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): July 30,
2007
_______________________
CRYOLIFE,
INC.
(Exact
name of registrant as specified in its charter)
_________________________
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Florida
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1-13165
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59-2417093
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
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(IRS
Employer
Identification
No.)
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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):
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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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Section
3 – Securities and Trading Markets
Item
3.03 Material Modification to Rights of Security
Holders.
Please
see the disclosure set forth
under Item 5.03, which is incorporated by reference into this Item
3.03.
Section
5 – Corporate Governance and Management
Item
5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
(e) Effective
July 30, 2007, CryoLife ("CryoLife" or the "Company") and Steven G. Anderson
entered into an amended and restated employment agreement (the “Agreement”) for
Mr. Anderson to continue 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. Set
forth below is a summary of the material provisions of the
Agreement:
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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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·
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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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2
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·
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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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·
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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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·
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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.
|
The
revised Agreement also contains
provisions clarifying the calculation of Mr. Anderson’s retention payment, as
well as a new change in control definition that more closely tracks Section
409(a) of the Internal Revenue Code of 1986, as amended. Mr. Anderson
continues to be bound by post-termination provisions regarding non-competition
and non-solicitation of employees, and a provision regarding non-solicitation
of
customers has been added.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change
in Fiscal Year.
Amendment
to the Articles of Incorporation
On
August 1, 2007, the “Company filed
the Articles of Amendment (the "Articles of Amendment") to its Articles of
Incorporation with the Secretary of State of Florida, a copy of which is filed
herewith as Exhibit 3.1, whereby subsection (d) of Article V of the
Articles of Incorporation is deleted in its entirety. Subsection (d)
of Article V of the Articles of Incorporation contained the designation, terms
and conditions of the Company’s 6% convertible preferred stock (the “Convertible
Preferred Stock”).
Further,
the Board determined that the
460,000 shares of the Company’s previously issued, but converted, Convertible
Preferred Stock be designated as authorized, but unissued, shares of preferred
stock, the rights and preferences of which have not been
designated. The Company had previously announced on a Current Report
on Form 8-K filed on June 7, 2007, that the remaining outstanding shares of its
Convertible Preferred Stock would be converted by the Company into the Company's
common stock on and effective as of June 25, 2007.
3
Amendment
to the Bylaws
On
July 30, 2007, the Board of
Directors of CryoLife amended and restated the Bylaws of the Company. Set forth
below is a summary of the material amendments:
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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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|
·
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Article
XIV of the former bylaws regarding the reimbursement of disallowed
expenses was removed.
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This
summary does not purport to be
complete, and is qualified in its entirety by reference to the full text of
the
amended and restated Bylaws of the Company, which are attached as Exhibit 3.4
to
this Current Report on Form 8-K and are incorporated herein.
The
amendments became effective
immediately upon their adoption by the Board of Directors.
Item
5.05 Amendments to the Registrant’s Code of Ethics, or Waiver
of a Provision of the Code of Ethics
On
July 30, 2007, the Board of
Directors the Company amended the Company's Code of Business Conduct and Ethics
(the "Code") applicable to directors, officers and employees of the Company,
including the company’s chief executive officer, chief financial officer, chief
accounting officer and controller. The material amendments are summarized
below:
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·
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Language
discussing the removal of directors for code violations was deleted;
and
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·
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A
prohibition on employees, officers and directors competing with CryoLife
was added.
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The
foregoing is only a summary of the
amendments to the Code, and is qualified by reference to the Code, as amended.
The Code, as amended (which is attached as Exhibit 14.1 to this Current Report
on Form 8-K and incorporated by reference herein) may be found on our internet
website at http://www.cryolife.com/investornew.htm.
Section
9 – Financial Statements and Exhibits
Item
9.01(c) Exhibits.
(a)
Financial Statements.
Not
applicable.
4
(b)
Pro
Forma Financial Information.
Not
applicable.
(c)
Shell
Company Transactions.
Not
applicable.
(d)
Exhibits.
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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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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.
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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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6
Exhibit
3.1
ARTICLES
OF AMENDMENT TO THE
ARTICLES
OF INCORPORATION
OF
CRYOLIFE,
INC
To: Department
of State
Tallahassee,
Florida 32304
Pursuant
to the provisions of Sections
607.1002 and 607.1006 of the Florida Business Corporation Act (the “Act”), the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The
name of the corporation is CRYOLIFE, INC.
2. The
following amendment of the Articles of Incorporation (the “Amendment”) was
adopted by the Board of Directors of the Corporation in the manner prescribed
by
the Act, Sections 607.1002 and 607.1006:
Article
V of the Articles of
Incorporation is amended by deleting therefrom subsection (d) in its
entirety.
3. This
amendment was adopted by the Board of Directors on July 30, 2007 without
shareholder action, as permitted by Section 607.1002 of the Act. Shareholder
action with respect to the amendment was not required.
4. This
amendment does not provide for an exchange, reclassification, or cancellation
of
issued shares.
IN
WITNESS WHEREOF, the foregoing Articles of Amendment are executed by
Steven G. Anderson and attested by Suzanne K. Gabbert on July 30,
2007.
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/s/
Steven G. Anderson
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Steven
G. Anderson, President and
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|
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Chief
Executive Officer, CryoLife, Inc.
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Attested
by:
/s/
Suzanne K. Gabbert
Suzanne
K. Gabbert,
Secretary,
CryoLife, Inc.
Exhibit
3.4
BYLAWS
OF
CRYOLIFE,
INC.
ARTICLE
I
Offices
The
corporation may have offices at
such places both within and without the State of Florida as the Board of
Directors may from time to time determine or the business of the corporation
may
require.
ARTICLE
II
Shareholders
Section
1. Annual Meeting. The annual meeting of the shareholders
shall be held within the seven (7) month period beginning with the first day
of
the last month of the fiscal year of the corporation for the purpose of electing
Directors and for the transaction of such other business as may come before
the
meeting, the actual day thereof to be set forth in the Notice of Meeting or
in
the Call and Waiver of Notice of Meeting. If the election of
Directors shall not be held at any such annual meeting of the shareholders
or at
any adjournment thereof, the Board of Directors shall cause the election to
be
held at a special meeting of the shareholders as soon thereafter as may be
convenient.
Section
2. Special
Meetings. Special meetings of the shareholders for any purposes,
unless otherwise prescribed by law or by the Articles of Incorporation, may
be
called by the President or Secretary at the request in writing of the majority
of the Board of Directors then in office. Special meetings of the
shareholders may also be called by shareholders in the manner provided in the
Company’s Articles of Incorporation. Such request shall state the
purpose or purposes of the meeting. Business transacted at a special
meeting of the shareholders shall be limited to the purposes stated in the
notice thereof.
Section
3. Place of Meeting. The Board of Directors may designate
any place, whether within or without the State of Florida unless otherwise
prescribed by law or by the Articles of Incorporation, as the place of meeting
for any annual meeting or for any special meeting of the
shareholders. In the absence of any such designation, the meeting
shall be held at an office of the company or at any place near an office of
the
company. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place, either within or without
the State of Florida unless otherwise prescribed by law or by the Articles
of
Incorporation, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place
of
meeting shall be at any office of the corporation.
Section
4. Notice of
Meeting. Written or printed notice stating the place, day and
hour of the meeting, and in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than
ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally or by first-class mail, by or at the direction of the President
or
the Secretary, or the officer or persons that called the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed,
such notice shall be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears on the stock
transfer books of the corporation, with postage thereon prepaid.
Section
5. Waiver of Notice
of Meeting. When shareholders who hold four-fifths (4/5) of the
voting stock having the right and entitled to vote at any meeting, shall be
present at such meeting, however called or notified, and shall sign a written
consent thereto on the record of the meeting, the acts of such meeting shall
be
as valid as if legally called and notified.
Section
6. Voting
Lists. The officer or agent having charge of the stock transfer
books for shares of the corporation shall make, at least ten (10) days before
each meeting of shareholders, a complete list of the shareholders entitled
to
vote at such meeting, or any adjournment thereof, arranged in alphabetical
order, with the address and the number and class and series of shares held
by
each, which list, for a period of ten (10) days prior to such meeting, shall
be
kept on file at the principal office of the corporation and shall be subject
to
inspection by any shareholder during the whole time of the
meeting. The original stock transfer book shall be prima facie
evidence as to who are the shareholders entitled to examine such list or
transfer books or to vote at any meeting of the shareholders.
Section
7.
Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders, unless otherwise provided
in
the Articles of Incorporation, but in no event shall a quorum consist of less
than one-third (1/3) of the shares entitled to vote at the
meeting. If less than a majority of the outstanding shares are
represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting
as
originally notified. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
quorum.
Section
8. Voting of
Shares. Each shareholder entitled to vote shall at every meeting
of the shareholders be entitled to one vote in person for each share of voting
stock held by him. Such right to vote shall be subject to the right
of the Board of Directors to close the transfer books or to fix a record date
for voting shareholders as hereinafter provided, and if such Directors shall
not
have exercised such right, no share of stock shall be voted on at any election
for Directors which shall have been transferred on the books of the corporation
within twenty (20) days next preceding such election. No shareholder
shall enter into a voting trust agreement or any other type agreement vesting
another person with the authority to exercise the voting power of any or all
of
his stock.
Section
9.
Proxies. At all meetings of shareholders, a shareholder
may vote by proxy, executed in writing by the shareholder or by his duly
authorized attorney-in-fact; but no proxy shall be valid after eleven
(11) months from its date, unless the proxy provides for a longer
period. Such proxies shall be filed with the Secretary of the
corporation before or at the time of the meeting.
