CAS MEDICAL SYSTEMS INC (Form: 8-K, Received: 08/31/2010 13:23:10)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 27, 2010

CAS MEDICAL SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)	0-13839 (Commission File Number)	06-1123096 (I.R.S. Employer Identification No.)
44 East Industrial Road, Branford, Connecticut 06405 (Address of principal executive offices, including zip code) (203) 488-6056 (Registrant ’ s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 3.02. UNREGISTERED SALES OF EQUITY SECURITIES

On August 27, 2010, in connection with his appointment as President and Chief Executive Officer of CAS Medical Systems, Inc. (the “Company”), the Company entered into three agreements with Thomas M. Patton pursuant to which Mr. Patton was granted (i) options to purchase 350,000 shares of Company common stock, (ii) 250,000 shares of restricted common stock of the Company and (iii) 150,000 shares of restricted common stock of the Company. The aforementioned securities were issued pursuant to the private placement exemption set forth in Section 4(2) of the Securities Act of 1933, as amended. A more completed description of the grants is provided in Item 5.02 below and is incorporated by reference herein.

Item 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

On August 27, 2010, Andrew E. Kersey stepped down from his positions as President and Chief Executive Officer and resigned from his position as a member of the Board of Directors of the Company.

On August 27, 2010, the Company appointed Thomas M. Patton as its President and Chief Executive Officer. Mr. Patton was also appointed to the Company’s Board of Directors. Mr. Patton has previously served as the CEO of Wright Medical Group, an orthopedic device company, located in Memphis Tennessee, and as President of Novametrix Medical Systems, a patient monitoring company, located in Wallingford, CT. Most recently Mr. Patton acted as an Advisor to the healthcare focused private equity group of Ferrer Freeman & Company, and as CEO of QDx, Inc., a successful start-up that developed a revolutionary platform for hematology diagnostics.

Mr. Patton, age 46, attended The College of the Holy Cross where he majored in Economics and Accounting. After graduating magna cum laude from Georgetown University Law Center, Mr Patton worked at the law firm of Williams & Connolly in Washington, DC. Thereafter, he joined Wright Medical as its General Counsel where he served in various executive roles until being appointed CEO.

Employment Agreement with Thomas Patton

On August 27, 2010, the Company entered into an Employment Agreement with Thomas Patton (the “Employment Agreement”), pursuant to which Mr. Patton assumed the positions of President and Chief Executive Officer of the Company. The Employment Agreement has an initial term of two years and shall renew for successive one-year periods unless either party gives notice of an intent to not renew at least 60 days prior to the renewal date; provided, that Mr. Patton’s employment is “at will” and is terminable at any time by either party. Mr. Patton will receive an annual base salary of Three Hundred Thousand Dollars ($300,000), which may be subject to increase in the discretion of the Compensation Committee of the Board of Directors of the Company. Mr. Patton will also be eligible for an annual bonus in the form of cash or Company common stock as determined at the sole discretion of the Compensation Committee of the Board of Directors.

Mr. Patton will also be eligible for an annual performance-based bonus. For 2010, he will be eligible for a performance-based bonus if certain Company targets are achieved, with the target performance-based bonus equal to 35% of his annual base salary pro rated for the period of actual employment in 2010. For 2011, he will be eligible for a performance-based bonus if certain Company targets are achieved, with the target performance-based bonus equal to 50% of his annual base salary. The designation of the performance targets and the attainment percentage of such targets will be determined by the Compensation Committee of the Board, in consultation with Mr. Patton. He will also be entitled to participate in all employee benefit programs of the Company applicable to senior officers of the Company, as such programs may be in effect from time to time. Mr. Patton also received an option grant and two restricted stock grants, as described in greater detail under the heading “Inducement Option and Restricted Stock Grants to Thomas Patton”, below.

If the Company terminates Mr. Patton’s employment without Serious Cause (as defined in the Employment Agreement) or Mr. Patton terminates his employment for Good Reason (as defined in the Employment Agreement), the Company shall pay him a separation pay benefit as follows: if the involuntary separation from service occurs prior to August 27, 2011, Mr. Patton will be paid six (6) months of base salary, and if the involuntary separation from service occurs on or after August 27, 2011, he will be paid twelve (12) months of base salary. Payment of severance shall be made in equal fixed installments during the period of payment in accordance with the Company’s standard payroll procedures and normal payroll dates then in effect. In the event the value of the aforementioned payments exceeds two times the lesser of Mr. Patton’s annualized compensation or the maximum amount that may be taken into account for qualified plan purposes (in each case, as determined in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as provided above, but instead shall be withheld and paid on the first regularly scheduled payroll date immediately following the date that is six months after the separation from service date, without adjustment for the delay in payment. Also, if the separation from service occurs at a time when more than one-half of the performance measuring period for an annual performance bonus has elapsed, Mr. Patton will be eligible for a pro rated amount of the performance bonus he would have otherwise earned had he remained employed by the Company for the entire performance period.

If the Company terminates Mr. Patton’s employment without Serious Cause, or he terminates employment with the Company for Good Reason, and, in either case, his employment is terminated within the period beginning on the date that a Change of Control (as defined in the Employment Agreement) is formally proposed to the Company’s Board of Directors and ending on the second anniversary of the date on which such Change of Control occurs, the Company will pay Mr. Patton a separation pay benefit consisting of twelve (12) months of annual base salary. Payment of such severance shall be made in equal fixed installments during the period of payment in accordance with the Company’s standard payroll procedures and normal payroll dates then in effect. In the event the value of the payments exceeds two times the lesser of Mr. Patton’s annualized compensation or the maximum amount that may be taken into account for qualified plan purposes (in each case, as determined in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as provided above, but instead shall be withheld and paid on the first regularly scheduled payroll date immediately following the date that is six months after the separation from service date, without adjustment for the delay in payment. Also, if the separation from service occurs at a time when more than one-half of the performance measuring period for an annual performance bonus has elapsed, Mr. Patton will be eligible for a pro rated amount of the performance bonus he would have otherwise earned had he remained employed by the Company for the entire performance period.

If upon a Change of Control Mr. Patton is offered continued employment, but chooses to not accept such offer and has a separation from service within 30 days after the Change of Control, he will be entitled to a single lump sum payment equal to twelve (12) months of base salary. Such payment shall be made on the 45th day following the Change of Control (or the first business day thereafter, if the 45th day after the Change in Control is not a business day). In the event that the provisions of Internal Revenue Code Section 280G relating to “excess parachute payments” shall be applicable to any payment or benefit received or to be received by Mr. Patton, then the total amount of payments or benefits payable (the “Payments”) which are deemed to constitute parachute payments shall be either: (i) the full amount of the Payments, or (ii) a reduced amount which would result in no portion of the Payments being subject to the excise tax imposed pursuant to Section 4999 of the Internal Revenue Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and Excise Tax, results in the receipt by Mr. Patton, on an after-tax basis, of the greatest amount of benefit.

The Employment Agreement also contains customary confidentiality covenants and covenants not to complete or solicit during the term of employment or in the six month period (or in certain circumstances, the one year period) thereafter.

The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the Employment Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

Inducement Option and Restricted Stock Grants to Thomas Patton

Option Grant . On August 27, 2010, the Company granted Mr. Patton a nonstatutory stock option to acquire 350,000 shares of the common stock of the Company at $2.10 per share, representing the closing price of the common stock on the grant date. The options will vest in equal monthly installments over a four (4) year period that begins on the grant date, provided Mr. Patton is then still employed by the Company. Notwithstanding the foregoing, all of the options will vest upon a Change in Control, provided Mr. Patton is then still employed by the Company.

Restricted Stock Grants .

On August 27, 2010, the Company granted Mr. Patton 250,000 shares of common stock of the Company, subject to certain restrictions. The restricted shares will vest over an approximately four (4) year period commencing on the grant date in the following manner: 20,833 shares will vest December 30, 2010, provided he is then still employed by the Company. The remaining shares shall vest on the day following the end of each calendar quarter, beginning with April 1, 2011, and continuing on each July 1st, October 1st, January 1st and April 1st thereafter until October 1, 2014. At each quarterly vesting date, 15,625 restricted shares will vest, except that on October 1, 2014, 10,417 restricted shares shall vest, in each case provided Mr. Patton is then still employed by the Company. Notwithstanding the foregoing, all of such restricted shares, to the extent not yet vested, will vest upon a Change in Control, provided Mr. Patton is then still employed by the Company.

On August 27, 2010, the Company granted Mr. Patton 150,000 shares of common stock of the Company, subject to certain restrictions. These restricted shares will vest at the earlier of (i) the first date that the Company stock has maintained an average share price (measured by the actual daily closing price) of at least Four Dollars and Fifteen Cents ($4.15) per share over a period of sixty (60) consecutive trading days (i.e., a day that the primary market on which shares of the Company common stock are listed or quoted is open for trading); or (ii) upon a Change in Control if the stock is valued in the Change in Control at or above $4.15 per share, and, further provided, in either case, that Mr. Patton is then still employed by the Company.

