EXHIBIT 10.28


MEDICALCV, INC.


NON-QUALIFIED
STOCK OPTION AGREEMENT

PURSUANT TO 2001 EQUITY INCENTIVE PLAN


	
  No. of shares subject to option:               

  	
  Option No.:              

  
	
  Date of grant:
                      

  	
   

  



 


THIS OPTION
AGREEMENT is entered into by and between MedicalCV, Inc., a Minnesota
corporation (the “Company”), and                           
(the “Optionee”) pursuant to the Company’s 2001 Equity Incentive Plan, as
amended to date (the “Plan”). Unless otherwise defined herein, certain
capitalized terms shall have the meaning set forth in the Plan.


W I T N E S S E T
H:


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


2.             Grant of Option. Pursuant to
the provisions of the Plan, the Company grants to the Optionee, subject to the
terms and conditions of the Plan and to the terms and conditions herein set
forth, the right and option to purchase from the Company all or a part of an
aggregate 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 is
understood and agreed that the Option evidenced hereby is subject to the
following terms and conditions:


(a)           Expiration
Date. This Option shall expire ten years after the date of grant specified
above. Notwithstanding the foregoing, if the Optionee’s employment or
relationship with the Company or Related Company is terminated by reason of
death, Disability or Retirement, this Option shall expire on the one-year
anniversary of the termination date. If the Optionee’s employment or
relationship with the Company or Related Company is terminated by reasons for
other than death, Disability or Retirement, this Option shall, subject to Section 4
of the Plan, expire on the three-month anniversary of the termination date. Except
as 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 or
mental impairment, to substantially perform the principal duties of employment
with the Company, which condition, in the opinion of a physician selected by
the Board, is expected to have a duration of not less than 120 days.


(b)           Exercise
of Option. Subject to the Plan and the other terms of this Agreement
regarding the exercisability of this Option, this Option shall be exercisable
cumulatively, to the extent it is vested, as set forth in Exhibit A. Any
exercise shall be accompanied by a written notice to the Company specifying the
number of shares of Stock as to which the Option is being exercised. Notation
of any partial exercise shall be made by the Company on Schedule I hereto. This
Option 









 



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


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


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


(e)           Acceleration
of Option Upon Change in Control. In the event of a Change in Control, as
defined in Section 1.3 of the Plan, the provisions of Section 3(b) and
Exhibit A hereof pertaining to vesting shall cease to apply and this
Option shall become immediately vested and fully exercisable with respect to
all Shares; provided, however, that the provisions of this Subsection 3(e) shall
not apply unless the Optionee has been employed by the Company for a period
equal to or exceeding one calendar year. No acceleration of vesting shall occur
under this Subsection 3(e) in the event a surviving corporation or its
parent assumes this Option or in the event the surviving corporation or its
parent substitutes an option agreement with substantially the same terms as
provided in this Agreement. Nothing in this Subsection 3(e) shall limit
the Committee’s authority to cancel this Option in accordance with Section 9
of the Plan.


(f)            Subject
to Lock Up. Optionee understands that the Company at a future date may file
a registration or offering statement (the “Registration Statement”) with the
Securities and Exchange Commission to facilitate an underwritten public
offering of its securities. The Optionee agrees, for the benefit of the
Company, that should such an underwritten public offering be made and should
the managing underwriter of such offering require, the undersigned will not,
without the prior written consent of the Company and such underwriter, during
the 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 the
Shares acquired upon exercise of this Option during the Lock Up Period; or sell
or grant, or agree to sell or grant, options, rights or warrants with respect
to any of the Shares acquired upon exercise of this Option. The foregoing does
not prohibit gifts to donees or transfers by will or the laws of descent to
heirs or beneficiaries provided that such donees, heirs and beneficiaries shall
be bound by the restrictions set forth herein. The term “Lock Up Period” shall
mean the lesser of (x) 180 days or (y) the period during which
Company officers and directors are restricted by the managing underwriter from
effecting any sales or transfers of the Shares. The Lock Up Period shall
commence on the effective date of the Registration Statement.


(g)           Not
An Employment Contract. 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.



