Document:

EX-10.3

 Exhibit 10.3 

CryoLife, Inc. 
 1655
Roberts Boulevard N.W. 
 Kennesaw, Georgia 30144 

Date: September 2, 2014 
  

			
	Name:	  	Mr. J. Patrick Mackin
	Address:	  	250 Bergamot Drive
		  	Medina, MN 55340

 RE: Grant of Stock Option 

Dear Pat: 
 This letter sets forth the agreement (the
“Agreement”) between you (the “Employee”) 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 400,000 shares (of Common Stock the “Option Shares”) at the purchase price of $10.18 per share. The date of grant (“Grant Date”) of the option is September 2, 2014. This option is intended to be and shall be
treated as an “Incentive Stock Option,” which is an option that is intended to be an “incentive stock option” pursuant to Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding
the foregoing, to the extent that all or any portion of the option fails for any reason to comply with the provisions of Section 422 of the Code, it shall be treated as a “Non-Qualified Stock Option.” This option is granted pursuant
to the CryoLife, Inc. Second Amended and Restated 2009 Stock Incentive Plan (the “Plan”). 
 2. Time of Exercise of
Option. Prior to its termination as set forth in Section 5 below, and subject to Section 8 of the Plan, 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: 
  

									
	 Vesting/ Initial Exercise Date
	  	Number of Option
Shares Exercisable	 	  	Cumulative Percentage of
Option Shares Exercisable	 
			
	 September 2, 2015
	  	 	133,333	  	  	 	33 1/3	% 
	 September 2, 2016
	  	 	133,333	  	  	 	33 1/3	% 
	 September 2, 2017
	  	 	133,334	  	  	 	33 1/3	% 

 3. Method of Exercise. The option shall be exercised by written notice directed to the
Compensation Committee (the “Committee”), at the Company’s principal executive office, and except as set forth below, must be accompanied by payment of the option price for the number of Option Shares purchased in accordance with the
Plan’s requirements. The payment for the number of Option Shares purchased may be payable in cash or by tendering (by actual delivery of shares) unrestricted shares of the Company’s common stock in accordance with the Plan. To the extent
permitted by applicable law, you may elect to pay for the number of Option Shares purchased by irrevocably authorizing a third party to sell shares of the Company’s common stock acquired upon exercise of the Option Shares and remitting to the
Company a sufficient portion of the sale proceeds as payment of the entire option price for the number of Option Shares purchased, including any tax withholding resulting from such exercise. The Company shall make delivery of such shares in
accordance with the Plan provided that if any law or regulation requires the Company to take any action with respect to the shares specified in such notice before the issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to take such action. 
 4. The Plan. The Plan, as amended from time to time by the Board of Directors of
the Company, is hereby incorporated in this Agreement, and to the extent that anything in this Agreement is inconsistent with the Plan, the terms of the Plan shall control. Employee acknowledges that the Company has provided a copy of the Plan to
Employee. 
 5. Termination of Option. Except as herein otherwise stated, and subject to the provisions of Section 5.15 of
the Plan, the option, to the extent not previously exercised, shall terminate in accordance with the Plan and upon the first to occur of the following events: 

(a) Disability. The expiration of 36 months after the date on which Employee’s employment by the Company is terminated, if such
termination be by reason of Employee’s permanent and total disability, provided, however, that (i) the option shall be exercisable only to the extent that Employee had the right to exercise the option at the time of termination, and
(ii) if the Employee dies within such 36 month period, any unexercised option held by such Employee shall thereafter be exercisable in accordance with the provisions of and shall terminate upon the first to occur of the events described in
Sections 5(b) and (d); 
 (b) Death. In the event of Employee’s death while in the employ of the Company, the expiration of 12
months following the date of his or her death, provided that the option shall be exercisable following the Employee’s death only to the extent that Employee had the right to exercise the option at the time of his or her death; 

