Staar Surgical Co DEF 14A, filed Apr 24, 2024
Staar Surgical Co (STAA)
About this DEF 14A
Staar Surgical Co filed this DEF 14A on April 24, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ |
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Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under §240.14a-12
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Payment of Filing Fee (Check all boxes that apply): |
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☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0‑11.
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STAAR SURGICAL COMPANY STAAR Surgical Company is disrupting refractive vision correction with our Implantable Collamer® Lenses (ICLs). Our EVO ICL™ lenses are an Evolution in Visual Freedom designed to provide premium refractive outcomes while optimizing patient comfort. STAAR Surgical is Ushering in the Next Generation of Vision Correction with EVO ICLTM 2023 Net Sales $322.4M 2023 Net Income $21.3M Cash, cash equivalents and investments available for sale $232.4M as of December 29, 2023 TOTAL ICLS SOLD… 1M 1999-2Q19 ~20 YEARS 2M 2Q22 ~3 YEARS 3M 1Q24 <2 YEARS 6M 4Q26E VISION 2026 STAAR expects to sell more ICLs in the next three years (2024-2026) than the first 25 years of ICL sales combined. 30+ Year History of Safety and Effectiveness 3 Million+ Lenses Sold 200+ Peer-Reviewed ICL Clinical Papers 99.4% of EVO patients surveyed would choose EVO again* * Patient EVO Visian ICL registry data on file. Strategic Priorities and Growth Initiatives for 2024 Increasing Surgeon Confidence in Measurement of the Eye and Lens Size Selection Increasing -6D to -8D Sales Mix New Product Innovation Growing New and Emerging markets Creating a High-Performance Organization Multi-year track record of profitable growth, aided by strong balance sheet, create a strong foundation for 2024 and beyond.
April 24, 2024 |
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Dear Fellow Shareholders:
At STAAR, our vision is to be the first choice for doctors and patients seeking visual freedom from the hassles of eyeglasses or contact lenses. We believe that our lens-based vision correction technology will continue to disrupt traditional laser-based refractive procedures, as more and more surgeons and patients seek out the benefits and advantages of our Implantable Collamer® Lenses (ICLs).
In 2023, we delivered another year of global growth and profitability, while continuing to invest in driving consumer awareness of the EVO ICL™. Despite macroeconomic challenges and a global decline in refractive industry procedures in 2023, we grew our net sales in 2023 by 13% to $322.4 million. Our ICL sales were up 18% compared to 2022. Even with significant investments to build a foundation for future growth, including sales and marketing, operations, and manufacturing capacity and capabilities, we generated net income of $21.3 million in 2023, and we ended the year with cash, cash equivalents and investments available for sale of $232.4 million. We believe this positions us well for 2024 and beyond.
We believe that if we execute on our strategic priorities and growth initiatives, we can bring the EVO ICL to more patients globally and create significant shareholder value. The near and long-term market opportunity for EVO ICL is exciting and vast - myopia is a global pandemic with no known cure. In 2024, we intend to focus on the following:
In 2024, growing our U.S. business will continue to be a priority for us. We believe our marketing campaigns in 2022 and 2023 increased customer awareness, and as patients seek out EVO ICL as a potential option for vision correction, our ability to educate, train and support surgeons will be critical. This is important not only in the U.S, but also as we look to grow our business in other new and emerging markets worldwide. To that end, we recently established a Department of Global Professional Education and Training under our Chief Medical Officer, which brings together strategic and professional education, clinical training, and commercial training under a single leadership point. That department will more closely align training, education, and commercial activities globally to enhance knowledge and understanding of our ICL technology and its benefits to patients and practices.
We have passionate and dedicated employees at STAAR, and we plan to continue to invest in our organization and our people. We are creating a High-Performance Organization around shared goals and corporate values that emphasize empowerment, high speed of execution, accountability. global mindset, and fun. And as a facts and data-driven organization, we are using voice of customer and voice of employee input to drive better decisionmaking. The STAAR team is embracing what it means to be a High-Performance Organization, and I am excited about what we can achieve together. On behalf of management and Board, I want to thank each of the over 1,000 STAAR employees worldwide for their contributions to our Company’s success in 2023.
And I want to thank each of our shareholders for your continued support. I hope you share in my enthusiasm for EVO ICL and believe in STAAR’s vision. On behalf of the customers that we serve, their patients, and all of my colleagues, I thank you for your investment in STAAR Surgical Company.
Sincerely, |
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Thomas G. Frinzi Chair of the Board, President and Chief Executive Officer |
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STAAR SURGICAL COMPANY 25651 Atlantic Ocean Dr. Lake Forest, CA 92630 |
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NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS |
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Meeting Date: |
Meeting Time: |
Meeting Place: |
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Who may Vote:
Shareholders of record at the close |
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The Board of Directors is soliciting your proxy for the annual meeting of the shareholders (the “Annual Meeting”) of STAAR Surgical Company (“STAAR” or the “Company”) to be held on June 20, 2024, at 8:30 a.m. (Pacific Time), and at any and all postponements or adjournments of the Annual Meeting, for the purposes set forth in this Notice and the accompanying Proxy Statement.
The Annual Meeting will be conducted by live audio webcast via the internet at www.virtualshareholdermeeting.com/STAA2024. STAAR shareholders or their legal proxy holders can participate, submit questions, vote, and examine our shareholder list at the Annual Meeting by visiting www.virtualshareholdermeeting.com/STAA2024 and using a valid control number.
Items of Business |
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Elect the following seven director nominees named in the Proxy Statement for a term of office expiring at the Company’s 2025 annual meeting of shareholders or until their successors are duly elected and qualified: Arthur C. Butcher, Stephen C. Farrell, Thomas G. Frinzi, Wei Jiang, Aimee S. Weisner, Elizabeth Yeu, M.D., and Lilian Zhou |
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Ways to Vote: |
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Approve an amendment to the Company’s Amended and Restated Omnibus Equity Incentive Plan, which increases the number of shares of Company common stock that are reserved for issuance under the plan by 2.6 million shares |
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By Internet
By Telephone
By Mail |
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Ratify the appointment of BDO USA, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 27, 2024 |
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Approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers |
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Transact such other business as may properly come before the Annual Meeting or any adjournment or postponement of the meeting |
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The Annual Meeting will be held as a live audio webcast via the internet. You will not be able to attend the Annual Meeting in person. The accompanying Proxy Statement includes instructions on how to participate in the Annual Meeting and how you may vote your shares.
Your vote is important to us. Whether or not you expect to attend the Annual Meeting by live audio webcast, please submit a proxy or your voting instructions as soon as possible to instruct how your shares are to be voted at the Annual Meeting. |
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The Board of Directors recommends a vote “FOR” each |
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IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY
MATERIALS FOR THE STAAR SURGICAL COMPANY 2024 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JUNE 20, 2024
You can find the Proxy Statement for the Annual Meeting, the proxy card, and the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2023 at www.proxyvote.com. To view materials via the internet, please follow the instructions set forth on the Notice of Availability of Proxy Materials mailed on or about April 24, 2024, to all shareholders of record as of the close of business on April 22, 2024.
Shareholders of record as the close of business on April 22, 2024 are entitled to notice of, and to vote at, the Annual Meeting. Shareholders of record can vote via:
- The Internet at www.proxyvote.com (and following instructions on the proxy card);
- By calling 1-800-690-6903; or
- By mail if you request a paper copy of the materials, which will include a proxy card (please see the instructions on the Notice of Availability of Proxy Materials).
If you are a beneficial owner who holds shares in “street name” through a broker, bank or other nominee, you should refer to the instructions provided by the organization that holds your shares.
The Annual Meeting will be held as a live audio webcast via the internet. To be admitted to the Annual Meeting, please visit www.virtualshareholdermeeting.com/STAA2024. Online check-in will be available approximately 10 minutes before the meeting starts. If you are a shareholder of record, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card. If you are a beneficial owner who holds shares in “street name” through a broker, bank or other nominee and your voting instruction form or Notice of Internet Availability of Proxy Materials indicates that you may vote those shares through the http://www.proxyvote.com website, then you may be admitted using the 16-digit control number included on that instruction form or notice. Otherwise, beneficial owners should contact their broker, bank or other nominee (preferably at least five days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend and participate in the Annual Meeting. Once admitted to the Annual Meeting, shareholders will be able to submit questions, vote or examine the shareholder list at the Annual Meeting by following the instructions on the Annual Meeting website.
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By Order of the Board of Directors, |
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Nathaniel Sisitsky, Esq. |
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General Counsel and Corporate Secretary |
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Lake Forest, California |
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April 24, 2024 |
Forward-Looking Statements and Website References
This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are those concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact, including statements regarding our environmental and other sustainability plans and goals. We caution you that these statements are not guarantees of future performance, nor promises that goals or targets will be met. Although we believe that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations and assumptions will prove to be correct. Forward-looking statements are subject to many risks and uncertainties, including but not limited to, the risk factors that we identify in our filings made with the Securities and Exchange Commission (the “SEC”), and actual results may differ materially from the results anticipated in such forward-looking statements. Our forward-looking statements speak only as of the date of this proxy statement, and we undertake no duty to update or revise any forward-looking statement that we may make, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.
PROXY STATEMENT SUMMARY
STAAR Surgical Company
STAAR Surgical Company (the “Company,” “STAAR,” “we,” “us,” or “our”) designs, develops, manufactures, and sells implantable lenses for the eye and accessory delivery systems used to deliver the lenses into the eye. We are the leading manufacturer of lenses used worldwide in corrective or “refractive” surgery. We have been dedicated solely to ophthalmic surgery for over 40 years. Our goal is to position our refractive lenses throughout the world as primary and premium solutions for patients seeking visual freedom from wearing eyeglasses or contact lenses while achieving excellent visual acuity through refractive vision correction. In 2023, STAAR reported worldwide revenue of $322.4 million, an increase of 13% from the prior year, and we generated net income of $21.3 million.
This summary highlights certain information contained within this Proxy Statement. You should read the entire Proxy Statement carefully and consider all information before voting.
Annual Meeting of Shareholders
The Board of Directors is soliciting your proxy for use at the 2024 Annual Meeting of Shareholders. The Board is making proxy materials available on the Internet to shareholders on or about April 24, 2024.
Meeting Date: |
Meeting Time: |
Meeting Place: |
Proposals |
Board Recommendation |
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1 |
Elect seven director nominees |
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FOR all director nominees |
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Approve an amendment to the Company’s Amended and Restated Omnibus Equity Incentive Plan |
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FOR |
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Ratify the appointment of the Company’s independent registered public accounting firm |
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FOR |
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Approve on a non-binding advisory basis the compensation of the Company’s named executive officers (“say-on-pay”) |
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FOR |
Director Nominees
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Director Since |
Other Public Boards |
Committee Service |
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Age |
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Audit |
Compensation |
Nominating/Governance |
Arthur C. Butcher |
53 |
2024 |
1 |
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Member |
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Stephen C. Farrell* |
59 |
2016 |
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Chair |
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Member |
Thomas G. Frinzi** |
68 |
2020 |
— |
— |
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Wei Jiang |
60 |
2024 |
1 |
Member |
— |
Chair |
Aimee S. Weisner |
55 |
2022 |
2 |
— |
Chair |
Member |
Elizabeth Yeu, M.D. |
45 |
2021 |
1 |
Member |
Member |
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Lilian Zhou |
41 |
2023 |
— |
Member |
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Member |
* Independent Lead Director ** All directors are independent, except for Mr. Frinzi, STAAR’s President and CEO |
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2024 Proxy Statement |
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Corporate Governance Highlights
Our Board of Directors is elected annually by our shareholders at the Annual Meeting |
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Board Refreshment and Tenure |
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• 3 new director nominees joined within the last year • 3 director nominees with tenure of 1-5 years • 1 director nominee with tenure of 5+ years |
Independence and Diversity |
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• Independent Lead Director • 6 of 7 director nominees are independent • 3 of 7 director nominees are female • 3 of 7 director nominees self-identify as ethnically diverse |
Executive Compensation Highlights
Our “say-on-pay” vote received over 95% support from shareholders at the 2023 Annual Meeting |
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Compensation Best Practices |
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• 2023 long-term incentive awards for our executives were granted in a combination of stock options, restricted stock units, and performance stock units. • In connection with the hiring of new executives in 2023, including Mr. Frinzi as President and Chief Executive Officer, the Compensation Committee conducted benchmarking and used the services of its independent compensation consultant, Aon Human Capital Solutions (formerly Radford Consulting) to structure market-based compensation packages to attract and retain each executive. |
Pay for Performance |
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• Given macroeconomic and other factors that impacted our business and industry in 2023, our performance fell short of goals that we set at the beginning of 2023. As a result, our annual bonus plan was funded at 50% of target, and performance stock units granted to members of our management team in 2023 did not vest and were forfeited. |
Equity Incentive Plan Highlights
We are seeking shareholder approval of a 2.6 million increase in the shares available for grant |
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Equity Plan and Amendment |
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• Our shareholders last approved the Amended and Restated Omnibus Equity Incentive Plan (the “Plan”) at the 2023 Annual Meeting. • The Plan includes governance best practices, including prohibitions on option repricing and cash buyouts of underwater options, limitations on share recycling, and award amount limits, including for director awards. • The Plan amendment would increase the shares available for grant by 2.6 million shares, to an aggregate total of 22,805,000 shares. |
Responsible Share Usage
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• The Company has thoughtfully managed its equity award burn rate, with a three-year average unadjusted burn rate of 1.6%. • The Company’s 2023 unadjusted burn rate was 2.6%, driven primarily by equity awards for new executives, including Mr. Frinzi as President and Chief Executive Officer. |
2024 Proxy Statement |
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Proposal No. 1 is for the election of seven directors nominated for re-election to the Board. Each of Arthur C. Butcher, Stephen C. Farrell, Thomas G. Frinzi, Wei Jiang, Aimee S. Weisner, Elizabeth Yeu, M.D., and Lilian Zhou currently serve as directors, and each has been nominated for re-election as a director to serve until STAAR’s 2025 Annual Meeting of Shareholders and until his or her successor has been duly elected and qualified, or until his or her earlier death, removal or retirement.
Our Board currently consists of eight directors, and the term of service for each of our directors will expire at the Annual Meeting. All of our current directors, with the exception of K. Peony Yu, M.D., are standing for re-election at the Annual Meeting. As Dr. Yu is not standing for re-election, our Board has voted to reduce the size of the Board from eight directors to seven directors upon the expiration of Dr. Yu’s term as a director.
The Board of Directors has nominated Arthur C. Butcher, Stephen C. Farrell, Thomas G. Frinzi, Wei Jiang Aimee S. Weisner, Elizabeth Yeu, M.D., and Lilian Zhou for re-election to the Board. Each of these nominees has indicated his or her willingness to serve and, unless otherwise instructed, the Proxy holders will vote the Proxies received by them for those seven nominees. If a nominee is unable or unwilling to serve as a director at the time of the Annual Meeting or any continuation, postponement or adjournment of the meeting, the Proxy holders will vote the Proxies for another nominee, if the current Board of Directors designates a nominee to fill the vacancy.
The qualifications of the individual directors upon which the Board of Directors based its nominations are described along with the biography of each nominee below.
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The Board of Directors recommends a vote “FOR” the election of the Board of Directors’ nominees. |
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2024 Proxy Statement |
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INFORMATION REGARDING DIRECTOR NOMINEES
The table below sets forth certain information regarding the seven directors nominated for re-election to the Board, as of April 24, 2024:
Director Nominees |
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Director Since |
Other Public Boards |
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Age |
Audit |
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Arthur C. Butcher |
53 |
2024 |
1 |
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Member |
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Stephen C. Farrell* |
59 |
2016 |
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Chair |
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Member |
Thomas G. Frinzi** |
68 |
2020 |
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Wei Jiang |
60 |
2024 |
1 |
Member |
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Chair |
Aimee S. Weisner |
55 |
2022 |
2 |
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Chair |
Member |
Elizabeth Yeu, M.D. |
45 |
2021 |
1 |
Member |
Member |
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Lilian Zhou |
41 |
2023 |
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Member |
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Member |
* Independent Lead Director ** All directors are independent, except for Mr. Frinzi, STAAR’s President and CEO |
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Director Nominee Highlights
2024 Proxy Statement |
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–– Information Regarding Director Nominees ––
Each of our seven director nominees’ skills and experiences are summarized in the following table and described more fully in their individual profiles below. Even though a particular skill may not be indicated in the table, our directors often have some level of experience in many of the areas listed.
Director Nominee Skills and Experience
Director Nominee Gender and Diversity |
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Total Number of Directors* |
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7 |
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Female |
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Male |
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Part I: Gender Identity |
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Directors |
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Part II: Demographic Background |
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Asian |
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2 |
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1 |
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White |
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1 |
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*As of April 22, 2024. The chart only includes information for directors nominated for re-election at the Annual Meeting.
2024 Proxy Statement |
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–– Information Regarding Director Nominees ––
Director Nominee Profiles
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Arthur C. Butcher Director since March 2024 Age 53 |
Qualifications. The Board of Directors concluded that Mr. Butcher should serve on the Board of Directors because he brings to the Board extensive medical device marketing, strategy and product development experience, including significant business experience in Asia. In addition, the Board believes that it can benefit from Mr. Butcher’s experience and perspective from serving on the board of Acotec Scientific, a public company listed on the Hong Kong Stock Exchange.
Experience. Mr. Butcher currently serves as Executive Vice President and Group President, MedSurg and Asia Pacific for Boston Scientific, a medical device company, a position he has held since May 2022. Prior to his current role, Mr. Butcher served as Boston Scientific’s Executive Vice President and President, Asia Pacific, from February 2020 to May 2022, and was responsible for commercialization of the company’s full portfolio of products across all divisions in the Asia Pacific region. Mr. Butcher joined Boston Scientific in 1997, and he has held management roles with increasing responsibility and has deep experience across the company’s divisions. He serves as a member of the Board of Directors of Acotec Scientific Holdings Limited, listed publicly on the Hong Kong Stock Exchange.
Education. Mr. Butcher earned a B.A. in International Relations from the University of Pennsylvania and an M.B.A. from Columbia University. |
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Stephen C. Farrell Director since January 2016 Age 59 |
Qualifications. The Board of Directors concluded that Mr. Farrell should serve on the Board of Directors because he brings to the Board significant operating, financial and board experience, as well as a strong knowledge of healthcare, having led PolyMedica and Convey Health Solutions. Mr. Farrell also has significant audit committee experience, having served as Chair of the Audit and Corporate Citizenship Committees for Questcor Pharmaceuticals and Lineage Cell Therapeutics, and also would qualify as a financial expert. In addition, the Board believes his expertise in healthcare distribution, accounting and financial stewardship brings a valuable skill set and strategic perspective to our Board.
Experience. Mr. Farrell most recently served as the Chief Executive Officer and a member of the Board of Directors of Convey Health Solutions, a private equity sponsored technology-enabled healthcare business process outsourcer, from February 2011 to February 2024. Also, from 2012 to 2020 he served as a member of the Board of Directors of Lineage Cell Therapeutics, formerly known as BioTime, Inc., a clinical stage biotechnology company focused in the field of regenerative medicine. From 2008 to 2009, Mr. Farrell served as the Executive Vice President and Chief Financial Officer for Stream Global Services, a business process outsourcer. From 1999 to 2007, Mr. Farrell served as President of PolyMedica Corporation, a publicly traded provider of diabetes supplies that was acquired by Medco Health Solutions in 2007. From 2007 to 2014, he served as a member of the Board of Directors of Questcor Pharmaceuticals, a biopharmaceutical company that was acquired by Mallinckrodt PLC in 2014. Mr. |
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2024 Proxy Statement |
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–– Information Regarding Director Nominees ––
Farrell spent five years as a Senior Manager at PricewaterhouseCoopers auditing leading public companies from 1994 to 1999.
Education. Mr. Farrell earned a B.A. from Harvard University and an M.B.A. at the University of Virginia, Darden School of Business. |
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Thomas G. Frinzi Director since June 2020 President and Chief Executive Officer since January 2023 Age 68 |
Qualifications. Mr. Frinzi’s extensive experience in the ophthalmic and medical device industries encompasses both large, well-established companies and innovative start-ups. The Board of Directors concluded that Mr. Frinzi should serve on the Board of Directors because of his familiarity with relevant international sales and marketing aspects of the ophthalmic industry, experience with regulatory and governance aspects of the ophthalmic industry, executive leadership experience, and familiarity with the challenges faced by growth-oriented companies in the ophthalmic industry.
Experience. In June 2022, the Board of Directors appointed Mr. Frinzi to serve as Chair of the Board. In December 2022, the Board of Directors appointed Mr. Frinzi to serve as President and Chief Executive Officer of STAAR, effective January 1, 2023. From February 2017 through December 2019, Mr. Frinzi served as Worldwide President, Surgical, Johnson & Johnson Vision business, which includes a broad ophthalmology portfolio across the areas of refractive and cataract surgery. Mr. Frinzi served as Senior Vice President of Abbott Laboratories and President, Abbott Medical Optics (AMO) from January 2016 until February 2017 when Johnson & Johnson acquired AMO. Prior to joining Abbott, Mr. Frinzi held a number of leadership positions in ophthalmology and medical device companies. He served as President and CEO of WaveTec Vision, a developer of surgical systems for eye surgery from September 2010 through September 2014 when it was acquired by Alcon. Thereafter, he served as Alcon’s Head of WaveTec Vision until July 2015. He also held senior positions in commercial operations, business development, and sales and marketing at Bausch & Lomb Surgical, Refractec, Chiron Vision, and Johnson & Johnson. In August 2020, he joined as Executive Chair of the Board of Directors of Cornea Gen, a private company developing therapeutics for the prevention and treatment of corneal disease.
