**EXHIBIT 10.28**

**MEDICALCV, INC.**

**NON-QUALIFIEDSTOCK OPTION AGREEMENTPURSUANT TO 2001 EQUITY INCENTIVE PLAN**
| No. of shares subject to option:                         | Option No.:               |
|------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|
| Date of grant:                       |                                                                                            |

 

THIS OPTIONAGREEMENT is entered into by and between MedicalCV, Inc., a Minnesotacorporation (the “Company”), and                           (the “Optionee”) pursuant to the Company’s 2001 Equity Incentive Plan, asamended to date (the “Plan”). Unless otherwise defined herein, certaincapitalized terms shall have the meaning set forth in the Plan.

W I T N E S S E TH:

# 1.             Nature of the Option. ThisOption is not intended to qualify as an Incentive Stock Option within themeaning of Section 422 of the United States Internal Revenue Code of 1986,as amended.

# 2.             Grant of Option. Pursuant tothe provisions of the Plan, the Company grants to the Optionee, subject to theterms and conditions of the Plan and to the terms and conditions herein setforth, the right and option to purchase from the Company all or a part of anaggregate of               (                                                                        )shares of Stock (the “Shares”) at the purchase price of $              per share, such Option to be exercised as hereinafter provided.

# 3.             Terms and Conditions. It isunderstood and agreed that the Option evidenced hereby is subject to thefollowing terms and conditions:

## (a)           ExpirationDate. This Option shall expire ten years after the date of grant specifiedabove. Notwithstanding the foregoing, if the Optionee’s employment orrelationship with the Company or Related Company is terminated by reason ofdeath, Disability or Retirement, this Option shall expire on the one-yearanniversary of the termination date. If the Optionee’s employment orrelationship with the Company or Related Company is terminated by reasons forother than death, Disability or Retirement, this Option shall, subject to Section 4of the Plan, expire on the three-month anniversary of the termination date. Exceptas otherwise provided by the Board, an Optionee shall be considered to have a “Disability”if the Optionee is unable, by reason of a medically determinable physical ormental impairment, to substantially perform the principal duties of employmentwith the Company, which condition, in the opinion of a physician selected bythe Board, is expected to have a duration of not less than 120 days.

## (b)           Exerciseof Option. Subject to the Plan and the other terms of this Agreementregarding the exercisability of this Option, this Option shall be exercisablecumulatively, to the extent it is vested, as set forth in Exhibit A. Anyexercise shall be accompanied by a written notice to the Company specifying thenumber of shares of Stock as to which the Option is being exercised. Notationof any partial exercise shall be made by the Company on Schedule I hereto. ThisOption 

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## may not be exercised for a fraction of a Share, and must be exercisedfor no fewer than one hundred (100) shares of Stock, or such lesser number ofshares as may be vested.

## (c)           Paymentof Purchase Price Upon Exercise. At the time of any exercise, the ExercisePrice of the Shares as to which this Option is exercised shall be paid in cashto the Company, unless, in accordance with the provisions of Section 4.2(c) ofthe Plan, the Board shall permit or require payment of the purchase price inanother manner set forth in the Plan.

## (d)           Nontransferability.This Option shall not be transferable other than by will or by the laws ofdescent and distribution. During the lifetime of the Optionee, this Optionshall be exercisable only by the Optionee or by the Optionee’s guardian orlegal representative. No transfer of this Option by the Optionee by will or bythe laws of descent and distribution shall be effective to bind the Companyunless the Company is furnished with written notice thereof and a copy of thewill and/or such other evidence as the Board may determine necessary toestablish the validity of the transfer.

## (e)           Accelerationof Option Upon Change in Control. In the event of a Change in Control, asdefined in Section 1.3 of the Plan, the provisions of Section 3(b) andExhibit A hereof pertaining to vesting shall cease to apply and thisOption shall become immediately vested and fully exercisable with respect toall Shares; provided, however, that the provisions of this Subsection 3(e) shallnot apply unless the Optionee has been employed by the Company for a periodequal to or exceeding one calendar year. No acceleration of vesting shall occurunder this Subsection 3(e) in the event a surviving corporation or itsparent assumes this Option or in the event the surviving corporation or itsparent substitutes an option agreement with substantially the same terms asprovided in this Agreement. Nothing in this Subsection 3(e) shall limitthe Committee’s authority to cancel this Option in accordance with Section 9of the Plan.

