**Exhibit10.57**

 

EMPLOYMENTAGREEMENT

 

This Employment Agreement(hereinafter this “Agreement”) dated as of August 16, 2002 (the “EffectiveDate”) by and between i-STAT CORPORATION, a Delaware corporation having a placeof business at 104 Windsor Center Drive, East Windsor, New Jersey 08520 (the“Company”), and Bruce F. Basarab, an individual residing at 7226 Drew HillRoad, Golden, Colorado 80403 (“Employee”).

 

WITNESSETH:

 

WHEREAS, the Companydesires to employ Employee and Employee desires to be employed by the Company,all pursuant to the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, inconsideration of the premises and the mutual covenants herein contained, thereceipt and sufficiency of which are hereby acknowledged, and intending to belegally bound hereby, it is agreed as follows:

 

Section 1.  Definitions.  Unless otherwise defined herein, thefollowing terms shall have the following respective meanings:

 

“Benefit” meansthose benefits set forth in Section 3.3 hereof.

 

“Cause” means (i)any felony conviction or admission of guilt, (ii) any breach or nonobservanceby Employee of any material covenant set forth herein, (iii) any willful,intentional or deliberate disobedience or neglect by Employee of the lawful andreasonable orders or directions of the Chief Executive Officer of the Company; provided,that the Chief Executive Officer of the Company has given Employee writtennotice of such disobedience or neglect and Employee has failed to cure suchdisobedience or neglect within a period reasonable under the circumstances, or(iv) any willful or deliberate misconduct by employee that is materiallyinjurious to the Company.

 

“Change of Control”shall mean any of the following:

 

A.                                   Anacquisition (other than directly from the Company) of any voting securities ofthe Company (the “Voting Securities”) by any “Person” (as the term “person” isused for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of1934, as amended (the “1934 Act”) immediately after which such Person has “BeneficialOwnership” (within the meaning of Rule 13d-3 promulgated under the 1934 Act) ofthirty percent (30%) or more of the combined voting power of the Company’s thenoutstanding Voting Securities; provided, however, that in determiningwhether a Change of Control has occurred, Voting Securities which are acquiredin a “Non-Control Acquisition” (as defined below) shall not constitute anacquisition which would cause a Change of Control.   A “Non-Control Acquisition” shall mean an acquisition by (i) anemployee benefit plan (or trust forming a part thereof) maintained by (x) theCompany or

 

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(y) any corporation or other Person of which a majority of its votingpower or its equity securities or equity interest is owned directly orindirectly by the Company (a “Subsidiary”), (ii) the Company or any Subsidiary,or (iii) any Person in connection with a Non-Control Transaction (as definedbelow).

 

B.                                     Theindividuals who, as of the date immediately before any “Change of Control” setforth in clauses A or C hereof, are members of the Board (the “IncumbentBoard”), cease for any reason to constitute at least a majority of the Board; provided,further, that no individual shall be considered a member of the Incumbent Boardif such individual initially assumed office as a result of either an actual orthreatened “Election Contest” (as described in Rule 14a-11 promulgated underthe 1934 Act) or other actual or threatened solicitation of proxies or consentsby or on behalf of a Person other than the Board (a “Proxy Contest”) includingby reason of any agreement intended to avoid or settle any Election Contest orProxy Contest.

 

C.                                     Approvalby the stockholders of the Company of:

 

(i)                                     Amerger, consolidation, or reorganization involving the Company, unless:

 

(1)                                 Thestockholders of the Company, immediately before such merger, consolidation orreorganization, own, directly or indirectly, immediately following such merger,consolidation or reorganization, at least a majority of the combined votingpower of the outstanding voting securities of the corporation resulting fromsuch merger or consolidation or reorganization (the “Surviving Corporation”) insubstantially the same proportion as their ownership of the Voting Securitiesimmediately before such merger, consolidation, or reorganization; and

 

(2)                                 Theindividuals who were members of the Incumbent Board immediately prior to theexecution of the agreement providing for such merger, consolidation, orreorganization constitute at least a majority of the members of the board of directorsof the Surviving Corporation or corporation Beneficially Owning, directly orindirectly, a majority of the voting securities of the Surviving Corporation;and

 

(3)                                 NoPerson (other than the Company, any Subsidiary, any employee benefit plan (orany trust forming a part thereof) maintained by the Company, theSurvivingCorporation, any Subsidiary, or any Person who, immediately prior tosuch merger, consolidation or reorganization had Beneficial Ownership offifteen percent (15%) or more of the then outstanding Voting Securities) owns,directly or indirectly, thirty percent (30%) or more of the combined votingpower of the Surviving Corporation’s then outstanding voting securities.

