8-K
iRhythm Holdings, Inc. (IRTC)
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): December 14, 2020
iRhythm Technologies, Inc.
(Exact name of Registrant as specified in its charter)
| Delaware | 001-37918 | 20-8149544 |
|---|---|---|
| (State or other jurisdiction of<br>incorporation or organization) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification Number) |
699 8th Street, Suite 600
San Francisco, California 94103
(Address of principal executive office) (Zip Code)
(415) 632-5700
(Registrant’s telephone number, including area code)
N/A
(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:
☐ 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))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common Stock, Par Value $0.001 Per Share | IRTC | The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 14, 2020, iRhythm Technologies, Inc. (the “Company”) announced that Kevin M. King will retire from his position as President and Chief Executive of the Company, effective January 12, 2021. Mr. King will continue to serve on the Company’s board of directors.
In connection with his retirement, Mr. King and the Company plan to enter into a transition agreement pursuant to which Mr. King will assist with the transition of his role and consult for the Company as an executive advisor following his resignation.
The Company also announced that Michael J. Coyle, age 58 had been appointed as the Company’s President and Chief Executive Officer, effective January 12, 2021. Since December 2009, Mr. Coyle has served in leadership positions at Medtronic, a global medical device company, including as Executive Vice President and President for the Cardiovascular Portfolio of Medtronic, Plc. since November 2020 and as Executive Vice President and Group President, Cardiac and Vascular Group of Medtronic, Plc. since January 2015 and of Medtronic, Inc. since December 2009. Prior to that, Mr. Coyle served as President of the Cardiac Rhythm Management division at St. Jude Medical, Inc., an international medical device company, from 2001 to 2007, and prior positions included serving as President of St. Jude’s Daig Catheter division and numerous leadership positions at Eli Lilly & Company, a global pharmaceutical company. Mr. Coyle received an M.B.A. from the Wharton School of Business at the University of Pennsylvania and a Bachelor of Science in Chemical Engineering from Case Western Reserve University.
In connection with his position as President and Chief Executive Officer, the Company entered into an Offer Letter with Mr. Coyle which provides for, among other things, (i) a base salary of $660,000, (ii) annual bonus eligibility with a target bonus amount of 100% of salary, (iii) the issuance of a grant of restricted stock units valued at $6.0 million that vest over four years and (iv) the issuance of a grant of performance stock units valued at $5.0 million that vest pursuant to yet to be determined performance-based metrics. The foregoing summary of the Offer Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Offer Letter that is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Mr. Coyle will also participate in the Company’s Executive Change in Control and Severance and Change in Control program, which was filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2020 filed with the SEC on August 7, 2020. In addition, Mr. Coyle will enter into the Company’s standard form of indemnification agreement, which was filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-213773) filed with the SEC on September 23, 2016.
There are no arrangements or understandings between Mr. Coyle and any other persons pursuant to which he was appointed as an officer of the Company. Mr. Coyle has no family relationships with any of the Company’s directors or executive officers, and, other than as described above, Mr. Coyle does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
On December 14, 2020, the Company issued a press release announcing Mr. King’s retirement and the appointment of Mr. Coyle as the Company’s President and Chief Executive Officer effective January 12, 2021. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Exhibits
| (d) | Exhibits. |
|---|---|
| Exhibit No. | Description |
| --- | --- |
| 10.1 | Offer Letter, dated December 10, 2020, by and between iRhythm Technologies, Inc. and Michael J. Coyle. |
| 99.1 | Press Releasedated as of December 14, 2020. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| IRHYTHM TECHNOLOGIES, INC. | ||
|---|---|---|
| Date: December 14, 2020 | By: | /s/ Kevin M. King |
| Kevin M. King | ||
| Chief Executive Officer |
Document
Exhibit 99.1
December 10, 2020
Michael J. Coyle
Dear Mike:
We are pleased to offer you the position of President and Chief Executive Officer of iRhythm Technologies, Inc. (the “Company”) and it will be expected that you join the Company’s Board of Directors (the “Board”). In this capacity, you will be responsible for the overall management of the Company, reporting to the Board. You shall devote your best efforts and full business time, skill and attention to the performance of your duties. Your service on other boards requires advance approval of the Board and is restricted to non-competitive entities. You may engage in civic and not-for-profit activities as long as such activities do not interfere with the performance of your duties hereunder. If you decide to join us, the terms and conditions of your employment and benefits are outlined in Exhibit A. You should note that the Company may modify job titles, salaries, and benefits from time to time as it deems necessary.
