CRYOLIFE INC
FORM OF DIRECTORS STOCK OPTION AGMT.
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>cryolife10q93004ex101.txt
<DESCRIPTION>FORM OF DIRECTORS STOCK OPTION AGMT.
<TEXT>
                                                                    EXHIBIT 10.1


                                 CRYOLIFE, INC.
                           1655 ROBERTS BOULEVARD N.W.
                             KENNESAW, GEORGIA 30144


                                                            --------------------
                                                                   (Date)
Re:      GRANT OF DIRECTOR STOCK OPTION

Dear   ________________________:

     This  letter sets forth the  agreement  (the  "Agreement")  between you and
CryoLife, Inc., a Florida corporation (the "Company"),  regarding your option to
acquire shares of the Company's Common Stock.

     1. Grant of Option:  Subject to the terms and  conditions set forth herein,
the Company hereby grants to you (the  "Optionee")  the option (the "Option") to
purchase,  in the  aggregate,  up to ______  shares  of the  Common  Stock  (the
"Shares").  The Option shall be deemed granted by the Company to the Optionee as
of  _____________  (the "Grant  Date").  This Option is granted  pursuant to the
CryoLife,  Inc. 2004 Non-Employee  Directors Stock Option Plan (the "Plan"). The
Option is not an  incentive  stock  option  under  Section  422 of the  Internal
Revenue Code of 1986, as amended ("Code").

     2. Option Price: The Option exercise price is $_____ per share (the "Option
Exercise Price").

     3. Option  Period:  This Option  shall vest and become  exercisable  on the
Option's  Grant Date.  This Option may be  exercised at any time after its Grant
Date,  provided that at the time of exercise all of the  conditions set forth in
the Plan  have  been  met.  Notwithstanding  the  foregoing,  no  Option  may be
exercised later than five years after the Grant Date.

     4. The Plan.  The Company's  2004  Directors  Stock Option 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.  Optionee
acknowledges that the Company has provided a copy of the Plan to Optionee.

     5. Termination of Option: Except as herein otherwise stated, the Option, to
the extent not previously  exercised,  shall  terminate five (5) years following
the Grant Date.

     6. Cessation of Service: If Optionee leaves the Board of Directors while in
good  standing,  for any reason,  including  without  limitation  resignation or
death,  Optionee's  Options  shall remain in effect and  exercisable,  and shall
expire as if Optionee had remained a Non-Employee  Director of the Company. Upon
the death of the Optionee,  his or her Options shall be  exercisable  by his/her
legal  representatives  or heirs,  but in no event may the Options be  exercised
beyond the last date which they could have been  exercised  had the Optionee not
died.

     7.  Delivery  of Notice:  The  Optionee  may  exercise  the Option  only by
delivering  written  notice to the Company of his or her intent to exercise  the
Option  (the  "Notice').  The Notice  shall be  delivered  to the Company at its
principal office at:

                           1655 Roberts Blvd., N.W.
                           Kennesaw, Georgia  30144

or to such other address as may be  designated by the Company.  The Notice shall
specify the number of Shares to be purchased in accordance  with this  Agreement
and shall include payment in full of the Option Price.

     8. Payment: The Option Exercise Price shall be paid in cash in U.S. Dollars
at the time the Option is  exercised or in shares of Common Stock of the Company
having an aggregate value equal to the Option Exercise Price or by a combination

<PAGE>

of cash and Common Stock.  If the Option  Exercise  Price is paid by transfer of
shares of Common  Stock of the  Company  then the value of such  shares  will be
determined by the last closing  price of the  Company's  Common Stock on the New
York Stock  Exchange prior to the exercise of the options.  In addition,  to the
extent  permitted by applicable law and  regulations,  Optionee may elect to pay
the exercise  price upon the exercise of the Option by authorizing a third party
to sell shares of Common 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.

     9. Delivery of Shares to Optionee:  Upon the Optionee's  proper exercise of
the Option,  the Company shall deliver to the Optionee one or more  certificates
evidencing the number of Shares purchased pursuant to the exercise of the Option
and such Shares shall be fully paid and nonassessable.

