exv10w14



 





Exhibit 10.14




EMPLOYMENT AGREEMENT




between




Compex Medical SA

Z.I. “Larges Pièces”, chemin du Dévent, CH – 1024 Ecublens

(hereinafter referred to as the “Company”)



on the one hand




and




Mr. Serge Darcy

9, rue Sommelier

F – 74000 Annecy

(hereinafter referred to as “Mr. Darcy”)



on the other hand




* * *




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     The terms of Mr. Darcy’s employment with the Company are as follows:



1. Article




Position and Duties



Mr. Darcy will be employed by the Company to serve as Chief Executive Officer
in Ecublens, and in such other offices or locations of the Company as he may be
elected or appointed to with effect as of September 1, 2002, provided that a
frontalier permit is obtained in his favour by that date. Should the work
permit formalities not be completed on September 1, 2002, his start date shall
be postponed accordingly. His seniority with Compex France Sàrl shall be taken
into consideration in the context of the present employment agreement.



His duties within the Company will be to assume the general management within
the frame of activities, which will be assigned to him by the Company’s board
of directors as expressed by its (the “Chairman”).



In the exercise of his duties on behalf of the Company, Mr. Darcy will be
placed under the authority of the Chairman.




2. Article




Employee’s General Obligations



Mr Darcy shall faithfully and diligently perform his task, in compliance with
the instructions given to him by the Chairman.



He shall devote all his working time to the Company and shall refrain from
working or collaborating with any other firm or Company during his employment
with the Company without the authorisation of the Chairman. The parties
expressly agree that Mr. Darcy will be entitled to no special remuneration
whether financial or through time in lieu of by way of supplementary hours or
statutory overtime.



During the employment contract, Mr. Darcy shall comply with an obligation of
discretion with regard to all matters, documents, clients and/or information of
which he will get knowledge.



This obligation of discretion shall last also after the termination of the
present contract.




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3. Article 




Compensation



A. For the exercises of the duties defined above, Mr. Darcy is entitled to the
following compensation.





	(i)	 	a gross annual salary (the “Salary”) of
	 
	 	 	CHF       336,000.—
	 
	 	 	The Salary is to be paid in arrears in 12 monthly payments.
	 
	 	 	Subject to the agreement of the local Swiss tax authorities, the Salary
is inclusive of a representation allowance which amount is reviewed and
negotiated yearly with the aforementioned authorities.
	 
	 	 	The Salary of CHF 336,000.— shall be adapted, upwards or downwards, at
the end of the month where the CHF/Euro exchange rate varies of 10% at
least compared to the start date of this employment agreement (September
1, 2002 or any later date), in proportion to such variation. Any
subsequent date of adaptation of the Salary shall be taken as the date of
reference to consider further adaptations triggered by the minimum 10%
variation.
	 
	(ii)	 	a discretionary bonus (the “Bonus”) of 0.5% of the Company’s EBIT for the
Company’s fiscal year ending on June 30.
	 
	 	 	The Bonus is to be paid within 10 days of the approval at the general
shareholders’ meeting of the relevant audited financial statements of the
Company, but in no event later than six months from the end of the
relevant fiscal year.
	 
	 	 	For the purposes of this Agreement, “EBIT” shall mean consolidated net
income of the Company and its Subsidiaries before charges of interest and
taxes on income and capital.
	 
	 	 	Only a prorated Bonus shall be paid to Mr. Darcy if Mr. Darcy is unable
to fulfil his duties for no faulty reasons such as but no limited to
accident, sickness, etc... during the fiscal year. No Bonus or prorated
bonus shall be paid to Mr. Darcy if he is dismissed for “motifs
justifiés” or if he resigns without “motifs justifiés”.



B. Furthermore, Mr. Darcy is eligible for a discretionary additional bonus (the
“Additional Bonus”) of :





	 	•	 	15% of the Salary provided that threshold goals set by the Board are met or
	 
	 	•	 	30% of the Salary provided that target goals set by the Board are met or
	 
	 	•	 	60% of the Salary provided that outstanding goals set by the Board are met.




      The above amounts exclude each other.


The objectives to be fulfilled by Mr. Darcy shall be set by the Board during
the process of establishing the budget of the Company for the current year,
starting July 1 and ending June 30, of the following year. The Salary shall be
defined as the Salary existing July 1.



The Additional Bonus is to be paid as set out under (ii) above.



