Exhibit 10.1

CRYOLIFE, INC.

2009 EMPLOYEE STOCK INCENTIVE PLAN

SECTION 1

GENERAL

1.1 Purpose. The CryoLife, Inc. 2009 Employee Stock Incentive Plan (the “Plan”)
has been established by CryoLife, Inc. (the “Company”) to (i) attract and retain
persons eligible to participate in the Plan; (ii) motivate Participants (as
defined in Section 1.2 below), by means of appropriate incentives, to achieve
long-range goals; (iii) provide incentive compensation opportunities that are
competitive with those of other similar companies; and (iv) further identify
Participants’ interests with those of the Company’s stockholders through
compensation that is based on the Company’s common stock; and thereby promote
the long-term financial interests of the Company and its Subsidiaries, as
defined in Section 9(h), including the growth in value of the Company’s equity
and enhancement of long-term stockholder return. Pursuant to the Plan,
Participants may receive Options, SARs, or Other Stock Awards, each as defined
herein (collectively referred to as “Awards”). The Plan is designed so that
Awards granted hereunder intended to comply with the requirements for
“performance-based compensation” under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”), may comply with such requirements, and
the Plan and such Awards shall be interpreted in a manner consistent with such
requirements.

1.2 Participation. Subject to the terms and conditions of the Plan, the
Committee (as defined in Section 6) shall determine and designate, from time to
time, from among the Eligible Grantees, as defined in Section 9(f), those
persons who will be granted one or more Awards under the Plan, and thereby
become “Participants” in the Plan. In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Subject to the
provisions of Section 6.2(e), Awards may be granted as alternatives to or
replacement of awards outstanding under the Plan, or any other plan or
arrangement of the Company or a Subsidiary (including a plan or arrangement of a
business or entity, all or a portion of which is acquired by the Company or a
Subsidiary).

1.3 Operation, Administration, and Definitions. The operation and administration
of the Plan, including the Awards made under the Plan, shall be subject to the
provisions of Section 5 (relating to operation and administration). Capitalized
terms in the Plan shall be defined as set forth in the Plan (including the
definition provisions of Section 9 of the Plan).

SECTION 2

OPTIONS AND SARS

2.1 Definitions.

(a) The grant of an “Option” entitles the Participant to purchase shares of
Stock at an Exercise Price established by the Committee. Options granted under
this Section 2 may either be Incentive Stock Options (“ISOs”) or Non-Qualified
Options (“NQOs”), as determined in the discretion of the Committee. An “ISO” is
an Option that is intended to satisfy the requirements applicable to an
“incentive stock option” described in Section 422(b) of the Code. An “NQO” is an
Option that is not intended to be an “incentive stock option” as that term is
described in Section 422(b) of the Code.

(b) A stock appreciation right (a “SAR”) entitles the Participant to receive, in
cash or Stock (as determined in accordance with Subsection 2.5), value equal to
(or otherwise based on) the excess of: (a) the Fair Market Value (as defined in
Section 9) of a specified number of shares of Stock at the time of exercise;
over (b) an Exercise Price established by the Committee.

 

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2.2 Exercise Price. The Exercise Price of each Option and SAR granted under this
Section 2 shall be not less than 100% of the Fair Market Value of a share of
Stock on the date of grant of the Award. Unless a higher price is established by
the Committee or determined by a method established by the Committee at the time
the Option or SAR is granted, the Exercise Price for each Option and SAR shall
be equal to 100% of the Fair Market Value on the date of grant of the Award.

2.3 Exercise. An Option and a SAR shall be exercisable in accordance with such
terms and conditions and during such periods as may be established by the
Committee, before or after grant.

2.4 Payment of Option Exercise Price. The payment of the Exercise Price of an
Option granted under this Section 2 shall be subject to the following:

(a) Subject to the following provisions of this Subsection 2.4, the full
Exercise Price for shares of Stock purchased upon the exercise of any Option
shall be paid at the time of such exercise (except that, in the case of an
exercise arrangement approved by the Committee and described in paragraph
2.4(c), payment may be made as soon as practicable after the exercise).

(b) The Exercise Price shall be payable in cash or by tendering (by actual
delivery of shares) unrestricted shares of Stock that are acceptable to the
Committee, valued at Fair Market Value as of the day the shares are tendered, or
in any combination of cash or shares, as determined by the Committee.

(c) To the extent permitted by applicable law, a Participant may elect to pay
the Exercise Price upon the exercise of an Option by irrevocably 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 Exercise Price and any tax
withholding resulting from such exercise.