Education. Mr. Frinzi earned a B.A. from the University of Tampa. |
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Wei Jiang Director since March 2024 Age 60 |
Qualifications. The Board of Directors concluded that Mr. Jiang should serve on the Board of Directors because of his more than 25 years’ experience in the pharmaceutical and medical device industries, with particular focus in China and the Asia/Pacific region. In addition, the Board believes that it can benefit from Mr. Jiang’s experience and perspective from serving on the board of Waters Corporation, a public company listed on the New York Stock Exchange.
Experience. Mr. Jiang most recently served as Executive Vice President and President, Bayer Pharmaceuticals Region China & APAC, and President, Bayer Group Greater China Region, until his retirement in 2021. Prior to joining Bayer in 2012, he held various senior positions at AstraZeneca, |
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2024 Proxy Statement |
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–– Information Regarding Director Nominees ––
culminating in his role as Senior Vice President, China operations. Prior to that, Mr. Jiang served as Managing Director, China operations at Guidant Corporation and in various roles at Eli Lilly & Company including Marketing Director, China Operations. Mr. Jiang has served as a member of the Board of Directors of Waters Corporation (NYSE: WAT) since 2021, including as a member of its science and technology committee.
Education. Mr. Jiang earned a B.BA. in business administration from Campbell University in North Carolina and an M.A. in economics from Indiana State University. |
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Aimee S. Weisner Director since June 2022 Age 55 |
Qualifications. The Board of Directors concluded that Ms. Weisner should serve on the Board of Directors because she brings to the Board extensive in-house legal and compliance experience with different medical device companies, including an in-depth understanding of regulatory issues, corporate governance, risk management, intellectual property, corporate transactions, human resources, and internal audit, as well as significant experience in the ophthalmic industry. In addition, the Board believes that it can benefit from Ms. Weisner’s experience and perspective from her prior service on the boards of several U.S. public companies in the medical device and pharmaceutical fields.
Experience. Ms. Weisner most recently served as Corporate Vice President, General Counsel of Edwards Lifesciences Corporation, a medical technology company, from 2011 until her retirement in 2019. From 2009 to 2010, she was engaged in private practice and served as legal advisor to public pharmaceutical and medical device companies located in Southern California. Prior to this, from 2002 to 2009, Ms. Weisner served in a number of positions at Advanced Medical Optics, Inc. (acquired by Abbott Laboratories), including Executive Vice President, Administration and Secretary. From 1998 to 2002, Ms. Weisner served in a number of positions at Allergan, Inc., including Vice President, Assistant General Counsel and Assistant Secretary. Ms. Weisner began her legal career as an associate at the law firm of O’Melveny & Myers LLP. Ms. Weisner has served on the Board of Directors of Glaukos Corporation (NYSE: GKOS) since 2014, including as a member of its audit committee, and on the Board of Directors of Lensar, Inc. (NASDAQ: LNSR), including as a member of its compensation committee, since February 2021. Ms. Weisner previously served on the Board of Directors of Oyster Point Pharma (NASDAQ: OYST) from 2019 to 2023.
Education. Ms. Weisner earned a B.A. from California State University, Fullerton, and a J.D. from Loyola Law School, Los Angeles. |
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Elizabeth Yeu, M.D. Director since January 2021 Age 45 |
Qualifications. The Board of Directors concluded that Dr. Yeu should serve on the Board of Directors because of her experience as a practicing and nationally recognized ophthalmologist and educator, and her deep understanding of the clinical needs of refractive surgeons and patients seeking visual freedom. |
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2024 Proxy Statement |
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–– Information Regarding Director Nominees ––
In addition, the Board believes that it can benefit from Dr. Yeu’s experience and perspective from her prior service on the boards of several companies in the medical device and pharmaceutical fields.
Experience. Dr. Elizabeth Yeu has been a Partner at Virginia Eye Consultants since 2014. She has served as an Assistant Professor of Ophthalmology at the Eastern Virginia Medical School since 2012. Dr. Yeu is currently the President of the American Society of Cataract and Refractive Surgery (ASCRS), and she serves on the ASCRS Executive Board. Dr. Yeu has authored hundreds of articles and is a frequent lecturer nationally and internationally in the areas of refractive cataract surgery, anterior segment reconstruction, ocular surface disease management and the surgical management of astigmatism. Dr. Yeu was voted to The Ophthalmologist's Global Power List as follows: Global Top 100 Power List 2022 and 2020, Top 100 Women in Ophthalmology in 2021, Emerging Leader in 2019, Rising Stars in 2017 and Top 40 Under 40 in 2015. Dr. Yeu received the Women in Medicine’s Top Ophthalmologist Award in 2021, the inaugural Clinical Rising Star award in 2018 by the Ophthalmic Innovations Summit (OIS), was recognized as a Castle Connelly Top Doc 2016-2022 and received their Exceptional Women in Medicine Award in 2017-2018, earned the Best Doctors Award by her peers from 2013-2016, the Millennial Eye Award in 2015, and was recognized as Top 40 Under 40 through Virginia’s Inside Business Journal. Dr. Yeu has served on the board of directors of Tarsus Pharmaceuticals, Inc. (NASDAQ: TARS), a biopharmaceutical company focused on the development and commercialization of therapeutic candidates to address the prevalent disease with limited treatment options, since December 2021. Since January 2022, Dr. Yeu has also served on the board of directors of Avellino Lab USA, Inc., a global leader in genetic molecular diagnostics at the forefront of precision medicine for eye care.
Education. Dr. Yeu earned her medical degree through an accelerated and combined undergraduate/ medical school program at the University of Florida College of Medicine. She completed her Ophthalmology residency at Rush University Medical Center in Chicago, where she served as Chief Resident (2006-2007). Dr. Yeu completed a fellowship in cornea, anterior segment and refractive surgery at Baylor College of Medicine’s Cullen Eye Institute from 2007-2008, and she served as an Assistant Professor after her fellowship training. |
|
Lilian Zhou Director since December 2023 Age 41 |
Qualifications. The Board of Directors concluded that Ms. Zhou should serve on the Board of Directors because she brings to the Board more than two decades of capital markets and investment experience, with particular focus on China and the Asia/Pacific region. Ms. Zhou also adds deep understanding of corporate governance, corporate strategy and corporate finance from a shareholder's perspective. In addition, the Board believes that it can benefit from Ms. Zhou’s experience as a Chartered Financial Analyst.
Experience. Ms. Zhou most recently served as Founder, Chief Investment Officer and Managing Partner of Yulan Capital Management, an investment advisory firm backed by Tiger Management, L.L.C. (a Tiger Seed), which operated out of New York and Shanghai from 2013 through June 2023. Yulan Capital Management primarily focused on researching and investing in companies in the Asia region and its institutional investor base consisted of leading endowments, pension funds and insurance companies. Prior to Yulan Capital, Ms. Zhou worked at Citadel, Kelusa Capital and Bear Stearns & Co. in investing and research roles. Ms. Zhou began her career as an investment banking analyst at Credit Suisse in 2004.
Education. Ms. Zhou earned a B.A., Economics and Mathematics-Statistics, from Columbia University, and an M.B.A. from The Wharton School, University of Pennsylvania. She is a Chartered Financial Analyst (CFA). |
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2024 Proxy Statement |
– 9 – |
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CORPORATE GOVERNANCE
Since our 2023 Annual Meeting of Shareholders, we have had ongoing dialogue with a number of our investors, representing over 50% of shares outstanding, to build relationships and receive feedback on a variety of topics important to them, including governance and operations. The feedback received through our shareholder outreach efforts is communicated to and considered by the Board, and has helped inform our decisions, when appropriate. At the 2023 Annual Meeting of Shareholders, we received over 95% support from shareholders on our “say-on-pay” advisory vote.
Corporate Governance Highlights |
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Our Board governance structure includes a Lead Independent Director |
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Our Board conducts annual evaluations to improve processes and effectiveness |
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Our Board has a resignation policy for uncontested elections of directors |
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Other than our CEO, all of our Board members are independent under SEC and NASDAQ rules |
Corporate Governance Guidelines
Our Board has adopted corporate governance guidelines to memorialize its governance practices, which serve as a framework within which our Board of Directors and our Board Committees operate. These guidelines cover a number of areas, including the role and functioning of the Board and Board Committees, Board composition and leadership structure, director selection and qualification, succession planning, and shareholder engagement, among other things. A copy of our Guidelines on Significant Corporate Governance Issues is available on our website at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.”
Director Independence
Our Board has reviewed its composition, the composition of our Board Committees and the independence of each director. Based upon information provided by each director, our Board has determined that none of our current directors, with the exception of Thomas G. Frinzi who serves as President and Chief Executive Officer, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each is independent under applicable SEC and NASDAQ rules. The Board also determined that Gilbert H. Kliman, M.D. was independent during the period he served on the Board during fiscal 2023. In making these determinations, our Board considered the current and prior relationships that each non-employee director has with the Company and all other facts and circumstances our Board deemed relevant in determining their independence.
Board Leadership Structure
The Board annually reviews its leadership structure to evaluate whether the structure remains appropriate for us. We have no policy requiring either that the positions of the Chair of the Board and Chief Executive Officer be separate or that they be occupied by the same individual. Our Board believes that it is important to retain flexibility to allocate the responsibilities of both offices in a way that is in our best interests and the best interests of our shareholders at the time it elects a new Chief Executive Officer or Chair of the Board, or at other times when consideration is warranted by circumstances.
Our Chair of the Board, Thomas G. Frinzi, was appointed Chief Executive Officer upon the retirement of our prior Chief Executive Officer, Caren Mason, effective January 1, 2023. Pursuant to our Guidelines on
2024 Proxy Statement |
– 10 – |
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–– Corporate Governance ––
Significant Corporate Governance Issues, in the event the Chair of the Board is not an independent director, the independent directors will annually appoint from amongst themselves a Lead Independent Director with such responsibilities as the Board shall determine from time to time. Effective January 1, 2023, the independent members of the Board appointed Stephen C. Farrell as Lead Independent Director.
The Lead Independent Director has the following responsibilities:
time for discussion of all agenda items;
We believe the combined Chair and CEO leadership role along with a Lead Independent Director streamlines our Board’s processes to provide support and direction on corporate initiatives and, at the same time, promotes effective and independent oversight of management and our business.
Evaluation of Board Effectiveness
The Board, under the direction of the Nominating and Governance Committee, conducts an annual self-evaluation and assessment process. The Board believes that an annual evaluation process is an important component of strong corporate governance practices and promoting ongoing Board effectiveness. The process involves each director annually completing an evaluation of the full Board. The evaluation is intended to provide each director with an opportunity to evaluate performance for the purpose of improving Board and Board Committee processes and effectiveness. The detailed evaluation questionnaire, which is administered by our General Counsel, seeks quantitative ratings and qualitative comments in key areas of Board practice, and asks each director to evaluate how well our Board and our Board Committees operate and to make suggestions for improvements. These key areas include Board composition and director participation, meeting procedures, materials and format, allocation and delegation of responsibilities among our Board and its committees and adequacy and availability of resources. The General Counsel compiles the directors’ feedback and presents the results to the full Board, on an anonymous basis, for candid discussion and feedback. After receiving feedback from the Board discussion of these results, the Nominating and Governance Committee recommends improvements for the Board to consider implementing, as needed. As part of the process for the 2023 annual evaluation, the Board also engaged in a peer evaluation, supported by our General Counsel. Our General Counsel conducted interviews with each Board member to discuss the individual director’s performance and obtain feedback on the effectiveness of other directors.
Director Resignation Policy for Uncontested Election of Directors
In an uncontested election of directors (i.e., an election where the only nominees are those recommended by the Board), any director nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation to the Board of Directors following certification of the election results. For additional details, the Director Resignation Policy is published on our website, at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.”
2024 Proxy Statement |
– 11 – |
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–– Corporate Governance ––
Special Meeting of Shareholders
Our Bylaws provide that a special meeting of shareholders (i) may be called, for any purpose or purposes, by the Board of Directors, the Chair of the Board, or the President, and (ii) shall be called by the Secretary if appropriately requested by a person (or group of persons) beneficially owning in the aggregate at least 35% of the Company’s outstanding shares of common stock.
Stock Ownership Guidelines
To further align the interests of our non-employee directors and our executive officers, the Board adopted guidelines relating to stock ownership. These stock ownership guidelines provide that non-employee directors are required, within four years of a non-employee director first joining the Board of Directors, to own a number of shares of our common stock equal in value to three times (3x) their base annual cash retainers, not including amounts received for service on Board Committees. Our Chief Executive Officer is required to own a number of shares of our common stock equal in value to three times (3x) his or her annual base salary, and our other executive officers are required to own a number of shares of our common stock equal in value to their annual base salaries, within four years from date of hire or promotion. For purposes of these stock ownership guidelines, ownership of our common stock includes (i) shares owned outright, (ii) shares owned by immediate family members residing in the same household, and (iii) shares held in trust for the benefit of the non-employee director or executive officer or their immediate family members residing in the same household. From time to time the Board will consider and may reset the level of stock ownership that it considers appropriate for our stock ownership guidelines.
Code of Business Conduct and Ethics
STAAR has adopted a Code of Business Conduct and Ethics applicable to all employees and directors. The Code of Business Conduct and Ethics is published on our website, at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.” We intend to disclose future amendments to, or waivers from, certain provisions of the Code of Business Conduct and Ethics applicable to executive officers or directors on our website.
In 2022, we revised our Supplier Code of Conduct to include, among other things, certain standards from The International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work. Our Supplier Code of Conduct is also published on our website, at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.”
Prohibition on Hedging Shares
STAAR’s global Anti-Hedging Policy prohibits any director, officer or employee subject to its terms from entering into short sales or derivative transactions, such as forward contracts or collars, to hedge or offset their economic exposure to STAAR shares.
Board of Directors’ Role in Risk Oversight
We believe that effective risk management and control processes are critical to our long-term success. Management is responsible for the day-to-day management of strategic, operational, legal, compliance, cybersecurity and financial risks, while our Board, as a whole and through our Board Committees, is responsible for the oversight of our risk management framework and activities. Consistent with this approach, subject matter experts within management, such as the General Counsel, the Chief Financial Officer, the Vice President of Global Human Resources, and the director of Internal Audit, and on occasion outside consultants review the framework and/or certain specific risks, as well as trends and emerging risks, with our Board and the applicable Board Committee as part of management presentations that focus on particular business functions, operations, or strategies. Management also provides report-outs regarding its enterprise risk assessments, including its compliance and risk mitigation
2024 Proxy Statement |
– 12 – |
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–– Corporate Governance ––
activities. Each of the Board's three standing Committees assists the Board in its risk oversight responsibilities, as follows:
Additional information about the responsibilities of the Board’s three standing Committees can be found below under “Board Committee Structure and Composition.”
Compensation Recoupment (Clawback) Policy
This policy includes standards for seeking the return, recoupment or “claw-back,” of excess incentive-based compensation received by the Company’s executive officers on or after October 2, 2023 and during a three fiscal year lookback (as required by Nasdaq listing standards implementing Exchange Act Rule 10D-1) in certain circumstances following a restatement of STAAR’s financial statements. If, following a restatement, it is determined that incentive-based compensation received by an executive officer exceeds the amount that would have been received if determined or calculated based on the Company’s restated financial results, such excess amount of incentive-based compensation shall be subject to recoupment by the Company. For purposes of this policy, incentive-based compensation includes any compensation granted, earned or vested based in whole or in part on the Company’s attainment of a financial reporting measure, and includes the annual bonuses and performance stock unit awards granted to our named executive officers in 2023. The Company may effect any recovery pursuant to the policy by requiring payment of such amount(s) to the Company, by set-off, by reducing future compensation, or by such other means or combination of means as the Compensation Committee determines to be appropriate. Any right of recoupment or recovery pursuant to the policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any other policy, any employment agreement or plan or award terms, and any other legal remedies available to the Company; provided that the Company shall not recoup amounts pursuant to such other policy, terms or remedies to the extent it is recovered pursuant to the recoupment policy. The Compensation Recoupment (Clawback) Policy is published on our website, at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.”
Sustainability and Environmental, Social and Governance (ESG)
We seek to achieve our corporate goals in an ethical and sustainable manner. We published our most recent Sustainability Report in April 2024, which discusses our commitment to reducing our environmental footprint and fostering a culture of sustainability and inclusivity. We prepared the Sustainability Report consistent with the Sustainability Accounting Standards Board (SASB) framework of sustainability topics for medical equipment and supplies companies, which references the Taskforce on Climate-Related Financial Disclosures (TCFD) framework for third party risk. Our Sustainability Report is available in the Investor Resources section of our website, at http://staar.com, under “Investors-Investor Resources & FAQs-Governance Documents.”
2024 Proxy Statement |
– 13 – |
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–– Corporate Governance ––
As discussed in the Sustainability Report, we continue to be focused as a Company on energy intensity, particularly as we grow and expand, and teams of cross-functional employees actively engage in proposing projects and participating in efforts to boost operational efficiency, cut costs, and lessen our carbon footprint. We have established an ESG Committee and a Climate Risk Committee to help drive these efforts, and we have engaged a consulting firm to conduct a critical supplier climate risk analysis designed in alignment with the TCFD reporting framework. In furtherance of our commitment to employee well-being, diversity, equity, and inclusion, we have expanded our offering of skills training for employees, professional development opportunities, and diversity training and programming. In 2023, we also focused on enabling employee participation in charitable and community philanthropic activities, and we fully launched a global employee charitable matching program.
Compensation Policies and Practices Related to Risk Management
STAAR’s Compensation Committee and Board of Directors have analyzed and continue to monitor whether STAAR’s compensation practices with respect to executive officers or any of its employees create incentives for risk-taking that could harm STAAR or its business. The Compensation Committee and the Board of Directors have determined that STAAR’s compensation practices and policies do not create any risk that is reasonably likely to have a material adverse effect on STAAR.
Meetings of the Board of Directors
The Board held six meetings during 2023. During 2023, each of our directors attended more than 75% of the total number of meetings of the Board and Board Committees on which they then served (during the period he or she served). In addition to Board meetings, directors are kept informed of our business through personal meetings and other communications, including telephone and electronic contacts with our Chief Executive Officer and others regarding matters of interest and concern to us and our shareholders. Independent directors meet when they deem necessary in executive session without management and at such other times as may be requested by any independent director. It is the policy of STAAR that directors attend the annual meeting of shareholders, if practicable. Each of our directors who was serving on our Board at the time of the 2023 Annual Meeting attended the 2023 Annual Meeting.
Board Committee Structure and Composition
The Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The Board has adopted a written charter for each Board Committee to provide for its organization, procedures, and responsibilities. The following chart reflects the composition of the Board Committees as of the date of this Proxy Statement:
Committee Composition |
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|
Audit |
Compensation |
Nominating/Governance |
Arthur C. Butcher |
— |
Member |
— |
Stephen C. Farrell(1) |
Chair |
— |
Member |
Thomas G. Frinzi(2) |
— |
— |
— |
Wei Jiang |
Member |
— |
Chair |
Aimee S. Weisner |
— |
Chair |
Member |
Elizabeth Yeu, M.D. |
Member |
Member |
— |
K. Peony Yu, M.D.(3) |
Member |
— |
Member |
Lilian Zhou |
Member |
— |
Member |
(1) Mr. Farrell is Lead Independent Director. |
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(2) Mr. Frinzi is Board Chair, President and CEO. |
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(3) Dr. Yu is not standing for re-election at the Annual Meeting. |
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2024 Proxy Statement |
– 14 – |
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–– Corporate Governance ––
All of the directors listed in the above chart are independent directors under the rules of the Securities and Exchange Commission and the NASDAQ, with the exception of Thomas G. Frinzi, who serves as STAAR’s President and Chief Executive Officer.
Nominating and Governance Committee
The principal purpose of the Nominating and Governance Committee is to help ensure that the Board is appropriately constituted to meet its fiduciary obligations to shareholders and STAAR, and that STAAR has and follows appropriate governance standards. In accordance with its written charter, the Committee is responsible for the following:
During 2023, the Nominating and Governance Committee was comprised of Aimee S. Weisner (Chair), Stephen C. Farrell, Elizabeth Yeu, M.D., and K. Peony Yu, M.D. In April 2024, Wei Jiang and Lilian Zhou joined the Nominating and Governance Committee, and Mr. Jiang was named the Chair. Also in April 2024, Dr. Yeu left the Nominating and Governance Committee and joined the Audit Committee. Each member of the Nominating and Governance Committee is “independent” as that term is defined under the Listing Rules of the NASDAQ Stock Market. During 2023, the Nominating and Governance Committee met four times.
Compensation Committee
Under its written charter, the principal duties of the Compensation Committee are to help ensure that STAAR’s compensation of its executive officers satisfies the following principal requirements:
The Compensation Committee makes recommendations to the Board of Directors on all elements of the total direct compensation of the Chief Executive Officer, including base salary, annual bonus, long-term equity compensation and perquisites. The Compensation Committee approves all elements of the total direct compensation of the other executive officers of STAAR, including base salary, annual bonus, long-term equity compensation and perquisites. The Compensation Committee also administers STAAR’s equity incentive plan. The Compensation Committee may delegate authority to subcommittees or Committee members.
