ALPHATEC HOLDINGS, INC. (NASDAQ:ATEC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement

Departure ofStephen O’Neil

Effective October1, 2017, Stephen O’Neil resigned as a member of the Board of Directors (the “Board”) of the Company and its operating subsidiary, Alphatec Spine, Inc. (“Spine”). Mr.O’Neil also was a member of the Board’s Nominating, Governance and Compensation Committee. Mr.O’Neil’s resignation was not the result of any disagreements between Mr.O’Neil and the Company on any matter relating to the Company’s operations, policies or practices. In connection with his departure from the Company’s Board, Mr.O’Neil and the Company entered into a Vesting Acceleration Agreement (the “Vesting Agreement”). to the Vesting Agreement, as of October1, 2017, all outstanding options to purchase the Company’s common stock and any restricted common stock held by Mr.O’Neil as of October1, 2017, became vested and exercisable. In addition, the term during which Mr.O’Neil may exercise any stock option was extended until the earlier of: (i)October1, 2019 (or the following business day if such day is not a business day of the Company), or (ii)the expiration date that would apply to such stock option. This summary of the Vesting Agreement is qualified in its entirety by reference to the full text of the Vesting Agreement, which is filed hereto as Exhibit 10.3.

Appointment of Quentin Blackford

On October1, 2017, the Board appointed Quentin Blackford to fill the vacancy created by Mr.O’Neil’s resignation and to serve as a director for a term commencing on October2, 2017 and expiring at the Annual Meeting of Stockholders of the Company in 2018 and until his successor is duly elected and qualifies, unless he sooner dies, retires or resigns.The Board of Directors has determined that Mr.Blackford satisfies the current “independent director” standards established by the rules of The Nasdaq Stock Market.

Mr.Blackford, age 38, currently serves as the Chief Financial Officer of DexCom, Inc. (“DexCom”), a company focused on developing and marketing continuous glucose monitoring systems for ambulatory use by people with diabetes and by healthcare providers. Prior to joining DexCom in August 2017, Mr.Blackford served since August 2016 as the Executive Vice President, Chief Financial Officer, Head of Strategy and Corporate Integrity of NuVasive, Inc. (“NuVasive”), a medical device company focused on developing minimally disruptive surgical products and procedures for the spine. In this role, Mr.Blackford was responsible for leading NuVasive’s Finance, Strategy and Corporate Development, Compliance and Regulatory functions. From August 2014 until August 2016, Mr.Blackford served as NuVasive’s Executive Vice President, Chief Financial Officer. From July 2012 to August 2014, Mr.Blackford served as NuVasive’s Executive Vice President of Finance and Investor Relations, and from January 2011 to June 2012, he served as NuVasive’s Vice President, Finance. Mr.Blackford joined NuVasive in 2009 as its Corporate Controller and was previously employed at Zimmer Holdings, Inc., including most recently as the Director of Finance and Controller for Zimmer’s Dental Division. He obtained his Certified Public Accounting license (currently inactive) following the achievement of dual Bachelor of Science degrees in Accounting and Business Administration, with an emphasis in Accounting, from Grace College.

The Board selected Mr.Blackford to serve on the Board because it believes that his knowledge and experience in the areas of finance, strategy and corporate development, along with his knowledge and experience in the medical device industry contribute to the breadth of knowledge of the Board of Directors.

Mr.Blackford will receive the following annual cash and equity compensation in accordance with the Company’s standard compensation program for independent directors: (i)an annual grant of nonqualified options equivalent in value to $30,000 on the date of grant with three-year vesting; (ii)an annual grant of shares of restricted stock equivalent in value to $45,000 on the date of grant with one-year vesting; (iii)an annual cash retainer of $25,000, which is paid quarterly; and (iv)an annual payment of $8,000, paid quarterly, to each independent director that serves as a member of a Board committee. In addition, it is anticipated that Mr.Blackford will enter into the Company’s standard form of indemnification agreement for non-employee directors, a copy of which is attached as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March31, 2009, filed with the SEC on May5, 2009, and incorporated herein by reference.

There are no other arrangements or understandings between Mr.Blackford and any other person to which he was selected to serve on the Board. There are no family relationships between Mr.Blackford 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 Item 404(a) of Regulation S-K.

Appointment of Patrick Miles

On October1, 2017, the Board fixed the number of directors to serve on the Board at eight members and appointed Patrick Miles as Executive Chairman of the Company and Spine, effective October2, 2017. In connection with Mr.Miles’ appointment, director Mortimer Berkowitz III stepped down from his position as Chairman of the Board, but remains a director of the Company. Due to Mr.Miles’ employment as an officer of the Company (as detailed below), the Board of Directors has determined that Mr.Miles does not satisfy the current “independent director” standards established by the rules of The Nasdaq Stock Market and, effective October2, 2017, it appointed Mr.Berkowitz as the Lead Director of the Board.

Mr.Miles, age 51, has over 20 years of experience in the orthopaedic industry and most recently served, from September 2016 to September 2017, as the Vice Chairman of NuVasive. As Vice Chairman, Mr.Miles was responsible for enhancing the Company’s strategic plans for the future of spine surgery and supporting technology development. Mr.Miles served as a member of NuVasive’s Board of Directors since August 2016 until his resignation in September 2017. Prior to that, Mr.Miles served as NuVasive’s President

and Chief Operating Officer from February 2015 to September 2016. He previously served as NuVasive’s President of Global Products and Services from October 2011 to January 2015, President of the Americas from January 2010 to September 2011, Executive Vice President of Product Marketing and Development from January 2007 to December 2009, Senior Vice President of Marketing from December 2004 to January 2007, and as its Vice President, Marketing from January 2001 to December 2004. Prior to those positions, he served as Director of Marketing for ORATEC Interventions, Inc., a medical device company, and as a Director of Marketing for Minimally Invasive Systems and Cervical Spine Systems for Medtronic Sofamor Danek, and held several positions with Smith& Nephew. Mr.Miles received a B.S. in Finance from Mercer University.