 2
 






 



(h)           No
Rights as Shareholder. The Optionee shall have no rights as a shareholder
of the Company with respect to any Shares prior to the date of issuance to the
Optionee of a certificate for such Shares.


(i)            Compliance
with Law and Regulations. This Option and the obligation of the Company to
sell and deliver Shares hereunder shall be subject to all applicable laws, rules and
regulations (including, but not limited to, federal securities laws) and to
such approvals by any government or regulatory agency as may be required. This
Option shall not be exercisable, and the Company shall not be required to issue
or deliver any certificates for Shares of Stock prior to the completion of any
registration or qualification of such Shares under any federal or state law, or
any rule or regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable. Moreover, this
Option may not be exercised if its exercise or the receipt of Shares of Stock
pursuant thereto would be contrary to applicable law.


(j)            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 the surrender of shares of Stock which the Optionee already owns, or to
which the Optionee is otherwise entitled under the Plan.


4.             Termination of Employment. Upon
the termination of the employment of Optionee prior to the expiration of the
Option, the following provisions shall apply:


(a)           Upon
the Involuntary Termination of Optionee’s employment or the voluntary
termination or resignation of Optionee’s employment, the Optionee may exercise
the Option to the extent the Optionee was vested in and entitled to exercise
the Option at the date of such employment termination for a period of three (3) months
after the date of such employment termination, or until the term of the Option
has expired, whichever date is earlier. To the extent the Optionee was not
entitled to exercise this Option at the date of such employment termination, or
if Optionee does not exercise this Option within the time specified herein,
this Option shall terminate.


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


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


(a)           If
the Optionee is at the time of his Disability employed by the Company or a
Subsidiary and has been in continuous employment (as determined by the
Committee in its sole discretion) since the Date of Grant of the Option, then
the Option may be exercised by the Optionee for one (1) year following the
date of such Disability or until the expiration date of the Option, whichever
date is earlier, but only to the extent the Optionee was vested in and entitled
to 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 a
medically determinable physical or mental impairment, to substantially perform
the principal duties of employment with the Company, which condition, in the
opinion of a physician selected by the Board, is expected to have a duration of
not 



 3
 






 



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


(b)           If
the Optionee is at the time of his death employed by the Company or a
Subsidiary and has been in continuous employment (as determined by the
Committee in its sole discretion) since the Date of Grant of the Option, then
the Option may be exercised by the Optionee’s estate or by a person who acquired
the right to exercise the Option by will or the laws of descent and
distribution, for one (1) year following the date of the Optionee’s death
or until the expiration date of the Option, whichever date is earlier, but only
to the extent the Optionee was vested in and entitled to exercise the Option at
the time of death.


(c)           If
the Optionee is at the time of his Retirement employed by the Company or a
Subsidiary and has been in continuous employment (as determined by the
Committee in its sole discretion) since the Date of Grant of the Option, then
the Option may be exercised by the Optionee for one (1) year following the
date 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 in
and entitled to exercise the Option at the time of Retirement. For purposes of
this Section 5, Retirement of the Optionee shall mean, with the approval
of the Committee, the occurrence of the Optionee’s Date of Termination on or
after the date the Optionee attains age 55.


(d)           If
the Optionee dies within three (3) months after Termination of Optionee’s
employment with the Company or a Subsidiary the Option may be exercised for
nine (9) months following the date of Optionee’s death or the expiration
date of the Option, whichever date is earlier, by the Optionee’s estate or by a
person who acquires the right to exercise the Option by will or the laws of
descent or distribution, but only to the extent the Optionee was vested in and
entitled to exercise the Option at the time of Termination.


