EXHIBIT 10
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT
(“Agreement”) effective September 17, 2007, by and
between MedicalCV, Inc. , a corporation duly organized and
existing under the laws of the State of Minnesota, with a place of
business at 9725 South Robert Trail, Inver Grove Heights, Minnesota
55077 (hereinafter referred to as the “ Company
”), and Michael A. Brodeur , a resident of the state
of Minnesota (hereinafter referred to as “ Executive
”).
BACKGROUND OF
AGREEMENT
·
The Company desires to hire
Executive as its Vice President, Finance and Chief Financial
Officer and Executive desires to be employed by the
Company.
·
The Company and Executive desire to
memorialize the terms and conditions of Executive’s
employment, including additional terms and conditions which have
been approved by the Company’s Board of Directors.
In consideration of the foregoing,
the Company and Executive agree as follows:
ARTICLE 1
EMPLOYMENT
1.01 Subject to the terms of
Articles 3 and 6, the Company hereby agrees to employ Executive in
the capacity of Vice President, Finance and Chief Financial
Officer, pursuant to the terms of this Agreement, and Executive
agrees to such employment. Executive will also have the
responsibilities and office of principal financial officer and
principal accounting officer. Executive’s
offices/titles will not be effective until his employment commences
on September 17, 2007.
1.02 Executive shall generally
have the authority, responsibilities, and such duties as are
customarily performed by the chief financial officer, principal
financial officer and principal accounting officer of a public
company of similar size and industry, specifically including,
without limitation, the following responsibilities:
(i)
working with senior management of
the Company and its Board of Directors (the “Board”) in
formulating short and long term goals and developing, implementing,
and executing strategies to attain Company objectives;
(ii)
endeavoring to establish and
maintain a relationship of trust and credibility with members of
the senior management team, the Board, its committees, outside
auditors and legal counsel;
(iii)
supervising the implementation of
the Company’s policies and business processes in order to
meet the corporate governance and internal control requirements
established by the senior management team, the Board and relevant
laws, including, but not limited to: (A) designing and
implementing effective disclosure controls and procedures and
effective internal controls over financial reporting that are
necessary to ensure accurate financial reporting; (B) conducting
periodic reviews and evaluations of the effectiveness of the
Company’s disclosure controls and procedures and
internal
controls over financial reporting,
including, without limitation, interfacing with the senior
management team and other Company personnel, the Board, Audit
Committee, outside auditors and legal counsel to ensure the
effectiveness of the Company’s disclosure controls and
procedures, internal controls over financial reporting and related
matters; (C) accurately reporting the results of Company operations
and related matters to the Securities and Exchange Commission and
other regulatory agencies; and (D) acting as a certifying officer
of the Company’s financial reporting under the Exchange Act
and other regulatory agencies;
(iv)
managing and protecting the
Company’s capital and liquid assets and monitoring and
advising management regarding the availability of adequate capital
at all times;
(v)
regularly and systematically
appraising and evaluating the Company’s performance results
against the Company’s established objectives; and
(vi)
consistent with the foregoing, such
other finance functions as the Chief Executive Officer may assign
to Executive from time to time during his employment
period.
Executive shall also render such
additional services and duties within the scope of
Executive’s experience and expertise as may be reasonably
requested of him from time to time by the Board.
1.03 Executive shall report to
the Chief Executive Officer and shall generally be subject to
direction, orders and advice of the Board.
1.04 In his capacity as Vice
President, Finance and Chief Financial Officer, Executive shall use
his best energies and abilities in the performance of his duties,
services and responsibilities for the Company.
1.05 During the term of his
employment, Executive shall devote substantially all of his
business time and attention to the business of the Company and its
subsidiaries and affiliates and shall not engage in any substantial
activity inconsistent with the foregoing, whether or not such
activity shall be engaged in for pecuniary gain, unless approved by
the Board; provided, however, that, to the extent such activities
do not violate, or substantially interfere with his performance of
his duties, services and responsibilities under this Agreement,
Executive shall be permitted to serve on civic or charitable boards
or committees thereof.
ARTICLE 2
COMMENCEMENT OF TERM
2.01 Executive’s
employment shall commence on September 17, 2007.
ARTICLE 3
NATURE OF EMPLOYMENT
3.01 Executive’s
employment pursuant to this Agreement shall be on an at-will basis,
with either Executive or the Company having the right to terminate
Executive’s employment with or without cause on not less than
sixty (60) days’ prior written notice, subject to the
Company’s obligations to Executive
pursuant to Sections 6 and 7.
The terms and conditions of this Agreement may be amended from time
to time with the consent of the Company and Executive. All
such amendments shall be effective when memorialized by a written
agreement between the Company and Executive or by resolutions of
the Board or the Company’s Compensation Committee (the
“Committee”).
