EMPLOYMENT AGREEMENT
EXHIBIT
10.14
This
EMPLOYMENT AGREEMENT (the “Agreement”) is made as of August
8, 2005,
by and
between CRITICARE SYSTEMS, INC., a Delaware corporation (the “Company”), and
Xxxx X. Xxxxxxx (‘Employee”).
RECITALS
A.
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Employee
is currently employed by the Company as its Vice President -
Finance.
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B.
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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.
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C.
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The
parties desire to evidence their agreement as to the terms of the
Company’s employment of Employee.
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AGREEMENT
In
consideration of the foregoing recitals and mutual covenants contained herein,
the parties hereby agree as follows:
1.
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Employment.
The Company hereby continues its employment of Employee as the Company’s
Vice President - Finance, and Employee hereby accepts such employment,
subject to the provisions of this
agreement.
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2.
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Duties
and Authority.
Employee shall be employed as the Company’s Vice President - Finance.
Employee shall have such duties and authority as are customary for
the
Vice President - Finance of a publicly held corporation with similar
authority as the Company’s Board of Directors or President 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
the
usual and customary hours per calendar week to such employment as
are
generally expected of similarly situated employees of publicly held
companies. At all times, Employee shall be subject to the direction
of the
Company’s Board of Directors and its
President.
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3.
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Compensation
and Benefits.
Employee shall be entitled to the following compensation and benefits
for
services rendered to the Company:
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(a)
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Compensation.
Employee shall receive an annual base salary payable in equal installments
not less frequently than monthly. Employee’s base salary shall be reviewed
annually within 30 days prior to the end of each fiscal year (but
such
annual base salary shall not be reduced to less than the prior year’s
annual base salary without Employee’s written
consent).
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(b)
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Bonus
Plan.
Employee shall be eligible to receive a bonus annually, based on
Employee’s and the Company’s financial performance, in the discretion of
the Board of Directors.
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(c)
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Expense
Reimbursements. The
Company shall reimburse Employee 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.
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(d)
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Automobile
Allowance.
Employee shall receive a Company car or car allowance subject to
Company
policies in effect from time to time with respect to reimbursement
for
personal use.
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(e)
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Vacations.
Employee
shall be entitled to paid vacations of not more than four weeks each
calendar year, which may be taken at 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 form one year to the
next.
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(f)
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Health
Insurance.
Employee shall be entitled to family health insurance coverage under
the
Company’s group plan on a premium-sharing basis then in
effect.
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(g)
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Life
and Disability Insurance.
Employee shall be entitled to participate in the Company’s group life
insurance and disability insurance in effect from time to
time.
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(h)
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Severance
Pay.
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(i)
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This
Agreement may be terminated by the Company at any time for Cause
(as
hereinafter defined), 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 dishonesty by Employee in the course of Employee’s employment
with the Company, or the commission of a
felony.
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(ii)
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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
for a
period of 12 months after the date of termination or until Employee
secures new employment, whichever is shorter, consisting of the following:
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A.
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Employee’s
base salary, and
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B.
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The
amount which the Company pays for group heath insurance benefits
with
respect to such employee and Employee’s family and the continuation of
Employee’s company provided group term life and disability insurance or
equivalent coverage, and
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C.
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Continuation
of use of the company car or an equivalent car
allowance.
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2
(iii)
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Notwithstanding
anything to the contrary herein, Employee’s employment hereunder may be
terminated by the Company at any time prior to or after a “Change in
Control” (as hereinafter defined), however, in such event, Company shall
pay Employee for a period of 12 months after the date of termination
as
severance benefits consisting of the
following;
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A.
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Employee’s
base salary, and
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B.
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The
amount which the Company pays for group heath insurance benefits
with
respect to such Employee and Employee’s family and the continuation of
Employee’s company provided group term life and disability insurance or
equivalent coverage, and
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C.
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Continuation
of use of the company car or an equivalent car
allowance.