In addition, if you decide to join the Company, it will be recommended by the Compensation Committee (the “Compensation Committee”) to the Company's Board of Directors (the “Board”) around February 2021, that the Company grant you equity awards with an aggregate grant date fair value of eleven million dollars ($11,000,000), consisting of the following:
1.An award of restricted stock units (“RSUs”) covering a number of shares of the Company’s common stock with an aggregate grant date fair value of $6,000,000 which will vest annually over four years at the rate of twenty-five percent (25%) per year, subject to your continuing employment through each vesting date.
2.An award of performance stock units (“PSUs”) covering a number of shares of the Company’s common stock with an aggregate grant date fair value of $5,000,000 which will vest pursuant to performance-based metrics applicable to the Company’s management team generally to be set forth in the Company’s 2021 PSU incentive program, as determined by the Compensation Committee in its sole discretion, subject to your continuing employment through the vesting date.
Each equity award will be subject to the terms and conditions of the Company's 2016 Equity Incentive Plan (as amended from time to time, the “2016 Plan”) and, as applicable, a PSU agreement or RSU agreement thereunder.
For purposes of this letter, the grant date fair value of each award will be determined in accordance with the Company’s standard equity grant practice, which typically means, with respect to awards of PSUs and RSUs, the grant date fair value will be calculated based on the thirty (30) day average closing price of the Company’s common stock as reported on the Nasdaq Global Select Market for the calendar month prior to approval, or such other methodology the Board or Compensation Committee may determine prior to the grant of the awards becoming effective.
No right to any stock is earned or accrued until such time that vesting occurs, nor does the grant of the equity awards confer any right to continue vesting or employment.
The Company is excited about your joining and looks forward to a beneficial and productive relationship. Nevertheless, you should be aware that your employment with the Company is for no specified period and constitutes at‑will employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice. We request that, in the event of resignation, you give the Company at least two weeks’ notice.
The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any.
For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.
We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company's understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business
Exhibit 99.1
activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.
As a Company employee, you will be expected to abide by the Company's rules and standards. As a condition of your employment, you are also required to sign and comply with an At‑Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (“CIIAA”) which requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company, and non‑disclosure of Company proprietary information. In the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that (i) any and all disputes between you and the Company will be fully and finally resolved by binding arbitration, (ii) you are waiving any and all rights to a jury trial but all court remedies will be available in arbitration, (iii) all disputes will be resolved by a neutral arbitrator who will issue a written opinion, (iv) the arbitration will provide for adequate discovery, and (v) the Company will pay all the arbitration fees, except an amount equal to the filing fees you would have paid had you filed a complaint in a court of law. Please note that we must receive your signed CIIAA before your first day of employment.
To accept the Company's offer, please sign and date this letter in the space provided below. If you accept our offer, we anticipate your first day of employment will be Tuesday, January 12, 2021. This letter, along with any agreements relating to proprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews or pre‑employment negotiations, whether written or oral. This letter, including, but not limited to, its at‑will employment provision, may not be modified or amended except by a written agreement signed by the Chairman of the Board of the Company and you. This offer of employment will terminate if it is not accepted, signed and returned by December 13, 2020. An At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement will follow in a separate communication should you decide to accept.
We look forward to your favorable reply and to working with you at iRhythm Technologies, Inc.
Sincerely,
| /s/ Abhijit Y. Talwalkar | |
|---|---|
| Abhijit Y. Talwalkar | |
| Chairman of the Board of Directors | |
| Agreed to and accepted: | |
| --- | --- |
| Signature: | /s/ Michael J. Coyle |
| Printed Name: | Michael J. Coyle |
| Date: | December 10, 2020 |
Exhibit 99.1
Exhibit A
Services and Benefits for Michael J. Coyle
Position: President and Chief Executive Officer and Director
Base Pay Rate: You will be a full-time employee, with a base rate of $660,000 annually, which will be earned and payable in substantially equal installments in accordance with the Company’s payroll policy.