In addition, the Compensation Committee reviews succession planning for executive officers and monitors compliance with our Stock Ownership Policy and our Compensation Recoupment (Clawback) Policy. The Committee also reviews our human capital management and social responsibility policies and practices. This oversight includes periodic review of our Company demographics, talent development, employee retention and employee compensation. The Compensation Committee also periodically reviews our employee diversity and inclusion recruitment, retention and compensation efforts.
During 2023, the Compensation Committee was comprised of Aimee S. Weisner (Chair), and Elizabeth Yeu, M.D. In addition, Gilbert H. Kliman, M.D. served on the Compensation Committee during 2023, prior to his resignation from the Board on December 1, 2023. In April 2024, Arthur C. Butcher joined the
2024 Proxy Statement |
– 15 – |
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–– Corporate Governance ––
Compensation Committee. Each current member of the Compensation Committee is “independent” as that term is defined under NASDAQ Listing Rules. During 2023, the Compensation Committee met four times.
Role of Compensation Consultant
The Compensation Committee has sole authority to retain and terminate a compensation consultant to assist in the evaluation of director, Chief Executive Officer or senior executive compensation. The Compensation Committee engaged Aon Human Capital Solutions (formerly Radford Consulting) to serve as the Compensation Committee’s compensation consultant in 2023. The Compensation Committee has assessed the independence of Aon considering the factors set forth in applicable SEC and NASDAQ rules and has concluded no conflicts of interest were raised by the work performed for the Compensation Committee. In 2023, Aon’s services included a review of the Company’s compensation program concerning the Chief Executive Officer and other members of management, as well as a review of non-employee director compensation. In addition, Aon provided benchmark data and recommendations, including for the Company’s peer group. Aon also assisted with the Company’s analysis of its equity incentive plan, including the amendment of the Company’s equity incentive plan, and the structure and types of awards granted thereunder.
Audit Committee
The principal duties of the Audit Committee are to oversee (i) the quality and integrity of STAAR’s financial statements and the internal controls thereof, (ii) the qualifications and independence of STAAR’s independent registered public accounting firm, (iii) the performance of STAAR’s Internal Audit Department and independent registered public accounting firm, (iv) compliance with applicable legal and regulatory requirements, and (v) monitoring enterprise risk, including cybersecurity and compliance. The Committee communicates with management throughout the year to help it assess the performance of STAAR’s independent registered public accounting firm for consideration of re-engagement in future years.
During 2023, the Audit Committee was comprised of Stephen C. Farrell (Chair), K. Peony Yu, M.D., and Lilian Zhou. In addition, Gilbert H. Kliman, M.D. served on the Audit Committee during 2023, prior to his resignation from the Board on December 1, 2023. In April 2024, Wei Jiang and Elizabeth Yeu, M.D. joined the Audit Committee. Each member of the Audit Committee is “independent” as that term is defined under the Audit Committee rules of the SEC and the Listing Rules of the NASDAQ Stock Market. STAAR has determined that Mr. Farrell qualifies as an “audit committee financial expert” under the rules of the SEC. In 2023, the Audit Committee met four times.
Director Identification, Selection and Diversity
One of the Nominating and Governance Committee’s key responsibilities is the identification and evaluation of director nominees. The Nominating and Governance Committee believes that Board refreshment is important as our business grows and evolves over time, and that fresh viewpoints and perspectives are regularly considered. Since 2023, the Nominating and Governance Committee has helped identify and recruit three new directors to join our Board.
Board Refreshment and Director Tenure |
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Three new independent directors have joined our Board within the last year |
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Three of our director nominees (43%) have a Board tenure of less than one year |
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Three of our director nominees (43%) have a Board tenure of between one and five years |
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One of our director nominees (14%) has a Board tenure of over five years |
2024 Proxy Statement |
– 16 – |
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–– Corporate Governance ––
In the ordinary course, absent special circumstances, the Nominating and Governance Committee will generally re-nominate incumbent directors who continue to be qualified for Board service and are willing to continue as directors. From time to time, the Nominating and Governance Committee may also consider and evaluate potential new director candidates who meet the criteria for selection as a Board nominee and have specific qualities or skills identified by the Board, and one or more of such candidates may be appointed as directors as appropriate and in accordance with the Company’s organizational documents.
Director candidates will be selected based on input from members of the Board, senior management and, if the Nominating and Governance Committee deems appropriate, a third-party search firm. In addition to candidates proposed by the Board or identified by the Nominating and Governance Committee, the Committee considers candidates for director suggested by our shareholders. Shareholders may recommend candidates for consideration by the Nominating and Governance Committee by submitting the names and supporting information to: Office of the Secretary, STAAR Surgical Company, 25651 Atlantic Ocean Drive, Lake Forest, California, 92630. Of the three new directors that joined our Board within the last year, Ms. Zhou was identified as a potential director nominee by Company shareholders, and each of Mr. Butcher and Mr. Jiang was identified as a potential director nominee by a third-party search firm.
The process for evaluating prospective nominees for director, including candidates recommended by shareholders, includes meetings from time to time to evaluate biographical information and background material relating to prospective nominees, interviews of selected candidates by members of the Nominating and Governance Committee and other members of the Board, and application of our general criteria for director nominees set forth in our Guidelines on Significant Corporate Governance Issues. These criteria include, among other things, the prospective nominee’s integrity, business or other experience and expertise, and independence. The Nominating and Governance Committee uses the same criteria for evaluating candidates regardless of the source of referral.
In selecting nominees for the Board of Directors, the Nominating and Governance Committee evaluates the general and specialized criteria set forth above, identifying the relevant specialized criteria prior to commencement of the recruitment process, considers previous performance if the candidate is a candidate for re-election, and generally considers the candidate’s ability to contribute to the success of STAAR. The Nominating and Governance Committee believes that differences in background, professional experiences, education, skills and viewpoints will enhance the performance of the Board of Directors. The Nominating and Governance Committee and the Board of Directors believe that a diverse board leads to improved performance by encouraging new ideas, expanding the knowledge base available to management and other directors and fostering a culture that promotes innovation and vigorous deliberation. In considering nominees for service on the Board of Directors, the Nominating and Governance Committee takes into consideration the diversity of professional experience, background, viewpoints, and skills of the current and prospective members of the Board of Directors. Examples of this include diversity of management experience, financial expertise, medical device industry experience, international experience, gender, ethnicity, and educational background.
As described in our Guidelines on Significant Corporate Governance Issues, as part of the search process for each new director, the Nominating and Governance Committee actively seeks out diversity with respect to demographics such as gender, race, ethnic and national background, veteran status, geography, age and sexual orientation. As part of the search process for each new director, the Nominating and Governance Committee includes women and members of underrepresented communities as candidates in the pool from which Board nominees are chosen. The Nominating and Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The Committee believes that the backgrounds and qualifications of the directors considered as a group should provide a significant breadth of experience, knowledge and abilities to assist the Board in fulfilling its responsibilities, and assesses the effectiveness of this goal during the Board’s annual evaluation.
2024 Proxy Statement |
– 17 – |
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–– Corporate Governance ––
The Board of Directors’ nominees for the Annual Meeting have been recommended by the Nominating and Governance Committee and have been nominated by the Board of Directors. The Committee received no formal shareholder recommendations of candidates for election at the 2024 Annual Meeting.
Director Onboarding and Education
When a new director joins our Board, including the three new directors that have joined our Board within the last year, we conduct an onboarding process to provide them with an understanding of public company board governance and knowledge of our Company and industry to perform effectively in their role. This includes a review of our corporate governance structure, requirements and expectations of Board members, and applicable laws and regulations related to board service. They also participate in substantive meetings with members of management to provide an overview of the Company, including our products, finances, and strategy, as well as information about our industry. We also make available additional resources to our Board so they can remain up to date on current issues concerning boards, new regulations and developments impacting our business or industry.
Shareholder Communications with Directors
Shareholders may communicate with the chair of the Board of Directors, the chair of our Audit Committee or the chair of our Nominating and Governance Committee, or with the Board of Directors as a group, by writing to such persons c/o Office of the Secretary, STAAR Surgical Company, 25651 Atlantic Ocean Drive, Lake Forest, California, 92630.
The Corporate Secretary distributes communications directed to the Board of Directors or to any individual director or directors, as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, the Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of the Board of Directors should be excluded, such as the following:
In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be excluded, with the provision that any communication that is excluded must be made available to any outside director upon request.
2024 Proxy Statement |
– 18 – |
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COMPENSATION OF DIRECTORS
The table below sets forth information regarding our non-employee director compensation program for the fiscal year ended December 29, 2023:
Non-Employee Director Compensation Program |
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Annual Cash Retainers |
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Board Member Base Annual Cash Retainer |
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$ |
50,000 |
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Audit Committee Chair Additional Retainer |
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$ |
15,000 |
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Compensation Committee Chair Additional Retainer |
|
$ |
15,000 |
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Nominating and Governance Committee Chair Additional Retainer |
|
$ |
15,000 |
|
Members of the Audit Committee, Compensation Committee, or Nominating and Governance Committee Additional Retainer |
|
$ |
10,000 |
|
Lead Independent Director Additional Retainer |
|
$ |
40,000 |
|
Annual Equity Awards |
|
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|
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Board Member Annual Equity Grant |
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$ |
180,000 |
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Director Retainers and Equity Awards
The cash retainers shown above are consistent with the cash compensation program approved by shareholders at the 2019 Annual Meeting. The annual equity grant shown above is consistent with the program approved by shareholders at the 2022 Annual Meeting.
The annual non-employee director equity award is granted on the date of the annual meeting of shareholders, with a fair market value of $180,000 on the date of grant. The annual award vests in full on the earlier of the first anniversary of the grant date or the date of the next annual meeting of shareholders to elect directors. Each non-employee director annually chooses the form of equity he or she receives (stock options, restricted stock, or a combination thereof) based on a Black Scholes value of stock options or the fair value of restricted stock on the date of grant. When new non-employee directors join the Board, they are granted a director equity award at the start of their Board service that is pro-rated based on the length of the remaining director term.
In 2023, the annual non-employee director awards were granted on June 15, 2023, to our directors serving on the Board on such date. As the one-year anniversary of the grant date precedes the date of the 2024 Annual Meeting, these awards are scheduled to vest in full on June 15, 2024. Equity awards to non-employee directors are granted pursuant to the Company’s Amended and Restated Omnibus Equity Incentive Plan (referred to herein as the Plan). Under the Plan, the total grant date fair value of equity awards granted to a non-employee director during any calendar year, taken together with any cash fees paid to the non-employee director in respect of the director’s Board service during such calendar year (including service as a member or chair of any committees of the Board), may not exceed $500,000.
On December 16, 2022, the Board announced the creation of the role of Lead Independent Director and appointed Stephen C. Farrell to serve in that capacity, effective January 1, 2023. As set forth in the table above, the Lead Independent Director receives an additional annual retainer of $40,000 for such service, which Mr. Farrell received in connection with his service as the Lead Independent Director during 2023.
2024 Proxy Statement |
– 19 – |
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–– Compensation of Directors ––
2023 Director Compensation
The table below summarizes the fiscal 2023 compensation of each non-employee director who served as a director during 2023, including fees earned or paid in cash, Option Awards and Stock Awards.
Name |
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Fees Earned or Paid in Cash ($) |
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Option Awards ($)(1) |
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Stock Awards ($)(1) |
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Total ($) |
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Stephen C. Farrell |
|
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114,890 |
|
(2) |
|
|
89,966 |
|
(3) |
|
|
90,013 |
|
(3) |
|
|
294,869 |
|
Gilbert H. Kliman, M.D.(4) |
|
|
64,615 |
|
(5) |
|
|
— |
|
|
|
|
179,973 |
|
(6) |
|
|
244,588 |
|
Aimee S. Weisner |
|
|
79,986 |
|
(7) |
|
|
— |
|
|
|
|
179,973 |
|
(8) |
|
|
259,959 |
|
Elizabeth Yeu, M.D. |
|
|
70,000 |
|
|
|
|
179,989 |
|
(9) |
|
|
— |
|
|
|
|
249,989 |
|
K. Peony Yu, M.D. |
|
|
70,000 |
|
|
|
|
89,966 |
|
(10) |
|
|
90,013 |
|
(10) |
|
|
249,979 |
|
Lilian Y. Zhou(11) |
|
|
4,286 |
|
(12) |
|
|
47,708 |
|
(13) |
|
|
47,692 |
|
(13) |
|
|
99,686 |
|
2024 Proxy Statement |
– 20 – |
|
INFORMATION REGARDING EXECUTIVE OFFICERS
The table below sets forth certain information regarding our executive officers as of April 24, 2024:
Executive Officers |
||
|
||
Executive |
Age |
Position |
Thomas G. Frinzi |
68 |
President and Chief Executive Officer |
Scott Barnes, M.D. |
62 |
Chief Medical Officer |
Warren Foust |
48 |
Chief Operating Officer |
Keith Holliday, PhD |
61 |
Chief Technology Officer |
Magda Michna, PhD |
48 |
Chief Clinical, Regulatory and Medical Affairs Officer |
Nathaniel B. Sisitsky, Esq. |
50 |
General Counsel and Corporate Secretary |
Patrick F. Williams |
51 |
Chief Financial Officer |
|
Thomas G. Frinzi Director President and Chief Executive Officer Age 68 |
Mr. Frinzi has served as a member of the Board since June 2020. In June 2022, the Board appointed Mr. Frinzi to serve as Chair of the Board. In December 2022, the Board of Directors appointed Mr. Frinzi to serve as President and Chief Executive Officer of STAAR, effective January 1, 2023.
Information regarding Mr. Frinzi can be found above under the caption “Information Regarding Director Nominees.” |
|
|
Scott Barnes, M.D. Chief Medical Officer Age 62 |
Dr. Barnes joined STAAR in October 2017 as Chief Medical Officer. Dr. Barnes joined STAAR after a distinguished 30-year career with the military, retiring at the rank of Colonel in September 2017. From 2004 to 2017, Dr. Barnes served as Chief of Ophthalmology Services, Womack Army Medical Center, Fort Bragg, North Carolina. Soon after he joined Womack, he was asked to serve as the theater ophthalmology consultant and surgeon in Iraq and Afghanistan during 2005. In 2008, Colonel Barnes was |
|
2024 Proxy Statement |
– 21 – |
|
–– Information Regarding Executive Officers ––
awarded the Army Surgeon General's A designator, similar to the level of professor at a civilian institution. Dr. Barnes began his medical career in 1986 as a research assistant in the Department of Genetics, Harvard Medical School/Children's Hospital in Boston and in 1991 became a general surgery intern at William Beaumont Army Medical Center. He went on to become a Special Forces (“Green Beret”) Battalion and Group Surgeon as well as the Deputy Surgeon for the US Army Special Operations Command. He completed an ophthalmology residency at the Wilford Hall/Brooke Army Medical Center in San Antonio, Texas in 1998. Colonel Barnes held numerous ophthalmology positions at a number of military bases and was asked to serve as the Deputy Commander for Clinical Services for all combat trauma, medical, veterinary, and dental care in Afghanistan during a 13-month deployment from 2011 to 2012. Dr. Barnes has given more than 200 presentations and lectures as well as led over 30 ophthalmology or refractive surgery research projects. He has been awarded Speaker of the Day at the Royal Hawaiian Eye Meeting ten times as well as numerous other awards and honors at industry meetings. In addition to earning his Bachelor of Arts degree from Wheaton College, and his doctorate degree from Northwestern University Medical School in Chicago, Dr. Barnes' post-doctoral training includes a Cornea Fellowship at the Massachusetts Eye and Ear Infirmary/Harvard Medical School in Boston. |
|
Warren Foust Chief Operating Officer Age 48 |
Mr. Foust joined STAAR in April 2023 as Chief Operating Officer. Prior to joining STAAR, Mr. Foust served as Worldwide President, Johnson & Johnson Vision, Surgical, since December 2019. Prior to Johnson & Johnson Vision, Surgical, he served as Worldwide President of Mentor, a leading breast reconstruction and aesthetics business unit of Johnson & Johnson from 2018 to 2019, and Vice President, U.S. Sales and Marketing from 2015 to 2018. Prior to Mentor, Mr. Foust held various sales leadership roles at DePuy Synthes, also a company of Johnson & Johnson. He started his career at Roche Pharmaceuticals as a sales representative in 1999. Mr. Foust holds a Master’s Degree of Marketing and bachelor’s degree from the University of Alabama. |
|
|
Keith Holliday, PhD Chief Technology Officer Age 61 |
Dr. Keith Holliday joined STAAR in August 2015 as Vice President of Research and Development. In March 2017, he assumed the role of the Chief Technology Officer. From 2007 to his arrival at STAAR, he served as Vice President, Research and Development at ReVision Optics where he oversaw the development of their corneal inlay technology that includes a hydrogel inlay for presbyopia correction, delivery devices and clinical methodologies as well as managing first-in-man clinical studies. Previously, Dr. Holliday was Director of Laser Technology at Advanced Medical Optics (AMO) and Staff Laser Scientist at VISX. Prior to joining VISX, Dr. Holliday worked primarily in academia. He spent three years at the Swiss Federal Institute of Technology, where he was primarily involved with the utilization of optically active polymers and crystals, to develop materials and techniques for very high density, holographic optical storage and computational systems. Dr. Holliday holds patents in excimer laser beam |
|
2024 Proxy Statement |
– 22 – |
|
–– Information Regarding Executive Officers ––
detection, control and profiling, and methods to correct presbyopia that synergistically take into account the epithelium’s response to corneal inlays, and he has also authored 37 peer reviewed publications in the scientific literature plus two book chapters and one single-authored book. He is considered an expert on presbyopia and served as a committee member for the International Society of Presbyopia. He obtained his first degree in Physics and Electronics from the University of Saint Andrews in Scotland and a Ph.D. from the Laser Physics Centre at the Australian National University. |
|
Magda Michna, PhD Chief Clinical, Regulatory and Medical Affairs Officer Age 48 |
Dr. Michna joined STAAR in April 2023 as Chief Clinical, Regulatory and Medical Affairs Officer. Prior to joining STAAR, Dr. Michna served as Chief Global Clinical, Medical and Regulatory Affairs Officer for AcuFocus, Inc., an ophthalmic medical device company, since April 2018. AcuFocus was acquired by Bausch & Lomb in January 2023. Prior to AcuFocus, Dr. Michna served as Chief Clinical Officer at Presbia. From 2012 to 2017, Dr. Michna led clinical development for many premium intraocular lens and other surgical device technologies supporting the Alcon Surgical franchise. Her industry career began as a Vision Scientist at VISTAKON®, a division of Johnson & Johnson Vision from 2008 to 2012, which she joined following an academic Research Fellowship with the Vision Research Group at McGill University’s Department of Ophthalmology from 2005 to 2008. Dr. Michna holds a Doctor of Philosophy degree in optical physics and a bachelor’s degree from the University of Melbourne, Australia. |
|
|
Nathaniel B. Sisitsky, Esq. General Counsel and Corporate Secretary Age 50 |
Mr. Sisitsky joined STAAR in December 2023 as Senior Vice President, General Counsel and Corporate Secretary. Prior to joining STAAR, Mr. Sisitsky served as Senior Vice President, General Counsel and Corporate Secretary of NuVasive, Inc., a medical device company, from June 2018 until NuVasive’s merger with Globus Medical in September 2023. Previously, he served as NuVasive’s Vice President and Associate General Counsel, Corporate Affairs, from July 2015 to June 2018. Prior to joining NuVasive, Mr. Sisitsky was Vice President and Associate General Counsel at CareFusion Corporation, a global medical technology company, from 2009 to 2015. From 2004 to 2009, Mr. Sisitsky served as Vice President, Legal – Corporate Finance at American Tower Corporation, a global owner and operator of wireless communication sites. Prior to joining American Tower, Mr. Sisitsky was a Junior Partner in the Corporate Department of Wilmer Cutler Pickering Hale and Dorr (WilmerHale), based in Boston, MA. He holds a B.A. in Political Science and Economics from Emory University and a J.D. from New York University School of Law. |
|
2024 Proxy Statement |
– 23 – |
|
–– Information Regarding Executive Officers ––
|
Patrick F. Williams Chief Financial Officer Age 51 |
Mr. Williams joined STAAR in July 2020 as Chief Financial Officer. He brings over 20 years of financial and operational management experience with public companies. Mr. Williams was most recently at Sientra, Inc., a medical aesthetics company where he initially served as the Chief Financial Officer, and then served as the General Manager of the miraDry® business unit, from 2018 to 2019. Prior to Sientra, Mr. Williams was Chief Financial Officer of ZELTIQ Aesthetics, Inc., a publicly-traded medical device company that was acquired in 2017. Mr. Williams has also served as Vice President at NuVasive, Inc., a San Diego-based medical device company, in strategy, finance and investor relations roles. Mr. Williams received a MBA in Finance and Management from San Diego State University and a Bachelor of Arts in Economics from the University of California, San Diego. |
|
2024 Proxy Statement |
– 24 – |
|
COMPENSATION DISCUSSION AND ANALYSIS
Overview and Highlights
The following Compensation Discussion and Analysis describes the objectives of our executive compensation program and provides disclosure about the elements of compensation earned by and awarded to each of the executive officers identified in the “Summary Compensation Table,” whom we refer to in this section as our “named executive officers” or “NEOs.” It also discusses our executive compensation philosophy and programs, including the decisions made by the Compensation Committee of our Board of Directors (which we refer to in this Compensation Discussion and Analysis as the “Committee”) under those programs, and the factors considered in making those decisions for the Company’s named executive officers in 2023.
