--------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 8-K
--------------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 5, 2005
---------
CRYOLIFE, INC.
(Exact name of registrant as specified in its charter)
-------------------------
FLORIDA 1-13165 59-2417093
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1655 ROBERTS BOULEVARD, N.W., KENNESAW, GEORGIA 30144
(Address of principal executive office) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 419-3355
-------------------------------------------------------------
(Former name or former address, if changed since last report)
-------------------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
--------------------------------------------------------------------------------
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Employment Agreement with Steven G. Anderson
On September 5, 2005, CryoLife ("CryoLife" or the "Company") and Mr.
Anderson entered into an employment agreement for Mr. Anderson to serve as the
Company's President, Chief Executive Officer and Chairman of the Board of
Directors, a copy of which is attached hereto as Exhibit 10.1 and incorporated
herein by reference. This new agreement supersedes the previous agreement. The
material terms of such agreement include the following:
o Mr. Anderson's agreement has a term of two years from September 5,
2005 (the "Anderson Effective Date"). His employment agreement will
automatically extend for an additional one year each anniversary
thereafter unless either Mr. Anderson or the Company elects not to
extend the term of the agreement by notifying the other party in
writing at least 30 days prior to the first anniversary of the
Anderson Effective Date and each anniversary thereafter.
o Mr. Anderson's employment with the Company may be terminated by the
Company for Cause, Good Reason or Disability (as those terms are
defined in Mr. Anderson's employment agreement) or automatically upon
Mr. Anderson's death.
o Mr. Anderson's initial base salary will be $600,000 per year and a
bonus set by the Compensation Advisory Committee of the CryoLife Board
of Directors. The salary and bonus will be subject to a yearly review
by the Compensation Advisory Committee. Mr. Anderson is entitled to
participate in all compensation and bonus plans made available to
CryoLife's executive employees.
o Mr. Anderson is entitled to paid vacation in accordance with the
Company's standard vacation policy. Vacations not taken will be
cumulative and carried over to a subsequent year. Upon employment
termination, Mr. Anderson will be paid at the rate of $2,307 per day
for accumulated vacation days not taken.
o Mr. Anderson is entitled to receive benefits under the Company's
standard medical plan and contributory 401(k) plan and will receive
life insurance coverage of at least two times base pay.
o The Company will reimburse Mr. Anderson all reasonable expenses
incurred by him directly related to performance of his
responsibilities and duties for CryoLife. Reimbursable expenses shall
also include, with a value of up to 10% of Mr. Anderson's base salary,
monthly car payments and auto expenses and dues and business related
expenses at specified private clubs.
o The Company will pay Mr. Anderson a retention payment in addition to
other compensation due pursuant to Mr. Anderson's agreement equal to
one times the aggregate of Mr. Anderson's annual salary and bonus
compensation for the year in which a change of control occurs.
o During the term covered by Mr. Anderson's employment agreement and for
a period of two years after any termination of his employment
agreement, Mr. Anderson agrees not to accept any position as chief
executive officer, president or chief operating officer with, or
provide comparable level executive consultation to any competitors of
CryoLife.
2
o Mr. Anderson is entitled to the following termination benefits:
o If the Company terminates Mr. Anderson's employment other than
for Cause, Mr. Anderson terminates his employment for Good
Reason, or Mr. Anderson's employment is terminated by reason of
his Disability then he is entitled to a severance payment in an
amount equal to two times the aggregate of Mr. Anderson's annual
salary and bonus compensations for the year in which the
termination of employment occurs except in the event of
retirement that occurs prior to the first anniversary of the
Anderson Effective Date. Such severance payment will be paid
according to a specified installment payment plan.
o If Mr. Anderson's employment is terminated by reason of his
retirement, he will be entitled to a severance payment equal to
one times Mr. Anderson's annual salary and bonus compensation for
the year in which retirement occurs but, so long as Mr. Anderson
remains employed by the Company, such payment will increase to a
maximum of two times Mr. Anderson's annual salary and bonus
compensation. Such payment will be paid according to a specified
installment payment plan. The Company will pay Mr. Anderson for
obligations accruing through the date of his termination.
o If Mr. Anderson's employment is terminated due to his death, the
Company will pay Mr. Anderson's legal representatives for
obligations accruing through the date of his termination.
o If Mr. Anderson's employment is terminated for any reason other
than Cause, the Company will continue to provide major medical
benefits to Mr. Anderson and his wife, Ann B. Anderson for the
duration of their lives subject to a limit of $25,000 per year.
o If Mr. Anderson is terminated for Cause, his employment agreement
shall terminate without further obligations to him other than for
payment obligations accruing through the date of his termination.
