Exhibit 10.1
RETENTION AGREEMENT
 
This RETENTION AGREEMENT is entered into as of this 30th day of September, 2008,
by and between ICU MEDICAL, INC., a Delaware corporation (the “Company”) and
Richard A. Costello, a key employee of the Company (the “Employee”).
 
RECITALS
 
WHEREAS, the Company recognizes that, as is the case with many publicly-held
corporations, the possibility of a change in control of the Company exists and
that the uncertainties raised by such a possibility may result in the
distraction or even the premature departure of the Employee to the detriment of
the Company and its stockholders, and
 
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that
appropriate steps should be taken to reinforce and encourage the continued
employment and dedication of the Employee without distraction from the
possibility of a change in control of the Company and related events and
circumstances.
 
NOW, THEREFORE, as an inducement for and in consideration of the Employee
remaining in its employ, the Company agrees that the Employee shall receive the
severance benefits set forth in this Agreement in the event the Employee’s
employment with the Company is terminated under the circumstances described
below subsequent to a Change in Control (as defined in Section 1.1).
 
I. Key Definitions.
 
As used herein, the following terms shall have the following respective
meanings:
 
A. “Change in Control” means
 
1. the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock
of the Company if, after such acquisition, such Person beneficially owns (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of
either (i) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection 1.1(a), the following
acquisitions shall not constitute a Change in Control: (i) any acquisition from
the Company, (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with all of clauses (i),
(ii) and (iii) of subsection (c) of this Section 1.1; or
 
2. individuals who, as of the date hereof, constitute the members of the Board
(the “Incumbent Directors”) ceasing for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election or nomination for election
by the Company’s stockholders was approved by a vote of at least a majority of
the Incumbent Directors then in office shall be deemed to be an Incumbent
Director (except that this proviso shall not apply to any individual whose
initial election as a director occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board); or
 
3. the consummation of a reorganization, merger or consolidation involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company (a “Business Combination”), unless, immediately following such
Business Combination, each of the following three conditions is satisfied: (i)
all or substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, respectively, of the
resulting or acquiring corporation in such Business Combination (which shall
include, without limitation, a corporation which as a result of such transaction
owns the Company or substantially all of the Company’s assets either directly or
through one or more subsidiaries)(such resulting or acquiring corporation is
referred to as the “Acquiring Corporation”) in substantially the same
proportions, relative to one another, as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, respectively, (ii) no Person (excluding
the Acquiring Corporation or any employee benefit plan (or related trust)
maintained or sponsored by the Company or the Acquiring Corporation)
beneficially owns, directly or indirectly, 50% or more of the then-outstanding
shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding voting securities of such corporation (except to
the extent that such ownership existed prior to the Business Combination) and
(iii) a majority of the members of the board of directors of the Acquiring
Corporation were Incumbent Directors at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
 
 
 

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4. approval of the stockholders of the Company of a complete liquidation or
dissolution of the Company.
 
B. “Change in Control Date” means the first date during the Term (as defined in
Section 2) on which a Change in Control occurs.  Anything in this Agreement to
the contrary notwithstanding, if a Change in Control occurs and if the
Employee’s employment with the Company is terminated prior to the Change in
Control Date or if any event which constitutes Good Reason (as defined in
Section 1.4) occurs prior to the Change in Control Date, and if it is reasonably
demonstrated by the Employee that such termination of employment or event which
constitutes Good Reason (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change in Control or (ii) otherwise
arose in connection with or in anticipation of a Change in Control, then for all
purposes of this Agreement the “Change in Control Date” shall mean the date
immediately prior to the date of such termination of employment or event which
constitutes Good Reason.
 
C. “Cause” means:
 
1. the Employee’s intentional, willful and continuous failure to substantially
perform his or her reasonable assigned duties (other than any such failure
resulting from incapacity due to physical or mental illness or any failure after
the Employee gives notice of termination for Good Reason), which failure is
materially and demonstrably injurious to the Company, and which failure is not
cured within 30 days after a written demand for substantial performance is
received by the Employee from the Board which specifically identifies the manner
in which the Board believes the Employee has not substantially performed the
Employee’s duties; or
 
2. the Employee’s intentional and willful engagement in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company or is
intended to result in substantial personal enrichment; or
 
3. the Employee’s conviction for a felony or the Employee’s plea of nolo
contendere in connection with a felony indictment.
 
For purposes of this Section 1.3, no act or failure to act by the Employee shall
be considered “willful” unless it is done, or omitted to be done, in bad faith
and without reasonable belief that the Employee’s action or omission was in the
best interests of the Company.
 