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A
termination without cause shall be deemed to have occurred if Company, without
Employee’s consent, materially reduces Employee’s 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.
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 the 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.
All
amounts payable to Employee under this Section 3 shall be paid in normal payroll
installments on normal payroll dates less all applicable withholding. Except
as
otherwise provided in this Section 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.
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 information, samples and all other materials and copies thereof
relating to the Company’s business which Employee may possess or which are under
Employee’s control.
4.
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Options.
In
the event of a Change in Control of the Company as those terms are
defined
in the Agreement, stock options held by Employee shall become immediately
exercisable without regard to vesting and/or applicable benchmarks
unless
the agreement governing the exercise of such options contains provisions
expressly to the contrary. In the event of a sale or exchange of
assets or
stock anticipated to constitute a Change in Control, the Company
agrees
that it shall make provisions for the conversion or exchange of shares
to
be received upon the exercise of such options for the consideration
to be
received by stockholders of the Company generally; provided, however,
that
Employee may be required to provide to the Company an irrevocable
notice
of exercise a reasonable period of time prior to the actual closing
date
to facilitate such exchange.
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3
5.
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Confidentiality.
Employee covenants that Employee shall at all times keep 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 Employee’s duties for the
Company, (b) disclosure is required by applicable law, or (c) the
Company’s Board of Directors authorizes
disclosure.
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6.
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Other
Company Employees.
For a period of one year from the date Employee’s employment by the
Company terminates, Employee shall not (a) solicit another Company
employee to leave the Company’s employ and work for the Employee or
another person or entity, or (b) participate in the hiring of another
Company employee by another person or entity away form the
Company.
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7.
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Arbitration.
Any controversy or claims arising out of or relating to this Agreement
shall be submitted to binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
in
Waukesha County, Wisconsin, and judgment upon the award rendered
by the
arbitrator may be entered in any court having jurisdiction thereof.
If the
parties cannot agree on the choice of a single arbitrator within
15 days
after receipt of a notice of arbitration, then the parties shall
contact
the chairperson of the Alternative Dispute Resolution section of
the
Wisconsin Bar, who shall select an independent arbitrator, and the
arbitration shall be decided by such independent arbitrator. Each
of the
parties reserves the right to file with a court of competent jurisdiction
an application for temporary or preliminary injunctive relief or
a
temporary protective order on the grounds that the arbitration award
to
which the applicant may be entitled may be rendered ineffective in
the
absence of such relief. The arbitration award shall be in writing,
and
shall specify the factual and legal basis for the award. The losing
party
shall pay all costs and expenses of the
arbitrator.
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8.
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Notices.
Any notice, request, approval, consent, demand, permission or other
communication required or permitted by this Agreement shall be effective
only if it is in 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 States Mail, registered or certified mail,
return
receipt requested, with first-class postage prepaid, addressed as
follows:
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If
to the
Employee:
Xxxx
X.
Xxxxxxx
X000
X00000 Xxxxx Xxxxx
Xxxxxxxxxx,
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.
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9.
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Assignability.
This Agreement requires the personal services of 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.
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10.
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Other
Agreements. This
Agreement contains the entire agreement 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.
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11.
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Amendments
and Waivers.
No
amendments to this Agreement or any waiver of any of its provisions
shall
be effective unless expressly stated in 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 this 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 of this Agreement or of any subsequent breach of the same
or any
other provision of this Agreement.
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12.
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Severability.
If
any provision of the Agreement shall be held illegal, invalid or
otherwise
unenforceable under controlling law, the remaining provisions of
this
Agreement shall not be affected thereby but shall continue in
effect.
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13.
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Governing
Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of
Wisconsin.
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CRITICARE
SYSTEMS, INC.
By:
/s/
Xxxx X.
Xxxxx
Its: PRES/CEO
EMPLOYEE:
/s/
Xxxx X. Knudson_______________
Xxxx
X.
Xxxxxxx
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