ex10-1



 




Exhibit 10.1       


SPACELABS MEDICAL, INC.

15220 N.E. 40th Street

Redmond, Washington 98073


December 5, 2001


Mr. Carl A. Lombardi

Chairman, President and Chief Executive Officer

Spacelabs Medical, Inc.

15220 N.E. 40th Street

Redmond, Washington 98073


Dear Carl:


     This letter will confirm the agreements that have been reached between you
and the Board of Directors of Spacelabs Medical, Inc. (“Company”) in light of
our discussions regarding your continued service with the Company and the
rights and obligations of you and the Company with respect thereto.


     As we have discussed, the Board has determined that it is in the best
interests of the Company and its shareholders that you postpone your retirement
and continue to serve the Company and its subsidiaries in all of your current
capacities for a defined period while the Company evaluates strategic options
and matters of management succession. We have agreed that you will continue
such service until the earlier of the date of the 2002 annual meeting of the
Company’s shareholders (but not later than May 31, 2002 unless you otherwise
agree) and a date mutually agreed upon between you and the Company (“Retirement
Date”), and you then will retire from all of your positions as a director,
officer or employee of the Company and its affiliates.


     Your retirement in accordance with the terms of this agreement will be
deemed a termination of your employment by the Company without Cause as
contemplated by and defined in the severance agreement between you and the
Company dated March 16, 2001 (“Severance Agreement”), with the result that you
will be entitled to the lump sum payments and other benefits provided for
thereunder upon satisfaction of the conditions set forth therein (unless
Section 2 of the Severance Agreement applies, in which case the Amended and
Restated Change of Control Agreement between you and the Company dated as of
July 24, 1998 (“Change of Control Agreement”) will control). The benefits will
be the greater of those calculated as of your Retirement Date and those
calculated as of the date hereof.


 








 


Mr. Carl A. Lombardi

December 5, 2001

Page 2


     The Severance Agreement and the Change of Control Agreement remain in full
force and effect. In the event that your employment with the Company
terminates prior to the Retirement Date, the rights and obligations of you and
the Company will be determined under the Severance Agreement and the Change of
Control Agreement.


     Your employment pursuant to this agreement continues to be “at-will” and
may be terminated by either the Company or you at any time with or without
Cause, subject to your rights under this agreement, the Severance Agreement and
the Change of Control Agreement.


     If the foregoing accurately reflects our agreement, please countersign a
copy of this agreement and return it to Gene DeFelice, whereupon this will be a
legally binding agreement between you and the Company entered into in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.




 



	 	Sincerely,


 


	 	SPACELABS MEDICAL, INC.



 


	 	By  	


Phillip M. Nudelman


	 	Chairman of the Compensation Committee, acting pursuant to a resolution of the Board of Directors




AGREED AND ACCEPTED:


 






Carl A. Lombardi