EXHIBIT 10.1
CRYOLIFE, INC.
0000 XXXXXXX XXXXXXXXX X.X.
XXXXXXXX, XXXXXXX 00000
--------------------
(Date)
Re: GRANT OF DIRECTOR STOCK OPTION
Dear ________________________:
This letter sets forth the agreement (the "Agreement") between you and
CryoLife, Inc., a Florida corporation (the "Company"), regarding your option to
acquire shares of the Company's Common Stock.
1. Grant of Option: Subject to the terms and conditions set forth herein,
the Company hereby grants to you (the "Optionee") the option (the "Option") to
purchase, in the aggregate, up to ______ shares of the Common Stock (the
"Shares"). The Option shall be deemed granted by the Company to the Optionee as
of _____________ (the "Grant Date"). This Option is granted pursuant to the
CryoLife, Inc. 2004 Non-Employee Directors Stock Option Plan (the "Plan"). The
Option is not an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended ("Code").
2. Option Price: The Option exercise price is $_____ per share (the "Option
Exercise Price").
3. Option Period: This Option shall vest and become exercisable on the
Option's Grant Date. This Option may be exercised at any time after its Grant
Date, provided that at the time of exercise all of the conditions set forth in
the Plan have been met. Notwithstanding the foregoing, no Option may be
exercised later than five years after the Grant Date.
4. The Plan. The Company's 2004 Directors Stock Option Plan, as amended
from time to time by the Board of Directors of the Company, is hereby
incorporated in this Agreement and to the extent that anything in this Agreement
is inconsistent with the Plan, the terms of the Plan shall control. Optionee
acknowledges that the Company has provided a copy of the Plan to Optionee.
5. Termination of Option: Except as herein otherwise stated, the Option, to
the extent not previously exercised, shall terminate five (5) years following
the Grant Date.
6. Cessation of Service: If Optionee leaves the Board of Directors while in
good standing, for any reason, including without limitation resignation or
death, Optionee's Options shall remain in effect and exercisable, and shall
expire as if Optionee had remained a Non-Employee Director of the Company. Upon
the death of the Optionee, his or her Options shall be exercisable by his/her
legal representatives or heirs, but in no event may the Options be exercised
beyond the last date which they could have been exercised had the Optionee not
died.
7. Delivery of Notice: The Optionee may exercise the Option only by
delivering written notice to the Company of his or her intent to exercise the
Option (the "Notice'). The Notice shall be delivered to the Company at its
principal office at:
0000 Xxxxxxx Xxxx., X.X.
Xxxxxxxx, Xxxxxxx 00000
or to such other address as may be designated by the Company. The Notice shall
specify the number of Shares to be purchased in accordance with this Agreement
and shall include payment in full of the Option Price.
8. Payment: The Option Exercise Price shall be paid in cash in U.S. Dollars
at the time the Option is exercised or in shares of Common Stock of the Company
having an aggregate value equal to the Option Exercise Price or by a combination
of cash and Common Stock. If the Option Exercise Price is paid by transfer of
shares of Common Stock of the Company then the value of such shares will be
determined by the last closing price of the Company's Common Stock on the New
York Stock Exchange prior to the exercise of the options. In addition, to the
extent permitted by applicable law and regulations, Optionee may elect to pay
the exercise price upon the exercise of the Option by authorizing a third party
to sell shares of Common 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.
9. Delivery of Shares to Optionee: Upon the Optionee's proper exercise of
the Option, the Company shall deliver to the Optionee one or more certificates
evidencing the number of Shares purchased pursuant to the exercise of the Option
and such Shares shall be fully paid and nonassessable.
