Exhibit 10.2

EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT, entered into August  10, 2009, by and between CAS
Medical Systems, Inc., a Delaware corporation (the “Company”, which term
includes any successor to CAS Medical Systems, Inc., by merger or otherwise),
and Jeffery A. Baird (the “Employee”).
 
WITNESSETH:
 
WHEREAS, the Company desires that the Employee continue to serve as Chief
Financial Officer of the Company and the Employee is willing to continue to
serve the Company in such capacity.
 
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the parties hereto agree as follows:
 
Section 1.  
Employment

 
The Company will employ the Employee, and the Employee will perform services for
the Company and its subsidiaries, on the terms and conditions set forth in this
Agreement and for the period specified in Section 3 hereof (“Term of
Employment”).
 
Section 2.  
Duties

 
The Employee, during the Term of Employment, will serve the Company as its Chief
Financial Officer.  The Employee will have such duties and responsibilities as
are assigned to him by the President of the Company commensurate with the
Employee’s position.  The Employee will perform his duties hereunder faithfully
and to the best of his abilities and in furtherance of the business of the
Company and its subsidiaries, and will devote his full business time, energy,
attention and skill to the business of the Company and its subsidiaries and to
the promotion of its interests, except as otherwise agreed by the Company.
 
Section 3.  
Term of Employment

 
The Employee’s employment hereunder shall be “at will” and is terminable at any
time by either party, subject to the provisions of Sections 9 and 10 hereof.
 
Section 4.  
Salary

 
The Employee will receive, as compensation for his duties and obligations to the
Company pursuant to this Agreement, a base salary at the annual rate of Two
Hundred Thousand Dollars, payable in substantially equal installments in
accordance with the Company’s payroll practice.  It is agreed between the
parties that the Company will review the base annual salary annually and in
light of such review may (but will not be obligated to), in the discretion of
the Compensation Committee of the Board of Directors of the Company, increase
such annual base salary taking into account any change in the Employee’s
responsibilities, increases in the cost of living, performance by the Employee,
and other pertinent factors.  It is also agreed that during such annual review
the annual base salary can be reduced.
 
Section 5.  
Bonus

 
During the Term of Employment, the Employee will be eligible for an annual bonus
in the form of cash or Company common stock as determined at the sole discretion
of the Compensation Committee of the Board of Directors.  Any bonus payable
hereunder shall be calculated after the close of the end of the calendar year,
and thereafter paid in a lump sum by no later than the 15th day of the third
month following the end of the calendar year in which the right to the bonus is
no longer subject to a substantial risk of forfeiture (as defined for purposes
of Internal Revenue Code Section 409A, including Treasury Regulations Section
1.409A-1(d)).
 
 

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Section 6.  
Employee Benefits

 
Subject to any applicable probationary or similar periods, during the Term of
Employment, the Employee will be entitled to participate in all employee benefit
programs of the Company applicable to senior officers of the Company, as such
programs may be in effect from time to time.  Subject to any applicable
probationary or similar periods, during the Term of Employment, the Employee
will also be entitled to participate in all retirement programs of the Company
for which current employees are eligible, as such programs may be in effect from
time to time (including the Company’s 401(k) plan).
 
Section 7.  
Business Expenses

 
All reasonable travel and other out-of-pocket expenses incidental to the
rendering of services by the Employee hereunder will be paid by the Company and
if expenses are paid in the first instance by the Employee, the Company will
reimburse him therefor upon presentation of proper invoices; subject in each
case to compliance with the Company’s reimbursement policies and
procedures.  All reimbursements will be paid in the same taxable year in which
the expense is incurred; provided that expenses incurred toward the end of the
calendar year that cannot administratively be reimbursed before the year end
shall be reimbursed by no later than March 15th of the following calendar year.
 
Section 8.  
Vacations and Sick Leave

 
The Employee will be entitled to holidays, reasonable vacation and reasonable
sick leave each year, in accordance with policies of the Company, as determined
by the Board of Directors, provided, however, that the Employee will be entitled
to a minimum of four (4) weeks vacation per year.
 
Section 9.  
Termination

 
(a) Termination of Agreement by the Company for Convenience.  The Company may
terminate the Employee’s employment and the Term of Employment for convenience
at any time upon written notice to the Employee, which termination shall be
effective upon delivery of such notice unless such notice specifically provides
for termination to be effective at a later date.
 
(b) Termination of Employment by the Company for Serious Cause.  In the event of
Serious Cause (as defined below), the Company may terminate the Employee’s
employment and the Term of Employment upon written notice of such termination
stating the Serious Cause upon which the Company relies for its
termination.  The Employee’s employment and the Term of Employment will be
terminated effective as of the date specified in such notice, which will in no
event be earlier than the effective date of such notice as provided in Section
18.
 
