EXHIBIT
10.3


EMPLOYMENT
AGREEMENT


This Agreement (“the
Agreement”) dated as of the [as to Mr. Heacox, 4th, and as to Mr.
Fronk, 4th]  day of May, 2006 (the “Effective Date”), is
by and between CryoLife, Inc., a Florida corporation (“CryoLife”) and [Executive’s Name]  (the “Employee”).


WITNESSETH:


WHEREAS, CryoLife
desires, in the best interests of CryoLife and its shareholders, to enter into
this Employment Agreement in order to assure the Employee of CryoLife’s
commitment and, in so doing, to motivate the Employee to continue in Employee’s
dedicated service to CryoLife even in circumstances such as a possible future
threat or occurrence of a Change of Control (defined below) of CryoLife; and,


WHEREAS, the
Employee desires to remain employed by CryoLife in the capacity and upon the
terms set forth in this Employment Agreement.


NOW, THEREFORE, in
consideration of the premises, the promises hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, it is hereby agreed as follows:


1.             Employment.


(a)           CryoLife hereby employs Employee in
the capacity of [as to Mr. Heacox, Senior
Vice President, Research and Development, and as to Mr.
Fronk, Vice President,
Regulatory Affairs and Quality Assurance] and Employee
hereby accepts such duties as are customarily performed and exercised by such
officer subject to the supervision of the President of CryoLife. The duties of
Employee shall include those duties more specifically described on Exhibit A
attached hereto together with such additional duties as are assigned by the
President of CryoLife.


(b)           CryoLife agrees to continue the
Employee in its employ, and the Employee hereby agrees to remain in the employ
of CryoLife subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second anniversary of
such date (the “Employment Period”). Unless either party elects not to extend
the term of this Agreement by so notifying the other in writing at least 30
days prior to the first anniversary of the Effective Date, the Employment
Period shall automatically extend for an additional one year.


2.             Employment Duties.


(a)           During the Employment Period, (A) the
Employee’s position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Employee’s services shall be performed
at the location where the Employee was employed immediately preceding the
Effective Date.


(b)           During the Employment Period, and
excluding any periods of vacation and sick leave to which the Employee is
entitled, the Employee agrees to devote reasonable attention and time to the
business and affairs of CryoLife and, to the extent necessary to discharge the
responsibilities assigned to the Employee hereunder, to use the Employee’s
reasonable best efforts to perform faithfully and efficiently such
responsibilities.


(c)           During the Employment Period, the
Employee will not, without the prior written consent of CryoLife, directly or
indirectly other than in the performance of the duties hereunder, render
services of a business, professional or commercial nature to any other person
or firm, whether for compensation or otherwise, except with respect to any
noncompetitive family businesses of the Employee for which the rendering of
such services will not have an adverse effect upon Employee’s performance of
his duties and obligations hereunder.



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3.             Compensation, Benefits and
Business Expenses.


(a)           For all services which Employee
renders to CryoLife or any of its subsidiaries or affiliates during the term
hereof, CryoLife agrees to pay the Employee the salary and bonus compensation
as set by the Compensation Advisory Committee of the Board of Directors.
Employee shall be entitled to participate in all compensation and bonus plans
made available to CryoLife’s executive employees. Employee’s salary at the
Effective Date is set forth on Exhibit A.


(b)           CryoLife shall pay all reasonable
expenses incurred by the Employee directly related to performance of his
responsibilities and duties for CryoLife hereunder. Employee shall submit to
CryoLife statements that justify in reasonable detail all reasonable expenses
so incurred. Subject to such audits as CryoLife may deem necessary, CryoLife
shall reimburse Employee the full amount of any such expenses advanced by
Employee.


(c)           Employee shall be entitled to a
vacation each year of his employment with CryoLife, according to the standard
vacation policy, as well as insurance and other employment benefits, as more
particularly described on Exhibit A. Vacations not taken shall be
cumulative and carried over to a subsequent year.


