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FORM
8-K
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Florida
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1-13165
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59-2417093
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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·
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The
term of the revised Agreement will run through December 31,
2010. The Agreement will not automatically
renew.
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Mr.
Anderson’s annual base salary will remain at $600,000 through December 31,
2007; however, the Agreement provides that, for each year thereafter,
Mr.
Anderson’s base salary will be increased by a minimum amount based on the
increase in the cost of living index. In no event may Mr.
Anderson’s base salary be reduced below its then current level except in
the event of a general salary reduction, and then only to the extent
that
the base salaries of all executive officers are
reduced.
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For
each year in which the Agreement is in effect, Mr. Anderson will
be
entitled to participate in an annual bonus program on terms and in
amounts
no less favorable to him than those currently contained in the Company’s
executive incentive plan and the 2007 bonus program for Mr. Anderson
approved thereunder, with such modifications as may be reasonably
imposed
for all executive officers and approved by at least 2/3’s of the Company’s
independent directors; provided, that if the Company’s chief financial
officer advises the Committee that it would materially negatively
impact
the Company to pay all or a portion of the bonus in cash, the Committee
may choose to pay the bonus in Company stock, but only to the extent
that
such action is taken with respect to all executive officers of
Company.
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The
revised Agreement provides for an amendment to Mr. Anderson’s 2007 bonus
program under the executive incentive plan to remove any discretion
of the
Committee to materially change the terms of the bonus program or
to reduce
or otherwise refuse to pay any portion of the bonus earned thereunder,
subject to the ability of the Committee to pay the bonus in stock,
on the
terms discussed above.
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The
revised Agreement provides that Mr. Anderson will be reimbursed up
to a
maximum of $10,000 for his expenses in connection with negotiating
the
Agreement.
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The
size of Mr. Anderson’s severance payment has been reduced from two times
salary and bonus (currently approximately $2.4 million) to
$1,985,000. In addition to Mr. Anderson’s ability
to receive the severance payment as a result of termination of his
employment by the Company without cause, by him for good reason or
as a
result of his disability or retirement, as provided in the previous
agreement, the revised Agreement now provides that Mr. Anderson will
be
entitled to the severance payment upon termination of his employment
as a
result of non-renewal of the Agreement when it expires at the end
of
2010. Mr. Anderson retains the other components of his
severance package, including medical benefits for himself and his
wife,
tax gross up payments in certain circumstances and payment for accrued,
unused vacation.
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The
revised Agreement provides that Mr. Anderson is entitled to payment
of all
expenses, including legal expenses, incurred by him in the event
that
there is a dispute between him and the Company regarding the terms
of the
Agreement, but only in the event that he prevails in a law suit or
the
Company agrees to pay any disputed amounts to him. The prior
agreement provided for payment of Mr. Anderson’s expenses regardless of
the outcome of the dispute.
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Mr.
Anderson continues to be entitled to receive a retention payment
in the
event of a change in control of the Company, equal to one times his
current salary and bonus.
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As
soon as practicable following November 3, 2009, the Company has agreed
to
amend Mr. Anderson’s Agreement, as well as the Company’s Bylaws, to remove
the three times salary and bonus cap on severance, separation and/or
similar payments. The Company has performed a
quantitative analysis of the potential impact of this provision and
has
determined that its future removal is appropriate given the reduced
severance payment to which Mr. Anderson has agreed. This cap
will remain in place until the 2009
amendment.
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Article
I of the former bylaws stated that the principle office of the Company
was
in Tampa, Florida. This provision has been
removed;
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Article
VII, Sections 1, 3 and 4 regarding share certificates were amended
to
reflect changes in NYSE listing standards, which will require that
CryoLife stock be eligible to participate in a direct participation
system
sponsored by a securities depositary beginning January 1, 2008;
and
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Article
XIV of the former bylaws regarding the reimbursement of disallowed
expenses was removed.
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Language
discussing the removal of directors for code violations was deleted;
and
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A
prohibition on employees, officers and directors competing with CryoLife
was added.
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Exhibit
Number
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Description
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3.1
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Articles
of Amendment to the Articles of Incorporation of CryoLife,
Inc.
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3.4
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By-Laws
of CryoLife, Inc. as Amended and Restated July 30,
2007.
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10.1
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Employment
Agreement dated as of July 30, 2007 with Steven G.
Anderson.
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14.1
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Code
of Business Conduct and Ethics.
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CRYOLIFE,
INC.
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Date: August
1, 2007
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By:
/s/ D. A. Lee
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Name:
D. Ashley Lee
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Title:
Executive Vice President, Chief Operating Officer and Chief Financial
Officer
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