“Serious Cause” means (i) the willful and continued failure by the Employee to
perform substantially his duties hereunder, other than by reasons of health,
after demand for substantial performance is delivered by the Company that
identifies the manner in which the Company believes the Employee has not
substantially performed his duties; (ii) the Employee will have been indicted by
any federal, state or local authority in any jurisdiction for, or will have
pleaded guilty or nolo contendere to, an act constituting a felony, (iii) the
Employee will have habitually abused any controlled substance (such as narcotics
or alcohol), or (iv) the Employee will have (A) engaged in acts of fraud,
material dishonesty or gross misconduct in connection with the business of the
Company, or (B) committed a material breach of this Agreement.
 
 

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(c) Termination of Employment by Employee for Good Reason. The Employee may
terminate his employment and the Term of Employment in the event of “Good
Reason.”  Termination for Good Reason means a resignation of employment and
Separation from Service (as such term is defined for purposes of Internal
Revenue Code Section 409A) within six (6) months following the initial existence
of one or more of the following conditions arising without the Employee’s
written consent:
 
(i)  
a reduction greater than five (5) percent in the aggregate in the Employee’s
base salary or benefits, other than an across-the-board reduction affecting
substantially all members of senior management;

 
(ii)  
a material reduction in the Employee’s duties and significant responsibilities
hereunder following the occurrence of a Change of Control, as defined in Section
10(b) hereof (not including reasonable changes in title or in corporate
structure); or

 
(iii)  
a material breach of this Agreement by the Company (which shall include a
failure to make payments due hereunder);

 
provided, in any such case, that (1) the Employee shall provide, pursuant to
Section 18 hereof, a prior written notice specifying the reasons for his
termination to the Company’s President within sixty (60) days after the initial
existence of the condition, and give Company an opportunity to cure such
condition (if curable), and (2) “Good Reason” shall exist only if the Company
shall fail to cure such condition within thirty-one (31) days after its receipt
of such prior written notice.  In addition, until the actual Separation from
Service, the Employee must remain willing and able to continue to perform
services in accordance with the terms of this Agreement and the Employee must
not be in breach of any of the Employee’s obligations hereunder.
 
(d) Effect of Termination for Serious Cause or Without Good Reason.  In the
event of termination of the Employee’s employment and the Term of Employment by
the Company for Serious Cause or by the Employee without Good Reason, the
Employee will forfeit all bonus amounts accruing for the then current fiscal
year, and the Company will be liable to the Employee only for (i) any accrued
but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a
prior fiscal year (subject, if applicable, to the terms of any deferred
compensation arrangements), and (iii) reimbursement of business expenses
incurred prior to the date of termination.
 
(e) Death, Retirement, Disability.  In the event of the death, Retirement or
Disability of the Employee, the Employee’s employment and Term of Employment
will be terminated as of the date of such death, Retirement or Disability and
the Company will pay the Employee, or the Employee’s estate or legal
representative, as appropriate, (i) any accrued but unpaid base salary and
vacation, (ii) any earned but unpaid bonus from a prior fiscal year (subject, if
applicable, to the terms of any deferred compensation arrangements), and (iii)
reimbursement of business expenses incurred, but unpaid, prior to the date of
termination.
 
“Disability” means the Employee’s inability, for reasons of health, to carry out
the functions of his position for a total of one hundred eighty (180) days
during any twelve (12) month period.  “Retirement” will mean retirement from
employment upon or after attaining age sixty-five (65) or such earlier age
agreed to by the Company.
 
(f) Effect of Termination Without Serious Cause or With Good Reason.  If (i) the
Company terminates the Employee’s employment without Serious Cause, or (ii) the
Employee terminates his employment for Good Reason (other than, in the case of
each of clause (i) and (ii) above, within the period beginning on the date that
a Change in Control is formally proposed to the Company’s Board of Directors and
ending on the second anniversary of the date on which such Change of Control
occurs), the Company shall pay the Employee a separation pay benefit (the
“Severance Payment”) equal to six (6) months of the Employee’s annual rate of
base salary (as of the Employee’s Separation from Service date) and will make
available a subsidized healthcare benefit, as described below.
 
 

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(1)  
Payment of the Severance Payments shall commence as of the Employee’s Separation
from Service date, and shall continue thereafter in equal fixed installments
over a six month period in accordance with the Company’s standard payroll
procedures and normal payroll dates then in effect.

