EXHIBIT 99.3
CRYOLIFE, INC.
1655 ROBERTS BOULEVARD N.W.
KENNESAW, GEORGIA 30144
(770) 419-3355 - (800) 438-8285
(800) 533-6406 IN CANADA - FAX (770) 426-0031
____________________
Re: GRANT OF NON-QUALIFIED STOCK OPTION
Dear ___________________:
This letter sets forth 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 (the "Option Shares") which shall consist of treasury shares
of Common Stock at the purchase price of $29.25 per share, which price is equal
to the mean of the high and low price of the Company's Common Stock on the New
York Stock Exchange on the date of grant . The date of grant ("Grant Date") of
the option is ________________. This option is intended to be and shall be
treated as a "Non-Qualified Stock Option", as that term is defined in Section
422 of the Internal Revenue Code of 1986, as amended. This option is not granted
pursuant to the CryoLife, Inc. 1998 Long Term 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:
Cumulative Percentage of
Exercise Date Option Shares Exercisable
------------- -------------------------
First Anniversary of Grant Date 20%
Second Anniversary of Grant Date 40%
Third Anniversary of Grant Date 60%
Fourth Anniversary of Grant Date 80%
Fifth Anniversary of Grant Date 100%
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Grant of Non-Qualified Stock Option
"Grant Date" - ___________________
Page Two
3. Method of Exercise. The option shall be exercised by written notice
directed to the Compensation Advisory Committee (the "Committee"), at the
Company's principal executive office, accompanied by payment of the option price
for the number of Option Shares purchased in accordance with the Plan's
requirements. 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 1998 Long Term Incentive Plan, as amended from
time to time by the Board of Directors of the Company, is hereby incorporated in
this letter and to the extent that anything in this letter 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. The Optionee has received a
Prospectus covering the Shares subject to this Option.
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 (as defined in the Plan),
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 months 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 (as defined in the Plan), 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 months 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
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Grant of Non-Qualified Stock Option
"Grant Date" - ___________________
Page Three
(d) Other. Upon the earlier to occur of (i) 66 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).
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 66 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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Grant of Non-Qualified Stock Option
"Grant Date" - ___________________
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(b) Employee resides at the following address:
(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 not currently registered under the Securities
Act of 1933, as amended (the "Act"), and if registered in the future 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
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Grant of Non-Qualified Stock Option
"Grant Date" - ___________________
Page Five
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 as long as Employee remains 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: 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 Corporation then the value of such
shares will be determined by the mean of the high and low prices of the
Corporations's Common Stock on the New York Stock Exchange on the date of the
exercise of the option. The Option Exercise Price may be paid by a combination
of cash and Common Stock. Notwithstanding the foregoing, 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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Grant of Non-Qualified Stock Option
"Grant Date" - ___________________
Page Six
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. The Company looks forward to a
long and mutually beneficial relationship.
Very truly yours,
CRYOLIFE, INC.
(SEAL)
BY:
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Title: President & CEO
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ATTEST:
RONALD D. McCALL
ACCEPTED AND AGREED on this ______ day of _______________________.
EMPLOYEE:
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Print Name:
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