2
ARTICLE
III
Board
of Directors
Section
1. General
Powers. The business and affairs of the corporation shall be
managed by its Board of Directors.
Section
2. Number, Tenure and
Qualifications. The number of Directors of the corporation shall
be not less than one (1) nor more the fifteen (15), the number of the same
shall
be fixed by the Board of Directors at any regular or special
meeting. Each Director shall hold office until the next annual
meeting of shareholders and until his successor has been qualified, unless
sooner removed by the shareholders at any general or special
meeting. None of the Directors need be residents of the State of
Florida.
Section
3. Annual
Meeting. After each annual meeting of shareholders, the Board of
Directors shall hold its annual meeting at the same place as and immediately
following such annual meeting of shareholders for the purpose of the election
of
officers and the transaction of such other business as may come before the
meeting; and, if a majority of the Directors be present at such place and time,
no prior notice of such meeting shall be required to be given to the
Directors. The place and time of such meeting may also be fixed by
written consent of the Directors.
Section
4. Regular
Meetings. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall be determined from time
to time by the Board of Directors.
Section
5. Special
Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board, if there be one, or the President or any
two (2) Directors. The persons authorized to call special meetings of
the Board of Directors may fix the place for holding any special meetings of
the
Board of Directors called by them.
Section
6.
Notice. Notice of any special meeting shall be given at
least three (3) days prior thereto by written notice delivered personally or
mailed to each Director at his business address, or by telegram. If
mailed, such notice shall be deemed to be delivered when deposited in United
States mail so addressed, with postage thereon prepaid. If notice be
given by telegram, such notice shall be deemed to be delivered when the telegram
is delivered to the telegraph company. Any Director may waive notice
of such meeting, either before, at or after such meeting. The
attendance of a Director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened.
Section
7.
Quorum. A majority of the Directors shall constitute a
quorum, but a smaller number may adjourn from time to time, without further
notice, until a quorum is secured.
Section
8. Manner of
Acting. The act of the majority of the Directors present at a
meeting at which a quorum is present shall be the act of the Board of
Directors.
3
Section
9.
Vacancies. Any vacancy occurring in the Board of
Directors, including any vacancy created by reason of an increase in the number
of directors, may be filled by the affirmative vote of a majority of the
remaining Directors though less than a quorum of the Board of
Directors. A Director elected to fill a vacancy shall be elected for
the unexpired term of his predecessor in office.
Section
10.
Compensation. The compensation of non-employee Directors
for their services as a Director may be fixed by resolution of the Board of
Directors, or by a duly authorized committee of the Board of
Directors. Unless otherwise determined by the Board of Directors or
such committee, Directors shall be paid their expenses of attendance at each
meeting of the Board of Directors or committee thereof. No payment
received by a Director for services as a Director shall preclude a Director
from
serving the corporation in any other capacity.
Section
11. Presumption of
Assent. A director of the corporation who is present at a meeting
of its Board of Directors at which action on any corporate matter is taken
shall
be presumed to have assented to the action taken, unless he votes against such
action or abstains from voting in respect thereto because of an asserted
conflict of interest.
Section
12. Informal Action
by Board. Any action required or permitted to be taken by any
provisions of law, of the Articles of Incorporation or of these Bylaws at any
meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if, prior to such action, a written consent thereto is signed
by all members of the Board or of such committee, as the case may be, setting
forth the actions of the Board or of the committee.
Section
13. Telephonic
Meetings. Members of the Board of Directors or an executive
committee shall be deemed present at a meeting of such board or committee if
a
conference telephone, or similar communications equipment by means of which
all
persons participating in the meeting can hear each other at the same time,
is
used.
Section
14.
Removal. Any director may be removed, with or without
cause, by the shareholders at any general or special meeting of the shareholders
whenever, in the judgment of the shareholders, the best interests of the
corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person removed. This Bylaw
shall not be subject to change by the Board of Directors.
ARTICLE
IV
Officers
Section
1. Number and
Qualification. The officers of the corporation shall be a
Chairman of the Board, a Chief Executive Officer, a President, a Chief Operating
Officer, a Chief Financial Officer and a Secretary, each of whom shall be
elected by the Board of Directors. The Board of Directors may also
elect one or more Executive Vice Presidents, Senior Vice Presidents, Vice
Presidents, one or more Assistant Secretaries and Assistant Treasurers and
such
other officers as the Board of Directors shall deem appropriate. Two
(2) or more offices may be held by the same person.
4
Section
2. Election and Term
of Office. The officers of the corporation shall be elected
annually by the Board of Directors at its first meeting after each annual
meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as may
be
convenient. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified, or until his death, or until
he
shall resign or shall have been removed in the manner hereinafter
provided.
Section
3.
Removal. Any officer elected or appointed by the Board of
Directors may be removed by the board of Directors whenever in its judgment
the
best interests of the corporation will be served thereby, but such removal
shall
be without prejudice to the contract rights, if any, of the person so
removed.
Section
4.
Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
Section
5. Duties of
Officers. The Chairman of the Board of the corporation, or the
Presiding Director if there shall not be a Chairman of the Board, shall preside
at all meetings of the Board of Directors and of the shareholders which he
shall
attend. The Chairman or the President shall be the chief executive
officer of the corporation, as specified by the Board of
Directors. Subject to the foregoing, the officers of the corporation
shall have such powers and duties as usually pertain to their respective offices
and such additional powers and duties specifically conferred by law, by the
Articles of Incorporation, by these Bylaws, or as may be assigned to them from
time to time by the Board of Directors.
Section
6. Executive
Compensation. The salaries and other compensation of the officers
shall be fixed from time to time by the Board of Directors, and no officer
shall
be prevented from receiving such salary or compensation by reason of the fact
that he is also a Director of the corporation.
Section
7. Delegation of
Duties. In the absence of or disability of any officer of the
corporation or for any other reason deemed sufficient by the Board of Directors,
the Board may delegate his powers or duties to any other officer or to any
other
Director for the time being.
Section
8. Limitation on
Executive Compensation. The corporation shall not award bonuses
to officers, directors and/or other employees to avoid or satisfy margin
calls. Severance, separation and/or similar payments made to the
Chief Executive Officer, as well as all other officers at the Vice President
level or higher, shall be limited to the equivalent of such officer’s total
salary for the three calendar years immediately preceding the year in which
such
payment is determined, including bonuses and guaranteed benefits.
ARTICLE
V
Executive
and Other Committees
Section
1. Creation of Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate an Executive
Committee and one or more other committees, each to consist of one (1) or more
of the Directors of the corporation.
5
Section
2. Executive
Committees. The Executive committee, if there shall be one, shall
consult with and advise the officers of the corporation in the management of
its
business and shall have and may exercise, to the extent provided in the
resolution of the Board of Directors creating such Executive Committee, such
powers of the Board of Directors as can be lawfully delegated by the
Board.
Section
3. Other
Committees. Such other committees shall have such functions and
may exercise the powers of the Board of Directors as can be lawfully delegated
and to the extent provided in the resolution or resolutions creating such
committee or committees.
Section
4. Meetings of
Committees. Regular meetings of the Executive Committee and other
committees may be held without notice at such time and at such place as shall
from time to time be determined by the Executive Committee or such other
committees, and special meetings of the Executive Committee or such other
committees may be called by any member thereof upon two (2) days notice to
each
of the other members of such committee, or on such shorter notice as may be
agreed to in writing by each of the other members of such committee, given
either personally or in the manner provided in Section 6 of Article III of
these
Bylaws (pertaining to notice for Directors' meetings).
Section
5. Vacancies on
Committees. Vacancies on the Executive Committee or on such other
committees may be filled by the Board of Directors then in office at any regular
or special meeting.
Section
6. Quorum of
Committees. At all meetings of the Executive Committee or such
other committees, a majority of the committee's members then in office shall
constitute a quorum for the transaction of business.
Section
7. Manner of Acting
of Committee. The acts of a majority of the members of the
Executive Committee, or such other committees, present at any meeting at which
there is a quorum, shall be the act of such committee.
Section
8. Minutes of
Committees. The Executive Committee, if there shall be one, and
such other committees shall keep regular minutes of their proceedings and report
the same to the Board of Directors when required.
Section
9.
Compensation. Members of the Executive Committee and such
other committees may be paid compensation in accordance with the provisions
of
Section 10 of Article III (pertaining to compensation of
Directors).
ARTICLE
VI
Indemnification
of Director and Officers
If
in the judgment of a majority of the
entire Board of Directors (excluding from such majority any director under
consideration for indemnification), the criteria set forth in Section 607.0l4(l)
or (2) of the Florida General Corporation Act have been met, then the Company
shall indemnify any officer or director, or former officer or director, his
personal representatives, devisees or heirs, in the manner and to the extent
contemplated by Section 607.0l4.
6
ARTICLE
VII
Stock
Section
1. Certificates for Shares; Uncertificated Shares. Shares
of stock in the corporation may be represented by certificates or may be issued
in uncertificated form in accordance with the Florida Business Corporation
Act,
as amended. The issuance of shares in uncertificated form shall not
affect shares already represented by a certificate until the certificate is
surrendered to the corporation. Every holder of stock in the
corporation represented by certificates shall be entitled to have a certificate,
signed by a President or a Vice President and the Secretary or an Assistant
Secretary, exhibiting the holder's name and certifying the number of shares
represented. The certificates shall be numbered and entered in the
books of the corporation as they are issued.
