**Exhibit 10.17**

 

**[Execution Copy]**

** **

Smiths Medical Holdco Limited

765 Finchley RoadLondon NW 11 8DS

 

December 5, 2004

 

Michael Dobrovic

Medex, Inc.

2231 Rutherford Road

Carlsbad, CA 92008

 

Dear Mike:

 

I am excited on behalf ofSmiths Medical Holdco Limited (the “Company”) to have the opportunity towork with you following the proposed transaction.  The purpose of this letter is to set out theterms upon which we have agreed for your employment with Medex, Inc. (“Medex”)to continue following the closing (the “Closing”) of the transactionscontemplated by the Agreement and Plan of Merger, dated as of December 5,2004 (the “Merger Agreement”), by and among the Company, ForestAcquisition Corp., an Ohio corporation and a wholly-owned subsidiary of theCompany (“Merger Sub”), MedVest Holdings Corporation, an Ohiocorporation, (“MedVest”), each of the individual stockholders of theCompany signatories to the Merger Agreement, and OEP MedVest LLC, a Delawarelimited liability company, as representative on behalf of the stockholders ofMedVest.  Effective as of the Closing,this letter shall amend the Severance and Non-Compete Agreement dated as of May 21,2003 (as amended, the “Agreement”) between you and Medex.  Where there is a discrepancy between thisletter and the Agreement, this letter will be the controlling document.  Except as set forth in this letter, theAgreement shall remain in full force and effect and you and Medex confirm youragreement with the terms thereof.  Youremployment with Medex remains at will. Capitalized terms used herein and not otherwise defined shall have themeanings ascribed thereto in the Agreement.

 

1.             BaseSalary and Automobile Allowance. Your annual base salary shall be two hundred eight thousand ($208,000)dollars, plus an annual cost of living allowance in an amount equal to (i) sixthousand six hundred sixty-seven ($6,667) dollars per year from the Closinguntil September 1, 2005 and (ii) three thousand three hundredthirty-three ($3,333) dollars per year from September 1, 2005 until September 1,2006.  Your base salary shall be payablein accordance with the standard payroll practices of Medex, less all statutorywithholdings and deductions.  Increases,if any, in this base salary are at Medex’s sole discretion, based on your performance,and shall be effective August 1st of the relevant year.  Your first performance review will be in August 2005.  You will receive an automobile allowance inthe amount of one thousand three hundred fifty dollars ($1,350) per month, lessall statutory withholds and deductions, for the purchase and use of anautomobile of a type suitable for an employee in this position.

 

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2.             TransitionPayments.  To induce the Company’saffiliates to enter into the transactions contemplated by the Merger Agreement,for which you will receive substantial benefit, you, Medex and the Companyhereby agree that (a) the benefits under Section 6(c) of theAgreement (the “Change in Control Benefits”), (b) the remainingpayments to be made in accordance with Section 7 of the Agreement (the “CompetePayment”), and (c) your bonus for the 2004 fiscal year (the “BonusPayment,” and together with the Change in Control Benefits and the CompetePayment, the “Transition Payments”) shall be paid in accordance with Section 3below.  You further agree that you willnot be entitled to receive the Compete Payment or the Bonus Payment if youvoluntarily terminate your employment with Medex during the Transition Period(as defined in Section 3 below), and you will not be entitled to receivethe Change in Control Benefits if you voluntarily terminate your employmentwith Medex before the first anniversary of Closing.  It is understood and agreed by the partiesthat any termination for Good Reason (as defined below) shall not be deemed tobe a voluntary termination for purposes of this letter.  “Good Reason” shall mean (A) a materialbreach by Medex of any material obligation under the Agreement that is notcurable or that is not cured within 30 days after written notice thereof fromyou to Medex or (B) your relocation from the present metropolitan area ofemployment, without your consent.

 

3.             Termination.

 

(a)           During Transition Period.  The “Transition Period” shall be theperiod beginning on the Closing Date and ending on December 31, 2005.  Medex shall pay in full the Compete Paymentand the Bonus Payment, plus interest thereon at the prime rate as published inthe Eastern edition of the Wall Street Journal from January 1, 2005 to thedate of payment, on the earlier of (i) the date Medex terminates youremployment, (ii) the termination of your employment for Good Reason or onaccount of your death or disability or (iii) so long as you remainemployed with Medex during the entire Transition Period, December 31,2005.

 

(b)           On the First Anniversary.  Medex shall pay in full the Change in ControlBenefits, including, without limitation, the continuation of medical insurancecoverage in the manner contemplated by Section 6(c)(iv) of theAgreement, on the earlier of (i) the date Medex terminates your employment,(ii) the termination of your employment for Good Reason or on account ofyour death or disability or (iii) so long as you remain employed withMedex during the entire twelve months period following the Closing, the firstanniversary of the Closing. Notwithstanding anything set forth in the Agreement to the contrary, theparties acknowledge and agree that the aggregate cash payment to be paid aspart of the Change in Control Benefits shall include interest thereon at theprime rate as published in the Eastern edition of the Wall Street Journal from January 1,2005 to the date of payment.

 

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If you agree with the terms andconditions of this letter, please return one original executed copy of thisdocument to me.  This letter shall becomeeffective only at the Closing, and if the Merger Agreement is terminated forany reason whatsoever, the terms of this letter shall be of no force andeffect.

 
|                                           | Sincerely,                     |
|------------------------------------------------|--------------------------------|
|                                           |                           |
|                                           | Smiths  Medical Holdco Limited |
|                                           |                           |
|                                           | By:                            | /s/ R. J.  Taunt |   |
|                                           | Name:                          | R. J. Taunt |   |
|                                           | Title:                         |   Authorized Signatory |   |
|                                           |                           |
|                                           | Medex, Inc.               |
|                                           |                           |
|                                           | By:                            | /s/ Dominick  A. Arena |   |
|                                           | Name:                          | Dominick A. Arena |   |
|                                           | Title:                         | CEO |   |
|                                           |                           |
| **The above terms are accepted and approved:** |                           |
|                                           |                           |
| /s/ Michael  Dobrovic                          |                           |   |
| **(Signature of the Employee)**                |                           |   |
|                                           |                           |
| Dated:    December 5, 2004      |                           |
|                                                |                                |  |  |  |  |  |

 

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