Re: Amendment to Executive Employment Agreement
EXHIBIT 99.2
May 31, 2007
Xxxxxx X. Xxxxxx
Vice President, Regulatory Affairs and Quality Assurance
MedicalCV, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx, XX 00000
Re: Amendment to Executive Employment Agreement
Dear Xx. Xxxxxx:
Reference is made to your Executive Employment Agreement with MedicalCV, Inc. (“MedCV” or “we”) dated August 18, 2005 (the “Employment Agreement”) providing for your employment as Vice President, Regulatory Affairs and Quality Assurance 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 Section 3.01 of the Employment Agreement is hereby amended and superseded by the following: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 the first to occur of (1) the date we advise you that MedCV has engaged a new vice president, regulatory affairs and quality assurance, or (2) July 1, 2007 (the “Termination Date”). Between the date hereof and the Termination Date, you agree to assist MedCV in identifying, interviewing and evaluating potential candidates to assume the responsibilities of vice president, regulatory affairs and quality assurance of MedCV. The foregoing is a condition to the payment of the severance payment to you provided in Paragraph 3. On the Termination Date, you will be deemed to have resigned from all offices held by you with MedCV. You further agree to provide MedCV with up to 20 hours per week of consulting services, as requested by MedCV, through a period which shall not continue beyond October 1, 2007 without your consent. During such period, you agree to assist MedCV as needed in all matters pertaining to regulatory affairs and quality assurance for which MedCV will pay you at the rate of $100.00 per hour.
(b) Until the Termination Date, you agree to continue to serve as MedCV’s Vice President, Regulatory Affairs and Quality Assurance and will continue to have the following job responsibilities: (1) responsible for the definition of and coordination of MedCV’s compliance as to all applicable local, state, federal and international regulations relative to the manufacture and distribution of medical devices, (2) responsible for development of appropriate regulatory strategies in support of MedCV goals and objectives, (3) direct and coordinate the activities of quality control, quality assurance, documentation control and risk management in support of MedCV goals, (4) provide input into the design of research and development programs and marketing positions that result in the submission of appropriate pre-market approval applications, (5) serve as primary MedCV contact with the FDA and other regulatory agencies both domestic and foreign, (6) assume overall responsibility for product and MedCV compliance with the FDA and international agencies in their full context, (7) maintain an up-to-date knowledge of existing and proposed regulations and assess adherence to these regulations for both domestic and international markets, (8) provide input to the preparation and administration of MedCV operating
policies and procedures, and (9) responsible for the preparation and administration of the departmental budget. Performance of the forgoing is a condition to the payment of the severance payment to you provided in Paragraph 3.
2. Compensation. 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. Except for the severance payment provided below, however, no other bonus or monetary compensation will be paid to you. The foregoing supersedes Sections 4.01, 4.02 and 6.01 of the Employment Agreement.
3. Special Severance Payment. We desire to have a smooth transition of your duties to a new vice president, regulatory affairs and quality assurance. Therefore, in lieu of any severance compensation payable under the Employment Agreement and conditioned upon you fulfilling your obligations under this agreement, MedCV will pay you Twenty Thousand Dollars ($20,000) on the Termination Date and MedCV will issue you a fully vested non-qualified stock option in the form used with executive officers of MedCV under the 2001 Equity Incentive Plan for the purchase of Five Thousand Seven Hundred Thirty-Four (5,734) shares of common stock on the Termination Date. Such option will have a per share exercise price equal to the closing price of one share of MedCV common stock on the business day immediately prior to the Termination Date and will expire on the date that is six months after the Termination Date. If required by any underwriter or agent in connection with the sale of our securities prior to July 1, 2008, you agree to abide by and enter into any form of share lock-up agreement that is entered into by any other executive officer of MedCV.
4. 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 June 21, 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:
Xxxx X. Xxxxxx
President and Chief Executive Officer
MedicalCV, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx, XX 00000
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.
5. 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 xxx or commence any other legal or equitable actions against MedCV, except to enforce this Agreement. You acknowledge and agree that this Agreement, including the special severance payment to you provided in Paragraph 3, provided herein 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 your 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.
6. 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.
7. 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 5 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 Section 3 above.
MEDICALCV, INC. |
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/s/ Xxxx X. Xxxxxx |
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Xxxx X. Xxxxxx |
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President and Chief Executive Officer |
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/s/ Xxxxxx X. Xxxxxx |
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Xxxxxx X. Xxxxxx |