Document:

Exhibit 10(b)

 

SECOND
AMENDMENT TO THE

PARTICIPATION AGREEMENT UNDER THE

HAGGAR CORP. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

This Second Amendment (“Second
Amendment”) to the Participation Agreement under the Supplemental Executive
Retirement Plan by and between Haggar Clothing Co., a Nevada corporation, and
Frank D. Bracken (the “Participant”) dated as of October 1, 1999 (the “Participation
Agreement”) is made and entered into by and between Haggar Clothing Co. and the
Participant effective as of January 1, 2005.  Any capitalized term used herein, and not
otherwise defined herein, shall have the meaning set forth in the Participation
Agreement or the Haggar Corp. Supplemental Executive Retirement Plan (the “Plan”).

 

RECITALS

 

A.                                   Haggar Clothing Co.
and the Participant previously entered into the Participation Agreement;

 

B.                                     Haggar Clothing
Co. and the Participant previously amended the Participation Agreement,
effective February 14, 2003 (the “First Amendment”);

 

C.                                     The portion of the
Participant’s benefit under the Plan vesting on and after January 1, 2005
(the “Unvested Benefit”) will be subject to section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), which section imposes
additional taxes on the Participant unless the Participation Agreement is
amended to comply with section 409A of the Code;

 

D.                                    The Participant’s
Unvested Benefit equals ten percent (10%) of the Participant’s benefit under
the Plan; and

 

E.                                      Haggar Clothing
Co. and the Participant desire to amend the terms of the Participation
Agreement to comply with section 409A of the Code with respect to the
Participant’s Unvested Benefit.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the premises and agreements herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Haggar Clothing Co. and the Participant hereby agree as follows:

 

1.                                       Addition of New Section 10.  A new Section 10 is hereby added,
effective January 1, 2005, to the Participation Agreement to read as follows:

 

10.                                 In
order to comply with the provisions of section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), this Section 10 will be
effective on and after January 1, 2005 with respect to the 10% of the
Participant’s benefit under the Plan that was not vested on January 1,
2005, notwithstanding anything to the contrary in the Plan or this
Agreement.  This Section 10 shall
have no effect on the 90% of the Participant’s benefit vested as of December 31,
2004

 

 

and the Plan
as in effect on December 31, 2004 shall continue to govern that portion of
the Participant’s benefit.  Moreover,
that vested portion of the Participant’s benefit shall not be considered in
calculating the Retirement Benefit or Pre-Retirement Death Benefit as such terms
are used below.

 

(a)                                  Change of Control.  Effective January 1, 2005, the
Participant (or the Participant’s surviving spouse) will no longer be entitled
to the lump sum benefit described in Section 4.1(d) of the Plan and
instead upon a Change of Control (as defined below) the Participant (or the
Participant’s surviving spouse) will receive, as soon as administratively
feasible following the Change of Control, a lump sum cash payment with an
actuarial present value of the remaining vested portion of the Retirement
Benefit or Pre-Retirement Death Benefit, as the case may be, reduced by
10%.  The Corporation’s actuaries shall
provide the calculation of such lump sum amount based on the Actuarial
Assumptions (as defined in the Plan).  On
and after January 1, 2005, the Participant (or the Participant’s surviving
spouse) will no longer be entitled to request the acceleration of the
Retirement Benefit or Pre-Retirement Death Benefit into a lump sum payment.

 

Change of Control, with respect to the Participant’s benefit that is
unvested as of January 1, 2005, shall mean (i) a merger or
consolidation of the Corporation or Haggar Clothing Co. with or into another
entity, or the exchange of securities (other than a merger or consolidation) by
the holders of the voting securities of the Corporation or Haggar Clothing Co.
and the holders of voting securities of any other entity, in which the
shareholders of the Corporation or Haggar Clothing Co. immediately before the
transaction do not own 50% or more of the combined voting power of the voting
securities of the surviving entity or its parent immediately after the
transaction; (ii) a dissolution of the Corporation or Haggar Clothing Co.;
(iii) a transfer of all or substantially all of the assets of the
Corporation, or Haggar Clothing Co., in one transaction or a series of
transactions occurring within a twelve month period to a “Person” or “Group”
(as defined below); (iv) a transaction or a series of transactions in
which a Person or Group becomes the beneficial owner, directly or indirectly,
of securities of the Corporation, or Haggar Clothing Co., representing more
than 50% of the combined voting power of the Corporation’s or Haggar Clothing
Co.’s then outstanding securities; or (v) a majority of the members of the
Corporation’s Board is replaced during any twelve month period by directors
whose appointment or election is not endorsed by a majority of the Corporation’s
Board prior to the date of the appointment or election; provided, however, that
a “Change of Control” shall not be deemed to have occurred if the ownership of
50% or more of the combined voting power of the surviving corporation, asset
transferee, Corporation or Haggar Clothing Co. (as the case may be), after
giving effect to the transaction or series of transactions, is directly or
indirectly held by (A) a trustee or other fiduciary under an employee
benefit plan

 

