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): August 15, 2005
THORATEC CORPORATION
(Exact name of registrant as specified in its charter)
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| California
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1-8145
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94-2340464 |
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| (State or other jurisdiction
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(Commission
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(IRS Employer |
| of incorporation)
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File Number)
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Identification No.) |
6035 Stoneridge Drive
Pleasanton, California 94588
(Address of principal executive offices including zip code)
(925) 847-8600
(Registrant’s telephone number, including area code)
Not Applicable
(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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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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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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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On August 16, 2005, Thoratec Corporation (the “Company”) issued a press release, which is furnished
hereto as Exhibit 99.1 and incorporated by reference as if fully set forth herein, announcing that
D. Keith Grossman, the Company’s President and Chief Executive Officer, is resigning from his
positions with the Company. Mr. Grossman’s resignation will be effective upon the earlier of the
date a replacement Chief Executive Officer (“Replacement CEO”) is hired and December 31, 2006,
which date is the expiration of Mr. Grossman’s amended employment agreement, as described below.
In connection with Mr. Grossman’s resignation, Mr. Grossman and the Company amended and restated,
effective August 15, 2005, the Employment Agreement by and between the Company and Mr. Grossman
dated December 6, 2001 (the “Amended Employment Agreement”). Additionally, Mr. Grossman and the
Company entered into a Consulting Services Agreement dated August 15, 2005 (“Consulting
Agreement”). The Amended Employment Agreement provides that Mr. Grossman will remain employed by
the Company for up to three months following the appointment of the Replacement CEO in order to
help transition such individual (the “Transition Period”). The Amended Employment Agreement
provides that at the end of the Transition Period Mr. Grossman will receive, in consideration for
the delivery of a release of the Company, the salary and bonus to which he would be entitled
through December 31, 2006 under his Employment Agreement prior to amendment. Additionally, at the
end of the Transition Period, all outstanding and unvested stock options will fully vest and all
restrictions on all shares of restricted common stock held by Mr. Grossman will lapse. Mr.
Grossman will also receive at the end of the Termination Period 18 months of paid COBRA premiums
and 18 months of paid premiums on a life insurance policy. Mr. Grossman will remain a member of
the Company’s Board of Directors and the Amended Employment Agreement provides that the Board of
Directors will continue to nominate Mr. Grossman to the Board of Directors through the Transition
Period. For nine months following the end of the Transition Period, Mr. Grossman will provide
consulting services to the Company pursuant to the Consulting Agreement in exchange for a
consulting fee of $5,000 per month. The Consulting Agreement terminates should Mr. Grossman
commence employment with a competitor of the Company.
In connection with Mr. Grossman’s resignation, the Company entered into Employment Agreements, each
with four year terms, with Jeffrey W. Nelson, President, Cardiovascular Division, and Lawrence
Cohen, President, International Technidyne Corporation. Mr. Nelson’s Employment Agreement provides
that he will be paid a retention bonus equal to 75 percent of his base salary twelve months after
the execution of his Employment Agreement provided he is still then employed by the Company. Mr.
Nelson will be paid an additional retention bonus equal to 75 percent of his base salary six months
after the hire date of the Replacement CEO provided he is still then employed by the Company. Mr.
Cohen’s Employment Agreement provides that he will be paid a retention bonus equal to 62.5 percent
of his base salary twelve months after the execution of his Employment Agreement provided he is
then still employed by the Company. Mr. Cohen will be paid an additional retention bonus equal to
62.5 percent of his base salary six months after the hire date of the Replacement CEO provided he
is then still employed by the Company. The Employment Agreements of Messrs. Nelson and Cohen
provide certain separation benefits whereby they will be entitled to severance in the amount of one
times their annual salary if they are terminated without cause or two times their base salary and
bonus if they are terminated without cause within eighteen months of a change of control of the
Company. These severance benefits contained within the Employment Agreements of Messrs. Nelson and
Cohen replace and supersede the identical benefits from the previous Separation Benefits Agreements
between the Company and Messrs. Nelson and Cohen. Additionally, pursuant to each Employment
Agreement, any outstanding and unvested stock options will fully vest upon their termination
without cause.
The Amended Employment Agreement, the Consulting Agreement, and each of the Employment Agreements
with Messrs. Nelson and Cohen are attached hereto as Exhibits 10.1 through 10.4 to this report on
Form 8-K and are incorporated herein by reference. This description summarizes certain provisions
of these agreements and is qualified in its entirety by reference to the terms and conditions in
the attached documents.
On August 19, 2005 the Board approved special
compensation to Howard E. Chase and Daniel M. Mulvena, members of the Board, in the amounts of $44,000 and $22,000, respectively, plus reimbursement
of actual expenses, to compensate them for the
extraordinary time and efforts dedicated by each of them related to the coordination and
implementation of Mr. Grossman’s resignation. The Board had appointed Messrs. Chase and Mulvena as
the representatives of the Board to negotiate and confer with Mr. Grossman, to draft and negotiate
the Amended Employment Agreement, the Consulting Agreement and the Employment Agreements with
Messrs. Nelson and Cohen, and to work and coordinate with counsel regarding these matters.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
(b) As more fully described under Item 1.01 above, Mr. Grossman’s resignation as President and
Chief Executive Officer of the Company will be effective upon the earlier of the hire date of the
Replacement CEO or December 31, 2006.
2.