Exhibit 10.14


 


EMPLOYMENT AGREEMENT


 


AGREEMENT
made and entered into by and between AGA Medical Corporation, a Minnesota
corporation (the “Company”), and John R. Barr of 120 Walpole Street,
Dover, Massachusetts 02030 (the “Executive”), effective as of the 19th
day of September, 2005 (the “Effective Date”).


 


WHEREAS,
the Executive desires to be employed by the Company, and the Company desires to
employ the Executive pursuant to the terms set forth herein.


 


NOW, THEREFORE, in consideration of the mutual promises,
terms, provisions and conditions set forth in this employment agreement (the “Agreement”),
the parties hereby agree:


 


1.             Employment.  Subject to the terms and conditions set forth
in this Agreement, the Company hereby offers and the Executive hereby accepts
employment.


 


2.             Term.      The Company hereby agrees to employ
Executive as Chief Operating Officer, and Executive hereby agrees to accept
such employment, on the terms and conditions set forth herein, for the period
commencing on Effective Date and terminating on the third (3rd)
anniversary of the Effective Date (unless sooner terminated as hereinafter set
forth) (the “Term”); provided, however, that commencing on
such third (3rd) anniversary date, and each anniversary of the date
hereof thereafter, the Term of this Agreement shall automatically be extended
for one additional year unless at least thirty (30) calendar days prior to each
such anniversary date, the Company or Executive shall have given notice that it
or he, as applicable, does not wish to extend this Agreement.  Following the date on which the Executive’s
employment so terminates, unless specifically otherwise agreed between
Executive and the Company, the Executive shall cease to hold any position
(whether as an officer, director, manager, Executive, trustee, fiduciary or
otherwise) with the Company, its parent, AGA Holdings, Inc. (“Holdings”),
or any of its Subsidiaries or Affiliates.


 


3.             Capacity and Performance.


 


(a)           During the term of Executive’s
employment hereunder, Executive shall serve the Company as its Chief Operating
Officer and shall report to the Chief Executive Officer.  In addition, and without further
compensation, Executive shall serve as a director and/or officer of Holdings
and/or one or more of the Company’s Subsidiaries if so elected or appointed
from time to time.


 


(b)           During the term of Executive’s
employment hereunder, the Executive shall be employed by the Company on a
full-time basis and shall perform such duties and responsibilities on behalf of
the Company, Holdings and the Company’s Subsidiaries as may be designated from
time to time by the Chief Executive Officer of Holdings.


 


(c)           During the term of Executive’s
employment hereunder, Executive shall devote his full business time to the
advancement of the business and interests of the Company, Holdings and the
Company’s Subsidiaries and to the discharge of his duties


 

















 


and responsibilities hereunder.  Executive shall not engage in any other
business activity or serve in any industry, trade, professional, governmental or
academic position during the Term, except as may be expressly approved in
advance by the Board of Directors of Holdings (the “Board”) in
writing.  Notwithstanding the preceding,
the Executive may, without being in violation of the Executive’s obligations
hereunder, (i) serve on corporate, civic or charitable boards, or
committees which are not engaged in business competition with the Company, and (ii) invest
the Executive’s personal assets in such form or manner as will not require any
material services by the Executive in the operation of the entities in which
such investments are made, provided the Executive shall use the Executive’s
best efforts to pursue such activities in such a manner so that such activities
shall not prevent the Executive from fulfilling the Executive’s obligations to
the Company hereunder.


 


4.             Compensation and Benefits.  During the term of Executive’s employment
hereunder as compensation for all services performed by the Executive:


 


(a)           Base Salary.  The Company shall pay the Executive a base
salary at the rate of Three Hundred Eighty Thousand dollars ($380,000) per
year, payable in accordance with the payroll practices of the Company for its
executives and subject to increase (but not subject to decrease without the
consent of Executive) from time to time by the Board, in its sole discretion
(such base salary, including any increase from time to time, is hereafter
referred to as the “Base Salary”).