 
(2)  
In the event the value of the Severance Payments shall exceed two times the
lesser of the Employee’s annualized compensation or the maximum amount that may
be taken into account for qualified plan purposes (in each case, as determined
in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the
excess shall not be paid as provided in (1), above, but instead shall be
withheld and paid on the first regularly scheduled payroll date immediately
following the date that is six months after the Employee’s Separation from
Service date, without adjustment for the delay in payment.

 
(3)  
In no event shall Severance Payments be accelerated, nor shall the Employee be
eligible to defer payment of Severance Payments to a later date.

 
(4)  
If COBRA continuation coverage under any Company healthcare plan is elected by
the Employee, the Company shall provide such coverage on the same terms with
respect to employee cost and employer subsidy as was being made available to the
Employee immediately prior to his Separation from Service for the period of the
COBRA coverage or six months, whichever is shorter.

 
In addition, the Employee will be entitled to prompt payment of (A) any accrued
but unpaid salary and vacation, (B) any earned but unpaid bonus from a prior
fiscal year (subject, if applicable, to the terms of any deferred compensation
arrangements), and (C) reimbursement of business expenses incurred prior to the
date of termination, and all of the Employee’s equity-linked grants (e.g., stock
options, restricted stock) shall immediately accelerate and vest in full.
 
All payments under Section 9 or Section 10 of (i) any accrued but unpaid base
salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year,
and (iii) reimbursement of business expenses incurred prior to the date of
termination shall be paid in a single sum on the first regularly scheduled
payroll date immediately following the Employee’s separation from service.
 
For purposes of this Agreement, “termination of employment”, “retirement” and
words of similar import shall means the Employee’s Separation from Service as
defined in Section 409A of the Code and final regulations issued thereunder.
 
(g) No Other Obligations.  In the event of the termination of the Employee’s
employment and the Term of Employment pursuant to Sections 9 or 10 herein, the
Company will have no obligations to the Employee other than those set forth in
Sections 9 and 10 herein.
 
Section 10.  
Change of Control

 
(a) Effect of Termination.  If (i) the Company terminates the Employee’s
employment without Serious Cause, or (ii) the Employee terminates employment
with the Company for Good Reason, and, in the case of either (i) or (ii) above,
the Employee’s employment is terminated (A) under circumstances constituting an
Involuntary Separation from Service within the meaning of Treasury Regulations
Section 1.409A-1(n) and (B) within the period beginning on the date that a
Change of Control is formally proposed to the Company’s Board of Directors and
ending on the second anniversary of the date on which such Change of Control
occurs, the Company shall pay the Employee a separation pay benefit (the “Change
of Control Severance Payment”) equal to the Employee’s annual base salary (as of
the Employee’s Separation from Service date) and will make available a
subsidized healthcare benefit, as described below.
 
 

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(1)  
Payment of the Change of Control Severance Payments shall commence as of the
Employee’s Separation from Service date, and shall continue thereafter in equal
fixed installments over a one year period in accordance with the Company’s
standard payroll procedures and normal payroll dates then in effect.

 
(2)  
In the event the value of the Severance Payments shall exceed two times the
lesser of the Employee’s annualized compensation or the maximum amount that may
be taken into account for qualified plan purposes (in each case, as determined
in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the
excess shall not be paid as provided in (1), above, but instead shall be
withheld and paid on the first regularly scheduled payroll date immediately
following the date that is six months after the Employee’s Separation from
Service date, without adjustment for the delay in payment.

 
(3)  
In no event shall Change of Control Severance Payments be accelerated, nor shall
the Employee be eligible to defer payment of Change of Control Severance
Payments to a later date.

 
(4)  
If COBRA continuation coverage under any Company healthcare plan is elected by
the Employee, the Company shall provide such coverage on the same terms with
respect to employee cost and employer subsidy as was being made available to the
Employee immediately prior to his Separation from Service for the period of the
COBRA coverage or one year, whichever is shorter.

 
In addition, the Employee will be entitled to prompt payment of (A) any accrued
but unpaid salary and vacation, (B) any earned but unpaid bonus from a prior
fiscal year (subject, if applicable, to the terms of any deferred compensation
arrangements), and (C) reimbursement of business expenses incurred prior to the
date of termination.
 
If any portion of the payments which the Employee has the right to receive from
the Company, or any affiliated entity or successor, hereunder would constitute
“excess parachute payments” (as defined in Section 280G of the Internal Revenue
Code) subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code, such excess parachute payments shall be reduced to the largest amount that
will result in no portion of such excess parachute payments being subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code.  In the event a
reduction must be in accordance with this paragraph, Change in Control Severance
Payments shall be reduced to the extent necessary.
 
