Exhibit
10.18


 


MEDICALCV,
INC.


1997
STOCK OPTION PLAN


(As
Approved by Shareholders December 13, 1997)


 


NON-QUALIFIED
STOCK OPTION AGREEMENT


 


	
  Option No: E-024

  	
   

  	
  Date of Grant:
  November 18, 2004

  



 


THIS
AGREEMENT, entered into as of November 18, 2004 (the “Grant
Date”), is by and between John H.
Jungbauer, (the “Optionee”) and MedicalCV, Inc. (the “Company”).


 


WHEREAS, the
Company has established and maintains the MedicalCV, Inc. 1997 Stock Option
Plan (the “Plan”), which is incorporated into and forms a part of this
Agreement.


 


WHEREAS, the
Company has determined that the Optionee is an Eligible Individual and wishes
to grant the Optionee n Award pursuant to the terms of the Plan.


 


NOW,
THEREFORE, IT IS AGREED, by and between the Company and the
Optionee, as follows:


 


1.             Award of Stock Option.  The Company hereby grants to the Optionee a
non-qualified stock option (the “Option”) to purchase 81,416 (eighty-one
thouand, four hundred sixteen) shares of Common Stock of the Company (the “Covered
Shares”) at an exercise price of $2.00 per share (the “Exercise Price”).


 


2.             Non-Qualified Option.  The Option granted hereunder is a
Non-Qualified Option.  It is not intended
to be an “incentive stock option” as that term is described in Section 422(b)
of the Internal Revenue Code.


 


3.             Vesting.  The
Option shall vest 25 percent on the first four anniversaries and be fully
exercisable in accordance with the terms of this Agreement and the Plan through
the Expiration Date.


 


4.             Expiration. 
Subject to earlier termination as hereinafter provided, and the
provisions of Section 11 of the Plan, this option shall expire on November 18,
2014.


 


5.             Termination. 
This Option shall terminate:


 


(a)                                  upon
termination of Optionee’s relationship for cause, as determined by the Board of
directors of the Company;


 


(b)                                 three
(3) months following the termination of Optionee’s relationship with the
Company; provided, however, that if Optionee shall die within three (3) months
after such termination, this Option may be exercised by the person who is legally


 


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entitled to exercise this
Option for a period of nine (9) months following the earlier of the date of
death or the expiration date of the Option;


 


(c)                                  the
earlier of the one (1) year following the date of Optionee’s death or the
expiration date of this Option in accordance with the terms of Section 11.2.2
of the Plan; or


 


(d)                                 the
earlier of one (1) year following Optionee’s disability or the expiration date
of the Option, in accordance with the terms of Section 11.2.1 of the Plan.


 


For all events, Optionee
may only exercise this Option to the extent it was exercisable on the date of
termination, disability or death.


 


6.             Exercising the Option.


 


(a)                                  Notice.   Subject to the terms of this Agreement and the
Plan, the Option may be exercised in while or in part by filing written notice
with the Secretary of the Company at its corporate headquarters prior to the
Expiration Date.  Such notice shall
specify the number of Covered Shares which the Optionee elects to purchase, and
shall be accompanied by payment in full of the Exercise Price for such Covered
Shares, together with payment of or provision for any withholding requirements
as specified in Section 7.


 


(b)                                 Payment
of Exercise Price.  Payment of the
Exercise Price shall be by cash or by cashier’s check payable to the
Company.  Except as otherwise provided by
the Committee before the Option is exercised: (i) all or a portion of the
Exercise Price may be paid by the Optionee by delivery of shares or by attestation
of Stock owned buy the Optionee and acceptable to the Committee having an
aggregated Fair Market Value (valued as of the date of exercise) that is equal
to the amount if cash that would otherwise be required, and (ii) the Optionee
may pay the Exercise Price by irrevocably authorizing a third party to sell
shares of Stock (or a sufficient portion of the shares) acquired upon exercise
of the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire Exercise Price and any tax withholding resulting
from such exercise.


 


(c)                                  Notation
on Schedule I.  Notation of any
partial exercise shall be made by the Company on Schedule I attached hereto.


 


(d)                                 Compliance
with Securities Laws.  The Option
shall not be exercisable if and to the extent the Company determines that such
exercise would violate applicable state or Federal securities laws or the rules
and regulations of any securities exchange on which the Stock is traded.  If the Company makes such a determination, it
shall use all reasonable efforts to Obtain compliance with such laws, rules or
regulations.  In making any determination
hereunder, the Company may rely on the opinion of counsel for the Company.


