Document:

Exhibit 4.13

 

 

EXHIBIT C to Written Circular for Topic

“HR Matters: Approval of the Management Board Compensation System

2020+” to the HR Committee & Supervisory Board of Fresenius Medical

Care Management AG in March 2020

 

Fresenius Medical Care Management AG

 

Management Board

Long Term Incentive Plan 2020

 

(MB LTIP 2020)

 

STRICTLY CONFIDENTIAL

PLAN CONDITIONS – MANAGEMENT BOARD LONG TERM INCENTIVE PLAN 2020

 

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TABLE OF CONTENTS

 

	
CLAUSE
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
PREAMBLE AND PURPOSE
    	
 
    	
3
    
	
2.
    	
ELIGIBILITY TO RECEIVE   PERFORMANCE SHARES AND THE POSSIBILITY OF BONUS SHARE AWARDS
    	
 
    	
4
    
	
3.
    	
PERFORMANCE SHARES
    	
 
    	
4
    
	
4.
    	
GRANT OF PERFORMANCE   SHARES
    	
 
    	
5
    
	
5.
    	
PERFORMANCE TARGETS
    	
 
    	
6
    
	
6.
    	
VESTING OF PERFORMANCE   SHARES
    	
 
    	
9
    
	
7.
    	
PERFORMANCE SHARES   PROCEEDS AS THE BASIS FOR THE BONUS SHARE AWARD
    	
 
    	
10
    
	
8.
    	
BONUS SHARE AWARDS
    	
 
    	
11
    
	
9.
    	
PERFORMANCE SHARES AND   BONUS SHARE AWARDS IN SPECIAL CASES
    	
 
    	
13
    
	
10.
    	
NO TRANSFERABILITY /   FORFEITURE
    	
 
    	
15
    
	
11.
    	
TAXES, CONTRIBUTIONS   AND OTHER EXPENSES
    	
 
    	
15
    
	
12.
    	
PROCEDURE, ENDING AND   ADJUSTMENT OF THE PLAN
    	
 
    	
16
    
	
13.
    	
LIABILITY RISKS,   EXCHANGE RISKS AND TAX RISKS
    	
 
    	
18
    
	
14.
    	
TERM OF THE PLAN
    	
 
    	
18
    
	
15.
    	
MISCELLANEOUS PROVISIONS
    	
 
    	
19
    
	
16.
    	
DEFINITIONS
    	
 
    	
19
    

 

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1.                                      Preamble and Purpose

 

1.1                               The supervisory board (the Supervisory Board) of Fresenius Medical Care Management AG (the General Partner), the general partner of Fresenius Medical Care AG & Co. KGaA (the Company), decided to establish the Fresenius Medical Care Management Board Long Term Incentive Plan 2020 (the Plan) to grant virtual performance-based shares of the Company (the Performance Shares) to the members of the management board (the Management Board) of the General Partner (each a Participant) as a long-term oriented compensation component for fiscal years 2020 to 2023, with the value of the Performance Shares (determined as provided in this Plan) to be paid to Participants in the form of actual and publicly traded shares of the Company (Bonus Shares) that shall be accessible to the Participants only after the expiry of a minimum holding period of one year (the Bonus Share Awards). In case the essential part of the managerial activities of a member of the Management Board is the management of an Affiliated Company, the Supervisory Board, in its reasonable discretion and in the individual case, is entitled to grant Performance Shares according to this Plan in whole or in part as compensation for such managerial activity.

 

1.2                               Subject to the following provisions, the Performance Shares may entitle the Participants to an allocation of a notional cash amount by the Company. The Company shall transfer a cash amount equal to such notional amount (after applicable payroll withholding taxes, contributions and other expenses in line with Clause 11) to a credit institution commissioned by the Company for the purpose of settling a Participant’s Bonus Share Award (the Settlement Institution), and the Settlement Institution shall upon request of the Company purchase Bonus Shares on the stock exchange or in the open market (Freiverkehr) for the Participant’s account as set out in clause 8.2. The Plan contains the requirements, terms and conditions as well as the procedures for the grant and settlement of Performance Shares as well as the purchase and administration of Bonus Shares (the Plan Conditions); the Plan has been adopted by the Supervisory Board.

 

1.3                               The purpose of this Plan is to align the interests of the Participants with the interests of the Company and its shareholders in encouraging the long-term and sustainable growth of the Company. This Plan offers the Participants a competitive and transparent compensation component which links the long-term benefits for the Participants with the long-term successful development of the Company.

 

1.4                               The Plan is a stock bonus plan and not a stock purchase plan, and the Company’s grant of a Bonus Share Award shall not constitute an “offer,” “offer to sell” or “sale” of Bonus Shares to Participants “for value” as such terms are used in the U.S. Securities Act of 1933, as amended (the “Securities Act”). Without limiting the generality of the foregoing, the Plan shall be maintained and administered in such manner that (i) Participants shall not individually bargain to pay or contribute cash or other tangible or definable

 

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consideration to the Plan, to the Company or to the Settlement Institution as a condition to, or in payment in whole or in part for, Bonus Shares, (ii) Participants shall have no authority or discretion to determine whether Performance Shares Proceeds are converted to Bonus Share Awards or to make any other investment decision relating to the grant of Bonus Share Awards or the acquisition of Bonus Shares, and (iii) Bonus Shares shall be delivered to recipients of Bonus Share Awards under the Plan at no direct cost to Participants and without imposition of any other terms or conditions that would require the registration of the Bonus Shares under the Securities Act.

 

1.5                               Capitalized terms used in this Plan but not defined in the body of the Plan are defined in Clause 16.

 

2.                                      Eligibility to receive Performance Shares and the possibility of Bonus Share Awards

 

2.1                               The eligibility of Participants to receive Performance Shares will be finally determined by the Supervisory Board, in each case – i.e. for each grant – in accordance with the terms of this Plan.

 

2.2                               This Plan does not establish and should not be read or construed so as to establish a legal right to receive Performance Shares as a basis for a Bonus Share Award or a legal right to the possibility of a Bonus Share Award. Neither the status or possible status as a Participant nor the fact that a Participant was granted Performance Shares, a Bonus Share Award, or both, in previous periods shall be interpreted as an obligation that Performance Shares and the possibility of a Bonus Share Award according to this Plan shall be granted or, if granted, shall continue to be granted or conceded in the future. In particular, granting Performance Shares and the possibility of a Bonus Share Award do not constitute an operational practice (betriebliche Übung) even if Performance Shares and Bonus Share Awards have been granted or made possible for several successive years.

 

3.                                      Performance Shares

 

3.1                               Performance Shares issued under the Plan may entitle a Participant in accordance with the Plan Conditions to an allocation of a notional cash amount by the Company or by any Affiliated Company as a basis for a Bonus Share Award.

 

3.2                               A Performance Share is a non-equity, cash-settled virtual compensation instrument. The Performance Shares will not be evidenced by certificates. The vesting of Performance Shares only forms the basis for the notional cash amount to be transferred by the Company to the Settlement Institution to settle a Bonus Share Award made to the Participant.

 

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4.                                      Grant of Performance Shares

 

4.1                               Subject to final determination by the Supervisory Board, the Participants will be granted Performance Shares within a time period of four years starting on 1 January 2020. For fiscal year 2020, Performance Share grants may be made with effect as per 27 July 2020 and for fiscal year 2021 and consecutive years, Performance Share grants may be made with effect as per 1 March (each a Grant Date). If a Participant’s initial service agreement with the General Partner comes into effect after the Grant Date in any relevant fiscal year, the respective Grant Date shall be the effective date of the service agreement of such Participant. The Supervisory Board may, however, resolve to deviate from each such Grant Date in case of objective grounds (sachliche Gründe).

