CryoLife, Inc. Kennesaw, Georgia 30144
Exhibit
10.1
CryoLife,
Inc.
0000
Xxxxxxx Xxxxxxxxx X.X.
Kennesaw,
Georgia 30144
[Date]
Name
Address
Address
Re: Grant of Incentive 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 set forth below, the Company
hereby grants to Employee the right, privilege, and option to purchase up to
________ shares (of Common Stock the "Option Shares") at the purchase price of
$________ per share. The date of grant ("Grant Date") of the option
is _________________. This option is intended to be and shall be
treated as an “Incentive Stock Option", as that term is defined in Section 422
of the Internal Revenue Code of 1986, as amended (“Section
422”). Provided, however, that to the extent that the option fails
for any reason to comply with the provisions of Section 422, it shall be treated
as a “Non-Qualified Stock Option” (as defined in the Plan). The
Company shall have no liability whatsoever to Employee in the event the option
fails for any reason to satisfy the requirements for Incentive Stock Options set
forth in Section 422. This option is granted pursuant to the
CryoLife, Inc. 2004 Employee Stock Incentive Plan (the “Plan”).
2. Time of Exercise of
Option. Prior to its termination as set forth in Section 5
below, this option shall vest, and the Employee may exercise the option granted
herein on the following dates, or thereafter provided the option is exercised
prior to its termination:
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Number of
Option
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Cumulative Percentage
of
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Exercise
Date
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Shares
Exercisable
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Option
Shares Exercisable
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3. Method of
Exercise. The option shall be exercised by written notice
directed to the Compensation Committee (the "Committee"), at the Company's
principal executive office, and except as set forth below, must be accompanied
by payment of the option price for the number of Option Shares purchased in
accordance with the Plan's requirements. The payment for the number
of Option Shares purchased may be payable in cash or by tendering (by actual
delivery of shares) shares of the Company’s common stock in accordance with the
Plan. To the extent permitted by applicable law, you may elect to pay
for the number of Option Shares purchased by irrevocably authorizing a third
party to sell shares of the Company’s common stock acquired upon exercise of the
Option Shares and remitting to the Company a sufficient portion of the sale
proceeds as payment of the entire option price for the number of Option Shares
purchased, including any tax withholding resulting from such exercise. The
Company shall make delivery of such shares in accordance with the Plan provided
that if any law or regulation requires the Company to take any action with
respect to the shares specified in such notice before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to take such action.
4. The
Plan. The Company’s 2004 Employee Stock Incentive 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. Employee acknowledges that the Company has provided a copy
of the Plan to Employee.
5. Termination of
Option. Except as herein otherwise stated, the option, to the
extent not previously exercised, shall terminate in accordance with the Plan and
upon the first to occur of the following events:
(a) Disability. The
expiration of 36 months after the date on which Employee's employment by the
Company is terminated, if such termination be by reason of Employee's permanent
and total disability, provided, however, that (i) the option shall be
exercisable only to the extent that Employee had the right to exercise the
option at the time of termination and (ii) if the Employee dies within such 36
month period, any unexercised option held by such Employee shall thereafter be
exercisable in accordance with the provisions of and shall terminate upon the
first to occur of the events described in Sections 5(b) and (d);
(b) Death. In
the event of Employee's death while in the employ of the Company, the expiration
of 12 months following the date of his or her death, provided that the option
shall be exercisable following the Employee's death only to the extent that
Employee had the right to exercise the option at the time of his or her
death.
(c) Retirement. In
the event Employee's employment with the Company terminates by reason of normal
or early retirement, any option held by such Employee may be exercised by the
Employee for a period of 36 months from the date of such termination; provided,
however, that if the Employee dies within such 36 month period any unexercised
option held by Employee shall thereafter be exercisable in accordance with the
provisions of and shall terminate upon the first to occur of the events
described in Section 5(b) and (d); or
(d) Other. Upon
the earlier to occur of (i) 84 months following the Grant Date, or (ii) upon
termination of Employee's employment by the Company (except if such termination
be by reason of death, disability, or normal or early retirement). It
is in Compensation Committee’s sole discretion to determine whether the
Employee’s employment with the Company terminates by reason of disability,
normal or early retirement.
Except as set forth above, the option
may not be exercised unless Employee, at the time he or she exercises the
option, is, and has been at all times since the date of grant of the option, an
employee of the Company. Employee shall be deemed to be employed by
the Company if he or she is employed by the Company or any of its
subsidiaries. Notwithstanding the above, in no event may the option
be exercised after 84 months following the Grant Date.
6. Reclassification,
Consolidation, or Merger. The number of Option Shares may be
adjusted in accordance with the Plan 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.
7. Rights Prior to exercise of
Option. This Option is not transferrable by Employee, except
by will or by the laws of descent and distribution or as otherwise set forth in
the Plan, and during Employee’s lifetime shall be exercisable only by
Employee. This option shall confer no rights to the holder hereof to
act as stockholder with respect to any of the Option Shares until payment of the
option price and delivery of a share certificate has been made.