ARTICLE 4
COMPENSATION AND BENEFITS
4.01 During the term of
employment hereunder, Executive shall be paid a base salary at the
rate of Two Hundred and Twenty-Five Thousand ($225,000) per year
(“Base Salary”), payable in installments in accordance
with the Company’s established pay periods, reduced by all
deductions and withholdings required by law and as otherwise
specified by Executive. The Company shall cause the Committee
to review Executive’s performance and Base Salary level each
calendar year during the Term, commencing, 2008.
Executive’s Base Salary may be increased (but not decreased),
in the sole discretion of the Board. In the event
Executive’s employment shall, for any reason, terminate
during the Term, Executive’s final monthly Base Salary
payment shall be made on a pro-rated basis as of the last day of
the month in which such employment terminated.
4.02 During the term of
employment, in addition to payments of Base Salary set forth above,
Executive shall be eligible to participate in any performance-based
cash bonus plan for senior executives based upon achievement of
goals established with respect to each fiscal year by the Board or
Committee after reasonable consultation with Executive, but
Executive’s participation and performance goals therein shall
remain within the discretion of the Board or Committee.
4.03 On September 17, 2007,
Executive will be awarded a stock option for 98,397 shares of
common stock as provided in his employment offer letter dated
September 4, 2007.
4.04 During the term of
employment, Executive shall be entitled to participate in employee
benefit plans, policies, programs, perquisites and arrangements, as
the same may be provided and amended from time to time, that are
provided generally to similarly situated executive employees of the
Company, to the extent Executive meets the eligibility requirements
for any such plan, policy, program, perquisite or
arrangement.
4.05 The Company shall
reimburse Executive for all reasonable business expenses incurred
by Executive in carrying out Executive’s duties, services,
and responsibilities under this Agreement. Executive shall
comply with generally applicable policies, practices and procedures
of the Company with respect to reimbursement for, and submission of
expense reports, receipts or similar documentation of, such
expenses.
4.06 If the Company, based
upon an opinion of legal counsel or a judicial determination,
determines that Section 304 of the Sarbanes-Oxley Act of 2002 is
applicable to Executive, to the extent that the Company is required
to prepare an accounting restatement due to the material
noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws,
Executive shall reimburse the Company for any bonus or other
incentive or equity-based compensation received from the Company
during the 12-month period following the first public issuance or
filing with the Securities and Exchange Commission (whichever first
occurs) of the financial document embodying such financial
reporting requirement and any profits received from the sale of the
Company’s securities during that 12-month period. In
the event Executive fails to make prompt reimbursement of any such
amount, the Company may, to the extent permitted by applicable law,
deduct the amount required to be reimbursed from Executive’s
compensation otherwise due under this Agreement.
ARTICLE 5
VACATION AND LEAVE OF
ABSENCE
5.01 Executive shall be
entitled to three (3) weeks of paid vacation per year, in addition
to the Company’s normal holidays. Vacation time will be
scheduled taking into account the Executive’s duties and
obligations at the Company. Unused paid vacation time shall
not accumulate from year to year, unless otherwise approved in
writing by the Board or Committee. Sick leave and all other
leaves of absence will be in accordance with the Company’s
stated personnel policies.
ARTICLE 6
TERMINATION
6.01 The Company may terminate
Executive’s employment without Cause by giving Executive at
least sixty (60) days written notice thereof. In the event of
such termination, Executive shall receive only the severance
compensation set forth in Article 7.01 and Executive shall also be
entitled to all or a portion of any bonus due Executive pursuant to
any bonus plan or arrangement established or mutually agreed-upon
prior to termination, to the extent earned or performed through the
date of termination, based upon the requirements or criteria of
such bonus plan or arrangement, as the Board shall in good faith
determine. Such pro-rated bonus, shall be payable at the time
and in the manner payable to other executives of the Company who
participate in such plan or arrangement.
6.02 Executive’s
employment will be deemed terminated as of the date of the death of
the Executive. In the event of such termination, there shall
be payable to Executive’s estate compensation earned through
the date of death together with a pro-rata portion of any bonus due
Executive pursuant to any bonus plan or arrangement established or
mutually agreed-upon prior to termination, to the extent earned or
performed based upon the requirements or criteria of such plan or
arrangement, as the Board shall in good faith determine. Such
pro-rated bonus, shall be payable at the time and in the manner
payable to other executives of the Company who participate in such
plan or arrangement.
