ALPHATEC HOLDINGS, INC. (NASDAQ:ATEC) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Appointment of CEO and New Director
Appointment of New Chairman of the Board
Effective December10, 2016, Terry M. Rich was appointed the Chief
Executive Officer of Alphatec Holdings, Inc. (the Company) and
Alphatec Spine Inc. (Spine), and as a member of the Companys and
Spines Board of Directors (the Board). In addition, effective
December10, 2016, Mortimer Berkowitz III, a current director of
the Company, was appointed as the new Chairman of the Board.
In connection with such appointments, Leslie H. Cross departed
from his position as the Companys and Spines interim Chief
Executive Officer, and as Chairman of the Board, effective
December10, 2016. Mr.Cross will continue to serve as a member of
the Board. As the positions of Chief Executive Officer and
Chairman are now held by separate persons, the Board will cease
to have a lead independent director.
Mr.Rich, age 49, most recently served as the President, Upper
Extremities of Wright Medical Group, N.V., a global medical
device company focused on extremities and biologics products,
from October 2015 to June 2016. Prior to that, Mr.Rich served as
Senior Vice President, U.S. Commercial Operations of Tornier,
N.V., from March 2012 to October 2015, at which time Tornier and
Wright Medical Group merged. Prior to joining Tornier, Mr.Rich
served as Senior Vice President of Sales West of NuVasive, Inc.,
a medical device company focused on developing minimally
disruptive surgical products and procedures for the spine. Prior
to such position, Mr.Rich served as Area Vice President, Sales
Director and Area Business Manager of NuVasive from December
2005. Prior to joining NuVasive, Mr.Rich served as Partner/Area
Sales Manager of Bay Area Spine, a distributor of DePuy Spine,
Inc.s products. Mr.Rich has a Bachelor of Labor Relations from
Rutgers College, Rutgers University. The Company believes that
Mr.Rich possesses specific attributes that qualify him to serve
as a director of the Company, including the perspective and
experience he will bring as Chief Executive Officer of the
Company, and his prior experience as an executive of both private
and publicly-traded medical device companies.
There are no family relationships between Mr.Rich and any
director or executive officer of the Company, and he has no
direct or indirect material interest in any transaction required
to be disclosed to Item404(a) of Regulation S-K.
In connection with his appointment, the Company entered into an
employment letter agreement with Mr.Rich, effective as of
December10, 2016, setting forth Mr.Richs compensation and certain
other terms. Mr.Richs employment is at-will. to his employment
letter agreement, Mr.Rich will be paid an annual base salary of
$450,000 and he will be eligible to receive an annual target cash
bonus equal to 50% of his annual base salary upon the Companys
and his achievement of goals to be established by the Board each
fiscal year. Mr.Rich is also entitled to participate in all of
the Companys benefits programs available to management employees
and to receive reimbursement of reasonable expenses he incurs in
connection with his service to the Company.
to the employment letter agreement, in connection with the
commencement of his employment on December12, 2016, Mr.Rich was
granted restricted stock units (RSUs) covering 200,000 shares of
the Companys common stock and stock options to purchase up to
200,000 shares of the Companys common stock as employment
inducement awards, each under the Companys 2016 Employment
Inducement Award Plan (as amended, the Inducement Plan). Such
awards were granted to Mr.Rich as a material inducement to his
entering into employment with the Company, to NASDAQ rules. The
RSUs will vest in equal installments on each of the first four
anniversaries of the date of grant, subject to Mr.Richs continued
service with the Company through the applicable vesting date. The
stock options will have an exercise price equal to the closing
price of the
Companys common stock on the date of grant and will vest over
four years, with 25% of the options vesting on the first
anniversary of the date of grant and the remainder of the options
vesting monthly over the subsequent three years, subject to
Mr.Richs continued service with the Company through the
applicable vesting date. In addition, the RSUs and the stock
options will fully vest upon a change in control of the Company
(as defined in the Inducement Plan).
The Company and Mr.Rich also entered into a severance agreement
and a change in control agreement, each effective December10,
2016. The severance agreement provides that in the event Mr.Richs
employment is terminated without cause, he will be eligible to
receive the following severance and other benefits, subject to
his execution of a release of claims against the Company and
certain other conditions: (a)the payment of cash severance in a
lump sum equal to one and one-half times the sum of (x)his
regular annual base salary and (y)his annual target bonus in
effect in the calendar year in which the termination of
employment occurs; (b)the Company will pay premiums for the
continuation of his health and dental insurance coverage to COBRA
for a period of 18 months; and (c)the post-termination exercise
period for any vested stock options held by Mr.Rich at the date
of termination will be extended through the later of (i) 90 days
after his date of termination or (ii)the remaining term of such
awards.
