**Exhibit 10.3**

**EMPLOYMENT AGREEMENT**

**THIS EMPLOYMENT AGREEMENT** (“Agreement”)is made effective July 21, 2007, by and between ProUroCare Inc., a Minnesotacorporation with its principal place of business in Golden Valley, Minnesota(the “Company”), and Richard B. Thon (“Employee”).

**WHEREAS**, the Company is in thebusiness of developing and marketing products to treat prostate conditions;

**WHEREAS**, the Company desires toemploy the Employee as its Chief Financial Officer, in accordance with thefollowing terms, conditions and provisions; and,

**WHEREAS**, the Employee desires toperform such services for the Company, all in accordance with the followingterms, conditions and provisions;

**NOW THEREFORE**, in considerationof the mutual covenants herein contained, it is agreed as follows:

**1.**                                      EMPLOYMENT AND DUTIES.

The Company hereby continues the Employee’semployment, and the Employee hereby accepts and agrees to serve the Company asthe Company’s Chief Financial Officer. The Employee’s duties shall be to direct the Company’s financial andaccounting functions; to provide direction in meeting the Company’s publicreporting requirements; and to manage the Company’s relationships with theinvestment community.  He will alsoparticipate in recruiting management personnel in his functional area and otherreasonable duties subject to review and modification from time to time by theCompany’s CEO. The Employee shall apply his best efforts, and devote his fulltime and attention to the Company’s affairs.

**2.**                                      TERM.

Subject to Paragraph 5, the term of this Agreement andthe Employee’s employment under this Agreement shall commence on July 21, 2007,and shall continue thereafter until June 30, 2009. Upon the expiration of theoriginal term; this Agreement may be renewed by mutual agreement.

**3.**                                      COMPENSATION.

The Company shall compensate the Employee for hisservices at the following salary, bonus and benefits:

**3.1****                               BaseSalary.**

The Employee shall be paid a minimum annualized basesalary of $140,000 per year, payable on the Company’s normal payroll cycle,less all required and authorized withholdings and taxes, throughout the initialterm of this Agreement. This base salary is the minimum salary during therespective time period of the term of this Agreement, and 

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may be increased fromtime to time at the discretion of the Board of Directors. The Employee shall beconsidered an exempt employee under federal and state law.

**3.2****                               Bonus.**

The Employee is eligible to earn a bonus of up to 30%of his annual base salary, less all required and authorized withholdings andtaxes. The annual bonus criteria will be set by the Compensation Committee ofthe Board of Directors.

**3.3****                               StockOptions.**

The Employee shall be eligible to participate in theannual grant of Company stock options, consistent with the terms and conditionsof the 2002 and 2004 Stock Option Plans, and with amounts of options, includingexercise price and vesting provisions, determined by the Compensation Committeeof the Board of Directors from time to time. The stock options are also subjectto Sections 5 and 6 of this Agreement.

**3.4****                               EmployeeBenefits Plans.**

Employee shall be eligible for fringe benefits offeredto other executive-level employees of the Company, subject to the Company’spolicies and the terms, restrictions, limitations and requirements of anysummary plan description and/or plan documents. Nothing herein shall alter,modify or change any such policy, summary plan description or plan document.

**3.5****                               LifeInsurance.**

During the term of this Agreement, the Company shallsecure and pay the premium for a term life insurance policy assignable to theEmployee in the amount of two times the Employee’s annual base salary or, atthe Employee’s written request, the Company shall reimburse the Employee forcomparable premiums on an existing policy for the same rating.

**4.**                                      EXPENSES.

The Company will reimburse the Employee for reasonableexpenses incurred by the Employee in connection with the business of theCompany upon presentation by the Employee of appropriate substantiation forsuch expenses.

**5.**                                      TERMINATION.

This Agreement shall terminate upon the occurrence ofany of the following:

**5.1.**                            **Terminationor Decision Not to Renew this Agreement by the Company for Reasons Other thanCause**.

The Company may terminate this Agreement or not renewthis Agreement prior to any renewal date for reasons other than Cause, upon 30days’ notice by the Company.  If 

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the Company so terminatesor fails to renew the Agreement, the Employee shall be entitled to severancepayments and benefits described in Section 6.

