Exhibit 10.1


 


  ICU Medical, Inc.


 


EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT is made and entered into as of this
first day of January 2006, by and between ICU Medical, Inc., a
Delaware corporation (“Employer”), and George A. Lopez (“Employee”).


 


RECITALS


 


A.                                    Employer
is engaged in the business of developing and manufacturing safe medical
connectors.


 


B.                                    Employer
desires to continue to employ Employee, and Employee desires to continue to be
employed, on the terms and conditions set forth in this Agreement.


 


C.                                    Prior
to or contemporaneously with the date of this Agreement, Employee and the
Company have entered into an Indemnification Agreement and a Confidentiality
and Inventions Agreement.


 


AGREEMENT


 


Accordingly,
in consideration of the mutual covenants contained herein, the parties agree as
follows:


 


1.                                      TERMS
OF AGREEMENT


 


1.1                               Initial
Term   The initial term of this
agreement shall begin on January 1, 2006 and shall continue until December 31,
2006 unless it is terminated earlier pursuant to Section 5.


 


1.2                               Renewal
Terms           Notwithstanding Section 1.1,
this Agreement shall be extended and continue in effect, subject to Section 5,
until the earlier of (i) the execution by Employer and Employee of an
amendment extending this Agreement or a new employment agreement or (ii) March 31,
2007 if, but only if, at December 31, 2006 each of the following is true:


 


a. This Agreement has not been terminated pursuant to Section 5
and Employer has not notified Employee of a termination pursuant to Section 5;


 


b. Neither Employer not Employee has notified the
other of its or his intention not to extend or renew this Agreement; and


 


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c. The
parties have not yet executed an amendment extending this Agreement or a new
employment agreement.


 


Neither
this Agreement nor the employment of Employee will in any event continue beyond
March 31, 2007 unless Employer and Employee execute an amendment extending
this Agreement or a new employment agreement by such date.


 


2.                                      EMPLOYMENT


 


2.1                               Employment
of Employee. Employer hereby hires Employee as President and Chief
Executive Officer. Employee hereby accepts such employment on the terms and
conditions of this Agreement.


 


2.2                               Position
and Duties. Employee shall serve, as President and Chief Executive
Officer of Employer and shall have the general powers and duties of management
usually vested in that office in a corporation and such other powers and duties
as may be prescribed by the Board of Directors or the Bylaws of Employer. In
this position, Employee will report directly to, and be subject to the
supervision of the Board of Directors.


 


2.3                               Standard
of Performance. Employee agrees that he will at all times faithfully
and industriously and to the best of his/her ability, experience and talents
perform all of the duties that may be required of and from him/her
pursuant to the terms of this Agreement. Such duties shall be performed at such
place or places as the interests, needs, business and opportunities of Employer
shall require or render advisable.


 


2.4                               Exclusive
Service. Employee shall devote all of his business energies and
abilities and all of his productive time to the performance of his duties under
this Agreement (reasonable absences during holidays and vacations excepted),
and shall not, without the prior written consent of Employer, render to others
any service of any kind (whether or not for compensation) that, in the opinion
of Employer, would materially interfere with the performance of his/her duties
under this Agreement.


 


Employee
shall not, without the prior written consent of Employer, maintain any
affiliation with, whether as an agent, consultant, employee, officer, director,
trustee or otherwise, nor shall s/he directly or indirectly render any services
of an advisory nature or otherwise to, or participate or engage in, any other
business activity.


 


3.                                      COMPENSATION


 


3.1                               Compensation.
During the term of this Agreement, Employer shall pay the amounts and
provide the benefits described in this Section 3, and Employee agrees to
accept such amounts and benefits in full payment for Employee’s services under
this Agreement.


 


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3.2                               Base
Salary. Employer shall pay to Employee a base salary of $ 500,000
annually in equal installments payable no less frequently than semi-monthly.


 


3.3                               Incentive
Bonus Compensation. Employee shall be eligible to receive a bonus equal
to $500,000 and an additional bonus of $550,000 if the criterion in the
Performance Based Bonus as approved by the Board of Directors on March 22,
2006 and approved by the Stockholders of the Company on May 12, 2006 are
achieved. Terms and conditions of payment of these bonuses shall be determined
by the Compensation Committee,  Board of
Directors of Employer.


 


3.4                               Fringe
Benefits. Subject to Section 3.6 and upon satisfaction of the
applicable eligibility requirements, Employee shall be entitled to all fringe
benefits which Employer may make generally available from time to time for
its executive employees. Such benefits shall include without limitation those
available, if any, under any group insurance, profit sharing, pension or
retirement plans or sick leave policy.


 


3.5                               Vacation
and Holiday. Employee shall be entitled to vacations and holidays in
accordance with Employer’s policies in effect from time to time and published
in the Employer’s Employee Handbook. Employee is entitled to additional
vacation time entirely at the sole discretion of employee.


 


3.6                               Deduction
from Compensation. Employer shall deduct and withhold from all
compensation payable to Employee all amounts required to be deducted or
withheld pursuant to any present or future law, ordinance, regulation, order,
writ, judgment, or decree requiring such deduction and withholding.