Our Named Executive Officers
For the fiscal year ended December 29, 2023, our named executive officers were:
A complete list of our current executive officers with accompanying biographical information is included in this Proxy Statement under the caption “Information Regarding Executive Officers.”
2023 Financial and Business Highlights
2024 Proxy Statement |
– 25 – |
|
– Compensation Discussion and Analysis –
2023 Executive Compensation Highlights
Say-on-Pay Results and Shareholder Engagement
The Committee and the Board consider shareholder feedback regarding executive compensation. The Company regularly interacts with shareholders throughout the year to discuss our financial results and to offer an opportunity for shareholders to provide their input and feedback, including related to executive compensation. Through these and other outreach efforts, we can:
Our “say-on-pay” proposal received over 95% support from shareholders |
Compensation Program Philosophy and Process
The Company is dedicated to pursuing a mix of near, medium, and longer-term business objectives designed to build and increase shareholder value. Our Board and Compensation Committee have sought to establish a compensation program that incentivizes and rewards our management team for achieving or exceeding corporate financial and non-financial goals and also individual objectives.
The Committee and management periodically review the Radford Global Life Sciences Surveys as well as benchmark data regarding our peer group. This data is used to assess the general competitiveness of our recruiting and compensation programs, and to assist the Committee and the Board of Directors in making compensation decisions. In 2023, the Compensation Committee engaged Aon Human Capital Solutions (formerly Radford Consulting) to review non-employee director and executive officer compensation and provide benchmark data and recommendations. In January 2023, Aon proposed updates to the peer group for the Company based on the Company’s revenue, market capitalization, and headcount, among
2024 Proxy Statement |
– 26 – |
|
– Compensation Discussion and Analysis –
other metrics. Based on Aon’s recommendations, we removed from our peer group Abiomed, and we added iRhythm Technologies. As a result, the peer group was comprised of the 17 companies reflected in the table below.
Such peer group was selected from U.S. based medical device companies with market capitalizations between $900 million and $8.1 billion and revenue generally between $140 million and $840 million. The Committee accepted Aon’s recommended revised peer group and the Board of Directors approved the Committee’s recommendation. Our peer group, which we used as one element for setting 2023 compensation, consisted of the following companies:
AtriCure |
|
iRhythm Technologies |
Axonics |
|
Merit Medical Systems |
Cardiovascular Systems |
|
Nevro |
Glaukos |
|
NuVasive |
Globus Medical |
|
Penumbra |
ICU Medical |
|
QuidelOrtho |
Inari Medical |
|
ShockWave Medical |
Inogen |
|
Tandem Diabetes Care |
Inspire Medical Systems |
|
|
We additionally use peer group data as part of reviewing the overall appropriateness and competitiveness of our executive compensation program.
In 2021, retention and recruitment challenges for high-performing executives suggested that our compensation structure was not sufficiently competitive. The Committee assessed benchmark data and recommendations from Aon in 2021 and determined that it was in the Company’s best interests to adjust the compensation program mid-year to support retention and recruitment efforts. In 2022, similar to the second half of 2021, the Committee determined, after assessing Aon’s benchmark data and recommendations, to target base salary at or near the 75th percentile of our peer companies and total target compensation between the 50th — 75th percentile based on an analysis of our peers’ compensation levels, which reflected the experience, leadership, specialized skill sets and sustained performance of our executive team. The Committee took a similar approach in 2023, including for recruiting new executives.
At our 2023 Annual Meeting held on June 15, 2023, shareholders representing approximately 95% of the votes cast on the proposal approved the compensation of our named executive officers. Given the strong support shown, we did not make any changes to our executive compensation program as a result of this vote.
Elements of Compensation
The elements of compensation that may be earned by our named executive officers include base salary, annual cash bonus, and equity-based awards. All components of each named executive officer’s compensation are annually reviewed in the context of Company performance and individual performance. The Committee is responsible for reviewing and approving compensation for the Company’s executive leadership, except for the Chief Executive Officer. The Board is responsible for reviewing and approving compensation for the Chief Executive Officer, based on the recommendation of the Committee. The Chief Executive Officer does not participate in the determination of her/his own compensation.
Base Salaries. The Committee, with input from the Chief Executive Officer, reviews, considers and approves base salaries at a level intended to attract and retain the Company’s executives. The Committee generally reviews base salaries in the first quarter of each year and approves any changes based upon company performance, market data, executive performance, scope of responsibility, and past and potential contributions to our business. In March 2023, named executive officer salaries increased 6.0% over 2022 levels as follows, consistent with base salary increases company wide.
2024 Proxy Statement |
– 27 – |
|
– Compensation Discussion and Analysis –
Named Executive Officer |
|
2022 Base Salary ($) |
|
|
2023 Base Salary as of December 29, 2023 ($) |
|
|
Percentage Increase |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Thomas G. Frinzi(1) |
|
|
— |
|
|
|
820,000 |
|
|
|
— |
|
Patrick F. Williams |
|
|
517,500 |
|
|
|
548,550 |
|
|
|
6 |
% |
Warren Foust(2) |
|
|
— |
|
|
|
550,000 |
|
|
|
— |
|
Scott Barnes |
|
|
512,325 |
|
|
|
543,065 |
|
|
|
6 |
% |
Keith Holliday |
|
|
494,730 |
|
|
|
524,414 |
|
|
|
6 |
% |
Annual Cash Bonuses. A material element of each named executive officer’s compensation is the opportunity to earn an annual performance-based cash bonus, with payout determined based on achievement of specific corporate financial objectives as well as personal performance. The Committee reviews, considers and approves bonus targets for named executive officers based on market data and also considers changes in the scope of responsibility and overall performance of individual named executive officers when establishing these targets. The Committee generally approves bonus targets for each named executive officer as a percentage of base salary in the first quarter of each year, and it establishes performance metrics and targets for funding of the overall bonus plan. For 2023, the Committee approved a bonus plan (the “2023 Bonus Plan”) that was designed to be funded based on STAAR meeting or exceeding specific targets for revenue and Adjusted EBITDA per share*.
The table below reflects base salary and target bonus amounts for each named executive officer in 2023:
Named Executive Officer |
|
Base Salary ($) |
|
|
Target Bonus Amount ($) |
|
|
Target Bonus Percentage(1) |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Thomas G. Frinzi |
|
|
820,000 |
|
|
|
861,000 |
|
|
|
105 |
% |
Patrick F. Williams |
|
|
548,550 |
|
|
|
356,558 |
|
|
|
65 |
% |
Warren Foust(2) |
|
|
550,000 |
|
|
|
385,000 |
|
|
|
70 |
% |
Scott Barnes |
|
|
543,065 |
|
|
|
244,379 |
|
|
|
45 |
% |
Keith Holliday |
|
|
524,414 |
|
|
|
262,207 |
|
|
|
50 |
% |
The Committee is responsible for determining the level of funding for the bonus pool based on the Company’s financial results and performance against the pre-established financial metrics and targets for the annual bonus plan. Then, based on such bonus pool funding, the Committee approves the individual bonus payments to the named executive officers, taking into account individual performance. For the bonus payout to Chief Executive Officer, the Committee makes a recommendation to the Board, which is then subject to Board approval. The determination of annual bonuses for 2023 performance are described further below under the section entitled “2023 Bonus Awards.”
________________
* Adjusted EBITDA per share is a non-GAAP financial measure. Information and reconciliations are provided in Appendix 3.
2024 Proxy Statement |
– 28 – |
|
– Compensation Discussion and Analysis –
Long-Term Equity Compensation. The Committee believes that long-term equity incentive awards serve to align the interests of the executive officers with the interests of our shareholders. Long-term equity incentive awards may be granted in the form of stock options, restricted shares, restricted stock units (“RSUs”), performance stock units (“PSUs”), or other types of equity or equity-linked compensation. In determining the size of equity grants to our executives, the Committee considers recommendations of the Chief Executive Officer, peer group data, individual performance, and level of responsibility in the Company. For the Chief Executive Officer’s equity grant, the Committee and Board consider Company and individual performance as well as peer group data. The Committee generally approves long-term equity incentive awards for each named executive officer as a percentage of base salary in the first quarter of each year. The Committee also considers and approves the structure of our long-term equity compensation program, including the types of awards to be granted, the mix of awards, as well as award terms. For 2023, the Committee approved an equity award program for our executives comprised of stock options, RSUs and PSUs. The Committee used the Black-Scholes value for stock options and the grant date market value of RSUs and PSUs on the date of grant. The equity grants made in 2023 are described further below under the section entitled “2023 Equity Awards.”
Stock Options. The exercise price of a stock option is the closing price of the Company’s common stock on the NASDAQ Stock Market on the date of grant. Under the Company’s Amended and Restated Omnibus Equity Incentive Plan (“Plan”), STAAR may not grant stock options with an exercise price below the fair market value of its common stock on the date of grant. STAAR does not grant stock options with a so-called “reload” feature. To encourage retention by providing a long-term incentive, the options typically vest ratably over a three-year period, and have a ten-year life.
Restricted shares/Restricted stock units/Performance stock units. Restricted shares are shares of common stock that STAAR grants subject to restrictions that lapse over time as the award vests. RSUs and PSUs represent the right to receive shares of the Company’s common stock in the future, which vest based on service (RSUs) or following achievement of pre-established performance metrics (PSUs). Restricted shares and RSUs are time-based awards that typically vest ratably over a three-year period. PSUs are performance-based awards that only vest if the Company meets or exceeds the performance metrics established for such awards. Subject to such performance conditions, PSUs typically vest ratably over a three-year period.
2023 Equity Awards
In 2023, the Committee approved the grant of long-term equity incentive awards to the named executive officers, consistent with the Company’s compensation philosophy and based upon the individual’s performance and benchmark data, in the form of stock options, RSUs, and PSUs.
Based on data and analysis from Aon, the Committee granted 2023 long-term equity incentive awards to our named executive officers as follows: (i) one third of the value in the form of stock options, (ii) one third of the value in the form of RSUs, and (iii) one third of the value in the form of PSUs. Messrs. Frinzi and Foust, who joined the Company in 2023, received equity awards granted one half of the value in the form of stock options and one half of the value in form of RSUs. For the 2023 PSU awards, the Committee established a financial target of $355 million in 2023 revenue. If this target is achieved, the PSUs would fund at 100%, with the total potential PSU payout capped at 150% of the target. If the performance criteria is achieved, the PSUs vest annually over three years, commencing one year from the date of grant. Based on the Company achieving $322.4 million in revenue for 2023, the Committee determined to fund the PSUs at 0% of the target, and accordingly the 2023 PSUs did not vest and were forfeited.
2024 Proxy Statement |
– 29 – |
|
– Compensation Discussion and Analysis –
The 2023 equity awards granted to named executive officers were as follows:
Named Executive Officer |
|
Grant Date |
|
Stock Options(1) |
|
|
Restricted Stock Units(3) |
|
|
Performance Stock Units(4) |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Thomas G. Frinzi(2) |
|
January 3, 2023 |
|
|
160,637 |
|
|
|
87,805 |
|
|
|
- |
|
Patrick F. Williams |
|
March 10, 2023 |
|
|
22,281 |
|
|
|
12,184 |
|
|
|
12,184 |
|
Warren Foust(2) |
|
May 8, 2023 |
|
|
37,567 |
|
|
|
20,331 |
|
|
|
- |
|
Scott Barnes |
|
March 10, 2023 |
|
|
19,301 |
|
|
|
10,555 |
|
|
|
10,555 |
|
Keith Holliday |
|
March 10, 2023 |
|
|
18,638 |
|
|
|
10,192 |
|
|
|
10,192 |
|
While the 2023 PSUs did not vest and were forfeited, the Committee believes that PSU awards are an effective tool to align executive compensation with shareholder interests. For 2024, the Committee modified the mix of awards granted to our named executive officers to increase the percentage of awards granted in the form of PSUs. For 2024, the Committee approved an equity award program for our named executive officers as follows: (i) 20% of the value in the form of stock options, (ii) 40% of the value in the form of RSUs, and (iii) 40% of the value in the form of PSUs.
2023 Bonus Awards
As described above, the Committee is responsible for determining the level of funding for the bonus pool based on the Company’s financial results and performance against the pre-established financial metrics and targets for the annual bonus plan. For 2023, the Committee approved financial performance metrics for the 2023 Bonus Plan consisting of fiscal 2023 revenue (with a target set at $355 million) and Adjusted EBITDA per share* (with a target set at $1.30). The 2023 Bonus Plan was structured such that the bonus pool would fund at 100% if both of these targets were achieved, with total potential bonus pool funding capped at 200% of target.
In 2023, the Company fell short of the targets for revenue and Adjusted EBITDA per share* for the 2023 Bonus Plan. The Company faced macroeconomic challenges and a global decline in refractive industry procedures in 2023, which required the Company to update its forecast and outlook during 2023. The Company did not change the performance targets for the 2023 Bonus Plan mid-year, and accordingly, we did not achieve our original targets. While we grew our net sales in 2023 by 13% to $322.4 million, with ICL sales growth of 18% compared to 2022, our performance for the year was below expectations. In a challenging year, we still generated net cash from operating activities of $14.6 million in 2023, and we ended the year with cash, cash equivalents and investments available for sale of $232.4 million, with no debt. Further, we increased capacity at our primary manufacturing facility in Monrovia, California and continued to advance the build-out of our manufacturing facility in Nidau, Switzerland, which will support anticipated future growth and create additional manufacturing flexibility and redundancy. Based on the Company achieving $322.4 million in revenue and Adjusted EBITDA per share* of $1.15, the Committee determined to fund the bonus pool at 50% of the target amount for 2023. The Committee and the Board greed that this level of pool funding aligns management’s compensation with shareholder interests.
________________
* Adjusted EBITDA per share is a non-GAAP financial measure. Information and reconciliations are provided in Appendix 3.
2024 Proxy Statement |
– 30 – |
|
– Compensation Discussion and Analysis –
As set forth in the table below, each of our named executive officers received a 2023 bonus payout at 50% of his individual target.
Named Executive Officer |
Target Bonus Amount ($) |
|
|
2023 Earned Bonus Payment ($) |
|
|
Bonus Payment as a Percent of Target Bonus |
|
|||
|
|
|
|
|
|
|
|
|
|||
Thomas G. Frinzi |
|
861,000 |
|
|
|
430,500 |
|
|
|
50 |
% |
Patrick F. Williams |
|
356,558 |
|
|
|
178,279 |
|
|
|
50 |
% |
Warren Foust(1) |
|
256,667 |
|
|
|
128,333 |
|
|
|
50 |
% |
Scott Barnes |
|
244,379 |
|
|
|
122,190 |
|
|
|
50 |
% |
Keith Holliday |
|
262,207 |
|
|
|
131,103 |
|
|
|
50 |
% |
Change-in-Control and Other Benefits
Change-in-Control Benefits
Our named executive officers will receive certain cash severance and other benefits from STAAR or a successor company if they experience a qualifying termination following a change in control of STAAR. Payments and benefits of this nature are often termed “double trigger” change-in-control benefits. In addition, the Plan provides that, if STAAR has a change in control, unvested equity-based awards will vest immediately unless the surviving company assumes or replaces the awards.
STAAR provides these benefits to help it compete with larger, better-capitalized companies in attracting employees. STAAR also recognizes the retention value of equity-based awards. Change-in-control benefits are intended to do the following:
The specific change-in-control benefits to which each named executive officer is entitled are discussed below under “Employment Agreements.”
Severance Arrangements
Each of our named executive officers is entitled to limited continuation of salary and benefits if the officer is terminated under specified circumstances. These arrangements are provided to maintain STAAR’s competitive position in attracting and retaining executive talent and are described further in the section “Employment and Other Agreements” below.
Perquisites
In 2023, the named executive officers received an opportunity to undergo an executive health screening and were eligible to receive an executive life insurance policy with premiums and costs paid by STAAR.
2024 Proxy Statement |
– 31 – |
|
– Compensation Discussion and Analysis –
The cost of these limited executive benefits, which are intended to promote the long-term health and financial stability of our executive officers, are shown in the Summary Compensation Table below.
Employee Benefits
The named executive officers participate in a variety of retirement, health and welfare, and paid time-off benefits that are broadly available to STAAR employees, which are designed to enable STAAR to attract and retain its workforce in a competitive marketplace. Health and welfare and paid time-off benefits help ensure that STAAR has a productive and focused workforce through reliable and competitive health and other benefits. Retirement savings plans help employees, especially long-serving employees, save and prepare financially for retirement.
STAAR’s qualified 401(k) plan allows all U.S.-based employees to contribute up to the limits imposed by the Internal Revenue Code—$22,500 per employee for 2023 (with an additional $7,500 annual catch-up contribution permitted for those over 50 years of age)—on a pre- or after-tax basis. During 2023 STAAR provided an 80% percent match up to the first 6% of the employee’s eligible contributions. Officers serving outside the U.S. receive pension benefits based on local regulations and standards. These benefits are generally provided to all of our full-time salaried employees and enhanced retirement benefits are not provided to our named executive officers.
Employment and Other Agreements
Employment Agreement with Thomas G. Frinzi
Thomas G. Frinzi succeeded Caren Mason as our President and Chief Executive Officer, effective January 1, 2023. In connection with his appointment as our Chief Executive Officer, Mr. Frinzi and the Board entered into an employment agreement (the “Frinzi Agreement”) which provides for the following: (i) base salary at an annual rate of $820,000, (ii) participation in the Company’s annual cash bonus program with a target bonus of 105% of his base salary, (iii) a new hire initial grant of equity with a grant date value of $9,000,000, (x) half of which consists of stock options and a third of which will vest on the one year anniversary of employment and the remainder of which will vest at the rate of 1/24 per month over the following two years, and (y) half of which consists of RSUs, a third of which will vest on each of the first, second and third anniversaries of employment. The Board evaluated benchmark data provided by Aon in establishing a competitive compensation program for Mr. Frinzi. Mr. Frinzi is also eligible to participate in all other elements of the Company’s executive compensation and benefits plans. Mr. Frinzi will not receive any compensation as a director during his tenure as our Chief Executive Officer.
If STAAR terminates Mr. Frinzi’s employment for reasons other than cause (as defined in the Frinzi Agreement) or Mr. Frinzi resigns for good reason (as defined in the Frinzi Agreement), he will be entitled to 18 months of base salary from the date of termination payable in 18 monthly installments. Mr. Frinzi will also be entitled to reimbursement of 18 months of COBRA premiums for continued group health coverage for himself and his eligible dependents.
In the event of a change in control, if Mr. Frinzi resigns within 18 months after the change in control due to a successor company’s failure to offer or maintain him in the position of Chief Executive Officer of the successor company or if he is terminated for reasons other than cause within 12 months of the change in control, then he will receive the severance benefits described above plus an amount equal to his bonus, if any, for the year prior to his termination and an amount equal to his target bonus for the year in which the termination occurs. In addition, all of Mr. Frinzi’s outstanding and unvested equity awards will vest in full.
The severance payment and benefits described above are subject to Mr. Frinzi’s execution and delivery of a general release of claims against the Company. The employment agreement also provides that if any payment or benefit to Mr. Frinzi would result in a parachute payment under Section 280G of the Internal
2024 Proxy Statement |
– 32 – |
|
– Compensation Discussion and Analysis –
Revenue Code, such payments and benefits will either be reduced to the extent necessary so no portion is subject to an excise tax or will be paid in full (whichever generates the better result for Mr. Frinzi). The agreement also includes customary confidentiality, intellectual property assignment, and employee non-solicitation provisions.
Offer Letters with Named Executive Officers
Other than the agreement with Mr. Frinzi discussed above, we do not have employment agreements with any of our other named executive officers. We are parties to an offer letter with each of our other named executive officers, which provide for initial base salary and target bonus. The offer letters provide for at-will employment with each of these individuals and do not contain any executory obligations on the part of the Company.
Executive Change-in Control Agreements
STAAR has entered into executive change-in-control retention agreements with certain executive officers and other key employees that provide cash and other severance benefits if there is a change in control of the Company. The Executive Change in Control Agreements with Drs. Barnes and Holliday and Messrs. Williams and Foust provide that if the officer’s employment is terminated by the Company without cause within 12 months after a change in control of STAAR, or if the officer resigns for good reason within 15 months after a change in control of STAAR, the officer will receive the following, subject to the execution of a release of claims:
In addition, pursuant to the Executive Change in Control Agreements, if any payments or benefits would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and benefits will be payable in full or reduced so that no portion is subject to the excise tax, whichever results in the greater net after-tax benefit to the executive.
Executive Severance Agreements
STAAR has entered into executive severance agreements with its executive officers and certain other key employees, including Drs. Barnes and Holliday and Messrs. Williams and Foust, that provide cash and other severance benefits if the officer’s employment is terminated without cause or the officer resigns for good reason (except in connection with a change in control of STAAR). The Executive Severance Agreements provide that they will be eligible to receive the following, subject to the execution of a release of claims:
2024 Proxy Statement |
– 33 – |
|
– Compensation Discussion and Analysis –
In the context of the Executive Change in Control Agreements and Executive Severance Agreements, resignation “for good reason” generally means that an employer has adversely changed the officer’s salary, location or other terms and conditions of employment to such a degree that the executive is entitled to voluntarily resign and to receive severance benefits.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management this Compensation Discussion and Analysis. Based on its review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for the STAAR Surgical 2024 Annual Meeting of Shareholders.
