-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D68hqMLLEYu8UEofLD2lbBXrjyz9f39vczMFTiTp878Tf3nGPzJqK/smVqGYcVeJ QHTlTcuA4Rf4UMDnu9W9VQ== 0000898430-02-001508.txt : 20020418 0000898430-02-001508.hdr.sgml : 20020418 ACCESSION NUMBER: 0000898430-02-001508 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20020418 EFFECTIVENESS DATE: 20020418 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAVITA INC CENTRAL INDEX KEY: 0000927066 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 510354549 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-86550 FILM NUMBER: 02614788 BUSINESS ADDRESS: STREET 1: 21250 HAWTHORNE BLVD STREET 2: SIE 800 CITY: TORRANCE STATE: CA ZIP: 90503-5517 BUSINESS PHONE: 3107922600 MAIL ADDRESS: STREET 1: 21250 HAWTHORNE BLVD SUITE 800 STREET 2: 21250 HAWTHORNE BLVD SUITE 800 CITY: TORRANCE STATE: CA ZIP: 90503-5517 FORMER COMPANY: FORMER CONFORMED NAME: TOTAL RENAL CARE INC DATE OF NAME CHANGE: 19940719 FORMER COMPANY: FORMER CONFORMED NAME: TOTAL RENAL CARE HOLDINGS INC DATE OF NAME CHANGE: 19950524 S-8 1 ds8.txt FORM S-8 As filed with the Securities and Exchange Commission on April 18, 2002 Registration No. 333- =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM S-8 REGISTRATION STATEMENT Under The Securities Act of 1933 ____________________ DAVITA INC. (Exact name of registrant as specified in its charter) Delaware 51-0354549 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 21250 Hawthorne Boulevard, Suite 800 Torrance, California 90503-5517 (310) 792-2600 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) _____________________ DaVita Inc. 2002 Equity Compensation Plan (Full title of the plan) Steven J. Udicious Vice President, General Counsel and Secretary DaVita Inc. 21250 Hawthorne Boulevard, Suite 800 Torrance, California 90503-5517 (310) 792-2600 (Name, address, including zip code, and telephone number, including area code, of agent for service) ___________________ Copies to: Ronn S. Davids, Esq. Riordan & McKinzie 300 S. Grand Ave., 29th Floor Los Angeles, California 90071-3109 (213) 229-8562
CALCULATION OF REGISTRATION FEE ==================================================================================================================== Proposed Proposed Title of each class of Amount Maximum Maximum Amount of securities to be to be Offering Price Aggregate Registration registered Registered Per Share/(1)/ Offering Price Fee - -------------------------------------------------------------------------------------------------------------------- Common Stock 8,500,000 $25.12 $213,520,000 $19,643.84 ====================================================================================================================
/(1)/ Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457, based on the average of the high and low sales prices of the Company's Common Stock on April 16, 2002, as reported on the New York Stock Exchange. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The following documents filed by DaVita Inc. (the "Company") with the Securities and Exchange Commission (the "Commission") are incorporated herein by reference: (1) Annual Report of the Company on Form 10-K for the fiscal year ended December 31, 2001. (2) All other reports filed by the Company pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since December 31, 2001, the end of the Company's most recently completed fiscal year for which an Annual Report on Form 10-K was filed. (3) The description of the common stock of the Company (the "Common Stock") contained in the Company's Registration Statement on Form 8-A, filed October 21, 1995. (4) All documents subsequently filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. Any statement contained herein or in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. The validity of the issuance of the shares of Common Stock registered hereby (the "Shares") has been passed upon for the Company by Steven J. Udicious, General Counsel of the Company. Mr. Udicious is also a Vice President and Secretary of the Company and holds stock and options to purchase stock granted under the Company's employee stock plans which in the aggregate represent less than 1% of the Company's outstanding Common Stock. Item 6. Indemnification of Directors and Officers. The Company is a Delaware corporation. Section 145 of the Delaware General Corporation Law provides that a Delaware corporation may indemnify any person against expenses, judgments, fines