(c) Retirement. In the event Employee’s employment with the Company terminates by reason of normal or early retirement, any option
held by such Employee may be exercised by the Employee for a period of 36 months from the date of such termination to the extent that Employee had the right to exercise the option at the time of his or her termination; provided, however, that if the
Employee dies within such 36 month period any unexercised option held by Employee shall thereafter be exercisable in accordance with the provisions of and shall terminate upon the first to occur of the events described in Section 5(b) and (d);
or 
 (d) Other. Upon the earlier to occur of (i) 84 months following the Grant Date, or (ii) upon termination of
Employee’s employment by the Company (except if such termination be by reason of death, disability, or normal or early retirement or, in accordance with Section 5.15 of the Plan, following a Change In Control). It is in Compensation
Committee’s sole discretion to determine whether the Employee’s employment with the Company terminates by reason of disability, normal or early retirement. 

  
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 Except as set forth above, the option may not be exercised unless Employee, at the time he or she exercises the
option, is, and has been at all times since the date of grant of the option, an employee of the Company. Employee shall be deemed to be employed by the Company if he or she is employed by the Company or any of its subsidiaries. Notwithstanding the
above, in no event may the option be exercised after 84 months following the Grant Date. 
 6. Reclassification, Consolidation, or
Merger. The number of Option Shares may be adjusted in accordance with the Plan if certain events such as merger, reorganization, consolidation, recapitalization, stock dividends, stock splits, or other changes in the Company’s
corporate structure affecting its Common Stock occur. 
 7. Rights Prior to Exercise of Option. This option is not transferrable
by Employee, except by will or by the laws of descent and distribution or as otherwise set forth in the Plan, and during Employee’s lifetime shall be exercisable only by Employee. This option shall confer no rights to the holder hereof to act
as stockholder with respect to any of the Option Shares until payment of the option price and delivery of a share certificate has been made. 

8. Employee’s Representations and Warranties. By execution of this Agreement, Employee represents and warrants to the Company as
follows: 
 (a) The entire legal and beneficial interest of the option and the Option Shares are for and will be held for the account
of the Employee only and neither in whole nor in part for any other person. 
  

	 	(b)	Employee resides at the following address: 

 250 Bergamot Drive 

Medina, MN 55340 
 (c) Employee is
familiar with the Company and its plans, operations, and financial condition. Prior to the acceptance of this option, Employee has received all information as he or she deems necessary and appropriate to enable an evaluation of the financial risk
inherent in accepting the option and has received satisfactory and complete information concerning the business and financial condition of the Company in response to all inquiries in respect thereof. 

9. Restricted Securities. Employee recognizes and understands that this option and the Option Shares are currently registered under the
Securities Act of 1933, as amended (the “Act”), but may not remain so registered, and are not registered under any state securities law. Any transfer of the option (if otherwise permitted hereunder, and once exercised, the Option Shares)

  
 - 3 - 

 
will not be recognized by the Company unless such transfer is registered under the Act, the Georgia Uniform Securities Act of 2008, as amended, (the “Georgia Act”) and any other
applicable state securities laws or effected pursuant to an exemption from such registration which may then be available. If the Option Shares are not registered, any share certificates representing the Option Shares may be stamped with legends
restricting transfer thereof in accordance with the Company’s policy with respect to unregistered shares of its Common Stock issued to employees as a result of exercise of options granted under the Plan. The Company may make a notation in its
stock transfer records of the aforementioned restrictions on transfers and legends. Employee recognizes and understands that the Option Shares may be restricted securities within the meaning of Rule 144 promulgated under the Act; that the exemption
from registration under Rule 144 may not be available under certain circumstances and that Employee’s opportunity to utilize such Rule 144 to sell the Option Shares may be limited or denied. The Company shall be under no obligation to maintain
or promote a public trading market for the class of shares for which the option is granted or to make provision for adequate information concerning the Company to be available to the public as contemplated under Rule 144. The Company will be
under no obligation to recognize any transfer or sale of any Option Shares pursuant to Rule 144 unless the terms and conditions of Rule 144 are complied with by the Employee. By acceptance hereof, Employee agrees that no permitted disposition of any
Option Shares shall be made unless and until (i) there is at the time of exercise of the option in effect a registration statement under the Act, or (ii) Employee shall have notified the Company of a proposed Option disposition and shall
have furnished to the Company a detailed statement of the circumstances surrounding such disposition, together with an opinion of counsel acceptable in form and substance to the Company that such disposition will not require registration of the
shares so disposed under the Act, the Georgia Act, and any applicable state securities laws. The Company shall be under no obligation to permit such transfer or disposition on its stock transfer books unless counsel for the Company shall concur as
to such matters. Employee recognizes and understands that if and for so long as Employee is a designated Section 16 officer of the Company, and for up to six months thereafter, any sales of Option Shares will be subject to Section 16 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the regulations promulgated thereunder. Employee also recognizes and understands that any sale of the Option Shares will also be subject to Rule 10b-5 promulgated
under the Exchange Act. Employee agrees that any disposition of the Option Shares shall be made only in compliance with the Act, the Exchange Act, and the rules and regulations promulgated thereunder. 