D. “Good Reason” means the occurrence, without the Employee’s written consent,
or any of the events or circumstances set forth in clauses (a) through (f)
below.  Notwithstanding the occurrence of any such event or circumstance, such
occurrence shall not be deemed to constitute Good Reason if, prior to the Date
of Termination specified in the Notice of Termination (each as defined in
Section 3.2(a)) given by the Employee in respect thereof, such event or
circumstance has been fully corrected and the Employee has been reasonably
compensated for any losses or damages resulting therefrom; provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Employee:
 
 
 

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1. any significant diminution in the Employee’s duties, responsibilities or
authority in effect immediately prior to the earliest to occur of (i) the Change
in Control Date, (ii) the date of the execution by the Company of the initial
written agreement or instrument providing for the Change in Control or (iii) the
date of the adoption by the Board of a resolution providing for the Change in
Control (with the earliest to occur of such dates referred to as the
“Measurement Date”);
 
2. a reduction in the Employee’s annual base salary as in effect on the
Measurement Date or as the same may be increased from time to time;
 
3. the failure by the Company to (i) continue in effect any material
compensation or benefit plan or program (a “Benefit Plan”) in which the Employee
participates or which is applicable to the Employee immediately prior to the
Measurement Date, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan or reasonable cash compensation in lieu thereof)
has been made with respect to such plan or program, (ii) continue the Employee’s
participation in a Benefit Plan (or in such substitute or alternative plan or
make reasonable cash compensation in lieu thereof) on a basis not materially
less favorable, both in terms of the amount of benefits provided and the level
of the Employee’s participation relative to other participants, than the basis
existing immediately prior to the Measurement Date or (iii) award cash bonuses
to the Employee in amounts and in a manner substantially consistent with past
practice in light of the Company’s financial performance;
 
4. a change by the Company in the location at which the Employee performs the
Employee’s principal duties for the Company to a new location that is either (i)
outside a radius of 35 miles from the Employee’s principal residence immediately
prior to the Measurement Date; (ii) more than 30 miles from the location at
which the Employee performs his or her principal duties for the Company
immediately prior to the Measurement Date, and which results in an increase in
the Employee’s daily commuting distance; or (iii) a requirement by the Company
that the Employee travel on Company business to a substantially greater extent
than required immediately prior to the Measurement Date;
 
5. the failure of the Company to obtain the agreement, in a form reasonably
satisfactory to the Employee, from any successor to the Company to assume and
agree to perform this Agreement, as required by Section 6; or
 
6. any failure of the Company to pay or provide to the Employee any portion of
the Employee’s compensation or benefits due under any Benefit Plan within seven
days of the date such compensation or benefits are due, or any material breach
by the Company of any employment agreement with the Employee.
 
The Employee’s right to terminate his or her employment for Good Reason shall
not be affected by his or her incapacity due to physical or mental illness.
 
E. “Disability” means the Employee’s absence from the full-time performance of
the Employee’s duties with the Company for 180 consecutive calendar days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee’s legal representative.
 
F. “Effective Date” means the date as of which this Agreement is entered into.
 
II. Term of Agreement.  This Agreement, and all rights and obligations of the
parties hereunder, shall take effect upon the Effective Date and shall expire
upon the first to occur of (a) the expiration of the Term (as defined below) if
a Change in Control has not occurred during the Term, (b) the date 12 full
calendar months after the Change in Control Date, if the Employee is still
employed by the Company as of such later date, or (c) the fulfillment by the
Company of all of its obligations under Sections 4 and 6 if the Employee’s
employment with the Company terminates within 12 full calendar months following
the Change in Control Date, provided that Section 5 shall remain in effect from
the Effective Date until 24 full calendar months after the Date of Termination
of the Employee.  “Term” shall mean the period commencing as of the Effective
Date and continuing in effect through September 30, 2009; provided, however,
that commencing on September 30, 2009 and each September 30 thereafter, the Term
shall be automatically extended for one additional year unless, not later than
90 days prior to the scheduled expiration of the Term (or any extension
thereof), the Company shall have given the Employee written notice that the Term
will not be extended.
 
 
 

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III. Employment Status; Termination Following Change in Control.
 
A. Not an Employment Contract.  The Employee acknowledges that this Agreement
does not constitute a contract of employment or impose on the Company any
obligation to retain the Employee as an employee and that this Agreement does
not prevent the Employee from terminating employment at any time.  If the
Employee’s employment with the Company terminates for any reason and
subsequently a Change in Control shall occur, the Employee shall not be entitled
to any benefits hereunder, except as otherwise provided pursuant to Section 1.2.
 