 

(4)                                 Atransaction described in the foregoing clauses (1) through (3) shall herein bereferred to as a “Non-Control Transaction”.

 

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(ii)                                  Acomplete liquidation or dissolution of the Company; or

 

(iii)                               Asale or other disposition of all or substantially all of the assets of theCompany to any Person (other than a transfer to a Subsidiary).

 

D.                                    Notwithstandingthe foregoing, a Change of Control shall not be deemed to occur solely because(i) any Person (the “Subject Person”) acquired Beneficial Ownership of morethan the permitted amount of the outstanding Voting Securities as a result ofthe acquisition of Voting Securities by the Company which by reducing thenumber of Voting Securities outstanding, increases the proportional number ofshares beneficially owned by the Subject Person; provided, that if aChange of Control would occur (but for the operation of this sentence) as aresult of the acquisition of Voting Securities by the Company, and after suchacquisition by the Company, the Subject Person becomes the Beneficial Owner ofany additional Voting Securities which increases the percentage of the thenoutstanding Voting Securities beneficially owned by the Subject Person to apercentage sufficient to constitute a Change of Control, then a Change ofControl shall be deemed to have occurred; or (ii) the acquisition of VotingSecurities by holders of the Company’s Series D Convertible Preferred Stock,par value $.10 per share.

 

“Common Stock”means the common stock of the Company, par value $.15 per share.

 

“Diminution in Responsibility”means a material diminution in Employee’s duties or responsibilities or theassignment to Employee of duties which are materially inconsistent with hisduties as Executive Vice President of Commercial Operations of the Company orwhich materially impair Employee’s ability to function in his position; provided,however, that no Diminution in Responsibility shall be deemed to have occurredsolely as a result of the consummation by the Company of a strategic corporatealliance, partnership or joint venture (in whatever form) pursuant to which anysubstantial portion of the Company’s marketing and sales activities, orresearch and development activities, or manufacturing activities come under thecontrol of any entity unaffiliated with the Company on the Effective Date.

 

“Permanent Disability”means Employee’s inability to substantially perform his duties andresponsibilities hereunder by reason of any physical or mental incapacity for aperiod of 180 consecutive days, or two or more periods of 90 consecutive dayseach in any 360-day period.

 

Section 2.  Employment; Duties.

 

2.1                       During theTerm of Employment (as hereinafter defined), the Company shall employ Employee,and Employee shall serve, as Executive Vice President of Commercial Operationsof the Company.  Employee’sresponsibilities shall

 

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include such functions and duties with respect to the Company and itssubsidiaries as the Chief Executive Officer or the Board of Directors of theCompany (the “Board”) shall determine and that are consistent with thefunctions and duties of a senior commercial operations officer of a corporationof similar size and nature.

 

2.2                       During theTerm of Employment and excluding any periods of vacation and sick leave towhich Employee is entitled, (a) Employee shall devote all of his business timeto the business and affairs of the Company (except as provided below) and shalluse his best efforts to perform faithfully and efficiently the responsibilitiesassigned to Employee, (b) Employee shall apply his skill and experience to theperformance of his duties in such employment, and (c) Employee shall have noother employment.  During the Term ofEmployment, it shall not be a violation of this Agreement for Employee to devoteup to two business days per calendar quarter to:  (i) serve as a director, officer or trustee of any tradeassociation or of any civic, educational or charitable organization, (ii) withthe prior consent of the Board, which shall not be unreasonably withheld, serveas director of any corporation that does not compete, directly or indirectly,with the Company, and (iii) manage his personal investments (provided,that no such investment may exceed five percent (5%) of the equity securitiesof any entity without the prior written approval of the Board and further provided,that nothing herein shall limit any investment in an entity whose primarypurpose is not the day-to-day operation of a particular business) and affairs.