The Employee will not be entitled to any benefits or other entitlements under
this section unless a Change of Control actually occurs.  Any amounts payable
pursuant to this Section 10 shall not duplicate amounts payable under Section 9
and vice versa.
 
(b) Change of Control.  A “Change of Control” of the Company will be deemed to
have occurred if (i) any “person” (as such term is defined in Section 3(a)(9)
and as used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
(the “Exchange Act”), excluding the Company or any of its subsidiaries, a
trustee or any fiduciary holding securities under an employee benefit plan of
the Company or any of its subsidiaries, an underwriter temporarily holding
securities pursuant to an offering of such securities or a corporation owned,
directly or indirectly, by shareholders of the Company in substantially the same
proportion as their ownership of the Company, becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing an increase from less than Twenty Percent
(20%) to Fifty Percent (50%) or more of the combined voting power of the
Company’s then outstanding securities (“Voting Securities”); (ii) during any
period of not more than two (2) years, individuals who constitute the Board of
Directors of the Company (the “Board”) as of the beginning of the period and any
new director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in clause (i) or
(iii) of this sentence) whose election by the Board or nomination for election
by the Company’s shareholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at such
time or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; (iii) the stockholders of
the Company approve a merger, consolidation or reorganization or a court of
competent jurisdiction approves a scheme or arrangement of the Company, other
than a merger, consolidation, reorganization or scheme which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least Fifty Percent (50%) of
the combined voting power of the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger, consolidation,
reorganization or scheme or arrangement, and such transaction is completed; or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or any agreement for the sale of substantially all of the Company’s
assets, and such transaction is completed.
 
 

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Section 11.  
Agreement Not to Compete or Solicit

 
(a) Covenant Not to Compete.  The Employee hereby covenants and agrees that at
no time during the Term of Employment, nor for a period of six (6) months (such
period to be one (1) year in the case of a termination resulting in payments
pursuant to Section 10) immediately following the termination of the Employee’s
employment, will he for himself or on behalf of any other person, partnership,
company or corporation, directly or indirectly, acquire any financial or
beneficial interest in (except as provided in the next sentence), provide
consulting or other services to, be employed by, or own, manage, operate or
control any entity engaged in the medical device business substantially similar
to the business engaged in by the Company or its subsidiaries at the time of
such termination of employment.  Notwithstanding the preceding sentence, the
Employee will not be prohibited from owning less than one percent (1%) of any
publicly traded corporation, whether or not such corporation is in competition
with the Company.
 
(b) Non-Solicitation.  The Employee hereby covenants and agrees that, at all
times during the Term of Employment and for a period of six (6) months (such
period to be one (1) year in the case of a termination resulting in payments
pursuant to Section 10) immediately following the termination thereof, the
Employee will not directly or indirectly employ or seek to employ any person or
entity employed at that time by the Company or any of its subsidiaries, or
otherwise encourage or entice such person or entity to leave such employment.
 
Section 12.  
Confidential Information

 
 
The Employee agrees to keep secret and retain in the strictest confidence all
confidential matters which relate to the Company or any affiliate of the
Company, including, without limitation, customer lists, client lists, trade
secrets, pricing policies and other business affairs of the Company and any
affiliate of the Company learned by him from the Company or any such affiliate
or otherwise before or after the date of this Agreement, and not to disclose any
such confidential matter to anyone outside the Company, or any of its
affiliates, whether during or after his period of service with the Company,
except as may be required in the course of a legal or governmental
proceeding.  Upon request by the Company, the Employee agrees to deliver
promptly to the Company upon termination of his services for the Company, or at
any time thereafter as the Company may request, all Company or affiliate
memoranda, notes, records, reports, manuals, drawings, designs, computer files
in any media and other documents (and all copies thereof) relating to the
Company’s or any affiliate’s business and all property of the Company or any
affiliate associated therewith, which he may then possess or have under his
control.

 
Section 13.  
Remedy

 
(a) Should the Employee engage in or perform, either directly or indirectly, any
of the acts prohibited by Sections 11 or 12 hereof, it is agreed that any and
all severance payments and related benefits hereunder shall immediately
terminate and the Company will also be entitled to full injunctive relief, to be
issued by any competent court of equity, enjoining and restraining the Employee
and each and every other person, firm, organization, association, or corporation
concerned therein, from the continuance of such violative acts. The foregoing
remedies available to the Company will not be deemed to limit or prevent the
exercise by the Company of any or all further rights and remedies which may be
available to the Company hereunder or at law or in equity.
 