B. Termination of Employment.
 
1. If the Change in Control Date occurs during the Term, any termination of the
Employee’s employment by the Company or by the Employee within 12 full calendar
months following the Change in Control Date (other than due to the death of the
Employee) shall be communicated by a written notice to the other party hereto
(the “Notice of Termination”), given in accordance with Section 7.  Any Notice
of Termination shall: (i) indicate the specific termination provision (if any)
of this Agreement relied upon by the party giving such notice; (ii) to the
extent applicable, set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination for the Employee’s employment under
the provision so indicated and (iii) specify the Date of Termination (as defined
below).  The date on which an employment termination becomes effective (the
“Date of Termination”) shall be (A) the close of business on the date specified
in the Notice of Termination (which date may not be less than 14 days or more
than 45 days after the date of delivery of such Notice of Termination), in the
case of a termination other than due to the Employee’s death, or (B) the date of
the Employee’s death in the case of a termination due to the Employee’s death,
as the case may be.
 
2. The failure by the Employee or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Employee or the Company,
respectively, from asserting any such fact or circumstance in enforcing the
Employee’s or the Company’s right hereunder.
 
3. Any Notice of Termination for Cause given by the Company must be given within
90 days of the occurrence of the event(s) or circumstance(s) which constitute(s)
Cause.  Prior to any Notice of Termination for Cause being given (and prior to
any termination for Cause being effective), the Employee shall be entitled to a
hearing before the Board at which he or she may, at his or her election, be
represented by counsel and at which he or she shall have a reasonable
opportunity to be heard.  Such hearing shall be held on not less than 15 days
prior written notice to the Employee stating the Board’s intention to terminate
the Employee for Cause and stating in detail the particular events event(s) or
circumstance(s) which the Board believes constitutes Cause for termination.
 
4. Any Notice of Termination for Good Reason given by the Employee must be given
within six months of the occurrence of the events or circumstances which
constitutes Good Reason.
 
IV. Benefits to Employee.
 
A. Compensation.  If the Change in Control Date occurs during the Term and the
Employee’s employment with the Company terminates within 12 full calendar months
following the Change in Control Date, the Employee shall be entitled to the
following benefits:
 
 
 

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1. Termination Without Cause or for Good Reason.  If the Employee’s employment
with the Company is terminated by the Company (other than for Cause, Disability
or death) or by the Employee for Good Reason within 12 full calendar months
following the Change in Control Date, then the Employee shall be entitled to the
following benefits:
 
a. the Company shall pay to the Employee either in a lump sum in cash within 30
days after the Date of Termination, or, if the Employee so elects in writing
within 15 days after the Date of Termination, in 24 bi-monthly installments,
without interest, beginning on the date of the first normal employee payroll of
the Company which occurs more than 30 days after the Date of Termination, the
aggregate of the following amounts:
 
i. the sum of (A) the Employee’s annual base salary for the current year through
the Date of Termination and (B) the product of (x) the Employee’s total on
target semi-annual and annual bonuses for the current fiscal year (including any
merit bonuses and any bonuses under the Company’s 2008 Performance-Based
Incentive Plan) (the “Target Bonus”) and (y) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 less (C) the amount of any
compensation previously paid for the current year, whether in quarterly bonus
payments, or otherwise, (the sum of the amounts described in clauses (A) and
(B), less the amount previously paid in (C), shall be  referred to as the
“Accrued Obligations”); and
 
ii. the sum of (A) the Employee’s annual base salary as of the date immediately
before the Date of Termination; and (B) the Employee’s Target Bonus for the
current fiscal year.
 
b. for 12 full calendar months after the Date of Termination, or such longer
period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue to provide benefits to the
Employee (other than any benefits under the executive bonus plan, the Company
401(k) Savings Plan, the 2005 Long Term Retention Plan or the 2008
Performance-Based Incentive Plan) and the Employee’s family at least equal to
those which would have been provided to them if the Employee’s employment had
not been terminated, in accordance with the applicable Benefit Plans in effect
on the Measurement Date or, if more favorable to the Employee and his or her
family, in effect generally at any time thereafter with respect to other peer
employees of the Company; provided, however, that if the Employee becomes
reemployed with another employer and is eligible to receive comparable life,
medical, dental, health, and accident or disability insurance benefits under
another employer-provided plan, on terms at least as favorable to the Employee
and his or her family, then the benefits described in this clause (ii) shall be
reduced to the extent such other benefits are available to the Employee and his
or her family;
 