10. Transferability: Except as otherwise provided in this paragraph 10, the
Options granted under this Plan are not transferable other than as designated by
the Optionee by will or by the laws of the descent and distribution, and during
the Optionee's life, may be exercised only by the Optionee. However, the
Optionee may transfer the Option for no consideration to or for the benefit of
the Optionee's Immediate Family (including, without limitation, to a trust for
the benefit of the Optionee's Immediate Family or to a partnership or limited
liability company for one or more members of the Optionee's Immediate Family or
to an XXX for the benefit of one or more members of his or her Immediate
Family), subject to such limits as the Board may establish, and the transferee
shall remain subject to all the terms and conditions applicable to such Option
prior to such transfer. The foregoing right to transfer the Option shall apply
to the right to consent to amendments to the grant agreement and shall also
apply to the right to transfer ancillary rights associated with the Option. The
term "Immediate Family" shall mean the Optionee's spouse, parents, children,
stepchildren, adoptive relationships, sisters, brothers and grandchildren (and,
for this purpose, shall also include the Optionee).
11. Optionee Not a Shareholder: The Optionee shall not be deemed, by reason
of this option agreement, for any purposes to be a shareholder of the Company
with respect to any of the shares of the capital stock of the Company or with
respect to any of the Shares, except to the extent that the Option has been
exercised, in whole or in part, and a stock certificate representing Shares has
been issued to the Optionee. Notwithstanding this provision, it is understood
and agreed that the Company and the Optionee shall make any required disclosure
of the "beneficial ownership" of Shares which may be received upon a future
exercise of the Option.
12. No Restrictions on the Company: The grant of the Option shall not
affect in any way the right or power of the Company or its shareholders to make
or authorize any or all adjustments, recapitalizations, reorganizations, or any
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock, or the rights
thereof, or dissolution or liquidation of the Company, or any sale or transfer
of all or any part of the assets or business of the Company, or any other
corporate act or proceeding, whether of a similar character or otherwise.
13. Reclassification, Consolidation or Merger: The number of Option Shares
shall be adjusted if certain events such as merger, reorganization,
consolidation, recapitalization, stock dividends, stock splits, or other changes
in the Company's corporate structure affecting its Common Stock occur, but only
if such adjustments are made to options issued under any of the Company's plans
then in effect pursuant to which incentive stock options may be granted. No
adjustments or substitution provided for in this Subsection, however, shall
require the Company to sell a fractional share, and the total substitution or
adjustment herein is and shall be limited accordingly.
14. Optionee's Representations and Warranties: By execution of this
Agreement, Optionee represents and warrants to the Company as follows:
A. Investment Representations and Warranties: The Optionee warrants and
represents to the Company that he or she is acquiring the Option and, upon
exercise of the Option, in whole or in part, the Shares for his or her own
account for investment purposes and not with a view to distribution, as defined
in the Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations of the Securities and Exchange Commission promulgated
thereunder. The Optionee further agrees that he or she will not sell, assign,
transfer or pledge the Option or any of the Shares purchased by him or her
pursuant to the exercise of the Option, unless and until either (i) a
registration statement under the Securities Act covering the Shares becomes
2
effective or (ii) the Company has received an opinion of counsel in form and
substance satisfactory to the Company and its counsel that such sale, transfer,
assignment or pledge may be accomplished without registration under the
Securities Act.
B. Compliance with Withholding Rules: The Company shall have the right to adopt
and apply rules governing the exercise of the Option and the issuance of Shares
pursuant thereto which will ensure that the Company will be able to comply with
the applicable provisions of any federal, state or local laws relating to the
withholding of taxes.
C. No Tax Advice: The Optionee understands that neither the Company nor any of
its affiliates, has given any advice regarding the federal income tax
consequences of (i) the Agreement, or (ii) the grant of the Option, or (iii) the
acquisition of the Shares upon exercise of the Option. The Optionee acknowledges
that he or she has been encouraged to seek independent advice regarding the
grant and the exercise of the Option herein.
15. Legends: The Company shall have the discretion to require that the
certificates representing the Shares shall bear such legends as are necessary to
ensure the enforceability of the conditions and limitations set forth herein.
16. Binding Effect: This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors-in-interest. All
parties bound by this Agreement shall take any and all actions necessary or
appropriate to effectuate the purposes and provisions hereof.
17. Amendments and Waivers: Except as otherwise provided herein, no change
or modification of this Agreement shall be valid unless the same is in writing
and signed by all the parties hereto. No waiver of any provision of this
Agreement shall be valid unless in writing and signed by the person against whom
it is sought to be enforced. The failure of any party at any time to insist upon
strict performance of any condition, promise, agreement or understanding set
forth herein shall not be construed as a waiver or relinquishment of the right
to insist upon strict performance of the same condition, promise, agreement or
understanding at a future time.