2.5 Settlement of Award. Shares of Stock delivered pursuant to the exercise of
an Option or a SAR shall be subject to such conditions, restrictions and
contingencies as the Committee may establish in the applicable Award Agreement.
Settlement of SARs may be made in shares of Stock (valued at their Fair Market
Value at the time of exercise), in cash, or in a combination thereof, as
determined in the discretion of the Committee. The Committee, in its discretion,
may impose such conditions, restrictions and contingencies with respect to
shares of Stock acquired pursuant to the exercise of an Option or a SAR as the
Committee determines to be desirable.

2.6 Restrictions on Options and SAR Awards. Each Option and SAR shall be subject
to the following:

(a) The term of any Option or SAR granted under the Plan shall not exceed seven
years from the date of grant.

(b) Any such Award shall be subject to such conditions, restrictions and
contingencies as the Committee shall determine.

(c) The Committee may designate whether any such Awards being granted to any
Participant are intended to be “performance-based compensation” as that term is
used in Section 162(m) of the Code. Any such Awards designated as intended to be
“performance-based compensation” shall be conditioned on the achievement of one
or more “Performance Measures.” The Performance Measures that may be used by the
Committee for such Awards shall be based on any one or more of the following,
which shall not be required to be calculated in accordance with GAAP, as
selected by the Committee: return on capital or increase in pretax earnings of
the Company and/or one or more divisions and/or subsidiaries, return on
stockholders’ equity of the Company, increase in earnings per share of the
Company, sales of the Company and/or one or more products or service offerings,
divisions and/or subsidiaries, pretax earnings of the Company and/or one or more
divisions and/or subsidiaries, net earnings of the Company and/or one or more
divisions and/or subsidiaries, control of operating and/or non-operating
expenses of the Company and/or one or more divisions and/or subsidiaries,
margins of the Company and/or one or more divisions and/or subsidiaries, market
price of the Company’s securities, and, solely for an Award not intended to
constitute “performance-based compensation” under Section 162(m) of the Code,
other factors directly tied to the

 

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performance of the Company and/or one or more divisions and/or subsidiaries or
other performance criteria. For Awards intended to be “performance-based
compensation,” the grant of the Awards and the establishment of the Performance
Measures shall be made during the period required under Code Section 162(m).

SECTION 3

OTHER STOCK AWARDS

3.1 Definitions. The term “Other Stock Awards” means any of the following:

(a) A “Stock Unit” Award is the grant of a right to receive shares of Stock in
the future.

(b) A “Performance Share” Award is a grant of a right to receive shares of Stock
or Stock Units, which is contingent on the achievement of performance or other
objectives during a specified period.

(c) A “Restricted Stock” Award is a grant of shares of Stock, and a “Restricted
Stock Unit” Award is the grant of a right to receive shares of Stock in the
future, with such shares of Stock or right to future delivery of such shares of
Stock subject to a risk of forfeiture or other restrictions that will lapse upon
the achievement of one or more goals relating to completion of service by the
Participant, or achievement of performance or other objectives, as determined by
the Committee.

3.2 Restrictions on Other Stock Awards. Each Stock Unit Award, Restricted Stock
Award, Restricted Stock Unit Award and Performance Share Award shall be subject
to the following:

(a) Any such Award shall be subject to such conditions, restrictions and
contingencies as the Committee shall determine.

(b) The Committee may designate whether any such Awards being granted to any
Participant are intended to be “performance-based compensation” as that term is
used in Section 162(m) of the Code. Any such Awards designated as intended to be
“performance-based compensation” shall be conditioned on the achievement of one
or more Performance Measures.

SECTION 4

STOCK SUBJECT TO THE PLAN

4.1 Awards Subject to Plan. Awards granted under the Plan shall be subject to
the following:

(a) Subject to the following provisions of this Subsection 4.1, the maximum
number of shares of Stock that may be delivered to Participants and their
beneficiaries under the Plan shall be 2 million shares of Stock. Shares of Stock
issuable hereunder may, in whole or in part, be authorized but unissued shares
or shares of Stock that shall have been or may be reacquired by the Company in
the open market, in private transactions or otherwise. Notwithstanding the
foregoing, with respect to SARs that are settled in Stock, the aggregate number
of shares of Stock subject to the SAR grant shall be counted against the shares
available for issuance under the Plan as one share for every share subject
thereto, regardless of the number of shares used to settle the SAR upon
exercise.