     10. Transferability: Except as otherwise provided in this paragraph 10, the
Options granted under this Plan are not transferable other than as designated by
the Optionee by will or by the laws of the descent and distribution,  and during
the  Optionee's  life,  may be  exercised  only by the  Optionee.  However,  the
Optionee may transfer the Option for no  consideration  to or for the benefit of
the Optionee's Immediate Family (including,  without limitation,  to a trust for
the benefit of the  Optionee's  Immediate  Family or to a partnership or limited
liability company for one or more members of the Optionee's  Immediate Family or
to an IRA  for  the  benefit  of one or  more  members  of his or her  Immediate
Family),  subject to such limits as the Board may establish,  and the transferee
shall remain subject to all the terms and  conditions  applicable to such Option
prior to such transfer.  The foregoing  right to transfer the Option shall apply
to the right to  consent to  amendments  to the grant  agreement  and shall also
apply to the right to transfer  ancillary rights associated with the Option. The
term "Immediate  Family" shall mean the Optionee's  spouse,  parents,  children,
stepchildren, adoptive relationships,  sisters, brothers and grandchildren (and,
for this purpose, shall also include the Optionee).

     11. Optionee Not a Shareholder: The Optionee shall not be deemed, by reason
of this option  agreement,  for any purposes to be a shareholder  of the Company
with  respect to any of the shares of the  capital  stock of the Company or with
respect  to any of the  Shares,  except to the  extent  that the Option has been
exercised, in whole or in part, and a stock certificate  representing Shares has
been issued to the Optionee.  Notwithstanding  this provision,  it is understood
and agreed that the Company and the Optionee shall make any required  disclosure
of the  "beneficial  ownership"  of Shares  which may be received  upon a future
exercise of the Option.

     12. No  Restrictions  on the  Company:  The grant of the  Option  shall not
affect in any way the right or power of the Company or its  shareholders to make
or authorize any or all adjustments, recapitalizations,  reorganizations, or any
other changes in the Company's capital structure or its business,  or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred or
prior  preference  stock ahead of or affecting the Common  Stock,  or the rights
thereof,  or dissolution or liquidation of the Company,  or any sale or transfer
of all or any part of the  assets  or  business  of the  Company,  or any  other
corporate act or proceeding, whether of a similar character or otherwise.

     13. Reclassification,  Consolidation or Merger: The number of Option Shares
shall  be   adjusted  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, but only
if such  adjustments are made to options issued under any of the Company's plans
then in effect  pursuant to which  incentive  stock  options may be granted.  No
adjustments or  substitution  provided for in this  Subsection,  however,  shall
require the Company to sell a fractional  share,  and the total  substitution or
adjustment herein is and shall be limited accordingly.

     14.  Optionee's  Representations  and  Warranties:  By  execution  of  this
Agreement, Optionee represents and warrants to the Company as follows:

A.  Investment   Representations  and  Warranties:  The  Optionee  warrants  and
represents  to the Company  that he or she is  acquiring  the Option  and,  upon
exercise  of the  Option,  in whole or in part,  the  Shares  for his or her own
account for investment purposes and not with a view to distribution,  as defined
in the Securities Act of 1933, as amended (the "Securities  Act"), and the rules
and   regulations  of  the  Securities  and  Exchange   Commission   promulgated
thereunder.  The Optionee  further agrees that he or she will not sell,  assign,
transfer  or pledge  the  Option or any of the  Shares  purchased  by him or her
pursuant  to  the  exercise  of  the  Option,  unless  and  until  either  (i) a
registration  statement  under the  Securities  Act covering the Shares  becomes


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<PAGE>

effective  or (ii) the  Company  has  received an opinion of counsel in form and
substance  satisfactory to the Company and its counsel that such sale, transfer,
assignment  or  pledge  may  be  accomplished  without  registration  under  the
Securities Act.

B. Compliance with Withholding  Rules: The Company shall have the right to adopt
and apply rules  governing the exercise of the Option and the issuance of Shares
pursuant  thereto which will ensure that the Company will be able to comply with
the  applicable  provisions of any federal,  state or local laws relating to the
withholding of taxes.

C. No Tax Advice:  The Optionee  understands that neither the Company nor any of
its  affiliates,   has  given  any  advice  regarding  the  federal  income  tax
consequences of (i) the Agreement, or (ii) the grant of the Option, or (iii) the
acquisition of the Shares upon exercise of the Option. The Optionee acknowledges
that he or she has been  encouraged  to seek  independent  advice  regarding the
grant and the exercise of the Option herein.

     15.  Legends:  The Company  shall have the  discretion  to require that the
certificates representing the Shares shall bear such legends as are necessary to
ensure the enforceability of the conditions and limitations set forth herein.