The Compensation Committee
Aimee Weisner (Chair)
Elizabeth Yeu, M.D.
April 24, 2024
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 29, 2023, the following individuals served as members of the Compensation Committee: Aimee Weisner, Dr. Elizabeth Yeu, and Dr. Gilbert Kliman. At the time of their service as a member of the Compensation Committee, each of the foregoing individuals was a non-employee director. No member of the Compensation Committee had a relationship that would constitute an interlocking relationship as defined by SEC rules for the fiscal year ended December 29, 2023.
2024 Proxy Statement |
– 34 – |
|
COMPENSATION TABLES
Summary Compensation Table
The following table summarizes the compensation of the named executive officers for each of the three fiscal years ended December 29, 2023, December 30, 2022 and December 31, 2021, respectively.
Name and Principal Position |
|
Year |
|
|
Salary ($) |
|
|
Stock Awards ($)(1)(2) |
|
|
Option Awards ($)(1) |
|
|
Non-Equity Incentive Plan Compensation ($)(3) |
|
|
All Other Compensation ($)(4) |
|
|
Total ($) |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Thomas G. Frinzi |
|
|
2023 |
|
|
|
788,462 |
|
|
|
4,499,989 |
|
|
|
4,500,006 |
|
|
|
430,500 |
|
|
|
1,624 |
|
|
|
10,220,581 |
|
President and Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Patrick F. Williams |
|
|
2023 |
|
|
|
541,385 |
|
|
|
1,379,960 |
|
|
|
689,991 |
|
|
|
178,279 |
|
|
|
27,254 |
|
|
|
2,816,869 |
|
Chief Financial Officer |
|
|
2022 |
|
|
|
513,462 |
|
|
|
1,380,060 |
|
|
|
690,010 |
|
|
|
420,469 |
|
|
|
26,054 |
|
|
|
3,030,055 |
|
|
|
|
2021 |
|
|
|
432,060 |
|
|
|
227,125 |
|
|
|
227,108 |
|
|
|
477,569 |
|
|
|
25,190 |
|
|
|
1,389,052 |
|
Warren Foust |
|
|
2023 |
|
|
|
359,615 |
|
|
|
1,374,986 |
|
|
|
1,374,997 |
|
|
|
128,333 |
|
|
|
12,361 |
|
|
|
3,250,292 |
|
Chief Operating Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Scott Barnes |
|
|
2023 |
|
|
|
535,971 |
|
|
|
1,195,459 |
|
|
|
597,708 |
|
|
|
122,190 |
|
|
|
32,988 |
|
|
|
2,484,316 |
|
Chief Medical Officer |
|
|
2022 |
|
|
|
508,327 |
|
|
|
1,195,454 |
|
|
|
597,699 |
|
|
|
288,183 |
|
|
|
31,788 |
|
|
|
2,621,451 |
|
|
|
|
2021 |
|
|
|
478,041 |
|
|
|
265,356 |
|
|
|
265,372 |
|
|
|
365,351 |
|
|
|
31,068 |
|
|
|
1,405,188 |
|
Keith Holliday |
|
|
2023 |
|
|
|
517,564 |
|
|
|
1,154,346 |
|
|
|
577,176 |
|
|
|
131,103 |
|
|
|
30,628 |
|
|
|
2,410,817 |
|
Chief Technology Officer |
|
|
2022 |
|
|
|
490,869 |
|
|
|
1,154,314 |
|
|
|
577,202 |
|
|
|
309,206 |
|
|
|
29,014 |
|
|
|
2,560,605 |
|
|
|
|
2021 |
|
|
|
420,690 |
|
|
|
223,329 |
|
|
|
223,303 |
|
|
|
373,990 |
|
|
|
28,294 |
|
|
|
1,269,606 |
|
Named Executive Officer |
|
Maximum Value of PSUs ($) |
|
|
|
|
|
|
|
Thomas G. Frinzi |
|
|
- |
|
Patrick F. Williams |
|
|
1,034,970 |
|
Warren Foust |
|
|
- |
|
Scott Barnes |
|
|
896,623 |
|
Keith Holliday |
|
|
865,759 |
|
Named Executive Officer |
|
Insurance Premiums ($) |
|
|
Company Contributions to 401(k) Plans ($) |
|
|
Total ($) |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Thomas G. Frinzi |
|
|
1,624 |
|
|
|
— |
|
|
|
1,624 |
|
Patrick F. Williams |
|
|
11,414 |
|
|
|
15,840 |
|
|
|
27,254 |
|
Warren Foust |
|
|
176 |
|
|
|
12,185 |
|
|
|
12,361 |
|
Scott Barnes |
|
|
17,148 |
|
|
|
15,840 |
|
|
|
32,988 |
|
Keith Holliday |
|
|
14,788 |
|
|
|
15,840 |
|
|
|
30,628 |
|
2024 Proxy Statement |
– 35 – |
|
– Compensation Tables –
Grants of Plan-Based Awards for Fiscal Year Ended December 29, 2023
The following table provides information on stock and option awards granted in 2023 to each of STAAR’s named executive officers and potential payouts for non-equity incentive plan awards under STAAR’s executive cash bonus plan. Actual cash bonus payments made for 2023 are shown in the Bonus column of the Summary Compensation Table above.
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
|
|
All Other Stock Awards: |
|
|
All Other Option |
|
|
Exercise or Base Price of Option |
|
|
Grant Date Fair Value of Stock and Option |
|
||||||||||||||
Name |
|
Grant Date |
|
Target ($) |
|
|
Threshold (#) |
|
|
Target (#) |
|
|
Maximum (#) |
|
|
Number of Units(3) (#) |
|
|
Options(4) (#) |
|
|
Awards ($/Share) |
|
|
Awards(5) ($) |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Thomas G. Frinzi |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2023 Annual Bonus |
|
|
|
|
861,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
2023 RSUs |
|
1/3/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
87,805 |
|
|
|
— |
|
|
|
— |
|
|
|
4,499,989 |
|
2023 Stock Options |
|
1/3/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
160,637 |
|
|
|
51.25 |
|
|
|
4,500,006 |
|
Patrick F. Williams |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2023 Annual Bonus |
|
|
|
|
356,558 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
2023 RSUs |
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,184 |
|
|
|
— |
|
|
|
— |
|
|
|
689,980 |
|
2023 Stock Options |
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22,281 |
|
|
|
56.63 |
|
|
|
689,991 |
|
2023 PSUs |
|
3/10/2023 |
|
|
— |
|
|
|
6,092 |
|
|
|
12,184 |
|
|
|
18,276 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
689,980 |
|
Warren Foust(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2023 Annual Bonus |
|
|
|
|
256,667 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
2023 RSUs |
|
5/8/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,331 |
|
|
|
— |
|
|
|
— |
|
|
|
1,374,986 |
|
2023 Stock Options |
|
5/8/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
37,567 |
|
|
|
67.63 |
|
|
|
1,374,997 |
|
Scott Barnes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2023 Annual Bonus |
|
|
|
|
244,379 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
2023 RSUs |
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,555 |
|
|
|
— |
|
|
|
— |
|
|
|
597,730 |
|
2023 Stock Options |
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
19,301 |
|
|
|
56.63 |
|
|
|
597,708 |
|
2023 PSUs |
|
3/10/2023 |
|
|
— |
|
|
|
5,278 |
|
|
|
10,555 |
|
|
|
15,833 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
597,730 |
|
Keith Holliday |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2023 Annual Bonus |
|
|
|
|
262,207 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
2023 RSUs |
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,192 |
|
|
|
— |
|
|
|
— |
|
|
|
577,173 |
|
2023 Stock Options |
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
18,638 |
|
|
|
56.63 |
|
|
|
577,176 |
|
2023 PSUs |
|
3/10/2023 |
|
|
— |
|
|
|
5,096 |
|
|
|
10,192 |
|
|
|
15,288 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
577,173 |
|
2024 Proxy Statement |
– 36 – |
|
– Compensation Tables –
Outstanding Equity Awards at Fiscal Year-End December 29, 2023
The following table shows the number of shares covered by exercisable and unexercisable options and unvested shares of restricted stock, RSUs and PSUs held by STAAR’s named executive officers on December 29, 2023. The market value of the stock awards was determined based on the closing price of a share of common stock on December 29, 2023, which was $31.21.
|
|
|
|
Option Awards |
|
|
|
|
|
Stock Awards |
|
||||||||||||||||||||||||
|
|
Award Grant |
|
Number of Securities Underlying Unexercised Options (#) |
|
|
Number of Securities Underlying Unexercised Options (#) |
|
|
Option Exercise Price |
|
|
Option Expiration |
|
|
Number of Shares or Units of Stock That Have Not Vested |
|
|
|
Market Value of Shares or Units of Stock That Have Not Vested |
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
|
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
|
|||||||
Name |
|
Date |
|
Exercisable |
|
|
Unexercisable |
|
|
($) |
|
|
Date(1) |
|
|
(#) |
|
|
|
($) |
|
|
(#) |
|
|
|
($) |
|
|||||||
Thomas G. Frinzi |
|
6/1/2020 |
|
|
971 |
|
|
|
- |
|
|
|
39.73 |
|
|
5/30/2030 |
(3) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
6/16/2022 |
|
|
2,881 |
|
|
|
- |
|
|
|
62.10 |
|
|
6/15/2032 |
(3) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
1/3/2023 |
|
|
- |
|
|
|
160,637 |
|
|
|
51.25 |
|
|
1/2/2033 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
1/3/2023 |
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
|
|
|
87,805 |
|
(2) |
|
|
2,740,394 |
|
|
|
— |
|
|
|
|
— |
|
Patrick F. Williams |
|
3/12/2021 |
|
|
4,869 |
|
|
|
443 |
|
|
|
90.38 |
|
|
3/11/2031 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/12/2021 |
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
|
|
|
838 |
|
(2) |
|
|
26,154 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
11,193 |
|
|
|
7,995 |
|
|
|
74.80 |
|
|
3/6/2032 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
|
|
|
6,150 |
|
(2) |
|
|
191,942 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
|
|
|
5,228 |
|
(5) |
|
|
163,166 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
- |
|
|
|
22,281 |
|
|
|
56.63 |
|
|
3/9/2033 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
|
|
|
12,184 |
|
(2) |
|
|
380,263 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
12,184 |
|
(6) |
|
|
380,263 |
|
Warren Foust |
|
5/8/2023 |
|
|
- |
|
|
|
37,567 |
|
|
|
67.63 |
|
|
5/7/2033 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
5/8/2023 |
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
|
|
|
20,331 |
|
(2) |
|
|
634,531 |
|
|
|
— |
|
|
|
|
— |
|
2024 Proxy Statement |
– 37 – |
|
– Compensation Tables –
|
|
|
|
Option Awards |
|
|
|
|
|
Stock Awards |
|
||||||||||||||||||||||||
|
|
Award Grant |
|
Number of Securities Underlying Unexercised Options (#) |
|
|
Number of Securities Underlying Unexercised Options (#) |
|
|
Option Exercise Price |
|
|
Option Expiration |
|
|
Number of Shares or Units of Stock That Have Not Vested |
|
|
|
Market Value of Shares or Units of Stock That Have Not Vested |
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
|
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
|
|||||||
Name |
|
Date |
|
Exercisable |
|
|
Unexercisable |
|
|
($) |
|
|
Date(1) |
|
|
(#) |
|
|
|
($) |
|
|
(#) |
|
|
|
($) |
|
|||||||
Scott Barnes |
|
11/13/2017 |
|
|
19,671 |
|
|
|
— |
|
|
|
15.25 |
|
|
11/12/2027 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/15/2018 |
|
|
5,200 |
|
|
|
— |
|
|
|
16.15 |
|
|
3/14/2028 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
6/14/2018 |
|
|
1,124 |
|
|
|
— |
|
|
|
29.80 |
|
|
6/13/2028 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/14/2019 |
|
|
9,157 |
|
|
|
— |
|
|
|
35.98 |
|
|
3/13/2029 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/20/2020 |
|
|
11,891 |
|
|
|
— |
|
|
|
27.53 |
|
|
3/19/2030 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/12/2021 |
|
|
5,689 |
|
|
|
518 |
|
|
|
90.38 |
|
|
3/11/2031 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/12/2021 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
979 |
|
(2) |
|
|
30,555 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
9,695 |
|
|
|
6,926 |
|
|
|
74.80 |
|
|
3/6/2032 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
5,328 |
|
(2) |
|
|
166,287 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
4,530 |
|
(5) |
|
|
141,381 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
— |
|
|
|
19,301 |
|
|
|
56.63 |
|
|
3/9/2033 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
10,555 |
|
(2) |
|
|
329,422 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
10,555 |
|
(6) |
|
|
329,422 |
|
Keith Holliday |
|
3/20/2020 |
|
|
16,372 |
|
|
|
— |
|
|
|
27.53 |
|
|
3/19/2030 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/12/2021 |
|
|
4,787 |
|
|
|
436 |
|
|
|
90.38 |
|
|
3/11/2031 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/12/2021 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
824 |
|
(2) |
|
|
25,717 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
9,362 |
|
|
|
6,689 |
|
|
|
74.80 |
|
|
3/6/2032 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
5,144 |
|
(2) |
|
|
160,544 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/7/2022 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
4,374 |
|
(5) |
|
|
136,513 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
— |
|
|
|
18,638 |
|
|
|
56.63 |
|
|
3/9/2033 |
(4) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
10,192 |
|
(2) |
|
|
318,092 |
|
|
|
— |
|
|
|
|
— |
|
|
|
3/10/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
10,192 |
|
(6) |
|
|
318,092 |
|
2024 Proxy Statement |
– 38 – |
|
– Compensation Tables –
Option Exercises and Stock Vested During Fiscal Year-Ended December 29, 2023
The table below shows the number of shares of STAAR common stock acquired by named executive officers during 2023 on the exercise of options, and the number of shares of stock subject to stock awards that vested in 2023 for each named executive officer.
|
|
Option Awards |
|
|
Stock Awards |
|
||||||||||
Name |
|
Number of Shares Acquired on Exercise (#) |
|
|
Value Realized on Exercise ($)(1) |
|
|
Number of Shares Acquired on Vesting (#) |
|
|
Value Realized on Vesting ($)(1) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Thomas G. Frinzi |
|
|
— |
|
|
|
— |
|
|
|
1,450 |
|
|
|
76,372 |
|
Patrick F. Williams |
|
|
— |
|
|
|
— |
|
|
|
16,770 |
|
|
|
884,617 |
|
Warren Foust |
|
|
— |
|
|
|
— |
|
|
|
- |
|
|
|
- |
|
Scott Barnes |
|
|
— |
|
|
|
— |
|
|
|
9,026 |
|
|
|
535,506 |
|
Keith Holliday |
|
|
— |
|
|
|
— |
|
|
|
8,208 |
|
|
|
486,238 |
|
Potential Payments Upon Termination or Change-In-Control Estimates as of December 29, 2023
The table below estimates the potential termination and change-in-control payments and benefits that our named executive officers would have been entitled to receive under their employment agreements if one of the following events had occurred on December 29, 2023:
2024 Proxy Statement |
– 39 – |
|
– Compensation Tables –
We are providing this information on a hypothetical basis in accordance with the regulations of the SEC. In fact, no such change in control occurred on December 29, 2023, and none of the named executive officers was terminated on that date. There can be no assurance that a change in control would produce the same or similar results as those described if it occurs on any other date, or if any assumption is correct when the actual event occurs. Termination for “good reason” generally means that an employer has adversely changed the terms and conditions of employment to such a degree that the executive, under the specific terms of his or her agreement, is entitled to voluntarily resign and to receive severance benefits.
Name |
|
Benefit(1) |
|
Termination without Cause or for Good Reason without a Change in Control ($) |
|
|
|
Termination without Cause or for Good Reason following Change in Control ($)(2) |
|
|
|
Change in Control (no termination) ($)(2) |
|
|
Disability ($) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Thomas G. Frinzi |
|
Severance |
|
|
1,230,000 |
|
(3) |
|
|
2,952,001 |
|
(3) |
|
|
— |
|
|
|
— |
|
|
|
COBRA(4) |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
Equity acceleration(5) |
|
|
— |
|
|
|
|
2,740,394 |
|
|
|
|
2,740,394 |
|
|
|
913,454 |
|
Patrick F. Williams |
|
Severance |
|
|
548,550 |
|
(3) |
|
|
1,261,665 |
|
(3) |
|
|
— |
|
|
|
— |
|
|
|
COBRA |
|
|
44,371 |
|
|
|
|
44,371 |
|
|
|
|
— |
|
|
|
— |
|
|
|
Equity acceleration(5) |
|
|
— |
|
|
|
|
761,524 |
|
|
|
|
761,524 |
|
|
|
330,451 |
|
Warren Foust |
|
Severance |
|
|
550,000 |
|
(3) |
|
|
1,320,000 |
|
(3) |
|
|
— |
|
|
|
— |
|
|
|
COBRA |
|
|
44,371 |
|
|
|
|
44,371 |
|
|
|
|
— |
|
|
|
— |
|
|
|
Equity acceleration(5) |
|
|
— |
|
|
|
|
634,531 |
|
|
|
|
634,531 |
|
|
|
211,510 |
|
Scott Barnes |
|
Severance |
|
|
543,065 |
|
(3) |
|
|
1,031,823 |
|
(3) |
|
|
— |
|
|
|
— |
|
|
|
COBRA |
|
|
172 |
|
|
|
|
172 |
|
|
|
|
— |
|
|
|
— |
|
|
|
Equity acceleration(5) |
|
|
— |
|
|
|
|
1,105,249 |
|
|
|
|
1,105,249 |
|
|
|
731,790 |
|
Keith Holliday |
|
Severance |
|
|
524,414 |
|
(3) |
|
|
1,048,828 |
|
(3) |
|
|
— |
|
|
|
— |
|
|
|
COBRA |
|
|
25,438 |
|
|
|
|
25,438 |
|
|
|
|
— |
|
|
|
— |
|
|
|
Equity acceleration(5) |
|
|
— |
|
|
|
|
701,115 |
|
|
|
|
701,115 |
|
|
|
340,515 |
|
2024 Proxy Statement |
– 40 – |
|
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information about the equity compensation outstanding and the shares available for issuance under STAAR’s equity plans as of the close of business on December 29, 2023:
Plan Category |
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) |
|
|
|
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($) (b) |
|
|
|
Weighted Remaining Contractual Life of Outstanding Options, Warrants and Rights (c) |
|
|
|
Number of |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity Compensation Plans |
|
|
3,086,210 |
|
(1) |
|
|
46.38 |
|
(2) |
|
|
6.04 |
|
(3) |
|
|
2,993,717 |
|
Equity Compensation Plans |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
2024 Proxy Statement |
– 41 – |
|
PAY RATIO DISCLOSURE
Our compensation philosophy is to pay our worldwide employees competitively with similar positions, talent and experience in the applicable labor market. We follow this philosophy regardless of the geographic location where we hire employees and regardless of the role; whether at the executive, mid-management, professional or hourly level. We utilize competitive bench-marking data to regularly validate our target compensation range within each respective market place and within each respective employment role. By doing so we believe we maintain an appropriately compensated, qualified and motivated workforce.
As a result of the rules the SEC adopted under the Dodd-Frank Act we are providing the following disclosure about the ratio of the total annual of compensation of our Chief Executive Officer compared to the total annual compensation of the median compensated employee within our worldwide workforce. Our assessment produced the following:
We identified our median compensated employee by calculating the total compensation of our employees of record as of December 29, 2023 using year end payroll records and including the following compensation elements:
Because the SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
For 2023, the ratio of our Chief Executive Officer’s annual compensation to that of our median employee increased relative to the pay ratio reported for 2022. As discussed above, Thomas G. Frinzi succeeded Caren Mason as our Chief Executive Officer, effective January 1, 2023. In connection with his appointment as our Chief Executive Officer, Mr. Frinzi received a new hire equity award, which was larger than Ms. Mason’s annual equity award. Accordingly, the inclusion of the value of the new hire equity award for Mr. Frinzi in the Chief Executive Officer’s annual compensation calculation resulted in a higher ratio for 2023.
