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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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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 30, 2005
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CRYOLIFE, INC.
(Exact name of registrant as specified in its charter)
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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
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(Former name or former address, if changed since last report)
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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))
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SECTION 1. REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
GERALD B. SEERY IS APPOINTED SENIOR VICE PRESIDENT OF SALES AND MARKETING.
Cryolife, Inc. ("Cryolife") has appointed Gerald B. Seery to the newly
created position of Senior Vice President of Sales and Marketing, effective
October 1, 2005. Mr. Seery joined CryoLife in 1993 and has held several
positions with the Company including Marketing Manager for vascular tissues,
Director of Marketing, Vice President of Marketing, and President of the
Aurazyme subsidiary. Mr. Seery had been President of CryoLife Europa, based in
the U.K., for three years before his return to the United States. On July 1,
2005, Cryolife appointed him Vice President of International Operations.
Mr. Seery is a graduate of The Catholic University of America and has an
MBA from Columbia University. Mr. Seery reports to Steven G. Anderson, President
and CEO of CryoLife, Inc.
Effective October 1, 2005, Mr. Seery receives a base salary of $250,000. In
addition, he will receive a percentage of any net increase in CryoLife's
revenues during the last quarter of 2005 as compared to the last quarter of
2004. Mr. Seery does not have a written employment agreement with Cryolife.
However, his employment requires a 30-day notice of termination.
THE COMPANY'S COMPENSATION COMMITTEE APPROVES ACCELERATED VESTING OF CERTAIN
OPTIONS.
On September 30, 2005, CryoLife's Compensation Committee, composed entirely
of independent directors, approved the acceleration of vesting of unvested and
"out-of-the-money" options previously awarded to employees, including executive
officers, with option exercise prices greater than $6.97 effective as of
September 30, 2005. Options held by non-employee directors are fully vested. The
accelerated vesting covered options to acquire an aggregate of 166,925 shares,
at exercise prices ranging from $7.06 to $31.99.
Options held by the following individuals, who were named in the Company's most
recent proxy statement as the most highly paid officers in 2004, were
accelerated as shown:
Name Principal Position Number of Options Accelerated
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Steven G. Anderson Chairman of the Board, President 82,693
and Chief Executive Officer
David Ashley Lee Executive Vice President, Chief 10,822
Operating Officer and Chief
Financial Officer
Albert E. Heacox, Ph.D. Senior Vice President, Research 4,000
and Development
David M. Fronk Vice President, Regulatory Affairs 9,684
and Quality Assurance
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The decision to accelerate vesting of these underwater stock options was made
primarily to avoid recognizing compensation cost in the Consolidated Statement
of Operations in future financial statements upon the adoption of Statement of
Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment"
("SFAS 123R"), which, when effective, will require all share-based payments to
employees, including grants of employee stock options to be recognized on the
Company's financial statements based on their fair values. SFAS 123R has been
adopted by the Company beginning October 1, 2005.
SECTION 2 FINANCIAL INFORMATION.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF- BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On September 30, 2005, the Company borrowed approximately $3.5 million
under its credit agreement with Wells Fargo Foothill, Inc., to fund a portion of
its payment obligations under the settlement of the securities class action
lawsuit. The Company described the terms of the settlement in its Form 8-K,
dated and filed on July 28, 2005, which is incorporated herein by reference.
The Company reported the terms of the credit agreement in its Form 8-K
dated February 8, 2005 and filed on February 11, 2005. The Company reported an
amendment to the revolving credit agreement on its Form 8-K dated September 27,
2005 and filed on September 28, 2005. The Company incorporates herein by
reference the information set forth in Item 2.03 of these two Form 8-Ks. Under
the credit agreement, the Company's interest rate on this borrowing is currently
7.75% per annum.
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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: October 3, 2005 By: /s/ D. A. Lee
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Name: D. Ashley Lee
Title: Executive Vice President, Chief
Operating Officer and Chief
Financial Officer
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