(b) Subject to adjustment in accordance with Subsections 4.2 and 4.3, the
following additional maximums are imposed under the Plan:

(i) Subject to the proviso contained in this paragraph, the maximum number of
shares of Stock that may be issued in conjunction with Other Stock Awards
granted pursuant to Section 3 shall be up to 500,000 shares; provided, however,
that for every share of Stock in excess of 500,000 awarded hereunder in respect
of Other Stock Awards, the maximum number of shares reserved for grant hereunder
shall be reduced by 1.5 shares. By way of

 

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example, if only grants of Other Stock Awards are made under the Plan, the
maximum number of shares that may be issued is 1,500,000.

(ii) The maximum number of shares of Stock that may be covered by Awards granted
to any one individual pursuant to Section 2 (relating to Options and SARs) shall
be 400,000 during any fiscal year and the maximum number of shares of Stock that
may be covered by Other Stock Awards pursuant to Section 3 shall be 250,000
during any fiscal year; and

(c) To the extent any shares of Stock covered by an Award are not delivered to a
Participant or beneficiary because the Award is forfeited or canceled, or the
shares of Stock are not delivered because the Award is settled in cash, such
shares shall not be deemed to have been delivered for purposes of determining
the maximum number of shares of Stock available for delivery under the Plan. To
the extent that shares of Stock subject to Other Stock Awards, and the issuance
of which reduced the maximum number of shares authorized for issuance under the
Plan by 1.5 shares, are forfeited or cancelled, or if such an Award terminates
or expires without a distribution of shares to the Participant, the number of
shares of Stock remaining for Award grants hereunder shall be increased by 1.5
for each share forfeited, cancelled or otherwise not delivered. Shares of Stock
shall not again be available if such shares are surrendered or withheld as
payment of either the exercise price of an Award and/ or withholding taxes in
respect of an Award. Awards that are settled solely in cash shall not reduce the
number of shares of Stock available for Awards. Upon the exercise of any Award
granted in tandem with any other Award, such related Awards shall be cancelled
to the extent of the number of shares of Stock as to which the Award is
exercised and, notwithstanding the foregoing, such number of shares shall no
longer be available for Awards under the Plan. The maximum number of shares of
Stock available for delivery under the Plan shall not be reduced for shares
subject to plans assumed by the Company in an acquisition of an interest in
another company.

4.2 Adjustments for Changes in Capitalization. If the outstanding shares of
Stock are changed into or exchanged for a different number or kind of shares or
other securities of the Company by reason of any recapitalization,
reclassification, stock split, stock dividend, combination, subdivision or
similar transaction, or if the Company makes an extraordinary dividend or
distribution to its stockholders (including without limitation to implement a
spinoff) (each, a “Corporate Transaction”) then, subject to any required action
by the stockholders of the Company, the number and kind of shares of Company
stock available under the Plan or subject to any limit or maximum hereunder
shall automatically be proportionately adjusted, with no action required on the
part of the Committee or otherwise. Subject to any required action by the
stockholders, the number and kind of shares covered by each outstanding Award,
and the price per share in each such Award, shall also be automatically
proportionately adjusted for any increase or decrease in the number of issued
shares of the Company resulting from a Corporate Transaction or any other
increase or decrease in the number of such shares, or any decrease in the value
of such shares, effected without receipt of consideration by the Company.
Notwithstanding the foregoing, no fractional shares shall be issued or made
subject to an Option, SAR or Stock Award in making the foregoing adjustments.
All adjustments made pursuant to this Section shall be final, conclusive and
binding upon the holders of Options, SARS and Stock Awards.

4.3 Certain Mergers and Other Extraordinary Events. If the Company merges or
consolidates with another corporation, or if the Company is liquidated or sells
or otherwise disposes of substantially all of its assets while unexercised
Options or other Awards remain outstanding under this Plan, (A) subject to the
provisions of clause (C) below, after the effective date of the merger,
consolidation, liquidation, sale or other disposition, as the case may be,
whether or not the Company is the surviving corporation, each holder of an
outstanding Option or other Award shall be entitled, upon exercise of that
Option or Award or in place of it, as the case may be, to receive, at the option
of the Committee and in lieu of shares of Stock, (i) the number and class or
classes of shares of Stock or other securities or property to which the holder
would have been entitled if, immediately prior to the merger, consolidation,
liquidation, sale or other disposition, the holder had been the holder of record
of a number of shares of Stock equal to the number of shares of Stock as to
which that Option may be exercised or are subject to the Award or (ii) shares of
stock of the company that is the surviving corporation in such merger,
consolidation, liquidation, sale or other disposition having a value, as of the
date of payment under Subsection 4.3(i) as determined by the Committee in its
sole discretion, equal to the value of the shares of Stock or other securities
or property otherwise payable under Subsection 4.3(i); (B) whether or not the
Company is the surviving corporation, if Options or other Awards have not
already become exercisable, the Board of Directors may waive any limitations set
forth in

