EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 1st day of
October, 1998, by and between CRITICARE SYSTEMS, INC., a Delaware corporation
(the "Company"), and XXXXXX XXXXXX ("Employee").
RECITALS
A. Employee is currently employed by the Company as its Vice
President-Operations.
B. The Company desires to make certain agreements with Employee in
order to induce Employee to remain in such employ and in exchange for Employee's
covenants herein.
C. The parties desire to evidence their agreement as to the terms of
the Company's employment of Employee.
AGREEMENT
In consideration of the mutual covenants contained herein, the parties
hereby agree as follows:
1. Employment. The Company hereby continues its employment of Employee
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as the Company's Vice President-Operations, and Employee hereby accepts such
employment, subject to the provisions of this Agreement.
2. Duties and Authority. Employee shall be employed as the Company's
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Vice President-Operations. Employee shall have such duties and authority as are
customary for the Vice President-Operations of a publicly-held corporation with
similar operations, including without limitation, such specific management
duties and authority as the Company's Board of Directors may from time to time
reasonably assign Employee consistent with the foregoing and the other
provisions of this Agreement. Employee agrees to devote his entire business
time, energy and skills to such employment. However, it is understood that
Employee shall not be required to devote more than an average of 50 hours per
calendar week to such employment. At all times, Employee shall be subject to
the direction of the Company's Board of Directors and its President.
3. Compensation and Benefits. Employee shall be entitled to the
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following compensation and benefits for services rendered to the Company:
(a) Base Salary. Employee shall receive an annual base salary
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payable in equal installments not less frequently than monthly, which shall be
established annually (but which shall not be reduced to less than the prior
year's annual salary without Employee's written consent) ("Base Salary").
(b) Bonus Plan. Employee shall be eligible to receive a bonus
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annually, based on Employee's and the Company's financial performance, in the
discretion of the Board of Directors.
(c) Expense Reimbursements. The Company shall reimburse Employee
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for actual out-of-pocket costs incurred for reasonable business expenses, other
than automobile expenses (which are covered in Section 3(d) ) in accordance with
the policies and procedures of the Company in effect from time to time.
(d) Automobile Allowance. Employee shall receive a Company car or
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car allowance subject to Company policies in effect from time to time with
respect to reimbursement for personal use.
(e) Vacations. Employee shall be entitled to paid vacations of
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not more than four weeks each calendar year, which may be taken in Employee's
discretion; provided, however, that such vacation shall not unreasonably
interfere with the Company's needs at such time. Unused vacation time for a
calendar year shall not be carried over from one year to the next.
(f) Health Insurance. Employee shall be entitled to family health
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insurance coverage under the Company's group plan on a premium-sharing basis
then in effect.
(g) Disability Insurance. Employee shall be entitled to
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participate in the Company's group disability insurance in effect from time to
time.
(h) Severance Pay.
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(i) This Agreement may be terminated by the Company at any
time for "Cause," and in such event Employee shall not be entitled to receive
any further compensation. For purposes of this Agreement, the term "Cause"
shall mean acts of fraud, repeated material misconduct, or intentional
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dishonesty by Employee in the course of Employee's employment with the Company,
or the commission of a felony.
(ii) In the event that Employee voluntarily terminates
Employee's employment by the Company, Employee shall not be entitled to receive
any further compensation; provided, however, that if such voluntary termination
occurs at any time after Employee has completed three (3) months of employment
by the Company after the occurrence of a Change in Control (as hereinafter
defined), Employee shall be entitled to receive severance benefits consisting of
Employee's Base Salary plus the amount which the Company pays for group health
insurance benefits with respect to such Employee for a period of six (6) months
after the date of such termination.
(iii) Notwithstanding anything to the contrary herein,
Employee's employment hereunder may be terminated by the Company without "Cause"
at any time prior to a "Change in Control" (has hereinafter defined), however,
in such event, Company shall pay Employee as severance benefits Employee's Base
Salary (has hereinafter defined) plus the amount that the Company pays for group
health and disability insurance with respect to such employee for a period equal
to the period following the date upon which Employee's employment is terminated
until Employee secures alternative employment, up to a maximum of six (6) months
after the date of such termination. Employee agrees to utilize her best efforts
to obtain such replacement employment.
(iv) In the event that Employee's employment is terminated by
the Company at any time after a Change in Control by the Company without Cause,
Company shall pay Employee as severance benefits Employee's Base Salary plus the
amount that the Company pays for group health insurance with respect to such
employee for a period equal to the portion of the "Severance Period" (as
hereinafter defined) remaining after the date of termination of Employee's
employment but not less than six (6) months. The term "Severance Period" shall
mean 12 months after a Change in Control.
