EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into on May 20, 2009, by and between Francis J. Martin (the “Executive”) and NMT Medical, Inc., a Delaware corporation (the “Company”).

WHEREAS, the Company wishes to employ the Executive as the President and Chief Executive Officer of the Company under the terms and conditions set forth below; and

WHEREAS, the Executive wishes to accept such employment under those terms and conditions;

NOW, THEREFORE, in consideration of the provisions and mutual covenants contained in this Agreement and for other good and valuable consideration, the Parties agree as follows:

The Company agrees to employ the Executive, and the Executive agrees to serve, on the terms and conditions of this Agreement, for a period commencing as of April 14, 2009 and ending on April 13, 2010, or such shorter period as may be provided for herein, and such term shall be automatically extended by successive additional one-year terms in the event that the Company fails to provide written notice of non-renewal of the Agreement to the Executive in accordance with Section 24 not later than 180 days prior to the expiration of the then-current employment term (each an “Extension”). The employment term described above, including any Extension, is hereinafter referred to as the “Employment Term”.

During the Employment Term, the Executive shall serve as President and Chief Executive Officer of the Company. In such capacity, the Executive shall report to the Board of Directors of the Company (the “Board of Directors”) and shall perform such duties and have such responsibilities of an executive nature as are set forth in the Company’s Amended and Restated By-Laws, as amended from time to time (the “By-Laws”), and as are customarily performed by a person holding such office, it being recognized that the Executive’s specific duties and responsibilities, consistent with his titles hereunder, may be changed by the Board of Directors from time to time consistent with those overall duties customarily performed by a person holding such office. The Executive shall devote his full business time and attention to the performance of his duties under this Agreement; provided, however, that the Executive shall be permitted to serve as a director on up to two boards of directors in addition to the Board of Directors. In addition, during the Employment Term, the Executive shall serve without additional compensation as a director of the Company and on any committees of the Board of Directors, if requested, subject to the terms of the By-Laws and to the approval of the stockholders of the Company to the extent required by applicable law and the By-Laws.

During the Employment Term and effective as of April 14, 2009, the Executive shall be paid base salary at the annualized rate of $260,000 (“Salary”), subject to deductions for income taxes, social security,

state payroll and unemployment and all other legally required or authorized deductions and withholding. The Executive’s Salary shall be payable in accordance with the Company’s standard payroll practice. The Joint Compensation and Options Committee of the Board of Directors (the “Compensation Committee”) shall review and establish the Executive’s Salary at least on an annual basis.

(a) On the date of this Agreement, the Executive shall be granted two stock options. One such option (the “Initial Option”) will be a stock option to purchase 60,000 shares of common stock, par value $.001 per share, of the Company (the “Common Stock”), under either the Company’s 2001 Stock Incentive Plan, as amended (the “2001 Plan”), or the Company’s 2007 Stock Incentive Plan, as amended (the “2007 Plan”) and subject to the terms of the applicable plan and related option agreement between the Executive and the Company. The exercise price for the Initial Option shall be the closing sale price of the Common Stock on the date of grant, as specified in the 2001 Plan or 2007 Plan, as applicable. This option shall, to the maximum extent permissible under Section 422 of the Internal Revenue Code of 1986 (the “Code”), as amended, constitute an incentive stock option, with any balance of such option to be treated as a non-statutory stock option. The Initial Option shall vest in 48 equal monthly installments on each monthly anniversary of the date of grant. The Initial Option shall have a term of ten (10) years from the date of grant, subject to the terms of the applicable plan and related option agreement and Sections 13 and 15 of this Agreement. Notwithstanding the foregoing, the Initial Option shall become immediately exercisable in the event of a Change of Control of the Company or the termination of the Executive’s employment without cause pursuant to Section 13. For purposes of this Agreement, a “Change of Control of the Company” shall be deemed to have occurred only upon (a) any merger or consolidation of the Company with or into another entity as a result of which the Common Stock is converted into or exchanged for the right to receive cash, securities or other property, (b) any exchange of all or substantially all shares of the Company for cash, securities or other property pursuant to a statutory share exchange transaction, or (c) sale or other disposition of all or substantially all of the assets of the Company.

(b) The second stock option (the “Performance Option,” and together with the Initial Option, the “Options”) to be granted to the Executive on the date of this Agreement will be a stock option to purchase 120,000 shares of Common Stock, under either the 2001 Plan or 2007 Plan and subject to the terms of the applicable plan and related option agreement between the Executive and the Company. The exercise price for one-half of the Performance Option shall be $4.50 per share, and the exercise price for the remaining one-half of the Performance Option shall be $9.00 per share, and such option shall be reflected in the Company’s form of option agreement. The Performance Option shall, to the maximum extent permissible under the Code, as amended, constitute an incentive stock option, with any balance of such option to be treated as non-statutory stock options. The Performance Option shall have a term of ten (10) years from the date of grant, subject to the terms of the applicable plan and related option agreement and Sections 13 and 15 of this Agreement. Notwithstanding the foregoing, the Initial Option shall become immediately exercisable in the event of a Change of Control of the Company or the termination of the Executive’s employment without cause pursuant to Section 13.