 

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or imposed pursuant to this Plan so that all Options or other Awards, from and
after a date prior to the effective date of that merger, consolidation,
liquidation, sale or other disposition, as the case may be, specified by the
Board of Directors, shall be exercisable in full; and (C) all outstanding
Options or SARs may be cancelled by the Board of Directors as of the effective
date of any merger, consolidation, liquidation, sale or other disposition,
provided that with respect to a merger or consolidation the Company is not the
surviving company, and provided further that any optionee or SAR holder shall
have the right immediately prior to such event to exercise his or her Option or
SAR to the extent such optionee or holder is otherwise able to do so in
accordance with this Plan or his individual Option or SAR agreement; provided,
further, that any such cancellation pursuant to this Section 4.3 shall be
contingent upon the payment to the affected Participants of an amount equal to
(i) in the case of any out-of-the-money Option or SAR, cash, property or a
combination thereof having an aggregate value equal to the value of such Option
or SAR, as determined by the Committee or the Board of Directors, as applicable,
in its sole discretion, and (ii) in the case of an in-the-money Option or SAR,
cash, property or a combination thereof having an aggregate value equal to the
excess of the value of the per-share amount of consideration paid pursuant to
the merger, consolidation, liquidation, sale or other disposition, as the case
may be, giving rise to such cancellation, over the exercise price of such Option
or SAR multiplied by the number of shares of Stock subject to the Option or SAR.

Any adjustments pursuant to this Subsection 4.3 shall be made by the Board or
Committee, as the case may be, whose determination in that respect shall be
final, binding and conclusive, regardless of whether or not any such adjustment
shall have the result of causing an ISO to cease to qualify as an ISO.

4.4 Changes in Par Value. In the event of a change in the shares of the Company
as presently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the shares within the meaning of this Plan.

4.5 Limitation on Grantees’ Rights. Except as hereinbefore expressly provided in
this Section 4, a Participant shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or consolidation
or spin-off of assets or stock of another corporation, and any issue by the
Company of shares of stock of any class, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of shares of
Stock subject to an Award, unless the Committee shall otherwise determine.

4.6 Company Right and Power. The grant of any Award pursuant to this Plan shall
not adversely affect in any way the right or power of the Company (A) to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, (B) to merge or consolidate, (C) to dissolve, liquidate or
sell, or transfer all or any part of its business or assets or (D) to issue any
bonds, debentures, preferred or other preference stock ahead of or affecting the
Stock.

4.7 Fractional Shares. If any action described in this Section 4 results in a
fractional share for any Participant under any Award hereunder, such fraction
shall be completely disregarded and the Participant shall be entitled only to
the whole number of shares resulting from such adjustment.

SECTION 5

OPERATION AND ADMINISTRATION

5.1 Effective Date; Duration. The Plan shall be effective as of the date of its
approval by the stockholders of the Company (the “Effective Date”). The Plan
shall have a duration of seven years from the Effective Date; provided that in
the event of Plan termination, the Plan shall remain in effect as long as any
Awards under it are outstanding; provided further, however, that no Award may be
granted under the Plan on a date that is more than seven years from the
Effective Date.

 

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5.2 Vesting. Except as set forth below and in Section 4.3, and other than
Options, SARs, Restricted Stock, Restricted Stock Units or Other Stock Awards
conditioned upon the attainment of Performance Goals that relate to performance
periods of at least one fiscal year, and except to the extent accelerated by the
Committee upon death, disability, retirement or Change in Control, no Award
granted hereunder may vest in excess of  1/3 of the number of shares subject to
the Award per year for the first three years after the grant date. Unless the
Committee determines otherwise, the date on which the Committee adopts a
resolution expressly granting an Award shall be considered the day on which such
Award is granted. The term of any Award granted under the Plan will not exceed
seven years from the date of grant.

5.3 Uncertificated Stock. To the extent that the Plan provides for issuance of
stock certificates to reflect the issuance of shares of Stock, the issuance may
be effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange.

5.4 Tax Withholding. All distributions under the Plan are subject to withholding
of all applicable taxes, and the Committee may condition the delivery of any
shares or other benefits under the Plan on satisfaction of the applicable
withholding obligations. The Committee, in its discretion, and subject to such
requirements as the Committee may impose prior to the occurrence of such
withholding, may permit such withholding obligations to be satisfied through
cash payment by the Participant, through the surrender of shares of Stock which
the Participant already owns, or through the surrender of unrestricted shares of
Stock to which the Participant is otherwise entitled under the Plan, but only to
the extent of the minimum amount required to be withheld under applicable law.