 

Section 3.  Compensation And Benefits.

 

3.1                       BaseSalary.  During the Term ofEmployment, the Company shall pay Employee a salary at the annual rate of TwoHundred Fifty Thousand dollars ($250,000) or such greater amount as theCompany’s Board of Directors may from time to time establish pursuant to theterms hereof (the “Base Salary”).  SuchBase Salary shall be reviewed annually and may be increased, but not decreased,by the Board of Directors of the Company in its sole discretion. The Base Salaryshall be payable in accordance with the Company’s customary payroll practicesfor its senior management personnel.

 

3.2                       PerformanceBonus.  During the Term ofEmployment, Employee shall be eligible to participate in the Company’s AnnualIncentive Program (the “AIP”). For each fiscal year of the Company endingduring the Term of Employment (as hereinafter defined), Employee shall receivea bonus equal to not less than (i) 10.0% of the Base Salary in cash, andoptions under the Company’s Equity Incentive Plan (the “Incentive Plan”)(“Performance Bonus Options”) to purchase not less than 7,500 shares of CommonStock of the Company (“Shares”), for achieving the Minimum Level under the AIP;(ii) 20.0% of the Base Salary in cash, and Performance Bonus Options topurchase not less than 15,000 Shares, for achieving the Target Level under theAIP; and (iii) 30.0% of the Base Salary in cash, and Performance Bonus Optionsto purchase not less than 22,500 Shares, for achieving the Maximum Level underthe AIP (collectively, the “Performance Bonus”). Employee recognizes that theBoard of Directors of the

 

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Company reserves the right to amend or terminate the AIP at any time,in which case the Company shall substitute therefor such other benefits andprograms as shall provide Employee with a substantially equivalent opportunityto derive substantially equivalent rewards for performance.

 

3.3                       Benefits.

 

(a)                          BenefitPlans. During the Term of Employment, Employee may participate, on the samebasis and subject to the same qualifications as other senior managementpersonnel of the Company, in any benefit plans and policies in effect withrespect to senior management personnel of the Company.

 

(b)                         Reimbursementof Expenses. During the Term of Employment, Company shall pay or promptlyreimburse Employee, upon submission of proper invoices in accordance with theCompany’s normal procedures, for all reasonable out-of-pocket business,entertainment and travel expenses incurred by Employee in the performance ofhis duties hereunder.

 

(c)                          Vacation.During the Term of Employment, Employee shall be entitled to vacations inaccordance with the policies of the Company applicable to senior managementpersonnel from time to time.

 

(d)                         Post-RetirementBenefits. Employee shall be entitled to any post-retirement benefitsgenerally made available to the Company’s senior management personnel.

 

(e)                          Withholding.The Company shall be entitled to withhold from amounts payable or benefitsaccorded to Employee under this Agreement all federal, state and local income,employment and other taxes, as and in such amounts as may be required byapplicable law.

 

3.4                       StockOptions.

 

(a)                          InitialGrant.  On or as soon as practicableafter the Effective Date hereof, the Company shall grant to Employee an option(the “Initial Stock Option”) to purchase Forty Thousand (40,000) shares ofCommon Stock pursuant to the terms of the Incentive Plan.  The Initial Stock Option shall becomeexercisable over a five-year term with respect to 20% of such shares on each anniversaryof the date of grant.

 

(b)                         CompanyStrategic Incentive Program (“SIP”) Grant. On or as soon as practicable after the Effective Date hereof, theCompany shall grant to Employee an option under the SIP (the “SIP Option”) topurchase Eighty Thousand (80,000) shares of Common Stock pursuant to the termsof the Incentive Plan.  The SIP Optionshall become exercisable in full on the seventh anniversary of the date ofgrant.

 

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(c)                          AcceleratedVesting of SIP Options.  Subject toEmployee’s satisfactory achievement of certain performance criteria, asdetermined by the Chief Executive Officer and approved by the Board ofDirectors, consistent with Employee’s duties and responsibilities, the SIPOption shall become exercisable with respect to (i) 26,666 shares on June 30,2003, (ii) 26,666 shares on December 31, 2004, and (iii) all remaining shareson December 31, 2005.