 


3.7                               Disability
Severance Benefits. Should Employee’s employment hereunder be
terminated by reason of his/her total disability, Employer shall pay Employee,
within 30 days of termination, a lump sum severance payment equal to 50% of the
base salary in Section 3.2,  and
regularly accrued salary for any pay periods worked by the employee, but not
paid. Total disability means Employee is unable to perform his/her duties
for a consecutive period of six months due to bodily injury or sickness,
including mental or nervous disorder, as determined by a physician selected by
Employer, and while disabled s/he does not engage in any employment for wage or
profit.


 


Employer’s
obligation to pay disability severance benefits shall be reduced by any
payments for which s/he and his/her dependents are eligible under the Federal
Social Security Act, and any payment to which s/he is eligible under the Worker’s
Compensation Law, Unemployment Insurance Code or other similar legislation, or
under any other plan or insurance maintained and paid for by Employer providing
benefits for loss of time from disability or unemployment.


 


4.                                      REIMBURSEMENT
OF EXPENSES


 


Employer
shall pay to or reimburse Employee for those travel, promotional and similar
expenditures incurred by Employee which Employer determines are reasonably necessary
for the proper discharge of Employee’s duties under this Agreement and for


 


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which Employee submits
appropriate receipts and indicates the amount, date, location and business
character, provided that the nature and general amount of such expenditures is
either in accordance with the Company’s policies announced from time to time or
approved in advance.


 


5.                                      TERMINATION


 


5.1                               Termination
Date. The date on which this Agreement terminates shall be the “Termination
Date.”  After the Termination Date,
Employee shall not be employed by Employer, Employer shall promptly pay to
Employee any compensation under this Agreement accrued but unpaid as of that
date, and Employee shall not be entitled to any compensation from Employer for
the performance by Employee after that date of any obligations of Employee to
Employer under this Agreement.


 


5.2                               Termination
Without Cause. Without cause, Employer may terminate this
Agreement at any time for any reason, or no reason (including without
limitation the Employee’s disability as a result of any physical or mental
condition that Employer determines will prevent Employee from performing the
essential functions of the job, with or without reasonable accommodation) by
giving Employee 60 days written notice. If requested by Employer to do so,
Employee shall continue to perform his/her duties under this Agreement
during such 60 day period. This Agreement shall automatically and without
further action of Employer terminate on the death of Employee.


 


5.3                               Termination
For Cause. Employer may terminate this Agreement at any time
without prior notice for “cause” or in the event that Employee does not cure a
breach of any provision of this Agreement within five days after Employer
delivers demand to Employee to cure such breach. For this purpose, “cause”
shall include, without limitation, (i) Employee’s insubordination, meaning
the willful failure to conform to or conduct himself/herself in accordance
with the policies and standards of Employer or the refusal to perform the
duties assigned pursuant to Section 2 or assigned by the Board of
Directors; (ii) the dishonesty of Employee; (iii) Employee’s
conviction for a felony or for fraud, embezzlement or any other act of moral
turpitude; (iv) any willful violation by Employee of laws or regulations
applicable to Employer’s business; or (v) Employee’s gross negligence or
willful misconduct in the performance of his/her duties under this Agreement
which would adversely affect the business or reputation of Employer. A
termination by Employee at any time after the occurrence of an event which
would constitute cause for termination by Employer shall be considered a
termination by Employer for cause.


 


5.4                               Return
of Employer Property. Within five days after the Termination Date,
Employee shall return to Employer all products, books, records, forms,
specifications, formulae, data processes, designs, papers and writings relating
to the business of Employer, including without limitation proprietary or licensed
computer programs, customer lists and customer data, and/or copies or
duplicates thereof in Employee’s possession or under Employee’s control. Employee
shall not retain any copies or duplicates of such property and all licenses
granted to him/her by Employer to use computer programs or software shall be
revoked on the Termination Date.


 


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6.                                      NONCOMPETITION


 


6.1                               Noncompetition
During Employment. During the term of this Agreement, Employee shall
not, without the prior written consent of Employer, directly or indirectly
render services of a business, professional, or commercial nature to any person
or firm, whether for compensation or otherwise, or engage in any activity
directly or indirectly or as an officer, director, employee, consultant, or
holder of more than one (1%) percent of the capital stock of any other
corporation. Otherwise, Employee may make personal investments in any
other business so long as these investments do not require him/her to participate
in the operation of the companies in which s/he invests.


 


6.2                               Non-solicitation.
Employee acknowledges that s/he will have access at the highest level to,
and the opportunity to acquire knowledge of, valuable, confidential and
proprietary information relating to the business of the Company and,
accordingly, in order to preserve the value of such information for the
Company, Employee covenants and agrees as follows:


 


(a)                                  Employee
shall not, during the term of this Agreement and for a period of one year
following the termination of this Agreement for any reason, without the prior
written consent of the Company, directly or indirectly offer employment to, or
engage the services of, persons who were employed in the Company during the 12
month period preceding such termination date.


