Document:

EXHIBIT
10.1

 

June 28, 2007

 

Eapen Chacko

Vice President, Finance and Chief Financial Officer

MedicalCV, Inc.

9725 South Robert Trail

Inver Grove Heights, MN 55077

 

Re:                             Amendment to Restated Executive
Employment Agreement

 

Dear Mr. Chacko:

 

Reference is made
to your Restated Executive Employment Agreement with MedicalCV, Inc.
("MedCV" or "we") dated May 30, 2006 (the "Employment
Agreement") providing for your employment as Vice President, Finance and
Chief Financial Officer of MedCV. 
Following our discussion concerning your objectives and the future needs
of MedCV, 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hereby amended and superseded by the following:

(a)           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 September 15, 2007 (the "Termination Date").  Between the date hereof and the Termination
Date, you agree to fully participate as MedCV’s Vice President, Finance and
Chief Financial Officer in the preparation and filing of (a) MedCV’s Annual
Report on Form 10-KSB for the fiscal year ended April 30, 2007, (b) the
Registration Statement on Form SB-2 MedCV is contractually required to file to
register for resale shares of common stock underlying warrants sold to
investors in MedCV’s April 2007 and June 2007 debt financing, (c) the
contemplated post-effective amendments to MedCV’s three existing resale
registration statements, and (d) the Quarterly Report on Form 10-QSB for the
quarter ending July 31, 2007. 
Performance of the foregoing is a condition to the payment of
compensation, benefits and severance under Section 2 of this Agreement.  On the Termination Date, you will be deemed
to have resigned from all offices held by you with MedCV.

(b)           Until
the Termination Date, you agree to continue to serve as MedCV's Vice President,
Finance and Chief Financial Officer and will continue to have the job
responsibilities set forth in Section 1.02 of the Employment Agreement.  Performance of such job responsibilities is a
condition to the payment of compensation, benefits and severance under Section
2 of this Agreement.

2.             Compensation. 
Subject to your performance of the conditions specified in Sections 1(a)
and 1(b) of this Agreement, 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 you will be entitled to receive
the severance pay provided in Article 7 of the Employment Agreement.  In particular, this Agreement preserves and
restates the provisions of Sections 7.01, 7.01(a), 7.01(b), 7.01(c), 7.03, and
7.04 of the Employment Agreement, as modified by this Agreement.  Except as set forth in Section 2 of this
Agreement, no other bonus, monetary compensation or equity compensation will be
paid to you.  The foregoing supersedes
Sections 4.01, 4.02 and 6.01 of the Employment Agreement

3.             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 July 19,
2007.  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.

4.             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 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 the Employment Agreement, as amended by this Agreement.  You acknowledge and agree that the severance
payment under Section 7.01 of the Employment Agreement 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 such 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.

5.             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.

6.             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 4 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 the Employment Agreement.

 

	
   

  	
   

  	
  MEDICALCV, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc P. Flores

  
	
   

  	
   

  	
  Marc P. Flores

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Eapen Chacko 6/29/07.

  
	
   

  	
   

  	
  Eapen ChackoEXHIBIT
10.2

MEDICALCV,
INC.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

Effective July 1,
2007, compensation for service on the Board of Directors of MedicalCV, Inc.
will be as follows:

Annual
Cash Compensation

	
  Board Member (other
  than Board Chair)

  	
   

  	
  $

  	
  10,000

  	
   

  
	
  Board Chair

  	
   

  	
  $

  	
  24,000

  	
   

  
	
  Audit Committee Member
  (other than Audit Committee Chair)

  	
   

  	
  $

  	
  1,500

  	
   

  
	
  Audit Committee Chair

  	
   

  	
  $

  	
  4,000

  	
   

  
	
  Compensation Committee
  Member (other than Compensation Committee Chair)

  	
   

  	
  $

  	
  1,000

  	
   

  
	
  Compensation Committee
  Chair

  	
   

  	
  $

  	
  1,500

  	
   

  
	
  Corporate Governance
  and Nominating Committee Member (other than Corporate Governance and
  Nominating Committee Chair)

  	
   

  	
  $

  	
  1,000

  	
   

  
	
  Corporate Governance
  and Nominating Committee Chair

  	
   

  	
  $

  	
  1,500

  	
   

  
	
  Board Meeting Fee (in
  person) 

  	
   

  	
  $

  	
  1,500

  	
   

  
	
  Board Meeting Fee
  (telephonic) 

  	
   

  	
  $

  	
  500

  	
   

  
	
  Committee Meeting Fee
  (in person) 

  	
   

  	
  $

  	
  500

  	
   

  
	
  Committee Meeting Fee (telephonic) 

  	
   

  	
  $

  	
  500

  	
   

  

 

Equity
Compensation

Each non-employee
director who is elected to the Board other than at an annual meeting of
shareholders of the Company will automatically receive a ten-year option to
purchase 5,000 shares of common stock. 
Such option will (1) have a per share exercise price equal to the fair
market value of one share of common stock on the date of grant, (2) become
exercisable on the first anniversary of the date of grant, and (3) be granted
pursuant to the terms and conditions of the Amended and Restated 2001 Equity
Incentive Plan.  The date of grant shall
be the date of election of such person to the Board.

The foregoing
option awards are in addition to the awards automatically granted pursuant to
Section 5(b) of the 2005 Director Stock Option Plan.  Under that plan, each year, as of the date of
the annual meeting of shareholders of the Company, each non-employee director
who has been elected or reelected or who is continuing as a member of the Board
as of the adjournment of the annual meeting, automatically receives an option
award in the amount of 5,000 shares.  In addition, each non-employee
director who is elected to the Board other than at an annual meeting of
shareholders of the Company automatically receives an initial option
award.  The number of shares to be covered by such initial award shall
equal the nearest whole number, rounded down, equal to (a) 5,000 shares
multiplied by (b) the quotient obtained by dividing (1) the number of
whole weeks between the date of such person’s election of the Board and the
scheduled date of the next annual meeting of shareholders of the Company and
(2) 52 weeks.  The date of such initial award shall be the date of
election of such person to the Board.

As a result of the
foregoing, depending upon the time of year at which he or she joins the Board,
a non-employee director who is elected to the Board other than at an annual
meeting of shareholders of the Company will receive initial option awards to
purchase between 5,000 shares and 10,000 shares in the aggregate.

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