 

(d)                         AcceleratedVesting of Options Due to Termination of Employment or Change of Control.  Notwithstanding Sections 3.2, 3.4(a), 3.4(b)and 3.4(c) hereof, the Performance Bonus Options, Initial Stock Option and theSIP Option shall automatically become fully exercisable upon the earlier tooccur of (i) a Change of Control, or (ii) the termination by Employee of hisemployment with the Company for Good Reason (as hereinafter defined).

 

(e)                          OptionAgreements.  The Performance BonusOptions, the Initial Stock Option and the SIP Option shall be evidenced byagreements in customary form for grants of stock options under the IncentivePlan to executive officers of the Company, consistent with the terms andconditions of this Agreement.

 

3.5                       Relocation.

 

(a)                          Reimbursement.  The Company shall reimburse Employee up toOne Hundred Twenty Thousand dollars ($120,000) for the costs (the “RelocationCosts”) of relocating Employee’s household to the East Windsor, New Jerseyarea, including but not limited to the cost of transportation of householdgoods and real estate sales commissions and related expenses (the “RelocationCosts”); provided, that such relocation shall be completed within twelve(12) months after the Effective Date or as otherwise may be extended by theChief Executive Officer of the Company. Upon termination by Employee of his employment with the Company otherthan for Good Reason, Employee shall repay the Company for that portion of theRelocation Costs equal to the result of multiplying the Relocation Costsreimbursed by the Company by a fraction, the numerator of which is the numberof days then remaining in the Term of Employment, and the denominator of whichis the aggregate number of days in the Term of Employment.

 

(b)                         Withholding.  The Company shall, in accordance with itsnormal policies and procedures for the payment of withholding tax, pay to theInternal Revenue Service and the appropriate state and local revenueauthorities (collectively, the “Tax Authorities”), on behalf of Employee, anamount equal to the federal (including, without limitation, Medicare taxes),state and local income taxes (the foregoing taxes are hereinafter collectivelyreferred to as “Income Taxes”) required to be withheld in connection withpayment of the Relocation Costs.

 

(c)                          Gross-Up.  To the extent that, as a result of thepayment of all or any portion of the Relocation Costs to Employee by theCompany as provided in

 

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this Section 3.5, Employee is obligated to pay any income, payroll orother taxes to the Tax Authorities, the Company shall pay to Employee, or onbehalf of Employee, as the case may be, the sum of (i) all Income Taxes due byEmployee as a result of reimbursement of the Relocation Costs, plus (ii) anamount equal to any and all Income Taxes paid or required to be paid withrespect to the receipt of the amount set forth in clause (i) above (including,without limitation, any taxes on such additional amount). It is the intentionof the parties hereto that the Company will pay on behalf of Employee anywithholding tax due in connection with reimbursement of the Relocation Costsand that the Company will pay to Employee any out-of-pocket tax liabilityEmployee experiences in connection with reimbursement of the Relocation Costs.Any amounts payable by the Company to Employee pursuant to this Section 3.5(c)shall be paid no later than five (5) business days before Employee is obligatedto pay any taxes to the Tax Authorities.

 

(d)                         TemporaryLiving.  The Company shall providereasonable temporary living assistance in the East Windsor, New Jersey area untilEmployee’s relocation is complete, but in no event after December 31, 2002.

 

3.6                       Term.  This Agreement shall remain in full forceand effect for an initial period of four (4) years from the Effective Date (the“Term of Employment”) shall be automatically extended for additional one-yearperiods thereafter (each a “Renewal Period”) unless Employee notifies the Boardof Directors or the Board of Directors notifies Employee that the notifyingparty does not desire to extend such Term of Employment at least ninety (90)days prior to the end of the expiration of the Term of Employment.  Employee’s employment hereunder shall becoterminous with the Term of Employment, unless sooner terminated as providedin Section 5 hereof.

 

Section 4.  Representations And Warranties ByEmployee And The Company.