 

4.2                               Each Participant will be awarded an individual grant value in the currency in which the Participant receives his or her base salary (the Grant Currency) from the General Partner at the time when the Grant Value is determined by the General Partner (the Grant Value). The Grant Value shall be an amount equal to 135% of a Participant’s Total Fixed Annual Remuneration of the fiscal year for which the relevant Performance Shares shall be granted. In case of an increase or decrease, as the case may be, of the Total Fixed Annual Remuneration during a fiscal year and after a relevant Grant Date, the Grant Value for the respective financial year shall be retroactively increased or decreased, as the case may be, with effect as per the Grant Date to ensure that the Grant Value for each fiscal year shall amount to 135% of a Participant’s Total Fixed Annual Remuneration, as may be amended, for such fiscal year (including any relevant increase or decrease, as the case may be). The Supervisory Board may, however, resolve to deviate from such Grant Value in case of objective grounds (sachliche Gründe). To determine the number of Performance Shares to be granted to the respective Participant (the Number of Granted Performance Shares) the Grant Value denominated in the Grant Currency will be converted into Euro based on the average Foreign Currency Exchange Rates over a period of 30 (thirty) calendar days prior to each Grant Date (the FX Rates at Grant Date) and divided by the value per Performance Share at Grant Date. The value per Performance Share will be determined in accordance with IFRS 2 on each respective Grant Date, denominated in Euro, and considering the average Stock Exchange Price over a period of 30 (thirty) calendar days prior to such Grant Date. For the avoidance of doubt, the Number of Granted Performance Shares will be rounded up or down to the next closest integer number (e.g. 124.54 will result in 125). The amount of the individual Grant Value shall be determined on the basis of the Participant’s individual performance and the Participant’s responsibilities within FME Group. This determination will be made for each grant at the Supervisory Board’s discretion.

 

4.3                               The grant of Performance Shares will be made without any payment by the Participant.

 

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4.4                               The grant shall be communicated to the Participants in text form, i.e. by mail, email or via an online platform. No grant shall be effective unless and until it is communicated to the Participant.

 

5.                                      Performance Targets

 

5.1                               Based on the degree of attainment of three pre-determined financial targets (the Performance Targets) the number of Performance Shares to Vest can vary from 0% to 200% of the Number of Granted Performance Shares. The three Performance Targets are:

 

(a)                                 Revenue Growth

(b)                                 Net Income Growth and

(c)                                  Return on Invested Capital.

 

5.2                               The achievement of the respective Performance Targets in relation to each grant of Performance Shares is measured over a performance period of three years starting from the beginning of the calendar year in which the respective grant was made (the Performance Period) and is determined as follows:

 

(a)                                 Revenue Growth shall mean the annual growth of revenues of the Company as determined in accordance with IFRS using the consolidated, reported and audited figures in Euro of the financial statements prepared in accordance with IFRS. The growth rates are determined at Constant Currency.

 

For Revenue Growth, a target achievement of 100% is reached at an average annual Revenue Growth throughout the Performance Period of 6%. For Revenue Growth between 1% to 6% and 6% to 11% the target achievement is linearly interpolated — see Figure 1. The target achievement for this Performance Target is capped at 200% for each year of the Performance Period.

 

	
 
    	
 
    	
Growth
    	
 
    	
Achievement
    	
 
    	
Weight
    	
 
    
	
Performance   Target 1:
    	
 
    	
<   1%
    	
 
    	
0
    	
%
    	
 
    	
 
    
	
Revenue   Growth
    	
 
    	
6%
    	
 
    	
100
    	
%
    	
1/3
    	
 
    
	
 
    	
 
    	
>   11%
    	
 
    	
200
    	
%
    	
 
    	
 
    

 

Figure 1 — Revenue Growth

 

In case of changes to IFRS accounting principles in the first year in which such changes become effective the relevant figures of the respective prior year as restated according to such changes should form the basis for the determination of the growth in revenues. If such restatements will not be made, pro forma figures for the relevant year in which such changes become effective for the first

 

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time shall be calculated under the old regime with reasonable effort to determine the Revenue Growth.

 

(b)                                 Net Income Growth shall mean the annual growth of net income attributable to the shareholders of the Company determined in accordance with IFRS using the consolidated, reported and audited figures in Euro of the financial statements prepared in accordance with IFRS. The growth rates are determined at Constant Currency.

 

For Net Income Growth, a target achievement of 100% is reached at an average annual Net Income Growth throughout the Performance Period of 5%. For a Net Income Growth between 0% to 5% and 5% to 10% the target achievement is linearly interpolated — see Figure 2. The target achievement for this Performance Target is capped at 200% for each year of the Performance Period.

 

	
 
    	
 
    	
Growth
    	
 
    	
Achievement
    	
 
    	
Weight
    	
 
    
	
Performance   Target 2:
    	
 
    	
<   0%
    	
 
    	
0
    	
%
    	
 
    	
 
    
	
Net   Income Growth
    	
 
    	
5%
    	
 
    	
100
    	
%
    	
1/3
    	
 
    
	
 
    	
 
    	
>   10%
    	
 
    	
200
    	
%
    	
 
    	
 
    

 

Figure 2 - Net Income Growth

 

In case of changes to IFRS accounting principles in the year in which such policies become effective the relevant restated figures of the prior year should form the basis for the determination of the Net Income Growth. If such restatements will not be made, pro forma figures for the relevant year in which such changes become effective for the first time shall be calculated under the old regime with reasonable effort to determine the Net Income Growth.

 

(c)                                  Return on Invested Capital (ROIC) shall mean the ROIC level based on the Company’s consolidated, reported and audited financial statements determined in accordance with IFRS.

 

The ROIC is measured against a target ROIC (the Target ROIC). The Target ROIC corresponds to the ROIC level at which a target achievement of 100% is reached. The Target ROIC is 6.0% for each year of the Performance Period. For a ROIC level between 5.5% to 6.0% and 6.0% to 6.5% the target achievement is linearly interpolated — see Figure 3. The target achievement for this Performance Target is capped at 200% for each year of the Performance Period.

 

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Level
    	
 
    	
Achievement
    	
 
    	
Weight
    	
 
    
	
Performance   Target 3:
    	
 
    	
<5.5%
    	
 
    	
0
    	
%
    	
 
    	
 
    
	
ROIC   level against Target ROIC
    	
 
    	
6.0%
    	
 
    	
100
    	
%
    	
1/3
    	
 
    
	
 
    	
 
    	
>6.5%
    	
 
    	
200
    	
%
    	
 
    	
 
    

 

Figure 3 - ROIC level against the Target ROIC

 

In case of changes to IFRS accounting principles first effective on or after 1 January of the respective year of grant, the ROIC determining the respective ROIC target achievement for the relevant year in which such changes become effective for the first time as well as for the relevant consecutive years of that grant shall be calculated under the old regime with reasonable effort to determine the ROIC level.

 

5.3                               The achievement of the Performance Targets is determined annually, as described in Clause 5.2, and for each year of the Performance Period and as soon as the Company’s audited figures for such respective year are available (the Yearly Target Achievement); for this purpose, the three Performance Targets are weighted equally (i.e. 1/3, 1/3, 1/3).

 

Example:

 

 

5.4                               The overall target achievement (the Overall Target Achievement) for each respective grant of Performance Shares is calculated by taking the average of the Yearly Target Achievements of the respective Performance Period; for this purpose, each Yearly Target Achievement is weighted equally (i.e. 1/3, 1/3, 1/3).

 

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Example:

 

 

5.5                               The total number of Performance Shares attributable to each Participant to vest (the Number of Performance Shares to Vest) is calculated by multiplying the Number of Granted Performance Shares with the Overall Target Achievement.

 

Example:

 

 

5.6                               The individual figures for each Performance Target shall be rounded using commercial rounding to the second decimal place of the percentage figure (e.g. 8.1523% will result in 8.15%). The Yearly Target Achievement and the Overall Target Achievement shall be rounded using commercial rounding to the next integer in percentage points (e.g. 129.93% will result in 130%). Similarly, the number of Performance Shares to Vest shall be commercially rounded to the next integer number (e.g. 162.5 will result in 163).

 

6.                                      Vesting of Performance Shares

 

6.1                               Vesting Date

 

Subject to the terms of this Plan, the Performance Shares will vest on the date of the third anniversary of the respective Grant Date (the Vesting Date). Exceptions or modifications may apply in special cases described in Clause 9.