The foregoing option and restricted stock grants were issued as inducement grants in accordance with the exemption from stockholder approval provided in Rule 5635 of the Nasdaq Stock Market.

The foregoing descriptions of the option and restricted stock grants do not purport to be complete and are qualified in their entirety by reference to the Inducement Nonqualified Stock Option Agreement dated August 27, 2010 between the Company and Thomas M. Patton, the Inducement Restricted Stock Agreement dated August 27, 2010 between the Company and Thomas M. Patton (250,000 shares) and the Inducement Restricted Stock Agreement dated August 27, 2010 between the Company and Thomas M. Patton (150,000 shares), copies of which are filed as Exhibits 10.2, 10.3 and 10.4 hereto and incorporated herein by reference.

The Company issued a press release with respect to the foregoing appointment, which is attached hereto as Exhibit 99.1. The Company also issued a press release in accordance with the Listing Rules of the Nasdaq Stock Market with respect to the inducement equity grants to Mr. Patton, which is attached hereto as Exhibit 99.2.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits – The following exhibits are filed as part of this report:

10.1	Employment Agreement dated August 27, 2010 between the Registrant and Thomas M. Patton

10.2	Inducement Nonqualified Stock Option Agreement dated August 27, 2010 between the Registrant and Thomas M. Patton

10.3	Inducement Restricted Stock Agreement dated August 27, 2010 between the Registrant and Thomas M. Patton (250,000 shares)

10.4	Inducement Restricted Stock Agreement dated August 27, 2010 between the Registrant and Thomas M. Patton (150,000 shares)

99.1	Press Release dated August 30, 2010

99.2	Press Release dated August 31, 2010 regarding Inducement Grants

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CAS MEDICAL SYSTEMS, INC.


Date: August 31, 2010	By:	/s/ Jeffery A. Baird
		Jeffery A. Baird
		Chief Financial Officer

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, entered into August 27, 2010, by and between CAS Medical Systems, Inc., a Delaware corporation (the “Company,” which term includes any successor to CAS Medical Systems, Inc., by merger or otherwise), and Thomas M. Patton (the “Employee”)

WITNESSETH:

WHEREAS, the Company wishes to employ the Employee as President and Chief Executive Officer of the Company and the Employee is willing to serve the Company in such capacity.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the parties hereto agree as follows:

Section 1.

Employment

The Company will employ the Employee, and the Employee will perform services for the Company and its subsidiaries, on the terms and conditions set forth in this Agreement.

Section 2.

Duties

The Employee will serve the Company as its President and Chief Executive Officer. The Employee will have such duties and responsibilities as are assigned to him by the Board of Directors of the Company commensurate with the Employee’s position, including responsibility for all strategic and operational matters relating to the Company and its subsidiaries, subject to the direction of the Board of Directors. The Employee will perform his duties hereunder faithfully and to the best of his abilities and in furtherance of the business of the Company and its subsidiaries, and will devote his full business time, energy, attention and skill to the business of the Company and its subsidiaries and to the promotion of its interests, except as otherwise agreed by the Company.

Section 3.

Term

This Agreement shall have an initial term of two years, beginning as of the Employee’s first day of work, August 27, 2010 (the “Effective Date”). It shall renew for successive one-year periods unless either party gives notice of an intent to not renew this Agreement at least 60 days prior to the renewal date.

Notwithstanding the foregoing, the Employee’s employment hereunder shall be “at will” and is terminable at any time by either party, subject to the provisions of Sections 10 and 11 hereof.

Section 4.

Salary

The Employee will receive as compensation for his duties and obligations to the Company pursuant to this Agreement a base salary at the annual rate of Three Hundred Thousand Dollars ($300,000), payable in substantially equal installments in accordance with the Company’s standard payroll practices. It is agreed between the parties that the Company will review the base annual salary annually and, in light of such review, may (but will not be obligated to), in the discretion of the Compensation Committee of the Board of Directors of the Company, increase such annual base salary taking into account any change in the Employee’s responsibilities, increases in the cost of living, performance by the Employee, and other pertinent factors.

Section 5.

Bonus

The Employee will be eligible for an annual bonus in the form of cash or Company common stock as determined at the sole discretion of the Compensation Committee of the Board of Directors.

The Employee will also be eligible for an annual performance-based bonus. For 2010, it is agreed that the Employee will be eligible for a performance-based bonus if certain Company targets are achieved, with the target performance-based bonus equal to 35% of the Employee’s annual base salary pro rated for the period of actual employment in 2010. For 2011, it is agreed that the Employee will be eligible for a performance-based bonus if certain Company targets are achieved, with the target performance-based bonus equal to 50% of the Employee’s annual base salary. The designation of the performance targets and the attainment percentage of such targets will be determined by the Compensation Committee of the Board, in consultation with the Employee.

Annual discretionary and performance-based bonuses payable hereunder shall be calculated after the close of the end of the calendar year, and thereafter paid in a single lump sum by no later than the 15 th day of the third month following the end of the calendar year in which the right to the bonus is no longer subject to a substantial risk of forfeiture (as defined for purposes of Internal Revenue Code Section 409A, including Treasury Regulations Section 1.409A-1(d)).

Section 6.

Equity Compensation

(a) Options . As of the Effective Date, the Employee will be granted nonstatutory stock options to acquire 350,000 shares of the common stock of the Company at the fair market value of such stock on the Effective Date. The options will vest in monthly installments over a four (4) year period that begins on the Effective Date. At each monthly vesting date, until such time as the four (4) year vesting period expires, options with respect to 7,292 shares (7,276 shares for the last month) will vest, provided the Employee is then still employed by the Company. Notwithstanding the foregoing, all of the options will vest upon a Change in Control (as defined in Section 11, thereof), provided the Employee is then still employed by the Company. The grant of options will be memorialized in, and the options subject to, a separate option agreement to be entered into by and between the Employee and Company.

(b) Restricted Stock .

(1) Grant One. As of the Effective Date, the Employee will be granted 250,000 shares of the common stock of the Company, subject to certain restrictions. The restricted shares will vest over an approximately four (4) year period commencing upon the Effective Date in the following manner: 20,833 shares will vest December 30, 2010, provided the Employee is then still employed by the Company. The remaining shares shall vest on the day following the end of each calendar quarter, beginning with April 1, 2011, and continuing on each July 1st, October 1st, January 1st and April 1st thereafter until October 1, 2014. At each quarterly vesting date, 15,625 restricted shares will vest, except that on October 1, 2014, 10,417 restricted shares shall vest, in each case provided the Employee is then still employed by the Company. Notwithstanding the foregoing, all of the Grant One restricted shares, to the extent not yet vested, will vest upon a Change in Control (as defined in Section 11, hereof), provided the Employee is then still employed by the Company. The grant of the restricted shares will be memorialized in, and the restricted shares subject to, a separate restricted stock award agreement to be entered into by and between the Employee and Company.

(2) Grant Two. As of the Effective Date, the Employee will be granted 150,000 shares of the common stock of the Company, subject to certain restrictions. The restricted shares will vest at the earlier of (i) the first date that the Company stock has maintained an average share price (measured by the actual daily closing price) of at least Four Dollars and Fifteen Cents ($4.15) per share over a period of sixty (60) consecutive trading days (i.e., a day that the primary market on which shares of the Company common stock are listed or quoted is open for trading); or (ii) upon a Change in Control (as defined in Section 11, hereof) if the stock is valued in the Change in Control at or above $4.15 per share, and, further provided, in either case, that the Employee is then still employed by the Company. The grant of the restricted shares will be memorialized in, and the shares subject to, a separate restricted stock award agreement to be entered into by and between the Employee and Company.

Section 7.

Employee Benefits

Subject to any applicable probationary or similar periods, during the period of his employment with the Company, the Employee will be entitled to participate in all employee benefit programs of the Company applicable to senior officers of the Company, as such programs may be in effect from time to time. Subject to any applicable probationary or similar periods, during his period of employment with the Company, the Employee will also be entitled to participate in all retirement programs of the Company for which current employees are eligible, as such programs may be in effect from time to time (including the Company’s 401(k) plan).

Section 8.

Business Expenses

All reasonable travel and other out-of-pocket expenses incidental to the rendering of services by the Employee hereunder will be paid by the Company, and, if expenses are paid in the first instance by the Employee, the Company will reimburse him therefor upon presentation

of proper invoices, subject in each case to compliance with the Company’s reimbursement policies and procedures. All reimbursements will be paid in the same taxable year in which the expense is incurred, provided that expenses incurred toward the end of the calendar year that cannot administratively be reimbursed before the year end shall be reimbursed by no later than March 15 th of the calendar year following the calendar year in which the expense was incurred.