**5.2.****                            Terminationby Employee.**

Employee may terminate this Agreement at any time,upon 30 days’ notice to the Company.  Inthe event Employee terminates this Agreement for other than Good Reason orChange in Control as set forth in Sections 5.3 and 5.7 below, the Company shallpay Employee all salary, bonuses, and other benefits earned and accrued up tothe date of termination.

**5.3.****                            Terminationby the Employee for Good Reason**.

In the event Employee Terminates this Agreement forGood Reason, Employee shall be entitled to severance payments and benefitsprovided for in Section 6.  The Employeemust provide notice of the existence of the Good Reason condition within aperiod not to exceed 90 days of its initial existence.  Upon receiving such notice, the Company shallhave 30 days to remedy the Good Reason condition.

For purpose of this Agreement, “Good Reason” shall bedefined as the occurrence of any of the following events without the expresswritten consent of Employee:

(a)          a material reduction inEmployee’s base salary during the initial term of this Agreement;

(b)         a change in Employee’stitle or position or a material diminution in Employee’s duties or theassignment of duties on a regular basis which are not customarily associatedwith or consistent with the title of Chief Financial Officer; or

(c)          a breach by the Companyof any of its material payment obligations to Employee under this Agreement orany Exhibits to this Agreement.

**5.4.****                            Terminationupon Employee’s Death**.

Under circumstances of the Employee’s death, theCompany agrees to make any earned, but unpaid, salary and bonus payments to theEmployee’s designated beneficiaries. Additionally, any unexercised, vestedstock options which were available to the Employee immediately prior to date ofdeath shall be exercisable by beneficiaries in accordance with the Company’sstock option plan.

**5.5.****                            Terminationin the Event of Disability**.

The Company may terminate this Agreement, upon 30 days’notice, if the Employee is not able to perform the essential functions ofEmployee’s position(s), with reasonable accommodation, for a continuous periodin excess of ninety (90) days.

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**5.6.****                            Terminationby the Company for Cause**.

For purposes of this Agreement, “Cause” shall bedefined as:

(a)          Failure of the Employeeto substantially perform any duties reasonably required by the Company that areconsistent with the Employee’s position and failure to cure the breach withinten (10) days of written notice of the breach by the Company;

(c)          The commission by theEmployee of any criminal act, or act of fraud or dishonesty by the Employee asdetermined solely by the Company to be related to or in connection with hisemployment by the Company; or,

(c)          If the Employeematerially breaches the Employee’s other covenants contained in this Agreementand fails to cure the breach within ten (10) days of written notice of thebreach by the Company.

**5.7.****                            TerminationDue to “Change in Control”**.

(a)          If, during a one (1)year period subsequent to a “Change in Control” as defined below, the Employeeseparates from employment with the then controlling company for one of thefollowing reasons, the then controlling company agrees to continue Employee’sthen current salary for six (6) months and one (1) additional month for eachfull year of service with the Company, with a maximum accumulated severance oftwelve (12) months, and immediately vest all unvested stock options held byEmployee:

(i)                                     terminationwithout “cause”;

(ii)                                  unacceptabledemotion;

(iii)                               Employeeis asked to assume duties or responsibilities which are substantially lower instatus and unacceptable to the Employee; or

(iv)                              theEmployee is asked to relocate geographically to a location more than 100 milesaway from Employee’s work location prior to the change of control and isunacceptable to Employee.