 

4.1                       Employeehereby represents and warrants to the Company as follows:

 

(a)                          Theperformance by Employee of his duties and other obligations hereunder will notconflict with or constitute a default under (whether immediately, upon thegiving of notice or lapse of time or both) any prior employment agreement,contract, or other instrument to which is a party or by which he is bound.

 

(b)                         Employeehas the right, power and legal capacity to enter and deliver this Agreement andto perform his duties and other obligations hereunder. This Agreementconstitutes the legal, valid and binding obligation of Employee enforceableagainst him in accordance with its terms.

 

4.2                       The Companyhereby represents and warrants to Employee as follows:

 

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(a)                          TheCompany is duly organized, validly existing and in good standing under the lawsof the State of Delaware, with all requisite corporate power and authority toown its properties and conduct its business in the manner presentlycontemplated.

 

(b)                         TheCompany has full power and authority to enter into this Agreement and to incurand perform its obligations hereunder.

 

(c)                          Theexecution, delivery and performance by the Company of this Agreement does notand will not conflict with or result in a breach or violation of or constitutea default under (whether immediately, upon the giving of notice or lapse oftime or both) the certificate of incorporation or by-laws of the Company, orany agreement or instrument to which the Company is a party or by which theCompany or any of its properties may be bound or affected.

 

Section 5.  Termination.  Employee’s employment hereunder will beginon the Effective Date and shall continue until terminated upon the first tooccur of the following events:

 

(a)                          Deathor Permanent Disability of Employee. The Company may, at its option, terminate Employee’s employment forPermanent Disability (as herein defined). In the event of termination for deathor disability, Employee or his designated beneficiary shall be entitled totermination benefits pursuant to Section 5(d) hereof.

 

(b)                         Terminationby the Company for Cause.  In theevent of termination by the Company pursuant to this Section 5(b), the Companyshall have no further obligations to Employee under this Agreement other thanto (i) pay Employee’s then current Base Salary through the effective date oftermination, and (ii) subject to the terms hereof, pay or provide any benefitswhich may be due to Employee.

 

(c)                          Terminationby Employee for Good Reason.  In theevent of termination by Employee for Good Reason (as defined below) pursuant tothis Section 5(c), the Company shall (i) continue to pay Employee monthlycompensation equal to one-twelfth of Employee’s then current Base Salary for aperiod of eighteen (18) months following the date of termination, (ii) on thedate on which performance bonuses are paid to all Company employees, pay toEmployee a lump sum equal to the cash portion of the Performance Bonus of theTarget Level applicable to the year in which such termination occurs, pro ratedas if Employee had continued in the Company’s employ for a period of eighteen(18) months after such termination, and (iii) immediately accelerate theexercisability of all unvested stock options granted to Employee to purchaseCommon Stock as of the date of such termination.  Employee’s right to terminate his employment pursuant to thisSection 5(c) shall not be affected by his incapacity due to PermanentDisability.  The following actions oromissions by the Company shall constitute “Good Reason”:

 

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(A)                          If aDiminution of Responsibility occurs, Employee may, at his sole option byproviding written notice to the Company within sixty (60) days following suchDiminution of Responsibility, deem such Diminution of Responsibility to be“Good Reason” under this Section 5(c); or

 

(B)                            Thefailure of the Company to obtain an agreement, satisfactory to Employee, fromany successor or assignee of all or substantially all of the Company’sbusiness, to assume the Company’s obligations to Employee under this Agreement.

 

(d)                         Terminationby the Company without Cause.

 

(i)                            TheCompany shall give Employee not less than thirty (30) days prior written noticeof the termination of his employment without Cause and the Company shall havethe option of amending, suspending or terminating Employee’s duties andresponsibilities prior to the expiration of the thirty-day notice period (forwhich purposes no Diminution of Responsibility shall be deemed to haveoccurred).

 

(ii)                         If suchtermination shall occur, the Company shall (A) continue to pay Employee monthlycompensation equal to one-twelfth of Employee’s then current Base Salary for aperiod of twelve (12) months following the date of such termination, and (B) onthe date on which performance bonuses are paid to all Company employees, payEmployee a lump sum equal to the cash portion of the Performance bonus at theTarget Level applicable to the year in which such termination occurs, pro ratedto reflect the date of Employee’s termination (the “Pro-Rated PerformanceBonus”).