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Commencing with the Company’s fiscal year ended December 31, 2009, after the completion of the Company’s fiscal year and as soon as the Company’s financial information required to be included in its Annual Report on Form 10-K for such fiscal year is available, but in no event later than 90 days after the end of such fiscal year, the Executive shall be eligible to receive an annual bonus (the “Annual Bonus”) in an amount of up to $25,000 in cash, with the exact amount of such Annual Bonus, if any, to be determined by the Board of Directors, in its sole discretion, after consultation with the Compensation Committee and/or the Executive, as the Board of Directors deems appropriate, on an annual basis. In the event that the Board of Directors determines that the Executive is entitled to the Annual Bonus for a given fiscal year, then the Executive shall be paid the Annual Bonus not later than the date on which the Company files its Annual Report on Form 10-K for such fiscal year, but in no event later than two and a half months following the end of such fiscal year.

(a)         Benefit Programs . During the Employment Term, the Company shall provide the Executive and eligible family members with medical, dental, and disability insurance and such other benefits and perquisites as are provided in the Company’s applicable plans and programs to its employees generally; provided, that the Executive meets the qualifications therefor (“Benefits”).

(b)         Vacation . During each twelve month period of the Employment Term, the Executive shall be entitled to four weeks of vacation; provided, however, that any vacation time not taken during any year shall be forfeited. The Executive shall also be entitled to all paid holidays given by the Company to its officers and employees.

(c)         Car Expenses . The Company will provide a monthly automobile allowance of $750, which amount shall be paid to the Executive pursuant to the Company’s standard payroll practices.

(d)         Continued Benefits . In the event the Employment Term is terminated due to Disability (as defined below) pursuant to Section 12, due to the termination of the Executive by the Company without Cause (as defined below) pursuant to Section 13 or by the Executive without cause pursuant to Section 15, normal employee medical and dental insurance benefits shall be continued on an insured basis for the Executive and eligible family members for a period of 12 months following the month in which the Termination Date (as defined below) occurs.

The Executive represents and warrants to the Company that the Executive is under no contractual or other restriction or obligation which is inconsistent with the execution of this Agreement, the performance of his duties hereunder, or the other rights of the Company hereunder.

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In view of the unique and valuable services it is expected Executive will render to the Company, Executive’s knowledge of the customers, trade secrets, and other proprietary information relating to the business of the Company and its customers and suppliers and similar knowledge regarding the Company it is expected Executive will obtain, and in consideration of the compensation to be received hereunder, Executive agrees that he will not, during the period he is employed by the Company under this Agreement or otherwise, and for a period of one year after he ceases to be employed by the Company under this Agreement or otherwise, compete with or be engaged in, or Participate In (as defined below) any other business or organization (which shall not include a university, hospital, or other non-profit organization) which during such one year period is or as a result of the Executive’s engagement or participation would become competitive with the Company’s business of designing, developing, manufacturing, marketing and selling medical devices designed to address cardiac structural defects that are being designed, developed, manufactured, marketed or sold by the Company up to the time of such cessation; provided, however, that the provisions of this Section 8 shall not be deemed breached merely because the Executive owns less than 1% of the outstanding capital stock of a corporation, if, at the time of its acquisition by the Executive such stock is listed on a national securities exchange. The term “Participate In” shall mean: “directly or indirectly, for his own benefit or for, with or through any other person (including the Executive’s immediate family), firm or corporation, own, manage, operate, control, loan money to, or participate in the ownership, management, operation or control of, or be connected as a director, officer, employee, partner, consultant, agent, independent contractor, or otherwise with, or acquiesce in the use of his name in.”

The Executive will not, directly or indirectly, solicit or interfere with, or endeavor to entice away from the Company any of its suppliers, customers or employees within a period of one year after the date of termination of the Executive’s employment (the “Termination Date”). The Executive will not directly or indirectly employ any person who was an employee of the Company within a period of one year after such person leaves the employ of the Company.

If any restriction contained in this Section 8 shall be deemed to be invalid, illegal, or unenforceable by reason of the extent, duration or geographical scope thereof, or otherwise, then the court making such determination shall have the right to reduce such extent, duration, geographical scope or other provisions hereof, and in its reduced form such restriction shall then be enforceable in the manner contemplated hereby.

Any interest in patents, patent applications, inventions, technological innovations, copyrights, copyrightable works, developments, discoveries, designs and processes which the Executive during the period he is employed by the Company under this Agreement or otherwise may acquire, conceive of or develop, either alone or in conjunction with others, utilizing the time, material, facilities or information of the Company (“Inventions”) shall belong to the Company; as soon as the Executive owns, conceives of, or develops any Invention, he agrees immediately to communicate such fact in writing to the Board of Directors, and without further compensation, but at the Company’s expense, forthwith upon request of the Company, the Executive

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shall execute all such assignments and other documents (including applications for patents, copyrights, trademarks, and assignments thereof) and take all such other action as the Company may reasonably request in order (a) to vest in the Company all of the Executive’s right, title and interest in and to such Inventions, free and clear of liens, mortgages, security interests, pledges, charges and encumbrances and (b), if patentable or copyrightable, to obtain patents or copyrights (including extensions and renewals) therefor in any and all countries in such name as the Company shall determine.

The Employee Nondisclosure Agreement dated as of April 14, 2009, between the Company and the Executive shall remain in full force and effect.

Because a breach of the provisions of any of Section 8, Section 9 and Section 10 could not adequately be compensated by money damages, the Company shall be entitled, in addition to any other right and remedy available to it, to an injunction restraining such breach or a threatened breach, and in either case no bond or other security shall be required in connection t