and settlements actually and reasonably incurred by any such person in connection with a threatened, pending or completed action, suit or proceeding in which such person is involved by reason of the fact that he or she is or was a director, officer, employee or agent of such corporation, provided that (i) such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, such person had no reasonable cause to believe his or her conduct was unlawful. If the action or suit is by or in the name of the corporation, the corporation may indemnify any such person against expenses actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which the action or suit is brought determines upon application that, despite the II-1 adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. Article XI, Section 1 of the Company's By-Laws provides for indemnification of persons to the fullest extent permitted by the Delaware General Corporation Law. In accordance with the Delaware General Corporation Law, the Company's Certificate of Incorporation, as amended, limits the personal liability of its directors for violations of their fiduciary duty. The Certificate of Incorporation eliminates each director's liability to the Company or its stockholders for monetary damages except (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions, or (iv) for any transaction from which a director derived an improper benefit. The effect of this provision is to eliminate the personal liability of directors for monetary damages for actions involving a breach of their fiduciary duty of care, including any such actions involving gross negligence. This provision will not, however, limit in any way the liability of directors for violations of the federal securities laws. In addition, the Company has agreed to indemnify some of its directors and officers to the maximum extent of the law pursuant to Employment or Indemnification Agreements. Item 7. Exemptions from Registration Claimed. Not applicable. Item 8. Exhibits. 4.1 2002 Equity Compensation Plan of the Company. 5.1 Opinion of Steven J. Udicious, General Counsel, DaVita Inc. 23.1 Consent of Steven J. Udicious, General Counsel, DaVita Inc. (included in Exhibit 5.1). 23.2 Consent of KPMG LLP. 23.3 Consent of PricewaterhouseCoopers LLP. 24.1 Powers of Attorney (included on page II-4). II-2 Item 9. Undertakings. The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided however, that paragraphs (i) and (ii) above shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES, Pursuant to the requirements of the Securities Act, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Torrance, State of California, on April 17, 2002. DAVITA INC. By: /s/ Kent J. Thiry ____________________________ Kent J. Thiry Chairman and Chief Executive Officer POWERS OF ATTORNEY KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Kent J. Thiry and Steven J. Udicious, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated:
Signature Title Date --------- ----- ---- /s/ Kent J. Thiry __________________________________ Chairman and Chief Executive Officer April 17, 2002 Kent J. Thiry (Principal Executive Officer) /s/ Richard K. Whitney ___________________________________ Chief Financial Officer (Principal April 17, 2002 Richard K. Whitney Financial Officer) /s/ Gary W. Beil ___________________________________ Vice President and Controller April 17, 2002 Gary W. Beil (Principal Accounting Officer) /s/ Nancy-Ann DeParle ___________________________________ Director April 17, 2002 Nancy-Ann DeParle /s/ Richard B. Fontaine ___________________________________ Director April 17, 2002 Richard B. Fontaine /s/ Peter T. Grauer ___________________________________ Director April 17, 2002 Peter T. Grauer
II-4 /s/ C. Raymond Larkin, Jr. Director April 17, 2002 ------------------------------------ C. Raymond Larkin, Jr. /s/ John M. Nehra Director April 17, 2002 ------------------------------------ John M. Nehra /s/ William L. Roper Director April 17, 2002 ------------------------------------ William L. Roper II-5 Index To Exhibits
Sequentially Numbered Exhibit Description Page Number - ------------ ----------- ----------- 4.1 2002 Equity Compensation Plan of the Company. 5.1 Opinion of Steven J. Udicious, General Counsel, DaVita Inc. 23.1 Consent of Steven J. Udicious, General Counsel, DaVita Inc. (included in Exhibit 5.1). 23.2 Consent of KPMG LLP. 23.3 Consent of PricewaterhouseCoopers LLP. 24.1 Powers of Attorney (included on page II-4).