Section
2. Transfer of
Shares. Transfers of shares of the corporation shall be made upon
its books by the holder of the share in person or by his lawfully constituted
representative, upon surrender of the certificate of stock for
cancellation. The person in whose name shares stand on the books of
the corporation shall be deemed by the corporation to be the owner thereof
for
all purposes and the corporation shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any other person
whether or not it shall have express or other notice thereof, save as expressly
provided by the laws of the State of Florida.
Section
3. Facsimile
Signature. Where a certificate is issued and is manually signed
on behalf of a transfer agent or a registrar other then the corporation itself
or an employee of the corporation, the signature of any such President, Vice
President, Secretary or Assistant Secretary may be a facsimile. In
case any officer or officers who have signed, or whose facsimile signature
or
signatures have been used, shall cease to be such officer or officers of the
corporation, such certificate or certificates may nevertheless be adopted by
the
corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the corporation.
Section
4. Lost
Certificate. The Board of Directors may direct a new certificate
or certificates or uncertificated shares to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by
the
person claiming their certificate of stock to be lost or
destroyed. When authorizing such issue of new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the
same
in such manner as it shall require and/or to give the corporation a bond in
such
sum as it may direct as indemnity against any claim that may be made against
the
corporation with respect to the certificate alleged to have been lost or
destroyed.
7
ARTICLE
VIII
Record
Date
The
Board of Directors is authorized,
from time to time, to fix in advance a date, not more than sixty (60) nor less
than ten (10) days before the date of any meeting of shareholders, or not more
than sixty (60) days prior to the date for the payment of any dividend or the
date for the allotment of rights, or the date when any change or conversion
or
exchange of stock shall go into effect, or a date in connection with the
obtaining of the consent of shareholders for any purpose, as a record date
for
the determination of the shareholders entitled to notice of and to vote at
any
such meeting and any adjournment thereof, or entitled to receive payment of
any
such dividend or to any such allotment, or to exercise the rights in respect
of
any such change, conversion or exchange of stock; or to give such consent,
as
the case may be; and, in such case, such shareholders and only such
shareholders as shall be shareholders of record on the date so fixed shall
be
entitled to such notice of, and to vote at such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment
of
rights, or to exercise such rights or to give such consent, as the case may
be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
ARTICLE
IX
Dividends
The
Board of Directors may from time to
time declare, and the corporation may pay, dividends on its outstanding shares
of capital stock in the manner upon the terms and conditions provided by the
Articles of Incorporation and Bylaws. Dividends may be paid in cash,
in property, or in shares of stock, subject to the provisions of the Articles
of
Incorporation and Bylaws.
ARTICLE
X
Fiscal
Year
The
fiscal year of the corporation
shall be the twelve (12) month period selected by the Board of Directors as
the
taxable year of the corporation for federal income tax purposes
ARTICLE
XI
Seal
The
corporate seal shall bear the name
of the corporation, which shall be between two concentric circles, and in the
inside of the inner circle shall be the calendar year of incorporation, an
impression of said seal appearing in the margin hereof.
8
ARTICLE
XII
Stock
in Other Corporations
Shares
of stock in other corporations
held by this corporation shall be voted by such officer or officers of this
corporation as the Board of Directors shall from time to time designate for
the
purpose or by a proxy thereunto duly authorized by said Board.
ARTICLE
XIII
Amendments
These
Bylaws may be altered, amended or
repealed and new Bylaws may be adopted by the Board of Directors; provided
that
any Bylaw or amendment thereto as adopted by the Board of Directors may be
altered, amended or repealed by vote of the shareholders entitled to vote
thereon, or a new Bylaw in lieu thereof may be adopted by the
shareholders. No Bylaw which has been altered, amended or adopted by
such a vote of the shareholders may be altered, amended or repealed by a vote
of
the Directors until two (2) years shall have expired since such action by vote
of such shareholders.
ARTICLE
XIV
Advance
Notice of Shareholder Nominations and Proposals
Section
1 Nominations and
Proposal Requirements. Nominations of persons for election to the
Board of Directors and proposals of business to be transacted by the
shareholders may be made at an annual meeting of shareholders (a) pursuant
to
the Corporation’s notice with respect to such meeting, (b) by or at the
direction of the Board of Directors, or (c) by any shareholder of record of
the
Corporation who (1) was a shareholder of record at the time of the giving of
the
notice provided for in the following paragraph, (2) is entitled to vote at
the
meeting and (3) has complied with the notice procedures set forth in this
Article.
For
nominations or other business to be
properly brought before an annual meeting by a shareholder pursuant to clause
(c) of the foregoing paragraph, (1) the shareholder must have given timely
notice thereof in writing to the Secretary of the Corporation, (2) such business
must be a proper matter for shareholder action under the Florida Business
Corporation Code, (3) if the shareholder, or the beneficial owner on whose
behalf any such proposal or nomination is made, has provided the Corporation
with a Solicitation Notice, as that term is defined in this paragraph, such
shareholder or beneficial owner must, (i) in the case of a proposal, have
delivered a proxy statement and form of proxy to holders of at least the
percentage of the Corporation’s voting shares required under applicable law to
carry any such proposal, or, (ii) in the case of a nomination or nominations,
have delivered a proxy statement and form of proxy to holders of a percentage
of
the Corporation’s voting shares reasonably believed by such shareholder or
beneficial holder to be sufficient to elect the nominee or nominees proposed
to
be nominated by such shareholder, and must, in either case, have included in
the
materials accompanying such notice to the Corporation, the Solicitation Notice
and any proxy statement and form of proxy utilized or to be utilized by such
person, and (4) if no Solicitation Notice relating thereto has been timely
provided pursuant to this Article, the shareholder or beneficial owner proposing
such business or nomination must not have solicited, and must represent that
he,
she or it will not solicit, a number of proxies sufficient to have required
the
delivery of such a Solicitation Notice under this Article. To be
timely, a shareholder’s notice and the required accompanying materials shall be
delivered to the Secretary at the principal executive offices of the Corporation
not less than ninety (90) nor more than one hundred eighty (180) days prior
to
the first anniversary (the “Anniversary”) of the date on which the
Corporation first mailed its proxy materials for the preceding year’s annual
meeting of shareholders; provided, however, that if the date of the annual
meeting is advanced more than thirty (30) days prior to or delayed by more
than
thirty (30) days after the anniversary of the preceding year’s annual meeting,
notice by the shareholder to be timely must be so delivered not later than
the
close of business on the later of (i) the 90th day prior
to such
annual meeting or (ii) the 10th day following
the
day on which public announcement of the date of such meeting is first
made. Such shareholder’s notice shall set forth (a) as to each person
whom the shareholder proposes to nominate for election or reelection as a
director all information relating to such person as would be required to be
disclosed in solicitations of proxies for the election of such nominees as
directors pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and shall contain such person’s written
consent to serve as a director if elected; (b) as to any other business that
the
shareholder proposes to bring before the meeting, a brief description of such
business, the reasons for conducting such business at the meeting and any
material interest in such business of such shareholder and the beneficial owner,
if any, on whose behalf the proposal is made; (c) as to the shareholder giving
the notice and the beneficial owner, if any, on whose behalf the nominations
or
proposal is made (i) the name and address of such shareholder, and of such
beneficial owner, as they appear on the Corporation’s books, (ii) the class and
number of shares of the Corporation that are owned beneficially and of record
by
such shareholder and such beneficial owner, and (iii) whether such shareholder
or beneficial owner has delivered or intends to deliver a proxy statement and
form of proxy to holders of, in the case of a proposal, at least the percentage
of the Corporation’s voting shares required under applicable law to carry the
proposal or, in the case of a nomination or nominations, a sufficient number
of
holders of the Corporation’s voting shares to elect such nominee or nominees
(the notice described in this sentence, a “Solicitation
Notice”).
9
Section
2. Increase in Number
of Directors. Notwithstanding anything in the second sentence of
the second paragraph of Section 1 of this Article XIV to the contrary, in the
event that the number of directors to be elected to the Board is increased
and
there is no public announcement naming all of the nominees for director or
specifying the size of the increased Board made by the Corporation at least
fifty-five (55) days prior to the Anniversary, a shareholder’s notice required
by this Article shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered to the Secretary at the principal executive offices of the Corporation
not later than the close of business on the 10th day following
the
day on which such public announcement is first made by the
Corporation.
Section
3. Compliance with
Procedures. Only persons nominated in accordance with the
procedures set forth in this Article XIV shall be eligible to serve as directors
and only such business shall be conducted at an annual meeting of shareholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Article. The chairman of the meeting shall have the
power and the duty to determine whether a nomination or any business proposed
to
be brought before the meeting has been made in accordance with the procedures
set forth in these Bylaws and, if any proposed nomination or business is not
in
compliance with these Bylaws, to declare that such defective proposed business
or nomination shall not be presented for shareholder action at the meeting
and
shall be disregarded.
10
Section
4. Nominations at
Special Meetings. Nominations of persons for election to the
Board of Directors may be made at a special meeting of shareholders at which
directors are to be elected pursuant to the Corporation’s notice of meeting (a)
by or at the direction of the Board or (b) by any shareholder of record of
the
Corporation who is a shareholder of record at the time of giving of notice
provided for in this paragraph, who shall be entitled to vote at the meeting
and
who complies with the notice procedures set forth in this Article
XIV. Nominations by shareholders of persons for election to the Board
may be made at such a special meeting of shareholders if the shareholder’s
notice required by the second paragraph of this Article XIV shall be delivered
to the Secretary at the principal executive offices of the Corporation not
later
than the close of business on the later of 90th day prior
to such
special meeting or the 10th day following
the
day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board to be elected at such
meeting.