## (f)            Subjectto Lock Up. Optionee understands that the Company at a future date may filea registration or offering statement (the “Registration Statement”) with theSecurities and Exchange Commission to facilitate an underwritten publicoffering of its securities. The Optionee agrees, for the benefit of theCompany, that should such an underwritten public offering be made and shouldthe managing underwriter of such offering require, the undersigned will not,without the prior written consent of the Company and such underwriter, duringthe Lock Up Period as defined herein: sell, transfer or otherwise dispose of,or agree to sell, transfer or otherwise dispose of this Option or any of theShares acquired upon exercise of this Option during the Lock Up Period; or sellor grant, or agree to sell or grant, options, rights or warrants with respectto any of the Shares acquired upon exercise of this Option. The foregoing doesnot prohibit gifts to donees or transfers by will or the laws of descent toheirs or beneficiaries provided that such donees, heirs and beneficiaries shallbe bound by the restrictions set forth herein. The term “Lock Up Period” shallmean the lesser of (x) 180 days or (y) the period during whichCompany officers and directors are restricted by the managing underwriter fromeffecting any sales or transfers of the Shares. The Lock Up Period shallcommence on the effective date of the Registration Statement.

## (g)           NotAn Employment Contract. The Option will not confer on the Optionee anyright with respect to continuance of employment or other service with theCompany or any Subsidiary, nor will it interfere in any way with any right theCompany or any Subsidiary would otherwise have to terminate or modify the termsof such Optionee’s employment or other service at any time.

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## (h)           NoRights as Shareholder. The Optionee shall have no rights as a shareholderof the Company with respect to any Shares prior to the date of issuance to theOptionee of a certificate for such Shares.

## (i)            Compliancewith Law and Regulations. This Option and the obligation of the Company tosell and deliver Shares hereunder shall be subject to all applicable laws, rules andregulations (including, but not limited to, federal securities laws) and tosuch approvals by any government or regulatory agency as may be required. ThisOption shall not be exercisable, and the Company shall not be required to issueor deliver any certificates for Shares of Stock prior to the completion of anyregistration or qualification of such Shares under any federal or state law, orany rule or regulation of any government body which the Company shall, inits sole discretion, determine to be necessary or advisable. Moreover, thisOption may not be exercised if its exercise or the receipt of Shares of Stockpursuant thereto would be contrary to applicable law.

## (j)            Withholding.All deliveries and distributions under this Agreement are subject towithholding of all applicable taxes. At the election of the Optionee, andsubject to such rules and limitations as may be established by theCommittee from time to time, such withholding obligations may be satisfiedthrough the surrender of shares of Stock which the Optionee already owns, or towhich the Optionee is otherwise entitled under the Plan.

# 4.             Termination of Employment. Uponthe termination of the employment of Optionee prior to the expiration of theOption, the following provisions shall apply:

## (a)           Uponthe Involuntary Termination of Optionee’s employment or the voluntarytermination or resignation of Optionee’s employment, the Optionee may exercisethe Option to the extent the Optionee was vested in and entitled to exercisethe Option at the date of such employment termination for a period of three (3) monthsafter the date of such employment termination, or until the term of the Optionhas expired, whichever date is earlier. To the extent the Optionee was notentitled to exercise this Option at the date of such employment termination, orif Optionee does not exercise this Option within the time specified herein,this Option shall terminate.

## (b)           Ifthe employment of an Optionee is terminated by the Company for cause, then theBoard or the Committee shall have the right to cancel the Option.

# 5.             Death, Disability or Retirementof Optionee. Upon the death, Disability or Retirement, as defined herein,of Optionee prior to the expiration of the Option, the following provisionsshall apply:

## (a)           Ifthe Optionee is at the time of his Disability employed by the Company or aSubsidiary and has been in continuous employment (as determined by theCommittee in its sole discretion) since the Date of Grant of the Option, thenthe Option may be exercised by the Optionee for one (1) year following thedate of such Disability or until the expiration date of the Option, whicheverdate is earlier, but only to the extent the Optionee was vested in and entitledto exercise the Option at the time of his Disability. For purposes of this Section 5,the term “Disability” shall mean that the Optionee is unable, by reason of amedically determinable physical or mental impairment, to substantially performthe principal duties of employment with the Company, which condition, in theopinion of a physician selected by the Board, is expected to have a duration ofnot 

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## less than 120 days, unless the Optionee is employed by the Company, aParent, a Subsidiary or an Affiliate, pursuant to an employment agreement whichcontains a definition of “Disability,” in which case such definition shallcontrol. The Committee, in its sole discretion, shall determine whether anOptionee has a Disability and the date of such Disability.