6.03 Any other provision of
this Agreement notwithstanding, the Company may terminate
Executive’s employment upon written notice specifying a
termination date based on any of the following events that
constitute Cause:
(a)
Any commission or nolo contendere
plea by Executive to a felony, gross misdemeanor or misdemeanor
involving moral turpitude, or any public conduct by Executive that
has or can reasonably be expected to have a detrimental effect on
the Company;
(b)
Any act of material misconduct,
willful and gross negligence, or breach of duty to the Company,
including, but not limited to, embezzlement, fraud, dishonesty,
nonpayment of an obligation owed to the Company, or willful breach
of fiduciary duty to the Company which results in a material loss,
damage, or injury to the Company;
(c)
Any material breach of any material
provision of this Agreement or of the Company’s announced
rules, codes or polices, which remains uncured or uncorrected for a
period of thirty (30) days following written notice thereof to
Executive specifying such breach;
(d)
Any act of insubordination by
Executive; however, an act of insubordination by Executive shall
not constitute Cause if Executive cures or remedies such
insubordination within thirty (30) days after written notice to
Executive, without material harm or loss to
the Company, unless such
insubordination is a part of a pattern of chronic insubordination,
which may be evidenced by reports or warning letters given by the
Company to Executive, in which case such insubordination is deemed
not curable.
(e)
Any unauthorized disclosure of any
Company trade secret or confidential information, or conduct
constituting unfair competition with respect to the Company,
including inducing a party to breach a contract with the Company;
or
(f)
A willful violation of federal or
state securities laws or regulations.
In making such determination, the
Board shall act in good faith and give Executive a reasonably
detailed written notice and a reasonable opportunity to be heard on
the issues at a Board or Committee meeting. For purposes of
this Agreement, no act or failure by the Executive shall be
considered “willful” if such act is done by Executive
in good faith in the belief that such act is or was lawful and in
the best interest of the Company or one or more of its
businesses. Nothing in this paragraph 6.03 shall be construed
to prevent Executive from contesting the Board or Committee’s
determination that Cause exists. In the event of such
termination, and notwithstanding any contrary provision otherwise
stated, Executive shall receive only his Base Salary earned through
the date of termination.
6.04 The employment of the
Executive shall in no event be considered to have been terminated
for Cause if the termination of his employment took
place:
(a)
as a result of an act or omission
which occurred more than 360 days prior to the Executive’s
having been given notice of the termination of his employment for
such act or omission, unless the commission of such act or such
omission could not at the time of such commission or omission have
been known to a member of the Board (other than the Executive, if
he is then a member of the Board), in which case there shall not be
termination for Cause if notice of termination took place more than
360 days from the date that the commission of such act or such
omission was or could reasonably have been so known; or
(b)
as a result of a continuing course
of action which commenced and was or reasonably could have been
known to a member of the Board (other than the Executive) more than
360 days prior to notice having been given to the Executive of the
termination of his employment.
6.05 Executive may terminate
his employment upon sixty (60) days prior written notice to the
Company for “Good Reason.” For purposes of this
Agreement, “Good Reason” means any of the following
actions taken by the Company without Cause:
(a)
the Company or any of its
subsidiaries reduces Executive’s Base Salary or current
equity compensation plan opportunities (participation in any such
plans or programs remaining in the discretion of the Board or
Committee), or benefit plans (other than company-wide changes to
benefit plans covering all full-time eligible
employees);
(b)
without Executive’s express
written consent, the Company or any of its subsidiaries
significantly reduces Executive’s job authority and
responsibility over financial matters at the Company as
contemplated by Article 1;
(c)
without Executive’s express
written consent, the Company or any of its subsidiaries requires
Executive to change the location of Executive’s job or
office, so that Executive
will be based at a location more
than fifty (50) miles from the location of Executive’s job or
office immediately preceding notice of such requirement.
(d)
a successor company fails or refuses
to assume the Company’s obligations under this Agreement;
or
(e)
the Company or any successor company
breaches any of the material provisions of this Agreement;
provided, however, that Executive shall provide detailed
information to the Company in such written notice and such grounds
for Good Reason are not remedied or continue for a period of thirty
(30) days or more following receipt of such notice.
6.06 During the term of his
employment and for 24 months after the date of Executive’s
termination of employment, (i) Executive shall not, directly or
indirectly, make or publish any disparaging statements (whether
written or oral) regarding the Company or any of its affiliated
companies or businesses, or the affiliates, directors, officers,
agents, principal shareholders or customers of any of them and (ii)
neither the Company or any of its affiliated companies or
businesses or their affiliates, directors, or officers shall
directly or indirectly, make or publish any disparaging statements
(whether written or oral) regarding Executive. Information
which the Company or Executive is required to make or disclose
regarding the other to comply with laws or regulations, or makes in
a pleading on the advice of litigation counsel, shall not
constitute a disparaging statement.
6.07 Upon any termination of
Executive’s employment with the Company, Executive shall be
deemed to have resigned from all other positions he then holds as
an officer, employee or director or other independent contactor of
the Company or any of it