 


(b)           Stock Options.  The Company shall grant Executive stock
options to purchase common stock equal to 1.5% of the fully diluted common
shares of the Company valued as of the July 28, 2005 recapitalization of
the Company occurring on July 28, 2005 (“Options”).  The Options will have a ten-year term and an
exercise price equal to the conversion price of Series A Preferred Stock
of the Company.  Options will fully vest
in five (5) years upon a vesting schedule to be determined by the
Compensation Committee of the Board. 
Upon a Change of Control, the Options will automatically vest provided Executive
is employed at the time of the Change of Control.  Options and option shares shall be nonvoting
ownership and shall have only those rights as determined by the Compensation
Committee of the Board in its sole discretion. 
If Executive’s employment is terminated for Cause, all vested and
unvested Options and option shares will be forfeited without further
action.  If Executive’s employment is
terminated for any other reason other than for Cause, Executive shall retain
vested Options and option shares, and only unvested Options and option shares
will be forfeited.  Options not exercised
by Executive within ninety (90) days after the Termination Date will be
forfeited.


 


(c)           Bonuses.  So long as Executive is still employed by
Company on March 15, 2006, the Company shall pay Executive a bonus in the
amount of Fifty Three Thousand Six Hundred and Sixteen dollars ($53,616).  Thereafter, so long as Executive is employed
by Company, the Company shall pay Executive a cash bonus for each calendar year
ending during the Term no later than the March 15th following the close of
each such calendar year, in an amount determined by the Compensation Committee
of the


 


2

















 


Board in its sole discretion; provided, however, that
the cash bonus shall not exceed 50% of the Base Salary of Executive at the
close of such preceding calendar year.


 


(d)           Vacations.  Executive shall be entitled to no less than
twenty (20) paid vacation days per calendar year during the Term subject to the
reasonable business needs of the Company. 
Executive shall also be entitled to no less than nine (9) sick/personal
days per calendar year during the Term. 
Vacation and sick/personal time shall otherwise be governed by the
policies of the Company, as in effect from time to time.


 


(e)           Other Benefits.  Subject to any contribution therefor
generally required of executives of the Company, Executive shall be entitled to
participate in, or benefit under, any and all Executive benefit plans, policies
or perquisites from time to time in effect for executives of the Company
generally, except to the extent such plans are in a category of benefit
specifically otherwise provided to Executive under this Agreement (e.g., severance pay). 
Such participation shall be subject to the terms of the applicable plan
documents and generally applicable Company policies.  The Board may alter, modify, add to or delete
Executive benefit plans at any time as it, in its sole judgment, determines to
be appropriate, unless otherwise provided under any Executive benefit plan.


 


(f)            Business Expenses.  The Company shall pay or reimburse Executive
for all reasonable and necessary business expenses incurred or paid by
Executive in the performance of his duties and responsibilities hereunder, subject
to any maximum annual limit or other restrictions on such expenses set by the
Board and to such reasonable substantiation and documentation as may be
specified by the Company from time to time.


 


(g)           Automobile Allowance.  The Company shall pay Executive an automobile
allowance at the rate of Seven Hundred Fifty dollars ($750) per month, payable
as additional ordinary income.  In
addition, the Company shall pay or reimburse Executive automobile insurance
premiums incurred by Executive on Executive’s primary automobile used for
business purposes, including any applicable taxes incurred by Executive as a
result of such payments.


 


(h)           Relocation Expenses.  The Company shall pay or reimburse Executive
for reasonable relocation expenses and temporary living costs incurred by
Executive in transferring Executive’s residence to the State of Minnesota as
set forth in Attachment B hereto (“Relocation Expenses”) up to a maximum of One
Hundred Thirty Thousand dollars ($130,000). 
Any exceptions to the eligible Relocation Expenses must be agreed upon
in advance between Executive and the Company; provided, however, that the final
determination of reasonableness of Executive’s Relocation Expenses shall be in
the sole discretion of the Company.


 


5.             Termination of Employment.  The Executive’s employment hereunder shall
terminate under the following circumstances (the date of each event of
termination set forth below, by whatever cause, is referred to as the “Termination
Date”):


 


(a)           Expiration.  Executive’s employment shall terminate upon
the expiration of this Agreement, without renewal, pursuant to Section 2
hereof.