## (b)           Ifthe Optionee is at the time of his death employed by the Company or aSubsidiary and has been in continuous employment (as determined by theCommittee in its sole discretion) since the Date of Grant of the Option, thenthe Option may be exercised by the Optionee’s estate or by a person who acquiredthe right to exercise the Option by will or the laws of descent anddistribution, for one (1) year following the date of the Optionee’s deathor until the expiration date of the Option, whichever date is earlier, but onlyto the extent the Optionee was vested in and entitled to exercise the Option atthe time of death.

## (c)           Ifthe Optionee is at the time of his Retirement employed by the Company or aSubsidiary and has been in continuous employment (as determined by theCommittee in its sole discretion) since the Date of Grant of the Option, thenthe Option may be exercised by the Optionee for one (1) year following thedate of the Optionee’s Retirement or until the expiration date of the Option,whichever date is earlier, but only to the extent the Optionee was vested inand entitled to exercise the Option at the time of Retirement. For purposes ofthis Section 5, Retirement of the Optionee shall mean, with the approvalof the Committee, the occurrence of the Optionee’s Date of Termination on orafter the date the Optionee attains age 55.

## (d)           Ifthe Optionee dies within three (3) months after Termination of Optionee’semployment with the Company or a Subsidiary the Option may be exercised fornine (9) months following the date of Optionee’s death or the expirationdate of the Option, whichever date is earlier, by the Optionee’s estate or by aperson who acquires the right to exercise the Option by will or the laws ofdescent or distribution, but only to the extent the Optionee was vested in andentitled to exercise the Option at the time of Termination.

# 6.             Termination of Relationship forMisconduct; Clawback. If the Board or the Committee reasonably believesthat the Optionee has committed an act of misconduct, it may suspend theOptionee’s right to exercise this option pending a determination by the Boardor the Committee. If the Board or the Committee determines that the Optioneehas committed an act of  misconduct orhas breached a duty to the Company, neither the Optionee nor the Optionee’sestate shall be entitled to exercise the Option. For purposes of this Section 6,an act of misconduct shall include embezzlement, fraud, dishonesty, nonpaymentof an obligation owed to the Company, breach of fiduciary duty or deliberatedisregard of the Company’s rules resulting in loss, damage or injury tothe Company, or if the Optionee makes an unauthorized disclosure of any Companytrade secret or confidential information, engages in any conduct constitutingunfair competition with respect to the Company, or induces any party to breacha contract with the Company. In making such determination, the Board or theCommittee shall act fairly and shall give the Optionee an opportunity to appearand present evidence on the Optionee’s behalf at a hearing before the Board orthe Committee. For purposes of this Section 6, an act of misconduct orbreach of fiduciary duty to the Company shall be an event giving the Companythe right to terminate Optionee’s employment pursuant to Section 1 ofOptionee’s Employment Agreement within the Company dated                     ,which Agreement is incorporated herein by reference. In addition, misconductshall include willful violations of federal or state securities laws. In makingsuch determination, the 

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# Board or the Committeeshall act fairly and shall give the Optionee an opportunity to appear andpresent evidence on the Optionee’s behalf at a hearing before the Board or theCommittee. In addition, if the Company, based upon an opinion of legal counselor a judicial determination, determines that Section 304 of theSarbanes-Oxley Act of 2002 is applicable to Optionee hereunder, to the extentthat the Company is required to prepare an accounting restatement due to thematerial noncompliance of the Company, as a result of misconduct, with anyfinancial reporting requirement under the securities laws, Optionee shallreimburse the Company for any compensation received by Optionee from theCompany during the 12-month period following the first public issuance orfiling with the Securities and Exchange Commission (whichever first occurs) ofthe financial document embodying such financial reporting requirement and anyprofits received from the sale of the Company’s common stock or common stockequivalents, acquired pursuant to this Agreement.

# 7.             Optionee Bound by Plan. TheOptionee hereby acknowledges receipt of a copy of the Plan and agrees to bebound by all the terms and provisions thereof. In the event of any question orinconsistency between this Agreement and the Plan, the terms and conditions ofthe Plan shall govern.