 

(iii)                      If suchtermination shall occur within eighteen (18) months immediately following aChange of Control, then in lieu of amounts due under paragraph (ii) above, theCompany shall (A) continue to pay Employee monthly compensation equal toone-twelfth of Employee’s then current Base Salary for a period of eighteen(18) months following the date of termination (B) on the date on whichperformance bonuses are paid to all Company employees, pay Employee a lump sumequal to the cash portion of the Performance Bonus at the Target Levelapplicable to the year in which such termination occurs, pro rated as ifEmployee had continued in the Company’s employ for a period of eighteen (18)months after such termination, and (C) immediately accelerate theexercisability of all unvested stock options granted to Employee to purchaseCommon Stock as of the date of such termination.

 

(e)                          Terminationby Employee without Good Reason.  Inthe event Employee wishes to resign without Good Reason, he shall give not lessthan thirty (30) days prior written notice of such resignation and the Companyshall have the option of terminating Employee’s duties and responsibilities atany time prior to Employee’s proposed termination date, subject to payment bythe Company to Employee of the lesser

 

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of (i) Employee’s then current Base Salary for a thirty (30) day period,or (ii) such portion of the period remaining under the notice given byEmployee.

 

(f)                            TerminationDue to Non-Renewal of Agreement by the Company.  In the event the Company notifies Employee under Section 3.6 thatit shall not renew this Agreement for any Renewal Period, Employee shall beentitled to monthly compensation equal to one-twelfth of Employee’s thencurrent Base Salary self-executing for a period of twelve (12) months followingthe end of the Term of Employment.

 

Section 6.  Change Of Control.  Notwithstanding anything contained in thisAgreement to the contrary, if Employee’s employment is terminated by theCompany, other than for Cause, prior to a Change of Control and suchtermination (i) was at the request of a third party who has indicated anintention or taken steps reasonably calculated to effect a Change of Controland who effectuates a Change of Control (a “Third Party”), or (ii) otherwiseoccurred as a condition to, or in connection with or anticipation of, a Changeof Control which actually occurs, then for all purposes of this Agreement, thedate of the Change of Control with respect to Employee shall mean the dateimmediately prior to the date of such termination of Employee’s employment andshall entitle Employee to the benefits provided under Section 5(c) of thisAgreement as though the termination of Employee’s employment was for GoodReason.

 

Section 7.  Federal Excise Tax.

 

7.1                       GeneralRule.  Employee’s payments andbenefits under this Agreement and all other arrangements or programs relatedthereto shall not, in the aggregate, exceed the maximum amount that may be paidto Employee without triggering golden parachute penalties under Section 280G ofthe Internal Revenue Code of 1986, as amended (the “Code”), and the provisionsrelated thereto with respect to such payments. If Employee’s benefits must be cut back to avoid triggering suchpenalties, Employee’s benefits will be cut back in the priority order Employeedesignates or, if Employee fails to promptly designate an order, in thepriority order designated by the Company. If an amount in excess of the limit set forth in this Section is paid toEmployee, Employee must repay the excess amount to the Company upon demand,with interest at the rate provided in Code Section 1274(b)(2)(B).  Employee and the Company agree to cooperatewith each other reasonably in connection with any administrative or judicialproceedings concerning the existence or amount of golden parachute penalties onpayments or benefits Employee receives.

 

7.2                       Exception.  Section 7.1 shall apply only if it increasesthe net amount Employee would realize from payments and benefits subject toSection 7.1, after payment of income and excise taxes by Employee on suchpayments and benefits.

 

7.3                       Determinations.  The determination of whether the goldenparachute penalties under Code Section 280G and the provisions related theretoshall

 

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apply, shall be made by counsel chosen by Employee. All otherdeterminations needed to apply this Section 7 shall be made in good faith bythe Company’s independent auditors.