Section
5. General. For purposes of this Article, “public
announcement” shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or a comparable national news service or in
a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Notwithstanding
the foregoing
provisions of this Article XIV, a shareholder must also comply with all
applicable requirements of the Exchange Act and the rules and regulations
thereunder with respect to matters set forth in this Article
XIV. Nothing in this Article XIV shall be deemed to affect any rights
of shareholders to request inclusion of proposals in the Corporation’s proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
ARTICLE
XV
Control
Share Acquisition
In
accordance with Section 607.0902(5)
of the Florida Business Corporation Act, section 607.0902 of the Florida
Business Corporation Act shall not apply to control-share acquisitions of shares
of the capital stock of the corporation.
11
Exhibit
10.1
AMENDED
AND RESTATED
EMPLOYMENT
AGREEMENT
This
Amended and Restated Employment
Agreement ("the Agreement") dated as of the 30th day of July, 2007 (the
"Effective Date"), is by and between CRYOLIFE, INC., a Florida corporation
("CryoLife") and STEVEN G. ANDERSON (the "Employee").
W
I T N E S S E T H:
WHEREAS,
the Board of Directors of
CryoLife (the "Board"), has determined that it is in the best interests of
CryoLife and its shareholders to enter into this Amended and Restated Employment
Agreement in order to assure the Employee of CryoLife's commitment and, in
so
doing, to motivate the Employee to continue in Employee's dedicated service
to
CryoLife even in circumstances such as a possible future threat or occurrence
of
a Change of Control (defined below) of CryoLife;
WHEREAS,
in order to accomplish these
objectives, the Board has caused CryoLife to enter into this Agreement;
and
WHEREAS,
Employee has determined that
it is in the best interests of Employee to enter into this
Agreement;
NOW,
THEREFORE, in consideration of the
premises, the promises hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
by
both parties, it is hereby agreed as follows:
1. EMPLOYMENT.
(a) CryoLife
hereby employs Employee in the capacity of President, Chief Executive Officer
and Chairman of the Board and Employee hereby accepts such
employment.
(b) CryoLife
agrees to continue the Employee in its employ, and the Employee hereby agrees
to
remain in the employ of CryoLife subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and ending on
December 31, 2010 (the "EmploymentPeriod").
2. EMPLOYMENT
DUTIES.
(a) Employee
shall have such duties as are customarily performed and exercised by the
President, Chief Executive Officer and Chairman of the Board of a public
company, subject to the supervision of the Board, together with such additional
duties as are reasonably assigned by the Board. During the Employment
Period, (A) the Employee's position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held, exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date, and (B) the Employee's services shall be performed
at the location where the Employee was employed immediately preceding the
Effective Date.
(b) During
the Employment Period, and excluding any periods of vacation and sick leave
to
which the Employee is entitled, the Employee agrees to devote reasonable
attention and time to the business and affairs of CryoLife and, to the extent
necessary to discharge the responsibilities assigned to the Employee hereunder,
to use the Employee's reasonable best efforts to perform faithfully and
efficiently such responsibilities.
(c) During
the Employment Period, the Employee will not, without the prior written consent
of CryoLife, directly or indirectly other than in the performance of the duties
hereunder, render services of a business, professional or commercial nature
to
any other person or firm, whether for compensation or otherwise, except with
respect to any noncompetitive family businesses of the Employee for which the
rendering of such services will not have an adverse effect upon Employee's
performance of his duties and obligations hereunder.
3. COMPENSATION,
BENEFITS AND BUSINESS EXPENSES.
(a) For
all services which Employee renders to CryoLife or any of its subsidiaries
or
affiliates during the term hereof, CryoLife agrees to pay the Employee the
salary and bonus compensation as set by the Compensation Committee of the Board
of Directors, subject to the following:
(i) Base
Salary. Employee’s annual base salary for the year ending December
31, 2007 shall be $600,000. The Employee's base salary shall be
reviewed annually by the Compensation Committee during the first quarter of
each
calendar year, beginning with the year ending December 31, 2008, and the base
salary for each such year shall be determined by the Compensation Committee,
which may authorize an increase in the Employee's base salary for such year;
provided, however, that Employee’s base salary shall be increased, at a minimum,
by an amount equal to the cumulative cost-of-living percentage increment during
the prior calendar year, if any, applied to the Employee’s base salary, as such
increment is reported in the "Consumer Price Index, Atlanta, Georgia, All
Items," published by the U.S. Department of Labor. In no event may
Employee’s base salary be reduced below its then current level at any time
during the Employment Period other than pursuant to a general wage reduction,
in
which event Employee’s base salary may only be reduced to the same extent and up
to the same percentage amount as the base salaries of all executive officers
are
reduced.
(ii) Bonus. Employee
shall be entitled to participate in an annual bonus program which shall provide
for the payment of an annual bonus to Employee on terms and in amounts no less
favorable to Employee than those currently contained in the Company’s Executive
Incentive Plan and the 2007 bonus program for Employee approved thereunder,
as
amended below, with such modifications thereto as shall be reasonably imposed
for all executive officers with the approval of at least 2/3’s of the Company’s
independent directors; provided, however, that, upon the certification of the
Company’s Chief Financial Officer (the “CFO”) that payment of cash bonuses would
materially negatively impact the Company’s cash position, liquidity or
operations, Employee’s bonus may be paid all or a portion in Company stock, but
only to the extent that all bonuses to executive officers are similarly
paid. Employee’s 2007 bonus program under the Executive Incentive
Plan is hereby amended to remove any discretion of the Compensation 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 Compensation Committee, upon the certification of the CFO that payment
of
cash bonuses would materially negatively impact the Company’s cash position,
liquidity or operations, to pay all or a portion of the 2007 bonus in Company
stock, but only to the extent that all bonuses to executive officers are
similarly paid.
2
(b) CryoLife
shall pay all reasonable expenses incurred by the Employee directly related
to
performance of his responsibilities and duties for CryoLife hereunder. Employee
shall submit to CryoLife statements that justify in reasonable detail all
reasonable expenses so incurred. Subject to such audits as CryoLife may deem
necessary, CryoLife shall reimburse Employee the full amount of any such
expenses advanced by Employee. Reimbursable expenses shall also
include, with a value of up to 10% of Employee's base salary, monthly car
payments and auto expenses and dues and business related expenses at the
Georgian Club, Buckhead Club, Marietta Country Club and Delta Crown
Room. The Employee shall also be promptly reimbursed up to a maximum
of $10,000 for any and all expenses (including, without limitation, legal fees)
incurred by him in connection with the negotiation, documentation and
implementation of this Agreement.
(c) Employee
shall participate in the standard Company vacation plan, Company medical plan,
Company life insurance program, and contributory 401K plan, as well as in all
other standard employee benefit plans; provided, however, that vacations not
taken shall be cumulative and carried over to a subsequent year. Upon
employment termination, Employee shall be paid at a rate per day equal to
Employee’s base salary then in effect divided by 260 for all accumulated
vacation days not taken. Such amount shall be deemed a payment
obligation accruing through the Date of Termination for purposes of Section
6 of
this Agreement.
4. CHANGE
OF CONTROL.
(a) In
consideration and recognition of the Employee's continued employment and his
contribution to protecting and enhancing shareholder value in any future sale
of
CryoLife that may occur and to provide incentive to Employee as a senior
executive to remain with the Company through any future sale or merger of the
Company, CryoLife agrees to pay to Employee a retention payment in addition
to
other compensation due pursuant to this Agreement equal to one times the
aggregate of Employee's annual salary and bonus compensation for the year in
which a Change of Control occurs (the "Retention Payment"). The
Retention Payment shall be in addition to sums otherwise payable pursuant to
Section 3 and shall be earned and become due upon the happening of a Change
of
Control (as defined below) provided Employee remains employed by the Company
at
such time or, if no longer then employed by the Company, Employee's employment
was terminated by the Company without Cause within 12 months prior to the Change
of Control. If the Change of Control occurs before the awarding of bonuses
in
the year in which the Change of Control occurs, or if it occurs during a year
in
which Employee is not employed by the Company, the bonus compensation component
of the Retention Payment shall be computed based on the prior year's bonus.
If
the Change of Control occurs during a year in which Employee is not employed
by
the Company, the salary compensation component of the Retention Payment shall
be
computed based on the prior year’s salary. Bonus compensation shall
include cash bonus payments and the value of any non-cash bonuses, such as
options or restricted stock. Any such options will be valued pursuant to the
Black Scholes valuation method as of the grant date, using the same assumptions
used by CryoLife in computing the FAS 123R charge for the options, and any
shares of restricted stock will be valued at the closing price of the CryoLife
Common Stock on The New York Stock Exchange on the date of
issuance. The Company’s annual option and restricted stock grants
shall not be deemed to be bonus compensation unless they are specifically
designated as such by the CryoLife Compensation Committee. For the
sake of clarification, all cash paid and any shares issued in payment of all
or
a portion of the bonus pursuant to the Company’s Executive Incentive Plan shall
be bonus compensation for purposes of this Agreement for the year in which
paid
or issued. The Retention Payment shall be paid within three months after the
occurrence of a Change of Control.
3
For
the
purposes of this Agreement, the term “Change of Control” shall mean a change in
the ownership or effective control of, or in the ownership of a substantial
portion of the assets of, Cryolife, to the extent consistent with Section 409A
of the Code and any regulatory or other interpretive authority promulgated
thereunder, as described in paragraphs (i) through (iii) below.
