**Exhibit10.19**

 

 

 

 

 

**SERVICEAGREEMENT**

 

 

 

 

 

enteredinto by and between

 

 

 

 

 

 

 

 

MedexGmbH

—           a limited liability company under German law —

represented by its [shareholders’ meeting]

 

 

 

—           hereinafter referred to as the “Company” —

 

 

 

and

 

 

 

**Dr.Georg Landsberg**

 

 

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On the date of execution of this AgreementDr. Landsberg is appointed managing director of the Company.  To the extent as provided below inArticle 9.1, this Agreement shall regulate the employment relationshipbetween the Company and Dr. Landsberg.

 

**Article1**

**Area ofResponsibility**

 

 

1.               Dr. Landsbergshall continue his work as managing director of the Company.  The distribution of tasks andresponsibilities shall result from the Schedule of Responsibilities of theManagement of the Company.  The Scheduleof Responsibilities may be amended at any time to reflect the development ofthe Company, as well as its operational requirements.  Within this context, currentlyDr. Landsberg shall be responsible for Continental Operations.  He shall report to the Managing Director ofSmiths Medical International, currently Mr. Martin Jamieson.

 

2.               Dr. Landsbergshall perform his duties and responsibilities in compliance with all statutoryprovisions, in particular in compliance with the German *“GmbH-Gesetz”*(Limited Liabilities Companies Act), as well as the Articles of Association ofthe Company and the By-laws for the Management, as amended from time to time,and devote all his efforts, professional know-how, and experience to theCompany.

 

Dr. Landsberg representsthe Company alone and is exempt from the restrictions imposed bysection `181 of the (German) “BGB” [Civil Code].  The Company reserves the right at any time toappoint further managing directors and to establish a different arrangementregarding the Company’s representation.

 

3.               Upon theCompany’s request, Dr. Landsberg shall also assume furtherresponsibilities in enterprises affiliated with the Company, as a managingboard member, managing director, supervisory board member, or similar executiveofficer.  Dr. Landsberg furthershall join and assume responsibilities in trade associations and similarorganizations, to the extent this is considered to be in the best interest ofthe Company.  Except as otherwise agreedupon by the parties hereto, the assumption of such responsibilities shall notestablish any additional employment contract or service agreement.

 

In the event thatDr. Landsberg receives any separate compensation for holding suchpositions and offices, such compensation shall be set off against thecompensation payable under the terms of this Service Agreement.

 

Dr. Landsberg shallresign from all of the aforementioned positions and offices whenever theCompany’s shareholders’ meeting so requests, at the latest upon his ceasing tobe employed by the Company (whether upon termination of his employment,resignation, retirement, or upon his being released from his work for theCompany.)

 

 

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**Article2**

**Compensation**

 

 

1.               Dr. Landsbergshall receive the following compensation for his services:

 

a)              An annualsalary in the gross amount of €234,000.00 (in words: Euro two hundredthirty-four thousand), payable in 12 equal installments, at the end of eachmonth;

 

b)             A one-timebonus, payable shortly after Smiths Group plc announces its results forthe year ended 31 July 2005, of a maximum of 50% of base salary, pro-ratedfor the period from the date this Agreement becomes effective, according toArticle 9.1 — until 31 July 2005, depending on performance againstagreed objectives;

 

 

c)              Effective1 August 2005, an annual bonus agreement will be offered according to theSmiths Medical bonus arrangements that can be amended from time to time, and inthe sole discretion of the shareholders’ meeting.  The bonus, if any, will amount to a maximumof 50% of base salary and would be payable shortly after Smiths Group plcannounces its results for that year.  Thebonus arrangements will depend on the performance of Smiths Medical as a wholeand the successful completion of personal objectives agreed withDr. Landsberg.

 

2.               To induceSmiths Group plc’s affiliates to enter into the transactions contemplatedby the Agreement and Plan of Merger dated as of 5 December 2004 (the “MergerAgreement”), by and among the Smiths Medical Holdco Limited, Forest AcquisitionCorp., MedVest Holdings Corporation (“MedVest”), and each of the individual stockholdersof MedVest signatories to the Merger Agreement, and OEP MedVest LLC, asrepresentative on behalf of the stockholders of MedVest, for which you willreceive substantial benefit, you and the Company hereby agree that (a) thebenefits (the “Control Payments”) under Section (c) of the Severance andNon-Compete Agreement dated 21 May 2003 (the “Existing Agreement”) betweenDr. Landsberg and Medex Inc., (b) the remaining payments to be madein accordance with Section 7 of the Existing Agreement (the “CompetePayment”), and (c) your bonus for the 2004 fiscal year (the “Bonus Payment,”and together with the Change in Control Payment and the Compete Payment, the “TransitionPayments”) shall be paid in accordance with Section 3 below.  You hereby agree that you will not beentitled to receive the Compete Payment or the Bonus Payment if you voluntarilyterminate your employment during the Transition Period (as defined inSection 3 below), and you will not be entitled to receive the Change inControl Payment if you voluntarily terminate your employment before the firstanniversary of the closing (the “Closing”) of the transactions contemplated bythe Merger Agreement.