The Board selected Mr.Miles to serve as Executive Chairman because it believes that he possesses specific attributes, perspective and experience gained as an executive and director of both private and publicly-traded medical device companies that qualify him to serve as the Company’s Executive Chairman.

There are no family relationships by or between Mr.Miles 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 RegulationS-K.

In connection with his appointment, the Company entered into an employment letter agreement with Mr.Miles, effective as of October2, 2017, setting forth Mr.Miles’ compensation and certain other terms. Mr.Miles’ employment is at-will. to his employment letter agreement, Mr.Miles will be paid an annual base salary of $550,000 and he will be eligible to receive an annual target cash bonus equal to 110% (prorated to 50% for fiscal 2017) of his annual base salary upon the Company’s and his achievement of goals to be established by the Company’s Board each fiscal year. Mr.Miles is also entitled to participate in all of the Company’s 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 October2, 2017, Mr.Miles will receive restricted stock units (“RSUs”) covering 1,000,000 shares of the Company’s common stock (with the grant of such RSUs made subject to, and effective on, the date on which the Company files a Registration Statement on Form S-8 registering the shares of common stock issuable upon settlement of the RSUs, which filing is expected to occur later this month) under the Company’s 2016 Employment Inducement Award Plan, for which the Board approved an amendment in order to increase the shares reserved thereunder by 1,000,000 shares to 2,550,000 shares, effective October2, 2017. Such awards were granted to Mr.Miles 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 three anniversaries of Mr.Miles’ first date of employment, subject to Mr.Miles’ continued service with the Company through the applicable vesting date. In addition, the RSUs will fully vest upon a change in control (as defined in the 2016 Employment Inducement Award Plan, as amended) of the Company.

The Company and Mr.Miles also entered into a severance agreement and a change in control agreement, each effective October2, 2017. The severance agreement provides that in the event Mr.Miles’ 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 his regular annual base salary and his annual target bonus in effect for the calendar year in which the termination of the 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.Miles 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.Miles’ 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: (1)a lump-sum cash severance payment in an amount equal to the sum of (a)two times his annual compensation; (b)the product of (x)his Long-term Incentive Award Value, multiplied by (y)a fraction, the numerator of which is the number of full and partial calendar months between January1 of the year of Separation from Service and the date of the Executive’s Separation from Service (provided, however, that such numerator shall not exceed six) and the denominator of which is twelve; and (c)the product of (x)the greater of (A)his target annual bonus amount for the year in which the Separation from Service occurs, or (B)the highest annual bonus paid to him out of the three prior bonuses paid to the him prior to the his Separation from Service, multiplied by (y)a fraction, the numerator of which is the number of full and partial calendar months between January1 of the year of Separation from Service and the date of the Executive’s Separation from Service and the denominator of which is twelve (12); (2) the Company will pay premiums for the continuation of his health and dental insurance coverage to COBRA for a period of 18 months; and (3)all of his outstanding equity awards will become fully vested to the extent that such vesting is based on service with the Company.

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 Company’s Quarterly Report on Form 10-Q for the quarter ending September30, 2017.

Amendment of Inducement Award Plan

On October1, 2017, the Board approved the Third Amendment to the Company’s 2016 Employment Inducement Award Plan, as amended (the “Plan”), to increase the shares of common stock reserved for issuance under the plan by 1,000,000 shares, to a total of 2,550,000 shares. A complete copy of the Plan amendment is filed as Exhibit 10.4 hereto and incorporated herein by reference. The above summary of the Plan amendment does not purport to be complete and is qualified in its entirety by reference to such exhibit.

On October2, 2017, the Company issued a press release announcing the Private Placement, the management and Board changes, and the amendment to the Plan, each as described and detailed above, which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information furnished under this Item 1.01 of this Current Report on Form8-K, including as contained in Exhibit 99.1, shall not be deemed “filed” for purposes of Section18 of the 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 or under the Exchange Act, whether made before or after the date hereof, except as expressly provided by specific reference in such a filing.

Forward-Looking Statements

This Current Report on Form8-Kmay contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward looking statements include statements regarding the Company’s expectations on the completion, timing and size of the Private Placement and the anticipated use of proceeds therefrom.The important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to, risks and uncertainties associated with market conditions and the satisfaction of customary closing conditions related to the Private Placement and other risks and uncertainties inherent in the Company’s business, including those detailed from time to time in the Company’s reports that it files with the SEC, including its Annual Report on Form10-Kfor the year ended December31, 2016, filed on March31, 2017 with the Securities and Exchange Commission, and its Amended Annual Report on Form10-K/Afiled on April28, 2017, as well as its Quarterly Reports on Form10-Qand periodic filings on Form8-K.The words “believe,” “will,” “should,” “expect,” “intend,” “estimate” and “anticipate,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement.The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

Alphatec Holdings, Inc. Exhibit
EX-4.1 2 d459451dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR STATE SECURITIES LAWS AND NO TRANSFER OF THESE SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER AND OF ALL APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS,…
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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.