Treace Medical Concepts, Inc DEF 14A, filed Apr 7, 2025
Treace Medical Concepts, Inc. (TMCI)
About this DEF 14A
Treace Medical Concepts, Inc filed this DEF 14A on April 7, 2025.
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 ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12 |
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
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No fee required. |
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Fee paid previously with preliminary materials. |
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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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April 7, 2025 |
Dear Fellow Stockholder: You are cordially invited to attend the 2025 Annual Meeting of Stockholders of Treace Medical Concepts, Inc. ("Treace Medical") to be held on Tuesday, May 20, 2025, at 11:00 a.m., Eastern Time. The Annual Meeting will be held via live webcast. You will be able to attend the 2025 Annual Meeting, vote and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/TMCI2025. You may vote your shares before the Annual Meeting by regular mail, telephone or online, or you may vote online during the Annual Meeting. Additional information about the matters to be addressed at the Annual Meeting and how to vote your shares can be found in the accompanying proxy statement. |
2024 Key Accomplishments - Introducing Solutions for All 4 Bunion Classes
At Treace Medical, our goal is to advance the standard of care for the surgical management of bunion and related midfoot deformities. Millions of people suffer from bunions, which can have a significant impact on mobility and quality of life.
In 2024, we executed on our agenda to comprehensively address the evolving needs of surgeons and patients with an expanding portfolio of innovative bunion solutions. Since our inception, we have worked closely with surgeons to understand and serve the large, unmet needs in the bunion market. In 2018, our Surgeon Advisory Board published a peer-reviewed paper describing four different classes of bunion deformities; these include (1) milder bunion deformities, (2) deformities that are more severe in nature, (3) bunions with a co-existing deformity of the midfoot, and (4) bunions with a co-existing arthritic great toe joint.
To address bunions across a broad spectrum of bunion classes, our patented Lapiplasty® System leads the way in both market position and innovation with over 120,000 patients treated since late 2015. To address bunions with a co-existing deformity of the midfoot, we introduced our Adductoplasty® System in 2021. To address mild or moderate bunions, which surgeons may prefer to address with a metatarsal osteotomy, we introduced two systems for osteotomy surgeries in late 2024: (1) the Nanoplasty™ 3D Minimally Invasive Bunion Correction System, and (2) the Percuplasty™ Percutaneous 3D Bunion Correction System. To address bunions with a co-existing arthritic great toe joint, in late 2024, we introduced our SpeedMTP™ System which combines our SpeedPlate™ compressive fixation technology with additive locking screws to provide surgeons with a new option for great toe fusions. We look forward to sharing more product and business developments with our stockholders during 2025.
Culture of Integrity and Focus on Sound Governance
At Treace Medical, we believe a strong culture of integrity and compliance is critically important to building a world-class business. Our board of directors recognize that a key element of this culture is sound corporate governance. More information about our corporate governance practices is included in our proxy statement.
As the Annual Meeting approaches, I wanted to take a moment to thank James T. Treace who will be retiring from our board of directors at the Annual Meeting. Jim has served as chairman of the board of directors since Treace Medical's inception in 2014. His unwavering service and insightful advice has been a meaningful part of the company's operational success.
On behalf of the board of directors, the officers and employees of Treace Medical, I would like to thank our stockholders for their continued support. We look forward to seeing you at the Annual Meeting.
Sincerely, |
John T. Treace, Chief Executive Officer, Director and Founder |
NOTICE OF 2025 ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY given that the 2025 Annual Meeting of Stockholders (the "Annual Meeting") of Treace Medical Concepts, Inc., a Delaware corporation (the "Company"), will be held by means of a virtual webcast at 11:00 a.m., Eastern Time, on Tuesday, May 20, 2025 for the following purposes:
Voting Items |
• To elect two Class I directors to serve for a three-year term of office expiring at the 2028 annual meeting of stockholders and until their respective successors have been duly elected and qualified; |
• To approve, on an advisory, non-binding basis, the compensation of our named executive officers; |
• To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2025; and |
• To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
These proposals are more fully described in the proxy statement following this Notice.
The board of directors of the Company recommends that you vote "FOR" the election of both nominees to serve as Class I directors of the Company, "FOR" the advisory approval of the compensation of our named executive officers, and "FOR" the ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2025.
The board of directors has fixed the close of business on March 24, 2025, as the record date for the determination of the stockholders entitled to notice of, and to vote at, the Annual Meeting. Only stockholders of record at the close of business on that date will be entitled to vote at the Annual Meeting.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL MEETING, WE ENCOURAGE YOU TO READ THE ACCOMPANYING PROXY STATEMENT AND OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED December 31, 2024, AND SUBMIT YOUR PROXY AS SOON AS POSSIBLE USING ONE OF THE THREE CONVENIENT VOTING METHODS DESCRIBED IN THE "QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING" SECTION IN THE PROXY STATEMENT. IF YOU RECEIVE MORE THAN ONE SET OF PROXY MATERIALS OR NOTICE OF INTERNET AVAILABILITY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SIGNED AND SUBMITTED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.
By Order of the Board of Directors,
Scot M. Elder
Chief Legal and Compliance Officer, Corporate Secretary
April 7, 2025
YOUR VOTE IS IMPORTANT.
Please vote via the mail, internet or telephone.
Internet: www.proxyvote.com
Phone: 1-800-690-6903
Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 20, 2025 at 11:00 am ET via live webcast at www.virtualshareholdermeeting.com/TMCI2025.
This proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 are available at http://materials.proxyvote.com/89455T.
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Stockholder Proposals for 2026 Annual Meeting of Stockholders |
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Proposal 3: Ratification of Selection of Independent Registered Public Accounting Firm |
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 20, 2025
ABOUT THE MEETING
We have sent you this proxy statement and the enclosed proxy card because our board of directors (the "Board") is soliciting your proxy for the 2025 Annual Meeting of Stockholders (the "Annual Meeting") of Treace Medical Concepts, Inc., a Delaware corporation (the "Company", "TMCI", "we", "us" or "our") and at any adjournment or postponement of the meeting for the purposes described in this proxy statement and the accompanying Notice of 2025 Annual Meeting of Stockholders.
The Annual Meeting will occur on May 20, 2025 at 11:00 a.m., Eastern Time, in a virtual meeting via live webcast on the internet. If you held shares of our common stock as of the close of business on the record date, March 24, 2025 (the "Record Date"), you are invited to attend the meeting at www.virtualshareholdermeeting.com/TMCI2025 and vote on the proposals described in this proxy statement. There will be no physical meeting location.
In addition to solicitations by mail, our directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, e-mail and personal interviews. We may retain outside consultants to solicit proxies on our behalf as well. All costs of solicitation of proxies will be borne by us. Brokers, custodians and fiduciaries will be requested to forward proxy soliciting material to the beneficial owners of common stock held in their names, and we may reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of proxy materials.