Mr. Darcy is not eligible for the Additional Bonus and therefore no Additional
Bonus shall be paid to Mr. Darcy if Mr. Darcy’s employment contract ends prior
or on to the date of payment or if either party has given notice of termination
prior or on the date of payment.



In addition to the foregoing, Mr. Darcy will receive the benefits described in
Article 5.


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4. Article 




Stock Options



In consideration of the future signing of this Agreement, Mr. Darcy was granted
on December [...] 2001 by Rehabilicare, Inc. 50’000 (fifty thousand) stock
options to purchase shares of Rehabilicare Inc. (the “Stock Options”). The
terms of the Stock Options, including but not limited to the vesting period,
are as set out in Rehabilicare’s Stock Option Plan attached hereto as
Schedule 1 and which is an integral part of this Agreement.




5. Article 




Fringe Benefits; Reimbursement of costs



The Company puts a private company car at the disposal of Mr. Darcy which he
may use both for his private and professional needs. The Company shall pay for
the maintenance of the company car and for the fuel required by the
professional use of the car. The car must be returned to the Company on the day
Mr. Darcy is dispensed from fulfilling his duties.



Mr Darcy shall be entitled to receive prompt reimbursement from the Company of
all reasonable expenses incurred by him in promoting the business of the
Company and in performing services hereunder, including all expenses of travel
and entertainment and living expenses while away from home and business or at
the request of or in the service of the Company, provided that such expenses
are incurred and accounted in accordance with the policies and procedures
established by the Company from time to time.




6. Article 




Social Security



Mr. Darcy shall be subject to Swiss social security.



According to the law, the premiums for Swiss social security (the “AHV, IV,
EO”) and Swiss unemployment insurance plan will be borne half by the Company
and half by Mr. Darcy.



Subject to the acceptance of the insurance companies, Mr. Darcy shall be
insured against professional and non-professional accident risks as well as for
daily indemnities in case of sickness risks. The Company shall assume the costs
of these insurances during the course of Mr. Darcy’s employment under this
Agreement.



Sickness insurance is Mr. Darcy’s entire responsibility and Mr. Darcy bears the
cost of such sickness insurance.



Subject to the acceptance of the pension fund, Mr. Darcy shall be a member of
the Company’s pension fund. The contribution to such pension fund shall be
borne half by the Company and half by Mr. Darcy.



Mr. Darcy’s contributions under this Article shall be withheld each month from
his salary.


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7. Article 




Involuntary and no-faulty absences



Subject to Mr. Darcy’s employment contract being still in force, during
involuntary and no-fault absences due to sickness, as defined by article 324a
of the Swiss Code of Obligations, the Company will pay 100% of Mr. Darcy’s
Salary for the first 90 days of such no-fault absence. Thereafter, Mr. Darcy
will receive, subject to the possibility of the Company’s obtaining and
maintaining necessary daily indemnities insurance coverage and subject to the
daily indemnities insurance policy, daily insurance indemnities as described
hereunder and as provided by the insurance contract. The maximum insurance
coverage duration is of 640 days with maximum daily indemnities of 90% of a
yearly AVS salary of CHF 250,000. As a complement, the Company pays the
remaining 10% of a yearly AVS salary of CHF 250,000 at which time the Company’s
obligation to pay is discharged.



During involuntary and no fault absences due to an accident, as defined by
article 324a of the Swiss Code of Obligations, article 324b of the Swiss Code
of Obligations applies.



During involuntary and no fault absences not covered by any private or public
daily indemnities insurance policy or should the daily indemnities in case of
sickness not be deemed equivalent within the meaning of art. 324a, section 4 of
the Swiss Code of Obligations for whatever reason, the Company will pay Mr.
Darcy’s Salary in accordance with article 324a, sections 1 and 2 of the Swiss
Code of Obligations.



Notwithstanding the above, the Company’s obligation to pay part or all of Mr.
Darcy’s Salary ceases in any event automatically upon Mr. Darcy’s resignation,
the termination of this agreement with notice or for “justes motifs” as defined
in article 9, whichever comes first.



Nothing in articles 6 and 7 shall prevent the Company from terminating the
employment agreement at any time.




8. Article




Vacation days



Mr. Darcy will be entitled to annual leave of 25 business days in addition to
the statutory holidays in Lausanne.




9. Article 




Termination



The present agreement is made for an indefinite period of time and can be
terminated by each of the parties by giving three months prior written notice
for the end of a month.



Any termination for “justes motifs” within the meaning of Art. 337 of the Swiss
Code of Obligations, including but not limited to serious wilful misconduct, is
expressly reserved.