EX-4.1 3 dex41.txt 2002 EQUITY COMPENSATION PLAN Exhibit 4.1 DAVITA INC. 2002 EQUITY COMPENSATION PLAN 1. Purpose. The purpose of the DaVita Inc. 2002 Equity Compensation Plan ("Plan") is to promote the interests of DaVita Inc. ("Company") and its stockholders by enabling the Company to offer an opportunity to acquire an equity interest in the Company so as to better attract, retain, and reward Employees, directors, and independent contractors and, accordingly, to strengthen the mutuality of interests between those persons and the Company's stockholders by providing those persons with a proprietary interest in pursuing the Company's long-term growth and financial success. Awards under the Plan will be made solely in the form of the issuance of Options; the Plan does not authorize the issuance of restricted stock. 2. Definitions. For purposes of this Plan, the following terms shall have the meanings set forth below. (a)"Board" or "Board of Directors" means the Board of Directors of DaVita Inc. (b)"Code" means the Internal Revenue Code of 1986. Reference to any specific section of the Code shall also be deemed to be a reference to any successor provision. (c)"Committee" means the administrative committee of this Plan that is provided for in Section 3 of this Plan. (d)"Common Stock" means the common stock of the Company or any security issued in substitution, exchange, or in lieu thereof. (e)"Company" means DaVita Inc., a Delaware corporation, or any successor corporation. Except where the context indicates otherwise, the term "Company" shall include its Parent and Subsidiaries, if any. (f)"Disabled" means permanent and total disability, as defined in Code Section 22(e)(3). (g)"Effective Date" of this Plan shall be the date of the 2002 annual meeting of the stockholders of DaVita Inc. (h)"Employee" means a worker whose earnings the Company reports on a Form W-2. (i)"Exchange Act" means the Securities Exchange Act of 1934. (j)"Fair Market Value" of Common Stock for any day shall be the last reported sale price on that day regular way, or if no such reported sale takes place on that day, the average of the last reported bid and ask prices on that day regular way, in either case on the principal national securities exchange on which the Common Stock is admitted to trading or listed. (i) If the national securities exchange is closed on such date, the "Fair Market Value" shall be determined as of the last preceding day on which the Common Stock was traded or for which bid and ask prices are available. (ii) In the case of an Incentive Stock Option, "Fair Market Value" shall be determined without reference to any restriction other than one that, by its terms, will never lapse. (k)"Incentive Stock Option" means an option to purchase Common Stock that is intended to be an incentive stock option under Code Section 422. (l)"Insider" means a person who is subject to Section 16 of the Exchange Act. (m)"Non-Qualified Stock Option" means any option to purchase Common Stock that is not an Incentive Stock Option. (n)"Option" means an Incentive Stock Option or a Non-Qualified Stock Option. (o)"Parent" shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of the corporations (other than the Company) 1 owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain, as determined in accordance with the rules of Code Section 424(e). (p)"Participant" means a person who has received an Option. (q)"Plan" means this DaVita Inc. 2002 Equity Compensation Plan. (r)"Predecessor Plans" shall mean the DaVita Inc. 1994 Equity Compensation Plan, 1995 Equity Compensation Plan, 1997 Equity Compensation Plan, and 1999 Equity Compensation Plan. (s)"Rule 16b-3" means Rule 16b-3 promulgated by the Securities and Exchange Commission. (t)"Section 162(m)" means Code Section 162(m), which imposes a million dollar ($1,000,000) compensation deduction limitation on amounts paid to certain senior executives. (u)"Severance" means, with respect to a Participant, the termination of the Participant's provision of services to the Company as an Employee, director, or independent contractor, whether by reason of death, disability, or any other reason. (i) For purposes of determining the exercisability of an Incentive Stock Option, a Participant who is on a leave of absence that exceeds ninety (90) days will be considered to have incurred a Severance on the ninety-first (91st) day of the leave of absence, unless the Participant's rights to reemployment are guaranteed by statute or contract. (ii) If a Participant switches from Employee to independent contractor status, that event is not treated as a Severance for purposes of exercising a Non-Qualified Stock Option. However, such a switch will result in an Option losing its status as an Incentive Stock Option after ninety (90) days has elapsed since the switch. Thereafter, the Option (if it is exercisable at all) will be treated as a Non-Qualified Stock Option. (iii) A Participant will not be considered to have incurred a Severance because of a transfer between the Company, Subsidiary, or Parent. (v)"Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain, as determined in accordance with the rules of Code Section 424(f). (w)"Substitute Option" means an option granted to an optionee who had performed services for an entity that was acquired by another company in substitution of a stock option previously granted to that individual or entity by the acquired entity. (x)"Ten Percent Stockholder" means any person who owns (after taking into account the constructive ownership rules of Code Section 424(d)) more than ten percent (10%) of the combined voting power of all classes of stock of DaVita Inc. or of any of its Parents or Subsidiaries. 