(b)         For purposes of thisAgreement, a “Change in Control” will be defined as follows:

(i)                                     Whenany “person” as defined in Section 3(a)(9) of the Securities Exchange Act asused in Sections 13(d) and 14(d) thereof, including a “group” as defined inSection 13(d) of the Securities Exchange Act, but excluding the Company or anysubsidiary or parent or any employee benefit plan sponsored or maintained bythe Company or any subsidiary or parent (including any trustee of such planacting as trustee), directly or indirectly, becomes the “beneficial owner” (asdefined in Rule 13d-3 under the Securities Exchange Act, as amend time to time)of securities of the Company 

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representinggreater than fifty (50) percent of the combined voting power of the Company’sthen outstanding securities; or,

(ii)                                  When,subsequent to the effective date of this Agreement, the individuals who, at thebeginning of such period, constitute the Board of Directors (“IncumbentDirectors”) cease for any reason other than death to constitute at least amajority thereof, provided, however, that a Director who was not a Director atthe beginning of this period will be deemed to have satisfied the definition of“Incumbent Director” if such Director was elected by, or with the approval ofat least sixty (60) percent of the Directors who then qualified as IncumbentDirectors; or,

(iii)                               Theapproval by the shareholders of any sale, lease, exchange or other transfer (inone transaction or a series of related transactions) of all or substantiallyall of the assets of the Company, the adoption of any plan or proposal for theliquidation or dissolution of the Company, or, any consolidation or mergerinvolving the Company whereby the Company is not the continuing or survivingentity or the Company’s shares are converted into cash, securities or otherproperty, provided, however, this provision shall not apply if the shareholdersof the Company have the same proportionate share of the surviving entity afterthe transaction.

**6.****                                      SEVERANCEPAYMENTS**

**6.1****                               SeverancePay**

In the event that the Company terminates or decidesnot to renew this Agreement without Cause pursuant to Section 5.1 or thatEmployee terminates this Agreement with Good Reason pursuant to Section 5.3,Employee shall be entitled to severance payments and benefits as follows:

(a)          If terminated or notrenewed during any term of this Agreement, the Company shall continue to pay toEmployee the Employee’s then current salary for a continuation period of four(4) months plus one (1) month per year of service up to a maximum of nine (9)months, such continuation period to include the 30 day notice provision inSection 5.1.

(b)         All stock options grantedbut still subject to vesting at the time of termination shall be immediatelyvested and shall be exercisable according to the terms of the Stock OptionAgreement.

(c)          The Company shall pay toEmployee all bonuses or other benefits earned and accrued up to the date oftermination or expiration upon nonrenewal.

(d)         The Company shallcontinue to pay its portion of any contribution to Employee’s health and lifeinsurance premiums for four (4) months (including the 30 day notice provisionin Section 5.1).

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**6.2****                               EmployeeService Date**

For purposes of computing years of service pursuant toSection 5.7(a) and 6.1(a), the Employee’s date of hire shall be January 1,2002.

**7.**                                      RESTRICTIVE COVENANTS, TRADESECRETS AND PROPRIETARY RIGHTS.

**7.1****                               Definitions.**

The following phrases, when used in this Agreement,will have the meanings set forth below:

(a)          “ConfidentialInformation” means materials, records, data and other information that is notgenerally known about or that is personal, sensitive or proprietary to theCompany, its shareholders, the Company’s clients, prospective clients and theirdependents, and information that the Company is obligated to treat asproprietary or confidential. This information includes, without limitation:

(i)                                     tradesecret information about the Company and its products, planned and/or futureproducts;

(ii)                                  “Inventions,”as defined in Section 7.1(b) below;

(iii)                               information concerningthe Company’s business, as the Company has conducted it, or as it may conductit in the future;

(iv)                              informationconcerning any of the Company’s past, current, planned or future products,services, costs, prices and other financial information, including (withoutlimitation) information about the Company’s research, development, engineering,purchasing, servicing, finances, marketing or selling;

(v)                                 theidentity of the Company’s clients, prospective clients and their dependents,and their pricing, buying history, tendency, and their health information;

(vi)                              informationthat the Company’s clients, prospective clients and their dependents considerconfidential, whether notified by the client, prospective client or dependentor not, so long that a prudent person would consider the informationconfidential;

(vii)                           information regarding anypatents developed, owned or used by or licensed to the Company; and,

(viii)                        the Company’s procedures,manuals, financial, cost and sales data, business opportunities for new ordeveloping business, reports, customer lists and contracts.