Section 9.

Vacations and Sick Leave

The Employee will be entitled to holidays, reasonable vacation and reasonable sick leave each year, in accordance with policies of the Company, as determined by the Board of Directors, provided, however, that the Employee will be entitled to a minimum of four (4) weeks vacation per year.

Section 10.

Termination

(a) Termination of Employment by the Company for Serious Cause . In the event of Serious Cause (as defined below), the Company may terminate the Employee’s employment upon written notice of such termination stating the Serious Cause upon which the Company relies for its termination. The Employee’s employment will be terminated effective as of the date specified in such notice, which will in no event be earlier than the effective date of such notice as provided in Section 19.

“Serious Cause” means (i) the willful and continued failure by the Employee to perform substantially his duties hereunder, other than by reasons of health, after demand for substantial performance is delivered by the Company that identifies the manner in which the Company believes the Employee has not substantially performed his duties; (ii) the Employee will have been indicted by any federal, state or local authority in any jurisdiction for, or will have pleaded guilty or nolo contendere to, an act constituting a felony; (iii) the Employee will have habitually abused any controlled substance (such as narcotics or alcohol); or (iv) the Employee will have (A) engaged in intentional and material misrepresentations to the Board of Directors, or acts of fraud or gross misconduct in connection with the business of the Company, or (B) committed a material breach of this Agreement.

(b) Termination of Employment by Employee for Good Reason . The Employee may terminate his employment in the event of “Good Reason.” Termination for Good Reason means a resignation of employment and Separation from Service (as such term is defined for purposes of Internal Revenue Code Section 409A) within six (6) months following the initial existence of one or more of the following conditions arising without the Employee’s written consent:

(i)	a material reduction in the Employee’s base salary or benefits;

(ii)	a material diminution in the Employee’s duties and significant responsibilities hereunder; or

(iii)

a material breach of this Agreement by the Company (which shall include a failure to make payments due hereunder);

provided, in any such case, that (1) a prior written notice specifying the reasons within sixty (60) after the initial existence of the condition and an opportunity to cure such condition (if curable) shall be afforded the Company, and (2) “Good Reason” shall exist only if the Company shall fail to cure such condition within 31 days after its receipt of such prior written notice. In addition, until the actual Separation from Service the Employee must remain willing and able to continue to perform services in accordance with the terms of this Agreement and the Employee must not be in breach of any of the Employee’s obligations hereunder.

(c) Effect of Termination for Serious Cause or Without Good Reason . In the event of termination of the Employee’s employment by the Company for Serious Cause or by the Employee without Good Reason, the Employee will forfeit all bonus amounts accruing for the then current fiscal year, and the Company will be liable to the Employee only for (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (iii) reimbursement of business expenses incurred prior to the date of termination.

(d) Death, Retirement or Disability . In the event of the Employee’s death, Retirement or Disability, the Employee’s employment will be terminated as of the date of such death, Retirement or Disability and the Company will pay the Employee, or the Employee’s estate or legal representative, as appropriate, (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (iii) reimbursement of business expenses incurred, but unpaid, prior to the date of termination.

“Disability” means the Employee’s inability, for reasons of health, to carry out the functions of his position for a total of one hundred eighty (180) days during any twelve (12) month period. “Retirement” will mean retirement from employment upon or after attaining age sixty-five (65) or such earlier age agreed to by the Company.

(e) Effect of Termination By Company Without Serious Cause or By Employee With Good Reason; Involuntary Separation from Service . If the Company terminates the Employee’s employment herein without Serious Cause or the Employee terminates his employment hereunder for Good Reason, and, in either case, the Employee’s employment is terminated under circumstances constituting an Involuntary Separation from Service within the meaning of Treasury Regulations Section 1.409A-1(n) other than within the period beginning on the date that a Change in Control is formally proposed to the Company’s Board of Directors and ending on the second anniversary of the date on which such Change of Control occurs, the Company shall pay the Employee a separation pay benefit, as described below, in consideration for the Employee’s continued compliance with his obligations under Section 12 hereof (covenant to not compete or solicit), subject to Section 14 hereof.

(1) If the Involuntary Separation from Service occurs within twelve months of the Effective Date, the Employee will be paid six (6) months of the Employee’s base salary (as of the Employee’s Separation from Service date), and if the Involuntary Separation from Service occurs twelve months or more after the Effective Date, the Employee will be paid twelve (12) months of the Employee’s base salary (as of the Employee’s Separation from Service date).

(2) Payment shall commence as of the Employee’s Separation from Service date, and shall continue thereafter in equal fixed installments during the period of payment in accordance with the Company’s standard payroll procedures and normal payroll dates then in effect.

(3) In the event the value of the payments exceeds two times the lesser of the Employee’s annualized compensation or the maximum amount that may be taken into account for qualified plan purposes (in each case, as determined in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as provided in (2), above, but instead shall be withheld and paid on the first regularly scheduled payroll date immediately following the date that is six months after the Employee’s Separation from Service date, without adjustment for the delay in payment.

(4) In no event shall payments be accelerated, nor shall the Employee be eligible to defer payments to a later date.

In addition, the Employee will be entitled to prompt payment of (A) any accrued but unpaid salary and vacation, (B) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (C) reimbursement of business expenses incurred prior to the date of termination, and all of the Employee’s equity-linked grants (e.g., stock options, restricted stock) shall immediately accelerate and vest in full. Also, if the Separation from Service occurs at a time when more than one-half of the performance measuring period for an annual performance bonus has elapsed, the Employee shall be eligible for a pro rated amount of the performance bonus the Employee would have otherwise earned had he remained employed by the Company for the entire performance period. Payment shall be made as provided in Section 5, above, with the pro ration determined on a per diem basis.

Finally, if COBRA continuation coverage under any Company healthcare plan is elected by the Employee, the Company shall provide such coverage on the same terms with respect to employee cost and employer subsidy as was being made available to the Employee immediately prior to his Separation from Service for the period of the COBRA coverage or the period that separation pay payments are made as provided above, whichever is shorter, provided , however, that if making this subsidized health care benefit available to the Employee would violate the non-discrimination rules applicable to non-grandfathered health plans under the Patient Protection and Affordable Care Act and related legislation, this paragraph shall be null and void ab initio , and no post-employment subsidized health care benefit shall be made available to the Employee.

(f) Timing of Certain Payments . All payments under Section 10 or Section 11 of (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year, and (iii) reimbursement of business expenses incurred prior to the date of termination shall be paid in a single sum on the first regularly scheduled payroll date immediately following the Employee’s Separation from Service.

(g) No Other Obligations . In the event of the termination of the Employee’s employment, the Company will have no obligations to the Employee other than those set forth in Sections 10 and 11 herein.

Section 11.

Change of Control

(a) Change of Control . A “Change of Control” of the Company will be deemed to have occurred if (i) any “person” (as such term is defined in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), excluding the Company or any of its subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by shareholders of the Company in substantially the same proportion as their ownership of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing an increase from less than Twenty Percent (20%) to Fifty Percent (50%) or more of the combined voting power of the Company’s then outstanding securities (“Voting Securities”); (ii) during any period of not more than two (2) years, individuals who constitute the Board of Directors of the Company (the “Board”) as of the beginning of the period and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i) or (iii) of this sentence) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at such time or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the stockholders of the Company approve a merger, consolidation or reorganization or a court of competent jurisdiction approves a scheme or arrangement of the Company, other than a merger, consolidation, reorganization or scheme which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least Fifty Percent (50%) of the combined voting power of the Voting Securities of the Company or such surviving entity outstanding immediately after such merger, consolidation, reorganization or scheme or arrangement, and such transaction is completed; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or any agreement for the sale of substantially all of the Company’s assets, and such transaction is completed.

(b) Effect of Involuntary Termination . If the Company terminates the Employee’s employment without Serious Cause, or the Employee terminates employment with the Company for Good Reason, and, in either case, the Employee’s employment is terminated (i) under circumstances constituting an Involuntary Separation from Service within the meaning of Treasury Regulations Section 1.409A-1(n) and (ii) within the period beginning on the date that a Change of Control is formally proposed to the Company’s Board of Directors and ending on the second anniversary of the date on which such Change of Control occurs, the Company shall pay the Employee a separation pay benefit consisting of twelve (12) months of the Employee’s annual base salary (as of the Employee’s Separation from Service date), as described below, in consideration for the Employee’s continued compliance with his obligations under Section 12 hereof (covenant to not compete or solicit), subject to Section 14 hereof.