4.             Change of
Control.


(a)           In consideration and recognition of
the Employee’s continued employment and his contribution to protecting and
enhancing shareholder value in any future sale of CryoLife that may occur and
to provide incentive to Employee as an executive to remain with CryoLife
through any future sale or merger of CryoLife, CryoLife has provided in Section
6(a) to increase the severance payment amount upon the occurrence of a
Severance Increase Event. A Severance Increase Event shall occur upon the
happening of a Change of Control (as defined below) if Employee remains
employed by CryoLife at such time or   if Employee’s employment was
terminated by CryoLife without Cause within the six (6) months immediately
preceding a Change of Control.


(b)           For the purposes of this Agreement,
the term “Change of Control” shall mean a change in the beneficial ownership of
CryoLife’s voting stock or a change in the composition of the Board of the
Directors of CryoLife (the “Board”) that occurs as follows:


(i)            any
“person,” including a “syndicate” or “group” as those terms are used in Section
13(d)(3) of the Securities Exchange Act of 1934, is or becomes the beneficial
owner, directly or indirectly, of securities of CryoLife representing 20% or
more of the combined voting power of CryoLife’s then outstanding “Voting
Securities,” which is any security which ordinarily possesses the power to vote
in the election of the Board of Directors of a corporation without the happening
of any precondition or contingency;


(ii)           CryoLife
is merged or consolidated with another corporation and immediately after giving
effect to the merger or consolidation less than 60% of the outstanding Voting
Securities of the surviving or resulting entity are then beneficially owned in
the aggregate by (x) the shareholders of CryoLife immediately prior to such
merger or consolidation, or (y) if a record date has been set to determine the
shareholders of CryoLife entitled to vote on such merger or consolidation, the
shareholders of CryoLife as of such record date;


(iii)          the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the date hereof,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of CryoLife) whose appointment or election by the Board
or nomination for election by CryoLife’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or



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(iv)         
CryoLife transfers substantially all of its assets to another corporation which
is a less than 60% owned subsidiary of CryoLife.


5.             Termination of Employment.


(a)           Disability or Death. If
CryoLife determines in good faith that the Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Employee written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Employee’s
employment. In such event, the Employee’s employment with CryoLife shall
terminate effective on the 30th day after receipt of such notice by the
Employee (the “Disability Effective Date”), provided that, within the 30 days
after such receipt, the Employee shall not have returned to full-time
performance of the Employee’s duties. For purposes of this Agreement, “Disability”
shall mean the absence of the Employee from the Employee’s duties with CryoLife
on a full-time basis for 180 consecutive days as a result of incapacity due to
mental or physical illness or determination by a physician selected by CryoLife
or its insurers and acceptable to the Employee or the Employee’s legal representative
that the Employee is unable to perform the essential functions of his position
as a result of incapacity due to mental or physical illness. The Employee’s
employment shall terminate automatically upon the Employee’s death during the
Employment Period.


(b)           Cause. CryoLife may terminate
the Employee’s employment during the Employment Period for Cause. For purposes
of this Agreement, “Cause” shall mean:


(i)            the willful and continued failure of
the Employee to perform substantially the Employee’s duties with CryoLife
(other than any such failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to Employee by the Board or the Chief Executive Officer of CryoLife
which specifically identifies the manner in which CryoLife believes that the
Employee has not substantially performed the Employee’s duties, or


(ii)           the willful engaging by the Employee
in illegal conduct or gross misconduct which is materially and demonstrably
injurious to CryoLife.


For purposes of this
provision, no act or failure to act, on the part of the Employee, shall be
considered “willful” unless it is done, or omitted to be done, by the Employee
in bad faith or without reasonable belief that the Employee’s action or
omission was in the best interests of CryoLife. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board
or upon the instructions of the Chief Executive Officer or a senior officer of
CryoLife or based upon the advice of counsel for CryoLife shall be conclusively
presumed to be done, or omitted to be done, by the Employee in good faith and
in the best interests of CryoLife.