 

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6.2                               Additional Vesting Conditions

 

Subject to the terms of this Plan, the Performance Shares furthermore will vest only on the conditions and insofar as

 

(a)                                 the Participant continuously has been in a service relationship with FME Group from the Grant Date to the Vesting Date (the Service Condition). In case the Service Condition has not been fulfilled, the respective Performance Shares are forfeited on the date on which the service relationship of the Participant with FME Group ends. Exceptions or modifications may apply in special cases described in Clause 9 hereinafter; and

 

(b)                                 in relation to or in connection with his or her service relationship with FME Group, the Participant has not committed any violations of legal provisions or other rules, e.g. internal guidelines of FME Group (the Compliance Violations). If, following a corresponding investigation, Compliance Violations have been determined conclusively with respect to a Participant, the Supervisory Board is entitled to declare within its reasonable discretion and in due consideration particularly of the nature and the severity of the Compliance Violation the forfeiture, in whole or in part, of the Performance Shares granted to such Participant. The Participant shall be informed of the extent of the forfeited Performance Shares and of the reasons for the corresponding decision in text form, i.e. by mail, email or via an online platform.

 

7.                                      Performance Shares Proceeds as the basis for the Bonus Share Award

 

7.1                               Performance Shares Proceeds

 

Performance Shares Proceeds correspond to the average Stock Exchange Price in cash in the period of 30 (thirty) calendar days prior to the Vesting Date (the Performance Shares Proceeds). Subject to deviating special provisions of this Plan set forth in Clause 9, Performance Shares Proceeds are not paid out to the Participant in cash but only form the basis for the Bonus Share Award in accordance with Clause 8 hereinafter. Performance Shares Proceeds are determined in the currency in which the Participant receives his or her base salary from the General Partner in the month of the Vesting Date (the Settlement Currency). For this purpose, the respective FX Rates at Grant Date shall be applied. The purpose of applying the FX Rates at Grant Date is to mitigate exposure to Participant’s grants arising from exchange rate fluctuations between the Grant Date and the Vesting Date. In cases of Extraordinary Developments, such as hyperinflation, the Supervisory Board is entitled to adjust the FX Rates at Grant Date to the benefit of the Participants.

 

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7.2                               Total Cap

 

The amount of Performance Shares Proceeds that form the basis for the Bonus Share Award of a Participant is capped in total at an amount equaling 400% of the Grant Value received by the Participant; any exceeding amounts of Performance Shares Proceeds will be forfeited without substitution. Clauses 11, 12.2 and 12.3 remain unaffected.

 

7.3                               Maximum Compensation

 

The maximum compensation (the Maximum Compensation) is the maximum amount of all fixed and variable compensation components of a Participant as set out in the Participant’s service agreement and is determined by the Supervisory Board in accordance with section 87a para. 1 sent. 2 No. 1 of the German Stock Corporation Act. If the Maximum Compensation is reached or exceeded, the Supervisory Board may, at its discretion, reduce the amount of Performance Shares Proceeds for the respective year below the cap of 400% of the Grant Value received by the Participant to meet the Maximum Compensation for a respective year.

 

Example for a Participant to be paid in Euro:

 

 

8.                                      Bonus Share Awards

 

8.1                               Performance Shares Proceeds after taxes and contributions, if any, form the basis for the Bonus Share Award. Performance Shares Proceeds are granted to the Participant in such manner that the Performance Shares Proceeds are transferred by the Company to the Settlement Institution for the acquisition of Bonus Shares in accordance with the provisions in Clause 8.2 to 8.4 hereinafter.

 

8.2                               For the purpose of transferring the Performance Shares Proceeds into a Bonus Share Award, the Company shall determine the net amount of the Performance Shares Proceeds (Performance Shares Proceeds after applicable payroll withholding taxes, contributions and other expenses in line with Clause 11) attributable to a Participant’s Performance Shares. The Company shall transfer the net amount of the Performance Shares Proceeds

 

11

 

denominated in Euro to the Settlement Institution within (10) ten stock exchange trading days following the Vesting Date and instruct the Settlement Institution on the basis of an agreement between the Settlement Institution and the Company to purchase shares of the Company for the account of the Participant, i.e. the Participant becomes beneficial owner of the Bonus Shares. The Settlement Institution shall, after having received the Performance Shares Proceeds from the Company, purchase shares of the Company for the settlement of Bonus Share Awards on the stock exchange or in open market (Freiverkehr) transactions over a period of (10) ten stock exchange trading days starting on the 11th stock exchange trading day following the Vesting Date (the Purchase Period). To the extent practicably and legally possible, the Settlement Institution shall aim to realize the Volume Weighted Average Prices (VWAP) of the Company’s share listed on the electronic XETRA trading system of Deutsche Börse AG in Frankfurt/Main or a comparable successor system over the Purchase Period. The Settlement Institution shall not purchase any shares from the Company or from any Affiliated Company. The number of shares to be purchased for the account of the Participant is determined by the net amount of the Performance Shares Proceeds. The Settlement Institution must use the entire net amount of the Performance Shares Proceeds for the purchase of shares of the Company. If this results in a fractional amount of the net amount of the Performance Shares Proceeds insufficient to purchase one additional full share of the Company, this fractional amount shall be carried forward to the next cycle of purchasing Bonus Shares. Any dividends payable on the purchased Bonus Shares in accordance with this Clause 8.2 shall be transferred to a separate account specified by the Participant.

 

8.3                               The Participant shall be informed of the purchase of the Bonus Shares and their number in text form, i.e. by mail, email or via an online platform.

 

8.4                               By means of a corresponding agreement with the Settlement Institution, the Company shall ensure that the Participant cannot dispose of the Bonus Shares for a period of one year following the deposition of the Bonus Shares into the custody account, where they are held for the account of the Participant (the Blocking Period). For the avoidance of doubt, all other shareholders’ rights deriving from the Bonus Shares, in particular the Participant’s right to vote at a general meeting of the Company and the Participant’s right to dividends, shall remain unaffected by the Blocking Period. Following the expiration of the Blocking Period, the Settlement Institution shall at the discretion of the Participant either (i) transfer the Bonus Shares to an account specified by the Participant or (ii) sell the Bonus Shares and transfer (after deduction of taxes, if any) the proceeds of such sale to an account specified by the Participant. Any remaining fractional amounts following the last purchase of Bonus Shares under this Plan shall also be transferred to such account.

 

8.5                               The Participant shall provide the Company or, as the case may be, the Settlement Institution with the information necessary for the processing and the execution of the Bonus Share Award and shall perform all necessary acts of cooperation. If the Bonus Share Award cannot be made because the Participant has culpably (schuldhaft) failed to

 

12

 

provide the necessary information or perform the necessary acts of cooperation, the Supervisory Board shall be entitled to forfeit all or part of the Performance Shares Proceeds.

 

8.6                               The fees of the Settlement Institution and all costs in connection with the facilitation of the Bonus Share Award shall be borne by the Company (including, for the avoidance of doubt, any transaction costs incurred for the acquisition of the Participant’s Bonus Shares by the Settlement Institution as well as any costs for setting up and maintaining the Participant’s share deposit account).

 

9.                                      Performance Shares and Bonus Share Awards in Special Cases

 

9.1                               Retirement

 

For the purposes of this Plan, Retirement is defined as a case in which the Participant has reached the age of 63, is no longer a member of the Management Board, his or her service relationship with the General Partner has definitively ended without having been dismissed and the Participant has not and will not engage in any further service or employment relationship with the Company, an Affiliated Company or any other company (the Retirement). In case of Retirement, the Service Condition described in Clause 6.2(a) shall be deemed to be met and the Participant’s entitlement to the Performance Shares shall vest on the respective Vesting Date subject to the fulfillment of the additional vesting condition pursuant to Clause 6.2(b). For Performance Shares vesting in the year following the year of Retirement as well as in subsequent years, Performance Shares Proceeds shall be paid out to the Participant in cash without undue delay following the Vesting Date, and in all cases shall be paid prior to 15 March of the calendar year following the Vesting Date. In these cases and for these Performance Shares a transformation of the Performance Shares Proceeds into a Bonus Share Award in accordance with Clause 8 is no longer necessary.