(1) Payment shall commence as of the Employee’s Separation from Service date, and shall continue thereafter in equal fixed installments during the period of payment in accordance with the Company’s standard payroll procedures and normal payroll dates then in effect.

(2) In the event the value of the payments exceeds two times the lesser of the Employee’s annualized compensation or the maximum amount that may be taken into account for qualified plan purposes (in each case, as determined in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as provided in (1), above, but instead shall be withheld and paid on the first regularly scheduled payroll date immediately following the date that is six months after the Employee’s Separation from Service date, without adjustment for the delay in payment.

(3) In no event shall payments be accelerated, nor shall the Employee be eligible to defer payment to a later date.

In addition, the Employee will be entitled to prompt payment of (A) any accrued but unpaid salary and vacation, (B) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (C) reimbursement of business expenses incurred prior to the date of termination. Also, if the Separation from Service occurs at a time when more than one-half of the performance measuring period for an annual performance bonus has elapsed, the Employee shall be eligible for a pro rated amount of the performance bonus the Employee would have otherwise earned had he remained employed by the Company for the entire performance period. Payment shall be made as provided in Section 5, above, with the pro ration determined on a per diem basis.

(c) Effect of Voluntary Termination . If upon a Change in Control the Employee is offered continued employment, but chooses to not accept such offer and has a Separation from Service within 30 days after the Change in Control, the Employee will be entitled to a single lump sum payment equal to twelve (12) months of the Employee’s annual base salary (as of the Employee’s Separation from Service date). Such payment shall be made on the 45th day following the Change in Control (or the first business day thereafter, if the 45th day after the Change in Control is not a business day).

(d) Parachute Payments . Notwithstanding anything in this Agreement to the contrary, in the event that the provisions of Internal Revenue Code Section 280G relating to “excess

parachute payments” shall be applicable to any payment or benefit received or to be received by the Employee, then the total amount of payments or benefits payable to the Employee (the “Payments”) which are deemed to constitute parachute payments shall be either: (i) the full amount of the Payments, or (ii) a reduced amount which would result in no portion of the Payments being subject to the excise tax imposed pursuant to Section 4999 of the Internal Revenue Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of benefit. Unless the Company or the Employee otherwise agree in writing, any determination required under this Section 5.2(c)(1) shall be made in writing by independent public accountants appointed by the Company and reasonably acceptable to the Employee (the “Accountants”), whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. The Company shall bear all costs the Accountants may reasonably incur. In the event a reduction must be made in accordance with this paragraph, the reduction shall be made, first, from any payment made pursuant to paragraph (c), above, and, second, from any separation pay payment made pursuant to paragraph (b), above, but only to the extent such payment is determined to be includible in the excess parachute payment amount and only to the extent necessary.

(e) Entitlement to Payment . The Employee will not be entitled to any benefits or other entitlements under this section unless a Change of Control actually occurs. Any amounts payable pursuant to this Section 11 shall not duplicate amounts payable under Section 10 and vice versa.

Section 12.

Agreement Not to Compete or Solicit

(a) Covenant Not to Compete . The Employee hereby covenants and agrees that at no time during his period of employment with the Company, nor for a period of one (1) year (six (6) months in the case of a termination of employment within six (6) months of the Effective Date under circumstances described in Section 10(e)) immediately following the termination of the Employee’s employment, will he for himself or on behalf of any other person, partnership, company or corporation, directly or indirectly, acquire any financial or beneficial interest in (except as provided in the next sentence), provide consulting or other services to, be employed by, or own, manage, operate or control any entity engaged in a business that competes in the marketplace with any product or service offered, or under development, by the Company or its subsidiaries at the time of such termination of employment. Notwithstanding the preceding sentence, the Employee will not be prohibited from owning less than one percent (1%) of any publicly traded corporation, whether or not such corporation is in competition with the Company.

(b) Non-Solicitation . The Employee hereby covenants and agrees that, at all times during his period of employment with the Company and for a period of six (6) months (such period to be one (1) year in the case of a termination resulting in payments pursuant to Section 11) immediately following the termination thereof, the Employee will not directly or indirectly employ or seek to employ any person or entity employed at that time by the Company or any of its subsidiaries, or otherwise encourage or entice such person or entity to leave such employment.

Section 13.

Confidential Information

The Employee agrees to keep secret and retain in the strictest confidence all confidential matters which relate to the Company or any affiliate of the Company, including, without limitation, customer lists, client lists, trade secrets, pricing policies and other business affairs of the Company and any affiliate of the Company learned by him from the Company or any such affiliate or otherwise before or after the date of this Agreement, and not to disclose any such confidential matter to anyone outside the Company, or any of its affiliates, whether during or after his period of service with the Company, except as may be required in the course of a legal or governmental proceeding. Upon request by the Company, the Employee agrees to deliver promptly to the Company upon termination of his services for the Company, or at any time thereafter as the Company may request, all Company or affiliate memoranda, notes, records, reports, manuals, drawings, designs, computer files in any media and other documents (and all copies thereof) relating to the Company’s or any affiliate’s business and all property of the Company or any affiliate associated therewith, which he may then possess or have under his control.

Section 14.

Remedy

(a) Should the Employee engage in or perform, either directly or indirectly, any of the acts prohibited by Sections 12 or 13 hereof, it is agreed that any and all compensation (including separation pay) and related benefits hereunder shall immediately terminate and the Company will also be entitled to full injunctive relief, to be issued by any competent court of equity, enjoining and restraining the Employee and each and every other person, firm, organization, association, or corporation concerned therein, from the continuance of such violative acts. The foregoing remedies available to the Company will not be deemed to limit or prevent the exercise by the Company of any or all further rights and remedies which may be available to the Company hereunder or at law or in equity.

(b) The Employee acknowledges and agrees that the covenants contained in this Agreement are fair and reasonable in light of the consideration paid hereunder, and the invalidity or unenforceability of any particular provision, or part of any provision, of this Agreement will not affect the other provisions or parts hereof. If any provision hereof is determined to be invalid or unenforceable and if any such provision will be so determined to be invalid or unenforceable by reason of the duration or geographical scope of the covenants contained therein, such duration or geographical scope, or both, will be reduced to a duration or geographical scope solely to the extent necessary to cure such invalidity.

Section 15.

Successors and Assigns

This Agreement will be binding upon and inure to the benefit of the Employee, his heirs, executors, administrators and beneficiaries, and the Company and its successors and assigns.

Section 16.

Governing Law

This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Connecticut, without reference to rules relating to conflicts of law.

Section 17.

Entire Agreement

This Agreement constitutes the full and complete understanding and agreement of the parties and supersedes all prior understandings and agreements as to employment of the Employee. This Agreement cannot be amended, changed, modified or terminated without the written consent of the parties hereto.

Section 18.

Waiver of Breach

The waiver of either party of a breach of any term of this Agreement will not operate nor be construed as a waiver of any subsequent breach thereof.

Section 19.

Notices

Any notice, report, request or other communication given under this Agreement will be written and will be effective upon delivery when delivered personally, by overnight courier or by fax. Unless otherwise notified by any of the parties, notices will be sent to the parties as follows: (i) if to the Employee, at the address set forth in the Company’s records, with a copy to 25 Andy Lane, Guilford, CT 06437; and (ii) if to the Company, to CAS Medical Systems, Inc., 44 East Industrial Road, Branford, CT 06405, Attention: Board of Directors, with a copy to D. Terrence Jones, Wiggin and Dana LLP. One Century Tower, P.O. Box 1832, New Haven, CT 06508-1832.

Section 20.

Severability

If any one or more of the provisions contained in this Agreement will be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.

Section 21.

Counterparts

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. Delivery of signatures by facsimile or electronic image shall be valid for all purposes hereunder.

Section 22.

Internal Revenue Code Section 409A Compliance.

(a) The parties hereto recognize that certain provisions of this Agreement may be affected by Section 409A of the Internal Revenue Code and guidance issued thereunder, and agree to amend this Agreement, or take such other action as may be necessary or advisable, to comply with Section 409A.

(b) Notwithstanding anything herein to the contrary, it is expressly understood that at any time the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A) is publicly traded on an established securities market (as defined for purposes of Internal Revenue Code Section 409A), if a payment or provision of an amount or benefit constituting a deferral of compensation is to be made pursuant to the terms of this Agreement to the Employee on account of a Separation from Service at a time when the Employee is a Specified Employee (as defined for purposes of Internal Revenue Code Section 409A(a)(2)(B)(i)), such deferred compensation shall not be paid to the Employee prior to the date that is six (6) months after the Separation from Service or as otherwise permitted under Treasury Regulations Section 1.409A-3(i)(2).