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(b)         “Inventions” means anydiscoveries, modifications, designs, methods, know-how, systems or improvements(whether or not they are in writing or reduced to practice) or works ofauthorship (whether or not they can be patented or copyrighted) that theEmployee makes, authors, or conceives (either alone or with others) and that:

(i)                                     concernthe Company’s current, planned and/or future products, research, testing ordevelopment;

(ii)                                  resultfrom any work the Employee performs for the Company; and/or

(iii)                               in which the Company’sequipment, facilities, or trade secret information were used.

“Inventions” does not include discoveries,modifications, designs or improvements developed: (1) entirely on the Employee’sown time which do not relate to any of the Company’s products, including thosein development stages, or services that the Company provides to its clients;(2) in which the Company’s equipment, facilities, supplies or trade secretinformation were not used in any way, and; (3) do not directly relate to theCompany’s business or the Company’s actual or demonstrably anticipated researchor development, or does not result from any work the Employee performed underthis Agreement.

(c)          “Comparable Technology”means

(i)                                     anypressure sensing technology or system that is used to measure the elasticity ofsoft tissue in the prostate or related urologic organs (i.e., kidney, uretersor bladder);

(ii)                                  anypressure sensing technology or system that is used to create two or threedimensional images for the purpose of identifying abnormal lesions and forguiding biopsy in prostate or related urologic organs; and/or

(iii)                               anyEIT (electrical impedance tomography) technology or system that is used for thepurpose of measuring heat propagation and/or electrical conductivity in theprostate or related urologic organs.

(iv)                              anyother applications for which the Company (1) has made a direct investment; (2)has obtained licensing rights to acquire such technology; and (3) is activelyengaged in research and development (or has been so engaged during the pasttwelve (12) months).

**7.2****                               Returnof Confidential Information.**

The Employee will not, during or after the Employee’s relationshipwith the Company, use any Confidential Information (except as required by theEmployee’s duties 

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with the Company), orcommunicate, divulge or disclose any Confidential Information to any person ororganization, except as authorized in writing by the Board of Directors of theCompany. Upon termination of the Employee’s relationship with the Company,Employee agrees to return and/or leave with the Company all material concerningany Confidential Information in the Employee’s possession or control,including, but not limited to, any records, manuals, books, documents, letters,reports, data, and client lists, whether prepared by the Employee or others,whether originals or copies, whether in -hard copy or stored on a diskette orhard drive or otherwise, including drawings, blueprints and otherreproductions.

**7.3****                               PropertyRights.**

With the exception of work, tests, research,materials, processes or systems conducted, developed or used by the Employeethat do not directly or indirectly relate to the Company’s business or theCompany’s actual or demonstrably anticipated research and/or development, theCompany will own and have all right and title in all Inventions, ConfidentialInformation, work, tests, research, materials, processes or systems conducted,developed or used by the Employee under this Agreement or during the course ofthe performance of the Employee’s duties with the Company prior to the date ofthis Agreement (collectively, the “Company Works”).  To the extent that the Employee retains anyrights, title and/or interest, including, without limitation, all ownershiprights, copyright rights, trademark rights, patentable invention rights, andtrade secret rights in any Company Works (collectively, the “IP Rights”), oracquires any such IP Rights, the Employee hereby forever assigns, transfers andconveys to the Company all current and future ownership interest and allcurrent and future rights in, to and arising out of the such IP Rights andgrants to the Company an irrevocable, nonexclusive, worldwide, royalty-freelicense to use, execute and copy any Company Works. The assignment, transfer,grant, conveyance and setting over to the Company as made in the precedingsentence shall include the assignment of all rights to recover all damages, attorneys’fees, and lost profits associated with the loss or infringement of any of theIP Rights, as well as the right to seek injunctive relief (both preliminary andpermanent) with respect to the foregoing and the right to receive any and allother remedies available at law or in equity. Employee agrees not to disclose,use, market or sell, either directly or indirectly, any Company Works to anyperson or entity. The Employee shall take reasonable precautions and measuresto protect the Confidential Information, Company Works and IP Rights relatedthereto. The rights and obligations under this Section 7.3 are perpetual innature.