c. to the extent not previously paid or provided, the Company shall timely pay
or provide to the Employee any other amounts or benefits required to be paid or
provided or which the Employee is eligible to receive following the Employee’s
termination of employment under any plan, program, policy, practice, contract or
agreement of the Company (such other amounts and benefits shall be referred to
as the “Other Benefits”);
 
d. The Company shall pay the commercially reasonable fees of one executive
outplacement firm’s services provided to the Employee, such firm to be chosen by
the Employee, not to exceed $10,000.
 
e. Any outstanding stock options granted to the Employee pursuant to the
Company’s Amended and Restated 1993 Stock Incentive Plan or the Company’s 2003
Stock Option Plan, and any outstanding stock options granted to the Employee
after the Effective Date and prior to a Change in Control, shall immediately
vest upon the Date of Termination.
 
f. Notwithstanding any provision of this Agreement, (A) awards (“LTRP Awards”)
that have been granted to the Employee under the Company’s 2005 Long Term
Retention Plan (the “LTRP”) that have not been paid in accordance with the terms
of the LTRP shall not be considered Accrued Obligations, Target Bonus or
benefits to be provided in accordance with Benefit Plans for purposes of
determining amounts to be paid under this Section 4.1(a) or Section 4.1(b) and
(B) LTRP Awards are Other Benefits that will be paid or not paid, as the case
may be, in accordance with the terms of the LTRP.
 
 
 

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2. Resignation without Good Reason; Termination for Cause; Termination for Death
or Disability.  If the Employee voluntarily terminates his or her employment
with the Company within 12 full calendar months following the Change in Control
Date, excluding a termination for Good Reason, or the Employee’s employment with
the Company is terminated by the Company for Cause, or by reason of the
Employee’s death or Disability within 12 full calendar months following the
Change in Control Date, then the Company shall (i) pay the Employee (or his or
her estate, if applicable), in a lump sum in cash within 15 days after the Date
of Termination, the Accrued Obligations and (ii) timely pay or provide to the
Employee the Other Benefits earned before the Date of Termination.
 
B. Mitigation.  The Employee shall not be required to mitigate the amount of any
payment or benefits provided for in this Section 4 by seeking other employment
or otherwise.  Further, except as provided in Section 4.1(a)(ii), the amount of
any payment or benefits provided for in this Section 4 shall not be reduced by
any compensation earned by the Employee as a result of employment by another
employer, by retirement benefits, by disability or death benefits, by offset
against any amount claimed to be owed by the Employee to the Company or
otherwise.
 
C. Limitation on Payments.  In the event that any of the severance benefits
provided for in Section 4.1 of this Agreement (i) constitute “parachute
payments” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) but for this Section 4.3, would be
subject to the excise tax imposed by Section 4999 of the Code, then the
Employee’s severance benefits under Section 4.1 will be either:
 
(A) delivered in full, or
 
(B) delivered as to such lesser extent which would result in no portion of such
severance benefits being subject to excise tax under Section 4999 of the Code,
 
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999 of the
Code, results in the receipt by the Employee on an after-tax basis of the
greatest amount of severance benefits, notwithstanding that all or some portion
of such severance benefits may be taxable under Section 4999 of the
Code.  Unless the Company and the Employee otherwise agree in writing, any
determination required under this Section 4.3 will be made in writing by the
Company’s independent public accountants immediately prior to the Change in
Control Date (the “Accountants”), whose determination will be conclusive and
binding upon the Employee and the Company for all purposes.  For purposes of
making the calculations required by this Section 4.3, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code.  The Company and the Employee will furnish
to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section 4.3.  The
Company will bear all fees and costs payable to the Accountants in connection
with any calculations contemplated by this Section 4.3.
 
V. Disputes.
 
A. Settlement of Disputes; Arbitration.  All claims by the Employee for benefits
under this Agreement shall be directed to and determined by the Board and shall
be in writing.  Any denial by the Board of a claim for benefits under this
Agreement shall be delivered to the Employee in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement
relied upon.  The Board shall afford a reasonable opportunity to the Employee
for a review of the decision denying a claim.  Any further dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Orange County, California, in accordance with the
rules of the American Arbitration Association then in effect.  Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.
 