     16. Binding  Effect:  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective  successors-in-interest.  All
parties  bound by this  Agreement  shall take any and all actions  necessary  or
appropriate to effectuate the purposes and provisions hereof.

     17. Amendments and Waivers:  Except as otherwise provided herein, no change
or  modification  of this Agreement shall be valid unless the same is in writing
and  signed  by all the  parties  hereto.  No waiver  of any  provision  of this
Agreement shall be valid unless in writing and signed by the person against whom
it is sought to be enforced. The failure of any party at any time to insist upon
strict  performance of any condition,  promise,  agreement or understanding  set
forth herein shall not be construed as a waiver or  relinquishment  of the right
to insist upon strict performance of the same condition,  promise,  agreement or
understanding at a future time.

     18. Complete Agreement: This Agreement, together with the Plan, constitutes
and sets forth all of the final and complete promises,  agreements,  conditions,
understandings,  warranties  and  representations  among the parties hereto with
respect to the Option and the  Shares,  and there are no  promises,  agreements,
conditions,  understandings,  warranties  or  representations,  oral or written,
express or implied,  among them with  respect to the  matters  set forth  herein
other than as set forth  herein or in the Plan as they may be amended  from time
to time.

     19. Captions and Pronouns: The captions contained in this Agreement are for
convenience  of  reference  only and  shall  not in any way  modify or limit the
meaning or  interpretation  of this Agreement.  All terms and words used in this
Agreement,  regardless of the number and gender in which they are used, shall be
deemed and  construed to include any other number,  singular or plural,  and any
other gender,  masculine,  feminine,  or neuter, as the context or sense of this
Agreement or any section,  paragraph  or clause  herein may require,  as if such
words had been fully and properly written in the appropriate number and gender.

     20.  Governing  Law: This  Agreement  shall be governed by and construed in
accordance with the laws of the State of Georgia.

     21.  Counterparts:  Any number of  counterparts  of this  Agreement  may be
signed and delivered, and each shall be considered an original and together they
shall constitute one agreement.

     22. Severability:  This Agreement shall not be severable in any way, but if
any provision should be held to be invalid,  the invalidity shall not effect the
validity of the remainder of this Agreement.

     23. Restricted  Securities:  Optionee  recognizes and understands that this
Option  and the  Shares  have not been and may not be in the  future  registered
under the Securities Act of 1933, as amended (the "Act"), the Georgia Securities
Act of 1973, as amended (the "Georgia Act"), or any other state  securities law.
Any  transfer  of  the  Option  (if  otherwise  permitted  hereunder,  and  once
exercised,  the  Shares)  will not be  recognized  by the  Company  unless  such
transfer is registered  under the Act, the Georgia Act, and any other applicable
state   securities  laws  or  effected   pursuant  to  an  exemption  from  such


                                       3
<PAGE>

registration which may then be available.  Any share  certificates  representing
the  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 as a result of exercise of options.  The Company may make a
notation in its stock transfer  records of the  aforementioned  restrictions  on
transfers and legends.  Optionee  recognizes and understands that the 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 Optionee's opportunity to utilize such Rule
144 to sell the 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 Shares  unless the terms and  conditions of Rule 144 are
complied with by the Optionee.  By acceptance  hereof,  Optionee  agrees that no
permitted  disposition  of this  option or any Shares  shall be made  unless and
until (i) there is then in effect a  registration  statement  under the Act, the
Georgia Act,  and  applicable  state  securities  laws  covering  such  proposed
disposition and such  disposition is made in accordance  with such  registration
statement,  or (ii)  Optionee  shall  have  notified  the  Company of a proposed
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.

     24.  APPLICABLE  TAXES:  No later than the date as of which an amount first
becomes  includable  in the gross income of the Optionee for Federal  income tax
purposes with respect to the exercise of the Option,  the Optionee  shall pay to
the Company,  or make  arrangements  satisfactory  to the Company  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 this
Agreement shall be conditional upon such payment or arrangements and the Company
shall,  to the extent  permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Optionee.

     IN WITNESS  WHEREOF,  the Company has caused this instrument to be executed
by its duly authorized  officers and the Optionee has executed this Agreement as
of the date and year first above written.

                 (SEAL)                   THE COMPANY:
                                          CRYOLIFE, INC.


                                          --------------------------------------
Attest:

---------------------------------------
Secretary for the Company
                                          OPTIONEE:

                                          --------------------------------------

                                          --------------------------------------
                                          (Print name of Optionee)



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