In the event that the Company terminates the present agreement with notice
other than for “motifs justifiés”, the Company shall pay Mr. Darcy a gross
severance indemnity equivalent to one year Salary, which includes any salary
amounts related to untaken vacation, if any, less any amounts due by the
Company other than the Bonuses mentioned hereinafter, plus the unpaid Bonus
related to the prior complete fiscal year, plus the prorated Bonus for the
current fiscal year for the period ending three months after the last day of
effective work of Mr. Darcy or the day when notice is given, whichever the
earliest, being agreed that the Company may dispense Mr. Darcy from fulfilling
his duties at its entire convenience. The severance indemnity shall be paid
against signing of a release by Mr. Darcy as follows : 50% of the severance
indemnity shall be paid as soon as practicable upon the end of Mr. Darcy’s
employment contract and the remaining 50% in 12 equal monthly instalments. This
clause providing for the payment of a severance indemnity does not apply in case of termination in
the context of transfer of employment agreement due to any reorganisation in
the Rehabilicare Group, of sale of the Company or of its assets if the acquirer
offers equivalent conditions to Mr. Darcy.


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10. Article 




Covenant not to compete and not to solicit



Mr. Darcy is aware of the fact that the employment relationship will give him
access to the customers and to business secrets and that the use of such
knowledge would significantly damage the Company. Mr Darcy further acknowledges
that as a result of his employment by the Company, he will become acquainted
with other company employees and their abilities and that such information is
proprietary to the Company.



Accordingly, Mr Darcy expressly agrees that he shall not, during a period of
one year from the taking effect of the termination, carry out anywhere in
Europe any activity or accept any employment, or become a shareholder, adviser,
consultant or board member of a company or an enterprise that offers products
or services offered by the Company. During the same period, Mr. Darcy shall
not, without the prior written consent of the Company: (i) solicit, induce or
attempt to induce any person who is an employee of the Company to leave the
employ of the Company nor to engage in any business that competes with the
Company; or (ii) hire or assist in the hiring of any person who is an employee
of the Company to work for any business that competes with the Company.



In case of a breach of the present non-compete undertaking, Mr Darcy will pay
to the Company liquidated damages in an amount of CHF 100’000.- and, if the
breach is of a continuing nature, an amount of CHF 20’000.- at the beginning of
each month of such continuing breach. In addition, Mr Darcy will have to
compensate the Company for any further damage arising from such breach.
Further, the Company may request the elimination of the situation in breach of
the Agreement.



Finally, in case of a breach of the present non-compete undertaking, the
Company has no further obligation to pay any balance of the severance indemnity
and Mr. Darcy shall reimburse any partial payment of the severance indemnity
which he will have already received.




11. Article 




General Provisions





	(i)	 	Governing law and jurisdiction



This Agreement will be governed by, construed and enforced in accordance with
the laws of Switzerland, in particular Art. 319 ff of the Swiss Code of
Obligations.



Any dispute arising out of the present agreement will be submitted exclusively
to the ordinary courts of the Canton of Vaud, Switzerland, the appeal to the
Swiss Federal Court in the cases provided for by law being reserved.





	(ii)	 	Notice



All notices shall be addressed to the other party at the address specified at
the beginning of this Agreement, or to any other address as provided by the
parties through subsequent written notice.




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	(iii)	 	Entire agreement and release



This is the entire agreement between the parties and supersedes all prior or
all contemporaneous agreements between the parties with respect to the subject
matter thereof as well as the agreement between Compex France Sàrl and Mr.
Darcy dated March 15, 2000, the “Serge Darcy Offer Letter – President and CEO
Compex SA” dated 28 December 2001 executed by David B. Kaysen and the “Serge
Darcy fiscal year 2002 salary and MBO calculations” dated July 1, 2001 executed
by David Kaysen and Serge Darcy.



This Agreement may not be modified or amended except in writing signed by both
parties.





	(iv)	 	Waiver



No waiver of any violation or non-performance of this Agreement in one instance
shall be deemed to be a waiver of any violation or non-performance in any other
instance. All waivers must be in writing.



Encl. Schedule 1 : Rehabilicare’s Stock Option Plan



IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated below.




	 	 	 
	/s/ John Maley, Chairman



Compex SA	 	
/s/ Serge Darcy



Mr. Serge Darcy
	Date: July 29, 2002	 	
Date: July 29, 2002






For purposes of Article 4 only:



	 
	/s/ John Maley, Chairman
	Rehabilicare Inc. 
	 
	 




Date: July 29, 2002




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