 


3

















 


(b)           Death.  In the event of Executive’s death during the
term of Executive’s employment hereunder, Executive’s employment shall
immediately and automatically terminate.


 


(c)           Disability.  The Company may terminate Executive’s
employment hereunder, upon notice to Executive, in the event that Executive
becomes disabled during his employment hereunder through any illness, injury,
accident or condition of either a physical or psychological nature and, as a
result, is unable to satisfactorily perform his duties and responsibilities
hereunder on a full-time basis, with reasonable accommodation, for ninety (90)
days during any period of three hundred and sixty-five (365) consecutive
calendar days.  If any question shall
arise as to whether during any period Executive is disabled through any
illness, injury, accident or condition of either a physical or psychological nature
so as to be unable to perform substantially all of his duties and
responsibilities hereunder, Executive, at the request of the Company, shall
submit to a medical examination by a physician selected by the Company (“Company
Physician”) to determine whether Executive is so disabled which
determination shall be binding on the Executive.  If such question shall arise and Executive
shall fail to submit to such medical examination by the Company Physician, the
Company’s determination of the issue shall be binding on Executive.


 


(d)           By the Company for Cause.  The Company may terminate Executive’s
employment hereunder for Cause at any time upon notice to Executive setting
forth the nature of such Cause.  The
following shall constitute “Cause” for termination: (i) Executive’s
conviction of or plea of nolo contendere
to a felony or other crime involving moral turpitude; (ii) Executive’s
fraud, theft or embezzlement committed with respect to the Company, Holdings or
the Company’s Subsidiaries; (iii) breach by Executive of any of the
provisions of Sections 7, 8 and/or 9 hereof that causes material harm to the
Company, Holdings or any of the Company’s Subsidiaries; (iv) Executive’s
willful and continued failure to perform his material duties to the Company and
its Subsidiaries; or (v) Executive’s willful failure to comply with or
follow the directions or orders of the Board; provided, however,
that the Company may terminate Executive’s employment hereunder for Cause
within the meaning of these clauses (iv) or (v) only after the
Company has provided written notice to Executive of the failure and Executive
shall have not have remedied such failure within fifteen (15) business days
following the effectiveness of such notice.


 


(e)           By the Company Other than for
Cause.  The Executive’s employment
may be terminated by the Company at any time without Cause.


 


(f)            By the Executive.  The Executive may terminate his employment
hereunder at any time upon the provision of sixty (60) days prior written
notice to the Company.


 


6.             Compensation
Upon Termination.


 


(a)           Expiration.  In the event of Executive’s termination
hereunder upon the expiration of any Term as contemplated by Section 2, the
Company shall pay Executive


 


4

















 


any amounts due and payable
in accordance with Section 4(c), plus one lump cash payment equal to six (6) months
of the Base Salary at the rate that was in effect during the Term prior to his
Termination Date, within the 30 day period following his Termination Date.


 


(b)           Death.  In the event of a termination of Executive’s
employment hereunder by reason of death as contemplated by Section 5(b),
the Company shall pay  Executive’s
designated beneficiary or, if no beneficiary has been designated by the
Executive, to his estate, the following amounts: (i) the sum of the Base
Salary earned but not paid through the Termination Date plus the balance
of the Executive’s earned but unused vacation days as of the Termination Date
for the calendar year in which the Termination Date occurs, and (ii) any
life insurance carried on behalf of the Executive for the benefit of Executive’s
beneficiaries and Executive’s estate.


 


