exv10w1



 








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.




 









 








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.