On or about April 7, 2025, we will begin mailing a Notice of Internet Availability of Proxy Materials (the "Internet Notice") to our stockholders. The Internet Notice provides instructions on how to access the proxy materials over the internet, including our proxy statement, Notice of 2025 Annual Meeting of Stockholders, proxy card and our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Annual Report"). The Internet Notice will also describe how to vote by mail, telephone or online and, if desired, how to receive a printed set of proxy materials. If you requested your materials via email, the email contains voting instructions and links to the materials on the internet. In addition, we have provided brokers, dealers, banks, voting trustees, and their nominees, at our expense, with additional copies of our proxy materials and the 2024 Annual Report so that they can supply these materials to the beneficial owners of shares of our common stock as of the Record Date. You may obtain, free of charge, a copy of the 2024 Annual Report (excluding exhibits and documents incorporated by reference) by writing to Treace Medical Concepts, Inc., 100 Palmetto Park Place, Ponte Vedra, FL 32081 Attention: Corporate Secretary or by emailing us at legal@treace.net. Copies of exhibits will be provided upon request. The 2024 Annual Report is also available in the "Financials & Filings" section of our website at https://investors.treace.com.
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2025 PROXY STATEMENT |
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About the Meeting
Questions and Answers about these Proxy Materials and Voting
Why did I receive a Notice of Internet Availability of Proxy Materials in the mail instead of a full set of proxy materials?
Under rules adopted by the Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials over the internet. Accordingly, we have sent you the Internet Notice. The Internet Notice will instruct you as to how you may access and review the proxy materials on the internet and, if desired, how to request a printed set of proxy materials. In addition, by following the instructions in the Internet Notice, you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. We believe that these rules allow us to conserve natural resources and reduce our costs of printing and delivering proxy materials, while providing a convenient method for stockholders to access the materials and vote.
To request that a full set of the proxy materials be sent to your specified postal address, you may use any of these three methods: (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. Please have your proxy card in hand when you access the website or call and follow the instructions provided. Please submit such request by May 6, 2025.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the Notice to ensure that all your shares are voted.
What is the date, time and place of the Annual Meeting?
The Annual Meeting will be held on Tuesday, May 20, 2025, beginning at 11:00 a.m., Eastern Time. We are pleased to announce that this year’s Annual Meeting will be a virtual meeting via live webcast on the internet. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/TMCI2025 and entering the 16-digit control number included in the Internet Notice, on your proxy card or in the instructions that accompanied your proxy materials. There will be no physical meeting location.
What am I voting on?
There are three matters scheduled for a vote at the Annual Meeting:
For Proposal No. 1, you may vote "For All" the director nominees to the Board, "Withhold All" your votes for the director nominees to the Board, or vote “For All Except” the director nominees written on the line indicated on the proxy card.
For Proposal No. 2, you may vote "For" the proposal, "Against" the proposal or “Abstain” from voting on the proposal.
For Proposal No. 3, you may vote "For" the ratification, "Against" the ratification, or “Abstain” from voting on the ratification.
What if another matter is properly brought before the Annual Meeting?
If any other matters are properly brought before the Annual Meeting and you have properly submitted a proxy, the persons named in the accompanying proxy as proxy holders, Mark L. Hair and Scot M. Elder, will have the discretion to vote all proxies on such matters for you. As of the date of this proxy statement, the Board does not know of any other properly submitted business to be presented for consideration at the Annual Meeting. If any of our nominees for director are
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About the Meeting
unavailable, or are unable to serve or for good cause will not serve, the persons named as proxy holders will vote your proxy for such other candidate or candidates, if any, as may be nominated by the Board.
What are the Board's recommendations?
Our Board recommends that you vote
"FOR" the election of Lawrence W. Hamilton and Deepti Jain as Class I directors (Proposal No. 1);
"FOR" the approval, on an advisory, non-binding basis, of the compensation of our named executive officers (Proposal No. 2); and
"FOR" the ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2025 (Proposal No. 3).
Who is entitled to vote at the meeting?
Only our stockholders of record at the close of business on March 24, 2025, the Record Date for the Annual Meeting, are entitled to receive notice of, and to participate in and vote at, the Annual Meeting. As of the Record Date, there were 62,890,191 shares of common stock outstanding, all of which are entitled to be voted at the Annual Meeting.
Registered Stockholders. If shares of our common stock are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares and the Internet Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or vote in person at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as "stockholders of record."
Street Name Stockholders. If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in "street name," and the Internet Notice was forwarded to you by your broker or nominee. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you wish to vote your shares at the Annual Meeting rather than submitting a voting instruction form to your broker, follow the instructions from your broker. Beneficial owners are also invited to attend the Annual Meeting.
What are the voting rights of the holders of our common stock?
Holders of common stock are entitled to one vote per share on each matter that is submitted to stockholders for approval.
How can I vote my shares without attending the Annual Meeting?
The procedures for voting depend on whether you are the stockholder of record or a beneficial owner in which your common shares are held by a bank, broker or other nominee (referred to as being held in "street name").
If you are a stockholder of record, you may submit a proxy by telephone, via the internet or by mail, as follows:
By casting your vote in any of the three ways listed above, you are authorizing the individuals named in the proxy to vote your shares in accordance with your instructions. All shares that have been properly voted, and not revoked, will be voted at the
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2025 PROXY STATEMENT |
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About the Meeting
Annual Meeting. If you sign and return your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.
If your shares are held in the name of a broker, bank or other nominee, please follow their instructions for voting your shares. If you are a beneficial owner and do not provide the organization that holds your shares with any voting instructions, then such organization that holds your shares may generally vote your shares in their discretion on “routine” matters, but cannot vote your shares on “non-routine” matters. For more information, see “If I am a beneficial owner of shares held in street name and I do not provide my broker, bank or other nominee with voting instructions, what happens?”
If you are a beneficial owner and wish to vote at the Annual Meeting, you must obtain your 16-digit control number to access the meeting as a stockholder. If you haven’t received a 16-digit control number, you should contact your broker, bank or other nominee to obtain your control number or otherwise vote through such broker, bank or other nominee.
Can I change my vote after submitting my proxy?
Yes. Proxies may be revoked at any time before they are exercised at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
For shares held beneficially in street name, you may change your vote by submitting new voting instructions to your bank, broker or other nominee following the instructions it has provided, or, if you have obtained a 16-digit control number included on your Internet Notice, on your proxy card or on the instructions that accompanied your proxy materials, by attending the Annual Meeting and voting online.
How are votes counted?
Votes will be counted by the inspector of election, Broadridge Financial Solutions, Inc. ("Broadridge"), appointed for the Annual Meeting, who will separately count as follows:
If you are a stockholder of record, your executed proxy card is returned directly to Broadridge for tabulation. If you hold your shares through a bank or broker, your bank or broker returns one proxy card to Broadridge on behalf of all its clients.
What constitutes a quorum?
The presence at the meeting, in person or by remote communication, or by proxy, of the holders of a majority in voting power of the common stock issued and outstanding and entitled to vote on the Record Date will constitute a quorum, permitting the meeting to conduct its business. As of the Record Date, there were 62,890,191 shares of common stock outstanding, all of which are entitled to be voted at the Annual Meeting.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote online at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, then either the chairperson of the meeting or a majority in voting power of the stockholders entitled to vote at the meeting, present in person or by remote communication, or represented by proxy, may adjourn the Annual Meeting to another date.
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About the Meeting
If I am a stockholder of record and I do not vote, or if I return a proxy card or otherwise vote without giving specific voting instructions, what happens?
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, via the internet, by mail or online at the Annual Meeting, your shares will not be voted.
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted as recommended by the Board.
If I am a beneficial owner of shares held in street name and I do not provide my broker, bank or other nominee with voting instructions, what happens?