18. Complete Agreement: This Agreement, together with the Plan, constitutes
and sets forth all of the final and complete promises, agreements, conditions,
understandings, warranties and representations among the parties hereto with
respect to the Option and the Shares, and there are no promises, agreements,
conditions, understandings, warranties or representations, oral or written,
express or implied, among them with respect to the matters set forth herein
other than as set forth herein or in the Plan as they may be amended from time
to time.
19. Captions and Pronouns: The captions contained in this Agreement are for
convenience of reference only and shall not in any way modify or limit the
meaning or interpretation of this Agreement. All terms and words used in this
Agreement, regardless of the number and gender in which they are used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the context or sense of this
Agreement or any section, paragraph or clause herein may require, as if such
words had been fully and properly written in the appropriate number and gender.
20. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
21. Counterparts: Any number of counterparts of this Agreement may be
signed and delivered, and each shall be considered an original and together they
shall constitute one agreement.
22. Severability: This Agreement shall not be severable in any way, but if
any provision should be held to be invalid, the invalidity shall not effect the
validity of the remainder of this Agreement.
23. Restricted Securities: Optionee recognizes and understands that this
Option and the Shares have not been and may not be in the future registered
under the Securities Act of 1933, as amended (the "Act"), the Georgia Securities
Act of 1973, as amended (the "Georgia Act"), or any other state securities law.
Any transfer of the Option (if otherwise permitted hereunder, and once
exercised, the Shares) will not be recognized by the Company unless such
transfer is registered under the Act, the Georgia Act, and any other applicable
state securities laws or effected pursuant to an exemption from such
3
registration which may then be available. Any share certificates representing
the Shares may be stamped with legends restricting transfer thereof in
accordance with the Company's policy with respect to unregistered shares of its
Common Stock issued as a result of exercise of options. The Company may make a
notation in its stock transfer records of the aforementioned restrictions on
transfers and legends. Optionee recognizes and understands that the Shares may
be restricted securities within the meaning of Rule 144 promulgated under the
Act; that the exemption from registration under Rule 144 may not be available
under certain circumstances and that Optionee's opportunity to utilize such Rule
144 to sell the Shares may be limited or denied. The Company shall be under no
obligation to maintain or promote a public trading market for the class of
shares for which the option is granted or to make provision for adequate
information concerning the Company to be available to the public as contemplated
under Rule 144. The Company will be under no obligation to recognize any
transfer or sale of any Shares unless the terms and conditions of Rule 144 are
complied with by the Optionee. By acceptance hereof, Optionee agrees that no
permitted disposition of this option or any Shares shall be made unless and
until (i) there is then in effect a registration statement under the Act, the
Georgia Act, and applicable state securities laws covering such proposed
disposition and such disposition is made in accordance with such registration
statement, or (ii) Optionee shall have notified the Company of a proposed
disposition and shall have furnished to the Company a detailed statement of the
circumstances surrounding such disposition, together with an opinion of counsel
acceptable in form and substance to the Company that such disposition will not
require registration of the shares so disposed under the Act, the Georgia Act,
and any applicable state securities laws. The Company shall be under no
obligation to permit such transfer or disposition on its stock transfer books
unless counsel for the Company shall concur as to such matters.
24. APPLICABLE TAXES: No later than the date as of which an amount first
becomes includable in the gross income of the Optionee for Federal income tax
purposes with respect to the exercise of the Option, the Optionee shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any Federal, state, or local taxes of any kind required by law to be
withheld with respect to such amount. The obligations of the Company under this
Agreement shall be conditional upon such payment or arrangements and the Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Optionee.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its duly authorized officers and the Optionee has executed this Agreement as
of the date and year first above written.
(SEAL) THE COMPANY:
CRYOLIFE, INC.
--------------------------------------
Attest:
---------------------------------------
Secretary for the Company
OPTIONEE:
--------------------------------------
--------------------------------------
(Print name of Optionee)
4