5.5 Use of Shares. Subject to the overall limitation on the number of shares of
Stock that may be delivered under the Plan, the Committee may use available
shares of Stock as the form of payment for compensation, grants or rights earned
or due under any other compensation plans or arrangements of the Company or a
Subsidiary, including the plans and arrangements of the Company or a Subsidiary
assumed in business combinations.

5.6 Dividends and Dividend Equivalents. An Award (including without limitation
an Option or SAR Award) may provide the Participant with the right to receive
dividend payments or dividend equivalent payments with respect to Stock subject
to the Award (both before and after the Stock subject to the Award is earned,
vested, or acquired), which payments may be either made currently or credited to
an account for the Participant, and may be settled in cash or Stock as
determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents. In the event an Award is conditioned on the achievement of one or
more Performance Measures, any dividend payments or dividend equivalent payments
will only be earned, vested or acquired to the extent the underlying Stock
subject to the Award is earned, vested or acquired.

5.7 Payments. Awards may be settled through cash payments, the delivery of
shares of Stock, the granting of replacement Awards, or any combination thereof
as the Committee shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Committee shall determine. The Committee may permit or require the deferral
of any Award payment, subject to such rules and procedures as it may establish.

5.8 Transferability. Except as otherwise provided by the Committee, Awards under
the Plan are not transferable except as designated by the Participant by will or
by the laws of descent and distribution.

5.9 Form and Time of Elections. Unless otherwise specified herein, each election
required or permitted to be made by any Participant or other person entitled to
benefits under the Plan, and any permitted modification, or revocation thereof,
shall be in writing filed with the Committee at such times, in such form, and
subject to such restrictions and limitations, not inconsistent with the terms of
the Plan, as the Committee shall require.

5.10 Agreement With Company. An Award under the Plan shall be subject to such
terms and conditions, not inconsistent with the Plan, as the Committee shall, in
its sole discretion, prescribe. The terms and conditions of any Award to any
Participant shall be reflected in such form of written document as is determined
by the Committee. A

 

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copy of such document shall be provided to the Participant, and the Committee
may, but need not, require that the Participant sign a copy of such document.
Such document is referred to in the Plan as an “Award Agreement” regardless of
whether any Participant signature is required.

5.11 Action by Company or Subsidiary. Any action required or permitted to be
taken by the Company or any Subsidiary shall be by resolution of its Board of
Directors, or by action of one or more members of the Board (including a
committee of the Board) who are duly authorized to act for the Board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of such company.

5.12 Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

5.13 Limitation of Implied Rights.

(a) Neither a Participant nor any other person shall, by reason of participation
in the Plan, acquire any right in or title to any assets, funds or property of
the Company or any Subsidiary whatsoever, including, without limitation, any
specific funds, assets, or other property which the Company or any Subsidiary,
in its sole discretion, may set aside in anticipation of a liability under the
Plan. A Participant shall have only a contractual right to the Stock or amounts,
if any, payable under the Plan, unsecured by any assets of the Company or any
Subsidiary, and nothing contained in the Plan shall constitute a guarantee that
the assets of the Company or any Subsidiary shall be sufficient to pay any
benefits to any person.

(b) The Plan does not constitute a contract of employment, and selection as a
Participant will not give any participating employee the right to be retained in
the employ of the Company or any Subsidiary, nor any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Except as otherwise provided in the Plan, no Award
under the Plan shall confer upon the holder thereof any rights as a stockholder
of the Company prior to the date on which the individual fulfills all conditions
for receipt of such rights.

5.14 Evidence. Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information which the person acting on it considers
pertinent and reliable, and shall be signed, made or presented by the proper
party or parties.

5.15 Termination of Employment Following Change In Control. In the event that
the employment of a Participant who is an employee of the Company or a
Subsidiary is terminated by the Company during the six-month period following a
Change in Control, all of such Participant’s outstanding Options and SARs may
thereafter be exercised by the Participant, to the extent that such Options and
SARs were exercisable as of the date of such termination of employment (x) for a
period of six months from such date of termination or (y) until expiration of
the stated term of such Option or SAR, whichever period is the shorter.

5.16 Section 409A. It is intended that all Options and SARs granted under the
Plan shall be exempt from the provisions of Section 409A of the Code and that
all Other Stock Awards under the Plan, to the extent that they constitute
“non-qualified deferred compensation” within the meaning of Section 409A of the
Code, will comply with Section 409A of the Code (and any regulations and
guidelines issued thereunder). The Plan and any Award Agreements issued
hereunder may be amended in any respect deemed by the Board or the Committee to
be necessary in order to preserve compliance with Section 409A of the Code.