If you are a beneficial owner of shares held in street name and do not provide the broker, bank or other nominee that holds your shares with specific voting instructions, then such broker may generally vote your shares in their discretion on "routine" matters, but cannot vote on "non-routine" matters.
Proposal No. 3, the ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025, is considered a routine matter. A broker, bank or other nominee may generally vote in their discretion on routine matters, and therefore no broker non-votes are expected in connection with Proposal No. 3.
Proposal No. 1, the director election, and Proposal 2, the advisory vote on executive compensation, are considered non-routine matters. If the broker, bank or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that nominee will inform the inspector of election that it does not have the authority to vote on the matter with respect to your shares. This is generally referred to as a "broker non-vote." Therefore, broker non-votes may exist in connection with Proposals No. 1 and No. 2. Broker non-votes count for purposes of determining whether a quorum is present.
How many votes are needed to approve each proposal?
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Proposal No. 1: Election of Directors |
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The plurality of the votes cast. This means that the two nominees receiving the highest number of "FOR" votes will be elected as Class I directors. |
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Votes withheld and broker non-votes will have no effect. |
Proposal No. 2: Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers |
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The majority of the votes cast. |
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Abstentions and broker non-votes will have no effect. |
Proposal No. 3: Ratification of Appointment of Independent Registered Public Accounting Firm. |
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The majority of the votes cast. |
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Abstentions will have no effect. We do not expect any broker non-votes on this proposal. |
How can I attend the Annual Meeting online?
To join the Annual Meeting online, visit www.virtualshareholdermeeting.com/TMCI2025 and log in as a "stockholder" with your 16-digit control number included on your Internet Notice, on your proxy card or on the instructions that accompanied your proxy materials. If you do not have a control number, please contact your bank, broker or other nominee as soon as possible so that you can be provided with one. See "What if I did not receive a 16-digit control number?" at page 6 below for more instructions.
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2025 PROXY STATEMENT |
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About the Meeting
When can I join the virtual Annual Meeting?
The meeting will begin promptly at 11:00 a.m., Eastern Time, on Tuesday, May 20, 2025. You may access the meeting platform beginning at 10:45 a.m., Eastern Time, and we encourage you to join in advance of the meeting start time to allow sufficient time to log in and confirm your connection and audio are working properly.
Can I ask questions during the virtual Annual Meeting?
Yes. If you are logged in as a "stockholder" at the virtual Annual Meeting, you will have an opportunity to submit questions live via the internet during a designated portion of the virtual Annual Meeting. Once you are logged in, type your question into the question box and click "submit."
Subject to time constraints, we intend to answer questions pertinent to the Company and meeting matters submitted by stockholders during the Annual Meeting that comply with our rules of conduct for the Annual Meeting, which will be posted on the meeting website during the meeting.
How do I vote during the virtual Annual Meeting?
You will have an opportunity to vote your shares electronically during a designated portion of the virtual Annual Meeting after logging in as a "stockholder" with your 16-digit control number at www.virtualshareholdermeeting.com/TMCI2025. Whether or not you plan to join the Annual Meeting, we encourage you to vote and submit your proxy in advance of the meeting by one of the methods described in these proxy materials.
Internet proxy voting is provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.
What if I lost my 16-digit control number?
You will be able to log into the virtual Annual Meeting as a guest. To join the meeting webcast, visit www.virtualshareholdermeeting.com/TMCI2025 and register as a guest. If you log in as a guest, you will not be able to vote your shares or ask questions during the meeting.
What if I did not receive a 16-digit control number?
If you are a beneficial owner of shares held in street name and did not receive a 16-digit control number on the Internet Notice, on your proxy card or on the instructions that accompanied your proxy materials, please contact your broker, bank or other nominee well in advance of the Annual Meeting for instructions on how to obtain a 16-digit control number and access the virtual meeting as a "stockholder." Instructions should also be provided on the voting instruction form provided by your broker, bank or other nominee. Without first obtaining your 16-digit control number and logging in as a "stockholder," you will still be able to attend the meeting by logging in as a guest, however, you will not be able to vote your shares or ask questions during the meeting.
What if I have technical difficulties?
On the meeting day, if you have trouble accessing the virtual meeting platform or encounter other technical difficulties with the platform before or during the meeting, please call the technical support number posted on the Annual Meeting login page at www.virtualshareholdermeeting.com/TMCI2025. Technical support information will also be available on www.virtualshareholdermeeting.com/TMCI2025 prior to the meeting day.
Will a list of stockholders be available for inspection prior to and during the meeting?
Yes. A list of stockholders will be available at our headquarters at 100 Palmetto Park Place, Ponte Vedra, FL 32081 for a period of ten days before the Annual Meeting for inspection by any stockholder. In addition, the list will be available for inspection online during the virtual Annual Meeting if you logged in as a "stockholder" with your 16-digit control number.
Who pays for costs relating to the proxy materials and Annual Meeting?
The costs of preparing, assembling and mailing this proxy statement, the Notice of Annual Meeting of Stockholders and the enclosed Annual Report and proxy card, along with the cost of posting the proxy materials on a website, will be borne by us.
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In addition to the use of mail, our directors, officers and regular employees may solicit proxies personally and by telephone, facsimile and other electronic means. They will receive no compensation in addition to their regular salaries or stipends. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy material to their principals and to request authority for the execution of proxies. We may reimburse these persons for their expenses in so doing.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a current report on Form 8-K within four business days after the Annual Meeting, we intend to file a current report on Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an amended report on Form 8-K to disclose the final results.
When are stockholder proposals due for next year’s Annual Meeting?
Stockholders wishing to include proposals in the proxy materials in relation to our annual meeting of stockholders to be held in 2026 under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") must submit the proposal in writing so that it is received by the Company on or before December 8, 2025. Proposals should be addressed to Treace Medical Concepts, Inc., 100 Palmetto Park Place, Ponte Vedra, FL 32081, Attention: Corporate Secretary. Such proposals must also meet the other requirements and procedures prescribed by Rule 14a-8 under the Exchange Act relating to stockholders’ proposals. Nothing in this paragraph shall be deemed to require the Company to include in its proxy statement and proxy relating to the 2026 annual meeting of stockholders any stockholder proposal which may be omitted from the proxy materials according to applicable regulations of the SEC in effect at the time the proposal is received.
Under our amended and restated bylaws (the "Bylaws"), in order for a stockholder to present a proposal for next year’s annual meeting, other than proposals to be included in the proxy materials as described above, or to nominate a director, you must do so no earlier than January 20, 2026, and no later than February 19, 2026; provided that if the date of that annual meeting is more than 30 days before or more than 60 days after May 20, 2026, a stockholder must give notice not later than the 90th day prior to the annual meeting date or, if later, the 10th day following the day on which public disclosure of the annual meeting date is first made. You are also advised to review our Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations. In addition to satisfying the requirements under our Bylaws, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than March 21, 2026.