3. Administration. (a)Except as provided below, this Plan shall be administered by the Compensation Committee of the Board. (b)If a grant to an Insider is intended be an exempt purchase under Section 16, the Committee must be composed exclusively of "Non-Employee Directors," as that term is defined in Rule 16b-3. Similarly, if the income recognized with respect to an Option is intended to be exempt from Code Section 162(m), the Committee must be composed exclusively of "Outside Directors," as that term is defined in Code Section 162(m). 2 (c)The Committee is authorized to interpret this Plan and to adopt rules and procedures relating to the administration of this Plan, including those relating to sub-plans established for the purpose of qualifying for preferred tax or other treatment under foreign laws. All actions of the Committee in connection with the interpretation and administration of this Plan shall be binding upon all parties. No member of the Committee shall incur any liability for any actions taken or inactions done in good faith. (d)Subject to the limitations of Sections 9 and 14 of this Plan, the Committee is expressly authorized to make such modifications to this Plan and to Options granted under this Plan as are necessary to effectuate the intent of this Plan as a result of any changes in the tax, accounting, or securities laws treatment of Participants or of the Plan. (e)The Board of Directors may, by a resolution adopted by the Board, delegate to one or more officers of the Company the power to issue Options, provided: (i) The enabling resolution specifies the total number of shares that may be subject to such Options; (ii) The officer may not issue Options to himself or herself; (iii) The Board of Directors fixes the exercise price; and (iv) The Board of Directors retains the authority to grant options to persons who are not Employees (i.e., independent contractors). 4. Duration of Plan. (a)This Plan shall be effective as of the Effective Date, provided this Plan is approved by the holders of a majority of the Company's shares of Common Stock at the 2002 annual meeting of the Company's stockholders, in accordance with the provisions of Code Section 422. The approval by the stockholders must relate to: (i) The class of Employees who are eligible to receive Incentive Stock Options; and (ii) The maximum number of shares of Common Stock that may be issued under the Plan, except as adjusted pursuant to Section 12 of this Plan. If either of those items is changed, the approval of the stockholders must again be obtained within twelve (12) months after the adoption of the amendment by the Board of Directors. (b)In the event that this Plan is not so approved at the 2002 stockholders' meeting, this Plan shall terminate and any Options previously awarded under this Plan shall be void. (c)The ability to grant Incentive Stock Options shall terminate on February 8, 2012, which is the tenth anniversary of the date on which the Board of Directors adopted the Plan. The preceding sentence shall not apply if there is stockholder approval of an amendment to the Plan prior to such date. The effect of obtaining stockholder approval shall be to extend the term of the Incentive Stock Option feature of the Plan for another ten (10) years from the date on which the Board of Directors approved the amendment. 5. Number of Shares. (a)The following rules shall govern the size of grants under this Plan. (i) The maximum number of shares of Common Stock which may be issued pursuant to this Plan shall be eight million, five hundred thousand (8,500,000) shares. This amount shall be increased by the residual shares remaining in the Predecessor Plans, regardless of whether those shares (A) were available for transfer to this Plan upon the Effective Date or (B) subsequently become available (e.g., by reason of forfeiture of a grant). 3 (ii) The maximum number of shares that may be issued to a single Participant in any consecutive twenty-four (24) month period is one million five hundred thousand (1,500,000). For purposes of determining the maximum number of shares that may be issued to a single Participant, (A) shares subject to a terminated Option shall be considered to remain outstanding and (B) the repricing of an Option shall be treated as the issuance of a new Option. (iii) The maximum number of shares that may be issued pursuant to Incentive Stock Options is five million (5,000,000) shares. The preceding numbers may be adjusted as set forth in Section 12 of this Plan. (b)Upon the expiration or termination of an Option (for any reason) which shall not have been exercised in full, the shares of Common Stock remaining unissued under the Option shall again become available for use under the Plan. (c)In the event a Participant pays part or all of the exercise price of an Option by surrendering shares of Common Stock that the Participant had previously acquired, only the number of shares issuable to the Participant in excess of the number that was surrendered shall be taken into account for purposes of determining the maximum number of shares that may be issued under the Plan, both as to that Participant and in the aggregate (to all Participants). Similarly, shares that are not issued to a Participant, but rather, are used to satisfy the income tax withholding obligations upon the exercise of an Option are not taken into account for purposes of determining the maximum number of shares that may be issued under the Plan. (d)To the extent permitted by applicable law and the rules of any stock exchange or quotation system on which the Company's stock is traded or listed, the Corporation can replenish the number of shares available under the Plan through