(c)           Disability.  In the event of a termination of Executive’s
employment hereunder by reason of disability as contemplated by Section 5(c),
the Company shall pay (i) the Base Salary at the rate in effect on the
Termination Date for another six (6) months and (ii) a one time lump
sum payment equal to the balance of the Executive’s earned but unused vacation
days as of the Termination Date, and the Company shall continue to provide
Executive and his dependents with continued coverage under all Company provided
medical and dental benefit  plans and
policies for the time period commencing on his Termination Date for another eighteen
(18) months (but only if the Executive does not have access at reasonable cost
to substantially equivalent benefits through another employer). Any
participation in such benefit plans and policies may be pursuant to the
continuation coverage rights of Executive pursuant to Part 6 of Title I of
ERISA (“COBRA”) or the Company may provide such benefits directly
through the purchase of insurance or otherwise. 
If benefits are provided pursuant to COBRA continuation rights, the
Company shall pay a cash amount to Executive at the time of the Termination
Date that is sufficient to cover all premiums required for such COBRA coverage
under the appropriate benefit plans. 
Notwithstanding the foregoing, unless the Company so elects, the period
for participation in any medical or dental plan pursuant to this Section 6(b) shall
not exceed the maximum period of continuation coverage provided under COBRA; provided,
that (unless such participation period continues at the election of the
Company) at the end of such period of COBRA continuation coverage, the Company
will pay the Executive the additional dollar amount that the Company would have
contributed if the Executive were to have remained a participant through the
end of such 18-month period.


 


(d)           By the Company for Cause,
or By Executive.  In the event of a
termination of Executive’s employment hereunder by the Company for Cause as
contemplated by Section 5(d), or by Executive as contemplated by Section 5(f),
the Company shall pay in a lump sum within 30 days of the Termination Date, to
the Executive the sum of the Base Salary earned but not paid through the
Termination Date plus the balance of Executive’s earned but unused
vacation days as of the Termination Date for the calendar year in which the
Termination Date occurs.


 


(e)           By the Company Other than
for Cause.  In the event of any
termination of Executive’s employment hereunder by the Company other than for
Cause as


 


5

















 


contemplated by Section 5(e), the Company shall pay
Executive (i) the Base Salary at the rate in effect on the Termination
Date for another eighteen (18)  months, and (ii) a
one-time lump sum payment equal to the balance of Executive’s earned but unused
vacation days as of the Termination Date. Any
obligation of the Company to the Executive pursuant to this Section 6(e) is
conditioned upon (i) the Executive signing a release of claims in the form
appended hereto as Attachment A (the “Executive Release”) within
twenty-one (21) days (or such greater period as the Company may specify)
following the date notice of termination of employment is given under either Section 5(e) or
Section 5(f) and upon the Executive’s not revoking the Executive
Release in a timely manner thereafter and (ii) the Executive’s
continued full performance of his continuing obligations under Sections 7, 8
and/or 9  hereof.  Base Salary to which the
Executive is entitled under this Section 6(e) shall be payable in
accordance with the normal payroll practices of the Company and will begin at
the Company’s next regular payroll period which is at least five business days
following the effective date of the Executive Release, but shall be retroactive
to the next business day following the Termination Date. The lump-sum payment
in respect of accrued vacation required by this Section 6(e) shall be
due and payable five business days following the effective date of the
Executive Release.


 


7.             Restricted Activities.  The Executive agrees that some restrictions
on his activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the
Company and its Subsidiaries:


 


(a)           While Executive is employed by the
Company and for eighteen (18) months after his employment terminates (in the
aggregate, the “Non-Competition Period”), Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent, Executive,
co-venturer or otherwise (other than through ownership of  publicly-traded capital stock of a corporation
which represents less than one percent (1%) of the outstanding capital stock of
such corporation), (i) compete with the Company, Holdings or any of the
Company’s Subsidiaries in any business related to developing, selling,
licensing or otherwise providing Products and related services to physicians,
hospitals or other medical establishments in the United States or such other
business activities which the Company, Holdings or any of the Company’s
Subsidiaries shall conduct or intend to conduct as of the Termination Date, or (ii) undertake
any planning for any business competitive with the Company, Holdings or any of
the Company’s Subsidiaries. 
Specifically, but without limiting the foregoing, Executive agrees not
to engage in any manner in any activity that is directly or indirectly
competitive or potentially competitive with the business of the Company,
Holdings or any of the Company’s Subsidiaries as conducted or under
consideration at any time during Executive’s employment with the Company or any
of its Subsidiaries (including prior to the date hereof).


 


(b)           Executive agrees that, during his
employment with the Company, he will not undertake any outside activity,
whether or not competitive with the business of the Company, Holdings or the
Company’s Subsidiaries, that could reasonably give rise to a conflict of
interest or otherwise interfere with his duties and obligations to the Company,
Holdings or any of the Company’s Subsidiaries.