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2025 PROXY STATEMENT |
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Board of Directors and Corporate Governance
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
DIRECTORS AND NOMINEES
Nominees for Election to a Three-Year Term Expiring at the 2028 Annual Meeting of Stockholders
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Lawrence W. Hamilton Mr. Hamilton has served as a member of our Board since November 2020. Mr. Hamilton has served as an Executive Coach and Senior Adjunct Faculty with the Leadership Development Institute at Eckerd College since September 2008. From July 1993 to July 2006, Mr. Hamilton served in various roles at Tech Data Corporation, most recently as Senior Vice President, Human Resources and Chief Human Resources Officer. From 1991 to 1993, Mr. Hamilton served as Vice President of Human Resources and Administration at Linvatec. From 1985 to 1991, Mr. Hamilton served in a variety of human resource management positions at Bristol-Myers Squibb Company (NYSE: BMY). Mr. Hamilton has also previously served as a member of the board of directors of Wright Medical Group, Inc., which was acquired by Stryker Corporation (NYSE: SYK) in November 2020, and HomeBanc Mortgage (NYSE: HBMC). Mr. Hamilton holds a BA in Political Sciences from Fisk University, an MPA (Labor) Policy from the University of Alabama and an Ed.S. in Human Resources Development from George Washington University. Mr. Hamilton is a certified Senior Professional in Human Resources and holds the Certified Compensation Professional designation from the American Compensation Association and the Board Certified Coach credential from the Center For Credentialing and Education. Qualifications We believe that Mr. Hamilton is qualified to serve on our Board due to his experience in managing employees, establishing compensation policies and guidelines and serving in board committee roles. |
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Committees • Audit • Compensation (Chair) |
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Deepti Jain Ms. Jain has served as a member of our Board since October 2021. From January 2019 to December 2020, Ms. Jain served as the President of IngenioRx, Inc., a subsidiary of Anthem, Inc. (NYSE: ANTM). From 2014 to 2018, Ms. Jain served as Senior Vice President and Chief Operating Officer of Anthem Pharmacy Solutions, a division of Anthem, Inc. Ms. Jain served as Chief Financial Officer and Senior Vice President of Finance of the Health Plan Division of Medco Health Solutions Inc. from 2010 to 2012. Ms. Jain served as a member of the board of directors, audit committee and compliance and reimbursement committee of Tactile Systems Technology, Inc. (NASDAQ: TCMD), a publicly traded medical device company, from January 2021 to May 2023. Ms. Jain holds a BA in Philosophy and Classical Music from Dayanand Anglo Vedic College, an MA in English Literature from Guru Nanak Dev University and an MBA from Zicklin School of Business at Baruch College. Qualifications We believe that Ms. Jain is qualified to serve on our Board due to her experience in launching fast-growing businesses, including as a chief financial officer and chief operating officer, her expertise in the healthcare industry, and her service on the boards of other publicly traded medical device companies. |
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Age |
Tenure |
||
57 |
3.5 Years |
||
Committees • Audit • Nominating and Corporate Governance (Chair) |
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8 |
|
Board of Directors and Corporate Governance
Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders
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Lance A. Berry Mr. Berry has served as a member of our Board since October 2022. Since December 2023, he has served as Executive Vice President and Chief Financial Officer of Artivion (NYSE: AORT), a cardiac and vascular surgery company focused on aortic disease. From December 2002 until its acquisition by Stryker Corporation (NYSE: SYK) in November 2020, Mr. Berry worked for Wright Medical Group, Inc., joining in 2002 as Corporate Controller and being promoted to various roles culminating in the roles of Senior Vice President and Chief Financial Officer from December 2009 to January 2019 and Executive Vice President, Chief Financial and Operations Officer from January 2019 to November 2020. Before joining Wright Medical, he was an accountant in the auditing division of Arthur Andersen, LLP, from 1995 to 2002. He served on the board of directors of Vapotherm (OTCQX: VAPO), a publicly traded developer and manufacturer of advanced respiratory technology, from January 2020 to September 2024. Mr. Berry is a Certified Public Accountant (inactive) and holds both a bachelor’s degree and a master’s degree in accounting from the University of Mississippi. Qualifications We believe that Mr. Berry is qualified to serve on our Board due to his extensive financial and managerial experience as a senior financial executive of a publicly traded medical device company, as well as his experience serving on the board of directors of other medical technology companies. |
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Age |
Tenure |
||
52 |
2.5 Years |
||
Committees • Audit |
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|
Elizabeth "Betsy" S. Hanna Ms. Hanna has served as a member of our Board since October 2021. In March 2024, Ms. Hanna was appointed President of Cyted Health, Inc., a provider of genomic diagnostic tests for diseases of the esophagus. From March 2022 to September 2023, Ms. Hanna served as Executive Vice President and Chief Commercial Officer of Agendia, Inc., a provider of molecular diagnostic test solutions. She served as President and Chief Executive Officer and a board member of Clinical Genomics, Inc., a provider of cancer diagnostic solutions, from January 2019 to March 2022. From October 2018 until her promotion, she was Chief Commercial Officer of Clinical Genomics. From December 2014 to September 2018, she served as President and Chief Operating Officer of Origin, Inc., a clinical-stage biotech company. From 2006 to April 2014, Ms. Hanna held positions of increasing responsibility at Johnson & Johnson (NYSE: JNJ), including most recently as Vice President, Global Strategic Marketing – Acuvue Brand from October 2012 to April 2014. She also served as a member of the Global Management Board for J&J Vision Care from October 2012 to April 2014. Ms. Hanna holds a BS in Chemical Engineering from the University of Illinois and an MBA from Harvard Business School. Qualifications We believe that Ms. Hanna is qualified to serve on our Board due to her experience at developing company strategies, operational plans, leadership teams, and performance management systems to commercialize innovative medical therapies, including as a chief executive officer. |
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Age |
Tenure |
||
60 |
3.5 Years |
||
Committees • Compensation • Nominating and Corporate Governance |
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|
2025 PROXY STATEMENT |
9 |
Board of Directors and Corporate Governance
|
Jane E. Kiernan Ms. Kiernan has served as a member of our Board since October 2022. Ms. Kiernan has served as the Chief Executive Officer and a member of the board of directors of Surgimatix, Inc., a privately held medical device company, since February 2022, after having served as its Chief Business Officer from May 2020 until February 2022. In January 2018, Ms. Kiernan co-founded K2 Biotechnology Ventures, an organization engaged in developing and commercializing university and medical center innovations. From October 2010 to May 2017, Ms. Kiernan served as the Chief Executive Officer of Salter Labs Inc., a manufacturer of specialty respiratory and airway management medical devices. From 2000 to 2010, Ms. Kiernan held executive and general management positions with Baxter Healthcare Corporation (NYSE: BAX). Ms. Kiernan serves on the board of Pharmazz, a private biopharmaceutical company, and AVeta Medical, a private medical device company. She previously served on the board of directors of Axonics, Inc. (NASDAQ: AXNX), a publicly traded global leader in incontinence therapies acquired by Boston Scientific in 2024, Endologix, Inc. (OTC: ELGXQ), a publicly traded provider of minimally invasive treatments of aortic disorders; and American Medical Systems (NASDAQ: AMMD), a publicly traded life sciences company acquired by Endo Pharmaceuticals. Ms. Kiernan holds a BS in business from Southern Methodist University. Qualifications We believe that Ms. Kiernan is qualified to serve on our Board due to her experience as an executive, including as a chief executive officer, leading medical device companies, as well as her experience serving on the board of directors, and audit and compensation committees of other medical technology companies. |