(c)           Good Reason. The Employee’s
employment may be terminated by the Employee for Good Reason. For purposes of
this Agreement, “Good Reason” shall mean:


(i)             the assignment to the Employee of
any duties inconsistent in any respect with the Employee’s position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 1(a) of this Agreement, or any
other action by CryoLife which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by CryoLife promptly after receipt of notice thereof given by the
Employee;


(ii)           any failure by CryoLife to comply
with any of the provisions of Section 3(a) or 3(b) of this Agreement, other
than an isolated, insubstantial or inadvertent failure not occurring in bad
faith and which is remedied by CryoLife promptly after receipt of notice
thereof given by the Employee;


(iii)          any threatened termination by CryoLife
of the Employee’s employment other than for Cause, Death or Disability; or


(iv)          any failure by CryoLife to comply with
and satisfy Section 11(c) of this Agreement.



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For purposes of this
Section 5(c), any good faith determination of “Good Reason” made by the
Employee shall be conclusive. Anything in this Agreement to the contrary
notwithstanding, a termination by the Employee for any reason at least 90 days
but not more than 120 days following consummation of a Change of Control or
during the 30 day period immediately following the first anniversary of a
Change of Control shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.


(d)           Notice of Termination. Any
termination by CryoLife for Cause, or by the Employee for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 12(b) of this Agreement. For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee’s employment under
the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than 30 days after the giving of
such notice). The failure by the Employee or CryoLife to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing
of Good Reason or Cause shall not waive any right of the Employee or CryoLife,
respectively, hereunder or preclude the Employee or CryoLife, respectively,
from asserting such fact or circumstance in enforcing the Employee’s or
CryoLife’s rights hereunder.


(e)           Date of Termination. “Date of
Termination” means (i) if the Employee’s employment is terminated by CryoLife
for Cause, or by the Employee for Good Reason, the date of receipt of the
Notice of Termination, or any later date specified therein, as the case may be,
(ii) if the Employee’s employment is terminated by CryoLife other than for
Cause or Disability, the Date of Termination shall be the date on which the
Employee receives the Notice of Termination, and (iii) if the Employee’s
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Employee or the Disability
Effective Date, as the case may be.


(f)            Non-Compete Commitment.
During the term of this Agreement and for a period of one year after any
termination of this Agreement, the Employee agrees not to accept any position
as [as to Mr. Heacox, Senior
Vice President, Research and Development, and as to Mr.
Fronk, Vice President,
Regulatory Affairs and Quality Assurance]  to any competitor of CryoLife in the cardiac,
vascular or orthopedic tissue processing business or biological glue business
within the United States. Payments of amounts owing under any Severance Payment
(defined in Section 6(a)) obligation, shall be conditioned upon Employee’s
continued compliance with this non-compete commitment.


(g)           Agreement Not to Solicit.
During the term of this Agreement and for a period of one year after any
termination of this Agreement, the Employee agrees he will not, without the
prior written consent of CryoLife, either directly or indirectly, on his own
behalf or in the service or on behalf of others, solicit or attempt to solicit,
divert or hire away any person then employed by CryoLife.


6.             Obligations of CryoLife upon
Termination.


(a)           Good Reason; Other Than for Cause,
Death or Disability. If, during the Employment Period, (i) CryoLife shall
terminate the Employee’s employment other than for Cause, Death or Disability
or (ii) the Employee shall terminate employment for Good Reason, then CryoLife
shall pay to Employee as severance compensation an amount equal to one time the
aggregate of Employee’s annual salary and bonus compensation for the year in
which the termination of employment occurs except, however, if a Severance
Increase Event has occurred, the severance compensation shall be increased to
an amount equal to two times the aggregate of Employee’s annual salary and
bonus compensation for the year in which the termination of employment occurs
(the “Severance Payment”). Such payment shall be in addition to sums due to
Employee through the Date of Termination and shall be subject to normal
withholding requirements of CryoLife. The Severance Payment shall be payable in
cash by CryoLife in 24 equal monthly installments commencing on the date thirty
(30) days after Employee’s Date of Termination (the “Severance Period”); provided, however, that, to the extend
required under Section 409A of the Code to avoid the imposition of additional
tax to Employee under the Section, any payment of the Severance Payment shall
commence on the six-month anniversary of Employee’s separation from service
with CryoLife (or, if earlier, the date of Employee’s death) and continue in
equal monthly installments over the remainder of the Severance Period, provided further, that, to the extent
permitted under Section 409A of the Code without the imposition of additional
tax to Employee under that Section, the Severance Payment shall be paid (i) in
an immediate lump-sum in the event the Employee’s separation from service
occurs on or after a Change of Control or (ii) in an immediate lump sum at the
time of a Change of Control (less amounts previously paid to Employee) in the
event the separation from service occurs within six months prior to a