Bonus: Each calendar year, you will be eligible to earn a bonus of 100% of your annual base salary at the time of bonus approval. The bonus will be based on achievement of financial targets and/or other performance objectives set by the Company, and the earned bonus will generally be paid within 90 days after the close of a calendar year. The eligible bonus amount will be prorated for any calendar quarter in which you are not employed for an entire quarter, and you must be employed on the date that your bonus, if any, is paid in order to earn and be eligible to receive the bonus.
Relocation Assistance: You will receive a one-time payment in the amount of $850,000 to use related to your relocation to the Bay Area. This bonus (the “Relocation Bonus”) will be paid in one lump sum on the next regularly scheduled pay date after you start employment with the Company, and all regular payroll taxes will be withheld. As a condition of your employment under this letter, you will be required to relocate your primary residence to the San Francisco Bay Area on or prior to October 1, 2021.
In the event your employment with the Company is terminated within 24 months of your date of hire due to your resignation without Good Reason, as defined in our Change of Control and Severance Policy, or (2) your termination for Cause, as defined in our Change of Control and Severance Policy, you will be responsible for reimbursing the Company for a portion of the full amount of the Relocation Bonus within 60 days of your employment termination date, with such portion equal to the product (rounded to the nearest whole cent) of: (i) the gross amount of the Relocation Bonus multiplied by (ii) a fraction (A) the numerator of which is equal to the difference between (x) 24 minus (y) the number of completed months you have served as the Company’s regular, full-time Chief Executive Officer as measured immediately prior to your termination date and (B) the denominator of which is 24. By your signature on this offer of employment, you authorize the Company to withhold the portion of the Relocation Bonus calculated pursuant to the prior sentence from any separation payments and/or other final pay you receive upon such termination of employment.
From January 12 through September 30, 2021, the Company will provide you with access to a corporate apartment near the Company’s headquarters. The monthly value of your access to the corporate apartment will be treated as compensation to you and subject to applicable withholdings (such value, the “Apartment Benefit”). In addition, in order to make the Apartment Benefit tax neutral to you, the Company will provide to you an amount or amounts (the “Tax Neutrality Payment”), determined by the Company after consultation with you, to be necessary to pay federal, state, local and non-U.S. income and employment taxes, if any, incurred by you (i) arising as a result of the Apartment Benefit, and (ii) arising from the payments made to you pursuant to this sentence. The Tax Neutrality Payment will be calculated by the Company based on the highest marginal rates actually in effect for you at the time or times the applicable taxes related to the Apartment Benefit are due, and the Company’s determination of the Tax Neutrality Payment will be final and binding. The Tax Neutrality Payment will be paid either to you or to the relevant taxing authorities on your behalf, or a combination thereof, as soon as practicable following the date such amounts are due to the applicable taxing authorities, and may be paid in installments as due. The Tax Neutrality Payment is intended to be a payment described in Treasury Regulation 1.409A-3(i)(1)(v), and as such in all events will be paid no later than the end of your taxable year next following your taxable year in which you are required to remit the related taxes to the taxing authorities.
Benefits and Expenses: You will be entitled to participate in the benefit plans and programs generally available from time to time to employees of the Company, subject to the terms of such plans and programs. This includes four weeks per year of Paid Time Off, in addition to specified Holidays, among other benefits.
Severance: You may be eligible to receive severance benefits in the event your employment is terminated under certain conditions pursuant to the terms of our Change of Control and Severance Policy and a participation agreement thereunder.
Document
Exhibit 99.1
iRhythm Technologies President and CEO Kevin King to Retire; Michael Coyle Joins Company as President and CEO Effective January 12, 2021
SAN FRANCISCO, December 14, 2020 -- iRhythm Technologies, Inc. (NASDAQ: IRTC), a leading digital health care solutions company focused on the advancement of cardiac care, today announced that Kevin King will retire as President and CEO effective January 12, 2021. Mr. King will continue to serve on iRhythm's board of directors and as an advisor to the business. Effective the same date, Mike Coyle will join the company as President and CEO and as a member of its board of directors.