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Age |
Tenure |
||
64 |
2.5 Years |
||
Committees • Compensation |
|||
Class III Directors whose terms in office expire at the 2027 Annual Meeting of Stockholders
|
John K. Bakewell Mr. Bakewell has served as a member of our Board since November 2020. He is an experienced executive with more than 30 years of service across the medical device, diagnostics, specialty pharma and healthcare services sectors. He most recently held the position of Chief Financial Officer of Exact Sciences Corporation (NASDAQ: EXAS), a molecular diagnostics company. Mr. Bakewell also previously served as Chief Financial Officer at Lantheus Holdings, Inc. (NASDAQ: LNTH), a diagnostic medical imaging company, Interline Brands, Inc., RegionalCare Hospital Partners, Inc., Wright Medical Group, Inc., which was acquired by Stryker Corporation (NYSE: SYK) in November 2020, Cyberonics, Inc., now part of LivaNova PLC (NASDAQ:LIVN), Altra Energy Technologies, Inc. and ZEOS International, Ltd. Mr. Bakewell has served as a member of the board of directors of Xtant Medical Holdings, Inc. (NYSE MKT: XTNT), a medical device company, since February 2018. Mr. Bakewell also previously served as a member of the board of directors of Neuronetics, Inc. (NASDAQ: STIM), a medical technology company, from May 2020 until May 2024, Entellus Medical, Inc., now part of Stryker Corporation (NYSE: SYK), ev3 Inc., now part of Medtronic plc (NYSE: MDT) and Corindus Vascular Robotics, Inc., now a Siemens Healthineers company. Mr. Bakewell holds a BA in Accounting from the University of Northern Iowa and is a certified public accountant (current status inactive). Qualifications We believe that Mr. Bakewell is qualified to serve on our Board due to his extensive financial and managerial experience as a senior executive of several publicly traded medical technology companies, as well as his experience serving on the board of directors of other medical technology companies. |
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Age |
Tenure |
||
63 |
4.5 Years |
||
Committees • Audit (Chair) • Nominating and Corporate Governance |
|||
10 |
|
Board of Directors and Corporate Governance
|
Richard W. Mott Mr. Mott has served as a member of our Board since March 2015. Mr. Mott has served as the Principal of Walkabout Consulting LLC, a management consulting and private equity firm, since January 2009. He served as the Chairman and Interim Chief Executive Officer of Endologix, LLC, a medical device company, from October 2020 through November 2021 and served as chairman of its board from 2021 to March 2025. From March 2010 until August 2021, Mr. Mott was a Director and Owner of VFD Technologies, a private equity firm that invests in high performance materials and medical device manufacturing businesses. From September 2002 to November 2007, Mr. Mott served as President and Chief Executive Officer of Kyphon Inc., a global medical device company, including through its acquisition by Medtronic plc (NYSE: MDT). From 1993 to 2002, Mr. Mott held various management positions at Wilson Greatbatch Technologies, Inc. and Bristol-Myers Squibb Company (NYSE: BMY). From May 2008 to December 2017, Mr. Mott served as chairman of the board of directors of Silk Road Medical, Inc. (NASDAQ: SILK), a medical device company. Mr. Mott currently serves on the board of various private companies, including the medical device companies CeQur Corporation and Arsenal Medical, Inc. He holds a BS in Ceramic Engineering from Alfred University and is a graduate of Harvard University’s Advanced Management Program. Qualifications We believe that Mr. Mott is qualified to serve on our Board due to his extensive experience leading medical device companies from the early stages of development to liquidity events. |
||
Age |
Tenure |
||
66 |
10 Years |
||
Committees • Lead Independent Director • Compensation |
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|
|||
|
John T. Treace Mr. Treace founded Treace Medical Concepts in 2014 and has served as our Chief Executive Officer and a member of our Board since our inception. Before that, Mr. Treace served as Senior Vice President of U.S. Sales and Global Marketing from January 2010 to January 2013, as Vice President, Biologics and Extremities, from January 2003 to December 2009, as Senior Director of Biologics Marketing from July 2001 to June 2003, and as Senior Director of Sales Administration from November 2000 to June 2001 for Wright Medical Group, Inc., a medical device company, which was acquired by Stryker Corporation (NYSE: SYK) in November 2020. Before that, Mr. Treace held positions at Xomed Surgical Products, Inc., including as Director of Marketing from June 1998 to September 2000 and as Senior Product Manager from April 1996 to June 1998. From July 2010 to July 2013, Mr. Treace served on the board of directors of ENTrigue Surgical, which was acquired by Arthrocare Corporation. Mr. Treace holds a BS in Finance from Seattle University. Qualifications We believe Mr. Treace is qualified to serve on our Board due to his extensive knowledge as our Company’s founder and Chief Executive Officer, his prior commercial and general management experience with a market-leading, publicly traded foot and ankle medical device company and his prior experience as a board member for ENTrigue Surgical. |
||
Age |
Tenure |
||
53 |
11 Years |
||
• Founder |
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|
2025 PROXY STATEMENT |
11 |
Board of Directors and Corporate Governance
Class I Director whose term in office expires at the 2025 Annual Meeting
|
James T. Treace* Mr. Treace has served as the Chairman of our Board since July 2014. Mr. Treace has served as the Founder and President of J&A Group, LLC, a privately funded medical device investment and consulting company, since October 2000. From November 1999 to October 2000, Mr. Treace served as President of Medtronic Xomed, a subsidiary of Medtronic plc (NYSE: MDT). From April 1996 to November 1999, Mr. Treace served as Chief Executive Officer, President and Chairman of the Board of Directors of Xomed Surgical Products, Inc. (NASDAQ: XOMD), until it was acquired by Medtronic plc. From July 1993 to April 1996, Mr. Treace co-founded and served as the Chief Executive Officer and Chairman of the Board at TreBay Medical Corp., an orthopaedic and microsurgical device company. From September 1981 to July 1990, he served as President and Chief Executive Officer of Concept, Inc. (NASDAQ: CCPT), now known as Conmed Linvatec (NYSE: CNMD), and from June 1966 to September 1981 as Executive Vice President of Richards Medical, now known as Smith & Nephew (NYSE: SNN). Mr. Treace previously served as Chairman of the Boards of Kyphon, Inc. (NASDAQ: KYPH), now part of Medtronic plc, Wright Medical Group, Inc. which was acquired by Stryker Corporation (NYSE: SYK) in November 2020, and American Medical Systems, Inc. (NASDAQ: AMMD), now part of Endo Pharmaceuticals (NASDAQ: ENDP). Qualifications We believe that James T. Treace is qualified to serve on our Board due to his experience as chief executive officer and chairman of the board of publicly traded and privately held medical device companies. *James T. Treace has notified the Company that he will retire from the Board at the expiration of his current term at the Annual Meeting and not stand for re-election as a director at the Annual Meeting. Upon Mr. James T. Treace’s retirement, John T. Treace will serve as Chairman of the Board. |
||
Age |
Tenure |
||
79 |
11 Years |
||
Committees • Chairman of the Board • Nominating and Corporate Governance |
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FAMILY RELATIONSHIPS
Two members of our Board as of the date hereof, including our Chief Executive Officer, have a family relationship. John T. Treace, our Chief Executive Officer, is the nephew of our current Chairman of the Board and director James T. Treace. There are no family relationships among any of our executive officers. Each of our executive officers serves at the discretion of our Board and holds office until his or her successor is duly appointed and qualified or until his or her earlier resignation or removal.