 

3.               The “TransitionPeriod” shall be the period beginning on the Closing and ending on31 December 2005.  The Company shallpay in full the Compete Payment and the Bonus Payment, plus interest thereon atthe prime rate as published in the Eastern edition of the Wall Street Journal fromthe Closing to the date of payment, on the earlier of (i) the date theCompany terminates your employment, (ii) the date you terminate youremployment for Good Reason (as defined below) or on account of your death ordisability, or (iii) 31 December 2005, so long as you remain employedwith the Company during the entire Transition Period.  “Good Reason” shall mean (A) a materialbreach by the 

 

 

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Companyof any material obligation under this Agreement that is not curable or that isnot cured within thirty days after written notice thereof by Dr. Landsbergto the Company, or (B) relocation of Dr. Landsberg from the presentmetropolitan area of employment, without Dr. Landsberg’s consent.  The company shall pay in full the Change inControl Payment on the earlier of (i) the date the Company terminates youremployment, (ii) the termination of your employment for Good Reason or on accountof your death or disability, or (iii) the first anniversary of the Closingso long as you remain employed with the Company during the entire twelve monthperiod following the Closing.  For theduration of your employment with the Company following the first anniversary ofthe Closing, the provisions s set out in this Agreement shall apply.

 

4.               Thecompensation provided for in Article 2.1 above shall be deemed fullconsideration for all services performed under this Service Agreement,including any services Dr. Landsberg may for operational reasons berequired to perform outside the Company’s regular business hours.

 

5.               The compensationshall be reviewed annually in accordance with Smiths Medical’s policies.  This does not constitute any entitlement ofDr. Landsberg to a pay rise.

 

6.               To the extentthat not otherwise stipulated in this Article 2, the compensationstipulated herein shall be payable on a pro-rata basis if this ServiceAgreement does not subsist for a full twelve months in any given calendar year.

 

7.               The assignmentor pledging of claims of compensation hereunder shall be subject to the priorwritten approval of the shareholders’ meeting.

 

 

**Article3**

**Benefitsin Kind; D&O Insurance**

 

 

1.               The Companyshall provide Dr. Landsberg with a company car of a class customary forsimilarly situated executives for both professional and private use.  The Company shall pay all costs, includinginsurance premiums, motor vehicle taxes, cost of repairs, fuel, oil, etc.,incurred in connection with the maintenance and use of the vehicle.

 

Except from his spouseliving in a common household, nobody besides Dr. Landsberg is authorized todrive the company car. Dr. Landsberg hereby waives any and all claims against the Companywhich may accrue to him, his family members, or any third parties in connectionwith the private use of the Company car, and agrees to indemnify the Companyfrom or against any and all claims brought against the Company by familymembers or third parties, to the extent that such claims are not covered by theinsurance policies taken out with regard to the Company car.

 

The Company shall alsoprovide a mobile phone for Dr. Landsberg’s use on business.

 

2.               The Companyshall reimburse Dr. Landsberg for all reasonable expenses incurred withinthe scope of his employment upon presentation of a voucher indicating theamount and business purpose and supported by appropriate documentation, subjecthowever, to the Company’s guidelines, if any, as applicable from time to timeand in compliance with applicable tax laws.

 

 

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3.               The Companyshall provide reasonable and adequate coverage for the benefit ofDr. Landsberg under Smiths Group’s D&O policy, provided coverage undersuch D&O insurance is commercially available and can be obtained atreasonable costs.

 

4.               Dr. Landsbergshall be responsible for all wage taxes payable on benefits in kind provided bythe Company.

 

 

**Article4**

**Preventionfrom Work**

**ContinuedPayment of Compensation in the Event of Illness or Accident**

 

 

1.               In the eventthat he is prevented from the performance of his duties for a considerableperiod of time, Dr. Landsberg shall inform the shareholders’ meeting withoutundue delay, also stating the reasons for such incapacity.

 

2.               In the event ofhis temporary disability due to illness, accident, or any other cause not dueto the fault of Dr. Landsberg, Dr. Landsberg shall be entitled tocontinued payment of compensation in the amounts stipulated in Article 2.1lit. a) of this Service Agreement for an uninterrupted period of threemonths or until termination of this Service Agreement, whichever occurs first.