 

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(b) The Employee acknowledges and agrees that the covenants contained in this
Agreement are fair and reasonable in light of the consideration paid hereunder,
and the invalidity or unenforceability of any particular provision, or part of
any provision, of this Agreement will not affect the other provisions or parts
hereof.  If any provision hereof is determined to be invalid or unenforceable
and if any such provision will be so determined to be invalid or unenforceable
by reason of the duration or geographical scope of the covenants contained
therein, such duration or geographical scope, or both, will be reduced to a
duration or geographical scope solely to the extent necessary to cure such
invalidity.
 
Section 14.  
Successors and Assigns

 
This Agreement will be binding upon and inure to the benefit of the Employee,
his heirs, executors, administrators and beneficiaries, and the Company and its
successors and assigns.
 
Section 15.  
Governing Law

 
This Agreement will be governed by and construed and enforced in accordance with
the laws of the State of Connecticut, without reference to rules relating to
conflicts of law.
 
Section 16.  
Entire Agreement

 
This Agreement constitutes the full and complete understanding and agreement of
the parties and supersedes all prior understandings and agreements as to
employment of the Employee.  This Agreement cannot be amended, changed, modified
or terminated without the written consent of the parties hereto.
 
Section 17.  
Waiver of Breach

 
The waiver of either party of a breach of any term of this Agreement will not
operate nor be construed as a waiver of any subsequent breach thereof.
 
Section 18.  
Notices

 
Any notice, report, request or other communication given under this Agreement
will be written and will be effective upon delivery when delivered personally,
by overnight courier or by fax.  Unless otherwise notified by any of the
parties, notices will be sent to the parties as follows: (i) if to the Employee,
at the address set forth in the Company’s records, and (ii) if to the Company,
to CAS Medical Systems, Inc., 44 East Industrial Road, Branford, CT 06405,
Attention: Board of Directors.
 
Section 19.  
Severability

 
If any one or more of the provisions contained in this Agreement will be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.
 
Section 20.  
Counterparts

 
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original but all of which together will constitute one and
the same instrument.  Delivery of signatures by facsimile or electronic image
shall be valid for all purposes hereunder.
 
Section 21.  
Internal Revenue Code Section 409A Compliance.

 
 
 

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(a) The parties hereto recognize that certain provisions of this Agreement may
be affected by Section 409A of the Internal Revenue Code and guidance issued
thereunder, and agree to amend this Agreement, or take such other action as may
be necessary or advisable, to comply with Section 409A.
 
(b) Notwithstanding anything herein to the contrary, it is expressly understood
that at any time the Company (or any successor or related employer treated as
the service recipient for purposes of Internal Revenue Code Section 409A) is
publicly traded on an established securities market (as defined for purposes of
Internal Revenue Code Section 409A), if a payment or provision of an amount or
benefit constituting a deferral of compensation is to be made pursuant to the
terms of this Agreement to the Employee on account of a Separation from Service
at a time when the Employee is a Specified Employee (as defined for purposes of
Internal Revenue Code Section 409A(a)(2)(B)(i)), such deferred compensation
shall not be paid to the Employee prior to the date that is six (6) months after
the Separation from Service or as otherwise permitted under Treasury Regulations
Section 1.409A-3(i)(2).
 
(c) For purposes of this Agreement, the following definitions shall apply:
 
(i)  
“Separation from Service” means, generally, a termination of employment with the
Company (or any successor or related employer treated as the service recipient
for purposes of Internal Revenue Code Section 409A), and shall have the same
meaning as such term has for purposes of Internal Revenue Code Section 409A
(including Treasury Regulation Section 1.409A-1(h)).

 
(ii)  
“Involuntary Separation from Service” means a Separation from Service due to the
independent exercise of the unilateral authority of the Company (or any
successor or related employer treated as the service recipient for purposes of
Internal Revenue Code Section 409A) to terminate the Employee’s employment,
other than due to the Employee’s implicit or explicit request, where the
Employee was willing and able to continue employment with the
Company.  Notwithstanding the foregoing, a termination for Good Reason may
constitute an Involuntary Separation from Service.  Involuntary Separation from
Service shall have the same meaning as such term has for purposes of Internal
Revenue Code Section 409A (including Treasury Regulation Section 1.409A-1(n)).

 
[signature page follows]
 

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
 
The Company:
 
 
CAS MEDICAL SYSTEMS, INC.
 
By: /s/  Andrew E. Kersey
Name:  Andrew E. Kersey
Title:    President and Chief Executive Officer
 
 
 
Employee:
 
 
/s/  Jeffery A. Baird
Jeffery A. Baird

 
 

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