 

Section 8.  Extended Medical And Dental Benefits.  In the event of the termination ofEmployee’s employment under Sections 5(a), 5(c) or 5(d) of this Agreement, andat Employee’s election, Employee and Employee’s dependents shall continue toreceive the Company’s standard employee medical and dental benefits at theCompany’s expense under such plans for (i) twelve (12) months for terminationunder Sections 5(a), or 5(d)(i) or 5(d)(ii) hereof, or (ii) eighteen (18)months for termination under Section 5(c) or Section 5(d)(iii) hereof.  Notwithstanding the foregoing, in the eventEmployee becomes covered or eligible to be covered as a primary insured (thatis, not as a beneficiary under a spouse’s plan) under another employer’s grouphealth plan during the extended benefit periods provided for herein, Employeeshall promptly notify the Company and the Company shall have no furtherobligation to provide group health benefits for Employee and any dependents.

 

Section 9.  Confidentiality Agreement.  Employee agrees to execute an EmployeeConfidentiality and Invention Agreement with the Company, in a form customarilyemployed by the Company, which provides for standard non-solicitation andnon-competition covenants covering a period of twelve (12) months afterEmployee ceases to be employed by the Company for any reason or no reason.

 

Section 10.  Release Of Claims.  The Company may condition payment of thecash termination benefits described in Sections 5(a), 5(c) or 5(d) of thisAgreement upon the delivery by Employee of a signed release of claims in a formcustomarily employed by the Company; provided, however, that Employeeshall not be required to release any rights Employee may have to be indemnifiedby the Company under Section 11.5 of this Agreement or the certificate ofincorporation or by-laws of the Company.

 

Section 11.  General.

 

11.1                 Notices.  Any notice or other communication under thisAgreement shall be in writing and shall be deemed to have been given:  (i) upon delivery when delivered personally;(ii) the next business day after being sent by Federal Express or similarovernight delivery prepaid; or (iii) three (3) days after being mailed viaregistered or certified mail, postage prepaid, return receipt requested, toeither party at the address set forth in the preamble of this Agreement, or tosuch other address as such party shall give by notice hereunder to the otherparty.

 

11.2                 Severabilityof Provisions.  If any provision ofthis Agreement shall be declared by a court of competent jurisdiction to beinvalid, illegal or incapable of being enforced in whole or in part, suchprovision shall be interpreted so as to remain enforceable to the maximumextent permissible consistent with applicable law and the remaining conditionsand provisions or portions thereof shall nevertheless remain in full force andeffect and enforceable to the extent they are valid, legal and enforceable, and

 

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no provision shall be deemed dependent upon any other covenant orprovision unless so expressed herein.

 

11.3                 BindingEffect.  This Agreement shall bebinding upon and shall inure to the benefit of the Company, its successors andassigns and the Company shall require any successors and assigns to expresslyassume and agree to perform this Agreement in the same manner and to the sameextent that the Company would be required to perform it if no such successionor assignment had taken place.

 

11.4                 EntireAgreement Modification. This Agreement and the exhibits attached heretocontains the entire agreement of the parties relating to the subject matterhereof, and any prior agreements or understandings between the parties heretowhich are not set forth herein are hereby superceded.  No modification of this Agreement shall be valid unless made inwriting and signed by the parties hereto.

 

11.5                 Indemnification.  The Company and Employee shall execute anindemnification agreement in the form attached hereto as Exhibit A.

 

11.6                 GoverningLaw.  This Agreement shall begoverned by and construed and enforced in accordance with the laws of the Stateof New Jersey without regard to principles of conflict of laws.

 

11.7                 Headings.  The headings of paragraphs are inserted forconvenience and shall not affect any interpretation of this Agreement.

 

11.8                 Counterparts.  This Agreement may be executed in one ormore counterparts, each of which shall be deemed an original, and all of whichtogether shall be deemed to be one and the same instrument.

 

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IN WITNESS WHEREOF, theparties hereto, intending to be legally bound hereby, have executed thisAgreement as of the day and year first above written.

 

 
|   | BRUCE F. BASARAB                       |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | /s/ Bruce F. Basarab                   |
|   | Bruce F. Basarab                       |
|   |                                   |
|   |                                   |
|   | i-STAT CORPORATION                     |
|   |                                   |
|   |                                   |
|   | /s/ William P. Moffitt                 |
|   | William P. Moffitt                     |
|   | President and Chief  Executive Officer |

 

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