BOARD COMPOSITION
Director Independence
As of the date of this proxy statement, our Board consists of nine members. James T. Treace, a Class I director, notified the Company that he will retire from the Board at the expiration of his current term at the Annual Meeting and not stand for re-election as a director at the Annual Meeting. In connection with Mr. James T. Treace’s departure from the Board, the Board has determined to decrease the number of members of the Board to eight, effective upon the expiration of Mr. James T. Treace’s current term at the Annual Meeting.
Under the Nasdaq Global Market listing requirements (the "Listing Rules"), independent directors must comprise a majority of a listed company’s board of directors within a specified period of time after listing on the Nasdaq Stock Market. The Listing Rule's definition of an independent director includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in any of various types of business dealings with us.
12 |
|
Board of Directors and Corporate Governance
As required by the Listing Rules, our Board has made a subjective determination as to the independence of each director and determined that directors Bakewell, Berry, Hamilton, Hanna, Jain, Kiernan and Mott, representing seven of our nine directors, are independent directors under the Listing Rules. James T. Treace is the uncle of our Chief Executive Officer. Our Board reviews the independence of each director at least annually. During these reviews, the Board considers transactions and relationships between each director, and his or her immediate family and affiliates, and our Company and its management to determine whether any such transactions or relationships are inconsistent with a determination that the director is independent. This review is based primarily on responses of the directors to questions in a directors’ and officers’ questionnaire regarding employment, business, familial, compensation and other relationships with our Company, including our management.
We believe that a majority of our directors and the composition of our Board meets the requirements for independence under current Listing Rules and SEC requirements. As required by the Listing Rules, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. We intend to comply with any future governance requirements to the extent they become applicable to us.
Classified Board of Directors
In accordance with our amended and restated certificate of incorporation as currently in effect (our "Certificate of Incorporation"), our Board is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election or until their earlier death, resignation or removal. Our directors are divided among the three classes as follows:
Our Certificate of Incorporation and Bylaws provide that the authorized number of directors may be changed only by resolution of the Board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board into three classes with staggered three-year terms, together with the requirement that stockholders may remove our directors only for cause with a two-thirds vote and the inability of stockholders to call special meetings, may have the effect of delaying or preventing a change in control or management of the Company.
MEETINGS OF OUR BOARD OF DIRECTORS AND COMMITTEES
Our Board held eight meetings during 2024 and acted by unanimous written consent six times. In 2024, the Audit Committee met four times and acted by unanimous written consent twice; the Compensation Committee met five times and acted by unanimous written consent six times; and the Nominating, Compliance and ESG Committee (now known as the Nominating & Corporate Governance Committee) (the "NCG Committee") met five times and acted by unanimous written consent once.
During 2024, each director attended at least 75% of the aggregate total number of meetings of the Board and the committees on which he or she served. We encourage our directors to attend our annual meetings of stockholders. Eight of the nine individuals who were directors at the time of our annual meeting held on May 21, 2024 attended the meeting.
|
2025 PROXY STATEMENT |
13 |
Board of Directors and Corporate Governance
BOARD COMMITTEES
Our Board has established a standing Audit Committee, Compensation Committee, and NCG Committee. Our Board may establish other committees to facilitate the management of our business. The composition and functions of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our Board. Each committee has adopted a written charter that satisfies applicable requirements of the Listing Rules and SEC regulations. The charters are posted in the "investors" area of our website under the "Corporate Governance" topic with the heading "Documents and Charters" at https://investors.treace.com/corporate-governance/documents-charters.
This reference to our website address and all other references to our website in this proxy statement do not incorporate by reference into this proxy statement the information contained at or available through our website, and you should not consider it to be a part of this proxy statement. The inclusion of our website address in this proxy statement is an inactive textual reference only.
|
Audit Committee All committee members meet the heightened independence and experience requirements applicable to Audit Committee members under the Listing Rules and SEC regulations. Further, each of Mr. Bakewell and Mr. Berry is an "audit committee financial expert" as defined under applicable rules of the SEC. Our Board has assessed whether all members of the Audit Committee meet the composition requirements of the Listing Rules, including the requirements regarding financial literacy and financial sophistication. Our Board found that each of the members of the Audit Committee has met the financial literacy and financial sophistication requirements under SEC regulations and the Listing Rules. Primary Responsibilities Under its charter, the Audit Committee responsibilities include: • appointing, determining the engagement, approving the compensation of and assessing the qualifications and independence of our independent auditor; • reviewing and discussing with management and the independent auditor our annual and quarterly financial statements and related disclosures; • discussing with management and the independent auditor the Company's process for assessing the adequacy and effectiveness of the Company's internal controls; • establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters and for the confidential and anonymous submission of complaints regarding questionable accounting or auditing matters; • overseeing policies and processes to manage major risk exposures that may affect our financial statements, operations, reputation or business continuity, including enterprise-level risk assessments, investment policies, insurance programs and the reliability and security (including cybersecurity) of our information systems and technology (but excluding exposures from regulatory and compliance risks delegated to the NCG Committee and from compensation risks delegated to the Compensation Committee) and discussing with management the steps taken to monitor and mitigate these risks; • reviewing and approving all related party transactions; • reviewing and discussing with management, the independent auditor, and the senior internal auditor the scope of and plans for internal audits; • reporting regularly to the Board regarding the Audit Committee's activities; • annually reviewing and reassessing the Audit Committee charter; and • periodically performing an evaluation of the Audit Committee’s performance. |
|
Chair John K. Bakewell |
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Other Members Lance A. Berry Lawrence W. Hamilton Deepti Jain |
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Independent: 100% Meetings in 2024: 4 Actions by Consent: 2 2024 Meeting Attendance: 100% |
14 |
|
Board of Directors and Corporate Governance
|
Compensation Committee Each of the members of our Compensation Committee is independent as defined in the Listing Rules, is a "non-employee director" as defined in Rule 16b-3 promulgated under the Exchange Act and is an "outside director" as that term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The Compensation Committee reviews and evaluates, at least annually, the performance of the Compensation Committee and its members. Primary Responsibilities Under its charter, the Compensation Committee’s responsibilities include: • establishing and administering the annual incentive programs for the chief executive officer and other members of senior management; • annually reviewing the compensation of our chief executive officer and our other executive officers and recommending to the independent members of our Board the compensation of our chief executive officer; • reviewing and making recommendations to our Board with respect to director compensation; • overseeing and administering our equity incentive plans; • reporting regularly to the Board regarding the Compensation Committee's activities; • annually reviewing and reassessing the Compensation Committee charter; and • periodically performing an evaluation of the Compensation Committee’s performance. |
|
Chair Lawrence W. Hamilton |
||
Other Members Elizabeth S. Hanna Jane E. Kiernan Richard W. Mott |
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Independent: 100% Meetings in 2024: 5 Actions by Consent: 6 2024 Meeting Attendance: 100% |
|
Nominating and Corporate Governance Committee Messrs. Bakewell and James T. Treace and Mss. Hanna and Jain each meet the independence requirements of the Listing Rules relating to NCG Committee independence. Primary Responsibilities Under its charter, the NCG Committee’s responsibilities include: • identifying individuals qualified to become Board members and recommending to the Board the nominees for election to the Board at the next annual meeting of stockholders; provided that for so long as the NCG Committee is not composed of all independent members, the independent members of the Board approve the nomination of directors; • recommending to the Board for its approval directors to serve as members of each committee and the Chairperson of each committee; • monitoring compliance with our code of business conduct and ethics; • overseeing our policies and programs related to compliance with laws and regulations; • reviewing hotline reports and compliance investigations (other than reports related to accounting, internal accounting controls, fraud or auditing matters), "whistleblower" reporting and non-retaliation policies; • receiving information about current and emerging risks and regulatory and enforcement trends, governmental inquiries or third-party claims; • developing and recommending to our Board corporate governance guidelines; • overseeing and recommending to our Board our practices, policies, strategies and reporting on environmental, social and governance matters; and • overseeing the evaluation of our Board and its committees and management. |
|
Chair Deepti Jain |
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Other Members John K. Bakewell Elizabeth S. Hanna James T. Treace* |
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Independent: 100% Meetings in 2024: 5 Actions by Consent: 1 2024 Meeting Attendance: 100% * Mr. James T. Treace will serve until the Annual Meeting. |
|
2025 PROXY STATEMENT |
15 |
Board of Directors and Corporate Governance
CORPORATE GOVERNANCE MATTERS
Corporate Governance Guidelines
We believe that good corporate governance is important to ensure that, as a public company, we will be managed for the long-term benefit of our stockholders. We and our Board have reviewed the corporate governance policies and practices of other public companies, as well as those suggested by various authorities in corporate governance. We have also considered the provisions of the Sarbanes-Oxley Act and the rules of the SEC and the Nasdaq Stock Market.