Employment Agreement with Mr. D. Ashley Lee
On September 5, 2005, the Company and Mr. Lee entered into an employment
agreement for Mr. Lee to serve as the Company's Executive Vice President, Chief
Operating Officer, Chief Financial Officer and Treasurer, a copy of which is
attached hereto as Exhibit 10.2 and incorporated herein by reference. This new
agreement supersedes the previous agreement. The material terms of such
agreement include the following:
o Mr. Lee's agreement has a term of two years from September 5, 2005
(the "Lee Effective Date"). His employment agreement will
automatically extend for an additional one year unless either Mr. Lee
3
or the Company elects not to extend the term of Mr. Lee's agreement by
notifying the other party in writing at least 30 days prior to the
first anniversary of the Lee Effective Date.
o Mr. Lee's employment with the Company may be terminated by the Company
for Cause, Good Reason or Disability (as those terms are defined in
Mr. Lee's employment agreement) or automatically upon Mr. Lee's death.
o Mr. Lee's initial base salary will be $340,000 per year and a bonus
set by the Compensation Advisory Committee of the CryoLife Board of
Directors. The salary and bonus will be subject to a yearly review by
the Compensation Advisory Committee. Mr. Lee is entitled to
participate in all compensation and bonus plans made available to
CryoLife's executive employees.
o Mr. Lee is entitled to paid vacation in accordance with the Company's
standard vacation policy. Vacations not taken will be cumulative and
carried over to a subsequent year.
o Mr. Lee is entitled to receive benefits under the Company's standard
medical plan and contributory 401(k) plan.
o The Company will reimburse Mr. Lee all reasonable expenses incurred by
him directly related to performance of his responsibilities and duties
for CryoLife.
o The Company will pay Mr. Lee a retention payment in addition to other
compensation due pursuant to Mr. Lee's agreement equal to one times
the aggregate of Mr. Lee's annual salary and bonus compensations for
the year in which a change of control occurs.
o Mr. Lee is entitled to the following termination benefits:
o If Mr. Lee is terminated for Good Reason then he is entitled to a
severance payment in an amount equal to one times the aggregate
of Mr. Lee's annual salary and bonus compensation for the year in
which the termination of employment occurs.
o If Mr. Lee's employment is terminated due to his death, the
Company will pay Mr. Lee's legal representatives for obligations
accruing through the date of his termination.
o If Mr. Lee's employment is terminated by reason of his
Disability, the Company will pay Mr. Lee for obligations accruing
through the date of his termination.
o If Mr. Lee is terminated for Cause or Mr. Lee terminates his
employment without Good Reason, his employment agreement shall
terminate without further obligations to him other than for
payment of his salary through the date of termination.
4
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not applicable
(b) Pro Forma Financial Information.
Not applicable
(c) Exhibits.
Exhibit Number Description
10.1 Form of Employment Agreement dated as of September
5, 2005 with Steven G. Anderson
10.2 Form of Employment Agreement dated as of September
5, 2005 with D. Ashley Lee
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
CryoLife, Inc. has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CRYOLIFE, INC.
Date: September 9, 2005 By: /s/ D. Ashley Lee
----------------------------------
Name: D. Ashley Lee
Title: Executive Vice President,
Chief Operating Officer and Chief
Financial Officer
6
EXHIBIT INDEX
Exhibit Number Description
10.1 Form of Employment Agreement dated as of September
5, 2005 with Steven G. Anderson
10.2 Form of Employment Agreement dated as of September
5, 2005 with D. Ashley Lee
7