 

9.2                               Occupational Disability

 

Without prejudice to the scope of Clause 9.1, Clause 9.1 sentences 2 to 4 shall apply mutatis mutandis in the case of Occupational Disability, provided that (i) the Participant provides adequate proof of his or her Occupational Disability to the General Partner within three months following the date of the occurrence of the Occupational Disability and (ii) the Participant is no longer a member of the Management Board and the Participant’s service relationship with the General Partner is terminated due to the Occupational Disability. If no such proof is provided within this period of time, the Supervisory Board may declare forfeiture of the Performance Shares that have not yet

 

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vested.

 

9.3                               Ordinary Termination / Cancellation of Service Relationship by Agreement

 

Except as otherwise provided herein, if a Participant’s service relationship with the General Partner has ended by termination or agreement, all Performance Shares not vested on the effective date of the termination or the agreement are forfeited.

 

9.4                               Death

 

In case of death of a Participant, the Service Condition described in Clause 6.2(a) shall be deemed to be met and the Participant’s entitlement to the Performance Shares shall vest on the respective Vesting Date subject to the fulfillment of the additional vesting condition pursuant to Clause 6.2(b). The Heirs of the Participant are entitled to a cash payout of the Performance Shares Proceeds without undue delay following the Vesting Date, and in any case prior to 15 March of the calendar year following the Vesting Date, if they give evidence of their entitlement to the Company or an office named by the Company within three months after the death of the Participant; otherwise, the Supervisory Board may declare the Performance Shares to be forfeited. For the avoidance of doubt, the Performance Shares Proceeds will not be transferred into Bonus Shares pursuant to Clause 8. Clause 9.5 (Termination for Cause) remains unaffected.

 

9.5                               Termination for Cause

 

Notwithstanding other cases in which Performance Shares are forfeited or may be declared forfeited in accordance with the provisions of this Plan, all Performance Shares shall be forfeited if the Participant’s service agreement was terminated by the General Partner for good cause, or if at the time of leaving, there were grounds which would have entitled the General Partner to terminate the service agreement for good cause.

 

9.6                               Engagement with Fresenius Group

 

The Performance Shares shall not be affected by the transfer of a Participant’s service agreement from the Company or from an Affiliated Company to Fresenius SE & Co. KGaA or to an affiliated company of Fresenius SE & Co. KGaA within the meaning of sections 15 et seqq. of the German Stock Corporation Act (Aktiengesetz), including Fresenius Management SE.

 

9.7                               Effect of Change in Status as General Partner

 

If the General Partner ceases to exercise the function of the Company’s general partner, all Performance Shares granted to a Participant shall be forfeited.

 

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9.8                               Impact on any Blocking Period for Bonus Shares

 

Any Blocking Period for Bonus Shares of a Participant shall remain unaffected in the special cases pursuant to Clauses 9.1 to 9.7. For the avoidance of doubt, such Blocking Period shall also apply vis-a-vis a Participant’s Heirs.

 

9.9                               Exceptional Cases in special circumstances

 

In exceptional cases in special circumstances, the Supervisory Board can waive or amend the provisions of this Clause 9, taking duly into account the Company’s interests.

 

10.          No Transferability / Forfeiture

 

10.1                        Performance Shares granted under this Plan and Performance Shares inherited according to Clause 9.4 are not transferable. Any other purported transfer, assignment or disposal of Performance Shares, such as the granting of sub-participations therein, pledging, granting usufruct rights (Nießbrauch) or the formation of a trust, shall be void and invalid. The same applies to legal transactions which are economically equal to a transfer or assignment.

 

10.2        Clause 10.1 shall apply mutatis mutandis to Bonus Shares subject to a Blocking Period.

 

11.          Taxes, Contributions and other Expenses

 

11.1        General

 

Performance Shares Proceeds are considered gross income. All taxes or contributions incurred in connection with the Plan shall be borne by the Participant or Participant’s successors in title, if legally permitted and subject to the reservation of relevant internal tax settlement guidelines and/or provisions agreed with the Participant. Any legal obligation of the General Partner, the Company or an Affiliated Company to pay income tax and other taxes or contributions on behalf of the Participant remains unaffected. The General Partner, the Company or Affiliated Companies are entitled for this purpose to deduct the necessary amounts from the remuneration of the Participant until the tax and contributions are completely repaid or to require the Participant to pay or provide for payment of at least the minimum amount of any taxes and contributions that the General Partner, the Company or an Affiliated Company may be required to withhold with respect to the Plan. The General Partner can make the payout under the Plan to the Participant conditional, inter alia, on evidence of payment of tax and/or contributions, or that adequate security is provided by the Participant. In this respect, the provisions of Section 38 (4) Income Tax Act (Einkommensteuergesetz) are referred to. The Participant shall be responsible for his or her own tax advice prior to his or her participation in the Plan. The General Partner, the Company or any Affiliated Company make no assurances and

 

15

 

provide no guarantees concerning the existence or otherwise of any tax obligations. The Participant will receive from the General Partner or Company a certificate as to the financial benefit received.

 

11.2                        Foreign Participants in this Plan

 

If the Participant is not liable for tax in Germany, the above provisions shall apply according to the applicable foreign tax law and/or double taxation agreements.

 

11.3                        Dividends and Sale Proceeds

 

Taxes, social security and other charges connected to dividends and sale proceeds shall be borne exclusively by the Plan Participant or Participant’s successor in title, if legally permitted.

 

11.4                        Section 162(m) of the U.S. Internal Revenue Code

 

If the Supervisory Board, in its sole discretion, determines at the request of the Management Board that the limitations on deductions under section 162(m) of the U.S. Internal Revenue Code (the IRC) may apply to Performance Shares granted to Participants hereunder, the Supervisory Board shall be entitled to decide upon the grant of Performance Shares made to such Participants.

 

12.                               Procedure, Ending and Adjustment of the Plan

 

12.1                        Unless otherwise provided in this Plan, the Plan shall be interpreted, waived, adjusted or otherwise administered, and may be amended or modified by the Supervisory Board and all Performance Shares granted to the Participants will be approved by the Supervisory Board. Adjustments to the Plan may also be made with regard to Performance Shares which have already been granted, provided that this does not affect the value of the Performance Shares or that the Participant is fully compensated for any financial loss suffered. For the avoidance of doubt, any such adjustments with regard to Performance Shares which have already been granted should not result in a retroactive reduction or lowering of relevant performance target levels pursuant to this Plan.

 

12.2                        In case of Extraordinary Developments, the Supervisory Board is entitled to cap grants of Performance Shares and/or Performance Shares Proceeds to be paid to the Participants under the Plan.

 

12.3                        Furthermore, the Supervisory Board is entitled to determine in certain cases, based on its respective reasonable discretion, that any extraordinary commercial, tax or similar impacts that may occur during any relevant Performance Period affecting the level of Yearly Target Achievement and/or Overall Target Achievement in relation to individual grants shall in full or in part be disregarded for purposes of determining Yearly Target

 

16

 

Achievement and/or Overall Target Achievement pursuant to this Plan in relation to such grants.

 

12.4                        If the Company is required to prepare an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the U.S. federal securities laws, the Company shall be entitled, without prejudice to Clause 12.5 hereafter, to recover to the full extent required under then current and applicable law and or applicable stock exchange listing rules from the Participants who received any bonus or other incentive-based compensation (including, without limitation, Performance Shares or a Bonus Share Award) based on the erroneous data during the period or periods defined in such law that precede the date the Company is required to prepare the accounting restatement, (i) the amount of such bonus or other incentive-based compensation in excess of what would have been paid to the executive officer under the accounting restatement and (ii) such other amounts, if any, as may be recoverable by applicable law.