**7.4****                               Inventions**.

(a)          The Employee agrees thatall Inventions that the Employee: (1) makes, develops or collaborates on duringthe term of this Agreement; or, (2) made, developed or collaborated on duringthe course of his work with the Company starting in January 2005, before theterm of this Agreement, are the sole and exclusive property of the Company.Upon executing this Agreement, the Employee will, with respect to any suchInvention:

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(i)                                     providethe Company with current, accurate, and complete records of any and allInvention(s) which records will belong to the Company and be kept and stored onthe Company’s premises by the Company;

(ii)                                  promptlyand fully disclose the existence and describe the nature of any Invention(s) tothe Company in writing (and without request);

(iii),                            assign, and the Employeedoes hereby assign, to the Company any and all of the Employee’s rights to theInvention(s), and applications the Employee makes for patents or copyrights inany country, and any patents or copyrights granted to the Employee in anycountry.

(iv)                              acknowledgeand deliver promptly to the Company any written instruments, and perform anyother reasonable acts necessary in the Company’s opinion and at its expense topreserve property rights in the Invention(s) against forfeiture, abandonment,or loss and to obtain and maintain letters patent and/or copyrights on theInvention(s) and to vest the entire right and title to the Invention(s) in theCompany, provided that the Employee makes no warranty or representation to theCompany as to rights against third parties hereunder.

(b)         The Employee herebyrepresents and agrees that at the time of entering this Agreement there are noInventions which relate to the business of the Company or to the Company’sresearch or development that the Employee has an obligation to assign to anyoneexcept the Company.

(c)          The Employee herebyrepresents and agrees that at the time of entering this Agreement there are noInventions which relate to the business of the Company or to the Company’sresearch or development that the Employee made or conceived prior to theEmployee’s employment by the Company.

**7.5****                               CovenantsAgainst Competition and Solicitation.**

In view of the unique value to the Company of theservices to be performed by the Employee, in consideration of the ConfidentialInformation to be obtained by or disclosed to the Employee, and as a materialinducement to the Company to enter into this Agreement and to pay and providethe Employee the compensation and benefits provided for herein, the Employeecovenants and agrees that, from and after the date hereof and until one (1)year after the Employee’s employment with the Company terminates for whateverreason, the Employee will not; directly or indirectly, anywhere in the world inwhich the Company is conducting business during the term of Employee’semployment:

(a)          own, manage, operate orcontrol, prepare or plan to own, manage, operate or control, or participate inthe ownership, management, operation or control of any business engaged in theresearch, development, production or marketing of any Comparable Technology;

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(b)         conduct or assist anyperson or entity to conduct any business engaged in the research, development,production or marketing of any Comparable Technology;

(c)          seek, accept or act,either as an employee, shareholder, partner, member, joint venturer, agent orother equity holder of or consultant or advisor, to business engaged in theresearch, development, production or marketing of any Comparable Technology;

(d)         solicit or divert,attempt to solicit or divert, or otherwise interfere in any fashion with, anyformer or existing customer, client, account, partner or other business source,or business prospect for the purpose of selling to such person any product orservice of any Comparable Technology; or,

(e)          induce, influence,solicit, hire, or engage or attempt to induce, influence, solicit, hire orengage any employee of, or consultant to, the Company to do any of theforegoing or to discontinue such person’s association with the Company orobtain such person as an employee, consultant or in a similar capacity for anyother business.

Employee acknowledges that the covenants in thisSection 7.5 are fair, necessary, and reasonable, in both scope and duration,for the consideration provided for in this Agreement.

**7.6****                               BluePencil Doctrine.**

If the duration orgeographical extent of, or business activities covered by Section 7.5 are inexcess of what is valid and enforceable under applicable law, then suchprovision shall be construed to cover only that duration, geographical extentor activities that are valid and enforceable. Employee acknowledges theuncertainty of the law in this respect and expressly stipulates that thisAgreement be given the construction which renders its provisions valid andenforceable to the maximum extent (not exceeding its express terms) possibleunder applicable law.