(i)

“Separation from Service” means, generally, a termination of employment with the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A), and shall have the same meaning as such term has for purposes of Internal Revenue Code Section 409A (including Treasury Regulation Section 1.409A-1(h)).

(ii)

“Involuntary Separation from Service” means a Separation from Service due to the independent exercise of the unilateral authority of the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A) to terminate the Employee’s employment, other than due to the Employee’s implicit or explicit request, where the Employee was willing and able to continue employment with the Company. Notwithstanding the foregoing, a termination for Good Reason may constitute an Involuntary Separation from Service. Involuntary Separation from Service shall have the same meaning as such term has for purposes of Internal Revenue Code Section 409A (including Treasury Regulation Section 1.409A-1(n)).

Section 23.

Arbitration.

Any dispute arising under or in connection with this Agreement shall be resolved by a single arbitrator in New Haven County, Connecticut in accordance with the arbitration rules of the American Arbitration Association. Except as the arbitrator may otherwise provide, each party shall be allowed discovery as provided in the Federal Rules of Civil Procedure, each party shall bear its own attorneys’s fees and related costs, and the costs of the arbitration shall be borne in equal shares by the parties to the arbitration. Any award of the arbitrator shall be enforceable in any court of competent jurisdiction.

[ signature page follows ]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

The Company:

CAS MEDICAL SYSTEMS, INC.

By: /s/ Louis P. Scheps

Name: Louis P. Scheps

Title: Chairman of the Board

Employee:

/s/ Thomas M. Patton

Thomas M. Patton

EXHIBIT 10.2

CAS MEDICAL SYSTEMS, INC.

INDUCEMENT NONQUALIFIED STOCK OPTION AGREEMENT

This Inducement Nonqualified Stock Option Agreement (this “ Agreement ”) is made as of August 27, 2010 (the “ Date of Grant ”), by and between CAS Medical Systems, Inc., a Delaware corporation (the “ Company ”), and Thomas M. Patton (the “ Optionee ” or the “ Grantee ”) as a material inducement to Grantee becoming a senior executive of the Company. The parties acknowledge that this Agreement is an “inducement” grant for purposes of the Rule 5635(c)(4) of the Nasdaq Stock Market (“ Nasdaq ”) and that the issuance of this Option (as defined below) is subject to applicable Nasdaq requirements.

1. Grant of Stock Option . Subject to and upon the terms, conditions, and restrictions set forth in this Agreement, the Company hereby grants to the Optionee as of the Date of Grant a stock option (the “ Option ”) to purchase Three Hundred Fifty Thousand (350,000) shares of Company common stock (the “ Optioned Shares ”). The Option may be exercised from time to time in accordance with the terms of this Agreement. The price at which the Optioned Shares may be purchased pursuant to the Option will be $2.10 per share (the “ Option Price ”). Notwithstanding the foregoing, in no event shall the Option Price be less than the fair market value of the underlying stock (as defined for purposes of Internal Revenue Code Section 409A and disregarding any lapse restriction as defined in Treasury Regulation Section 1.83-3(i)) on the Date of Grant. The Option is intended to be a nonqualified stock option and will not be treated as an “incentive stock option” within the meaning of that term under Section 422 of the Internal Revenue Code, or any successor provision thereto.

2. Term of Option . The term of the Option will commence on the Date of Grant and, unless earlier terminated in accordance with Section 6 hereof, will expire ten years from the Date of Grant.

3. Right to Exercise .

(a) Subject to Section 6 and Section 7 hereof, the Option will be exercisable from time to time prior to the tenth anniversary of the Date of Grant to the extent of 7,292 of the Optioned Shares on each monthly anniversary of the Date of Grant (7,276 for the last month); provided , that such vesting shall immediately cease if the Optionee’s employment by the Company and any subsidiary of the Company terminates for any reason ( provided , however , that any termination of the Optionee’s employment simultaneous with a Change in Control shall be deemed for purposes hereof to have occurred immediately after such Change in Control).

(b) To the extent the Option is exercisable, it may be exercised in whole or in part. The Optionee will be entitled to the privileges of ownership with respect to Optioned Shares purchased and delivered to the Optionee upon the exercise of all or part of the Option.

4. Option Nontransferable . The Option granted hereby will be neither transferable nor assignable by the Optionee other than by will or by the laws of descent and distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee, or in the event of his legal incapacity, by his guardian or legal representative acting on behalf of the Optionee in a

fiduciary capacity under state or foreign law and court supervision. In the event the Option is exercisable after the Optionee's death as permitted by this Agreement, this Option may be exercised by the Optionee's executor or administrator or by the distributee or legatee to whom this Option was transferred by will or the laws of descent and distribution.

5. Notice of Exercise; Payment .

(a) To the extent then exercisable, the Option may be exercised by written notice to the Secretary of the Company stating the number of Optioned Shares for which the Option is being exercised and the intended manner of payment.

(b) Payment equal to the aggregate Option Price of the Optioned Shares for which the Option is being exercised will be tendered in full with the notice of exercise in cash in the form of currency or check or other cash equivalent acceptable to the Company. The Optionee may also tender the Option Price by (i) the actual or constructive transfer to the Company of nonforfeitable, nonrestricted whole shares of the Company's common stock (“ Common Shares ”) that have been owned by the Optionee for more than six months prior to the date of exercise or (ii) any combination of the foregoing methods of payment, including a partial tender in cash and a partial tender in nonforfeitable, nonrestricted Common Shares. Nonforfeitable, nonrestricted Common Shares that are transferred by the Optionee in payment of all or any part of the Option Price will be valued on the basis of the last sales price of the Common Shares on the principal national securities exchange on which the Common Shares are traded or quoted (the “ Market Value Per Share ”) on the date the notice of exercise is received by the Company (or if no sale of Common Shares was made on that date, on the next preceding date on which there was a sale). Fractional Common Shares may not be issued by the Company and any such fractional Common Share will be eliminated by the Optionee paying the Company in cash an amount necessary to round the fraction up to a full Common Share.

(c) If permitted by applicable law, the requirement of payment in cash will be deemed satisfied if the Optionee makes arrangements that are satisfactory to the Company with a broker to sell on the exercise date a sufficient number of Optioned Shares that are being purchased pursuant to the exercise, so that the net proceeds of the sale transaction are at least equal to the amount of the aggregate Option Price plus payment of any applicable withholding taxes, and pursuant to which the broker undertakes to deliver to the Company the amount of the aggregate Option Price plus payment of any applicable withholding taxes on a date satisfactory to the Company, but not later than the date on which the sale transaction will settle in the ordinary course of business.

(d) As a further condition precedent to the exercise of the Option, the Optionee will comply with all regulations and requirements of any regulatory authority having control of, or supervision over, the issuance of Common Shares and in connection therewith will execute any documents that the Compensation Committee in its sole discretion deems necessary or advisable. The date of the Optionee’s written notice will be the exercise date.

6. Termination of Agreement .

(a) Subject to Section 6(b), this Agreement and the Option granted hereby will terminate automatically and without further notice on the earliest of the following dates:

(i) subject to Section 6(a)(ii), one year after the Optionee’s employment by the Company or any subsidiary of the Company terminates for any reason;

(ii) one year from the date of the Optionee’s death if the Optionee dies within the one year period described in Section 6(a)(i) or if the termination of the Optionee's employment with the Company or any subsidiary of the Company terminates due to the Optionee's death; or

(iii) ten years from the Date of Grant.

The Option will only be exercisable under this Section 6(a) to the extent that it would have been exercisable by the Optionee on the date of the termination of the Optionee's employment.

(b) Notwithstanding anything to the contrary herein, if upon the Optionee's termination of employment the Optionee becomes a senior management consultant to the Company and/or its subsidiaries under a post-employment consulting arrangement, the Option will continue to vest under its original vesting schedule set forth in Section 3(a), and this Agreement and the Option will not terminate pursuant to Section 6(a) until (i) if the Optionee permanently ceases to render consulting services to the Company and/or its subsidiaries under such post-employment consulting arrangement for any reason other than cessation by reason of death, the 90th calendar day following the date of such cessation of services and (ii) if the Optionee ceases to render consulting services on account of his or her death, the date that is one year after the 90 th calendar day following the date of the cessation of the Optionee’s services; provided , however , that in no event may this Option be exercised beyond, and the Option will terminate upon, the earlier of (A) the date that is the fifth anniversary of the date the Optionee terminates employment with the Company and its subsidiaries and (B) the tenth anniversary of the Date of Grant.

(c) For the purposes of this Agreement, the continuous employment of the Optionee with the Company or a Subsidiary will not be deemed to have been interrupted, and the Optionee will not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of the transfer of his or her employment among the Company and its subsidiaries or a leave of absence approved by the Company.