The term "Change in Control" shall mean a sale, assignment or
exchange of more than 51% of the voting stock outstanding immediately after such
sale or the sale, assignment or exchange of substantially all of the assets of
the Company. The date of a Change in Control shall mean the date upon which a
sale is closed, or in a series of transactions, the date upon which beneficial
ownership of the voting stock or assets is transferred. A termination without
Cause shall be deemed to have occurred if within the Severance Period, Company,
without Employee's consent, materially reduces Employee's
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responsibilities, reduces Employee's salary or requires Employee to relocate or
transfer to a site further than 30 miles from Employee's current place of
employment.
All amounts payable to Employee under this paragraph 3 shall be
paid in normal payroll installments on normal payroll dates less all applicable
withholding. Except as otherwise provided in this paragraph 3, as of the
effective date of termination, all obligations of the Company to pay Employee
compensation shall terminate and the Company shall have no further obligation to
Employee after the date of termination.
(i) Upon termination of employment for any reason, Employee will
deliver to the Company all data, records and information, including without
limitation, all documents, correspondence, files, notebooks, reports, computer
programs, software, manuals, customer lists, customer information, samples and
all other materials and copies thereof relating to the Company's business
(collectively, "Confidential Information") which Employee may possess or which
are under his control.
4. Confidentiality. Employee covenants that he shall at all times keep
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confidential the Company's financial statements and other financial information,
except to the extent (a) disclosure of financial information (but not financial
statements) is incidental to the performance of his duties for the Company, (b)
disclosure is required by applicable law, or (c) the Company's Board of
Directors authorizes disclosure.
5. Other Company Employees. For a period of one year from the date
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Employee's employment by the Company terminates, Employee shall not (a) solicit
another Company employee to leave the Company's employ and work for Employee or
another person or entity, or (b) participate in the hiring of another Company
employee by another person or entity away from the Company.
6. Notices. Any notice, request, approval, consent, demand, permission
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or other communication required or permitted by this Agreement shall be
effective only if it is in a writing signed by the party giving same and shall
be deemed to have been sent, given and received only either (a) when personally
received by the intended recipient, or (b) three days after depositing in the
United
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States Mail, registered or certified mail, return receipt requested, with first-
class postage prepaid, addressed as follows:
If to Employee:
Xxxxxx Xxxxxx
0000 X. 00xx Xxxxxx
Xxxx Xxxxx, XX 00000
If to the Company:
Criticare Systems, Inc.
00000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: President
or to such other address as the intended recipient may have theretofore
specified by notice given to the sender as provided in this section.
7. Assignability. This Agreement requires the personal services of
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Employee, and Employee's rights or obligations hereunder may not be assigned or
delegated except as set forth in this Agreement. In the event of a sale of the
stock of the Company, or consolidation or merger of the Company with or into
another company or entity, or the sale of all or any substantial part of the
assets of the Company to another corporation, entity or individual, the Company
may assign this Agreement to any successor in interest and upon such assignment,
Company shall have no further liability hereunder and the successor in interest
shall be subject to all obligations and be entitled to enforce all rights of the
Company under this Agreement. Subject to the foregoing, this Agreement shall
bind and inure to the benefit of the parties and their respective successors and
assigns.
8. Other Agreements. This Agreement contains the entire agreement
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between the Company and Employee with respect to the subject matter hereof, and
merges and supersedes all prior agreements, understandings or negotiations
whatsoever with respect to the subject matter hereof.
9. Amendments and Waivers. No amendment of this Agreement or any
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waiver of any of its provisions shall be effective unless expressly stated in a
writing signed by both parties. No delay or omission in the exercise of any
right, power or remedy under or for this Agreement shall impair such right,
power or remedy or be construed as a waiver of any breach. Any waiver of a
breach of any provision of this Agreement shall not be treated as a waiver of
any other provision
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of this Agreement or of any subsequent breach of the same or any other provision
of this Agreement.
10. Severability. If any provision of this Agreement shall be held
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illegal, invalid or otherwise unenforceable under controlling law, the remaining
provisions of this Agreement shall not be affected thereby but shall continue in
effect.
11. Governing Law. This Agreement shall be governed by and construed
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and enforced in accordance with the laws of the State of Wisconsin.
CRITICARE SYSTEMS, INC.
BY /s/ Xxxxxxx X. Von der Ruhr
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Its President
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EMPLOYEE:
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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