**7.7****                               Breach****.**

The Employee acknowledges that any breach, violationor evasion by the Employee of the terms of Section 7 may result in an immediateand irreparable injury and harm to the Company, and will cause the Company tosuffer damages in amounts difficult to ascertain. Accordingly, the Companyshall be entitled to the remedies of injunction and specific performance, oreither of such remedies, as well as other legal or equitable remedies anddamages to which the Company may be entitled. The Company shall also beentitled to its costs and attorneys’ fees for any breach of Section 7 by theEmployee.

**8.**                                      OTHER BUSINESS ACTIVITIES.

The Employee may not serve as an officer or directorof any other organization without express prior written approval by the Company’sBoard of Directors.

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**9.**                                      AGREEMENT AND ACKNOWLEDGEMENT.

The Employee represents that the Employee is free toenter into this Agreement and the acceptance of the relationship with theCompany does not violate any agreement between the Employee and any third party.

**10.**                               COOPERATION IN CLAIMS.

Both during Employee’s employment and thereafter, theEmployee agrees that in the event of a legal action against the Company, orlegal action initiated by the Company against another party, in which theEmployee is deemed by the Company to be a material witness or affiant, theEmployee agrees to make reasonable and best efforts to cooperate with theCompany in such matters. If the Employee is no longer employed, Company willreimburse the Employee for time and expenses incurred as a result ofcooperation for this purpose.

**11.**                               INDEMNIFICATION.

The Company agrees to make its best efforts toindemnify and hold harmless the Employee from liability incurred as a result ofperformance of duties as an officer and member of the Board of Directors. Thisincludes but is not limited to applicable statute, as well as efforts to securecoverage under pertinent insurance policies.

**12.**                               NOTICES.

All notices, requests, demands and othercommunications provided for by this Agreement shall be in writing and shall bedeemed to have been given when mailed at any general or branch United StatesPost Office enclosed in a certified postpaid envelope, return receiptrequested, and addressed to the address of the respective.

If to the Employee:

Richard B Thon8351 West Lake DriveChanhassen, MN 55317

If to the Company:

Chairman of the Compensation CommitteeProUroCare Medical Inc.5500 Wayzata Blvd., Suite 310

Golden Valley, MN55416

Any notices of change of address shall only beeffective, however, when received.

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**13.**                               SUCCESSORS AND ASSIGNS.

This Agreement shall inure to the benefit of, and bebinding upon, the Company, its successors and assigns, including, withoutlimitation, any corporation which may acquire all or substantially all of theCompany’s assets and business or into which the Company may be consolidated ormerged, and the Employee, his heirs, executors, administrators and legal representatives. The Employee may assign hisright to payment, and his obligations, under this Agreement.

**14.**                               APPLICABLE LAW.

This Agreement shall be governed by the laws of theState of Minnesota without regard to any conflict of law analysis. The Partiesagree that any dispute arising out or related to this Agreement shall be venuedin the State of Minnesota and the Parties consent to the exclusive jurisdictionof the Minnesota state orfederal courts for such disputes.

**15.**                               OTHER AGREEMENTS.

This Agreement supersedes all prior understandings andagreements between the parties. It may be amended only by a writing signed by the partieshereto.

**16.**                               NON-WAIVER.

No delay or failure by either party in exercising anyright under this Agreement, and no partial or single exercise of that right,shall constitute a waiver of that or any other right.

**17.**                               HEADINGS.

Headings in this Agreement are for convenience onlyand shall not be used to interpret or construe its provision.

**18.**                               COUNTERPARTS.

This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original but all of whichtogether shall constitute one and the same instrument.

**19.**                               SURVIVORSHIP.

The Parties’ obligations and rights set forth inSections 7, 10, 11 12, 13, 14, 15, and 16 shall survive the termination of thisAgreement.

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** **
| ** ** | **PROUROCARE INC.**  |
|------------|----------------------|
| ** ** | ** **           |
|       | By:                  | /s/ Alexander  Nazarenko |
|       |                 |  Alexander  Nazarenko |
|       |                 |  Its: Chairman, Compensation Committee,. |
|       |                 |
|       |                 |
| ** ** | **EMPLOYEE**         |
| ** ** | ** **           |
| ** ** | ** **           |
|       | /s/ Richard B.  Thon |
|       | Richard B. Thon      |

 

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