# 8.             Heirs and Successors. ThisAgreement shall be binding upon, and inure to the benefit of, the Company andits successors and assigns, and upon any person acquiring, whether by merger,consolidation, purchase of assets or otherwise, all or substantially all of theCompany’s assets and business. If any rights exercisable by the Optionee orbenefits deliverable to the Optionee under this Agreement have not beenexercised or delivered, respectively, at the time of the Optionee’s death, suchrights shall be exercisable by the Designated Beneficiary, and such benefitsshall be delivered to the Designated Beneficiary, in accordance with theprovisions of this agreement and the Plan. The “Designated Beneficiary” shallbe the beneficiary or beneficiaries designated by the Optionee in a writingfiled with the Committee in such form and at such time as the Committee shallrequire. If a deceased Optionee fails to designate a beneficiary, or if theDesignated Beneficiary does not survive the Optionee, any rights that wouldhave been exercisable by the Optionee and any benefits distributable to theOptionee shall be exercised by or distributed to the legal representative ofthe estate of the Optionee. If a deceased Optionee designates a beneficiary andthe Designated Beneficiary survives the Optionee but dies before the DesignatedBeneficiary’s exercise of all rights under this Agreement or before thecomplete distribution of benefits to the Designated Beneficiary under thisAgreement, then any rights that would have been exercisable by the DesignatedBeneficiary shall be exercised by the legal representative of the estate of theDesignated Beneficiary, and any benefits distributable to the DesignatedBeneficiary shall be distributed to the legal representative of the estate ofthe Designated Beneficiary.

# 9.             Plan Governs. Notwithstandinganything in this Agreement to the contrary, the terms of this Agreement shallbe subject to the terms of the Plan, a copy of which may be obtained by the Optioneefrom the office of the Secretary of the Company; and this Agreement is subjectto all interpretations, amendments, rules and regulations promulgated bythe Committee from time to time pursuant to the Plan.

# 10.           Notices. Any notice hereunderto the Company shall be addressed to it at its principal executive offices,located at 9725 South Robert Trail, Inver Grove Heights, Minnesota 55077,Attention: Chief Executive Officer; and any notice hereunder to the Optioneeshall be 

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# addressed to the Optioneeat the address last appearing in the employment records of the Company; subjectto the right of either party to designate at any time hereunder in writing someother address.

# 11.           Counterparts. This Agreementmay be executed in two counterparts each of which shall constitute one and thesame instrument.

# 12.           Governing Law. This Agreementshall be governed by and construed in accordance with the laws of the State ofMinnesota, except to the extent preempted by federal law, without regard to theprinciples of comity or the conflicts of law provisions of any otherjurisdiction.

IN WITNESSWHEREOF, MedicalCV, Inc. has caused this Agreement to be executed by itsChief Executive Officer and the Optionee has executed this Agreement, both asof the day and year first above written.
|        | **MEDICALCV, INC.**                  |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   | By Marc P. Flores                         |
|   | Its President and Chief Executive Officer |
|   |                                      |
|   | **OPTIONEE**                              |
|   |                                      |
|   |                                      |
|   | [NAME]                                    |
|   | [ADDRESS]                                 |

 

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**EXHIBIT A**

**OPTION AND VESTINGDATA**

Name of Optionee:

Total Number of Shares Subject to Option:

Date of Grant:

**OPTION VESTINGSCHEDULE**

| DATE                                                                                                                                                  | ** ** | ** ** | ** ** | **NO. OF SHARES  VESTED** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|---------------------------|
|                                                                                                                                                       |       |       |
| [This Stock Option vests to the extent of 25% on the  first anniversary of the date of grant, and vests to the extent of 6.25%  quarterly thereafter] |

 

The above vesting schedule assumes an ongoingrelationship with the Company. Your rights to exercise the unvested portion of youroption will cease upon termination of relationship with the Company, subject toChange in Control provisions set forth in Section 9 of the Plan. Referenceis made to the Plan and to relevant sections of the Agreement between you andthe Company for your rights to exercise the vested portion of your option inthe event of termination of your relationship with the Company during lifetimeor upon death. The above vesting schedule is in all respects subject to theterms of those documents.
| **OPTIONEE** | ** ** | **MEDICALCV, INC.**                  |
|--------------|------------|-------------------------------------------|
|         |       |                                      |
|         |       |                                      |
|         |       | By Marc P. Flores                         |
|         |       | Its President and Chief Executive Officer |

 

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SCHEDULE I - NOTATIONS AS TO PARTIAL EXERCISE
| Date of  Exercise | ** ** | ** ** | ** ** | **Number of  Purchased  Shares** | ** ** | **Balance of  Shares on  Option** | ** ** | **Authorized  Signature** | ** ** | **Notation  Date** |
|-------------------|------------|------------|------------|----------------------------------|------------|-----------------------------------|------------|---------------------------|------------|--------------------|
|                   |       |       |       |                             |       |                              |       |                      |
|              |       |       |       |                             |       |                              |       |                      |
|                   |       |       |       |                             |       |                              |       |                      |
|              |       |       |       |                             |       |                              |       |                      |
|                   |       |       |       |                             |       |                              |       |                      |
|              |       |       |       |                             |       |                              |       |                      |

 

 

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