7. Acceleration of Option . Notwithstanding Section 3 hereof, the Option granted hereby will become immediately exercisable in full in the event of a Change in Control. For purposes of this Agreement, a " Change in Control " will occur if (i) any “person” (as such term is defined in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “ Exchange Act ”), excluding the Company or any of its subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by shareholders of the Company in substantially the same proportion as their ownership of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3

under the Exchange Act), directly or indirectly, of securities of the Company representing an increase from less than Twenty Percent (20%) to Fifty Percent (50%) or more of the combined voting power of the Company’s then outstanding securities (“ Voting Securities ”); (ii) during any period of not more than two (2) years, individuals who constitute the Board of Directors of the Company (the “ Board ”) as of the beginning of the period and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i) or (iii) of this sentence) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at such time or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the stockholders of the Company approve a merger, consolidation or reorganization or a court of competent jurisdiction approves a scheme or arrangement of the Company, other than a merger, consolidation, reorganization or scheme which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least Fifty Percent (50%) of the combined voting power of the Voting Securities of the Company or such surviving entity outstanding immediately after such merger, consolidation, reorganization or scheme or arrangement, and such transaction is completed; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or any agreement for the sale of substantially all of the Company’s assets, and such transaction is completed.

8. No Employment Contract . Nothing contained in this Agreement will confer upon the Optionee any right with respect to continuance of employment by the Company or any of its subsidiaries, nor will it interfere in any way with any right the Company or any of its subsidiaries would otherwise have to terminate the employment or other service of the Optionee.

9. Taxes and Withholding . To the extent that the Company or any of its subsidiaries is required to withhold federal, state, local or foreign taxes in connection with the exercise of the Option, and the amounts available to the Company or such subsidiary for such withholding are insufficient, it will be a condition to the exercise of the Option that the Optionee makes arrangements that are satisfactory to the Company or such subsidiary for the payment thereof. The Optionee may elect to satisfy all or any part of any such withholding obligation by (a) surrendering to the Company a portion of the Optioned Shares that are issued or transferred to the Optionee upon the exercise of the Option, and the Optioned Shares so surrendered by the Optionee will be credited against any such withholding obligation at the Market Value per Share of such shares on the date of such surrender or (b) utilizing the broker assistance arrangement provided in Section 5.

10. Adjustments . In the event of any change in the common stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares, or of any similar change affecting the common stock, the shares subject to this Option and the purchase price per share thereof shall be appropriately adjusted consistent with such change in such manner as the Compensation Committee of the Board of Directors of the Company may deem equitable to prevent substantial dilution or enlargement of the rights granted to under this Option.

11. Availability of Common Shares . The Company will at all times until the expiration of the Option reserve and keep available, either in its treasury or out of its authorized but unissued Common Shares, the full number of Optioned Shares deliverable upon the exercise of the Option.

12. Restrictive Legends . Each certificate for Optioned Shares, unless such shares are eligible for resale without registration pursuant to Rule 144(b)(1)(i) under the Exchange Act or such shares are registered for sale under an effective registration statement filed under the Securities Act of 1933, as amended (the “ Securities Act ”), shall bear the following legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.”

In addition, the legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any such shares upon which it is stamped, if, unless otherwise required by applicable state securities laws, such shares are registered for resale under an effective registration statement filed under the Securities Act.

13. Severability . In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

14. Interpretation . The Committee, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions or settle any ambiguities which arise in connection with this Agreement and the Option.

15. Successors and Assigns . Without limiting Section 4 hereof, the provisions of this Agreement will inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

16. Governing Law . The interpretation, performance and enforcement of this Agreement will be governed by the laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof. Each party to this Agreement hereby consents and submits himself, herself or itself to the jurisdiction of the courts of the State of Connecticut for the purposes of any legal action or proceeding arising out of this Agreement.

17. Notices . Any notice to the Company provided for herein will be in writing to the Company and any notice to the Grantee will be addressed to the Grantee at his or her address on file with the Company. Except as otherwise provided herein, any written notice will be deemed to be duly given if and when delivered personally or sent by courier service, registered mail or electronic means of communication, and addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by notice to the other party as herein specified (provided that for this purpose any mailed notice will be deemed given on the third business day following deposit of the same in the mail).

[Signature page follows]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and Grantee has also executed this Agreement in duplicate, as of the day and year first above written.

CAS MEDICAL SYSTEMS, INC.

By: /s/ Louis P. Scheps

Name: Louis P. Scheps

Title: Chairman of the Board

The undersigned Grantee hereby acknowledges receipt of an executed original of this Agreement and accepts the Option granted hereunder, subject to the terms and conditions set forth herein.

/s/ Thomas M. Patton

Thomas M. Patton

EXHIBIT 10.3

CAS MEDICAL SYSTEMS, INC.

INDUCEMENT RESTRICTED STOCK AGREEMENT

This Inducement Restricted Stock Agreement (this “ Agreement ”) is made as of August 27, 2010 (the “ Date of Grant ”), by and between CAS Medical Systems, Inc., a Delaware corporation (the “ Company ”), and Thomas M. Patton (the “ Grantee ”) as a material inducement to Grantee becoming a senior executive of the Company. The parties acknowledge that this Agreement is an “inducement” grant for purposes of the Rule 5635(c)(4) of the Nasdaq Stock Market (“ Nasdaq ”) and that the issuance of the Restricted Shares (as defined below) is subject to applicable Nasdaq requirements.

1. Grant of Restricted Stock . Subject to and upon the terms, conditions, and restrictions set forth in this Agreement, the Company hereby grants to the Grantee, Two Hundred Fifty Thousand (250,000) shares of common stock of the Company. These shares are referred to in this Agreement as “ Restricted Shares ” during the applicable Restriction Period (as defined in paragraph 4(c) hereof). Acceptance of the Restricted Shares shall be deemed to be agreement by the Grantee to the terms and conditions set forth in this Agreement. Certificates representing the Restricted Shares may not be sold or otherwise transferred and must be held by the Grantee until the end of the applicable Restriction Period. Until such terms and conditions have lapsed with respect to any Restricted Shares, the certificate for such shares will, at the Company’s option, remain in the physical possession of the Company or bear a legend to the effect that they were issued or transferred subject to, and may be sold or otherwise disposed of only in accordance with, the terms of this Agreement.

2. Stockholder Status . Effective upon the Date of Grant, the Grantee will be a holder of record of the Restricted Shares and will have all rights of a stockholder with respect to such shares (including the right to vote such shares at any meeting of stockholders of the Company and the right to receive all dividends paid with respect to such shares), subject only to the terms and conditions imposed by this Agreement.

3. Effect of Changes in Capitalization . The number of Restricted Shares are subject to adjustment for stock splits, stock dividends and the like. Any additional or different shares or securities issued as the result of such an adjustment will be held or delivered in accordance with this Agreement and will be deemed to be included within the term “Restricted Shares”.

4. Lapse of Restrictions .

(a) Subject to paragraph 6, below, the restrictions set forth in paragraph 5, below, will lapse over an approximately four (4) year period commencing upon the Date of Grant in the following manner: The restrictions will lapse with respect to 20,833 shares on December 30, 2010, provided the Grantee is then still employed by the Company. The restrictions with respect to the remaining shares shall lapse on the day following the end of each calendar quarter, beginning with April 1, 2011, and continuing on each July 1st, October 1st, January 1st and April 1st thereafter until October 1, 2014. At each quarterly vesting date, the

restrictions with respect to 15,625 restricted shares shall lapse, except that on October 1, 2014, the restrictions with respect to 10,417 restricted shares shall lapse, in each case provided the Grantee is then still employed by the Company.

(b) Notwithstanding paragraph 4(a), the restrictions set forth in paragraph 5 below will lapse on all Restricted Shares at the close of business on the date on which a Change in Control of the Company (as defined below in this paragraph 4(b)) shall occur. For purposes of this Agreement, a “ Change in Control ” will occur if (i) any “person” (as such term is defined in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “ Exchange Act ”), excluding the Company or any of its subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by shareholders of the Company in substantially the same proportion as their ownership of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing an increase from less than Twenty Percent (20%) to Fifty Percent (50%) or more of the combined voting power of the Company’s then outstanding securities (“ Voting Securities ”); (ii) during any period of not more than two (2) years, individuals who constitute the Board of Directors of the Company (the “ Board ”) as of the beginning of the period and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i) or (iii) of this sentence) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at such time or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the stockholders of the Company approve a merger, consolidation or reorganization or a court of competent jurisdiction approves a scheme or arrangement of the Company, other than a merger, consolidation, reorganization or scheme which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least Fifty Percent (50%) of the combined voting power of the Voting Securities of the Company or such surviving entity outstanding immediately after such merger, consolidation, reorganization or scheme or arrangement, and such transaction is completed; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or any agreement for the sale of substantially all of the Company’s assets, and such transaction is completed.