Under the change in control agreement, in the event Mr.Richs
employment is terminated without cause or for good reason (as
defined in the agreement), and such termination occurs within 24
months following a change in control (as defined in the
agreement), he will be eligible to receive the following
severance and other benefits, subject to his execution of a
release of claims against the Company: (a)the payment of cash
severance in a lump sum equal to the sum of (w)two times his
regular annual base salary, (x)two times his annual target bonus
in effect in the calendar year in which the termination of
employment occurs, (y)a prorated portion (based on the number of
calendar months that have elapsed during the calendar year in
which the date of termination occurs, up to a maximum of 6
months) of the highest grant date fair value of any long-term
incentive award (cash and/or equity-based) granted to Mr.Rich in
the three calendar year period prior to the calendar year in
which the termination date occurs, and (z)a prorated portion
(based on the number of calendar months that have elapsed during
the calendar year in which the date of termination occurs) of the
greater of (i)the annual target bonus in effect in the calendar
year in which the termination of employment occurs or (ii)the
highest annual bonus paid to Mr.Rich of the three bonuses paid to
him prior to his termination; (b)the Company will pay premiums
for the continuation of his health and dental insurance coverage
to COBRA for a period of 18 months; (c)all of his outstanding
equity awards will vest (with any performance awards vesting as
set forth in the applicable award agreements); and (d)the
post-termination exercise period for any vested stock options
held by Mr.Rich at the date of termination will be extended
through the later of (x) 24 months after his date of termination
or (y)the remaining term of such awards (provided that if his
stock options are terminated or cashed-out in connection with
a change in control, he shall receive a lump sum cash payment
equal to the time value of such stock options (i.e., as
determined under the Black-Scholes method) inclusive of the
economic value for the extended post-termination exercise
period.
The foregoing
description of the employment letter agreement, severance
agreement, and change in control agreement does not purport to be
complete and is qualified in its entirety by reference to the
full text of such agreements, copies of which will be filed with
the Companys Annual Report on Form 10-K for the year ending
December31, 2016.
On December12,
2016, the Company issued a press release that included the
announcement of the management and Board changes described above,
which is attached hereto as Exhibit 99.1. The information
contained in Exhibit 99.1 shall not be deemed filed for purposes
of Section18 of the Securities Exchange Act of 1934, as amended
(the Exchange Act), or otherwise subject to the liabilities of
that Section, and it shall not be deemed incorporated by
reference in any filing under the Securities Act of 1933, as
amended, or under the Exchange Act, whether made before or after
the date hereof, except as expressly provided by specific
reference in such a filing.
Amendment of
Inducement Award Plan
On December10,
2016, the Board approved the first amendment to the Inducement
Plan, in order to increase the shares of common stock reserved
for issuance under the plan by 600,000 shares to 950,000 shares.
A complete copy of the Inducement Plan amendment is filed as
Exhibit 10.1 hereto and incorporated herein by reference. The
above summary of the Inducement Plan amendment does not purport
to be complete and is qualified in its entirety by reference to
such exhibit.
Item9.01.
Financial Statements and Exhibits.
(d) |
Exhibits. |
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| 10.1 |
First Amendment to the Alphatec Holdings, Inc. 2016 Employment Inducement Award Plan (incorporated by reference to Exhibit10.2 of the Companys Registration Statement on Form S-8 filed with the SEC on December12, 2016) |
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| 99.1 | Press Release, dated December12, 2016 |
About ALPHATEC HOLDINGS, INC. (NASDAQ:ATEC)
Alphatec Holdings, Inc. is a medical technology company. The Company through its subsidiary, Alphatec Spine, Inc. and its subsidiaries, designs, develops, manufactures and markets products for the surgical treatment of spine disorders. Its product portfolio and pipeline addresses the cervical, thoracolumbar and intervertebral regions of the spine and covers a range of spinal disorders and surgical procedures. Its products include Cervical and Cervico-Thoracic Products, which include Trestle Luxe Anterior Cervical Plate System and Pegasus Anchored Cervical Interbody; Thoracolumbar Fixation Products, which include Arsenal Degenerative System and OsseoScrew Spinal Fixation System; Spinal Spacers, which include Battalion Universal Spacer System and Alphatec Solus Locking ALIF Spinal Spacer; minimally invasive surgery Products, which include Illico Minimally Invasive Surgery System and BridgePoint Spinous Process Fixation System, and Biologics, which include Neocore Osteoconductive Matrix. ALPHATEC HOLDINGS, INC. (NASDAQ:ATEC) Recent Trading Information
ALPHATEC HOLDINGS, INC. (NASDAQ:ATEC) closed its last trading session down -0.45 at 4.45 with 96,333 shares trading hands.