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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: DECEMBER 22, 2005
(date of earliest event reported)
ATS MEDICAL, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-18602
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MINNESOTA 41-1595629
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
3905 ANNAPOLIS LANE, SUITE 105
MINNEAPOLIS, MINNESOTA 55447
(Address of Principal Executive Offices)
(763) 553-7736
(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):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Acceleration of Vesting of Stock Option Awards
On December 22, 2005, the Compensation Committee (the "Committee") of the
Board of Directors of ATS Medical, Inc. (the "Company") authorized the
acceleration of vesting of all otherwise unvested stock options held by its
employees with an exercise price of $3.00 or greater granted under the Company's
2000 Stock Incentive Plan or as a free standing option not under any plan.
Options to purchase 1,294,232 shares of the Company's Common Stock (the
"Shares"), including 182,500 Shares subject to options held by executive
officers of the Company, are subject to this acceleration which was effective as
of December 22, 2005. The options subject to acceleration included the following
options held by the Company's executive officers: 25,000 options held by Michael
Dale, 75,000 options held by Teresa Ajamil, 10,000 options held by Richard
Curtis, 62,500 options held by John Judd, and 10,000 options held by Marc
Sportsman. Options held by the non-employee directors of the Company were not
included in this action and so are not subject to acceleration.
The Committee also required that, as a condition to the acceleration, each
executive officer agree to refrain from selling Shares acquired upon the
exercise of accelerated options until the date on which the exercise would have
been permitted under the option's pre-acceleration vesting terms or, if earlier,
the executive officer's last day of employment (the "Lock-Up").
The decision to accelerate vesting of these underwater options was made
primarily to minimize certain future compensation expense that the Company would
otherwise recognize in its consolidated statement of operations with respect to
these options pursuant to Financial Accounting Standards Board Statement No. 123
(revised 2004), "Share-Based Payment" ("FAS 123R"), which becomes effective with
respect to the Company for reporting periods beginning after December 31, 2005.
The Company believes that the aggregate future expense that will be eliminated
as a result of the acceleration of the vesting of these options is approximately
$3.3 million.
Certain statements in this Report on Form 8-K that are not strictly
historical statements constitute forward-looking statements which involve risks
and uncertainties that could cause actual results and outcomes to differ
materially from what is expressed in those forward-looking statements. Such
forward-looking statements include, without limitation, those related to the
Company's expectations regarding the impact of the accelerated vesting of
options on its financial results in future periods. Important factors that may
affect such forward-looking statements include, without limitation: the
possibility that FAS 123R could be changed, amended or interpreted in a manner
that would change the Company's current assessment of the effects of the
adoption of FAS 123R on the acceleration of the vesting of stock options and the
final results of the closing of the Company's books for future financial
periods; as well as other risks detailed in the Company's filings with the
Securities and Exchange Commission, including those described in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.
The form of the Lock-Up is attached hereto as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Form of Lock-Up Agreement with Executive Officers
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATS MEDICAL, INC.
By: /s/ John R. Judd
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John R. Judd
Chief Financial Officer
Date: December 29, 2005
EXHIBIT INDEX
Exhibit No. Description
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99.1 Form of Lock-Up Agreement with Executive Officers