(i) Change
in Ownership of Cryolife. A change in the ownership of Cryolife shall
occur on the date that any one person, or more than one person acting as a
group
(within the meaning of paragraph (i)(D)), other than a group of which Employee
is a member, acquires ownership of Cryolife stock that, together with Cryolife
stock held by such person or group, constitutes more than 50% of the total
voting power of the stock of Cryolife.
(A) If
any one person or more than one person acting as a group (within the meaning
of
paragraph (i)(D)), other than a group of which Employee is a
member, is considered to own more than 50% of the total voting power
of the stock of Cryolife, the acquisition of additional Cryolife stock by such
person or persons shall not be considered to cause a change in the ownership
of
Cryolife or to cause a change in the effective control of the Cryolife (within
the meaning of paragraph (ii) below).
(B) An
increase in the percentage of Cryolife stock owned by any one person, or persons
acting as a group (within the meaning of paragraph (i)(D)), as a result of
a
transaction in which Cryolife acquires its stock in exchange for property,
shall
be treated as an acquisition of stock for purposes of this paragraph
(i).
(C) The
provisions of this paragraph (i) shall apply only to the transfer or issuance
of
Cryolife stock if such stock remains outstanding after such transfer or
issuance.
(D) For
purposes of this paragraph (i), persons shall be considered to be acting as
a
group if they are owners of an entity that enters into a merger, consolidation,
purchase, or acquisition of stock, or similar business transaction with
Cryolife. If a person, including an entity, owns stock in Cryolife
and another entity with which Cryolife enters into a merger, consolidation,
purchase, or acquisition of stock, or similar business transaction, such
shareholder shall be considered to be acting as a group with the other
shareholders in a corporation only to the extent of the ownership in that
corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other entity. Persons shall
not be considered to be acting as a group solely because they purchase or own
stock of Cryolife at the same time or as a result of the same public offering
of
Cryolife’s stock.
4
(ii) Change
in Effective Control of Cryolife.
(A) A
change in the effective control of Cryolife shall occur on the date that either
of (1) or (2) below occurs:
(1) Any
one person, or more than one person acting as a group (within the meaning of
paragraph (ii)(D)), acquires (or has acquired during the 12 month period ending
on the date of the most recent acquisition by such person or persons) ownership
of stock of Cryolife possessing 35% or more of the total voting power of the
stock of Cryolife; or
(2) A
majority of members of the Cryolife Board of Directors are replaced during
any
12 month period by Directors whose appointment or election is not endorsed
by a
majority of the Board of Directors prior to the date of the appointment or
election.
(B) A
change in effective control of Cryolife also may occur with respect to any
transaction in which either of Cryolife or the other entity involved in a
transaction experiences a Change of Control event described in paragraphs (i)
or
(iii).
(C) If
any one person, or more than one person acting as a group (within the meaning
of
paragraph (ii)(D)), is considered to effectively control Cryolife (within the
meaning of this paragraph (ii)), the acquisition of additional control of
Cryolife by the same person or persons shall not be considered to cause a change
in the effective control of Cryolife (or to cause a change in the ownership
of
Cryolife within the meaning of paragraph (i)).
(D) For
purposes of this paragraph (ii), persons shall be considered to be acting as
a
group if they are owners of an entity that enters into a merger, consolidation,
purchase, or acquisition of stock, or similar business transaction with
Cryolife. If a person, including an entity, owns stock in Cryolife
and another entity with which Cryolife enters into a merger, consolidation,
purchase, or acquisition of stock, or similar business transaction, such
shareholder shall be considered to be acting as a group with the other
shareholders in a corporation only with respect to the ownership in that
corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other entity. Persons shall
not be considered to be acting as a group solely because they purchase or own
stock of Cryolife at the same time, or as a result of the same public offering
of Cryolife’s stock.
(iii) Change
in Ownership of a Substantial Portion of Cryolife’s Assets. A change
in the ownership of a substantial portion of Cryolife’s assets shall occur on
the date that any one person, or more than one person acting as a group (within
the meaning of paragraph (iii)(C)), other than a group of which Employee is
a
member, acquires (or has acquired during the 12 month period ending on the
date
of the most recent acquisition by such person or persons) assets from Cryolife
that have a total gross fair market value (within the meaning of paragraph
(iii)(B)) equal to or more than 40% of the total gross fair market value of
all
of the assets of Cryolife immediately prior to such acquisition or
acquisitions.
5
(A) A
transfer of Cryolife’s assets shall not be treated as a change in the ownership
of such assets if the assets are transferred to one or more of the
following:
(1) A
shareholder of Cryolife (immediately before the asset transfer) in exchange
for
or with respect to Cryolife stock;
(2) An
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by Cryolife;
(3) A
person, or more than one person acting as a group (within the meaning of
paragraph (iii)(C)) that owns, directly or indirectly, 50% or more of the total
value or voting power of all of the outstanding stock of Cryolife;
or
(4) An
entity, at least 50% of the total value or voting power of which is owned,
directly or indirectly, by a person described in paragraph (iii)(A)(3).
For
purposes of this paragraph (iii)(A), and except as otherwise provided, a
person’s status is determined immediately after the transfer of assets.
(B) For
purposes of this paragraph (iii), gross fair market value means the value of
all
Cryolife assets, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.
(C) For
purposes of this paragraph (iii), persons shall be considered to be acting
as a
group if they are owners of an entity that enters into a merger, consolidation,
purchase, or acquisition of assets, or similar business transaction with
Cryolife. If a person, including an entity shareholder, owns stock in
Cryolife and another entity with which Cryolife enters into a merger,
consolidation, purchase, or acquisition of stock, or similar business
transaction, such shareholder shall be considered to be acting as a group with
the other shareholders in a corporation only to the extent of the ownership
in
that corporation prior to the transaction giving rise to the change and not
with
respect to the ownership interest in the other corporation. Persons
shall not be considered to be acting as a group solely because they purchase
or
own stock of Cryolife at the same time, or as a result of the same public
offering of Cryolife’s stock.
6
5. TERMINATION
OF EMPLOYMENT.
(a) Disability
or Death. If CryoLife determines in good faith that the
Disability of the Employee has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Employee
written notice in accordance with Section 12(b) of this Agreement of its
intention to terminate the Employee's employment. In such event, the Employee's
employment with CryoLife shall terminate effective on the 30th day after receipt
of such notice by the Employee (the "Disability Effective Date"), provided
that,
within the 30 days after such receipt, the Employee shall not have returned
to
full-time performance of the Employee's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Employee from the Employee's duties
with CryoLife on a full-time basis for 180 consecutive days as a result of
incapacity due to mental or physical illness or determination by a physician
selected by CryoLife or its insurers and acceptable to the Employee or the
Employee's legal representative that the Employee is unable to perform the
essential functions of his position as a result of incapacity due to mental
or
physical illness. The Employee's employment shall terminate automatically upon
the Employee's death during the Employment Period.
(b) Cause. CryoLife
may terminate the Employee's employment during the Employment Period for
Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the
willful and
continued failure of the Employee to perform substantially the Employee's duties
with CryoLife (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to Employee by the Board of CryoLife which specifically identifies
the manner in which CryoLife believes that the Employee has not substantially
performed the Employee's duties, or
(ii)
the willful engaging by the
Employee in illegal conduct or gross misconduct which is materially and
demonstrably injurious to CryoLife.
For
purposes of this provision, no act, or failure to act, on the part of the
Employee shall be considered "willful" unless it is done, or omitted to be
done,
by the Employee in bad faith or without reasonable belief that the Employee's
action or omission was in the best interests of CryoLife. Any act, or failure
to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for CryoLife shall be conclusively
presumed to be done, or omitted to be done, by the Employee in good faith and
in
the best interests of CryoLife.
(c) Good
Reason. The Employee's employment may be terminated by the
Employee for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean:
(i)
the assignment to the Employee of
any duties inconsistent in any respect with the Employee's position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a) of this Agreement, or any
other
action by CryoLife which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by CryoLife promptly after receipt of notice thereof given by the
Employee;
7
(ii)
any failure by CryoLife to comply
with any of the provisions of Section 3(a) or 3(b) of this Agreement, other
than
an isolated, insubstantial or inadvertent failure not occurring in bad faith
and
which is remedied by CryoLife promptly after receipt of notice thereof given
by
the Employee;
(iii)
any threatened termination by
CryoLife of the Employee's employment other than for Cause, Death or Disability;
or
(iv)
any failure by CryoLife to comply
with and satisfy Section 11(c) of this Agreement.
For
purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Employee shall be conclusive. Anything in this Agreement
to the contrary notwithstanding, a termination by the Employee for any reason
at
least 90 but not more than 120 days following consummation of a Change of
Control or during the 30 day period immediately following the first anniversary
of a Change of Control shall be deemed to be a termination for Good Reason
for
all purposes of this Agreement.
(d) Retirement. The
Employee may voluntarily terminate his employment at any time by reason of
Retirement. For purposes of this Agreement, "Retirement" shall mean
the cessation by Employee of all full-time employment of any kind.
(e) Notice
of Termination. Any termination by CryoLife, or by the Employee
for Good Reason or Retirement, shall be communicated by Notice of Termination
to
the other party hereto given in accordance with Section 12(b) of this
Agreement.