5.17 Regulations and Other Approvals.

(a) The obligation of the Company to sell or deliver Stock with respect to any
Award granted under the Plan or make any other distribution of benefits under
the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws (including, without
limitation, the requirements of the Securities Act of 1933) and all applicable
requirements of any securities exchange or similar entity, and the

 

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obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.

(b) Each Award is subject to the requirement that, if at any time the Committee
determines, in its absolute discretion, that the listing, registration or
qualification of Stock issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Award or the issuance of
Stock, no such Award shall be granted or payment made or Stock issued, in whole
or in part, unless listing, registration, qualification, consent or approval, as
applicable, has been effected or obtained free of any conditions not acceptable
to the Committee.

(c) In the event that the disposition of Stock acquired pursuant to the Plan is
not covered by a then current registration statement under the Securities Act of
1933 and is not otherwise exempt from such registration, such Stock shall be
restricted against transfer to the extent required by the Securities Act of
1933, as amended, or regulations thereunder, and applicable state securities
laws, and the Committee may require a Participant receiving Stock pursuant to
the Plan, as a condition precedent to receipt of such Stock, to represent to the
Company in writing that the Stock acquired by such Participant is acquired for
investment only and not with a view to distribution.

(d) With respect to persons subject to section 16 of the Securities and Exchange
Act of 1934, as amended, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule 16b-3.

5.18 Awards to Employees Subject to Taxation Outside of the United
States. Without amending the Plan, Awards may be granted to Participants who are
foreign nationals or who are employed outside the United States or both, on such
terms and conditions different from those specified in the Plan as may, in the
judgment of the Committee, be necessary or desirable to further the purposes of
the Plan. Such different terms and conditions may be reflected in Addenda to the
Plan or in the applicable Award Agreement. However, no such different terms or
conditions shall be employed if such terms or conditions constitute, or in
effect result in, an increase in the aggregate number of shares which may be
issued under the Plan or a change in the definition of Eligible Grantee.

SECTION 6

COMMITTEE

6.1 Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the “Committee”) in
accordance with this Section 6. The Committee shall be selected by the Board,
and shall consist solely of two or more members of the Board who are
non-employee Directors within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and are outside Directors within the meaning
of Code Section 162(m). If the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee. Unless otherwise determined by
the Board, CryoLife’s Compensation Committee shall be designated as the
“Committee” hereunder.

6.2 Powers of Committee. The Committee’s administration of the Plan shall be
subject to the following:

(a) Subject to the provisions of the Plan, the Committee will have the authority
and discretion to select from among the Eligible Grantees those persons who
shall receive Awards, to determine the time or times of receipt, to determine
the types of Awards and the number of shares covered by the Awards, to establish
the terms, conditions, performance criteria, restrictions, and other provisions
of such Awards, and (subject to the restrictions imposed by Section 7) to cancel
or suspend Awards, and to waive or otherwise modify any vesting or other
restrictions contained in awards. The Committee may also, without obtaining
stockholder approval, amend any outstanding award to provide the holder thereof
with additional rights or benefits of the type otherwise permitted by the Plan,
including without limitation, extending the term thereof; provided, however,
that in no event may the term of any Option or SAR exceed seven years.

 

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(b) The Committee will have the authority and discretion to interpret the Plan,
to establish, amend, and rescind any rules and regulations relating to the Plan,
to determine the terms and provisions of any Award Agreement made pursuant to
the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.

(c) Any interpretation of the Plan by the Committee and any decision made by it
under the Plan is final and binding on all persons.

(d) In controlling and managing the operation and administration of the Plan,
the Committee shall take action in a manner that conforms to the certificate of
incorporation and by-laws of the Company, and applicable state corporate law.

(e) Subject to Section 4.2 hereof, neither the Board, the Committee nor their
respective delegates shall have the authority to (i) reprice (or cancel and
regrant) any Option, SAR or, if applicable, other Award at a lower exercise,
base or purchase price without first obtaining the approval of the Company’s
stockholders, (ii) take any other action (whether in the form of an amendment,
cancellation or replacement grant, or a cash-out of underwater options) that has
the effect of repricing an Option, SAR or other Award, or (iii) grant any
Option, SAR or other Award that contains a so-called “reload” feature under
which additional Options, SARs or other Awards are granted automatically to the
Grantee upon exercise of the original Option, SAR or Award.

(f) Anything in the Plan to the contrary notwithstanding, neither the Board nor
the Committee may accelerate the payment or vesting of any Option, SAR or other
Award except in the event of death, disability, retirement or a Change in
Control.