 

12.5                        If the Participants have committed Compliance Violations which have occurred and/or have been determined conclusively only after the Vesting Date, the Supervisory Board is entitled within its reasonable discretion to claim back the Performance Shares Proceeds, in whole or in part, from the Participant in the Company’s name, provided that and insofar as the Company makes the repayment claim in writing, stating the reasons for such claim before the expiry of a period of three years starting on the day on which the Performance Shares Proceeds have been transferred into a Bonus Share Award. For the avoidance of doubt, the Company’s rights pursuant to this Clause 12.5 shall not prejudice any other rights the Company may have against the Participant in relation to any Compliance Violations under or in connection with his or her service relationship with FME Group.

 

12.6                        In general, benefit payments remain subject to a substantial risk of forfeiture until they are paid under Clause 8.1, due to the Service Condition imposed under Clause 6.2(a). In such cases, there is no “deferred compensation” and the constraints imposed by U.S. Internal Revenue Code Section 409A do not apply. In the case of payments due to Retirement (Clause 9.1), Occupational Disability (Clause 9.2) and death (Clause 9.4), there is no “deferred compensation” because the benefit is paid within the short-term deferral period described in Treasury Regulation Section 1.409A-1(b)(4). However, when a Participant attains age 63 the substantial risk of forfeiture lapses (due to the Retirement provision of Clause 9.1), and Plan benefits may then constitute “deferred compensation.” In those cases, the Plan complies with Section 409A by paying benefits on the fixed date specified in Clause 8.2, thereby complying with Treasury Regulation Section 1.409A-3(a)(4).

 

The administration of any amounts payable hereunder that constitute “deferred compensation” within the meaning of Section 409A will comply with Section 409A, and this Plan shall be administered, interpreted and construed in a manner intended to avoid the imposition of additional taxes, penalties or interest under Section 409A. The

 

17

 

Supervisory Board may exercise its right to adjust the Plan pursuant to Clause 12.1 above in order to preserve the intended tax consequences of the Performance Shares, and avoid the imposition of any tax under Section 409A. Notwithstanding the foregoing, the Participant shall be solely responsible and liable for the satisfaction of all taxes, penalties and interest that may be imposed on or for the account of the Participant or his or her beneficiaries in connection with this Plan (including any taxes, penalties and interest under Section 409A), and neither the Company nor the General Partner shall have any obligation to indemnify or otherwise hold the Participant (or any beneficiary) harmless from any or all of such taxes, penalties or interest.

 

In the event that any payment to the Participant is deemed to be an instalment payment of nonqualified deferred compensation under Section 409A, each individual instalment payment shall be deemed to be a separate “payment” within the meaning of Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

Other than by taking actions specifically permitted under this Plan, the Participant shall not have the right, directly or indirectly, to designate the taxable year during which a payment shall be made under this Plan.

 

13.                               Liability Risks, Exchange Risks and Tax Risks

 

13.1                        The liability of the Company and the General Partner or their respective legal representatives, employees and agents for simple negligence and consequential loss and loss of profit is excluded.

 

13.2                        The Company and the General Partner grant no warranty for the general market development and price of the shares of the Company after granting Performance Shares or Bonus Shares or for any other point or period in time. Therefore, the acceptance of Performance Shares as well as the receipt of a Bonus Share Award is at the sole risk of each Participant.

 

13.3                        The Company and the General Partner grant no warranty that the tax and contributions deducted in accordance with Clause 11 (Taxes, Contributions and other Expenses) or other tax and contributions payable by the Participants will be charged only on the Performance Shares Proceeds. Depending on a Participant’s personal circumstances, double taxation might occur if the Plan is subject to taxation in several countries. The Participants are advised to obtain advice on their personal tax situation.

 

14.                               Term of the Plan

 

This Plan will be effective as of 1 January 2020 and shall apply to grants of Performance Shares in financial years 2020, 2021, 2022 and 2023 and the corresponding Bonus Share Awards until the end of the respective Blocking Period. The Plan will terminate upon the

 

18

 

end of the Blocking Period for Bonus Share Awards executed as a result of the grant of Performance Shares in fiscal year 2023; in case no grants of Performance Shares were made in fiscal year 2023, the Plan expires at the end of the Blocking Period for Bonus Share Awards executed as a result of the last grant of Performance Shares under this Plan. Clauses 12.1 and 12.4 remain unaffected.

 

15.                               Miscellaneous Provisions

 

15.1                        This Plan is subject to German law without regard to the rules on conflict of laws.

 

15.2                        No provisions contained in this Plan (or in any documents referring to this Plan) transfer to a Participant or possible Participant any right to request the continuation of its service relationship with the General Partner. No service agreement can be deducted from this Plan (or from any documents referring to this Plan), nor shall it have any effect on the right of the Company or the General Partner to change compensation or other benefits of such Participant or to terminate its service relationship with or without notice. This applies subject to the provision that this Plan or any document connected therewith will adversely influence any independent contractual right of these persons.

 

15.3                        If any provision of this Plan is invalid or unenforceable, the validity of the remaining provisions of the Plan shall not be affected. The same applies if it is ascertained that the Plan is subject to an omission. In these cases, the invalid or unenforceable provision shall be substituted, or an omission repaired by such provision which most closely corresponds to the intended purpose of this Plan.

 

15.4                        References and headings attributed to individual Clauses and Sub-clauses of this Plan are solely for the purpose of easier reference. These headings are in no case significant or relevant for the interpretation of the Plan.

 

15.5                        No provision in this Plan leads to or infers a presumption that the authority of the Supervisory Board to issue Performance Shares or approve other compensation connected or not connected to shares granted under any other share based long-term incentive program or any other authority may in any way be restricted.

 

16.                               Definitions

 

16.1                        Affiliated Company means any company within FME Group with the exception of the Company.

 

16.2                        Blocking Period is defined in Clause 8.4.

 

16.3                        Bonus Shares is defined in Clause 1.1

 

16.4                        Bonus Share Award is defined in Clause 1.1

 

19

 

16.5                        Company is defined in Clause 1.1.

 

16.6                        Compliance Violations is defined in Clause 6.2(b).

 

16.7                        Constant Currency shall mean that for the purpose of this Plan the calculation of the figures stated under IFRS denominated in Euro shall be adjusted for currency effects. For the ascertainment of the currency adjustment all line items of the profit and loss statements of the companies that are included in the consolidated financial statements and which have a functional currency other than the reporting currency (Euro) of the group are translated with the average exchange rates of the year of the consolidated financial statements that are the basis for the comparison.

 

16.8                        Occupational Disability means that a Participant is either (a) 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, or (b) 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, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer. For purposes of this Plan, a Participant shall be deemed disabled if determined to be totally disabled by the U.S. Social Security Administration. A Participant shall also be deemed disabled if determined to be disabled in accordance with the applicable disability insurance program of such Participant’s Employer; provided that the definition of “disability” applied under such disability insurance program complies with the requirements of this Section. This definition applies solely for determinations with respect to US Taxpayers under Clause 9.2.

 

16.9                        Extraordinary Developments shall mean any kind of extraordinary scenarios in which the price of the Company’s shares would have lost any reasonably arguable correlation to the Company’s intrinsic enterprise value; however, no such Extraordinary Development shall be applicable in cases in which the price of Company’s shares rises (even substantially) as a result of the performance of the Participants.

 

16.10                 FME Group stands for the group of entities including the General Partner, the Company and its affiliated companies within the meaning of sections 15 et seqq. of the German Stock Corporation Act, with the exception of Fresenius SE & Co. KGaA and the companies affiliated with Fresenius SE & Co. KGaA within the meaning of sections 15 et seqq. of the German Stock Corporation Act in any manner other than through the Company.

 

16.11                 Foreign Currency Exchange Rates means the nominal prices of the foreign exchange rates as published by the European Central Bank. If no prices are published by the

 

20

 

European Central Bank, the Supervisory Board is entitled to agree on a suitable other form for obtaining the prices.