(c) As soon as practicable after the restrictions with respect to any installment of Restricted Shares lapse at the end of the period applicable to such installment set forth in paragraphs 4(a) and 4(b) above (the “ Restriction Period ”), the Company will deliver to the Grantee, or the Grantee’s legal representative, promptly after surrender of the Grantee's certificate(s) for the Restricted Shares to the Chief Financial Officer of the Company, the certificate or certificates for such shares free of any legend or further restrictions together with, if applicable, a new certificate representing any remaining Restricted Shares. It shall be a condition to the obligation of the Company to issue or transfer shares of Common Stock upon the lapse of restrictions that the Grantee (or any person entitled to act under this paragraph 4(c)) pay to the Company, upon its demand, such amount as may be requested by the Company for

the purpose of satisfying its liability to withhold federal, state or local income or other taxes by reason of such issuance or transfer. If the amount requested is not paid, the Company may refuse to issue or transfer shares of Common Stock.

5. Restrictions . During the Restriction Period, neither the Restricted Shares nor any right or privilege pertaining thereto may be sold, transferred, assigned, pledged, hypothecated or otherwise disposed of or encumbered in any way, by operation of law or otherwise, and shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of or encumber the Restricted Shares or any right or privilege pertaining thereto, otherwise than by will or by the laws of descent and distribution, or upon the levy of any execution, attachment or similar process thereupon, the Restricted Shares and all rights and privileges given hereby shall immediately terminate and the Restricted Shares shall be forfeited to the Company pursuant to paragraph 6 hereof.

6. Forfeiture .

(a) All the Grantee's rights to, and interest in, the Restricted Shares shall terminate and be forfeited to the Company without payment of consideration if either (i) the Grantee's employment by the Company and any subsidiary thereof terminates (or, if the Grantee is no longer employed by the Company but has become a consultant to the Company under a post-employment consulting arrangement, such consulting arrangement terminates) for any reason; provided , however , that the Grantee’s employment will not be deemed to have terminated for this purpose while the Grantee is on a leave of absence which has been approved by the Company or while the Grantee is serving as a consultant to the Company or any subsidiary thereof under a post-employment consulting arrangement, or (ii) any action prohibited by paragraph 5 hereof is taken. For purposes of this Agreement, a transfer of employment from the Company to a subsidiary or from a subsidiary to the Company or between subsidiaries shall not be deemed a termination of employment.

(b) If Restricted Shares are forfeited for any of the reasons stated in paragraph 6(a) hereof, such forfeiture shall be effective upon the occurrence of the event giving rise to the forfeiture; provided , however , that any termination of the Grantee’s employment simultaneous with a Change in Control shall be deemed for purposes hereof to have occurred immediately after such Change in Control.

(c) If at any time the Grantee forfeits any Restricted Shares pursuant to this Agreement, the Grantee agrees to return the certificate or certificates for such Restricted Shares to the Company duly endorsed in blank or accompanied by a stock power duly executed in blank.

(d) Determination as to whether an event has occurred resulting in the forfeiture of, or lapse of restrictions on, Restricted Shares, in accordance with this Agreement, shall be made by the Compensation Committee of the Board (the “ Committee ”), and all determinations of the Committee shall be final and conclusive.

7. Company Right to Terminate Employment and Other Remedies . Nothing provided herein shall be construed to affect in any way the right or power of the Company, subject to the provisions of any other written agreement between the Grantee and the Company relating to the subject matter, to terminate the Grantee’s employment as an employee of or a consultant to the Company at any time for any reason with or without cause, nor to preclude the Company from taking any action or enforcing any remedy available to it with respect to any action or conduct on the Grantee's part.

8. Additional Documents .

(a) It is the intention of the Company that this award of Restricted Shares shall meet the requirements of, and result in the application of, the rules prescribed by Section 83 of the Internal Revenue Code of 1986, as in effect at the date hereof, and applicable regulations thereunder. Accordingly, each and every provision shall be construed and interpreted in such manner as to conform with such intention and the Company reserves the right to execute and to require the Grantee to execute any further agreements or other instruments, which may be effective as of the date of the award of the Restricted Shares covered by this Agreement, including, but without limitation, any instrument modifying or correcting any provision hereof, or any action taken hereunder or contemporaneously herewith, and to take any other action, which may be effective as of the date of the award of the Restricted Shares covered by this Agreement, that, in the opinion of counsel for the Company, may be necessary or desirable to carry out such intention.

(b) If the Grantee fails, refuses or neglects to execute and deliver any instrument or document or to take any action requested by the Company to be executed or taken by the Grantee pursuant to the provisions of paragraph 8(a) above for a period of 30 days after the date of such request, the Company may require the Grantee, within ten 10 days after delivery to the Grantee of a written demand by the Company, to forfeit all Restricted Shares then held by the Grantee.

9. Restrictive Legends . Each certificate for Restricted Shares, and any such shares following the expiration of the Restriction Period, unless, in each case, such shares are eligible for resale without registration pursuant to Rule 144(b)(1)(i) under the Exchange Act or such shares are registered for sale under an effective registration statement filed under the Securities Act of 1933, as amended (the “ Securities Act ”), shall bear the following legend:

10. Severability . In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

11. Interpretation . The Committee, as constituted from time to time, will, except as expressly provided otherwise herein, have the right to determine any questions or settle any ambiguities which arise in connection with this Agreement and the Restricted Shares.

12. Successors and Assigns . Without limiting Section 4 hereof, the provisions of this Agreement will inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

13. Governing Law . The interpretation, performance and enforcement of this Agreement will be governed by the laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof. Each party to this Agreement hereby consents and submits himself, herself or itself to the jurisdiction of the courts of the State of Connecticut for the purposes of any legal action or proceeding arising out of this Agreement.

14. Notices . Any notice to the Company provided for herein will be in writing to the Company and any notice to the Grantee will be addressed to the Grantee at his or her address on file with the Company. Except as otherwise provided herein, any written notice will be deemed to be duly given if and when delivered personally or sent by courier service, registered mail or electronic means of communication, and addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by notice to the other party as herein specified (provided that for this purpose any mailed notice will be deemed given on the third business day following deposit of the same in the mail).

[Signature page follows]

CAS MEDICAL SYSTEMS, INC.

By: /s/ Louis P. Scheps

Name: Louis P. Scheps

Title: Chairman of the Board

The undersigned Grantee hereby acknowledges receipt of an executed original of this Restricted Stock Agreement and accepts the Restricted Shares granted hereunder, subject to the terms and conditions set forth herein.

/s/ Thomas M. Patton

Thomas M. Patton

EXHIBIT 10.4

CAS MEDICAL SYSTEMS, INC.

INDUCEMENT RESTRICTED STOCK AGREEMENT

1. Grant of Restricted Stock . Subject to and upon the terms, conditions, and restrictions set forth in this Agreement, the Company hereby grants to the Grantee, One Hundred Fifty Thousand (150,000) shares of common stock of the Company. These shares are referred to in this Agreement as “ Restricted Shares ” during the applicable Restriction Period (as defined in paragraph 4(c) hereof). Acceptance of the Restricted Shares shall be deemed to be agreement by the Grantee to the terms and conditions set forth in this Agreement. Certificates representing the Restricted Shares may not be sold or otherwise transferred and must be held by the Grantee until the end of the applicable Restriction Period. Until such terms and conditions have lapsed with respect to any Restricted Shares, the certificate for such shares will, at the Company’s option, remain in the physical possession of the Company or bear a legend to the effect that they were issued or transferred subject to, and may be sold or otherwise disposed of only in accordance with, the terms of this Agreement.

4. Lapse of Restrictions .

(a) The restrictions set forth in paragraph 5 below will lapse with respect to one hundred percent (100%) of the Restricted Shares on the first date following the Date of Grant that the Company’s common stock has maintained an average closing price per share of at least $4.15 (subject to adjustment for stock splits, stock dividends and the like) over a period of sixty consecutive Trading Days. For purposes hereof, “ Trading Day ” means any day on which the primary market on which shares of Company common stock are listed or quoted is open for trading.