 

 

**Article5**

**Vacation**

 

Dr. Landsberg shall be entitled to avacation of 30 working days per calendar year.  For the purposes of this provision, “workingday” shall mean all business days with the exception of Saturdays.  The duration and dates of such vacation shallbe coordinated with the other managing directors, if any, and agreed to by theshareholders’ meeting.  The vacation daysthat have accrued during any one vacation year shall be used by March 31of the following year, otherwise they shall be forfeited.

 

 

**Article 6**

**SecondaryEmployment / Non-Compete / Conflicts of Interest**

 

1.               Any secondaryemployment, whether compensated or uncompensated, that could affect theinterests of the Company shall require the prior approval of the shareholders’meeting.  The foregoing shall apply, *mutatis mutandis,* if Dr. Landsberg assumes anyresponsibilities on supervisory boards, advisory boards, or similar bodies ofenterprises not affiliated with the Company. In case of doubt, the opinion of the shareholders’ meeting shall besought before taking on such secondary employment.  Before taking on any secondary employment,prior notice shall be given to the shareholders’ meeting.

 

2.               Dr. Landsbergundertakes to refrain from competing with the Company or any companiesaffiliated with the Company for the duration of this Service Agreement.  In particular, Dr. Landsberg shall notacquire any interests in competitors of the Company, transact business onbehalf of such competitors, be it for his own account or for the account of 

 

 

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thirdparties, or provide any other services to such competitors.  Excepted from the foregoing shall be theacquisition of shares in publicly traded companies, provided that suchacquisitions do not give him a considerable influence over the actions of suchCompany.

 

Furthermore,Dr. Landsberg undertakes to strictly comply with all insider tradingregulations stipulated by the law and/or by the Company, each as amended fromtime to time.

 

3.               In the interestof both parties, Dr. Landsberg shall disclose to the shareholders’ meetingany conflict of interests arising in connection with the performance of hisduties and responsibilities.  Theforegoing provision shall apply, in particular, if customers, suppliers, or anyother business partners of the Company or affiliated with the Company arerelatives, personal friends, or close business associates ofDr. Landsberg, or stand in a close relationship with such relatives,personal friends, or close business associates. The duty of disclosure shall not be limited to cases in which a conflictof interest may have a specific effect on the performance of Dr. Landsberg’sduties and responsibilities; rather, the mere appearance of a conflict ofinterest shall be sufficient to give rise to such a duty.

 

 

 

**Article7**

**Duty ofConfidentiality;**

**ExclusiveLicense to Use Work Results; Inventions**

 

1.               Dr. Landsbergshall keep all business affairs of the Company and enterprises affiliated withthe Company confidential, if such affairs are confidential in nature and/orhave not already become public knowledge. Dr. Landsberg further shall not grant any third parties access tothe Company’s records and files.  Theseobligations shall continue even after termination of this Service Agreement.

 

2.               All workresults produced by Dr. Landsberg in the performance of his duties andresponsibilities shall be the exclusive property of the Company.  To the extent that such work results areprotected by copyright, Dr. Landsberg hereby grants the Company theexclusive and unlimited license to use such work results in all formsconceivable now or at a later date.  Thisexclusive license shall survive termination of this Service Agreement.  Dr. Landsberg shall not be entitled toany additional compensation for the exclusive license granted to the Companyhereunder.  The compensation stipulatedin this Service Agreement shall be deemed full and adequate consideration forthe exclusive license granted to the Company hereunder.

 

3.               The Companyshall be entitled to exclusive use of any inventions and proposed technicalimprovements, as well as any patents, utility models and designs, etc.,developed by Dr. Landsberg in the performance of his duties andresponsibilities as managing director, without additional payment.  The (German) *“Arbeitnehmererfindungsgesetz”*(Act on Employees’ Inventions) shall apply, except for the provisions providingfor the inventor’s claim to compensation.

 

 

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**Article8**

**Returnof Property**

 

 

Following termination of this ServiceAgreement or Dr. Landsberg’s release from work, Dr. Landsberg shall,of his own accord, return to the Company all objects due to the Company orenterprises affiliated with the Company in his possession, including alldocuments, notes, and instruments, as well as other data stored by technicalmeans, including any copies thereof.  Theforegoing duty shall especially include the duty to return the Company carprovided to Dr. Landsberg pursuant to Article 3.1 of thisAgreement.  The right to retain anydocuments or objects defined in this section is expressly excluded.  Dr. Landsberg shall not be entitled toany compensation or damages for returning Company property prior to terminationof this Service Agreement.  Upontermination of his employment relationship, Dr. Landsberg shall affirm inwriting the full discharge of his duty to return property.