 


6

















 


(c)           Executive further agrees that while
he is employed by the Company and during the Non-Competition Period, Executive
will not, directly or indirectly, (i) hire or attempt to hire any
Executive of the Company, Holdings or any of the Company’s Subsidiaries or
anyone who was such an Executive within the six (6) months preceding such
hire or attempt to hire, (ii) hire or attempt to hire any independent
contractor providing services to the Company, Holdings or any of the Company’s
Subsidiaries or anyone who was such an independent contractor within six (6) months
preceding such hire or attempt to hire, (iii) assist in hiring or any
attempt to hire of anyone identified in clauses (i) or (ii) of this
sentence by any other Person, (iv) encourage any Executive or independent
contractor of the Company, Holdings or any of the Company’s Subsidiaries to
terminate his or her relationship with the Company, Holdings or any of the
Company’s Subsidiaries, or (v) solicit or encourage any customer or vendor
of the Company, Holdings or any of the Company’s Subsidiaries to terminate or
diminish its relationship with any of them, or, in the case of a customer, to
conduct with any Person any business or activity which such customer conducts
or could conduct with the Company, Holdings or any of the Company’s
Subsidiaries.


 


8.             Confidential Information.


 


(a)           Executive acknowledges that the
Company, Holdings or any of the Company’s Subsidiaries continually develop
Confidential Information, that Executive has in the past and may in the future
develop Confidential Information for the Company, Holdings or any of the
Company’s Subsidiaries and that Executive has in the past and may in the future
learn of Confidential Information during the course of employment.   Executive will comply with the policies and
procedures of the Company and its Subsidiaries for protecting Confidential
Information and shall never use or disclose to any Person (except as required
by applicable law or for the proper performance of his duties and
responsibilities to the Company and its Subsidiaries), any Confidential
Information obtained by Executive incident to his employment or other
association with the Company, Holdings or any of the Company’s
Subsidiaries.  Executive understands that
this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination.


 


(b)           All documents, records, tapes and
other media of every kind and description relating to the business, present or
otherwise, of the Company, Holdings or any of the Company’s Subsidiaries and
any copies, in whole or in part, thereof (the “Documents”), whether or
not prepared by Executive, shall be the sole and exclusive property of the
Company, Holdings and the Company’s Subsidiaries.  Executive shall safeguard all Documents and
shall surrender to the Company at the time his employment terminates, or at
such earlier time or times as the Board or its designee may specify, all
Documents then in Executive’s possession or control.


 


9.             Assignment of Rights to
Intellectual Property.  Executive
shall promptly and fully disclose all Intellectual Property to the Company, and
he hereby acknowledges that all such Intellectual Property is the property of
the Company.  Executive hereby assigns
and agrees to assign to the Company (or as otherwise directed by the Company)
Executive’s full right, title and interest in and to all Intellectual
Property.  Executive agrees to execute
any and all applications


 


7

















 


for domestic and
foreign patents, copyrights or other proprietary rights and to do such other
acts (including without limitation the execution and delivery of instruments of
further assurance or confirmation) requested by the Company to assign the
Intellectual Property to the Company and to permit the Company to enforce any
patents, copyrights or other proprietary rights to the Intellectual
Property.  Executive will not charge the
Company for time spent in complying with these obligations.  All copyrightable works that Executive
creates shall be considered “work made for hire”.  Notwithstanding the foregoing, this Section 9
shall not apply to any Intellectual Property which no equipment, supplies,
facility or trade secret information of the Company, Holdings or any of the
Company’s Subsidiaries was used and which was developed entirely on Executive’s
own time, and (i) which does not relate (A) directly to the business
of the Company, Holdings or any of the Company’s Subsidiaries or (B) such
entities’ actual or demonstrably anticipated research development, or (ii) which
does not result from any work performed by the Executive for the Company,
Holdings or any the Company’s Subsidiaries.