10. Tax Matters. The Employee hereby agrees to comply with any applicable federal, state, and local income and employment tax
requirements which might arise with regard to a disposition of any Option Shares and to inform the Company of any such disposition which occurs prior to the expiration of (i) two years from the date of grant of the options, 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. 

  
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 11. Section 409A. This Agreement is intended to comply with, or otherwise be exempt
from, Section 409A of the Code. This Agreement shall be administered, interpreted and construed in a manner consistent with such Code section. Should any provision of this Agreement be found not to comply with, or otherwise be exempt from, the
provisions of Section 409A of the Code, it shall be modified and given effect, in the sole discretion of the Committee and without requiring your consent, in such manner as the Committee determines to be necessary or appropriate to comply with,
or effectuate an exemption from, Section 409A of the Code. 
 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. 
 [Signatures on Following Page] 

  
 - 5 - 

 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 Roger Weitkamp, CryoLife, Inc., 1655 Roberts Blvd., Kennesaw, GA 30144. 
  

					
		 		 	Sincerely,
			
	(SEAL)	 		 	THE COMPANY:
			
		 		 	CRYOLIFE, INC.
			
		 		 	 /s/ Steven G. Anderson

	Attest:	 		 	Steven G. Anderson
		 		 	Chairman
			
	 /s/    Roger
Weitkamp        
	 		 	
			
		 		 	EMPLOYEE:
			
		 		 	 /s/ James P. Mackin

		 		 	J. Patrick Mackin
		 		 	CEO & President

  
 - 6 -EX-10.4

 Exhibit 10.4 

Name: J. Patrick Mackin             

CRYOLIFE RESTRICTED STOCK AWARD AGREEMENT 

CRYOLIFE, INC. (“CryoLife”) is pleased to grant you the restricted stock award described below (“Stock Award”). This grant is made
subject to the further terms and conditions set forth in this Agreement and the terms of the CryoLife, Inc. Second Amended and Restated 2009 Stock Incentive Plan (the “Plan”). 

 

			
	Grant Date:	  	September 2, 2014
		
	Market Price on Grant Date:	  	$10.18 per share
		
	Total Number of Shares of Stock Award:	  	250,000

 Vesting: 

Subject to Section 8 of the Plan, this Stock Award vests 100% on September 2, 2017 (the “Vesting Date”) if
CryoLife achieves aggregate “Adjusted EBITDA” of at least $20.0 million over any four consecutive calendar quarters commencing after the Effective Date and ending prior to the Vesting Date. You must be employed by CryoLife or
one of its Subsidiaries or Affiliates on the Vesting Date to be entitled to the vesting of the Stock Award on such date; provided, however, that (A) should your employment terminate by reason of (i) death, (ii) Permanent Disability or
(iii) termination by the Company without Cause prior to the Vesting Date, and (B) prior to such termination CryoLife has achieved at least $20 million in Adjusted EBITDA over any four consecutive calendar quarters commencing after the
Effective Date and ending prior to such termination, then the vesting of the Stock Award shall accelerate, and the Stock Award shall be vested (a) one-third (83,333 shares), if such termination occurs after September 2, 2015 and on or
before September 2, 2016; and (b) two-thirds (166,666 shares), if such termination occurs after September 2, 2016. The vesting of all or any portion of the Stock Award is subject to certification by the Compensation Committee that the
Adjusted EBITDA performance goal has been achieved. The Compensation Committee may not exercise discretion to increase the number of shares subject to this Stock Award upon attainment of the performance goal. 