2024 Proxy Statement |
– 42 – |
|
PAY VERSUS PERFORMANCE
In accordance with rules adopted by the Securities and Exchange Commission pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Company provides the following disclosure regarding executive compensation for its principal executive officer (“PEO”) and Non-PEO NEOs and the Company performance for each of fiscal years 2023, 2022, 2021, and 2020. The Compensation Committee did not consider the pay versus performance disclosure in making its pay decisions for any of the fiscal years shown.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Initial |
|
|
|
|
|
|
|
|||||||||||
Year |
|
Summary Compensation Table Total for The PEO ($)(1) |
|
|
Compensation Actually Paid to the PEO ($)(1),(2),(3) |
|
|
Average Summary Compensation Table for Non-PEO NEOs ($)(1) |
|
|
Compensation Actually Paid to Non-PEO NEOs ($)(1),(2),(3) |
|
|
TSR ($) |
|
|
Peer Group TSR ($) |
|
|
Net Income ($) (rounded to the nearest thousands) |
|
|
Revenue ($) (rounded to the nearest thousands)(5) |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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2020 |
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||||||||
2020 |
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2021 |
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2022 |
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2023 |
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Patrick F. Williams |
|
Patrick F. Williams |
|
Patrick F. Williams |
|
Patrick F. Williams |
Scott Barnes |
|
Scott Barnes |
|
Scott Barnes |
|
Scott Barnes |
Keith Holliday |
|
Keith Holliday |
|
Keith Holliday |
|
Keith Holliday |
Hans Blickensdoerfer |
|
Hans Blickensdoerfer |
|
James Francese |
|
Warren Foust |
Deborah Andrews |
|
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Year |
|
Summary Compensation Table Total for the PEO ($) |
|
|
Exclusion of Stock Awards and Option Awards for the PEO ($) |
|
|
Inclusion of Equity Values for the PEO ($) |
|
|
Compensation Actually Paid to the PEO ($) |
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2023 |
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( |
) |
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2022 |
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( |
) |
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( |
) |
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2021 |
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( |
) |
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2020 |
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( |
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2024 Proxy Statement |
– 43 – |
|
– Pay Versus Performance –
Year |
|
Average Summary Compensation Table Total for Non-PEO NEOs ($) |
|
|
Average Exclusion of Change in Pension Value for Non-PEO NEOs ($) |
|
|
Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($) |
|
|
Average Inclusion of Pension Service Cost for Non-PEO NEOs ($) |
|
|
Average Inclusion of Equity Values for Non-PEO NEOs ($) |
|
|
Average Compensation Actually Paid to Non-PEO NEOs ($) |
|
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2023 |
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|
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- |
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( |
) |
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- |
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2022 |
|
|
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- |
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( |
) |
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- |
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2021 |
|
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( |
) |
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( |
) |
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( |
) |
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2020 |
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( |
) |
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( |
) |
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||||
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
Year |
|
Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for the PEO ($) |
|
|
Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for the PEO ($) |
|
|
Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for the PEO ($) |
|
|
Total - Inclusion of Equity Values for the PEO ($) |
|
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2023 |
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- |
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2022 |
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( |
) |
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( |
) |
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( |
) |
|
2021 |
|
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||||
2020 |
|
|
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|
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|
|
|
||||
Year |
|
Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) |
|
|
Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) |
|
|
Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) |
|
|
Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) |
|
||||
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2023 |
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( |
) |
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2022 |
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( |
) |
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( |
) |
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2021 |
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2020 |
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||||
2024 Proxy Statement |
– 44 – |
|
– Pay Versus Performance –
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid, Company Total Shareholder Return and Peer Group Total Shareholder Return
The following chart sets forth the relationship between Compensation Actually Paid to the Company’s PEO, the average of Compensation Actually Paid to the Company’s Non-PEO NEOs, and the cumulative TSR of the Company and S&P 400 Health Care Index over the three most recently completed fiscal years:
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
The following chart sets forth the relationship between Compensation Actually Paid to the Company’s PEO, the average of Compensation Actually Paid to the Company’s Non-PEO NEOs, and the Company’s net income over the three most recently completed fiscal years:
2024 Proxy Statement |
– 45 – |
|
– Pay Versus Performance –
Description of Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Revenue
The following chart sets forth the relationship between Compensation Actually Paid to the Company’s PEO, the average of Compensation Actually Paid to the Company’s Non-PEO NEOs, and the Company’s revenue over the three most recently completed fiscal years:
Tabular List of Most Important Financial Performance Measures
The following table presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually paid to the Company’s PEO and Non-PEO NEOs for 2023 to Company performance. The measures in this table are not ranked.
|
2024 Proxy Statement |
– 46 – |
|
The Board of Directors adopted a written Related Person Transaction Policy, which requires the Audit Committee’s approval for all covered transactions. The Policy applies to any transaction or series of transactions in which STAAR or a subsidiary is a participant, the amount involved exceeds $120,000 and a “Related Person” as defined in the Policy, including executive officers, directors and their immediate family members, and holders of in excess of 5% of our common stock, has a direct or indirect material interest. Under the Policy, all Related Person Transactions must first be submitted to the General Counsel of STAAR, who will determine whether the proposed transaction falls under the Policy and, if so, submit it to the Audit Committee for review, approval, ratification or other action. Based on its consideration of all of the relevant facts and circumstances, and full disclosure of the Related Person’s interest in the transaction, the Audit Committee will decide whether or not to approve the transaction and will approve only those transactions that are in the best interests of STAAR. We are not aware of any related party transactions with any directors, executive officers or more-than-five-percent security holders requiring disclosure under the SEC’s rules or our Related Party Transactions Policy since December 31, 2022.
2024 Proxy Statement |
– 47 – |
|
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table shows, as of April 22, 2024, information concerning the shares of common stock beneficially owned by each person known by STAAR to be the beneficial owner of more than 5% of our common stock (other than directors and executive officers). This information is based on publicly available information filed with the SEC as of the Record Date.
Name and Address |
|
Shares Beneficially Owned |
|
|
Percent of |
|
||
|
|
|
|
|
|
|
||
Broadwood Partners, L.P.(2) |
|
|
10,794,330 |
|
|
|
22.0 |
% |
BlackRock, Inc.(3) |
|
|
8,159,763 |
|
|
|
16.6 |
% |
The Vanguard Group(4) |
|
|
5,468,710 |
|
|
|
11.1 |
% |
Baillie Gifford & Co(5) |
|
|
4,448,208 |
|
|
|
9.1 |
% |
2024 Proxy Statement |
– 48 – |
|
– Security Ownership of Principal Shareholders and Management –
The following table shows, as of April 22, 2024, information with respect to the shares of common stock beneficially owned by (1) each director and director nominee, (2) each person who is named in the Summary Compensation Table above, and (3) all current executive officers and directors as a group. This information is based on publicly available information filed with the SEC as of April 22, 2024.
|
|
Shares Beneficially Owned |
|
|
|
|
||||||||||||||
Name(1) |
|
Shares of Common Stock Owned(2)(4) (#) |
|
|
Shares Subject to Options Exercisable on or Before June 21, 2024(3) (#) |
|
|
RSUs Vesting on or Before June 21, 2024(3) (#) |
|
|
Total (#) |
|
|
Percent of Class(5) |
|
|||||
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|||||
Arthur C. Butcher** |
|
|
— |
|
|
|
1,163 |
|
|
|
649 |
|
|
|
1,812 |
|
|
* |
|
|
Stephen C. Farrell** |
|
|
11,203 |
|
|
|
59,325 |
|
|
|
1,709 |
|
|
|
72,237 |
|
|
* |
|
|
Wei Jiang** |
|
|
65 |
|
|
|
— |
|
|
|
1,299 |
|
|
|
1,364 |
|
|
* |
|
|
Aimee S. Weisner** |
|
|
5,527 |
|
|
|
5,765 |
|
|
|
3,417 |
|
|
|
14,709 |
|
|
* |
|
|
Elizabeth Yeu** |
|
|
2,855 |
|
|
|
15,091 |
|
|
|
— |
|
|
|
17,946 |
|
|
* |
|
|
K. Peony Yu(6) |
|
|
1,077 |
|
|
|
10,426 |
|
|
|
1,709 |
|
|
|
13,212 |
|
|
* |
|
|
Lilian Y. Zhou** |
|
|
850 |
|
|
|
2,686 |
|
|
|
1,477 |
|
|
|
5,013 |
|
|
* |
|
|
Thomas G. Frinzi |
|
|
22,757 |
|
|
|
79,708 |
|
|
|
— |
|
|
|
102,465 |
|
|
* |
|
|
Patrick F. Williams |
|
|
34,277 |
|
|
|
28,986 |
|
|
|
— |
|
|
|
63,263 |
|
|
* |
|
|
Warren Foust |
|
|
— |
|
|
|
13,565 |
|
|
|
6,777 |
|
|
|
20,342 |
|
|
* |
|
|
Scott Barnes |
|
|
31,339 |
|
|
|
73,756 |
|
|
|
— |
|
|
|
105,095 |
|
|
* |
|
|
Keith Holliday |
|
|
17,774 |
|
|
|
41,398 |
|
|
|
— |
|
|
|
59,172 |
|
|
* |
|
|
All current directors and |
|
|
127,724 |
|
|
|
341,241 |
|
|
|
21,899 |
|
|
|
490,864 |
|
|
|
1.0 |
% |
* Less than 1%.
** Director or Nominee.
2024 Proxy Statement |
– 49 – |
|
AUDIT COMMITTEE REPORT
In any of our filings under the Securities Act or Exchange Act that incorporate this Proxy Statement by reference, the Report of the Audit Committee of the Board of Directors will be considered excluded from the incorporation by reference, and it will not be deemed a part of any such other filing unless we expressly state that the Report is so incorporated.
In accordance with a written charter adopted by the Board of Directors, the Audit Committee oversees STAAR’s financial reporting process. Management is responsible for STAAR’s financial statements and the financial reporting process, including the system of internal controls. The independent registered public accounting firm is responsible for (i) performing an independent audit of STAAR’s financial statements, (ii) expressing an opinion on whether STAAR’s financial statements fairly present, in all material respects, STAAR’s financial position and results of operations and conform with generally accepted accounting principles, and (iii) an opinion on whether management’s assessment that STAAR maintained effective internal control over financial reporting as of December 29, 2023, is fairly stated, in all material respects, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed with management and the independent registered public accounting firm the audited consolidated financial statements that have been included in our Annual Report on Form 10-K for the year ended December 29, 2023.
The Audit Committee has reviewed and discussed with STAAR’s independent registered public accounting firm, BDO USA, P.C., the matters required to be discussed by applicable standards of the Public Company Accounting Oversight Board (“PCAOB”) and Securities and Exchange Commission currently in effect. The Audit Committee has received and reviewed the written disclosures and the letter from BDO USA, P.C. required by the PCAOB regarding BDO USA, P.C.’s communications with the Audit Committee concerning the accountant’s independence, and has discussed with BDO USA, P.C. its independence from STAAR and its management.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, the inclusion of the audited financial statements in the Annual Report on Form 10-K for the fiscal year ended December 29, 2023 for filing with the SEC.
The Audit Committee
Stephen C. Farrell (Chair)
K. Peony Yu, M.D.
Lilian Zhou
April 24, 2024
2024 Proxy Statement |
– 50 – |
|
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO THE AMENDED AND RESTATED OMNIBUS EQUITY INCENTIVE PLAN
Subject to the requisite affirmative shareholder vote at the Annual Meeting, the Board has adopted Amendment No. 1 (the “Amendment”) to the STAAR Surgical Company Amended and Restated Omnibus Equity Incentive Plan (the “Plan”). The Amendment provides for the increase in the number of shares of our common stock reserved for issuance under the Plan by 2.6 million shares. The Plan is the only plan under which equity compensation may currently be awarded to our officers, directors, employees and independent contractors.
If this Proposal No. 2 is approved by shareholders, the Amendment, which is attached as Appendix 1 to this Proxy Statement, will become effective on June 20, 2024, thereby increasing the overall number of shares available under the Plan by 2.6 million shares. If shareholders do not approve this Proposal No. 2, the Amendment will not become effective and the Plan, which was previously approved by our shareholders, will continue in full force and effect, and we may continue to grant awards under the Plan, subject to the terms, conditions and limitations, using the shares available for issuance thereunder.
Introduction and Key Features of the Restated Plan
The purpose of the Plan is to enable the Company to attract, retain and motivate officers, directors, employees and independent contractors by providing for performance-based benefits, and to strengthen and align interests between these persons and the Company’s shareholders. The Plan is designed to meet this intent by offering performance-based stock and cash awards and other equity-based awards to incentivize award recipients to drive the Company’s long-term growth, profitability and financial success.
Background for Current Request to Increase the Share Reserve
Our shareholders last approved the Plan on June 15, 2023, at which time the Plan was amended and restated to increase the share reserve by 2,170,000 shares and to make certain other changes to the Plan.
The Company has thoughtfully managed the Plan and its equity award burn rate, with a three-year average unadjusted burn rate of 1.6%. In 2022, we granted awards with respect to approximately 726,000 shares of our common stock, reflecting an unadjusted burn rate of 1.5%. In 2023, we granted awards with respect to approximately 1.3 million shares of our common stock, and our unadjusted burn rate increased to 2.6%. This increase was driven primarily by equity awards that we granted in connection with the hiring of new executives. As discussed above in the Compensation Discussion and Analysis, we invested in our management team in 2023, including by hiring Mr. Frinzi to serve as our President and Chief Executive Officer, Mr. Foust to serve as our Chief Operating Officer, and Dr. Michna to serve as our Chief Clinical, Regulatory and Medical Affairs Officer, as well as other key executives. In general, new hire awards are larger than annual awards, resulting in more shares subject to the awards. In addition, as our stock price was lower in 2023 relative to 2022, we used more shares from the Plan’s share reserve to grant these awards. We want to be able to continue to attract, retain and motivate key executives and employees, and our remaining share reserve limits our ability to do so.
As of March 29, 2024, 962,029 shares remained available for issuance under the Plan. Additionally, as of March 29, 2024 there were 2,882,875 stock options outstanding under the Plan with a weighted average exercise price of $45.01 and weighted average remaining term of 6.98 years. In addition, as of March 29, 2024, there were 1,132,421 full-value awards (in the form of restricted shares, restricted stock units and
2024 Proxy Statement |
– 51 – |
|
– Proposal No. 2: Approval of Amendment to Equity Incentive Plan –
performance stock units) outstanding under the Plan. Other than the foregoing, no other awards under the Plan were outstanding as of March 29, 2024.
The closing stock price of our common stock as of March 29, 2024 was $38.28 per share.
Ramifications of Failure to Receive Approval and Key Historical Equity Metrics. Based on the recommendation of the Compensation Committee, the Board believes that if STAAR cannot increase the number of shares available for grant under the Plan, STAAR will not have sufficient shares for our equity compensation program and would find it necessary to devote a significantly greater portion of our cash on hand and cash generated by operations to compensate our employees, consultants and potential new hires. In addition, we believe our equity compensation program helps align the interests of our key employees with the interests of our shareholders, and an insufficient supply of equity for awards would deprive management and the Board of this useful tool.
In its determination to recommend that the Board approve the Amendment, the Compensation Committee reviewed historical burn rate information and noted that the Amendment is intended to satisfy institutional shareholder advisory firms’ tests and recommended practices. The following table shows how the key equity metrics have changed over the past three fiscal years under the Plan:
Key Equity Metrics |
|
2023 |
|
|
Average (2021 - 2023) |
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Shares subject to awards granted(1) |
|
|
1,282,586 |
|
|
|
782,479 |
|
Gross burn rate(2) |
|
|
2.59 |
% |
|
|
1.59 |
% |
Net burn rate(3) |
|
|
1.97 |
% |
|
|
1.38 |
% |
Dilution(4) |
|
|
12.48 |
% |
|
|
12.32 |
% |
Overhang(5) |
|
|
6.35 |
% |
|
|
6.30 |
% |
Shareholder Approval Requirement
Shareholder approval of the Amendment is necessary in order for us to (1) meet the shareholder approval requirements of the NASDAQ Stock Market, and (2) grant incentive stock options (“ISOs”) thereunder. Approval of the Amendment will constitute approval pursuant to the shareholder approval requirements of Section 422 of the Internal Revenue Code relating to ISOs.
|
|
|
|
|
|
STAAR’s Board of Directors unanimously recommends a vote “FOR” the approval of the Amendment to the Amended and Restated Omnibus Equity Incentive Plan |
|
|
|
|
|
|
|
|
2024 Proxy Statement |
– 52 – |
|
– Proposal No. 2: Approval of Amendment to Equity Incentive Plan –
The summary of the Amendment and the Plan included in this Proxy Statement is qualified in its entirety by express reference to the text of the Amendment and the Plan, copies of which are included as Appendix 1 and Appendix 2, respectively. to this Proxy Statement.
Summary of the Amended and Restated Omnibus Equity Incentive Plan
General
The Plan is intended to promote the interests of our Company and its shareholders by providing eligible officers, directors, employees and independent contractors with incentives and rewards to encourage them to continue in the service of the Company or its affiliates. The Plan is designed to serve this goal by providing such individuals with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. Our Board of Directors believes our capacity to grant equity-based compensation has been a significant factor in our ability to achieve our growth objectives and enhance shareholder value. The principal features of the Plan are summarized below, but the summary is qualified in its entirety by reference to the Plan itself, a copy of which is attached to this Proxy Statement as Appendix 2. You are encouraged to read the Plan in its entirety.
Administration
The Plan is administered by the Compensation Committee. To the extent necessary to comply with Rule 16b-3 of the Exchange Act, the Compensation Committee will consist solely of two or more non-employee directors of the Company, each of whom is a “non-employee director” within the meaning of the rules under Section 16 of the Exchange Act. In addition, to the extent required by applicable law, each member of the Compensation Committee shall be an “independent director” under the rules of the NASDAQ Stock Market (or other principal securities market on which shares of our common stock are traded). Our Board of Directors or the Compensation Committee may delegate to a committee of one or more members of our Board of Directors or one or more of our officers or employees the authority to grant or amend awards to participants other than (1) our senior executives who are subject to Section 16 of the Exchange Act, or (2) such individuals to whom the authority to grant or amend award has been delegated, subject to restrictions imposed by the Compensation Committee from time to time and by applicable law. The full Board of Directors will administer the Plan with respect to awards to non-employee directors. The Board of Directors, Compensation Committee or delegate thereof, as applicable, are referred to herein as the “plan administrator.”
Unless otherwise limited by the Board of Directors, the Compensation Committee will have the authority to administer the Plan with respect to grants of equity awards, including the power to determine eligibility, the types and sizes of awards, the price and timing of awards and the acceleration or waiver of vesting restrictions, as well as the authority to delegate such administrative responsibilities. However, notwithstanding any other provision of the plan, the plan administrator may not exercise discretion to provide for accelerated vesting of any award except in the event of the participant’s death, disability or upon or following a change in control of the Company.
Eligibility
Persons eligible to participate in the Plan are all non-employee members of our Board of Directors (currently seven non-employee directors), and, as of March 31, 2024, approximately 1,091 employees and 5 consultants of the Company and its subsidiaries, as determined by the plan administrator.
Size of Share Pool; Limitation on Awards and Shares Available
If our shareholders approve the Amendment, the total number of shares reserved for issuance under the Plan, as amended, will be 22,805,000. Under the terms of the Plan, the aggregate number of shares of common stock available for issuance under the Plan will be reduced by two shares for each share of
2024 Proxy Statement |
– 53 – |
|
– Proposal No. 2: Approval of Amendment to Equity Incentive Plan –
common stock delivered in settlement of any Full Value Award granted following June 15, 2023. Any shares distributed pursuant to an award may consist, in whole or in part, of authorized and unissued common stock, treasury common stock or common stock purchased on the open market.
If any shares subject to an award under the Plan are forfeited, expire or are settled for cash, any shares deemed subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the Plan. To the extent any Full Value Award granted after June 15, 2023 is forfeited or terminated or otherwise not paid in full or shares subject to such award are withheld or surrendered, the shares available under the Plan will be increased by two shares subject to such award that is forfeited, terminated, not paid in full withheld or surrendered. However, the following shares may not be used again for grant under the Plan: (1) shares tendered or withheld to satisfy the exercise price of an option; (2) shares tendered or withheld to satisfy the tax withholding obligations with respect to an award; (3) shares subject to a SAR that are not issued in connection with the stock settlement of the SAR on its exercise; and (4) shares purchased on the open market with the cash proceeds from the exercise of options. Shares forfeited by a participant or repurchased by us at the price originally paid by the participant will also again be available for awards under the Plan. The payment of dividend equivalents in cash in conjunction with any outstanding awards shall not be counted against the shares available for issuance under the Plan.
Awards granted under the Plan in connection with the assumption or substitution of outstanding equity awards previously granted by a company or other entity in the context of a corporate acquisition or merger will not reduce the shares authorized for grant under the Plan.
The maximum number of shares of our common stock that may be subject to one or more awards granted to any one participant pursuant to the Plan during any calendar year is 400,000 shares, and the maximum amount that may be paid under a cash award pursuant to the Plan to any one participant during any calendar year is $2,000,000. In addition, the total grant date fair value of equity-based awards granted to a non-employee director for services as a non-employee director during any calendar year, taken together with any cash fees paid during such calendar year to such non-employee director for services as a non-employee director, may not exceed $500,000.
Awards
The Plan provides for the grant of stock options, including ISOs and nonqualified stock options (“NSOs”), SARs, restricted stock, restricted stock units (“RSUs”), other stock or cash-based awards and dividend equivalents. Certain awards under the Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Internal Revenue Code (the “Code”), which may impose additional requirements on the terms and conditions of such awards. All awards under the Plan will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards will generally be settled in shares of our common stock, but the plan administrator may provide for cash settlement of any award.
Stock Options. Stock options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. The exercise price of a stock option may not be less than 100% of the fair market value of the underlying share on the date of grant (or 110% in the case of ISOs granted to certain significant shareholders), except with respect to certain substitute options granted in connection with a corporate transaction. The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant shareholders). Vesting conditions determined by the plan administrator may apply to stock options and may include continued service, performance and/or other conditions.
Stock Appreciation Rights. SARs entitle their holder, upon exercise, to receive an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The
2024 Proxy Statement |
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– Proposal No. 2: Approval of Amendment to Equity Incentive Plan –
exercise price of a SAR may not be less than 100% of the fair market value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten years. Vesting conditions determined by the plan administrator may apply to SARs and may include continued service, performance and/or other conditions. SARs under the Plan will be settled in cash or shares of common stock, or in a combination of both, as determined by the administrator.