2

 

maintained by
the Corporation, Haggar Clothing Co., or any Subsidiary, (B) one or more
of the “executive officers” of the Corporation that held such positions prior
to the transaction or series of transactions, or any entity, Person or Group
under their control, (C) one or more of the children of J.M. Haggar, Sr.
or their lineal descendants, or any entity, Person or Group under their
control, or (D) one or more members of the “senior management” of the
Corporation or Haggar Clothing Co. as designated by the Chief Executive Officer
from time to time, that held such positions prior to the transaction or series
of transactions, or any entity, Person or Group under their control.  As used herein, “Person” and “Group” shall
have the meanings set forth in Sections 13(d)(3) and/or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (“1934 Act”), and “executive
officer” shall have the meaning set forth in Rule 3b-7 promulgated
under the 1934 Act.  “Group” shall
further be determined by the Plan Administrator to constitute “more than one
person acting as a group” for purposes of section 409A of the Code and the
guidance promulgated thereunder (the “Deferred Compensation Rules”).  The definition of Change of Control above
shall be controlling with respect to the portion of  the Participant’s benefit that is unvested as
of January 1, 2005 for all purposes under the Plan and the Trust under the
Haggar Corp. Supplemental Executive Retirement Plan (the “Trust”).

 

(b)                                 Retirement Benefit.  The Participant’s vested Retirement Benefit
that would otherwise be payable pursuant to Section 4.1(a) of the
Plan shall not commence until the lapse of six months from the Participant’s
termination of employment with Haggar Clothing Co. on which date the delayed
annuity payments will be paid in full and future annuity payments will be paid
in accordance with their schedule.  The
Participant will not be entitled to any additional compensation for the time
value of money with respect to this six month delay.

 

(c)                                  Trust Funding.  Notwithstanding any provision of the Trust to
the contrary (including Section 1(f) of the Trust) the Corporation
shall have no obligation to make any payments to the Trust with respect to
amounts payable pursuant to Section 10(a) above to the Participant
upon a Change of Control as defined above.

 

(d)                                 Section 409A of the Code.  This Section 10 is intended to bring
distributions made with respect to the Participant’s benefit under the Plan
that was not vested on January 1, 2005 into compliance with the Deferred
Compensation Rules and the definition of Change of Control above is
intended to constitute “a change in the ownership or effective control of the
corporation, or in the ownership of a substantial portion of the assets of the
corporation” as such terms are used in the Deferred Compensation Rules.  Accordingly, this Section 10 and the
definition of Change of Control herein shall be interpreted by the Plan
Administrator, in its sole discretion exercised in good faith, in such a manner
that

 

3

 

distributions made under the Plan will comply
with the requirements of the Deferred Compensation Rules.

 

2.                                       Effect. 
Except as provided by this Second Amendment and the First Amendment, all
of the provisions of the Participation Agreement are hereby affirmed, ratified
and declared to be in full force and effect.

 

3.                                       Counterparts.  This Second Amendment may be executed in
multiple counterparts, each of which shall be deemed an original and together
shall constitute one and the same Second Amendment.

 

4.                                       Governing Law.  This Second Amendment shall be governed by
and construed in accordance with the laws of the State of Texas without
application of the conflict of laws principles thereof, except to the extent
preempted by federal law, which shall govern to such extent.

 

[Signature Page Follows]

 

4

 

IN
WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of March 15, 2005.

 

	
   

  	
  HAGGAR CLOTHING CO.,
  a Nevada

  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W. Feray

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John W. Feray

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Accounting Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
  /s/ Frank D. Bracken

  	
   

  
	
   

  	
  Frank D. Bracken

  
						

 

5Exhibit 10.13

 

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 Participant 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

 

2

 

otherwise have to terminate or modify the terms of
such Participant’s employment or other service at any time.

 

(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 Participant, 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 Participant already owns, or to which the
Participant 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 any Options granted to
the Optionee under the Plan.

 

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 or her 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 or her Disability.  For purposes of this Section 5, the term
“Disability”

 

3

 

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 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 or her 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 or her 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 Participant shall mean, with the approval of the [Committee],
the occurrence of the Participant’s Date of Termination on or after the date
the Participant 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.  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, neither the Optionee nor the Optionee’s estate shall be
entitled to exercise any option whatsoever. 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.

 

4

 

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 Participant or benefits deliverable to the
Participant under this Agreement have not been exercised or delivered,
respectively, at the time of the Participant’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
Participant in a writing filed with the Committee in such form and at such time
as the Committee shall require.  If a
deceased Participant fails to designate a beneficiary, or if the Designated
Beneficiary does not survive the Participant, any rights that would have been
exercisable by the Participant and any benefits distributable to the
Participant shall be exercised by or distributed to the legal representative of
the estate of the Participant.  If a
deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant 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 Participant 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 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.

 

5

 

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

6

 

EXHIBIT
A

 

OPTION
AND VESTING DATA

 

	
  Name of
  Optionee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Shares
  Subject to Option:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  	
  , 2004

  
						

 

OPTION
VESTING SCHEDULE

 

	
  DATE

  	
   

  	
  NO. OF SHARES

  VESTED

  
	
   

  	
   

  	
   

  
	
   

  	
  , 2004

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  , 2005

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  , 2006

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  , 2007

  	
   

  	
   

  	
   

  	
   

  

 

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

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