 


(b)                                 The
Employee shall not, during the term of this Agreement and for a period of one
year following termination of this Agreement for any reason, solicit, for
himself or others, any person or entity which was a customer of the Company on
such termination date.


 


7.                                      OTHER
PROVISIONS


 


7.1                               Compliance
With Other Agreements. Employee represents and warrants to Employer
that the execution, delivery and performance of this Agreement will not
conflict with or result in the violation or breach of any term or provision of
any order, judgment, injunction, contract, agreement, commitment or other
arrangement to which Employee is a party or by which s/he is bound, including
without limitation any agreement restricting the sale of products similar to
Employer’s products in any geographic location or otherwise. Employee
acknowledges that Employer is relying on his/her representation and warranty in
entering into this Agreement, and agrees to indemnify Employer from and against
all claims, demands, causes of actions, damages, costs or expenses (including
attorneys’ fees) arising from any breach thereof.


 


7.2                               Injunctive
Relief. Employee acknowledges that the services to be rendered under
this Agreement and the items described in Sections 5.4, 6 and 7 are of a
special, unique and extraordinary character, that it would be difficult or
impossible to replace such services or to compensate Employer in money damages
for a breach of this Agreement. Accordingly, Employee agrees and consents that
if s/he violates any of the provisions of this Agreement, Employer, in addition
to any other rights and remedies available under this Agreement or otherwise,
shall be entitled to temporary and permanent injunctive relief, without the
necessity of proving actual damages and without the necessity of posting any
bond or other undertaking in connection therewith.


 


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7.3                               Attorneys’
Fees. The prevailing party in any suit, arbitration or other proceeding
brought to enforce any provisions of this Agreement, shall be entitled to
recover all costs and expenses of the proceeding and investigation (not limited
to court costs), including attorneys’ fees at the hourly rates usually charged
by that party’s attorneys.


 


7.4                               Nondelegable
Duties. This is a contract for Employee’s personal services. The duties
of Employee under this Agreement are personal and may not be delegated or
transferred in any manner whatsoever, and shall not be subject to involuntary
alienation, assignment or transfer by Employee during his/her life.


 


7.5                               Entire
Agreement. This Agreement is the only agreement and understanding
between the parties pertaining to the subject matter of this Agreement, and
supersedes all prior agreements, summaries of agreements, descriptions of
compensation packages, discussions, negotiations, understandings,
representations or warranties, whether verbal or written, between the parties
pertaining to such subject matter. Notwithstanding the foregoing, the parties
intend to be bound by the terms of the Indemnification Agreement and the
Confidentiality and Inventions Agreement, the Retention Agreement entered into
as of April 18, 2001, and the Long-Term Retention Plan, which govern the
relationship of the parties with respect to subject matter of those respective
agreements.


 


7.6                               Governing
Law. The validity, construction and performance of this Agreement shall
be governed by the laws, without regard to the laws as to choice or conflict of
laws, of the State of California.


 


7.7                               Severability.
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions, and this Agreement shall be
construed in all respects as if any invalid or unenforceable provision were
omitted.


 


7.8                               Amendment
and Waiver. This Agreement may be amended, modified or
supplemented only by a writing executed by each of the parties. Either party may in
writing waive any provision of this Agreement to the extent such provision is
for the benefit of the waiving party. No waiver by either party of a breach of
any provision of this Agreement shall be construed as a waiver of any
subsequent or different breach, and no forbearance by a party to seek a remedy
for noncompliance or breach by the other party shall be construed as a waiver of
any right or remedy with respect to such noncompliance or breach.


 


7.9                               Binding
Effect. The provisions of this Agreement shall bind and inure to the
benefit of the parties and their respective successors and permitted assigns.


 


7.10                        Notice.
Any notices or communications required or permitted by this Agreement shall
be deemed sufficiently given if in writing and when delivered personally or 48
hours after deposit with the United State Postal Service as registered or
certified mail, postage prepaid and addressed as follows:


 


(a)                                  If
to Employer, to the principal office of Employer in the State of California,
marked “Attention:  President”; or


 


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(b)                                 If
to Employee, to the most recent address for Employee appearing in Employer’s
records.


 


7.11                        Headings.
The sections and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.


 


IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.


 


	
   

  	
   

  	
  EMPLOYER

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ICU
  MEDICAL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Michael T.
  Kovalchik, III, M.D.

  	
   

  	
  July 7, 2006

  	
   

  
	
   

  	
   

  	
  Michael T.
  Kovalchik, III, M.D.

  	
   

  	
  date

  	
   

  
	
   

  	
   

  	
  Chairman,
  Compensation Committee

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ George A.
  Lopez, M.D.

  	
   

  	
  July 7, 2006

  	
   

  
	
   

  	
   

  	
  George A. Lopez,
  M.D.

  	
   

  	
  date

  	
   

  
	
   

  	
   

  	
  President and
  C.E.O.

  	
   

  	
   

  



 


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