Based on this review, our Board has taken steps to implement many of these provisions and rules. In particular, we have adopted written corporate governance guidelines that provide the framework for our corporate governance, along with our Certificate of Incorporation, Bylaws, committee charters and other key governance practices and policies. Our corporate governance guidelines cover a range of topics including, but not limited to, independence of the Board, executive sessions, director qualification standards, board access to senior management and independent advisors, meeting attendance, service on other boards, board and committee self-evaluation, compensation and succession planning. The NCG Committee is responsible for reviewing and reassessing, from time to time as it deems appropriate, the adequacy of our corporate governance guidelines and recommending any proposed changes to the Board for approval. A copy of our corporate governance guidelines is available in the "investors" area of our website under the "Corporate Governance" topic with the heading "Documents and Charters" at https://investors.treace.com/corporate-governance/documents-charters.
Code of Conduct
We have also adopted a written code of conduct that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Our code of conduct is available in the "investors" area of our website under the "Corporate Governance" topic with the heading "Documents and Charters" at https://investors.treace.com/corporate-governance/documents-charters. We will disclose any amendments to the code, or any waivers of its requirements, on our website to the extent required by the applicable rules and exchange requirements.
We believe that a culture of integrity and compliance is critically important to fulfilling our mission. All employees and directors are expected to conduct business with high standards of business ethics. Each employee and director receives our code of conduct which emphasizes our four core values of Integrity, Courage, Excellence and Collaboration.
We cultivate an inclusive, open-door culture and have provided employees with many avenues to raise questions or concerns, without fear of retaliation, harassment, discrimination, or other inappropriate behavior, including anonymously reporting through a hotline accessible by phone or over the internet.
Insider Trading Compliance Policy
We have also
16 |
|
Board of Directors and Corporate Governance
Board Leadership Structure
Our Board established the following leadership structure in 2024:
Current Board Leadership Structure |
|||||
James T. Treace Chairman of the Board |
John T. Treace Chief Executive Officer |
Richard W. Mott Lead Independent Director |
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|
|
|
|||
Key Responsibilities |
Key Responsibilities |
Key Responsibilities |
|||
• Serving as the primary sounding board for the CEO • Building consensus among the independent directors |
• Leading the Company's operations • Setting the Company's business strategies |
• Consulting with the CEO and management • Advising on board agendas and governance |
|||
John T. Treace currently serves as our Chief Executive Officer; James T. Treace serves as Chairman of the Board; and Richard W. Mott serves as lead independent director. Our NCG Committee recommended and our Board approved Mr. Mott's appointment as lead independent director effective in August 2024. The lead director’s responsibilities include, but are not limited to (1) presiding over all meetings of the Board at which the Board Chair is not present, including any executive sessions of the independent directors, (2) providing input and consulting on Board meeting schedules and agendas, (3) being available for and engaging in consultation with the Chief Executive Officer and other members of management, (4) playing an increased role in crisis and risk management, as appropriate, and (5) acting as the liaison between the independent directors and the Chief Executive Officer and Board Chair.
The Chairman of the Board (1) serves as the primary sounding board for the Chief Executive Officer, thereby fostering constructive and efficient communications between the Board and the Chief Executive Officer, (2) acts as a focal point for director communications, thereby helping to identify significant issues for Board consideration and gathering input from the other directors, and (3) communicates with and builds consensus among the independent directors, thereby reducing some of the demands on the Chief Executive Officer’s time.
Our NCG Committee is charged with periodically reviewing the leadership structure of our Board. During 2024, our NCG Committee, Board and independent directors determined that having a separate Board Chair and a lead independent director provide additional support and perspective to our Chief Executive Officer and enhance the effectiveness of our Board as a whole.
Our Bylaws provide our Board with the flexibility to combine or separate the positions of Board Chair and Chief Executive Officer, and our corporate governance guidelines provide for the independent directors to determine whether to elect a lead independent director.
James T. Treace's term as a director will expire at the Annual Meeting upon his retirement from the Board, and as previously announced, John T. Treace will assume the role of Chairman of the Board, at that time. Mr. Mott will continue to serve as lead independent director. With James Treace's retirement, the Board and NCG Committee have determined that combining the roles of Chief Executive Officer and Board Chair is appropriate since John T. Treace founded the Company, has extensive strategic, operational, and executive leadership experience, and has deep knowledge of the medical device market. He will be supported in the role by Mr. Mott as lead independent director. Mr. Mott has extensive experience as a chief executive officer and as an advisor to medical device companies in various stages of development as well as a decade as a Treace Board member, making him a trusted and respected advisor.
|
2025 PROXY STATEMENT |
17 |
Board of Directors and Corporate Governance
Role of the Board in Risk Oversight
The diagram below explains the allocation of risk oversight among the Board, its Committees and management.