 

16.12                 FX Rates at Grant Date is defined in Clause 4.2.

 

16.13                 General Partner is defined in Clause 1.1.

 

16.14                 Grant Currency is defined in Clause 4.2.

 

16.15                 Grant Date is defined in Clause 4.1.

 

16.16                 Grant Value is defined in Clause 4.2.

 

16.17                 Heir means the person, the persons, the trust or trusts, which are nominated by a Participant or, if no such nomination is made, is or are entitled by will or the respective applicable law in the event of the death of a Participant, to receive the benefit of the Performance Shares under this Plan. The concept “heir” therefore also includes the executor appointed by will or the administrator appointed by the court, if no heir is named and is in a position to act under the given circumstances.

 

16.18                 IFRS means the “International Financial Reporting Standards” which are issued by the International Accounting Standards Board, as amended.

 

16.19                 IRC means the U.S. Internal Revenue Code of 1986, as amended from time to time.

 

16.20                 Management Board is defined in Clause 1.1.

 

16.21                 Maximum Compensation is defined in Clause 7.3.

 

16.22                 Net Income Growth is defined in Clause 5.10.

 

16.23                 Number of Granted Performance Shares is defined in Clause 4.2.

 

16.24                 Number of Performance Shares to Vest is defined in Clause 5.5.

 

16.25                 Overall Target Achievement is defined in Clause 5.4.

 

16.26                 Participant is defined in Clause 1.1.

 

16.27                 Performance Period is defined in Clause 5.1.

 

16.28                 Performance Shares is defined in Clause 1.1.

 

16.29                 Performance Shares Proceeds is defined in Clause 7.1.

 

16.30                 Performance Targets is defined in Clause 5.1.

 

21

 

16.31                 Plan is defined in Clause 1.1.

 

16.32                 Plan Conditions is defined in Clause 1.2.

 

16.33                 Purchase Period is defined in Clause 8.2.

 

16.34                 Retirement is defined in Clause 9.1.

 

16.35                 Return on Invested Capital (ROIC) is defined in Clause 5.1(c).

 

16.36                 Revenue Growth is defined in Clause 5.1(a).

 

16.37                 Securities Act is defined in Clause 1.4.

 

16.38                 Service Condition is defined in Clause 6.2(a).

 

16.39                 Settlement Currency is defined in Clause 7.1.

 

16.40                 Settlement Institution is defined in Clause 1.2.

 

16.41                 Stock Exchange Price means the closing price (Schlusskurs) of the Company’s shares in the electronic XETRA trading system of Deutsche Börse AG in Frankfurt/Main or a comparable successor system denominated in Euro. If no closing price is set in the XETRA trading system, the Supervisory Board is entitled to agree on a suitable means of replacing the closing price.

 

16.42                 Supervisory Board is defined in Clause 1.1.

 

16.43                 Target ROIC is defined in Clause 5.1(c).

 

16.44                 Total Fixed Annual Remuneration shall have the meaning as defined in each Participant’s service agreement.

 

16.45                 Treasury Regulations means the income tax regulations, including temporary and proposed regulations, promulgated under the U.S. Internal Revenue Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

 

16.46                 Vesting Date is defined in Clause 6.1.

 

16.47                 Yearly Target Achievement is defined in Clause 5.3.

 

22Exhibit 4.14

 

Lease Agreement

 

for Office Facilities

 

This Agreement is entered into between

 

(1)                                 Fresenius SE & Co. KGaA,

 

with business address at Else-Kröner-Straße 1, 61352 Bad Homburg v. d. Höhe

 

and registered with the commercial register of the local court of Bad Homburg v. d. Höhe under HRB 11852

 

— the “Landlord” —

 

and

 

(2)                                 Fresenius Medical Care AG & Co. KGaA,

 

with business address at Else-Kröner-Straße 1, 61352 Bad Homburg v. d. Höhe

 

and registered with the commercial register of the local court of Bad Homburg v. d. Höhe under HRB 4019

 

— the “Tenant A” —

 

(3)                                 Fresenius Medical Care Deutschland GmbH,

 

with business address at Else-Kröner-Straße 1, 61352 Bad Homburg v. d. Höhe

 

and registered with the commercial register of the local court of Bad Homburg v. d. Höhe under HRB 5748

 

— the “Tenant B” —

 

— the “Tenant A” and the “Tenant B” jointly the “Tenant” —

 

— the Landlord and the Tenant each a “Party” and together the “Parties” —

 

 

Recitals

 

(A)                               The Landlord is the owner of the real property located at the postal address of Else-Kröner-Straße 1 in 61352 Bad Homburg v. d. Höhe (the “Property”).

 

(B)                               The Tenant already currently leases parts of the Property from the Landlord under a lease agreement dated 30 September 1996, as amended from time to time, (the “Existing Lease Agreement”).

 

(C)                               The tenancy under the Existing Lease Agreement expired on 31 December 2016.

 

(D)                               The Parties do not wish to further amend the Existing Lease Agreement, but replace it by a new and restated lease agreement.

 

The Parties therefore conclude this lease agreement (the “Lease Agreement”) as follows:

 

1                                         Leased Premises

 

1.1                               This Lease Agreement relates to the office space located on the Property as coloured in red in the layout plan attached hereto as Annex 1.1 (the “Leased Office Space”). Beyond these areas the Tenant is entitled to use — together with the Landlord and other tenants and in close coordination with the Landlord — the common areas of the Buildings (together with the Leased Office Space referred to as the “Leased Space”).

 

The Tenant currently already occupies the Leased Space under the Existing Lease Agreement. Accordingly, both Parties are fully familiar with the size and shape of the Leased Space as depicted in Annex 1.1 and accept this as the agreed size and shape and the Tenant accepts the current condition of the Leased Space as the contractually owed condition (vertragsgemäß).

 

The buildings on the Property, in which the Leased Space is located (the “Buildings”) are not only used by the Tenant but also by the Landlord and other affiliated entities of the Landlord according to Sec. 15 seq. German Stock Corporation Act (Aktiengesetz — “AktG”).

 

1.2                               The Parties acknowledge and agree that the use of the Leased Space by various departments of the Tenant is permitted and does not require any further consent from the Landlord. It is also acknowledged and agreed, that the Tenant will probably need further leasable space located in Buildings on the Property in the future, if necessary also in the short term and/or only for a limited certain time. In this case, the Parties will enter into an ; amendment to this Lease Agreement in accordance with the template attached as Annex 1.2 in order to ensure transparency and compliance with the statutory written form requirement.

 

1.3                               It is therefore understood and agreed that the areas outlined in Annex 1.1 only depict the office areas leased to the Tenant for its exclusive use. Beyond these areas the Tenant is entitled to use — together with the Landlord and other tenants and in close coordination with the Landlord — all common areas of the Buildings, in particular:

 

(a)                                 a share of the so-called all-rooms (Allraum Nutzfläche)

 

(b)                                 a share of the conference rooms

 

(c)                                  all access and escape routes to and from the Leased Office Space;

 

 

(d)                                 the sanitary installations and social rooms adjacent or otherwise related to the Leased Office Space;

 

(e)                                  the entrance lobby and elevators;

 

(f)                                   joint use meeting rooms in building EK2 and connecting access routes;

 

(g)                                  20 outside parking spaces.

 

1.4                               This Lease Agreement includes all essential fixtures which are part of the Leased Space by virtue of law (wesentliche Bestandteile) and which are available at the commencement of the lease (the “Leased Fixtures”).

 

1.5                               The Landlord warrants that (i) the Leased Space meets the general technical requirements which may apply to the purpose of the lease and (ii) complies with all statutory provisions and/or all directives of authorities.

 

The Landlord shall, at its own cost and expense, fulfil any conditions imposed by authorities or by statutory provisions as of the Lease Commencement whereas any future modifications relating to its operations in the Leased Office Space are to be made at the Tenant’s cost and expense.

 

The Leased Space may not be used for purposes other than the purposes permitted according to the regulations of authorities applicable from time to time.

 

2                                         Term, Termination and Handover

 

2.1                               The lease term commenced on 1 January 2017, 0.00 hrs. CET (the “Lease Commencement”).

 

The lease term shall terminate on 31 December 2026, 24.00 hrs. CET.