6.3 Delegation by Committee. Except to the extent prohibited by applicable law
or the applicable rules of a stock exchange, the Committee may allocate all or
any portion of its responsibilities and powers to any one or more of its members
and may delegate all or any part of its responsibilities and powers hereunder,
including without limitation, the power to designate Participants hereunder and
determine the amount, timing and terms of Awards hereunder, to any person or
persons selected by it, including without limitation, any executive officer of
the Company. Any such allocation or delegation may be revoked by the Committee
at any time.

6.4 Information to be Furnished to Committee. The Company and Subsidiaries shall
furnish the Committee with such data and information as it determines may be
required for it to discharge its duties. The records of the Company and
Subsidiaries as to an employee’s or Participant’s employment, termination of
employment, leave of absence, reemployment and compensation shall be conclusive
unless the Committee determines such records to be incorrect. Participants and
other persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to carry
out the terms of the Plan.

6.5 Indemnification. Each person who is or shall have been a member of the
Committee, or the Board, shall be indemnified and held harmless by the Company
against and from any loss, cost, liability or expense that may be imposed upon
or reasonably incurred by him or her in connection with or resulting from any
claim, action, suit or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such action, suit or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall
be in addition to any other rights of indemnification or elimination of
liability to which such persons may be entitled under the Company’s Certificate
of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.

 

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SECTION 7

AMENDMENT AND TERMINATION

(a) The Plan may be terminated or amended by the Board of Directors at any time,
except that the following actions may not be taken without stockholder approval:

(i) any increase in the number of shares that may be issued under the Plan
(except by certain adjustments provided for under the Plan);

(ii) any change in the class of persons eligible to receive Awards under the
Plan;

(iii) any change in the requirements of Section 2.2 hereof regarding the
Exercise Price of Options and SARs;

(iv) any repricing or cancellation and regrant of any Option or, if applicable,
other Award at a lower exercise, base or purchase price, whether in the form of
an amendment, cancellation or replacement grant, or a cash-out of underwater
options or any action that provides for Awards that contain a so-called “reload”
feature under which additional Options or other Awards are granted automatically
to the Grantee upon exercise of the original Option or Award; or

(v) any other amendment to the Plan that would require approval of the Company’s
stockholders under applicable law, regulation or rule.

Notwithstanding any of the foregoing, adjustments pursuant to paragraph 4.2
shall not be subject to the foregoing limitations of this Section 7.

(b) Options, SARs and other Awards may not be granted under the Plan after the
date of termination of the Plan, but Options and SARs granted prior to that date
shall continue to be exercisable according to their terms and other Awards shall
continue to vest in accordance with their terms.

SECTION 8

CHANGE IN CONTROL

Subject to the provisions of paragraph 4.2 (relating to the adjustment of
shares), and except as otherwise provided in the Plan or the Award Agreement
reflecting the applicable Award, upon the occurrence of a Change in Control as
defined in Section 9:

(a) All outstanding Options (regardless of whether in tandem with SARs) shall
become fully exercisable.

(b) All outstanding SARs (regardless of whether in tandem with Options) shall
become fully exercisable.

(c) All Stock Units, Restricted Stock, Restricted Stock Units, Performance
Shares and other Awards shall become fully vested.

SECTION 9

DEFINED TERMS

In addition to the other definitions contained herein, the following definitions
shall apply:

(a) Affiliated Company. The term “Affiliated Company” means any company
controlled by, controlling or under common control with the Company.

 

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(b) Award. The term “Award” shall mean any award or benefit granted under the
Plan, including, without limitation, the grant of Options, SARs, Stock Unit
Awards, Restricted Stock Awards, Restricted Stock Unit Awards and Performance
Share Awards.

(c) Board. The term “Board” shall mean the Board of Directors of the Company.

(d) Change in Control. “Change of Control” means a change in the ownership or
effective control of, or in the ownership of a substantial portion of the assets
of, the Company, as described in paragraphs (i) through (iii) below.

(i) Change in Ownership of the Company. A change in the ownership of the Company
shall occur on the date that any one person, or more than one person acting as a
group (within the meaning of paragraph (iv)), acquires ownership of the Company
stock that, together with the Company stock held by such person or group,
constitutes more than 50% of the total voting power of the stock of the Company.

(A) If any one person or more than one person acting as a group (within the
meaning of paragraph (iv)), is considered to own more than 50% of the total
voting power of the stock of the Company, the acquisition of additional the
Company stock by such person or persons shall not be considered to cause a
change in the ownership of the Company or to cause a change in the effective
control of the Company (within the meaning of paragraph (ii) below).