repurchases of its existing shares, provided that the purchases are effected solely by the use of: (i) The cash proceeds received by the Company upon the exercise of Options issued under the Plan or a Predecessor Plan; and (ii) The actual tax savings achieved by the Company relating to the exercise of Options under the Plan and the Predecessor Plans; provided that those exercises occur after the Effective Date. 6. Eligibility. (a)Persons eligible to receive grants under this Plan shall consist of (i) Employees, (ii) members of the Board of Directors, and (iii) other persons providing services to the Company (i.e., independent contractors), other than persons only providing services in connection with a capital raising transaction. However, Incentive Stock Options may only be awarded to Employees. (b)In the event that the Company acquires another entity, the Committee may authorize the issuance of Substitute Options upon such terms and conditions as the Committee shall determine, which may be different from the terms contained in this Plan, taking into account the limitations of Code Section 424(a) in the case of a Substitute Option that is intended to be an Incentive Stock Option. (c)In the event that the Committee grants an Option to a person who is not currently an Employee of or an independent contractor to the Company, such Option shall not become effective until such individual commences performing services to the Company and it must satisfy the pricing limitations (set forth in Section 7 of this Plan) at that time. 4 (d)After taking into consideration the tax, securities, and accounting consequences of doing so, the Committee may grant Non-Qualified Stock Options to individuals who are performing services (whether as employees or as independent contractors) to entities that are related to or affiliated with the Company but that do not qualify as Parents or Subsidiaries. 7. Form of Options. Options shall be awarded under this Plan in such amounts, at such times, to such persons, on such terms and in such form as the Committee may approve, which shall not be inconsistent with the provisions of this Plan, but which need not be identical from grant to grant. (a)The exercise price per share of Common Stock purchasable under an Option shall be set forth in the Option, and shall not be less than the Fair Market Value of the Common Stock on the date of grant. However, the exercise price of an Incentive Stock Option issued to a Ten Percent Stockholder shall be no less than one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of the grant. However, the preceding two sentences shall not apply in the case of Substitute Options issued under this Plan. (b)An Option shall be exercisable at such time or times and be subject to such terms and conditions as may be set forth in its provisions. However, no Option shall be exercisable prior to the Effective Date. (c)Except in the case of Substitute Options, the aggregate Fair Market Value (determined as of the date of grant) of the number of shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year shall not exceed one hundred thousand dollars ($100,000). To the extent that a Participant's Options exceed that limit, they will be treated as Non-Qualified Stock Options, with the first Options that were awarded to the Participant to be treated as Incentive Stock Options. (d)Except as provided in Section 10 or in the case of Substitute Options, the term of an Option shall not exceed five (5) years from the date of grant. 8. Exercise of Options. (a)Options shall only be exercisable for whole numbers of shares. (b)Options are exercised by payment of the full amount of the purchase price to the Company as follows: (i) The payment shall be in cash or such other form or forms of consideration as the Committee shall deem acceptable, such as the surrender (either actually or constructively by means of attestation) of outstanding shares of Common Stock owned by the Participant for the minimum period of time necessary to avoid adverse accounting treatment (if applicable). (ii) After giving due consideration to the consequences under Rule 16b-3 and under the Code, the Committee may also authorize the exercise of Options by the delivery to the Company (or its designated agent) of an executed written notice of exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the shares of Common Stock and to deliver the sale or margin loan proceeds directly to the Company to pay all or a portion of the exercise price of the Option and/or any tax withholding obligations. For purposes of determining the amount of income that is recognized by a Participant pursuant to a "same-day sale" transaction described in Subparagraph (ii) above, the Fair Market Value of the Common Stock shall be the price at which the Common Stock was sold. (c)Except as otherwise provided in the terms of the Option, the Participant may exercise the Option following his or her Severance only to the extent that the Option could have been 5 exercised on the date of the Severance, so that no events that occur following Severance will increase the vested portion of the Option. (d)The Committee may provide for the acceleration of the vesting of Options upon a change of control or similar circumstances, under such conditions as may be set forth in the Options. 