 

2.2                               In the event of termination of this Lease Agreement before the agreed date for which termination the Tenant is responsible, the Tenant shall be liable for any and all damage caused thereby, in particular, but not limited to, loss of rent, incidental expenses and other charges relating to the period for which the lease has been entered into. The same shall apply vice versa should the Landlord be responsible for the termination.

 

2.3                               Since the Tenant already in occupies the Leased Space and possesses the required number of keys, no separate physical handover shall take place. The Leased Space under this Lease Agreement is automatically deemed handed over as of the Lease Commencement.

 

3                                         Rent, Rent Adjustment and Advance Payments on Ancillary Costs

 

3.1                               The annual rent for the Leased Space at the Lease Commencement is initially agreed at EUR 3,093,180 plus the statutory VAT applicable from time to time (currently 19%).

 

This annual rent is broken down as follows:

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Rent per unit
    	
 
    
	
 
    	
 
    	
Size (m2) or
    	
 
    	
Total rent p.a.
    	
 
    	
Total rent per
    	
 
    	
per month
    	
 
    
	
Area
    	
 
    	
quantity
    	
 
    	
(EUR)
    	
 
    	
month (EUR)
    	
 
    	
(EUR)
    	
 
    
	
Office Space
    	
 
    	
16,728.10
    	
 
    	
3,003,028.51
    	
 
    	
250,252.38
    	
 
    	
14.96
    	
 
    
	
Archive space
    	
 
    	
759.92
    	
 
    	
70,946.13
    	
 
    	
5,912.18
    	
 
    	
7.78
    	
 
    
	
Parking space
    	
 
    	
20.00
    	
 
    	
19,204.80
    	
 
    	
1,600.40
    	
 
    	
80.02
    	
 
    
	
Total:
    	
 
    	
 
    	
 
    	
3,093,179.44
    	
 
    	
257,764.95
    	
 
    	
 
    	
 
    

 

The rent and rent per unit are subject to the index based adjustment pursuant to Clause 3.3.

 

The annual rent is payable in twelve equal monthly instalments.

 

3.2                               In case of a subsequent change in the size of the Leased Space, i.e. if the Parties agree to increase or reduce the Leased Space pursuant to Clause 1.2, the rent shall be adjusted accordingly. For this purpose, the change in the size/quantity of the Leased Space — reduction or increase — is multiplied by the rent per unit set out in the table above (adjusted according to Clause 3.3, as the case may be) and the total rent is reduced or increased accordingly.

 

3.3                               The rent shall automatically be adjusted at the beginning of each calendar year in accordance with the increase or decrease of the consumer price index for Germany (Verbraucherpreisindex für Deutschland), basis 2010 = 100, as published by the Federal Office of Statistics, as compared to the level of such index on the Lease Commencement or as compared to the time any subsequent adjustment of the rent has been made as provided for herein. It is however understood that no Party shall be in default with the adjusted payment prior to a written notification of the adjustment by the other Party.

 

If, during the term of this Lease Agreement, the consumer price index should no longer be published by the Federal Office of Statistics, such index shall be replaced by the index published in its place by the Federal Office of Statistics or any successor organisation.

 

3.4                               The Landlord is in its equitable discretion (nach billigem Ermessen) entitled to claim reasonable advance payments on ancillary costs (Clause 4), which shall be payable each month in addition to and together with the rent.

 

4                                         Ancillary Costs

 

4.1                               The Tenant shall bear all operating costs within the meaning of the Operation Cost Ordinance (Betriebskostenverordnung).

 

4.2                               Ancillary costs are borne by the Tenant in form of a lump sum per square meter of Leased Office Space. There is no separate annual reconciliation or settlement of ancillary costs and, accordingly, there are no claims of the Landlord for additional payments or of the Tenant for reimbursements based on actual costs.

 

4.3                               Such lump sum is initially fixed at EUR 5.78 per square meter of office space per month at the Lease Commencement. This translates to an initial ancillary cost payment of EUR 96,717.19 per month (i.e. EUR 1,160,606.25 p.a.).

 

 

The lump sum payment will subsequently be annually re-determined by the Landlord at its equitable discretion (nach billigem Ermessen) as per 1 January of each year. Such re-determination has to be based on the actual costs of the preceding year. The Tenant’s share is determined by the share of the Leased Office Space of the Tenant in relation to all office space exclusively leased in the Buildings, i.e. all common and other areas are disregarded in the allocation. The ancillary cost lump sum per square meter shall be identical for all tenants in the Buildings in order to ensure fair and equal treatment. In case there are doubts about the re-determination, the Landlord shall make available to the Tenant the relevant invoices, and calculations at the Tenant’s request.

 

The ancillary cost lump sum is payable in twelve equal monthly instalments.

 

5                                         Manner of Payment

 

5.1                               The rent and the payment of the ancillary cost lump sum shall be payable in advance for each month no later than on the third business day (Werktag) of each month.

 

The rent shall be remitted at no cost to the Landlord’s account number provided from time to time to the Tenant.

 

5.2                               The receipt of the amount and/or the credit entry on the Landlord’s account shall be decisive for timely payment.

 

5.3                               If and when the Tenant is in arrears with any payment, the Tenant shall owe dunning costs, if any and default interest at the respective statutory rate according to Sec. 247 of the German Civil Code (Bürgerliches Gesetzbuch — “BGB”).

 

The Landlord’s right to assert further damage claims shall remain unaffected.

 

6                                         Maintenance and Repair, Improvements

 

6.1                               The Parties undertake to effect and shall bear the costs for the maintenance (incl. decorative repairs), repair and replacement within the Buildings as set out in the Annex 6.1 which is attached hereto.

 

6.2                               The Tenant is entitled to effect improvements to the Leased Office Space with the Landlord’s consent which shall not be unreasonably withheld.

 

Al the end of the lease term the Tenant has the option to either (i) leave improvements it has effected within the Leased Space in their then current condition without compensation or (ii) remove them at its own expense and repair any damage resulting from such removal.

 

7                                         Setoff, Retention and Reduction of Rent

 

7.1                               The Tenant may offset a claim against the rent or the ancillary costs or exercise a right of retention only, if the counterclaim is uncontested or has become res judicata.

 

7.2                               The Tenant may reduce the rent payments (Minderung) because of a defect of the Leased Space or its use only if and when (i) ii notifies the Landlord in writing of its intention to reduce the rent at least one month before effecting the first reduction and (ii) ii is not in arrears (Verzug) with any payments.

 

 

8                                         Subleasing

 

8.1                               The Landlord’s consent shall be required for any subleasing or other permission to use the Leased Space granted to third parties. Such consent to subleasing may not be unreasonably withheld.

 

8.2                               Subletting to affiliated entities of the Tenant within the meaning of Sec. 15 seq. AktG shall be deemed consented to by the Landlord as long as the relevant subtenant remains the Tenant’s affiliate within the meaning of Sec. 15 seq. AktG.

 

8.3                               The Tenant shall be liable for any and all acts or omissions of its subtenants. The Tenant, here and now, assigns to the Landlord for security purposes the Tenant’s claims against the subtenant under the sublease — including the lien (Pfandrecht) securing such claims — up to the amount of rent and ancillary cost prepayments owed to the Landlord. The Landlord accepts such assignment. The Tenant, however, remains entitled to collect rent and enforce claims under the sublease agreement unless the Landlord notifies the subtenant in writing that the security purpose has occurred.

 

9                                         Advertising Measures

 

Subject to the Landlord’s consent, the Tenant shall be entitled to install advertising signs at the places designated by the Landlord. The Tenant shall be responsible for obtaining permissions from authorities, if any. The consent may be withheld only if it is to be feared that the building will be disfigured or damaged as a result of the advertising measure.

 

10                                  Entry of Leased Office Space by Landlord

 

The Landlord or its designees shall be entitled to enter the Leased Office Space during regular business hours in order to check the state and condition after timely advance notice of at least five days.

 

If and when the Landlord intends to sell the Property or notice of termination of this Lease Agreement has been given, the Landlord or its designees may inspect the Leased Space together with the potential purchaser or subsequent tenant after timely advance notice.