(b) Notwithstanding paragraph 4(a), the restrictions set forth in paragraph 5 below will lapse on all Restricted Shares at the close of business on the date on which a Change in Control of the Company (as defined below in this paragraph 4(b)) shall occur, provided the common stock of the Company is valued in the Change in Control at or above $4.15 per share. For purposes of this Agreement, a “ Change in Control ” will occur if (i) any “person” (as such term is defined in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “ Exchange Act ”), excluding the Company or any of its subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by shareholders of the Company in substantially the same proportion as their ownership of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing an increase from less than Twenty Percent (20%) to Fifty Percent (50%) or more of the combined voting power of the Company’s then outstanding securities (“ Voting Securities ”); (ii) during any period of not more than two (2) years, individuals who constitute the Board of Directors of the Company (the “ Board ”) as of the beginning of the period and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i) or (iii) of this sentence) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at such time or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the stockholders of the Company approve a merger, consolidation or reorganization or a court of competent jurisdiction approves a scheme or arrangement of the Company, other than a merger, consolidation, reorganization or scheme which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least Fifty Percent (50%) of the combined voting power of the Voting Securities of the Company or such surviving entity outstanding immediately after such merger, consolidation, reorganization or scheme or arrangement, and such transaction is completed; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or any agreement for the sale of substantially all of the Company’s assets, and such transaction is completed.

6. Forfeiture .

8. Additional Documents .

[Signature page follows]

CAS MEDICAL SYSTEMS, INC.

By: /s/ Louis P. Scheps

Name: Louis P. Scheps

Title: Chairman of the Board

/s/ Thomas M. Patton

Thomas M. Patton

EXHIBIT 99.1

FOR IMMEDIATE RELEASE:

CASMED Appoints Thomas M. Patton

President and Chief Executive Officer

Branford, Conn. – August 30, 2010 – CAS Medical Systems, Inc. (NASDAQ: CASM) today announced that Thomas M. Patton has been appointed President and Chief Executive Officer and a member of the Company's Board of Directors. Mr. Patton assumed his duties as President and CEO at CASMED and joined the Board of Directors effective August 27, 2010. CASMED also announced that Andrew E. Kersey has resigned his positions of President, Chief Executive Officer and member of the Board of Directors on the same day.

“We are thrilled to have someone of Tom’s caliber manage our Company,” said Louis P. Scheps, Chairman of the Board of Directors of the Company. ”Tom is a seasoned executive in the medical products field with a broad range of operational and strategic experience from start-ups to growth companies, both public and private. He has a record of creating shareholder value through the creation of sound strategies and thoughtful execution. We look forward to having him lead our business.

“On behalf of CASMED’s Board of Directors, I would like to express our gratitude to Mr. Kersey for his service and leadership of the Company over the past few years,” continued Mr. Scheps. “He has positioned the Company well, and we wish him the best in his future endeavors.”

Mr. Patton stated, "I am excited to lead CASMED through the next phase of growth as we continue to commercialize our proprietary FORE-SIGHT ® Absolute Oximetry technology and expand on our strengths in our MAXNIBP ® non-invasive blood pressure technology. CASMED has robust technology platforms which include the first cerebral oximeter available with FDA clearance for non-invasive, continuous measurement of absolute cerebral tissue oxygen saturation for neonates, infants, children and adults. This product alerts medical practioners to otherwise undetected problems and can lead to better patient outcomes. I am confident in our ability to generate value from it and from our other business areas."

Mr. Patton has previously served as the CEO of Wright Medical Group, an orthopedic device company, located in Memphis, TN, and as President of Novametrix Medical Systems, a patient monitoring company, located in Wallingford, CT. Most recently, Mr. Patton acted as an advisor to the healthcare-focused private equity group of Ferrer Freeman & Company, LLC, and as CEO of QDx, Inc., a successful start-up that developed a revolutionary platform for hematology diagnostics. He has extensive experience as a corporate director.

Mr. Patton, age 46, attended The College of the Holy Cross where he majored in Economics and Accounting. After graduating magna cum laude from Georgetown University Law Center, Mr. Patton worked at the law firm of Williams & Connolly. LLP in Washington, DC. Thereafter, he joined Wright Medical as its General Counsel, and served that company in various roles until his appointment as CEO.

About CASMED ® - Monitoring What’s Vital

CAS Medical Systems, Inc. is a leading developer and manufacturer of medical devices for non-invasive patient monitoring. The Company’s FORE-SIGHT Absolute Cerebral Oximeter is the first cerebral oximeter available with FDA clearance for non-invasive, continuous measurement of absolute cerebral tissue oxygen saturation for neonates, infants, children and adults. This information helps avert brain damage or death during surgery and in critical care situations by allowing clinicians to identify patients with dangerously low levels of cerebral oxygen and intervene to reverse the condition.

The Company’s product lines include the high-acuity monitoring capabilities of the FORE-SIGHT Cerebral Oximeter, the bedside patient monitoring line of vital signs monitoring products, proprietary non-invasive blood pressure measurement technology, and supplies and service including blood pressure cuffs and products for neonatal intensive care. CASMED products are designed to meet the needs of a full spectrum of patient populations worldwide, ranging from adults to pediatrics and neonates.

For further information regarding CAS Medical Systems, Inc., visit the Company’s website at www.casmed.com .

Company Contact

CAS Medical Systems, Inc.

Susan Carron

Director of Corporate Communications

203-488-6056

ir@casmed.com

Statements included in this press release, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements relating to the future financial performance of the Company are subject to many factors including, but not limited to, the customer acceptance of the products in the market, the introduction of competitive products and product development, the result of on-going litigation, working capital and availability of capital, commercialization and technological difficulties , the impact of actions and events involving key customers, vendors, lenders and competitors and other risks detailed in the Company’s Form 10-K for the year ended December 31, 2009 and other subsequent Securities and Exchange Commission filings.

Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. When used in this press release the terms "anticipate", "believe", "estimate", "expect", "may", "objective", "plan", "possible", "potential", "project", "will" and similar expressions identify forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof, and we do not undertake any obligation to update any forward-looking statements, whether as a result of future events, new information or otherwise.

EXHIBIT 99.2

FOR IMMEDIATE RELEASE:

CASMED Reports Inducement Grants to CEO Thomas Patton

Under NASDAQ Marketplace Rule 5635

Branford, Conn. – August 31, 2010 – CAS Medical Systems, Inc. (NASDAQ: CASM), announced that on August 27, 2010, the Compensation Committee of its Board of Directors granted an inducement option grant and two inducement restricted stock grants to Mr. Thomas Patton as a component of his employment compensation. This press release is being made pursuant to NASDAQ Listing Rule 5635(c)(4) related to inducement grants. CASMED previously announced that Thomas Patton has been appointed President and Chief Executive Officer and member of the company's Board of Directors.

Mr. Patton previously served as the CEO of Wright Medical Group, an orthopedic device company, located in Memphis, TN, and as President of Novametrix Medical Systems, a patient monitoring company, located in Wallingford, CT. Most recently, Mr. Patton acted as an advisor to the healthcare-focused private equity group of Ferrer Freeman & Company, LLC, and as CEO of QDx, Inc., a successful start-up that developed a revolutionary platform for hematology diagnostics.

Mr. Patton, age 46, attended The College of the Holy Cross where he majored in Economics and Accounting. After graduating magna cum laude from Georgetown University Law Center, Mr. Patton worked at the law firm of Williams & Connolly, LLP in Washington, DC. Thereafter, he joined Wright Medical as its General Counsel.

The Compensation Committee of the CASMED Board of Directors approved the issuance to Mr. Patton of:

an inducement option to purchase up to 350,000 shares of CASMED common stock. The exercise price of this option is equal to the closing price of the common stock on August 27, 2010 ($2.10). The options vest in equal monthly installments over four years from the date of grant. These options expire after a term of ten years from the date of grant.

·	an inducement restricted stock grant of 250,000 shares vesting over time through October 1, 2014 (vesting 20,833 shares on December 30, 2010; 15,625 shares each quarter beginning April 1, 2011; and a final 10,417 shares on October 1, 2014).

·	an inducement restricted stock grant of 150,000 shares vesting only if CASMED common stock has maintained an average closing price per share of at least $4.15 (subject to adjustment for stock splits, stock dividends and the like) over a period of sixty consecutive trading days.

The aforementioned grants also accelerate upon a change in control of CASMED; provided that in the case of the price-vested restricted stock such acceleration would be subject to meeting the applicable price threshold.

Each of the foregoing grants was made as an inducement material to Mr. Patton's employment in accordance NASDAQ listing Rule 5635(c)(4).

CASMED is today filing a Form 8-K related to the employment of Mr. Patton. Please refer to that filing for a full description of the related employment agreement and stock option and restricted stock grants.

"On behalf of the CASMED Board of Directors, I would like to reiterate that we believe Tom Patton is uniquely qualified to lead CASMED. We believe that the incentive compensation package for Tom aligns well with the interests of all shareholders and stakeholders," said Louis P. Scheps, CASMED’s Chairman of the Board.

About CASMED ® - Monitoring What’s Vital

For further information regarding CAS Medical Systems, Inc., visit the Company’s website at www.casmed.com .

Company Contact

CAS Medical Systems, Inc.

Susan Carron

Director of Corporate Communications

203-488-6056

ir@casmed.com

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