EXHIBIT 10.2

 

April 6, 2006

 

Mr. John H. Jungbauer

VP, Finance and CFO

MedicalCV, Inc.

9725 South Robert Trail

Inver Grove Heights, MN 55077

 

Re:                             Amendment to Executive Employment Agreement

 

Dear Mr. Jungbauer:

 

Reference is made to your Executive Employment Agreement with MedicalCV, Inc.
(“MedCV” or “we”) dated August 8, 2005 (the “Employment Agreement”) providing
for your employment as Vice President, Finance and Chief Financial Officer of
MedCV. Following our discussions concerning the future needs of MedCV as we
enter into a new stage of growth, we have reached a mutual decision concerning
your departure from MedCV. This letter (the ”Agreement”) will address amendments
to the Employment Agreement and your severance and transition arrangements.
Except as provided in this letter, the following supersedes all other existing
arrangements for your employment, compensation and benefits.

 

1.                                       Termination and Duties.  Section 3.01
of the Employment Agreement is hereby amended and superseded by the following.
In lieu of further notice of termination of employment by you or MedCV, it is
agreed that, except as provided below, your employment by MedCV will terminate
on the date we advise you that MedCV has engaged a new chief financial officer
and/or principal accounting officer (the “Termination Date”). We agree, however,
that the actual date of termination of your employment shall not be earlier than
July 31, 2006. On the date we engage a new chief financial officer or principal
accounting officer, you will be deemed to have resigned from all offices held by
you with MedCV. If we advise you that we have engaged a new chief financial
officer and/or principal accounting officer, you agree that we will also have
the right, at our option, to extend your employment (as a non-officer)  through
a transition period which we specify in writing, but which shall not continue
beyond December 31, 2006, without your consent.. During such transition period,
you agree to assist MedCV and such officer as needed in all matters pertaining
to accounting and SEC reporting matters. Until the Termination Date, you agree
to continue to serve as MedCV’s Vice President, Finance and Chief Financial
Officer and will be charged with primary responsibility for coordinating MedCV’s
accounting and SEC filings. You and your staff will diligently complete and
close MedCV’s accounting for the year ending April 30, 2006; will work with
company officers, auditors and legal counsel to prepare and timely file MedCV’s
10-KSB report for such fiscal year; and will sign such 10-KSB and all
appropriate certifications thereto. The forgoing is a condition to the payment
of the severance payment to you provided in Paragraph 3.

 

2.                                       Compensation.  Your base compensation
and benefits will continue to be paid to you under the terms of your Employment
Agreement at their current rates through the Termination Date and any transition
period. Except for the severance payment provided below, however, no other bonus
or

 

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monetary compensation will be paid to you. The foregoing supersedes Sections
4.01, 4.02 and 6.01 of the Employment Agreement.

 

3.                                       Special Severance Payment.  Under the
terms of the Employment Agreement, you have the right to terminate your
employment upon 60 days prior notice and are entitled to a severance payment
equal to six months of your base compensation. We desire to have a smooth
transition of your duties to a new chief financial officer. Therefore,
conditioned upon your performance of this Agreement, MedCV will pay an
additional severance amount equal to $100,000. The severance amounts hereunder
shall be payable $100,000 (under your Employment Agreement) on the Termination
Date, and the special payment ($100,000) on January 2, 2007. MedCV will also pay
you the severance benefits provided in Section 7.01(a) and (b) of the Employment
Agreement. All amounts payable to you will be reduced by applicable
withholdings.

 

4.                                       Amendment to Stock Option.  Your
current stock options for the purchase of 1,440,131 shares of MedCV Common Stock
provide that you have three months following termination of employment to
exercise the vested portions thereof. Approximately 440,666 will be vested as of
July 1, 2006. In consideration of your agreements contained in this letter, it
is agreed that your stock option agreements will be amended, effective upon your
execution of this Agreement, to provide that your options, to the extent vested
upon termination of your employment, will be exercisable for a period of twelve
months following the termination of your employment. If required by any
underwriter or agent in connection with the sale of our securities, during such
12-month period, you agree to abide by and enter into any form of share lock-up
agreement that is entered into by any other executive officer of MedCV. In the
event you enter into such lock-up agreement, the exercise period of your options
will be extended for at least 90 days following the termination of any lock-up
period to enable you to exercise your option.

 

5.                                       Revocation.  You have twenty-one (21)
days from the date you receive this Agreement to consider whether to sign this
Agreement (not including the day you receive it), and are advised in writing by
this paragraph to consult an attorney as part of the consideration process. The
21-day consideration period thus expires at the end of the day on April 28,
2006. If you sign this Agreement before the expiration of the 21-day period, you
do so because you do not need additional time beyond the signature date to
decide whether to enter into this Agreement. You acknowledge that once you
execute this Agreement, you may, if you choose, revoke the Agreement within
fifteen (15) days after the date on which you signed it. (The parties hereto
agree that this 15-day revocation period includes, and is not in addition to,
the seven-day consideration period required by the Age Discrimination in
Employment Act.)  If you choose to revoke, written notice of revocation must be
delivered either in person, or mailed by certified mail, return receipt
requested, and properly addressed to:

 

Marc P. Flores

President and Chief Executive Officer

MedicalCV, Inc.

