Form 8-K
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): August 1, 2006
_______________________
CRYOLIFE,
INC.
(Exact
name of registrant as specified in its charter)
_________________________
|
Florida
|
1-13165
|
59-2417093
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
|
(IRS
Employer
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):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Section
1 Registrant’s
Business and Operations
Item
1.01 Entry
into a Material Definitive Agreement.
Restricted
Stock Grants to Non-Employee Directors
On
August
1, 2006,
the
Compensation Committee of the CryoLife, Inc. (“CryoLife” or the “Company”) Board
of Directors granted the right to receive 2,500 shares of restricted stock,
to
be issued effective August 7, 2006 (the “Effective Date”), to each non-employee
director: Thomas F. Ackerman,
James S. Benson, Daniel J. Bevevino, John M. Cook,
Ronald C. Elkins M.D., Virginia C. Lacy, Ronald D. McCall Esq.
and Bruce J. Van Dyne M.D.
Each
grant vests ratably over twelve months. Any unvested portion of the grant will
be forfeited upon the grantee’s ceasing to serve as a director of the Company
for any reason. All such grants were made under the 2002 Stock Incentive Plan.
Each non-employee director will also receive, to be paid in 2006, a cash payment
equal to 35% of the fair value of the grant, in order to help offset the income
tax expense that may result from the grant.
As
a
result of its annual review, the Board has determined that none of the
non-employees directors has a material relationship with the Company, other
than
his or her position as a director; however, in 2003, Mr. Benson was engaged
by the law firm representing a Special Litigation Committee of the Board of
Directors of the Company to serve as an expert witness to the Special Litigation
Committee's independent investigation into allegations made by the Plaintiffs
in
the shareholder derivative lawsuit filed against the Company's directors, which
was settled in 2005. Mr. Benson billed that law firm a total of
approximately $52,500 for services provided in 2003. Mr. Benson was engaged
to serve as an expert witness by a different law firm representing the Company
in the securities class action shareholder lawsuit filed against the Company,
which was also settled in 2005. Mr. Benson billed a total of approximately
$38,000 in expert witness fees for services provided in 2004 (approximately
$28,500) and 2005 (approximately $9,500).
A
copy of
the form of restricted stock award agreement is filed as Exhibit 10.1 hereto,
and incorporated herein by reference.
Option
Grants to Certain Executive Officers
On
August
1, 2006, the Company’s Compensation Committee granted stock options to Gerald B.
Seery, Senior Vice President, Sales and Marketing, David M. Fronk, Vice
President, Regulatory Affairs and Quality Assurance, and Albert E. Heacox,
Senior Vice President, Research and Development, under the Company’s 1998
Long-Term Incentive Plan to purchase 100,000, 50,000 and 50,000 shares,
respectively, of CryoLife’s common stock, to be issued effective August 7, 2006.
The options are governed by the 1998 Long-Term Incentive Plan and a
separate option agreement.
The
option agreement provides in part that the options will have an exercise price
equal to the mean of the high and low reported sale prices for the Company’s
common stock on the New York Stock Exchange on August 7, 2006 and will become
exercisable, subject to the employee remaining continuously employed by
CryoLife, as follows: 20% of the shares will become exercisable on the first
anniversary of August 7, 2006, and 20% more shares will become exercisable
on
each subsequent anniversary thereof until all shares (100%) of the option are
exercisable (on the fifth anniversary, assuming continuous employment). The
option has a term of 66 months but the option may terminate earlier as stated
in
the option agreement.
Messrs.
Seery, Fronk and Heacox have no material relationships with the Company and
its
affiliates other than their positions as officers.
Section
5 Corporate
Governance and Management
Item
5.02 Departure
of Directors or Principal Officers; Election of Directors;
Appointment
of Principal Officers.
On
August
1, 2006, the CryoLife Board of Directors appointed Amy D. Horton, CPA, age
36,
to be the Company’s Chief Accounting Officer, effective August 7, 2006. Ms.
Horton received her Masters in Accounting from Brigham Young University in
1992.
She has been employed by the Company since January 1998, serving first as a
Senior Financial Analyst, then as Assistant Controller and from April 2000 to
August 7, 2006 as the Controller. She will receive an annual salary of $200,000,
is eligible to receive option and other equity grants under the Company’s stock
incentive plans, and may receive a 2006 bonus of up to 31% of her base salary
under the Company’s performance-based bonus plan if certain performance targets
are achieved, as well as an additional bonus of up to 15% of her base salary
if
certain additional, higher performance targets are achieved. Ms. Horton will
be
entitled to participate in all compensation and bonus plans made available
to
CryoLife’s executive employees. If
CryoLife terminates Ms. Horton’s employment other than for cause, death or
disability or Ms. Horton terminates employment for good reason, then
Ms.
Horton’s employment agreement provides for a severance payment in
an
amount equal to one times the aggregate of Ms. Horton’s annual salary and bonus
compensation for the year in which the termination of employment
occurs. The Company will increase the severance payments otherwise due by one
times the aggregate of Ms. Horton’s annual salary and bonus compensation upon
termination of employment by the Company without cause following change of
control, or if her employment was terminated without cause within six months
prior to the change of control. Ms. Horton’s employment agreement also subjects
Ms. Horton to standard non-compete provisions.
Section
9 Financial
Statements and Exhibits.
Item
9.01(c) Exhibits.
(a)
Financial Statements.
Not
applicable.
(b)
Pro
Forma Financial Information.
Not
applicable.
(c)
Shell
Company Transactions.
Not
applicable.
(d)
Exhibits.
|
10.1
|
Form
of Restricted Stock Award
Agreement.
|
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:
August 7, 2006
|
By:
/s/
D. A. Lee
|
| |
Name:
D. Ashley Lee
|
| |
Title:
Executive
Vice President, Chief
|
| |
Operating
Officer and Chief
|
| |
Financial
Officer
|
| |
|