(B) An increase in the percentage of the Company stock owned by any one person,
or persons acting as a group (within the meaning of paragraph (iv)), as a result
of a transaction in which the Company acquires its stock in exchange for
property, shall be treated as an acquisition of stock for purposes of this
paragraph (i).

(C) Except as provided in (B) above, the provisions of this paragraph (i) shall
apply only to the transfer or issuance of the Company stock if such stock
remains outstanding after such transfer or issuance.

(ii) Change in Effective Control of the Company.

(A) A change in the effective control of the Company shall occur on the date
that either of (1) or (2) below occurs:

(1) Any one person, or more than one person acting as a group (within the
meaning of paragraph (iv)), acquires (or has acquired during the 12 month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing 30% or more of the total voting
power of the stock of the Company; or

(2) A majority of the members of the Company Board of Directors are replaced
during any 12 month period by Directors whose appointment or election is not
endorsed by a majority of the Board of Directors prior to the date of the
appointment or election.

(B) A change in effective control of the Company also may occur with respect to
any transaction in which either of the Company or the other entity involved in a
transaction experiences a Change of Control event described in paragraphs (i) or
(iii).

(C) If any one person, or more than one person acting as a group (within the
meaning of paragraph (iv)), is considered to effectively control the Company
(within the meaning of this paragraph (ii)), the acquisition of additional
control of the Company by the same person or persons shall not be considered to
cause a change in the effective control of the Company (or to cause a change in
the ownership of the Company within the meaning of paragraph (i)).

(iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A
change in the ownership of a substantial portion of the Company’s assets shall
occur on the date that any one person, or more than

 

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one person acting as a group (within the meaning of paragraph (iv)), acquires
(or has acquired during the 12 month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have
a total gross fair market value (within the meaning of paragraph (iii)(B)) equal
to or more than 40% of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition or acquisitions.

(A) A transfer of the Company’s assets shall not be treated as a change in the
ownership of such assets if the assets are transferred to one or more of the
following:

(1) A shareholder of the Company (immediately before the asset transfer) in
exchange for or with respect to the Company stock;

(2) An entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company;

(3) A person, or more than one person acting as a group (within the meaning of
paragraph (iv)) that owns, directly or indirectly, 50% or more of the total
value or voting power of all of the outstanding stock of the Company; or

(4) An entity, at least 50% of the total value or voting power of which is
owned, directly or indirectly, by a person described in paragraph (iii)(A)(3).

For purposes of this paragraph (iii)(A), and except as otherwise provided, a
person’s status is determined immediately after the transfer of assets.

(B) For purposes of this paragraph (iii), gross fair market value means the
value of all the Company assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

(iv) For purposes of this Section 9(d), persons shall be considered to be acting
as a group if they are owners of an entity that enters into a merger,
consolidation, purchase, or acquisition of assets, or similar business
transaction with the Company. If a person, including an entity shareholder, owns
stock in the Company and another entity with which the Company enters into a
merger, consolidation, purchase, or acquisition of stock, or similar business
transaction, such shareholder shall be considered to be acting as a group with
the other shareholders in a corporation only to the extent of the ownership in
that corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation. Persons shall not be
considered to be acting as a group solely because they purchase or own stock of
the Company at the same time, or as a result of the same public offering of the
Company’s stock.

(e) Code. The term “Code” means the Internal Revenue Code of 1986, as amended. A
reference to any provision of the Code shall include reference to any successor
provision of the Code.

(f) Eligible Grantee. The term “Eligible Grantee” shall mean any executive
officer or employee of the Company or a Subsidiary, as determined by the
Committee in its sole discretion. An Award may be granted to an employee, in
connection with hiring, retention or otherwise, prior to the date the employee
first performs services for the Company or the Subsidiaries, provided that such
Award shall not become vested prior to the date the employee first performs such
services.

(g) Fair Market Value. For purposes of determining the “Fair Market Value” of a
share of Stock as of any date, then the “Fair Market Value” as of that date
shall be the closing sale price of the Stock on that date on the New York Stock
Exchange.

(h) Subsidiaries. The term “Subsidiary” means any present or future subsidiary
corporation of the Company within the meaning of Section 424(f) of the Code, and
any present or future business venture designated by the Committee in which the
Company has a significant interest, as determined in the discretion of the
Committee.

 

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(i) Stock. The term “Stock” shall mean shares of common stock of the Company.

SECTION 10

GOVERNING LAW

This Plan shall be governed by, and construed in accordance with, the laws of
the State of Georgia, except to the extent that the Florida Business Corporation
Act shall be applicable.

 

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