Restricted Stock. Restricted stock is an award of nontransferable shares of our common stock that remain forfeitable unless and until specified vesting conditions are met. Vesting conditions applicable to restricted stock may be based on continuing service, the attainment of performance goals and/or such other conditions as the plan administrator may determine. In general, restricted stock may not be sold or otherwise transferred until restrictions are removed or expire. Holders of restricted stock will have voting rights and, except with respect to performance vesting awards, will have the right to receive dividends, if any, prior to the time when the restrictions lapse.
Restricted Stock Units. RSUs are contractual promises to deliver shares of our common stock (or the fair market value of such shares in cash) in the future, which may also remain forfeitable unless and until specified vesting conditions are met. RSUs generally may not be sold or transferred until vesting conditions are removed or expire. The shares underlying RSUs will not be issued until the RSUs have vested, and recipients of RSUs generally will have no voting or dividend rights prior to the time the RSUs are settled in shares, unless the RSU includes a dividend equivalent right (in which case the holder may be entitled to dividend equivalent payments under certain circumstances). Delivery of the shares underlying RSUs may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral. On the settlement date or dates, we will issue to the participant one unrestricted, fully transferable share of our common stock (or the fair market value of one such share in cash) for each vested and non-forfeited RSU.
Other Stock or Cash Based Awards. Other stock or cash-based awards are cash payments, cash bonuses awards, stock payments, stock option awards, performance awards or incentive awards that are paid in cash, shares of common stock or a combination of both. Such awards may include, without limitation, deferred stock, deferred stock units, performance awards, retainers, committee fees and meeting-based fees. The plan administrator will determine the terms and conditions of other stock or cash-based awards, which may include vesting conditions based on continued service, performance and/or other conditions.
Dividend Equivalents. Dividend equivalents represent the right to receive the equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents are credited as of dividend payments dates during the period between a specified date and the date such award terminates or expires, as determined by the plan administrator. In addition, dividend equivalents with respect to shares covered by a performance award will only be paid to the participant at the same time or times and to the same extent that the vesting conditions, if any, are subsequently satisfied and the performance award vests with respect to such shares.
Performance Awards
Any award may be granted as a performance award, meaning that the award will be subject to vesting and/or payment based on the attainment of specified performance goals.
Certain Transactions
The plan administrator has discretion to take action under the Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events
2024 Proxy Statement |
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– Proposal No. 2: Approval of Amendment to Equity Incentive Plan –
affecting our common stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations and other corporate transactions. In addition, in the event of certain non-reciprocal transactions with our shareholders known as “equity restructurings,” the plan administrator will make equitable adjustments to the Plan and outstanding awards.
In the event that a successor corporation in a change in control of the Company and its parents and subsidiaries refuses to assume or substitute for any award granted under the Plan, such award generally will become fully vested and exercisable, as applicable, and will be deemed exercised, immediately prior to the change in control, and all forfeiture or other restrictions on such awards will lapse. However, the vesting of any performance awards not assumed in a change in control will vest pursuant to the terms and conditions of the applicable award agreement. If an award vests and is exercised in lieu of assumption or substitution in connection with a change in control, the plan administrator will notify the participant of such vesting and any applicable exercise period, and the award will terminate upon the change in control. In addition, in the event that, within 12 months after a change in control, a participant is terminated by the Company other than for “cause” or resigns for “good reason” (each, as defined in the Plan), then the vesting and, if applicable, exercisability of 100% of the then-unvested shares subject to his or her outstanding awards will accelerate upon the date of such termination.
Claw-Back Provisions, Transferability, and Participant Payments
Awards granted under the Plan will be subject to the provisions of the Company’s Compensation Recoupment (Clawback) Policy. With limited exceptions for estate planning, domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the Plan are generally non-transferable prior to vesting, and are exercisable only by the participant, unless otherwise provided by the plan administrator. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the Plan, the plan administrator may, in its discretion, accept cash or check, shares of our common stock that meet specified conditions, shares issuable pursuant to an award, a “market sell order” or such other consideration as it deems suitable.
Plan Amendment and Termination; Repricing Without Shareholder Approval Prohibited
Our Board of Directors may amend or terminate the Plan at any time; however, except in connection with certain changes in our capital structure, shareholder approval will be required for any amendment that increases the aggregate number of shares available under the Plan or any individual award limit under the Plan, “reprices” any stock option or SAR, or cancels any stock option or SAR in exchange for cash or another award when the option or SAR price per share exceeds the fair market value of the underlying shares. In addition, no amendment, suspension or termination of the Plan may, without the consent of the affected participant, impair any rights or obligations under any previously-granted award, unless the award itself otherwise expressly so provides. No award may be granted pursuant to the Plan after the tenth anniversary of the earlier of the date the Plan was initially adopted by our Board of Directors or the date the Plan was approved by the Company’s shareholders.
Material U.S. Federal Income Tax Consequences
The following is a brief description of the principal United States federal income tax consequences related to awards under the Plan. This summary deals with the general federal income tax principles that apply and is provided only for general information. Some kinds of taxes, such as state, local and foreign income taxes and federal employment taxes, are not discussed. This summary is not intended as tax advice to participants, who should consult their own tax advisors.
Non-Qualified Stock Options. For federal income tax purposes, if participants are granted non-qualified stock options under the Plan, participants generally will not have taxable income on the grant of the option, nor will we be entitled to any deduction. Generally, on exercise of non-qualified stock options, participants will recognize ordinary income, and we will be entitled to a deduction, in an amount equal to
2024 Proxy Statement |
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– Proposal No. 2: Approval of Amendment to Equity Incentive Plan –
the difference between the option exercise price and the fair market value of the common stock on the date of exercise. The basis that participants have in shares of common stock, for purposes of determining their gain or loss on subsequent disposition of such shares of common stock generally, will be the fair market value of the shares of common stock on the date the participants exercise their options. Any subsequent gain or loss will be generally taxable as capital gains or losses.
Incentive Stock Options. There is no taxable income to participants when participants are granted an incentive stock option or when that option is exercised. However, the amount by which the fair market value of the shares of common stock at the time of exercise exceeds the option price will be an “item of adjustment” for participants for purposes of the alternative minimum tax. Gain realized by participants on the sale of an incentive stock option is taxable at capital gains rates, and no tax deduction is available to us, unless participants dispose of the shares of common stock within (1) two years after the date of grant of the option or (2) within one year of the date the shares of common stock were transferred to the participant. If the shares of common stock are sold or otherwise disposed of before the end of the one-year and two-year periods specified above, the difference between the option exercise price and the fair market value of the shares of common stock on the date of the option’s exercise (or the date of sale, if less) will be taxed at ordinary income rates, and we will be entitled to a deduction to the extent that participants must recognize ordinary income. If such a sale or disposition takes place in the year in which participants exercise their options, the income such participants recognize upon sale or disposition of the shares of common stock will not be considered income for alternative minimum tax purposes.
Incentive stock options exercised more than three months after a participant terminates employment, other than by reason of death or disability, will be taxed as a non-qualified stock option, and the participant will have been deemed to have received income on the exercise taxable at ordinary income rates. We will be entitled to a tax deduction equal to the ordinary income, if any, realized by the participant.
Other Awards. The current federal income tax consequences of other awards authorized under the Plan generally follow certain basic patterns: SARs are taxed and deductible in substantially the same manner as nonqualified stock options; nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid, if any, only at the time the restrictions lapse (unless the recipient elects, with our approval, to accelerate recognition as of the date of grant); RSUs, stock-based performance awards and other types of awards are generally subject to income tax at the time of payment, vesting or settlement based on the fair market value of the award on that date. Compensation otherwise effectively deferred will generally be subject to income taxation when paid. In each of the foregoing cases, we will generally have a corresponding deduction at the time the participant recognizes income, subject to Section 162(m) limitations.
Section 409A of the Code
Certain types of awards under the Plan may constitute, or provide for, a deferral of compensation subject to Section 409A of the Code. Unless certain requirements set forth in Section 409A of the Code are complied with, holders of such awards may be taxed earlier than would otherwise be the case (e.g., at the time of vesting instead of the time of payment) and may be subject to an additional 20% penalty tax (and, potentially, certain interest penalties and additional state taxes). To the extent applicable, the Plan and awards granted under the Plan are intended to be structured and interpreted in a manner intended to either comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance that may be issued under Section 409A of the Code. To the extent determined necessary or appropriate by the plan administrator, the 2016 Plan and applicable award agreements may be amended to further comply with Section 409A of the Code or to exempt the applicable awards from Section 409A of the Code.
2024 Proxy Statement |
– 57 – |
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– Proposal No. 2: Approval of Amendment to Equity Incentive Plan –
Plan Benefits
All future grants of awards under the Plan are subject to the discretion of the plan administrator and it is not possible to determine the benefits that will be received in the future by participants in the Plan. Please refer to the Grant of Plan-Based Awards Table on page 36 for information on awards granted in 2023 under the Plan to certain of the Company’s named executive officers. The equity grant program for our non-employee directors is described on page 19 under the Director Compensation section of this Proxy Statement.
Equity Award Grants Under the Prior Plan Since Inception
The following table sets forth summary information concerning the number of shares of our common stock subject to awards granted under the Plan to our named executive officers, directors and employees since the Incentive Plan’s inception through April 22, 2024 (the closing stock price of our common stock as of April 22, 2024 was $46.55 per share):
As described above, the plan administrator has the discretion to grant awards under the Plan, and it is not possible to determine the amounts of awards that will be granted in the future to participants under the Plan.
Name |
|
Stock Option Grants (#) |
|
|
Restricted Stock Awards (#) |
|
|
Restricted Stock Units (#) |
|
|
Performance Stock Units (#) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Thomas G. Frinzi |
|
|
231,116 |
|
|
|
4,729 |
|
|
|
162,194 |
|
|
|
74,389 |
|
Patrick F. Williams |
|
|
68,689 |
|
|
|
— |
|
|
|
63,746 |
|
|
|
61,232 |
|
Scott Barnes |
|
|
155,700 |
|
|
|
— |
|
|
|
64,529 |
|
|
|
39,735 |
|
Warren Foust |
|
|
59,533 |
|
|
|
— |
|
|
|
44,856 |
|
|
|
24,525 |
|
Keith Holliday |
|
|
226,589 |
|
|
|
— |
|
|
|
116,964 |
|
|
|
38,369 |
|
All current executive officers as a group |
|
|
839,698 |
|
|
|
4,729 |
|
|
|
524,285 |
|
|
|
274,264 |
|
Arthur C. Butcher |
|
|
1,163 |
|
|
|
649 |
|
|
|
— |
|
|
|
— |
|
Stephen C. Farrell |
|
|
79,653 |
|
|
|
8,991 |
|
|
|
921 |
|
|
|
— |
|
Wei Jiang |
|
|
— |
|
|
|
1,299 |
|
|
|
1,061 |
|
|
|
— |
|
Aimee S. Weisner |
|
|
5,765 |
|
|
|
3,417 |
|
|
|
3,697 |
|
|
|
— |
|
Elizabeth Yeu |
|
|
15,091 |
|
|
|
355 |
|
|
|
— |
|
|
|
— |
|
K. Peony Yu |
|
|
10,426 |
|
|
|
2,786 |
|
|
|
— |
|
|
|
— |
|
Lilian Y. Zhou |
|
|
2,686 |
|
|
|
1,477 |
|
|
|
— |
|
|
|
— |
|
All current directors who are not executive officers as a group |
|
|
114,784 |
|
|
|
18,974 |
|
|
|
5,679 |
|
|
|
— |
|
Each associate of any executive officers, director nominees or directors |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Each other person who received or is to receive 5 percent of such options, warrants or rights |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
All employees, including all current officers who are not executive officers, as a group |
|
|
15,378,609 |
|
|
|
329,822 |
|
|
|
1,939,173 |
|
|
|
351,444 |
|
2024 Proxy Statement |
– 58 – |
|
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors, on the recommendation of the Audit Committee, has approved the selection of BDO USA, P.C. to serve as our independent registered public accounting firm for the fiscal year ending December 27, 2024.
Although this appointment is not required to be submitted to a vote of the shareholders, the Audit Committee believes it is appropriate as a matter of good corporate governance to request that the shareholders ratify the appointment. If the shareholders do not ratify the appointment, which requires the affirmative vote of the holders of a majority of the voting power of the shares of the common stock present or by proxy, and entitled to vote on such proposal, the Board of Directors will consider the selection of another independent registered public accounting firm, but may still appoint BDO USA, P.C. if it determines that doing so is in the best interests of the Company and its shareholders. Even if shareholders ratify the appointment, the Board of Directors may exercise its discretion to select another firm if doing so is in the best interests of the Company and its shareholders.
Representatives of BDO USA, P.C., which served as the independent registered public accounting firm for STAAR for fiscal year 2023, have been invited to attend the Annual Meeting. STAAR expects representatives of BDO to be available at the Annual Meeting, where they will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.
Principal Accountant Fees and Services
The following table summarizes the aggregate fees for professional services provided by BDO USA, P.C. related to fiscal year 2023 and fiscal year 2022, all of which the Audit Committee pre-approved:
|
|
2023 |
|
|
2022 |
|
||
|
|
|
|
|
|
|
||
Audit Fees(1) |
|
$ |
1,798,514 |
|
|
$ |
1,365,849 |
|
Audit-Related Fees(2) |
|
|
— |
|
|
|
29,000 |
|
Tax Fees |
|
|
— |
|
|
|
— |
|
All Other Fees |
|
|
— |
|
|
|
— |
|
2024 Proxy Statement |
– 59 – |
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– Proposal No. 3: Ratification of Independent Registered Public Accounting Firm –
The Audit Committee administers STAAR’s engagement of BDO USA, P.C. and pre-approves all audit and permissible non-audit services on a case-by-case basis. In approving non-audit services, the Audit Committee considers whether the engagement could compromise the independence of BDO USA, P.C. and whether, for reasons of efficiency or convenience, it is in the best interest of STAAR to engage its independent registered public accounting firm to perform the services. The Audit Committee has determined that performance by BDO USA, P.C. of the non-audit services related to the fees shown in the table above did not affect that firm’s independence. BDO USA, P.C. does not currently provide any non-attest services.
Prior to engagement, the Audit Committee pre-approves all independent auditor services, and the Audit Committee pre-approved all fees and services of BDO USA, P.C., for work done in 2023 and 2022. The fees are budgeted and the Audit Committee requires the independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval categories. In those instances, the Audit Committee requires specific pre-approval before engaging the independent registered public accounting firm. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.
|
|
|
|
|
|
STAAR’s Board of Directors unanimously recommends a vote “FOR” the ratification of BDO USA, P.C. as our independent registered public accounting firm for the fiscal year ending December 27, 2024. |
|
|
|
|
|
|
|
|
2024 Proxy Statement |
– 60 – |
|
PROPOSAL NO. 4
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Background to the Advisory Vote
Pursuant to Section 14A of the Exchange Act, we are providing our shareholders the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this Proxy Statement (a “say-on-pay” vote). We currently solicit this vote on an annual basis. In an advisory vote at the 2023 Annual Meeting, shareholders representing over 95% of the votes cast on the proposal approved the compensation of our named executive officers. The Compensation Committee believes this affirms shareholders’ support of our approach to executive compensation.
Board of Directors Recommendation
As stated in our Compensation Discussion and Analysis, our compensation program is designed to reward our executives for meeting or exceeding corporate financial and non-financial goals and also individual objectives.
The Board of Directors believes that STAAR has been able to attract and retain personnel with a high level of professional skill and experience partly because of the value its executives have placed on the potential growth in value of their equity compensation if their efforts to improve STAAR’s business succeed.
In 2023, we continued to award a significant proportion of our named executive officers’ total compensation in the form of variable, at-risk compensation, either through annual performance-based cash incentives or equity awards.
The Board of Directors invites you to review carefully the Compensation Discussion and Analysis beginning on page 25, before voting to approve the compensation of our named executive officers on the following resolution:
“Resolved, that the shareholders of STAAR Surgical Company (“STAAR”) approve, on an advisory basis, the compensation of STAAR’s named executive officers, including STAAR’s compensation practices and principles and their implementation, as discussed and disclosed in the Compensation Discussion and Analysis, the compensation tables, and any narrative executive compensation disclosure contained in STAAR’s 2024 Proxy Statement.”
While the vote does not bind the Board of Directors to any particular action, the Board of Directors and the Compensation Committee value the input of the shareholders and will take into account the outcome of this vote in considering future compensation arrangements. We currently hold an annual say-on-pay advisory vote, and our next advisory vote on executive compensation following this vote will be held at our 2025 Annual Meeting of Shareholders.
|
|
|
|
|
|
STAAR’s Board of Directors unanimously recommends a vote “FOR” the approval, on an advisory basis, of the compensation of our named executive officers. |
|
|
|
|
|
|
|
|
2024 Proxy Statement |
– 61 – |
|
ANNUAL REPORT ON FORM 10-K
Our Annual Report on Form 10-K for the fiscal year ended December 29, 2023, which contains our consolidated financial statements of STAAR for that period, accompanies this proxy statement but is not a part of our soliciting materials.
We will provide shareholders, without charge, a copy of our Annual Report on Form 10-K for the fiscal year ended December 29, 2023, if the shareholder submits a written request to STAAR Surgical Company, c/o Office of the Corporate Secretary, 25651 Atlantic Ocean Drive, Lake Forest, California, 92630. Exhibits to the Form 10-K will be provided on written request of any shareholder, subject to reimbursement of STAAR’s reasonable expenses. Exhibits are available at no charge on the SEC’s website, www.sec.gov. STAAR’s Annual Report on Form 10-K is also available on STAAR’s website at www.staar.com. This website reference is not intended to function as a hyperlink and the information contained on STAAR’s website, wherever referenced, is not a part of this Proxy Statement.
