EXHIBIT 10.1
CABG Medical, Inc.
Incentive Compensation Plan
For 2005
I. PURPOSE
CABG Medical, Inc. (CABG) recognizes that creating a strong link between
performance and compensation is beneficial to the CABG’s pursuit of its
operational and financial objectives. This plan is designed to reward CABG
employees with performance-based compensation for achieving specified company
goals of advancing the development of the Holly Graft System and successfully
navigating the regulatory environment. This plan is aligned with shareholder
value drivers of the advancement of the Holy Graft System, initiation of
clinical trials and responsible use of financial resources.
II. PERFORMANCE TARGETS
CABG has determined that there should be four performance milestones for fiscal
2005, each tied to fiscal discipline or the achievement of certain clinical
milestones, to be communicated directly each to each eligible participant.
III. BONUS PAYOUT
CABG has established the target bonus as 15% of each eligible employee’s annual
salary. The actual bonus payout will be based on the number of performance
milestones achieved and the percentage earned for achieving each milestone will
be cumulative as depicted below:

                      % of     Bonus       Target     Percent       Earned    
Earned  
Achievement of one milestone
    10 %     1.5 %
Achievement of two milestones
    30 %     4.5 %
Achievement of three milestones
    60 %     9.0 %
Achievement of four milestones
    100 %     15.0 %

The bonus earned will be determined by multiplying the earned amount of the
target bonus by the eligible wages earned by the employee during the year.
Eligible wages will be calculated as the Form W-2 gross wages less wages earned
while on short/long-term disability and leave of absence.
IV. PARTICIPATION
All employees on May 3, 2005 are eligible to participate in this plan.
Additionally, full-time employees employed for at least three months during 2005
will be eligible to participate in this plan. Employees hired during the year
will not get credit for milestones achieved prior to their employment. For such
employees, the allocation of the earned bonus percentage to wages earned during
2005 will effectively result in the employee receiving a prorated bonus.
If employment of a participant is terminated due to performance or the
individual voluntarily leaves the Company, any unearned portion of the incentive
award is forfeited.
IV. APPROVAL, AUTHORIZATION AND TERMS
This Incentive Compensation Plan, its terms and policies have been authorized by
the Compensation Committee of the Board of Directors. Any modifications or
adjustments to the plan are subject to approval by the Compensation Committee.

 

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V. PAYMENT
Employees may elect to receive stock options in lieu of cash bonus payments. The
number of options issued will be based on a ratio of two stock options for each
dollar of cash foregone. The options will be issued pursuant to the 2000
Long-Term Incentive Plan. The grant date of the options will be the date their
issuance is formally approved by the Compensation Committee. The options will be
exercisable immediately at an exercise price equal to the fair value of the
common stock on the date their issuance is approved.
Cash bonus payments for 2005 will be paid as earned.