For
purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is to be later than the date of receipt of such notice,
specifies the termination date (which date shall not, except in the case of
Retirement, be more than 30 days after the giving of such
notice). The failure by the Employee or CryoLife to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing
of
Good Reason or Cause shall not waive any right of the Employee or CryoLife,
respectively, hereunder or preclude the Employee or CryoLife, respectively,
from
asserting such fact or circumstance in enforcing the Employee's or CryoLife's
rights hereunder.
(f) Date
of Termination. "Date of Termination" means: (i) if the
Employee's employment is terminated by CryoLife for Cause, or by the Employee
for Good Reason or Retirement, the date of receipt of the Notice of Termination,
or any later date specified therein, as the case may be, (ii) if the Employee's
employment is terminated by CryoLife other than for Cause or Disability, the
date on which the Employee receives Notice of Termination, and (iii) if the
Employee's employment is terminated by reason of death or by CryoLife for
Disability, the date of death of the Employee or the Disability Effective Date,
as the case may be. Notwithstanding the foregoing, the Date of Termination
may,
except in the case of Retirement, be accelerated by the party who receives
Notice of Termination by providing to the other party written notice of
acceleration, including the accelerated Date of Termination, within 30 days
of
receipt of the Notice of Termination.
8
(g) Non-Compete
Commitment. During the term of this Agreement and for a period of
two years after any termination of this Agreement, the Employee 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 in the cardiac or vascular tissue processing business
or
biological glue or protein hydrogel product business within the United States
or
the European Union. Payments of amounts owing under any Severance Payment
(defined in Section 6(d)) obligation, shall be conditioned upon Employee's
continued compliance with this non-compete commitment.
(h) Agreement
Not to Solicit. During the term of this Agreement and for a
period of two years after any termination of this Agreement, the Employee agrees
he will not, without the prior written consent of the Company, either directly
or indirectly, on his own behalf or in the service or on behalf of others,
solicit or attempt to solicit, divert or hire away any person employed by the
Company or any customer of the Company.
6. OBLIGATIONS
OF CRYOLIFE UPON TERMINATION.
(a) Expiration
of Term; Good Reason; Other Than for Cause, Death or
Disability. If the Employee’s employment is terminated by reason
of expiration of the Employment Period or if during the Employment Period,
(i)
CryoLife shall terminate the Employee's employment other than for Cause or
Death, or (ii) the Employee shall terminate employment for Good Reason or
Retirement, then CryoLife shall pay to Employee the Severance Payment (defined
below) and shall, subject to the limitations set forth in (e) below, continue
to
provide major medical insurance benefits comparable to those described in the
schedules attached to this Agreement (collectively, " Major Medical Benefits")
for Employee and Employee's wife, Ann B. Anderson, for the duration of their
lives. Such payment shall be in addition to sums due to Employee
through the Date of Termination and shall be subject to normal withholding
requirements of CryoLife.
(b) Death. If
the Employee's employment is terminated by reason of the Employee's death during
the Employment Period, this Agreement shall terminate without further obligation
to the Employee's legal representatives under this Agreement, other than for
(i)
payment of obligations occurring through the Date of Termination and (ii) for
CryoLife's agreement to continue the Major Medical Benefits for Employee's
wife,
Ann B. Anderson, for the duration of her life.
(c) Cause.
If the Employee's employment shall be terminated by CryoLife for Cause, this
Agreement shall terminate without further obligations to the Employee other
than
for payment obligations accruing through the Date of Termination.
(d) Severance
Payment. The "Severance Payment" shall be $1,985,000. The
Severance Payment shall be payable in cash by the Company in 24 equal monthly
installments over the two year period following the Date of Termination (the
"Severance Period"), with the first payment commencing on the date thirty (30)
days after Employee's Date of Termination; provided, however, that, to the
extent required under Section 409A of the Code to avoid the imposition of
additional tax to Employee under that Section, any payment of the Severance
Payment shall commence on the six-month anniversary of Employee's separation
from service with the Company, or on the date of Employee's death if Employee
should die prior to such six-month anniversary (such payment date being referred
to herein as the “Initial Payment Date”), with the first payment to be equal to
the sum of those payments that would have been made prior to the Initial Payment
Date but for the delay, and the remainder to be paid in equal monthly
installments over the remainder of the Severance Period; provided further,
that
to the extent permitted under Section 409A of the Code without the imposition
of
additional tax to Employee under that Section, the Severance Payment shall
be
paid (i) in an immediate lump-sum in the event the Employee's separation from
service occurs on or after a Change of Control or (ii) in an immediate lump
sum
at the time of a Change of Control (less amounts previously paid to Employee)
in
the event the separation from service occurs within six months prior to a Change
of Control. Payment of any Severance Payment will be subject to
normal withholding.
9
(e) Limitations
on Major Medical Benefits. The Company's obligation to provide
Major Medical Benefits to Employee and Ann B. Anderson, or either of them,
after
employment termination shall not oblige the Company to expend more than the
Maximum Annual Premium Amount in any calendar year as determined by
CryoLife. For purposes of this Agreement, Maximum Annual Premium
Amount shall mean the sum of $25,000 increased by the Consumer Price Index
using
September 1, 2005 as the base date. If all of the Major Medical Benefits cannot
be provided for the Maximum Annual Premium Amount, the Company shall utilize
the
Maximum Annual Premium Amount to obtain such major medical insurance coverage
as
can reasonably be obtained. When Employee or Employee's wife, Ann B.
Anderson, qualifies for Medicare, Medicaid or other governmentally provided
major medical benefit (collectively, "Government Benefits") of the sorts
otherwise included within Major Medical Benefits, the provision of benefits
under the Major Medical Benefits may be conditioned on Employee or Employee's
wife, Ann B. Anderson, as the case may be, looking first to Government Benefits
for coverage before drawing on the Major Medical Benefits.
7. NON-EXCLUSIVITY
OF RIGHTS.
Nothing
in this Agreement shall prevent
or limit the Employee's continuing or future participation in any plan, program,
policy or practice provided by CryoLife or any of its affiliated companies
and
for which the Employee may qualify, nor, except as specifically set forth
herein, shall anything herein limit or otherwise affect such rights as the
Employee may have under any contract or agreement with CryoLife or any of its
affiliated companies. Amounts which are vested benefits or which the
Employee is otherwise entitled to receive under any plan, practice or program
of
or any contract or agreement with CryoLife or any of its affiliated companies
at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
8. FULL SETTLEMENT.
In
no event shall the Employee be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Employee under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Employee
obtains other employment. CryoLife agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which the Employee
may
reasonably incur as a result of any contest by CryoLife or Employee with respect
to liability under or the interpretation of the validity or enforceability
of,
any provision of this Agreement, but only in the event and to the extent that
(i) the Employee receives a final, non-appealable judgment in his favor in
any
such action or receives a final judgment in his favor that has not been appealed
by the Company within 30 days of the date of the judgment; or (ii) the parties
agree to dismiss any such action upon CryoLife’s payment of the sums allegedly
due the Employee or performance of the covenants by CryoLife allegedly breached
by it.
10
9. LIMITATION
OR EXPANSION OF BENEFITS.
(a) In
the event it shall be determined that any benefit, payment or distribution
by
CryoLife to or for the benefit of the Employee (whether payable or distributable
pursuant to the terms of this Agreement or otherwise) would, if paid, be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the "Code"; such excise tax, the "Excise Tax"), then CryoLife shall
pay to Employee an additional amount of cash (a "Gross-Up Payment") equal to
the
amount necessary to cause the amount of the aggregate after-tax compensation
and
benefits received by the Employee hereunder (after payment of the excise tax
under Section 4999 of the Code with respect to any excess parachute payment,
and
any state and federal income and employment taxes with respect to the Gross-Up
Payment) to equal the aggregate after-tax compensation and benefits the Employee
would have received if Sections 280G and 4999 of the Code had not been enacted.
A nationally recognized public accounting firm selected by CryoLife shall
initially determine, at CryoLife's expense, whether an "excess parachute
payment" will be made to Employee, and if so, the amount of the Gross-Up
Payment. In the event of a subsequent claim by the Internal Revenue
Service that, if successful, would result in Employee's liability for an Excise
Tax under Section 4999 of the Code in excess of the amount covered by any
previous Gross-Up Payment, the Employee shall promptly notify CryoLife in
writing of such claim. If CryoLife elects to contest such claim, it
shall so notify the Employee and shall bear and pay directly or indirectly
all
costs and expenses of contesting the claim (including additional interest and
penalties incurred in connection with such action), and shall indemnify and
hold
Employee harmless, on an after-tax basis, for any excise, income, or employment
tax, including interest and penalties with respect thereto, imposed as a result
of CryoLife's payment of costs of the contest. Employee shall cooperate fully
with CryoLife in the defense of any such IRS claim. If, as a result
of CryoLife's action with respect to a claim, Employee receives a refund of
any
amount paid by CryoLife with respect to such claim, Employee shall promptly
pay
such refund to CryoLife. In the event the IRS claim is finally
determined to result in the imposition of additional excise tax under Section
280G of the Code on Employee, CryoLife shall make an additional Gross-Up Payment
with respect to any such additional excise tax.
(b) Anything
in this Agreement to the contrary notwithstanding, aggregate severance,
separation and/or similar payments made to Employee pursuant to this Agreement
and otherwise shall be limited to the equivalent of Employee’s salary paid
during the three completed fiscal years ended prior to the Date of Termination,
including bonuses and guaranteed benefits paid during those years. If necessary,
any Gross-Up Payment will be reduced in order to comply with this provision;
provided, however, that the Company agrees that it shall not deem any Retention
Payment hereunder to be a “severance, separation and/or similar payment” for
purposes of this Section 9(b) and Article IV, Section 8 of the
Company’s Bylaws. In consideration of this agreement, Employee agrees
to indemnify the Company and the Board for any and all costs and expenses,
including reasonable legal expenses, they may reasonably incur as a direct
result of such agreement. As soon as practicable following November
3, 2009, the Company agrees to amend this Agreement to remove this
Section 9(b) and to amend its Bylaws to remove the second sentence of
Article IV, Section 8 thereof.