 
 

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B. Expenses.  The prevailing party shall be entitled to recover all costs and
expenses, including reasonable attorneys’ fees, expert witness fees, court costs
and all other costs and expenses incurred in any action or proceeding arising
out of this Agreement or as to any matters related to but not covered by this
Agreement.  For purposes of this Section 5.2, the term “prevailing party”
includes a party who agrees to dismiss an action or proceeding upon the other’s
payment of the sums allegedly due or for performance of the covenants,
undertakings or agreements allegedly breached, or who obtains substantially the
relief it sought.
 
VI. Successors; Binding Agreement.
 
A. Successors.  The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no such succession had taken place.  Failure of the
Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a breach of this Agreement and shall
constitute Good Reason if the Employee elects to terminate employment (and such
termination shall be deemed to have occurred after a Change in Control), except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination.  As used
in this Agreement, “Company” shall mean the Company as defined above and any
successor to its business or assets as aforesaid that assumes and agrees to
perform this Agreement, by operation of law or otherwise.
 
B. Binding Agreement.  This Agreement shall inure to the benefit of and be
enforceable by the Employee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If the
Employee should die while any amount would still be payable to the Employee or
his or her family hereunder if the Employee had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the executors, personal representatives or
administrators of the Employee’s estate.
 
VII. Notice.  All notices, instructions and other communications given hereunder
or in connection herewith shall be in writing.  Any such notice, instruction or
communication shall be sent either (i) by registered or certified mail, return
receipt requested, postage prepaid, or (ii) prepaid via a reputable nationwide
overnight courier service, in each case addressed to the Company at 951 Calle
Amanecer, San Clemente, CA 92673, and to the Employee at the home address most
recently provided by the Employee to the Company (or to such other address as
either the Company or the Employee may have furnished to the other in writing in
accordance herewith).  Any such notice, instruction or communication shall be
deemed to have been delivered, whether or not actually received, five business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service.  Either party may give any notice, instruction or
other communication hereunder using any other means, but no such notice,
instruction or other communication shall be deemed to have been duly delivered
unless and until it is actually is received by the party for whom it is
intended.
 
VIII. Miscellaneous.
 
A. Employment by Subsidiary.  For purposes of this Agreement, the Employee’s
employment with the Company shall not be deemed to have terminated solely as a
result of the Employee continuing to be employed by a wholly-owned subsidiary of
the Company.
 
B. Severability.  If any provision of this Agreement is declared invalid or
unenforceable, such provision shall be deemed automatically adjusted to conform
to the requirements for validity or enforceability as declared at such time
while maintaining the original intent of the provision to the greatest extent
possible and, as so adjusted, shall be deemed a provision of this Agreement as
though originally included herein.  If the provision invalidated or deemed
unenforceable is of such a nature that it cannot be so adjusted, the provision
shall be deleted from this Agreement as though it had never been included
therein.  The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
 
 
 

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C. Injunctive Relief.  The Company and the Employee agree that any breach of
this Agreement by the Company or the Employee is likely to cause the Employee or
the Company substantial and irrevocable damage and therefore, in the event of
any such breach, in addition to such other remedies which may be available, the
Employee or the Company shall have the right to seek specific performance and
injunctive relief.
 
D. Governing Law.  The validity, interpretation, construction, enforceability
and performance of this Agreement shall be governed by the internal law of the
State of California.
 
E. Waivers.  No waiver by the Employee at any time of any breach of, or
compliance with, any provision of this Agreement to be performed by the Company
shall be deemed a waiver of that or any other provision at any subsequent time.
 
F. Counterparts.  This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but both of which together will constitute one
and the same instrument.
 
G. Tax Withholding.  Any payments provided for hereunder shall be paid net or
any applicable tax withholding required under federal, state or local law.
 
H. Entire Agreement.  Except as provided in the Employee’s stock option
agreements and employment agreement, this Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.  Nothing contained in this Agreement shall
limit the Employee’s or the Company’s rights, obligations an benefits under the
Employee’s stock option agreement.
 
I. Amendments.  The Employee and the Company may, by mutual agreement, amend or
modify this Agreement, provided, however that any such amendment or modification
shall only be effected by a written instrument executed by both the Company and
the Employee.
 
[SIGNATURE PAGE FOLLOWS]
 

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as a sealed
instrument as of the day and year first set forth above.
 

 
COMPANY:
 

 
ICU MEDICAL, INC.
 

 
By:/s/George A. Lopez, M.D.
 

 
Title:President and CEO
 

 

 
EMPLOYEE:
 

 
/s/ Richard A. Costello
RICHARD A. COSTELLO