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Change of Control.
Payment of any Severance Payment or Retention Payment will be subject to normal
withholding. If the employment termination occurs before the awarding of
bonuses in the year in which the employment termination occurs, the bonus
compensation component of the Severance Payment shall be computed based on the
prior year’s bonus. Bonus compensation shall include cash bonus payments and
the present value of non-cash bonuses such as options or restricted stock.


(b)           Death. If the Employee’s employment
is terminated by reason of the Employee’s death during the Employment Period,
this Agreement shall terminate without further obligations to the Employee’s
legal representatives under this Agreement, other than for payment of
obligations accruing through the Date of Termination.


(c)           Disability. If the Employee’s
employment is terminated by reason of the Employee’s Disability during the
Employment Period, this Agreement shall terminate without further obligations
to the Employee, other than for payment obligations accruing through the Date
of Termination.


(d)           Cause; Other than for Good Reason.
If the Employee’s employment shall be terminated by CryoLife for Cause or by
the Employee without Good Reason during the Employment Period, this Agreement
shall terminate without further obligations to the Employee other than the
obligation to pay to the Employee his salary through the Date of Termination.


7.             Non-exclusivity of Rights.
Nothing in this Agreement shall prevent or limit the Employee’s continuing or future
participation in any plan, program, policy or practice provided by CryoLife or
any of its affiliated companies and for which the Employee may qualify, nor
shall anything herein limit or otherwise affect such rights as the Employee may
have under any contract or agreement with CryoLife or any of its affiliated
companies. Amounts which are vested benefits or which the Employee is otherwise
entitled to receive under any plan, practice or program of or any contract or
agreement with CryoLife or any of its affiliated companies at or subsequent to
the Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified by
this Agreement.


8.             Full Settlement. In no event
shall the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Employee under any of
the provisions of this Agreement and such amounts shall not be reduced whether
or not the Employee obtains other employment. CryoLife agrees to pay as
incurred, to the full extent permitted by law, all legal fees and expenses
which the Employee may reasonably incur as a result of any contest (regardless
of the outcome thereof) by CryoLife, the Employee or others of the validity or
enforceability of, or liability under, any provision of this Agreement.


9.             Limitation or Expansion of
Benefits.


(a)           In the event it shall be determined
that any benefit, payment or distribution by CryoLife to or for the benefit of
the Employee (whether payable or distributable pursuant to the terms of this
Agreement or otherwise) would, if paid, be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”; such
excise tax, the “Excise Tax”), then
CryoLife shall pay to Employee an additional amount of cash (a “Gross-Up
Payment”) equal to the amount necessary to cause the amount of the aggregate
after-tax compensation and benefits received by the Employee hereunder (after
payment of the excise tax under Section 4999 of the Code with respect to any
excess parachute payment, and any state and federal income and employment taxes
with respect to the Gross-Up Payment) to equal the aggregate after-tax
compensation and benefits the Employee would have received if Sections 280G and
4999 of the Code had not been enacted. A nationally recognized public
accounting firm selected by CryoLife shall initially determine, at CryoLife’s
expense, whether an “excess parachute payment” will be made to Employee, and if
so, the amount of the Gross-Up Payment. In the event of a subsequent claim by
the Internal Revenue Service that, if successful, would result in Employee’s
liability for an Excise Tax under Section 4999 of the Code in excess of the
amount covered by any previous Gross-Up Payment, the Employee shall promptly
notify CryoLife in writing of such claim. If CryoLife elects to contest such
claim, it shall so notify the Employee and shall bear and pay directly or
indirectly all costs and expenses of contesting the claim (including additional
interest and penalties incurred in connection with such action), and shall
indemnify and hold Employee harmless, on an after-tax basis, for any excise,
income, or employment tax, including interest and penalties with respect
thereto, imposed as a result of CryoLife’s payment of costs of the contest.
Employee shall cooperate fully with CryoLife in the defense of any such IRS
claim. If, as a result of CryoLife’s action with respect to a claim, Employee
receives a refund of any amount paid by CryoLife with