By Order of the Board of Directors, STAAR Surgical Company |
|
|
Nathaniel Sisitsky, Esq. |
General Counsel and Corporate Secretary |
Lake Forest, California |
April 24, 2024 |
2024 Proxy Statement |
– 62 – |
|
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Q: |
Why are you providing this Proxy Statement? |
A: |
The Board of Directors is soliciting your proxy to vote at the Annual Meeting because you were a shareholder at the close of business on April 22, 2024—the “Record Date” for the Annual Meeting—and as such you are entitled to vote at the meeting. STAAR has made the Proxy Statement and related materials available to you on the Internet, in connection with this solicitation. |
Q: |
When and where is the Annual Meeting? Can I attend in person? |
A: |
The Annual Meeting will be held as a live audio webcast via the internet. You will not be able to attend the Annual Meeting in person. |
|
Meeting Date: |
Meeting Time: |
Meeting Place: |
Q: |
What is the purpose of the Annual Meeting? |
|
Stockholders are being asked to vote on each of the following proposals at the Annual Meeting: |
|
Proposal 1—Elect seven director nominees |
|
Proposal 2—Approve an amendment to the Company’s Amended and Restated Omnibus Equity Incentive Plan |
|
Proposal 3—Ratify the appointment of the Company’s independent registered public accounting firm |
|
Proposal 4—Approve on a non-binding advisory basis the compensation of the Company’s named executive officers (“say-on-pay”) |
Q: |
What is included in the proxy materials that I should read? |
A: |
The proxy materials include the following: |
|
• Notice of Annual Meeting of Shareholders; • Proxy Statement; and • our Annual Report on Form 10-K for the year ended December 29, 2023. |
Q: |
What is the voting requirement to elect the directors and to approve each of the proposals? |
A: |
The vote required for each proposal is as follows: For Proposal No. 1, the seven persons receiving the highest number of affirmative votes will be elected as directors. Votes withheld and broker non-votes will have no effect on this proposal. Although directors may be elected by a plurality, directors who do not receive a majority of votes cast are required to tender their resignations in accordance with STAAR’s Director Resignation Policy (described further on page 11). |
2023 Proxy Statement |
– 63 – |
|
– Questions and Answers About the Annual Meeting and Voting –
|
For Proposal No. 2, the amendment of the Company’s Amended and Restated Omnibus Equity Incentive Plan requires the affirmative vote of a majority of voting power present in person or by proxy and entitled to vote on the proposal. Abstentions have the same effect of a vote “AGAINST” this proposal. Broker non-votes will have no effect on this proposal. For Proposal No. 3, the ratification of the appointment of BDO USA, P.C. as the Company’s independent registered public accounting firm requires the affirmative vote of a majority of voting power present in person or by proxy and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” this proposal. We do not expect there to be any broker non-votes on this proposal. For Proposal No. 4, the approval on a non-binding advisory basis of the compensation of the Company’s named executive officers requires the affirmative vote of a majority of voting power present in person or by proxy and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will have no effect on this proposal. |
Voting |
Board Recommendation |
Voting |
Treatment of Abstentions & Broker Non-Votes |
1. Election of directors |
For each nominee |
Plurality |
Votes withheld and broker non-votes have no effect |
2. Amendment of equity plan |
For |
Majority of votes present in person or by proxy and entitled to vote thereon |
Abstentions have the effect of a vote against; brokers non-votes have no effect |
3. Ratification of auditors |
For |
Majority of votes present in person or by proxy and entitled to vote thereon |
Abstentions have the effect of a vote against; brokers are expected to be able to vote in their discretion |
4. Compensation of named executive officers (“say-on-pay”) |
For |
Majority of votes present in person or by proxy and entitled to vote thereon |
Abstentions have the effect of a vote against; broker non-votes have no effect |
Q: |
What are “broker non-votes”? |
A: |
If a beneficial owner who holds shares in “street name” through a broker, bank or other nominee fails to give voting instructions to such broker, bank or other nominee for any matters submitted to shareholders at the 2024 Annual Meeting, such broker, bank or other nominee will be able to vote the beneficial owner’s shares on routine proposals, but may not vote the shares on non-routine proposals. Proposal Nos. 1, 2, and 4 are expected to be considered non-routine matters and consequently, brokers are not expected to be able to vote uninstructed shares on these proposals. Proposal No. 3 is expected to be considered a routine matter and consequently, brokers are expected to be able to vote uninstructed shares on this proposal. When a broker, bank or other nominee votes a client’s shares on routine proposals, those shares are counted for purposes of establishing a quorum for the meeting and for purposes of determining whether a routine proposal is approved, but they will not be counted toward the approval of non-routine proposals as to which brokers, banks and other nominees are not entitled to vote. These missing votes with respect to such non-routine proposals are called “broker non-votes.” Note that whether a proposal is considered routine or non-routine is subject to stock exchange rules and final determination by the stock exchange. Even with respect to routine matters, some brokers are choosing not to exercise discretionary voting authority. As a result, we urge you to direct your broker how to vote your shares on all proposals to ensure that your vote is counted. |
Q: |
What is the difference between holding shares as a shareholder of record and as a beneficial owner? |
A: |
If your shares of STAAR common stock are registered directly in your name with STAAR’s transfer agent, Equiniti Trust Company (formerly American Stock Transfer & Trust Company), you are a shareholder of record with respect to those shares. |
2024 Proxy Statement |
– 64 – |
|
– Questions and Answers About the Annual Meeting and Voting –
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If you hold shares in a stock brokerage account or through a bank, broker or other nominee, you are considered the “beneficial owner” of shares held in street name. As the beneficial owner, you have the right to instruct your broker, bank or nominee how to vote your shares by the various methods described below. |
Q: |
How do I vote before the Annual Meeting? |
A: |
There are three ways to vote before the meeting: • By Internet. If you have Internet access, we encourage you to submit a proxy to vote on www.proxyvote.com by following instructions on the proxy card or Notice of Internet Availability of Proxy Materials. If you are a beneficial owner, the availability of online voting may depend on the voting procedures of the organization that holds your shares. • By telephone. If you received your proxy material by mail, you may vote by making a toll-free telephone call from the U.S. or Canada to 1-800-690-6903. If you are a beneficial owner, the availability of phone voting may depend on the voting procedures of the organization that holds your shares. • By mail. You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. Please see the instructions for making such a request on the Notice of Availability of Proxy Materials. |
Q: |
How can I vote during the Annual Meeting? |
A: |
You may vote during the Annual Meeting by going to www.virtualshareholdermeeting.com/STAA2024 and following the instructions on the Annual Meeting website. If you are a shareholder of record, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card to attend and vote during the Annual Meeting. If you are a beneficial owner who holds shares in “street name” through a broker, bank or other nominee and your voting instruction form or Notice of Internet Availability of Proxy Materials indicates that you may vote those shares through the http://www.proxyvote.com website, then you may attend and vote during the Annual Meeting using the 16-digit control number included on that instruction form or notice. Otherwise, beneficial owners should contact their broker, bank or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a "legal proxy" in order to be able to attend and participate in the Annual Meeting. |
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The Board of Directors recommends that you grant a proxy via the Internet, telephone or by mail prior to the Annual Meeting in case you are later unable to vote yourself during the Annual Meeting to ensure that your shares will be represented and voted. All properly executed and valid proxies will be voted at the annual meeting in accordance with the instructions provided by the shareholder granting the proxy. If you are a shareholder of record and submit a properly executed proxy but do not indicate your voting instructions, your shares will be voted as recommended by the Board of Directors in this Proxy Statement. If any matters not described in this Proxy Statement are properly presented at the Annual Meeting, the proxy holders will determine how to vote your shares. If the Annual Meeting is postponed or adjourned, the proxy holders can vote your shares at the new meeting date, unless you properly revoke your proxy prior to such time as described below. |
Q: |
How many votes do I have? |
A: |
You are entitled to one vote for each share of common stock that you hold. |
Q: |
Can I cumulate votes for the election of directors? |
A: |
No, STAAR’s Certificate of Incorporation does not provide for cumulative voting for the election of directors. This means you have one vote for each share entitled to vote at the Annual Meeting for each of the seven seats subject to election. |
2024 Proxy Statement |
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– Questions and Answers About the Annual Meeting and Voting –
Q: |
What can I do if I change my mind after I submit a proxy to vote my shares? |
A: |
If you change your mind after you submit your proxy to vote your shares, you can revoke your proxy before the Annual Meeting by any of the following methods: • By submitting a later-dated proxy with revised voting instructions over the Internet, by telephone or by mail before the shares are voted at the meeting (provided that proxies submitted over the Internet or by telephone will only be accepted until 11:59 p.m. on June 19, 2024)—only your last valid proxy will be counted. • By delivering a written notice to STAAR’s Corporate Secretary at any time before your proxy is voted at the Annual Meeting revoking your proxy. Such notices should be mailed to the following address: Office of the Corporate Secretary, STAAR Surgical Company, 25651 Atlantic Ocean Drive, Lake Forest, California, 92630. • By attending the Annual Meeting and voting electronically during the Annual Meeting. For information about voting during the Annual Meeting, please refer to the answer under the question “How can I vote during the Annual Meeting?” Simply attending the Annual Meeting will not, by itself, revoke your proxy. • If you are a beneficial holder, you may submit new voting instructions by contacting your broker, bank or nominee. You may also vote electronically during the Annual Meeting, as discussed above. |
Q: |
Who will count the vote? |
A: |
An automated system independently maintained by Broadridge Financial Solutions, Inc. will tabulate the vote and submit the results to officers of STAAR who will be designated as the inspectors of election. |
Q: |
What constitutes a quorum? |
A: |
As of the Record Date, 49,131,110 shares of common stock of STAAR were issued and outstanding. A majority of the outstanding shares, or 24,565,556 shares, present or represented by proxy, constitutes a quorum for the purpose of electing directors and adopting proposals at the Annual Meeting. Shareholders of record that submit a properly executed and valid proxy will have their shares counted towards the quorum. Shares voted on any Proposal, including abstentions, are also included in establishing a quorum. |
Q: |
Who can attend the Annual Meeting? |
A: |
Any shareholder as of the Record Date may attend the Annual Meeting. On the day of the Annual Meeting, shareholders or their legal proxy holders must visit www.virtualshareholdermeeting.com/STAA2024 to attend and participate in the Annual Meeting, including to vote and submit questions on proposals during the meeting. Shareholders will need the control number found on their proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials they previously received, or otherwise provided to them by the broker, bank or other nominee who holds their shares, to submit questions, vote or examine the shareholder list at the Annual Meeting. |
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Shareholders may submit questions during the Annual Meeting. Questions may be submitted during the Annual Meeting at www.virtualshareholdermeeting.com/STAA2024. We will try to answer as many questions as possible during the time scheduled. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or company business. If we receive substantially similar questions, we may group the questions together and provide a single response to avoid repetition. Additional information regarding the question-and-answer process will be available in the Rules and Procedures for the Conduct of STAAR Surgical Company’s 2024 Annual Meeting, which will be posted at the virtual Annual Meeting website during the Annual Meeting. |
2024 Proxy Statement |
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– Questions and Answers About the Annual Meeting and Voting –
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If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the login page for the Annual Meeting. |
Q: |
What authority does my broker have to vote my shares? |
A: |
If you are a beneficial owner holding your shares through a broker, bank or other nominee, and you do not submit voting instructions to your broker, bank or nominee, the broker, bank or other nominee has the ability to vote your shares at the Annual Meeting on matters that are defined as “routine” under applicable rules. We expect that the ratification of the selection of BDO USA, P.C. to serve as our independent registered public accountants will be considered a routine matter. We do not expect that any of the other proposals at the Annual Meeting will be considered routine and that therefore your broker, bank or other nominee will not have authority to vote on such proposals without your instruction. Note that whether a proposal is considered routine or non-routine is subject to stock exchange rules and final determination by the stock exchange. |
Q: |
What happens if a nominee for director is unable to serve? |
A: |
If a nominee becomes unavailable for election—a circumstance we do not expect—the Proxy holders may vote for a substitute nominee designated by the Board of Directors, unless the Board of Directors decides to decrease the size of the Board. |
Q: |
When are shareholder proposals submitted for inclusion in the proxy statement due for the 2025 Annual Meeting? |
A: |
If a shareholder seeks to include a proposal in the proxy statement for STAAR’s 2024 Annual Meeting, our Corporate Secretary must receive the proposal at our offices at 25651 Atlantic Ocean Drive, Lake Forest, California, 92630 no later than December 25, 2024 in a form that complies with the regulations of the Securities and Exchange Commission (the “SEC”). If we advance or delay the date of the 2025 Annual Meeting more than 30 days from the anniversary date of the 2024 Annual Meeting, shareholder proposals intended to be included in the proxy statement for the 2025 Annual Meeting must be received by us within a reasonable time before STAAR begins to print and mail the proxy statement for the 2025 Annual Meeting. If we determine that the date of the 2025 Annual Meeting will be advanced or delayed by more than 30 days from the anniversary date of the 2024 Annual Meeting, we will disclose the change in the earliest practicable Annual Report on Form 10-K, Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. |
Q: |
Can shareholders propose individuals to be considered as nominees and other business to be considered for the 2025 Annual Meeting, but not included in the proxy statement? |
A: |
Our Bylaws provide that, subject to certain defined exceptions, shareholders may nominate candidates for the Board of Directors or present other business at our annual meeting if they have given timely notice to the Corporate Secretary of STAAR, at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. To be timely, a shareholder’s notice nominating a candidate for the 2025 Annual Meeting must be delivered to the Corporate Secretary of STAAR at our offices at 25651 Atlantic Ocean Drive, Lake Forest, California, 92630 no earlier than February 20, 2025, and no later than March 22, 2025. Shareholders are advised to review the Bylaws, which contain additional requirements with respect to advance notice of nominations and shareholder proposals. |
Q: |
Who bears the costs of soliciting proxies? |
A: |
STAAR will bear the costs of this solicitation, including the expense of preparing, printing, assembling and mailing this Proxy Statement and any other material used in this solicitation of Proxies. We expect officers and regular employees of STAAR to communicate with shareholders, banks, brokerage houses, custodians, nominees and others by telephone, facsimile, email or in person to request that Proxies be furnished. No additional compensation will be paid for these services. We will reimburse banks, brokerage firms and other persons representing beneficial |
2024 Proxy Statement |
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– Questions and Answers About the Annual Meeting and Voting –
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owners of common stock for their reasonable out-of-pocket expenses in forwarding solicitation materials to the beneficial owners. |
Q: |
Will other business be presented at the Annual Meeting? |
A: |
As of the date of this Proxy Statement, the Board of Directors knows of no business to be presented for consideration at the Annual Meeting other than those matters described in the Notice of Annual Meeting of Shareholders. If, however, other matters are properly brought before the Annual Meeting, including a motion to adjourn the Annual Meeting to another time or place in order to solicit additional proxies in favor of the recommendations of the Board of Directors, the Proxy holders intend to vote the shares represented by the Proxies on such matters in accordance with the recommendation of the Board of Directors, and the authority to do so is included in the Proxy. |
Q: |
Can I obtain copies of the Board committee charters and other governance documents on STAAR’s website? |
A: |
STAAR’s website home page is http://staar.com. In the Investor Information—Corporate Governance area of the website you can find the following information: • Audit Committee Charter; • Compensation Committee Charter; • Nominating and Governance Committee Charter; • Code of Business Conduct and Ethics; and • Guidelines on Significant Corporate Governance Issues. |
Q: |
What is “householding”? |
A: |
To reduce the expense of delivering duplicate proxy materials to shareholders who may have more than one account holding STAAR common stock but who share the same address, we have adopted a procedure approved by the SEC called “householding.” Under this procedure, certain shareholders of record who have the same address and last name will receive only one copy of our Annual Report on Form 10-K and proxy statement that are delivered until such time as one or more of these shareholders notify us that they want to receive separate copies. This procedure reduces duplicate mailings and saves printing costs and postage fees, as well as natural resources. Shareholders who participate in householding will continue to have access to and utilize separate proxy voting instructions. |
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If you receive a single set of proxy materials as a result of householding, and you would like to have separate copies of our Annual Report on Form 10-K and/or Proxy Statement mailed to you, please submit a request, either in writing or by phone, by contacting us in writing at Office of the Corporate Secretary, STAAR Surgical Company, 25651 Atlantic Ocean Drive, Lake Forest, California 92630, or calling us at (626) 303-7902, and we will promptly send you what you have requested. You can also contact our Corporate Secretary at the address or telephone number noted previously if you received multiple copies of the annual meeting materials and would prefer to receive a single copy in the future, or if you would like to opt out of householding for future mailings. |
Q: |
Where can I find the voting results of the Annual Meeting? |
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We intend to announce preliminary voting results at the Annual Meeting and publish the final results by filing a Current Report on Form 8-K with the SEC within four business days after the Annual Meeting. |
2024 Proxy Statement |
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APPENDIX 1
AMENDMENT NO. 1 TO THE
STAAR SURGICAL COMPANY
AMENDED AND RESTATED OMNIBUS EQUITY INCENTIVE PLAN
This Amendment No. 1 (the “Amendment”) to the STAAR Surgical Company Amended and Restated Omnibus Equity Incentive Plan (the “Plan”) is adopted by the Board of Directors (“Board”) of STAAR Surgical Company, a Delaware corporation (the “Company”) on March 28, 2024. This Amendment will become effective upon approval by the Company’s shareholders at the Company’s 2024 annual meeting of shareholders.
WHEREAS, the Plan was last approved by the Company’s shareholders on June 15, 2023.
WHEREAS, the Board desires to amend the Plan, subject to approval of the Company’s shareholders, to increase the number of shares of Company common stock available for issuance thereunder; and
WHEREAS, if the Company’s stockholders fail to approve this Amendment, the existing Plan shall continue in full force and effect.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Section 3.1(a) of the Plan is hereby deleted and replaced in its entirety with the following:
“Subject to Sections 3.1(b) and 12.2, the aggregate number of Shares which may be issued or transferred pursuant to Awards (including, without limitation, Incentive Stock Options) under the Plan is 22,805,000. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market. Notwithstanding the foregoing, the aggregate number of Shares available for issuance under the Plan shall be reduced by two Shares for each Share delivered in settlement of any Full Value Award granted on or after the Effective Date.”
2. Except as expressly set forth in this Amendment, all other terms and conditions of the Plan shall remain in full force and effect.
APPENDIX 2
STAAR SURGICAL COMPANY
AMENDED AND RESTATED OMNIBUS EQUITY INCENTIVE PLAN
PURPOSE
The purpose of the STAAR Surgical Company Amended and Restated Omnibus Equity Incentive Plan (as it may be amended or restated from time to time, the “Plan”) is to promote the success and enhance the value of STAAR Surgical Company (the “Company”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. This Plan constitutes an amendment and restatement of the STAAR Surgical Company Amended and Restated Omnibus Equity Incentive Plan (the “Original Plan”), which was last approved by the Company’s stockholders on July 30, 2020.
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.
Notwithstanding the foregoing, the following transactions shall not constitute a Change in Control for purposes of the Plan: (i) any acquisition by the Company or any of its Subsidiaries; or (ii) any transaction (x) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction; (y) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity, provided, however, that no person or group shall be treated for purposes of this clause (y) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction and (z) any transaction after which at least a majority of the members of the board of directors (or the analogous governing body) of the Successor Entity were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such transaction.
Further notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or any portion of an Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
Appendix 2 - 2
Appendix 2 - 3
Appendix 2 - 4
Appendix 2 - 5
Appendix 2 - 6
The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, whether a Termination of Service has occurred, whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of any Program, Award Agreement or otherwise, or as otherwise required by Applicable Law, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then-applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Subsidiary employing or contracting with such Holder ceases to remain a Subsidiary following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).
SHARES SUBJECT TO THE PLAN
Appendix 2 - 7
GRANTING OF AWARDS
Appendix 2 - 8
GRANTING OF OPTIONS AND STOCK APPRECIATION RIGHTS
Appendix 2 - 9
Appendix 2 - 10
EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS
AWARD OF RESTRICTED STOCK
Appendix 2 - 11
AWARD OF RESTRICTED STOCK UNITS
Appendix 2 - 12
AWARD OF OTHER STOCK OR CASH BASED AWARDS AND DIVIDEND EQUIVALENTS
Appendix 2 - 13
ADDITIONAL TERMS OF AWARDS
Appendix 2 - 14
Appendix 2 - 15
Appendix 2 - 16
ADMINISTRATION
Appendix 2 - 17
Appendix 2 - 18
MISCELLANEOUS PROVISIONS
Appendix 2 - 19
Appendix 2 - 20
Appendix 2 - 21
Appendix 2 - 22
Appendix 2 - 23
Appendix 2 - 24
* * * * *
I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of STAAR Surgical Company on April 6, 2023.
* * * * *
I hereby certify that the foregoing Plan was approved by the stockholders of STAAR Surgical Company on June 15, 2023.
Executed on this 15th day of June 2023.
/s/ Samuel J. Gesten
Corporate Secretary
Appendix 2 - 25
APPENDIX 3
NON-GAAP FINANCIAL MEASURES
This Proxy Statement includes information regarding our Adjusted EBITDA per share, which is a performance metric in our executive compensation program. Adjusted EBITDA and Adjusted EBITDA per share are non-GAAP financial measures. Management uses Adjusted EBITDA and Adjusted EBITDA per share in its evaluation of Company operating performance and believes investors will find it useful in evaluating the Company’s operating performance, including cash flow generation, and in analyzing period-to-period financial performance of core business operations and underlying business trends. This non-GAAP financial measure is not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies.
EBITDA is a non-GAAP financial measure, which is calculated by adding interest income and expense, net; provision for income taxes; and depreciation and amortization to net income. In calculating Adjusted EBITDA and Adjusted EBITDA per share, the Company further adjusts for stock-based compensation expense. As stock-based compensation is a non-cash expense that can vary significantly based on the timing, size and nature of awards granted, the Company believes that the exclusion of stock-based compensation expense can assist investors in comparisons of Company operating results with other peer companies because (i) the amount of such expense in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expense can vary significantly between periods as a result of the timing of grants of new stock-based awards, including inducement grants in connection with hiring. Additionally, the Company believes that excluding stock-based compensation from Adjusted EBITDA and Adjusted EBITDA per share assists management and investors in making meaningful comparisons between the Company’s operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future.
The following table contains a reconciliation of Adjusted EBITDA and Adjusted EBITDA per share to Net Income (unaudited, $ in thousands except per share amounts) for the year ended December 29, 2023:
|
|
2023 |
|
|
Net income - (as reported) |
|
$ |
21,347 |
|
Provision (benefit) for income taxes |
|
|
12,349 |
|
Other (income) expense, net |
|
|
(5,599 |
) |
Depreciation |
|
|
5,111 |
|
Amortization of Intangible assets |
|
|
13 |
|
Stock-based compensation |
|
|
23,516 |
|
Adjusted EBITDA |
|
$ |
56,737 |
|
Adjusted EBITDA as a % of Revenue |
|
|
17.6 |
% |
|
|
|
|
|
Net income per share, diluted - (as reported) |
|
$ |
0.43 |
|
Provision (benefit) for income taxes |
|
|
0.25 |
|
Other (income) expense, net |
|
|
(0.11 |
) |
Depreciation |
|
|
0.10 |
|
Amortization of Intangible assets |
|
|
— |
|
Stock-based compensation |
|
|
0.48 |
|
Adjusted EBITDA per share, diluted(1) |
|
$ |
1.15 |
|
|
|
|
|
|
Weighted average shares outstanding - Diluted |
|
|
49,427 |
|
_________
(1) Adjusted EBITDA per diluted share may not add due to rounding.
WITHIN BOX) Date Signature (Joint Owners) Date
STAAR SURGICAL COMPANY 25651 ATLANTIC OCEAN DRIVE LAKE FOREST, CA 92630 ATTN: CORPORATE SECRETARY SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 19, 2024. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/STAA2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 19, 2024. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. V49356-P10789 STAAR SURGICAL COMPANY For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR the following: 1.Election of Directors. Nominees: 01) Arthur C. Butcher 02) Stephen C. Farrell 03) Thomas G. Frinzi 04) Wei Jiang 05) Aimee S. Weisner 06) Elizabeth Yeu, MD 07) Lilian Zhou The Board of Directors recommends you vote FOR proposals 2, 3 and 4. For Against Abstain 2.Approval of an amendment to our Amended and Restated Omnibus Equity Incentive Plan to increase the number of shares reserved for issuance under the plan. 3.Ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm for the year ending December 27, 2024. 4.Non-binding advisory vote to approve the compensation of our named executive officers. NOTE: In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting of Shareholders or any postponement or adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K and Notice and Proxy Statement are available at www.proxyvote.com. V49357-P10789 STAAR SURGICAL COMPANY Annual Meeting of Shareholders June 20, 2024, at 8:30 AM PDT This proxy is solicited by the Board of Directors The undersigned hereby appoints Thomas Frinzi and Nathaniel Sisitsky, and each of them, as proxies for the undersigned, with full power of substitution, to act and to vote all of the shares of common stock of STAAR SURGICAL COMPANY held of record by the undersigned at the close of business on April 22, 2024, at the Annual Meeting or any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations and in accordance with the judgment of the proxy holders on such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. Continued and to be signed on reverse side