8. Employee's Representations
and Warranties. By execution of this Agreement, Employee
represents and warrants to the Company as follows:
(a) The
entire legal and beneficial interest of the option and the Option Shares are for
and will be held for the account of the Employee only and neither in whole nor
in part for any other person.
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(b) Employee
resides at the following address:
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_____________________________
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_____________________________
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(c) Employee
is familiar with the Company and its plans, operations, and financial
condition. Prior to the acceptance of this option, Employee has
received all information as he or she deems necessary and appropriate to enable
an evaluation of the financial risk inherent in accepting the option and has
received satisfactory and complete information concerning the business and
financial condition of the Company in response to all inquiries in respect
thereof.
9. Restricted
Securities. Employee recognizes and understands that this
option and the Option Shares are currently registered under the Securities Act
of 1933, as amended (the “Act”), but may not remain so registered, and are not
registered under any state securities law. Any transfer of the option
(if otherwise permitted hereunder, and once exercised, the Option Shares) will
not be recognized by the Company unless such transfer is registered under the
Act, the Georgia Securities Act of 1973, as amended, (the “Georgia Act”) and any
other applicable state securities laws or effected pursuant to an exemption from
such registration which may then be available. If the Option Shares
are not registered, any share certificates representing the Option 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
to employees as a result of exercise of options granted under the
Plan. The Company may make a notation in its stock transfer records
of the aforementioned restrictions on transfers and legends. Employee
recognizes and understands that the Option 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 Employee's opportunity to utilize such Rule 144 to sell
the Option 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 Option Shares pursuant to Rule 144 unless the terms
and conditions of Rule 144 are complied with by the Employee. By
acceptance hereof, Employee agrees that no permitted disposition of any Option
Shares shall be made unless and until (i) there is at the time of exercise of
the option in effect a registration statement under the Act, or (ii) Employee
shall have notified the Company of a proposed Option 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. Employee recognizes and
understands that if and for so long as Employee is a designated Section 16
officer of the Company, and for up to six months thereafter, any sales of Option
Shares will be subject to Section 16 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and the regulations promulgated
thereunder. Employee also recognizes and understands that any sale of
the Option Shares will also be subject to Rule 10b-5 promulgated under the
Exchange Act. Employee agrees that any disposition of the Option
Shares shall be made only in compliance with the Act, the Exchange Act, and the
rules and regulations promulgated thereunder.
10. Tax
Matters: The Employee hereby agrees to comply with any
applicable federal, state, and local income and employment tax requirements
which might arise with regard to a disposition of any Option Shares and to
inform the Company of any such disposition which occurs prior to the expiration
of (i) two years from the date of grant of the option, and (ii) one year from
the date of transfer to him of Option Shares. No later than the date
as of which an amount first becomes includable in the gross income of the
Employee for federal income tax purposes with respect to the exercise of any
option under the Plan, Employee shall pay to the Company, or make arrangements
satisfactory to the Committee 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 the Plan are conditional
on such payment or arrangements and the Company shall have the right to deduct
any such taxes from any payment of any kind otherwise due to
Employee.
11. Payment: Except
as set forth below, 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 held by the employee for at least six months and having an aggregate
value equal to the Option Exercise Price. 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 the fair market value as of the day the shares are
tendered, which is the closing sale price of the Stock on that day on the New
York Stock Exchange. The Option Exercise Price may be paid by a
combination of cash and Common Stock. Notwithstanding the foregoing,
to the extent permitted by applicable law, Employee may elect to pay the Option
Exercise Price by 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
Option Exercise Price and any tax withholding resulting from such
exercise.
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12. Binding
Effect. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors, and permissible assigns.
13. Miscellaneous. This
Agreement shall be governed by and construed under the laws of the State of
Georgia. If any term or provision hereof shall be held invalid or
unenforceable, the remaining terms and provisions hereof shall continue in full
force and effect. Any modification to this Agreement shall not be
effective unless the same shall be in writing and such writing shall be signed
by authorized representatives of both of the parties hereto. The
terms of paragraphs 8 and 9 hereof shall survive exercise of the option by
Employee and shall attach to the Option Shares. The option contained
in this letter shall not confer upon Employee any right to continued employment
with the Company, nor shall it interfere in any way with the right of the
Company to terminate the employment of Employee at any time. This
letter can be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute but one and the
same instrument.
Please signify your acceptance of the
option and your agreement to be bound by the terms hereof by promptly signing
one of the two original letters provided to you and returning the same to the
President of the Company.
Thank you for your good work and
service.
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Sincerely,
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(SEAL)
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THE
COMPANY:
CRYOLIFE,
INC.
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Attest:
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Xxxxxx
X. Xxxxxxxx, President and CEO
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Xxxxxxx
X. Xxxxxxx, Secretary for the Company
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EMPLOYEE:
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____________________
Social
Security #:_____________________________
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