“Adjusted EBITDA” is defined on Exhibit A. The terms “Permanent Disability,” “Cause,” “Effective
Date,” and “Employment Period” shall have the meaning ascribed to them in your Employment Agreement executed July 7, 2014. 

Additional Terms and Conditions describes withholding of taxes on your award, transferability of your award, where to send notices and other matters. 

The Plan contains the detailed terms that govern your Stock Award. If anything in this Agreement or the other attachments is inconsistent with the Plan, the
terms of the Plan, as amended from time to time, will control. 
 The Plan Prospectus Document covering the Stock Award contains important information,
including federal income tax consequences. 
 The 2013 Annual Report of CryoLife contains financial and other background information regarding CryoLife (not
attached if you previously received the 2013 Annual Report). 

  
 1 

 Please sign below to show that you accept this Stock Award after review of the above documents. Keep a copy
and return both originals to Roger Weitkamp, CryoLife, Inc., 1655 Roberts Boulevard, NW, Kennesaw, Georgia 30144. 
  

									
	CRYOLIFE, INC.	 		 	GRANTEE:
				
	By:	 	 /s/ Steven G. Anderson
	 		 	 /s/ James P. Mackin

	Name:	 	Steven G. Anderson	 		 	Name:	 	J. Patrick Mackin
	Its:	 	Chairman	 		 	Social Security Number:    ###-##-####
	Date:	 	September 2, 2014	 		 	Your Residential Address:
		 		 		 	250 Bergamot Drive
		 		 		 	Medina, MN 55340
		 		 		 	Date:	 	September 2, 2014

  
 2 

 EXHIBIT A 

ADJUSTED EBITDA 

Adjusted EBITDA, a non-GAAP adjusted performance measure, is calculated as the Company’s consolidated net income before interest, taxes,
depreciation and amortization, as further adjusted by: 
  

	 	•	 	removing the impact of the following: 

  

	 	•	 	stock-based compensation 

  

	 	•	 	research and development expenses (excluding salaries and related expense) 

  

	 	•	 	grant revenue 

  

	 	•	 	litigation expense or income 

  

	 	•	 	acquisition, license, and other business development expense 

  

	 	•	 	integration costs (including any litigation costs or income related to assumed litigation) 

  

	 	•	 	other income or expense 

  

	 	•	 	including the impact of the change in balances of deferred preservation costs, inventory, and trade receivables on the company’s balance sheets 

As an example of computation of Adjusted EBITDA, the table below provides a reconciliation of 2013 Adjusted EBITDA to the Company’s 2013
net income under GAAP: 
 2013 Adjusted EBITDA Reconciliation (In Thousands) 

 

					
	 2013 Adjusted EBITDA
	  	$	28,171	  
	 Change in deferred preservation costs
	  	 	(657	) 
	 Change in inventory
	  	 	(786	) 
	 Change in trade receivables
	  	 	1,897	  
	 Amortization expense
	  	 	(2,006	) 
	 Depreciation expense
	  	 	(3,837	) 
	 Other than temporary investment impairment
	  	 	(3,229	) 
	 Other income, net
	  	 	26	  
	 Interest income
	  	 	4	  
	 Interest expense
	  	 	(71	) 
	 Income tax expense, net
	  	 	(7,120	) 
	 Charges related to acquisitions, licenses, business development or integration and litigation costs
	  	 	(1,625	) 
	 Grant revenues
	  	 	71	  
	 Research and development expense, excluding that portion pertaining to salaries and related expenses
	  	 	(4,168	) 
	 Stock compensation expense, excluding stock compensation expense related to the bonus program itself
	  	 	(3,240	) 
	 Gain on sale of Medafor investment
	  	 	12,742	  
		  	  