 


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7.             Withholding. 
All deliveries and distributions under this Agreement are subject to
withholding of all applicable taxes.  At
the election of the Optionee, and subject to such rules and limitations as may
be established by the Committee from time to time, such withholding obligations
may be satisfied through cash payment by the Optionee, through the surrender of
shares of Stock which the Optionee already owns, or through the surrender of
shares of Stock to which the Optionee is otherwise entitled pursuant to the
exercise of the Option.


 


8.             Transferability. 
Except as otherwise provided in this Section 8, the Option is not
transferable other than as designated by the Optionee by will or by the laws of
descent and distribution, and during the Optionee’s life, may be exercised only
by the Optionee.


 


9.             Heirs and Successors.  This Agreement shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all the Company’s assets and business.  If any rights exercisable by the Optionee or
benefits deliverable to the Optionee under this Agreement have not been
exercised or delivered, respectively, at the time of the Optionee’s death, such
rights shall be exercisable by the Designated Beneficiary, and such benefits
shall be delivered to the Designated Beneficiary, in accordance with the
provisions of this Agreement and the Plan. 
The “Designated Beneficiary” shall be the beneficiary or beneficiaries
designated by the Optionee in a writing filed with the Committee in such form
and at such time as the Committee shall require.  If a deceased Optionee fails to designate a
beneficiary, or if the designated Beneficiary does not survive the Optionee,
any rights that would have been exercisable by the Optionee and any benefits
distributable to the Optionee shall be exercised by or distributed to the legal
representative of the estate of the Optionee. 
If a deceased Optionee designates a beneficiary but the Designated
Beneficiary dies before the Designated Beneficiary’s exercise of all rights
under this Agreement or before the complete distribution of benefits to the
Designated Beneficiary under this Agreement, then any rights that would have
been exercisable by the Designated Beneficiary shall be exercised by the legal
representative of the estate of the Designated Beneficiary, and any benefits
distributable to the Designated Beneficiary shall be distributed to the legal
representative of the estate of the Designated Beneficiary.


 


10.           Administration.  The authority to manage and control the
operation and administration of the Agreement shall be vested in the Committee,
and the Committee shall have all powers with respect to this Agreement as it
has with respect to the Plan.  Any
interpretation of the Agreement by the Committee and any decision made by it
with respect to the Agreement is final and binding on all persons.


 


11.           Plan Governs.  Notwithstanding anything in this Agreement to
the contrary, the terms of this Agreement and the Option shall be subject to
the terms of the Plan, a copy of which may be obtained by the Optionee from the
office of the Secretary of the Company. 
This Agreement is subject to all interpretations, amendments, rules and
regulations promulgated by the Committee from time to time pursuant to the
Plan.


 


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12.           No Right to Continued Employment.
 The Option will not confer on the
Optionee any right with respect to continuance of employment or other service
with the Company or any Subsidiary, nor will it interfere in any way with any
right the Company or any Subsidiary would otherwise have to terminate or modify
the terms of such Optionee’s employment or other service at any time.


 


13.           Notices.  Any written notices provided for in this
Agreement or the Plan shall be in writing and shall be deemed sufficient if
delivered by hand, or sent by fax, overnight courier, or by postage paid first
class mail.  Notices sent by mail shall
be deemed received three business days after mailed but in no event later than
the date of actual receipt.  Notices
shall be directed, if to the Optionee, at the Optionee’s address indicated by
the Company’s records, or if to the Company, at the Company’s principal
executive office.


 


14.           Fractional Shares.  In lieu of issuing a fraction of a share upon
any exercise of the Option, resulting from an adjustment of the Option pursuant
to Section 12.3 of the Plan or otherwise, the Company will be entitled to pay
to the Optionee an amount equal to the Fair Market Value of such fractional
share.


 


15.           No Rights As Shareholder.  The Optionee shall not have any rights of a
shareholder with respect to the shares subject to the Option, until a stock
certificate has been duly issued following exercise of the Option as provided
herein.  The Optionee shall have no
voting rights and shall not receive any dividends paid or any dividend
equivalent payments before the stock certificate is issued.


 


16.           Amendment.  This Agreement may be amended by written
agreement of the Optionee and the Company, without the consent of any other
person.


 


17.           Definitions  Defined terms not otherwise set forth and
defined herein shall have the meaning ascribed them in the Plan.


 


IN
WITNESS WHEREOF, the Optionee has executed this Agreement,
and the Company has caused these presents to be executed in its name and on its
behalf, all as of the Grant Date.


 


	
  OPTIONEE

  	
  MedicalCV, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ John H. Jungbauer

  	
   

  	
  By:

  	
  /s/ Marc P. Flores

  
	
  John
  H. Jungbauer

  	
  Marc
  P. Flores

  
	
  12122 Everton Avenue
  North

  	
  President
  and CEO

  
	
  White Bear Lake, MN
  55110

  	
   

  
				



 


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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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