6.             Termination of Relationship for
Misconduct; Clawback. If the Board or the Committee reasonably believes
that the Optionee has committed an act of misconduct, it may suspend the
Optionee’s right to exercise this option pending a determination by the Board
or the Committee. If the Board or the Committee determines that the Optionee
has committed an act of  misconduct or
has breached a duty to the Company, neither the Optionee nor the Optionee’s
estate shall be entitled to exercise the Option. For purposes of this Section 6,
an act of misconduct shall include embezzlement, fraud, dishonesty, nonpayment
of an obligation owed to the Company, breach of fiduciary duty or deliberate
disregard of the Company’s rules resulting in loss, damage or injury to
the Company, or if the Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition with respect to the Company, or induces any party to breach
a contract with the Company. In making such determination, the Board or the
Committee shall act fairly and shall give the Optionee an opportunity to appear
and present evidence on the Optionee’s behalf at a hearing before the Board or
the Committee. For purposes of this Section 6, an act of misconduct or
breach of fiduciary duty to the Company shall be an event giving the Company
the right to terminate Optionee’s employment pursuant to Section 1 of
Optionee’s Employment Agreement within the Company dated                     ,
which Agreement is incorporated herein by reference. In addition, misconduct
shall include willful violations of federal or state securities laws. In making
such determination, the 



 4
 






 



Board or the Committee
shall act fairly and shall give the Optionee an opportunity to appear and
present evidence on the Optionee’s behalf at a hearing before the Board or the
Committee. In addition, if the Company, based upon an opinion of legal counsel
or a judicial determination, determines that Section 304 of the
Sarbanes-Oxley Act of 2002 is applicable to Optionee hereunder, to the extent
that the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, Optionee shall
reimburse the Company for any compensation received by Optionee from the
Company during the 12-month period following the first public issuance or
filing with the Securities and Exchange Commission (whichever first occurs) of
the financial document embodying such financial reporting requirement and any
profits received from the sale of the Company’s common stock or common stock
equivalents, acquired pursuant to this Agreement.


7.             Optionee Bound by Plan. The
Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof. In the event of any question or
inconsistency between this Agreement and the Plan, the terms and conditions of
the Plan shall govern.


8.             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 of 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 and
the Designated Beneficiary survives the Optionee but 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.


9.             Plan Governs. Notwithstanding
anything in this Agreement to the contrary, the terms of this Agreement 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; and this Agreement is subject
to all interpretations, amendments, rules and regulations promulgated by
the Committee from time to time pursuant to the Plan.


10.           Notices. Any notice hereunder
to 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 Optionee
shall be 



 5
 






 



addressed to the Optionee
at the address last appearing in the employment records of the Company; subject
to the right of either party to designate at any time hereunder in writing some
other address.


11.           Counterparts. This Agreement
may be executed in two counterparts each of which shall constitute one and the
same instrument.


12.           Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Minnesota, except to the extent preempted by federal law, without regard to the
principles of comity or the conflicts of law provisions of any other
jurisdiction.


IN WITNESS
WHEREOF, MedicalCV, Inc. has caused this Agreement to be executed by its
Chief Executive Officer and the Optionee has executed this Agreement, both as
of the day and year first above written.


	
  

  	
  MEDICALCV, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By Marc P. Flores

  
	
   

  	
  Its President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME]

  
	
   

  	
  [ADDRESS]

  



 



 6














 


EXHIBIT A


OPTION AND VESTING
DATA


Name of Optionee:


Total Number of Shares Subject to Option:


Date of Grant:


OPTION VESTING
SCHEDULE




	
  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 ongoing
relationship with the Company. Your rights to exercise the unvested portion of your
option will cease upon termination of relationship with the Company, subject to
Change in Control provisions set forth in Section 9 of the Plan. Reference
is made to the Plan and to relevant sections of the Agreement between you and
the Company for your rights to exercise the vested portion of your option in
the event of termination of your relationship with the Company during lifetime
or upon death. The above vesting schedule is in all respects subject to the
terms of those documents.


	
  OPTIONEE

  	
   

  	
  MEDICALCV, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By Marc P. Flores

  
	
   

  	
   

  	
  Its President and Chief Executive Officer

  



 










 



SCHEDULE I - NOTATIONS AS TO PARTIAL EXERCISE


	
  Date of

  Exercise

  	
   

  	
   

  	
   

  	
  Number of

  Purchased

  Shares

  	
   

  	
  Balance of

  Shares on

  Option

  	
   

  	
  Authorized

  Signature

  	
   

  	
  Notation

  Date