	  
	 
	 2013 GAAP Net Income 
	  	$	16,172	  
		  	  
	  
	 

  
 3 

 ADDITIONAL TERMS AND CONDITIONS OF YOUR RESTRICTED STOCK AWARD 

STOCK AWARD SHARE CERTIFICATES. Certificates
representing the shares of Common Stock to be issued pursuant to the Stock Award shall be issued in your name and shall be held by CryoLife until the Stock Award is vested or forfeited as provided herein. Upon vesting of your Stock Award, CryoLife
shall promptly deliver to you a certificate or certificates representing the shares as to which the Stock Award has vested free of the restrictions described in the following section. 

RIGHTS WITH RESPECT TO STOCK AWARD PRIOR
TO VESTING. You may not transfer your Stock Award or the shares to be issued hereunder prior to vesting. Once this Stock Award vests, you will receive transferable certificates
representing the vested portion. Prior to vesting, you are entitled to all other rights as a shareholder with respect to the shares underlying the Stock Award, including the right to vote such shares and to receive dividends and other distributions,
if any, payable with respect to such shares after the Grant Date. 
 WITHHOLDING. Whenever
CryoLife proposes, or is required, to distribute shares to you or pay you dividends with respect to the unvested portion of your Stock Award, CryoLife may either: (a) require you to pay to CryoLife an amount sufficient to satisfy any local,
state, Federal and foreign income tax, employment tax and insurance withholding requirements prior to the delivery of any payment or Stock certificate owing to you pursuant to the Stock Award; or, in its discretion, (b) reduce the number of
shares to be delivered to you by that number of shares of the Stock Award sufficient to satisfy all or a portion of such tax withholding requirements, based on the fair market value of the Stock Award as determined under the Plan. 

NOTICES. All notices delivered pursuant to this Agreement shall be in writing and shall be
(i) delivered by hand, (ii) mailed by United States certified mail, return receipt requested, postage prepaid, or (iii) sent by an internationally recognized courier which maintains evidence of delivery and receipt. All notices or
other communications shall be directed to the following addresses (or to such other addresses as such parties may designate by notice to the other parties): 
  

			
	To CryoLife:	  	CryoLife, Inc.
		  	1655 Roberts Boulevard, NW
		  	Kennesaw, Georgia 30144
		  	Attention: Secretary
		
	To you:	  	The address set forth in the Agreement.

 MISCELLANEOUS. Failure by you or CryoLife at any time or times to
require performance by the other of any provisions in this Restricted Stock Award Agreement (“Agreement”) will not affect the right to enforce those provisions. Any waiver by you or CryoLife of any condition or of any breach of any term or
provision in this Agreement, whether by conduct or otherwise, in any one or more instances, shall apply only to that instance and will not be deemed to waive conditions or breaches in the future. If any court of competent jurisdiction holds that any
term or provision of this Agreement is invalid or unenforceable, the remaining terms and provisions will continue in full force and effect, and this Agreement shall be deemed to be amended automatically to exclude the offending provision. This
Agreement may be executed in multiple copies and each executed copy shall be an original of this Agreement. This Agreement shall be subject to and governed by the laws of the State of Georgia. No change or modification of this Agreement shall be
valid unless it is in writing and signed by the party against which enforcement is sought, except where specifically provided to the contrary herein. This Agreement shall be binding upon, and inure to the benefit of, the permitted successors,
assigns, heirs, executors and legal representatives of the parties hereto. The headings of each section of this Agreement are for convenience only. This Agreement, together with the Plan, contains the entire Agreement of the parties hereto, and no
representation, inducement, promise, or agreement or other similar understanding between the parties not embodied herein shall be of any force or effect, and no party will be liable or bound in any manner for any warranty, representation, or
covenant except as specifically set forth herein or in the Plan. 

  
 4

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