THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of May 5, 1997, by and between
GERALD E. BISBEE, JR., PH.D. ("Executive") and APACHE MEDICAL SYSTEMS, INC., a Delaware
1. EMPLOYMENT TERM. The Company will employ Executive for a term commencing on January 1, 1997
and ending on December 31, 1997 ("Employment Term"). The Employment Term shall be automatically
extended for additional one-year terms, unless Executive or the Company's Board of Directors ("Board")
provides 90 days' advance written notice to the other of his/its intention not to renew.
2. EMPLOYMENT DUTIES. Executive will serve as Chief Executive Officer of the Company and Chairman of
the Board subject to the direction and control of the Board. Executive shall perform such duties as may be
assigned from time to time by the Board, and shall, on a full-time basis, serve the Company faithfully, diligently
and competently and to the best of his ability and in accordance with this Agreement and applicable law.
3. COMPENSATION. In exchange for Executive's services under this Agreement, the Company shall pay
Executive as salary $205,000 per annum, which shall be reviewed annually by the Compensation Committee of
the Board during its annual year-end compensation review ("Salary"). Salary shall be payable in 24 equal bi-
monthly installments and otherwise in accordance with the Company's ordinary payment practices. Any payments
made to Executive pursuant to this
Section 3 shall be treated as wages for withholding and employment tax purposes. Executive shall participate in
the Company's short-term cash incentive plan or any successor thereto (the "short-term plan") and any stock
option or stock incentive plan generally available to executives pursuant to the applicable plan documents.
(a) Executive shall be entitled during the Employment Term to participate in such employee benefit plans and
programs as are offered from time to time to employees of the