 


10.           Enforcement of Covenants.  Executive acknowledges that he has carefully
read and considered all the terms and conditions of this Agreement, including
the restraints imposed upon him pursuant to Sections 7, 8 and/or 9 hereof.  Executive agrees that said restraints are
necessary for the reasonable and proper protection of the Company, Holdings and
the Company’s Subsidiaries and that each and every one of the restraints is
reasonable in respect to subject matter, length of time and geographic
area.  Executive further acknowledges
that, were he to breach any of the covenants contained in Sections 7, 8 and/or
9 hereof, the damage to the Company would be irreparable.  Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled to
preliminary and permanent injunctive relief against any breach or threatened
breach by Executive of any of said covenants. 
The parties further agree that, in the event that any provision of
Sections 7, 8 and/or 9  hereof shall
be determined by any court of competent jurisdiction to be unenforceable by
reason of its being extended over too great a time, too large a geographic area
or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.


 


11.           Conflicting Agreements.
Executive hereby represents and warrants that the execution of this Agreement
and the performance of his obligations hereunder will not breach or be in
conflict with any other agreement to which Executive is a party or is bound and
that Executive is not now subject to any covenants against competition or
similar covenants or any court order or other legal obligation that would
affect the performance of his obligations hereunder.  Executive will not disclose to or use on
behalf of the Company any proprietary information of a third party without such
party’s consent.


 


12.           Definitions.  Words or phrases which are initially
capitalized or are within quotation marks shall have the meanings provided in
this Section 12 and as provided elsewhere herein.  For purposes of this Agreement, the following
definitions apply:


 


(a)           “Affiliate” means, with
respect to the Company or any other specified Person, any other Person directly
or indirectly controlling, controlled by or under common control with the
Company or such other specified Person, where control may be by management
authority, equity interest or other means.


 


8

















 


(b)           “Change of Control” means (i) a
consolidation or merger of the Company with or into any other corporation
(other than a merger in which the Company is the surviving corporation and
which will not result in more than 50% of the capital stock of the Company
being owned of record or beneficially by persons other than the holders of such
capital stock immediately prior to such merger), (ii) a sale or disposition
of all or substantially all of the properties and assets of the Company as an
entirety to any other person or persons in a single transaction or series of
related transactions, (iii) an acquisition of beneficial ownership by any
person or group of voting stock of the Company representing more than 50% of
the voting power of all outstanding shares of such voting stock, whether by way
of merger or consolidation or otherwise, or (iv) any other transaction
which results in the disposition of 50% or more of the voting power of all
classes of capital stock of the Company on a combined basis.


 


(c)           “Confidential Information”
means any and all information of the Company, Holdings and the Company’s
Subsidiaries that is not generally known by others with whom they compete or do
business, or with whom they plan to compete or do business and any and all
information which, if disclosed by the Company, Holdings or the Company’s
Subsidiaries, would assist in competition against them.  Confidential Information includes without
limitation such information relating to (i) the development, research,
testing, manufacturing, marketing and financial activities of the Company,
Holdings or the Company’s Subsidiaries, (ii) the Products, (iii) the
costs, sources of supply, financial performance and strategic plans of the
Company, Holdings or the Company’s Subsidiaries, (iv) the identity and
special needs of the customers of the Company, Holdings or the Company’s
Subsidiaries and (v) the people and organizations with whom the Company,
Holdings or the Company’s Subsidiaries have business relationships and those
relationships.  Confidential Information
also includes any information that the Company, Holdings or any of the Company’s
Subsidiaries have received, or may receive hereafter, from others which was
received by the Company, Holdings or any of the Company’s Subsidiaries with any
understanding, express or implied, that the information would not be disclosed.


 


(d)           “Intellectual Property” means
inventions, discoveries, developments, methods, processes, compositions, works,
concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) conceived, made, created, developed or reduced to practice by
Executive (whether alone or with others and whether or not during normal
business hours or on or off the premises of the Company, Holdings or any of the
Company’s Subsidiaries) during the Term of Executive’s employment with the
Company or any of its Subsidiaries (including prior to the Effective Date) that
relate to either the Products or any prospective activity of the Company,
Holdings or any of the Company’s Subsidiaries or that make use of  Confidential Information or any of the
equipment or facilities of the Company, Holdings or any of the Company’s
Subsidiaries.