9. Modification of Grants. (a)After due consideration to the possible tax, securities, and accounting consequences, the Committee may modify an existing Option, including by: (i) Accelerating the right to exercise it; or (ii) Extending or renewing it. (b)No modification may be made to an Option that would impair the rights of the Participant holding the Option without the Participant's consent. Furthermore, in no event will the exercise price of any outstanding Option be reduced or repriced, including any repricing effected by issuing replacement stock options for outstanding stock options that have an exercise price greater than the Fair Market Value of the Common Stock, without first obtaining stockholder approval. (c)In the event that the Board amends the terms of an Option so that it no longer qualifies as an Incentive Stock Option, the limitations imposed upon the Option under the Code and the Plan solely by virtue of its (formerly) qualifying as an Incentive Stock Option shall no longer apply, to the extent specified in the amendment. (d)Whether a modification of an existing Incentive Stock Option will be treated as the issuance of a new Incentive Stock Option will be determined in accordance with the rules of Code Section 424(h). (e)Whether a modification of an existing Option previously awarded to an Insider will be treated as a new Option for purposes of Section 16 of the Exchange Act will be determined in accordance with Rule 16b-3. 10. Termination of Options. (a)Except to the extent provided otherwise in the terms of the Option, each Option shall terminate on the earliest of the following dates: (i) The date that is one (1) year from the date of the Severance of the Participant, if the Severance occurred because of the Participant's Disability. (ii) The date that is one (1) year from the date of the Severance of the Participant, if the Severance occurred because of the Participant's death. (iii) In the case of any Severance other than one described in Subparagraphs (i) or (ii) above, the date that is three (3) months from the date of the Participant's Severance. (b)Except in the case of a Severance caused by death or Disability, in no event shall an Option be exercisable more than five (5) years after the date on which it was granted. (c)The nonvested portion of the Option shall terminate immediately upon Severance, and the vested portion at the time the balance of the Option terminates, as determined pursuant to the above rules. 11. Non-Transferability of Grants. During the lifetime of the Participant, Options are exercisable only by the Participant. Options are not assignable or transferable except by will or the laws of descent and distribution. 6 12. Adjustments. (a)In the event of any change in the capitalization of the Company affecting its Common Stock (e.g., a stock split, reverse stock split, stock dividend, recapitalization, combination, reclassification, or other similar transaction), the Committee shall make such adjustments as it may deem appropriate with respect to: (i) The number, kind, and exercise price of shares covered by each outstanding Option; and (ii) The maximum number and/or kind of shares that may be awarded under this Plan, including the limitations contained in Section 5(a) of this Plan. (b)The Committee may also make such adjustments in the event of a spin-off or other distribution of Company assets to stockholders (other than normal cash dividends). 13. Notice of Disqualifying Disposition. A Participant must notify the Company within fifteen (15) days if the Participant disposes of stock acquired pursuant to the exercise of an Incentive Stock Option issued under the Plan or a Predecessor Plan prior to the expiration of the holding periods required to qualify for long-term capital gains treatment on the disposition. 14. Amendments and Termination. Subject to the limitations of Section 4 of this Plan, the Board may at any time amend or terminate this Plan. However, no such amendment may adversely affect the rights of any Participant with respect to any outstanding Option without the Participant's consent. The Plan may not be amended other than by a written document executed by the Company. Furthermore, no Participant may rely upon any statement (oral or written) that is inconsistent with the terms of the Plan. 15. Tax Withholding. (a)The Company shall have the right to take such actions as may be necessary to satisfy its tax withholding obligations relating to the operation of this Plan. (b)To the extent authorized by the Committee, Participants may (i) surrender previously acquired shares of Common Stock or (ii) have shares withheld in satisfaction of the tax withholding obligations. To the extent necessary to avoid adverse accounting treatment, the number of shares that may be withheld for this purpose shall not exceed the minimum number needed to satisfy the applicable income and employment tax withholding rules. Similarly, the shares surrendered must have been owned by the Participant for the minimum period of time necessary to avoid adverse accounting treatment (if applicable). (c)If Common Stock is used to satisfy the Company's tax withholding obligations, the stock shall be valued at its Fair Market Value when the tax withholding is required to be made. 16. No Additional Rights. (a)Neither the adoption of this Plan nor the awarding of any Option shall: (i) Affect or restrict in any way the power of the Company to undertake any corporate action otherwise permitted under applicable law; or (ii) Confer upon any Participant the right to continue performing services for the Company (whether as an Employee or as an independent contractor), nor shall it interfere in any way with the right of the Company to terminate the services of any Participant at any time, with or without cause, subject to the terms of any applicable employment or consulting agreement between the Participant and the Company. (b)No Participant shall have any rights as a stockholder with respect to any shares awarded to the Participant under this Plan until the date a certificate for such shares has been issued to the Participant. 