9725 South Robert Trail

Inver Grove Heights, MN 55077

 

If mailed, the written notice of revocation must be postmarked within the 15-day
period. If you do not timely revoke your execution of this Agreement, then the
sixteenth day following the date of your execution will be the “Effective Date”
of this Agreement. By executing this Agreement, you represent that you
understand the terms and effect of this Agreement and enter into it willingly,
knowingly, and voluntarily.

 

6.                                       Release.  You, on behalf of yourself,
your heirs, successors, agents, assigns, and all other persons who could assert
a claim based on a relationship with you and/or dealings with MedCV, waive

 

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and release and promise never to assert any or all claims that exist or might
exist against MedCV, its related business entities, and their current and former
shareholders, directors, officers, employees, agents, attorneys, insurers, and
assigns, prior to the your signing of this Agreement. These claims include, but
are not limited to, claims arising under federal, state or local statutes,
ordinances, regulations, rules, or common law, including but not limited to the
following (as amended): Title VII of the Civil Rights Act of 1964; the Civil
Rights Act of 1991; the Americans with Disabilities Act; the Age Discrimination
in Employment Act; the Family Medical Leave Act; the Employee Retirement Income
Security Act; any state statute or law governing employment, discrimination, or
harassment in employment or governing termination of employment, including but
not limited to the Minnesota Human Rights Act, or similar state statutes or
local ordinances; the law of contract and tort including but not limited to
claims for defamation, fraud or misrepresentation, breach of privacy, assault,
battery, intentional or negligent infliction of emotional distress, promissory
estoppel, or any quasi-contractual theory or any other theory arising under the
common law; and any claims for attorney’s fees, costs, or disbursements, or any
action in equity, all to the fullest extent permitted by law. You represent and
warrant that you have not assigned any such claims to anyone else. You further
agree to the extent permitted by law not to sue or commence any other legal or
equitable actions against MedCV, except to enforce this Agreement. You
acknowledge and agree that this Agreement, including the extension of the
exercise period of your options and the special severance payment to you
provided in Paragraph 3, provided herein constitutes a fair, sufficient, and
adequate consideration for promises in this Agreement.

 

MedCV hereby releases you from all claims, liabilities or causes of action
(collectively, “Claims”) known to MedCV on the date hereof; provided, however,
that your release shall not apply to Claims (i) arising out of the enforcement
of this Agreement or your Employment Agreement; or (ii) arising from claims made
by third parties.

 

7.                                       Litigation Support.  Within the
forty-eight (48) month period following the Termination Date, you will comply
with any reasonable request by MedCV or its attorneys to assist in connection
with pending or future litigation or charges involving MedCV, including but not
limited to matters involving any past or present agent or employee of MedCV,
involving another business entity, or involving any other MedCV-affiliated
entity, parent, or successor. MedCV will reimburse you for all reasonable,
out-of-pocket expenses incurred in providing such assistance. If you are
requested to perform services in excess of eighty (80) hours during such period,
MedCV will reimburse you at the rate of $100.00 per hour.

 

8.                                       Miscellaneous.  This Agreement and the
documents it references constitute the entire agreement between you and MedCV
with respect to the matters covered and except for the last sentence of this
paragraph, supersedes all prior and contemporaneous agreements, representations,
and understandings of the parties with respect to the subject matter of this
Agreement, including but not limited to any previously-existing contract,
agreement, understanding, practice, or policy (oral or written) relating to
separation or severance pay in the event of termination of employment, except
that the benefit plans that you participate in shall remain in full force and
effect for as long as you participate in any such benefit plan. Except as
provided in this Agreement, the remaining provisions of your Employment
Agreement not inconsistent with this Agreement will remain in effect in
accordance with their terms.

 

If any provision of this Agreement is held to be void, voidable, unlawful, or
unenforceable, the remaining portions of this Agreement will continue in full
force and effect. Notwithstanding the foregoing, if your releases of claims set
forth in Paragraph 6 are held to be invalid or unenforceable, then at its
option, MedCV may declare the Agreement null and void and recover from you the
payments and benefits provided under Section 3 above.

 

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MEDICALCV, INC.

 

 

 

 

 

By:

/s/ Marc P. Flores

 

 

 

Marc P. Flores

 

 

President and Chief Executive Officer

 

 

 

 

 

/s/ John H. Jungbauer

 

 

John H. Jungbauer

 

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