Under King’s leadership, iRhythm successfully completed an IPO in 2016, achieved record financial growth and increased shareholder value significantly. During his tenure, the company’s annual revenue grew from approximately $5 million in 2011 to projected analyst consensus of $263 million in 2020, while increasing its market capitalization from approximately $80 million to more than $5.5 billion over the same time period.
"On behalf of iRhythm’s board of directors, I want to thank Kevin for his leadership and strategic contributions during his nine years at iRhythm. During his tenure, Kevin created and led the company’s strategic initiatives to redefine how cardiac arrhythmias are diagnosed and treated, built a strong management team and created tremendous value for multiple stakeholders since its pre-IPO period," said Abhijit Talwalkar, iRhythm’s Chairman. “Kevin’s vision and focused execution have enabled the company to meaningfully deepen its presence while expanding the market. We are delighted that he will continue his role as a board member and for a period of time as an advisor. We look forward to his continued contributions through the next phase of iRhythm’s growth.”
"I am extremely proud of all that we have accomplished, particularly the culture and team that we have built at iRhythm and the impact we have had with our Zio Service on the lives of more than three million patients,” said Kevin King, iRhythm President and CEO. "While the timing of any CEO transition is never easy, succession planning has been a thorough and thoughtful process. Our business outlook remains very strong with substantial opportunity for continued growth and expansion. I am confident that under Mike's leadership, iRhythm will continue to drive meaningful growth while delivering operational excellence."
On the appointment of Mr. Coyle, Talwalkar continued, "Mike is a proven leader in the healthcare industry with notable experience building and scaling multi-billion dollar businesses globally, particularly in cardiology. We look forward to his expertise and leadership as iRhythm enters the next phase of growth and expansion, and are confident that Mike will ensure iRhythm stays at the forefront of innovation, fully leveraging the significant opportunities to reach the next level of market leadership."
"This is an exciting time in iRhythm’s history, and I am grateful for the opportunity to build on the strong foundation and lead such an amazing company," said Mike Coyle, iRhythm’s incoming President and CEO. "Cardiac arrhythmias in general, and atrial fibrillation in particular, are dangerous and significantly underdiagnosed conditions among patients worldwide. iRhythm’s highly innovative Zio platform, as well as its leadership position in AI-enabled arrhythmia detection, can significantly improve how these patients are identified so they can receive the treatment that they need. I look forward to working with this talented and well-established team to build on the tremendous growth opportunities that lie ahead."
Prior to joining iRhythm, Mike Coyle served as an Executive Officer of Medtronic, Plc from 2009 through 2020. During this period, he served as Executive Vice President and Group President for the Cardiovascular Group, responsible for establishing strategic direction and optimizing enterprise performance for Medtronic’s Cardiovascular Device businesses. Prior to Medtronic, Mike provided leadership consulting services to private equity, venture capital, and medical device technology firms from 2007 to 2009. Prior to that, Mike served as a divisional president at St. Jude Medical, where he led the company’s global pacemaker, implantable
Exhibit 99.1
cardioverter defibrillator, and cardiac resynchronization businesses. He also led the company’s Daig Catheter division in an earlier president role. Additionally, Mr. Coyle held numerous leadership positions at Eli Lilly & Company. He earned a bachelor’s degree from Case Western Reserve University and a master’s degree in business administration from the Wharton School of Business, University of Pennsylvania. He currently serves on the board of directors for Haemonetics Corporation.
About iRhythm Technologies, Inc.
iRhythm is a leading digital health care company redefining the way cardiac arrhythmias are clinically diagnosed. The company combines wearable biosensor devices worn for up to 14 days and cloud-based data analytics with powerful proprietary algorithms that distill data from millions of heartbeats into clinically actionable information. The company believes improvements in arrhythmia detection and characterization have the potential to change clinical management of patients.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the Chief Executive Officer transition and the addition of a member to our Board of Directors. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include risks described in the section entitled “Risk Factors” and elsewhere in our filing made with the Securities and Exchange Commission on the Form 10-Q on November 6, 2020. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. iRhythm disclaims any obligation to update these forward-looking statements.
| Investor Relations Contact: | Media Contact: |
|---|---|
| Leigh Salvo | Saige Smith |
| (415) 937-5404 | (262) 289-7065 |
| investors@irhythmtech.com | irhythm@highwirepr.com |