7 17. Securities Law Restrictions. (a)No shares of Common Stock shall be issued under this Plan unless the Committee shall be satisfied that the issuance will be in compliance with applicable federal and state securities laws and the requirements of any stock exchange or other securities market on which the Company's securities may then be traded. Similarly, a Participant will not be permitted to exercise an Option if such exercise would violate the Company's internal policies. (b)The Committee may require certain investment (or other) representations and undertakings by the person exercising an Option if necessary to comply with applicable law. (c)Certificates for shares of Common Stock delivered under this Plan may be subject to such restrictions as the Committee may deem advisable. The Committee may cause a legend to be placed on the certificates to refer to those restrictions. (d)The inability of the Company to obtain registration, qualification, or other necessary authorization, or the unavailability of an exemption from any registration or qualification obligation deemed by the Company's counsel to be necessary for the lawful issuance and sale of any shares of its Common Stock under this Plan shall: (i) Suspend the Company's obligation to permit the exercise of any Option or to issue any shares under this Plan; and (ii) Relieve the Company of any liability in respect of the nonissuance or sale of the shares as to which the requisite authority or exemption shall not have been obtained. 18. Indemnification. (a)To the maximum extent permitted by law, the Company shall indemnify each member of the Committee and of the Board, as well as any other Employee of the Company with duties under the Plan, against expenses and liabilities (including any amount paid in settlement) reasonably incurred by the individual in connection with any claims against the individual by reason of the performance of the individual's duties under this Plan, unless the losses are due to the individual's gross negligence or lack of good faith. (b)The Company will have the right to select counsel and to control the prosecution or defense of the suit. (c)In the event that more than one person who is entitled to indemnification is subject to the same claim, all such persons shall be represented by a single counsel, unless such counsel advises the Company in writing that he or she cannot represent all such persons under the applicable rules of professional responsibility. (d)The Company will not be required to indemnify any person for any amount incurred through any settlement unless the Company consents in writing to the settlement. 19. Governing Law. This Plan and all actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of laws provisions. 8 EX-5.1 4 dex51.txt OPINION OF STEVEN J.UDICIOUS EXHIBIT 5.1 April 17, 2002 Ladies and Gentlemen: I am the General Counsel of DaVita Inc., a Delaware corporation (the "Company") and the holder of stock and options to purchase stock granted under the Company's employee stock plans which in the aggregate represent less than 1% of the Company's outstanding Common Stock. I am delivering this opinion in connection with the registration under the Securities Act of 1933, as amended (the "1933 Act"), of up to 8,500,000 shares of the Common Stock, $0.001 par value per share (the "Shares") issuable upon the exercise of options granted under the DaVita Inc. 2002 Equity Compensation Plan (the "Plan"). This opinion is delivered in connection with that certain Registration Statement on Form S-8 (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "Commission") under the 1933 Act to register the Shares. In rendering the opinion set forth herein, I have made such investigations of fact and law, and examined such documents and instruments, or copies thereof established to my satisfaction to be true and correct copies thereof, as I have deemed necessary under the circumstances. Based upon the foregoing and such other examination of law and fact as I have deemed necessary, and in reliance thereon, I am of the opinion that the Shares, when offered, sold and paid for pursuant to the exercise of options granted under the Plan, will be duly authorized, validly issued, fully paid and non-assessable. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the caption "Interests of Named Experts and Counsel" in Item 5 of Part II of the Registration Statement. In giving such consent, I do not thereby admit that I am in the category of persons whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the Commission thereunder. Very truly yours, /s/ Steven J. Udicious EX-23.2 5 dex232.txt CONSENT OF KPMG LLP EXHIBIT 23.2 Independent Auditors' Consent The Board of Directors DaVita Inc.: We consent to the use of our reports dated February 28, 2002, included in the DaVita Inc. annual report on Form 10-K for the year ended December 31, 2001, incorporated herein by reference in the registration statement on form S-8. /s/ KPMG LLP Seattle, Washington April 17, 2002 EX-23.3 6 dex233.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP. EXHIBIT 23.3 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated March 22, 2000, relating to the consolidated statements of income and comprehensive income, of shareholders' equity and of cash flows, which appears in DaVita Inc.'s (formerly Total Renal Care Holdings, Inc.) Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the incorporation by reference of our report dated March 22, 2000, relating to the Financial Statement Schedule, which appears in such Annual Report on Form 10-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Seattle, Washington April 17, 2002 -----END PRIVACY-ENHANCED MESSAGE-----