 


(e)           “Person” means an individual,
a corporation, a limited liability company, an association, a partnership, an
estate, a trust and any other entity or organization, including an Affiliate or
a Subsidiary.


 


9














 


(f)            “Products” mean all products
planned, researched, developed, tested, manufactured, sold, licensed, leased or
otherwise distributed or put into use by the Company or any of its
Subsidiaries, together with all services provided or planned by the Company or
any of its Subsidiaries, during Executive’s employment with the Company or any
of its Subsidiaries (including prior to the Effective Date).


 


(g)           “Subsidiary” shall mean any
Person of which the Company (or other specified Person) shall, directly or indirectly,
own beneficially or control the voting of at least a majority of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally or at least a majority of the partnership, membership, joint
venture or similar interests, or in which the Company (or other specified
Person) or a Subsidiary thereof shall be a general partner or joint venturer
without limited liability.


 


13.           Survival.  The provisions of this Agreement shall
survive following the Termination Date if so provided herein or desirable to
accomplish the purposes of other surviving provisions, including without
limitation the provisions of Section 6, 7, 8 and 9 hereof.


 


14.           Withholding.  All payments made by the Company under this
Agreement shall be reduced by any tax or other amounts required to be withheld
by the Company under applicable law.


 


15.           Assignment.  Neither the Company nor Executive may make
any assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that the Company may assign its rights and obligations under this Agreement
without the consent of Executive in the event that the Company shall hereafter
effect a reorganization, consolidation or merger or to whom the Company
transfers all or substantially all of its properties or assets.  This Agreement shall inure to the benefit of
and be binding upon the Company and Executive, their respective successors,
executors, administrators, heirs and permitted assigns.


 


16.           Severability.  If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as
to which it is so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.


 


17.           Waiver.  No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party.  The failure of either party to require the
performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.


 


18.           Notices.  Any and all notices, requests, demands and
other communications provided for by this Agreement shall be in writing and
shall be effective when delivered in person, when delivered by courier at
Executive’s last known address on the books of the Company, or five (5) business
days following deposit in the United States mail, postage prepaid,


 


10

















 


registered or
certified, and addressed to Executive at his last known address on the books of
the Company or, in the case of the Company, at its principal place of business,
attention of the Chairman of the Board, or to such other address as either
party may specify by notice to the other actually received.


 


19.           Entire Agreement.  This Agreement and the other plans and
documents specifically referred to herein constitute the entire agreement
between the parties regarding the subject matter of this Agreement and such
other plans and documents and supersede all prior communications, agreements
and understandings, written or oral, with respect to such subject matter,
including any prior employment or similar agreements between Executive and the
Company.


 


20.           Amendment.  This Agreement may be amended or modified
only by a written instrument signed by Executive and by a expressly authorized
representative of the Company.


 


21.           Headings.  The headings and captions in this Agreement are
for convenience only and in no way define or describe the scope or content of
any provision of this Agreement.


 


22.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.


 


23.           Compliance with Laws.  If the Company and Executive reasonably
determine that the terms of this Agreement are not in compliance with
applicable laws or regulations, including without limitation as would result in
the imposition of extraordinary current taxation, the Company and Executive
agree to undertake commercially reasonable efforts to amend this Agreement to
cure such noncompliance.  In furtherance
of the foregoing, it is the intent of the Company and Executive that this
Agreement comply with the provisions and principles established by the Internal
Revenue Service pursuant to Section 409A of the Internal Revenue Code of
1986, as amended.


 


24.           Governing Law.  This contract and shall be construed and enforced
under and be governed in all respects by the laws of Minnesota, without regard
to the conflict of laws principles thereof.


 


IN
WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the
Company, by its duly authorized representative, and by Executive, as of the
date first above written.


 


 


	
  THE EXECUTIVE:

  	
   

  	
  AGA MEDICAL
  CORPORATION:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ John R. Barr

  	
   

  	
  By:

  	
  /s/ Franck Gougeon

  
	
  John R. Barr

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President and CEO

  
					



 


11