 

11                                  Security, Landlord’s Lien

 

11.1                        The Tenant shall pay an amount of EUR 773,295 as security for any and all payment obligations hereunder including costs of legal remedies and eviction.

 

The Landlord has to arrange for the best possible interest on cash security, to which the Tenant is entitled.

 

11.2                        This security may also be provided also in the form of an irrevocable, directly enforceable, unconditional guaranty, unlimited in time, of a major German bank (selbstschuldnerische Bankbürgschaft). Payment by the guarantor shall be made upon first request of the Landlord.

 

The Tenant shall be released from the aforementioned obligation as long as Fresenius SE & Co. KGaA or one of its affiliated entities within the meaning of Sec. 15 seq. AktG is the owner of the property.

 

 

11.3                        Any security will be returned to the Tenant only, but then without undue delay, after fulfilment of all obligations of the Tenant, in particular, but not limited to, the obligation to pay rent, ancillary costs and repair costs and after vacation of the Leased Space.

 

The guaranty will expire six months after termination or expiration of this Lease Agreement if the Landlord has not used the guaranty by such point in time. The Landlord shall, however, be obligated to determine any claims under the guaranty and notify the Tenant thereof without delay.

 

11.4                        The Tenant knows that the Landlord has a statutory lien (Vermieterpfandrecht) on the Tenant’s property which the Tenant brought into the leased premises, and that the Tenant shall not be entitled to remove this property without the Landlord’s consent, except in the ordinary course of business. The ordinary course includes disposal of obsolete or replaced equipment.

 

12                                  Termination or Expiration of the Term of this Lease Agreement

 

Upon termination or expiration of the term of this Lease Agreement, the Tenant shall return to the Landlord the Leased Space cleaned, together with all keys, including those obtained by the Tenant, without the Tenant having any claim for compensation by the Landlord. The Tenant is obliged to repair damages it caused, ordinary wear and tear excepted.

 

In the event that, during the term of the lease, work for which the Tenant is responsible hereunder has not been executed and the Tenant is in default with such work, the Landlord may, at its choice, upon termination or expiration of the term of this Lease Agreement, cause such work to be executed at the Tenant’s costs and expense, or claim payment of the estimated costs of such work by the Tenant.

 

13                                  Insurances and Duty to ensure Safety

 

13.1                        To the extent permitted by law, the Tenant shall have the duty to make the Leased Space safe for persons (Verkehrssicherungspflicht).

 

13.2                        The Tenant shall be responsible for insurance coverage for the risk resulting from its business operation.

 

14                                  Miscellaneous

 

14.1                        This Agreement contains all contractual arrangements made between the Parties with respect to the lease. There are no verbal side agreements.

 

14.2                        Modifications of and supplements to this Lease Agreement shall be valid only if made in ‘ writing in the form of a formal amendment.

 

14.3                        If any provision of this Lease Agreement or of any amendment to it is or will become invalid, this shall not affect the validity of the remaining provisions hereof and thereof. The Parties undertake to replace the invalid provision by a legally valid provision most closely matching the commercial and legal intention of the invalid provision.

 

The same shall apply to unintentional gaps or omissions in this Lease Agreement.

 

14.4                        The Parties are aware of the requirements of written form provided for in Sec. 550 BGB in conjunction with Sec. 578 para 1 BGB. Each of the Parties undertakes that at the other Party’s request it will immediately issue any statements and take any other action that may

 

 

be required to ensure compliance with these requirements of written form arid both Parties further undertake not to terminate this Agreement prematurely on grounds of it being ineffective due to non-compliance with any written form requirements.

 

This is in particular the case since the Parties agree that in all probability changes in the size of the Leased Office Space will be agreed pursuant to Clause 1.3 in order to flexibly adapt the Leased Office Space to changing needs.

 

These undertakings shall apply not only to this ‘original’ or ‘principal’ Lease Agreement, but also to any addenda, amendments or supplements to this Lease Agreement.

 

The aforementioned Parties are in agreement that, in deviation from Sec. 125 para 2 BGB, any failure to observe the written form requirement shall not affect the validity of this Lease Agreement.

 

14.5                        Due to the protection purpose of Sec. 550 BGB, the written form cure clause in Clause 14.4 does not have any binding effect on a possible acquirer of the Property. Therefore, if the Property is sold and is transferred to the acquirer as new landlord, the Tenant undertakes to conclude a new written form clause with the same content with the acquirer if the latter requires it. In the Tenant’s interest, the Landlord undertakes to oblige an acquirer by means of the purchase agreement (agreement according to Sec. 328 BGB) to conclude an amendment containing a written form clause with the Tenant at the Tenant’s request.

 

14.6        This Lease Agreement shall be governed by German law. Exclusive place of jurisdiction is Bad Homburg v.d.H.

 

 

	
For   the Landlord:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
This
    	
9 March 2017
    	
 
    	
This
    	
9 March 2017
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fresenius SE & Co. KGaA
    	
 
    	
 
    	
 
    
	
represented   by its general partner Fresenius Management SE
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ Jürgen Götz
    	
 
    	
/s/ Stephan Sturm
    
	
Jürgen   Götz
    	
 
    	
Stephan Sturm
    
	
Member   of the Management Board
    	
 
    	
Member of the   Management Board
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
For   the Tenant A:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
This
    	
 
    	
 
    	
This
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fresenius Medical Care AG & Co. KGaA
    	
 
    	
 
    
	
represented by its   general partner Fresenius Medical Care Management AG
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/ Dr. Olaf Schermeier
    	
 
    	
/s/ Dominik Wehner
    
	
Dr. Olaf   Schermeier
    	
 
    	
Dominik Wehner
    
	
Member   of the Management Board
    	
 
    	
Member of the   Management Board
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
For   the Tenant B:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
This
    	
 
    	
 
    	
This
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fresenius   Medical Care Deutschland GmbH
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/ Dr. Olaf Schermeier
    	
 
    	
/s/ Dominik Wehner
    
	
Dr. Olaf   Schermeier
    	
 
    	
Dominik Wehner
    
	
Managing   Director
    	
 
    	
Managing Director
    

 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

Annex 6.1

 

	
 
    	
 
    	
 
    	
 
    	
Party that ultimately
    
	
 
    	
 
    	
Party that actually
    	
 
    	
bears the costs for
    
	
 
    	
 
    	
effects/instructs the
    	
 
    	
such measures
    
	
Item
    	
 
    	
required measures
    	
 
    	
(pro rate)
    
	
Roof and structure (maintenance)
    	
 
    	
Landlord
    	
 
    	
Landlord
    
	
Roof and structure (repair/replacement/renewal)
    	
 
    	
Landlord
    	
 
    	
Landlord
    
	
Other facilities (maintenance)
    	
 
    	
Landlord
    	
 
    	
Tenant (via ancillary cost lump sum)
    
	
Other facilities (repair/replacement/renewal)
    	
 
    	
Landlord
    	
 
    	
Landlord
    
	
Common areas (maintenance)
    	
 
    	
Landlord
    	
 
    	
Tenant (via ancillary cost lump sum)
    
	
Common areas (repair/replacement/renewal)
    	
 
    	
Landlord
    	
 
    	
Landlord
    
	
Decorative repairs (Schönheitsreparaturen)
    	
 
    	
Tenant
    	
 
    	
Tenant
    

 

For the purposes of this Annex 6.1 the relevant terms shall have the following defined meaning:

 

(i)            Roof and structure refers to the roof and roof cover of the Buildings, their facade, the floor, the outside areas including parking spaces, the overarching technical systems (e.g. fire protection systems), the canalisation, all structural and load bearing elements, the outside of external doors and windows as well as overarching technical systems such as plumbing, electricity supply, heating, ventilation and cooling systems.

 

(ii)           Maintenance and repair (lnstandhaltung und lnstandsetzung) refers to measures required to keep the Building and its installations functional and restore functionality in case of defects, including the replacement of expendable items (Verbrauchsteile).

 

(iii)          Replacement and renewal refers to the exchange of defective parts — except for expendable items — that cannot or not with any commercially reasonable effort be repaired or have exceeded their permitted lifespan.

 

1

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