11
10. CONFIDENTIAL
INFORMATION.
The
Employee and CryoLife are parties
to one or more separate agreements respecting confidential information, trade
secrets, inventions and non-competition (collectively, the "IP Agreements").
The
parties agree that the IP Agreements shall not be superseded or terminated
by
this Agreement and shall survive any termination of this Agreement.
11. SUCCESSORS.
(a) This
Agreement is personal to the Employee and without the prior written consent
of
CryoLife shall not be assignable by the Employee otherwise than by will or
the
laws of descent and distribution. This Agreement shall inure to the benefit
of
and be enforceable by the Employee's legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon CryoLife and its
successors and assigns.
(c) CryoLife
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of CryoLife to assume expressly and agree to perform this Agreement
in
the same manner and to the same extent that CryoLife would be required to
perform it if no such succession had taken place. As used in this
Agreement, "CryoLife" shall mean CryoLife as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to
perform this Agreement by operation of law, or otherwise.
12. MISCELLANEOUS.
(a) This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Georgia, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall
have
no force and effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, in either case, accompanied by a
facsimile copy, addressed as follows:
|
If
to the Employee:
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|
|
Steven
G. Anderson
|
|
|
5040
Northside Drive
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|
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Atlanta,
Georgia 30327
|
|
|
Facsimile:
(770) 590-3754
|
12
|
With
a copy to:
|
|
|
Steven
E. Fox
|
|
|
Rogers
& Hardin LLP
|
|
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2700
International Tower
|
|
|
229
Peachtree Street, N.E.
|
|
|
Atlanta,
Georgia 30303-1601
|
|
|
Facsimile:
(404) 525-2224
|
|
|
If
to CryoLife:
|
|
|
CryoLife,
Inc.
|
|
|
1655
Roberts Boulevard, N.W,
|
|
|
Kennesaw,
Georgia 30144
|
|
|
Attention: Chief
Financial Officer
|
|
|
Facsimile:
(770) 590-3754
|
|
|
With
a copy to:
|
|
|
B.
Joseph Alley, Jr.
|
|
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Arnall
Golden Gregory LLP
|
|
|
171
17th
St.
N.W., Suite 2100
|
|
|
Atlanta,
Georgia 30363
|
|
|
Facsimile:
(404) 873-8689
|
or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
(c) The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
(d) CryoLife
may withhold from any amounts payable under this Agreement such Federal, state,
local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) This
Agreement embodies the entire agreement between the parties with respect to
the
subject matter addressed herein. From and after the Effective Date,
this Agreement shall supersede any other agreement between the parties with
respect to the subject matter hereof including the Employment Agreement between
the parties dated September 5, 2005, which shall be null and void and of no
further force or effect. In the event of any conflict between this
Agreement and any benefits provision of CryoLife's Employee Handbook, the
provisions of this Agreement shall prevail.
(f) The
provisions of this Agreement are intended to satisfy the applicable requirements
of Section 409A of the Code and shall be performed and interpreted consistent
with such intent. If any provision of this Agreement does not satisfy such
requirements or could otherwise cause Employee to be subject to the interest
and
penalties under Section 409A of the Code, Employee and the Company agree to
negotiate in good faith an appropriate modification to maintain, to the maximum
extent practicable, the original intent of the applicable provision without
violating the requirements of Section 409A of the Code (or causing the
imposition of additional tax to Employee under Section 409A of the
Code).
13
IN
WITNESS WHEREOF, the Employee has
hereunder set the Employee's hand and, pursuant to the authorization from its
Compensation Committee and Board, CryoLife has caused this Agreement to be
executed in its name on its behalf, all as of the day and year first above
written.
|
/s/
Steven G. Anderson
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|
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STEVEN
G. ANDERSON
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|
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CRYOLIFE,
INC.
|
|
|
By: /s/
Ronald C. Elkins, M.D.
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|
|
Ronald
C. Elkins, M.D.
|
|
|
Director
and Chairman,
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|
|
Compensation
Committee
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14
Exhibit
14.1
CODE
OF BUSINESS CONDUCT AND ETHICS
As
Amended and Restated, July 30, 2007
CryoLife,
Inc. was founded with a commitment to the highest ethical standards of business
conduct and fair dealing in the Company's relations with all employees,
customers, suppliers and shareholders.
This
Code
of Business Conduct and Ethics clarifies our standards of conduct in potentially
sensitive situations; it makes clear that CryoLife, Inc. expects all employees,
officers and directors to understand and appreciate the ethical considerations
of their decisions; and it reaffirms our long-standing commitment to a culture
of corporate and individual accountability and responsibility for the highest
ethical and business practices.
We
encourage you to carefully read this Code of Business Conduct and Ethics,
discuss any questions that you may have with your immediate supervisor and
retain it for future use.
Very
truly yours,
Steven
G.
Anderson
Chairman
of the Board, President,
and
Chief
Executive Officer
The
Board
of Directors of CryoLife, Inc. has adopted this Code of Business Conduct and
Ethics to clarify the standards under which CryoLife and its Board of Directors
operate and the principles under which the Board and all CryoLife officers
and
employees carry out their duties. CryoLife, Inc. and its subsidiaries and
divisions are referred to collectively in this Code as "CryoLife." The Board
of
Directors may revise this Code from time to time and will make publicly
available any changes as they are adopted. A copy of the Code, as amended,
shall
be posted on the CryoLife, Inc. website. Nothing in the Code is intended or
will
be considered (i) to amend the Restated Certificate of Incorporation or Bylaws
of CryoLife, (ii) to change the legal duties imposed upon employees, officers
or
directors under Florida, federal and other applicable statutes, rules and
regulations or (iii) to change any rights of the employees, officers or
directors to indemnification under Florida and other applicable law or
CryoLife's Restated Certificate of Incorporation or Bylaws or otherwise.
References herein to federal, state, local or other applicable laws refer to
the
laws of the United States and all other applicable jurisdictions.
This
Code
applies to all employees, officers and directors of CryoLife, Inc. It is
important to the success of the Code that each employee, officer and director
of
CryoLife understands that:
|
·
|
He
or she is personally responsible for his or her own conduct in complying
with this Code and for promptly reporting known or suspected violations
to
the individual designated for this
purpose.
|
|
·
|
No
one has the authority or right to order, direct, request or even
attempt
to influence someone else to violate this Code or the law. Thus,
no one
will be excused for violating this Code or the law at the direction
or
request of someone else.
|
|
·
|
Any
attempt by any employee, officer or director to have another employee,
officer or director violate this Code, whether successful or not,
shall be
a violation of this Code and may be a violation of
law.
|
|
·
|
Any
retaliation or threat to retaliate against an employee, officer or
director for refusing to violate this Code or for reporting in good
faith
a violation or a suspected violation of this Code shall be a violation
of
this Code and may be a violation of
law.
|
|
·
|
Every
suspected violation of this Code by an employee, officer or director
will
be investigated and every actual violation by any employee or officer
will
constitute grounds for dismissal of such employee or
officer.
|
1.
Overall Standard
The
highest legal, moral and ethical standards of honesty, integrity and fairness
are to be practiced in the conduct of CryoLife's affairs. All employees,
officers and directors of CryoLife must always act in full compliance with
all
applicable United States and foreign, federal, state, local and other laws,
ordinances and regulations and with this Code. Failure to do so or to report
promptly apparent violations of law or this Code may result in removal,
dismissal, or other appropriate disciplinary action.
2.
Equal Opportunity
It
is the
policy of CryoLife to provide recruitment, hiring, training, promotion and
other
conditions of employment without regard to race, color, age, gender, sexual
preference, religion, disability, national origin or veteran status, and to
otherwise comply with all applicable anti-discrimination laws. It is the policy
of CryoLife to provide and maintain a working environment free of harassment,
intimidation or exploitation of any nature, including sexual and racial
harassment. CryoLife expects its employees, officers and directors to treat
all
CryoLife employees with respect and dignity and to fully support CryoLife's
objectives of providing equal opportunity employment and maintaining a workplace
free of harassment.
3.
Conflicts of Interest
No
employee, officer or director of CryoLife may engage in any activity that would
conflict with or be contrary to the best interests of CryoLife. A "conflict
of
interest" occurs when an individual's private interest interferes in any way
-
or even appears to interfere - with the interests of CryoLife. A conflict
situation can arise when an employee, officer or director takes actions or
has
interests that may make it difficult to perform his or her work objectively
and
effectively. Conflicts of interest also arise when an employee, officer or
director, or a member of his or her family, receives improper personal benefits
as a result of his or her position with CryoLife. Loans to, or guarantees of
obligations of, such persons are of special concern. CryoLife shall not make
a
loan to or guarantee any obligation of any executive officer or director, other
than as allowed by applicable law. In addition, no employee, officer or director
of CryoLife may participate in the management, revenues or equity ownership
of
any competing business. Furthermore, no officer of CryoLife may participate
in
the management, revenues or equity ownership of any CryoLife customer, supplier
or consultant, and such participation by all other employees is discouraged.
