c) Executive will be obligated to pay to the Company its costs and expenses in enforcing the waiver and release and defending against such lawsuit (including court costs, expenses and reasonable legal fees) if Company is the prevailing party, and (d) as an alternative to (c), at the Company’s option, the Executive’s vested but unexercised stock appreciation rights shall be forfeited and Executive shall immediately remit a cash payment to the Company equal to the sum of (i) the difference between (y) the fair market value of a share of Company Common Stock on the date of such breach or the date of Executive’s termination of employment, whichever is greater, and (z) the per share base price, multiplied by the number of shares of Company Common Stock purchased pursuant to the exercise of the stock appreciation rights that vested or continued to vest pursuant to the terms of the Transition Agreement, (ii) the fair market value of a share of Company Common Stock on the date of such breach or the date of Executive’s termination of employment, whichever is greater multiplied by the number of shares of Company Common Stock subject to restricted stock unit awards that vested upon the Executive’s termination of employment pursuant to the terms of the Transition Agreement and (iii) any cash payment received in lieu of the 2019 equity awards. 
3.Waiver of Reinstatement Rights.  To the extent permitted by law, Executive further waives, releases, and discharges Releasees from any reinstatement rights which Executive has or could have.

4.Representations and Warranties of Executive.  Executive expressly represents and warrants that he is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are released by Executive herein; that the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and that Executive has the full right and power to grant, execute and deliver the releases, undertakings, and agreements contained herein.  Executive further represents and warrants that he is unaware of any lien that has been noticed or filed and that would attach to any payment or benefit to be made or given by the Company pursuant to this Release.  Executive agrees to indemnify the Releasees, including payment of any attorneys’ fees and costs, and hold the Releasees harmless from and against any and all damages which may be suffered by them in the event that any of the foregoing representations and warranties are untrue in whole or part, and any and all claims based on or arising from any such assignment or transfer, or any attempted assignment or transfer, of any matters released herein.
5.Release of Known and Unknown Claims and Claims Under Age Discrimination in Employment Act.  Executive understands that this waiver and release includes a release of all known and unknown claims, including claims under the federal Age Discrimination in Employment Act.  Executive acknowledges that this Release does not waive any right or claim that he may have under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, that arises after the date of execution of this Release.
6.Knowing and Voluntary Waiver.  Executive further acknowledges and agrees that he has carefully read and fully understands all of the provisions of this Release and that he has been advised to and/or has obtained representation by counsel in connection with his execution of this Release.  Executive has freely, knowingly and voluntarily elected to execute this Release, in exchange for due consideration, by signing below.
7.Protected Rights.  Executive understands that nothing contained in this Release prohibits or limits Executive’s ability to file a charge or complaint with any federal, state or local governmental agency or commission. Executive also understands that this Release does not prohibit or limit Executive’s ability to communicate with any federal, state or local governmental agency or commission, or to otherwise participate in any investigation or proceeding that may be conducted by such an agency or commission, including providing documents or other information.
8.Cooperation.  In consideration for the payments and agreements set forth in the Transition Agreement, Executive agrees, upon request of the Company, to cooperate with the Company and its subsidiaries and affiliates with reasonable advance notice to provide information to and assist the Company, and its subsidiaries and affiliates in the investigation, defense, or prosecution of any suspected claim against or by the Company and its/their subsidiaries and affiliates or any Releasee.  Such assistance will include, but is not limited to, participating in interviews with representatives of the 

Company, attending, as a witness, depositions, trials, or other similar proceedings without requiring a subpoena, and producing and/or providing any documents or names of other persons with relevant information. Executive further agrees that he will provide full, complete and truthful information and testimony in all interviews, meetings, and/or testimony. Executive understands that Company will reimburse the Executive for reasonable out-of-pocket expenses incurred as a result of such cooperation.  Executive will act in good faith to furnish the information and cooperation required by this Section 8 (Cooperation) and the Company will act in good faith so that the requirement to furnish such information and cooperation does not create a hardship for the Executive. Following the expiration of the Transition Period, if the time incurred to comply with this Section 8 exceeds 40 hours, then Executive and Company shall engage in good faith negotiations to enter into a consulting agreement with a reasonable per diem or per hour rate as to be mutually determined between the Executive and the Company.
9.Exit Interview.  Executive agrees to fill out Company’s form Compliance Questionnaire, and to be available to participate in an exit interview with the Company’s Corporate Compliance Department or its designee if Executive is asked by the Company to do so.  In the event an interview is desired, at the sole discretion of the Company, the Company will contact the Executive to establish a mutually agreeable time for the interview.
10.Compliance Concerns.  Executive acknowledges that he has fulfilled his obligation to raise any and all compliance concerns while employed with the Company and that he is not currently aware of any compliance-related issues that he has not previously raised with the Company.  If Executive is currently aware of a compliance-related issue, Executive acknowledges his obligation to raise the concern(s) during his compliance exit interview.
11.Time to Consider Release; Revocation.  Executive acknowledges that he has had at least twenty-one (21) calendar days after the receipt of this Release to consider signing this Release, and that he may voluntarily choose to waive this 21-day period.  In addition, Executive has seven (7) calendar days after signing the Release to revoke it, in which case this Release will be null and void.  Any such revocation must be in writing and be submitted to Kathleen Waters, Chief Legal Officer.  Executive understands that if he signs this Release and does not revoke the Release within seven (7) calendar days after signing, this Release will become fully effective and enforceable.  Executive also understands that no severance payments will be paid to him until the seven (7) calendar day revocation period has expired without him having revoked the Release.
EXECUTED this ______ day of __________________, 20__.

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