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respect to such claim,
Employee shall promptly pay such refund to CryoLife. In the event the IRS claim
is finally determined to result in the imposition of additional excise tax
under Section 280G of the Code on Employee, CryoLife shall make an additional
Gross-Up Payment with respect to any such additional excise tax.


(b)           Anything in this Agreement to the
contrary notwithstanding, severance, separation and/or similar payments made to
the Employee shall be limited to the equivalent of three years salary,
including bonuses and guaranteed benefits. If necessary, any Gross-Up Payment
will be reduced in order to comply with this provision.


10.           Confidential Information. The
Employee and CryoLife are parties to one or more separate agreements respecting
confidential information, trade secrets, inventions and non-competition
(collectively, the “IP Agreements”). The parties agree that the IP Agreements
shall not be superceded or terminated by this Agreement and shall survive any
termination of this Agreement.


11.           Successors.


(a)           This Agreement is personal to the
Employee and without the prior written consent of CryoLife shall not be
assignable by the Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Employee’s legal representatives.


(b)           This Agreement shall inure to the
benefit of and be binding upon CryoLife and its successors and assigns.


(c)           CryoLife will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of CryoLife to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that CryoLife would be required to perform it if no such succession
had taken place. As used in this Agreement, “CryoLife” shall mean CryoLife as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.


12.           Miscellaneous.


(a)           This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force and effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.


(b)           All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:


If to the
Employee:


[Employee name and
address]


If to CryoLife:


CryoLife, Inc.

1655 Roberts Boulevard, N.W,

Kennesaw, Georgia 30144

Attention:  President


or to such other address
as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received
by the addressee.



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(c)           The invalidity or unenforceability or
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.


(d)           CryoLife may withhold from any
amounts payable under this Agreement such Federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any applicable law or
regulation.


(e)           From and after the Effective Date
this Agreement shall supersede any other agreement between the parties with
respect to the subject matter hereof.


(f)            The provisions of this Agreement are
intended to satisfy the applicable requirements of Section 409A of the Code and
shall be performed and interpreted consistent with such intent. If any
provision of this Agreement does not satisfy such requirements or could
otherwise cause Employee to be subject to the interest and penalties under
Section 409A of the Code, Employee and CryoLife agree to negotiate in good
faith an appropriate modification to maintain, to the maximum extent
practicable, the original intent of the applicable provision without violating
the requirements of Section 409A of the Code (or causing the imposition of
additional tax to Employee under Section 409A of the Code).



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IN WITNESS WHEREOF, the
Employee has hereunder set the Employee’s hand and, pursuant to the
authorization from its Board, CryoLife has caused these presents to be executed
in its name on its behalf, all as of the day and year first above written.


 


 


	
  

  	
   

  	
   

  
	
   

  	
  [Employee Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRYOLIFE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Steven G. Anderson

  
	
   

  	
   

  	
  Chairman, President and CEO

  
				



 



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Exhibit A


Duties and Responsibilities of [Employee Name]:


All duties of [as to Mr. Heacox, Senior Vice President, Research and
Development, and as to Mr. Fronk, Vice President, Regulatory Affairs and
Quality Assurance] and duties not inconsistent with such
duties that are assigned by the President.


Compensation:


Salary of  [Mr. Heacox—$265,650 ,
and Mr. Fronk—$240,000] and bonus set by the Compensation Committee. Salary
& Bonus subject to yearly review by the Compensation Committee of the Board
of Directors:


Vacation and Employee Benefits:


See attached
CryoLife vacation plan, standard CryoLife medical plan and contributory


401K plan.


CryoLife Business:


The development, marketing, sale and distribution of tissue
preservation services and biomedical and medical products including cardiac,
vascular or orthopedic tissue processing business and biological glues.