Any
employee participating in the management, revenues or equity ownership of any
customer, supplier or consultant shall disclose in writing the nature and extent
of such participation to the Chief Executive Officer or his designee. Any
director participating in the management, revenues or equity ownership of any
customer, supplier or consultant shall disclose in writing the nature and extent
of such participation to the Board's Chairman. An investment in the equity
or
debt of less than 3% of the relevant class of securities in a publicly held
competing business, customer, supplier or consultant will not be deemed to
be a
violation of this policy, but must nonetheless be reported as specified
above.
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4.
Payment of Gratuities
In
all
dealings with suppliers, customers, governmental officials and employees of
CryoLife, no director, employee or officer shall offer to give any payment
or
other significant thing of value that has as its purpose, or potential purpose,
or may appear to have as its purpose, improperly influencing the business
relationships between CryoLife and such persons or entities. This paragraph
shall not, however, prohibit a CryoLife employee from giving a reasonable and
customary holiday gift to a CryoLife customer or supplier.
5.
Receipt of Payments or Gifts
No
employee or officer and no director (in connection with his or her efforts
or
role as a director of CryoLife) may receive payments or gifts in exchange for
business opportunities with or otherwise from customers, vendors, suppliers
or
employees of CryoLife. This applies to anyone with whom CryoLife has an existing
or prospective relationship known to such employee, officer or director. In
our
continuing effort to maintain high ethical standards and to avoid appearances
of
impropriety, it is required that all employees, officers and directors and
members of their immediate families decline any such payment or gift, except
to
the extent specifically permitted below.
The
only
exception to the foregoing is that a gift can be accepted if such gift can
be
consumed or fully utilized within a 24-hour period, AND the gift is promptly
disclosed, in the case of an employee to an officer with responsibility for
his
or her department, in the case of a director, to the Board's Chairman, and
in
the case of the Chairman of the Board, to the Chairman of the Audit
Committee.
6.
Corporate Opportunities
Employees,
officers and directors must advance the legitimate interests of CryoLife when
the opportunity to do so arises. Employees, officers and directors, for their
own accounts or the account of another, may not (i) pursue an opportunity
discovered through the use of CryoLife property, information or position or
(ii)
use CryoLife's property, information or position for personal gain or (iii)
compete with CryoLife.
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7.
Political Contributions
Corporate
political contributions to any candidate for United States federal office or
to
any party or campaign in connection with any election for United States federal
office are prohibited. Corporate political contributions to any other political
candidate, party or campaign are generally discouraged and are prohibited where
such contributions are unlawful. Furthermore, any payments to any foreign
officials, political candidates or political parties outside the United States
are prohibited without the advance written approval of CryoLife, Inc.'s Chief
Executive Officer.
8.
Competition and Fair Dealing
CryoLife
seeks to outperform its competition fairly and honestly. We seek competitive
advantages through superior performance, never through unethical or illegal
business practices. Stealing proprietary information, possessing trade secret
information that was wrongfully obtained, or inducing such disclosures by past
or present employees of other companies is prohibited. Each employee, officer
and director should endeavor to respect the rights of and deal fairly with
CryoLife's customers, suppliers, competitors and employees. No employee, officer
or director should take improper advantage of anyone through manipulation,
concealment, abuse of proprietary information, misrepresentation of material
facts, or any other intentional improper practice.
9.
Protection and Proper Use of CryoLife's Assets
All
employees, officers and directors must endeavor to protect CryoLife's assets
and
ensure their efficient use. Theft, carelessness, and waste have a direct impact
on CryoLife's profitability. Any suspected incident of fraud or theft must
be
immediately reported for investigation. All CryoLife assets should be used
for
legitimate business purposes.
The
obligation of employees, officers and directors to protect CryoLife's assets
includes its proprietary information. Proprietary information includes
intellectual property such as trade secrets, patents, trademarks, and
copyrights, as well as business, marketing and service plans, engineering and
manufacturing ideas, designs, databases, records, salary information, any
financial data and reports that have not been publicly disclosed and any other
information not generally made available without restriction to third parties.
Unauthorized use or distribution of this information violates this Code and
may
be illegal.
10.
Financial Records, SEC Filings and Public Communications
The
Chief
Executive Officer, Chief Financial Officer, Chief Accounting Officer and
Controller of CryoLife, Inc., and all other persons performing similar functions
for CryoLife, Inc., shall be responsible for taking such actions and instituting
such policies and procedures as they believe will most efficiently and
effectively help to ensure full, fair, accurate, timely and understandable
disclosure in all reports and other documents that CryoLife files with or
submits to the Securities and Exchange Commission and other applicable
regulatory authorities and in all other public communications made by
CryoLife.
11.
Contractual Commitments
It
is of
utmost importance to the integrity and reputation of CryoLife that CryoLife
honors and fully complies with all contractual commitments.
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12.
Antitrust Law Compliance
All
employees, officers and directors of CryoLife must comply in all respects with
all applicable Unites States and foreign federal and state antitrust and
other comparable laws. To that end, no CryoLife employee, officer or director
may under any circumstances or in any context enter into any understanding
or
agreement (whether expressed or implied, formal or informal, written or oral)
with a competitor or potential competitor, limiting or restricting in any way
the actions of either party, including the offers of either party to any third
party, as to prices, costs, profits, products, services, terms or conditions
of
sale, market share, decisions to quote or not to quote, customer or supplier
classification or selection, sales territories or distribution
methods.
13.
Legal Compliance
Employees,
officers and directors must always act in full and timely compliance with all
applicable federal, state, local and other laws, ordinances and regulations,
the
rules and regulations of the Securities and Exchange Commission and the New
York
Stock Exchange and with this Code. Applicable federal, state, local and other
laws and regulatory agency rules with which compliance is required include,
without limitation, statutes, court and agency rulings and Securities and
Exchange Commission and New York Stock Exchange rules concerning:
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prohibitions
on trading in securities of CryoLife while aware of material, nonpublic
information, as discussed in greater detail in CryoLife's Policy
on
Trading in Company Securities, which is incorporated by reference
herein;
and
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reporting
of directors' and Section 16 reporting officers' ownership of CryoLife
equity securities and changes
therein.
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14.
Confidentiality
Employees,
officers and directors must not disclose any confidential information of
CryoLife until such time as the information has been publicly disclosed by
CryoLife, except that disclosure may be made to professional advisors (such
as
CryoLife's counsel and auditors) where such disclosure is in furtherance of
an
employee's, officer's or director's duty as a CryoLife employee, officer or
director. Absent unusual circumstances and subject always to the employee's,
officer's or director's responsibilities under applicable law, employees,
officers, and directors should refer media inquires to the Chief Executive
Officer or his or her designee.
15.
Ethics Compliance Officer
The
Chairman of the Board of Directors of CryoLife, Inc. will designate a Compliance
Officer. The Compliance Officer will be responsible for investigating and
reporting to the Nominating and Corporate Governance Committee and the Audit
Committee all reports of Code violations and for assuring the confidentiality
thereof, subject to disclosure obligations to the U.S. Government, any foreign
government or state, local or other applicable law enforcement authorities.
The
Compliance Officer is responsible for the maintenance of the Code and for the
administration of the training and compliance programs to insure compliance
with
the Code at the corporate level and will from time to time issue instructions
and procedures relating to the Code.
16.
Compliance and Training Program
The
Compliance Officer shall be responsible for developing and implementing a
compliance and training program to assist employees in becoming aware of and
complying with the Code and other legal obligations imposed by law or
regulation. Such programs will be under procedures established by the Compliance
Officer, which procedures shall provide at least the following
elements:
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Initial
distribution of the Code to all employees, officers and directors
and
subsequent distribution of the Code when modifications and/or updates
have
been made to the Code. (A written acknowledgment will be obtained
from all
employees, officers and directors indicating that they have received,
read, understood and agreed to comply with the
Code.)
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Training
for all new employees, officers and directors at the time of their
hiring
and all existing employees, officers and directors on at least an
annual
basis concerning the Code.
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A
mechanism (for example, a hot-line) to report actual or reasonably
suspected violations of the Code or any applicable laws or
regulations.
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Maintenance
of a register of all training satisfactorily completed by each
employee.
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Internal
operations review programs to determine compliance with the Code
on a
periodic or other appropriate
basis.
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17.
Reporting Violations of the Code
It
is the
obligation of every employee, officer and director to report promptly any actual
or reasonably suspected violations of the Code in the manner established by
CryoLife's Compliance Officer, the Nominating and Corporate Governance
Committee, or by the CryoLife Board of Directors (including anonymous "hot-line"
reports). All reports will be kept confidential and will be promptly
investigated, and appropriate corrective or disciplinary action will be taken,
including dismissal and notification of regulatory authorities when appropriate.
No such report shall result in negative consequences to any individual who
in
good faith reports a violation of this Code, and it shall be a violation of
this
Code for any director, officer or employee to take retaliatory action as a
result of any such report.
18.
Waivers of the Code
Any
waiver of this Code may be made only by the Board and will be promptly disclosed
as and to the extent required by law or the rules of any stock exchange on
which
the Company's securities are listed.
The
central purpose of this Code is to serve as an ongoing reminder of CryoLife,
Inc.'s policy of conducting its business in a legal and proper manner. This
includes not only complying with all applicable laws but also treating
CryoLife's customers, suppliers and employees with dignity and
respect.
If
you or
your co-workers have an ethics question, talk to your supervisor, a member
of
the Human Resources department, the Compliance Officer or to senior management.
If the ethics issue has not been addressed to your satisfaction, then contact
our compliance service, “Listen Up” at 1-877-776-8700 or via the internet at
www.ListenUpReports.com.
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