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                                                                   EXHIBIT 10.14

                        1999 INCENTIVE COMPENSATION PLAN

PURPOSE: The purpose of the 1999 Incentive Compensation Plan is to motivate and
retain all Officers and employees in order to maximize the performance of the
Company against pre-defined operating objectives.

BACKGROUND: Somanetics pursues a compensation program that includes salary,
incentive compensation, stock options and standard benefits (e.g. health
insurance) to achieve a market competitive package to attract, motivate and
retain key Officers and employees. The Incentive Compensation Plan is a core
component of the overall compensation package for Somanetics Officers and
employees and has been offered since 1996. The program affords the Officers and
employees the opportunity to be financially rewarded based on actual results and
affords the Company the benefit of conserving cash when business objectives are
not achieved.

PLAN SUMMARY: All Officers and non-commissioned, full-time employees participate
in the 1999 Incentive Compensation Plan. Potential incentive compensation under
the Plan is based on each participant's position, salary level, individual
performance against pre-defined objectives and Company performance against
pre-defined objectives. One half of actual incentive compensation is paid
quarterly based on year-to-date sales results versus the 1999 Sales Plan and the
remaining one half is paid at the end of the fiscal year based on performance
against a variety of pre-defined individual and Company objectives.

PLAN DETAIL:

         PLAN A: All Officers and non-commissioned, full-time employees
participate in Plan A of the program. This portion of the Plan represents 50% of
the incentive compensation potential for participants. The basis for incentive
compensation for this portion of the program is the Company's year-to-date
results versus the 1999 Sales Plan evaluated quarterly. In the event that
year-to-date performance versus the 1999 Sales Plan is <80%, no payment is made
under this portion of the Plan. Actual payment, if any, is made in the month
following the completion of each fiscal quarter, except for payment relating to
sales> 100% to Plan. Over achievement, if any, is measured and paid at year-end.

         PLAN B. Officers and certain employees participate in Plan B of the
program. This portion of the Plan represents the other 50% of the incentive
compensation potential for these participants. The basis for incentive
compensation for this portion of the program is the Company's performance versus
the 1999 Sales Plan, and to the extent that actual sales results are at least
80% to Plan, individuals receive incentive compensation in relation to their
achievement of pre-defined individual objectives. Measurement, and actual
payment, if any, is made at year-end.


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         PLAN C. Employees who participate in Plan A, but do not participate in
Plan B, participate in Plan C. This portion of the Plan represents the other 50%
of the incentive compensation potential for these participants. The basis for
incentive compensation for this portion of the program is the individual's
performance against pre-defined objectives. An individual must achieve at least
50% of their objectives to be considered for any incentive compensation under
this portion of the Plan. Measurement, and actual payment, if any, is made at
year-end.


PLAN A PARTICIPANTS: All Officers and non-commissioned, full-time employees.

PLAN B PARTICIPANTS:                        PLAN C PARTICIPANTS:
Bruce Barrett (President & CEO)               Rick Scheuing (V.P., R&D)
Raymond Gunn (CFO)                            Pam Winters (V.P., Operations)
Bill Iacona (Controller)                      Ron Widman (V.P., Medical Affairs)
Mary Ann Victor (V.P., IR/PR/HR)              Oleg Gonopolskiy (Senior Engineer)
Susan Draper (Mgr., Purchasing)               Jim Youngblood (Engineer)
Jean Esten (Sls/Mktg Administrator)           Julie Lim (Engineer)
Tim Macko (Materials Planner)                 Chris Osborne (Engineer)
Vickie Lundy (Clinical Assistant)             Gary Wellhausen (Engineer)
Lloyd Nieto (Quality Technician)
Rosanne Barone (Accounting Clerk)
Jeff Myszynski (Production Supervisor)
Kim Langer (Customer Service)
Cherie Foster (Executive Assistant)
Debbie Earle (Accountant)

NOTE:  New Officers and employees will be considered for participation at the
discretion of the President and/or the Compensation Committee.





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                           1999 INCENTIVE COMPENSATION
                              PAYMENT CALCULATIONS

PLAN A:  QUARTERLY PAYMENT

If the year-to-date NOL Plan is achieved, the calculation for the 1999 Incentive
Compensation payment is as follows:

      YTD% TO SALES PLAN    X    FACTOR    X    SALARY    X    RATE    X    .125

   FACTOR DETERMINATION:

       % TO SALES PLAN                           FACTOR

              <80%                                 0
           80% to 85%                             .6
           85% to 90%                             .7
           90% to 95%                             .8
           95% to 100%                            .9
              100%+                              1.0

PLAN B:  YEAR-END PAYMENT
<TABLE>
<S>      <C>
         % GOALS    X    SALARY    X    RATE    X    % SALES PLAN    X    % PROFITS PLAN    X    .5
</TABLE>


PLAN C:  YEAR-END PAYMENT

         % GOALS    X    SALARY    X    RATE    X    .5




Note: The President and/or the Compensation Committee reserve the right to
adjust actual incentive compensation paid to individuals under Plan B by +/-
25%.




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                        1999 INCENTIVE COMPENSATION PLAN
                            ADMINISTRATION GUIDELINES

-    This Plan shall be administered by the Company's Compensation Committee,
     which is authorized to interpret this Plan, to make, amend and rescind
     rules and regulations relating to this Plan, to make awards under this
     Plan, and to make all other determinations under this Plan necessary or
     advisable for its administration.

-    All determinations, interpretations and constructions made by the
     Compensation Committee shall be final and conclusive.

-    The Board reserves the right to pay bonuses to participants beyond those,
     if any, called for by the Plan.

-    Rights under this Plan may not be transferred, assigned or pledged.

-    Nothing in this Plan confers any participant any right to continued
     employment and does not interfere with the Company's right to terminate an
     employee's employment.

-    Revenue and net income will be as reported in the Company's Form 10-Q and
     10-K.

-    An Officer, or employee, must be a full-time employee in good standing at
     the time of actual payment in order to receive any payment under the Plan.
     No payment will be made to any person who leaves the full-time employ of
     the Company before the payment date. And, no payment will be made to any
     person who is subject to a formal, written performance action plan.

-    Any over achievement payment earned due to actual revenue exceeding Plan
     revenue will be paid after the end of the fiscal year based on final
     year-end sales results versus the 1999 Sales Plan.

-    Officer, or employee, participation in this Plan will be suspended during
     periods of sick days beyond the allowable amount, long-term disability
     periods, or any other extended leave of absence. Actual payment reductions
     will be at the discretion of the President and/or the Compensation
     Committee.

-    Earned payments under Plan A, except for payments relating to over
     achievement, are intended to be paid after the close of each fiscal quarter
     based on year-to-date performance versus the 1999 Sales Plan. Payments
     under Plan B, and any over achievement relating to Plan A, shall be paid at
     year-end. In either case, actual payment will be made as soon as
     practicable after sales and net income are determined and the payment
     confirmed by the Compensation Committee.

-    Payments under Plan A will be made for "catching up" on a year-to-date
     basis. For example, if the Company finishes the first quarter below Plan,
     participants can recoup their full first quarter bonus not earned at the
     conclusion of the first quarter by "catching up" by the end of the second
     quarter.


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-    The year-to-date NOL Plan must be achieved in order for quarterly and
     year-end payments to be made to participants.

-    The year-end Cash-on-hand Plan, plus any net cash inflow from a Corporate 
     partner or other source, must be achieved in order for year-end payments to
     be made to participants.