 

 

 

**Article9**

**Term ofEmployment and Termination**

 

 

1.               This ServiceAgreement is subject to the occurrence of, and shall become effective on theday of the Closing.

 

2.               This ServiceAgreement shall be for an initial fixed term of one year from the date of theClosing.  Thereafter, this ServiceAgreement may be terminated by either contracting party by giving three months’notice prior to the end of a calendar month. The right to terminate this Service Agreement for good cause(Section 626 of the German “BGB” [Civil Code]) shall not be affectedthereby.  If the appointment as managingdirector ends without simultaneous termination of the Service Agreement,Dr. Landsberg shall be released from his duty to work according to Article 9.4for the remaining term of the Agreement, and the Company shall continue to paythe compensation stipulated in Article 2.1 lit. a).

 

3.               The terminationof this Service Agreement shall only be valid if made in writing.

 

4.               The Companyshall have the right, at any time, in particular if notice of termination hasbeen given by either of the contracting parties, to release Dr. Landsbergfrom his duty to work (such release being either irrevocable or in a form thatit can be revoked), provided that the Company shall continue to pay thecontractual compensation due to Dr. Landsberg pursuant to Article 2.1lit. a).  In the event of an irrevocablerelease of Dr. Landsberg from work, the time of such release shall betaken into account in calculating the managing director’s claim tovacation.  For periods of release fromwork during which continued payment of compensation is not set off againstunused vacation claims, any income which Dr. Landsberg receives fromanother occupation or maliciously fails to acquire, shall be set off againsthis compensation claim.

5.               This ServiceAgreement shall end, without notice of termination being required, at the endof the month in which Dr. Landsberg attains the age of 65, as well in caseof his becoming incapable of gainful employment according to Section 43 ofthe (German) “SGB VI” (Social Code vol. 6).

 

 

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**Article10**

**InsuranceBenefits**

 

 

If Dr. Landsberg requests, the Companywill — by means of contribution — make annual contributions of €1,752 (inwords:  Euro one thousand seven hundredfifty-two) gross on behalf of Dr. Landsberg to an insurance company inaccordance with the provisions of a direct insurance *(Direktversicherung).*

 

 

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**Article11**

**FinalProvisions**

 

 

1.               To the extentthat this Service Agreement enters into force according to Article 9.1above, it shall supersede all former agreements regarding the employmentrelationship that may hitherto have been concluded by the parties and/or anyother affiliate, and/or subsidiary of the Company, especially, but notexclusively, the Severance and Non-Compete Agreement dated 21 May 2003,between Medex Inc. and Dr. Landsberg.

 

2.               To the extentthat this Service Agreement enters into force according to Article 9.1above, Dr. Landsberg hereby waives all and any possible claims arisingfrom all former agreements regarding the employment relationship that mayhitherto have been concluded by the parties and/or any other affiliate, and/orsubsidiary of the Company, especially, but not exclusively, arising from theSeverance and Non-Compete Agreement dated 21 May 2003, betweenMedex Inc. and Dr. Landsberg.

 

3.               This ServiceAgreement contains all the agreements and arrangements made between theparties.  There are no oral sideagreements.  For the avoidance of doubt,this Service Agreement shall be governed by German Law.

 

4.               Modificationsof and/or amendments to this Agreement shall only valid if made inwriting.  This shall also apply to thecancellation or amendment of the requirement of the written form.

 

5.               If anyprovision hereof is or becomes invalid, the validity of the other provisionshereof shall not be affected thereby.  Insuch a case, the invalid provision shall be replaced with a valid provisionwhich is as consistent as possible with the economic purpose of the invalidprovision intended by the parties to this Agreement.  This shall also apply if a provision is orbecomes invalid on account of the scope or extent of an obligation or a timeperiod.  In such case, the legallyadmissible scope or extent of obligation or time period shall apply.

 

6.               Dr. Landsbergacknowledges receipt of one original counterpart of this Agreement duly signedby each party hereto on this day.

 

 
| Place and date

                                                    |   |                          | Place and date | Dusseldorf

December 4, 2004 |
|--------------------------------------------------------------------------|--------|-------------------------------|----------------|------------------------------|
|                                                                     |   |                          |
| Medex GmbH,                                                              |   | /s/  Dr. Georg Landsberg |           |
| Represented by its  [shareholders’ meeting]

 

 

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| Place and date

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|  

We agree with Article 11.1  and accept the waiver in Article 11.2 |
|  

Medex Inc.

represented by

 

                         |   |   |
| /s/ Dominick A. Arena                                                     |   |   |   |
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