Full Board of Directors Our full Board is ultimately responsible for oversight of risks affecting the Company and of management’s development and execution of mitigation strategies to address those risks. In this capacity, the Board has delegated oversight of certain risks to its Committees as described below. Oversight of additional matters of potential risk not expressly delegated remain the province of the full Board. |
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Audit |
Nominating & Corp Governance |
Compensation |
|
• oversee our enterprise risk management and risk assessment processes • receive reports from management regarding management's processes and policies to manage, monitor and mitigate our major risk exposures affecting our financial statements, operations, business continuity, including enterprise-level risk assessments, investment policies, insurance programs and the reliability and security (including cybersecurity) of our information systems and technology • oversee and discuss with management the Company’s policies and controls relating to information technology, management information systems, and cybersecurity • report regularly to the Board on its risk oversight activities |
• oversee compliance programs related to legal and regulatory risks • receive reports from management about current and emerging risks and regulatory and enforcement trends, governmental inquiries, and third-party claims • review compliance hotline reports and compliance investigations, relevant “whistleblower” reporting and non-retaliation policies, and relevant education and training • review and provide recommendations to the Board regarding the Company’s environmental, social and governance -related practices, policies, disclosures and strategies as well as the Company’s public reporting on these matters • report regularly to the Board on its risk oversight activities |
• oversee policies to mitigate risks arising from compensation policies and practices, including the policies to recover incentive or equity-based compensation and limiting hedging activities related to Company stock • review with management and the Board the succession plans for the CEO and Company officers to ensure adequate levels of talent and development and minimize business disruptions in the event of a change in current leadership • generally supervise human capital management practices, including talent recruitment, development and retention; workplace and culture, and employee engagement • report regularly to the Board on its risk oversight activities |
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Role of Management While the Board and its Committees oversee risk management, the Company’s senior management is responsible for identifying, assessing and mitigating risk on a day-to-day basis. To support the Board in the effective execution of its oversight role, the Company’s Chief Executive Officer and other management team members regularly report to the Board and its Committees on various risks and opportunities facing our business and management’s related strategies. Our Board expects management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies adopted by the Audit Committee, NCG Committee, Compensation Committee, and the Board. |
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We believe this division of responsibilities is the most effective approach for addressing the risks we face, and our Board’s leadership structure, which also emphasizes the independence of the Board in its oversight of our business and affairs, supports this approach.
18 |
|
Board of Directors and Corporate Governance
Limitation on Liability and Indemnification Matters
Our Certificate of Incorporation and our Bylaws contain provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by the Delaware General Corporation Law (the "DGCL"). The DGCL provides that directors of a corporation will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for any:
These limitations of liability do not apply to liabilities arising under federal securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission.
Our Certificate of Incorporation and our Bylaws require us to indemnify our directors and officers, in each case to the fullest extent permitted by the DGCL. Our Bylaws also provide that we are obligated to advance expenses (including attorney’s fees and disbursements) incurred by any indemnified person in advance of the final disposition of any action or proceeding, and permits us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under Delaware law.
We have entered, and expect to continue to enter, into separate agreements to indemnify our directors, executive officers and other employees as determined by our Board. With specified exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act") may be permitted to our directors, officers and controlling persons under the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. We believe that these provisions of our Bylaws and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance that insures our directors and officers against liability for actions taken in their capacities as directors and officers.
We believe that these provisions in our Certificate of Incorporation and Bylaws and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers. However, the limitation of liability and indemnification provisions in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and our stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damages.
There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.
Compensation Committee Interlocks and Insider Participation
During 2024, each of Lawrence W. Hamilton, Elizabeth S. Hanna, Jane E. Kiernan and Richard W. Mott served on our Compensation Committee, with Mr. Hamilton serving as chair. No member of our Compensation Committee was, during 2024, an officer, former officer or employee of the Company or had any relationship requiring disclosure by us under Item 404 of Regulation S-K. During 2024, none of our executive officers served (i) as a member of the Compensation Committee, or other committee serving an equivalent function, of any other entity in which one of its executive officers of such entity served as a member of our Board or our Compensation Committee or (ii) as a director of any other entity in which one of its executive officers of such entity served as a member of our Compensation Committee.
|
2025 PROXY STATEMENT |
19 |
Board of Directors and Corporate Governance
Board Member Selection
Our NCG Committee is responsible for reviewing with our Board, on an annual basis, the appropriate characteristics, skills and experience required for our Board as a whole and its individual members. In evaluating the suitability of individual candidates (both new candidates and current members), the NCG Committee, in recommending candidates for election, and our Board, in approving (and, in the case of vacancies, appointing) such candidates, may take into account many factors, including but not limited to the following:
Currently, our Board evaluates each individual in the context of our Board as a whole, with the objective of assembling a group that can best oversee and contribute to the success of the business and represent stockholder interests through the exercise of sound judgment. We believe it is important to have a balanced board and are committed to maintaining and building a board with a variety of skills, personal and professional backgrounds, perspectives and experiences.
Directors John K. Bakewell and Lawrence W. Hamilton were recommended to join our Board by several of our existing directors in November 2020 based on their personal experience working with Messrs. Bakewell and Hamilton at other publicly traded medical technology companies. In July 2021, the NCG Committee engaged a third-party search firm to assist in identifying or evaluating potential nominees for director who were female and/or from a diverse cultural background. Directors Elizabeth S. Hanna and Deepti Jain were identified through the third-party search firm. Directors Lance A. Berry and Jane E. Kiernan were recommended to join our Board by several of our existing directors in October 2022 based on their personal experience working with Mr. Berry and Ms. Kiernan at other publicly traded medical technology companies.
As reflected below, our directors expected to continue to serve after the Annual Meeting bring varied viewpoints and perspectives and exhibit a balance of tenure, skills, experiences and backgrounds that we believe enhances the deliberation and decision-making processes of our Board, allowing it to effectively fulfill its oversight function.
20 |
|
Board of Directors and Corporate Governance
Communications with the Board
Our Board values the input and insights of the Company’s stockholders, believes that effective communication between the Board and stockholders strengthens the Board’s ability to effectively carry out its oversight function, and consequently, has adopted a stockholder communications policy. Stockholders may communicate with the independent members of our Board, our Chairperson of the Board, and any chairperson of a Board committee, about corporate governance, corporate strategy, board-related matters or other substantive matters that our Corporate Secretary and Chairperson of the Board consider to be important for the director(s) to know, by addressing any communications to the intended recipient by name or position in care of: Corporate Secretary, Scot M. Elder, 100 Palmetto Park Place, Ponte Vedra, Florida 32081 or legal@treace.net. The communication must include the stockholder’s name, address, telephone number and email address and a statement of the type and amount of Company securities that the stockholder holds. The Corporate Secretary will review any communications received from stockholders and will forward communications deemed appropriate to the Board or the relevant director(s). Communications that are deemed inappropriate (such as communications involving individual grievances, regarding ordinary business operations, or containing offensive, obscene or abusive content) will not be forwarded. A copy of our stockholder communications policy is available in the "Investors" area of our website under the "Corporate Governance" topic with the heading "Documents & Charters" at https://investors.treace.com/corporate-governance/documents-charters.
Stockholder Recommendations of Director Candidates
Stockholders who wish to recommend individuals to the NCG Committee for consideration as potential director candidates may submit the names of the recommended individuals, together with appropriate biographical information and background materials, to the NCG Committee, c/o Corporate Secretary, Scot M. Elder, 100 Palmetto Park Place, Ponte Vedra, Florida 32081. In the event there is a vacancy, and assuming that appropriate biographical and background material has been provided on a timely basis, the NCG Committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.
CORPORATE RESPONSIBILITY
Information about our environmental, social and governance-related programs and initiatives is available on our website at https://investors.treace.com/impact. Please note that nothing contained on or accessible through our website, including our corporate responsibility reports or sections thereof, will be deemed incorporated by reference into this proxy statement.
Dedication to Quality and Patient Safety |
|
• We are committed to designing and delivering safe, effective and high quality products. • To meet this commitment, we have deployed a robust quality management system informed by U.S. Food and Drug Administration regulations and ISO 13485 standards. • Our supplier qualification process requires suppliers that manufacture our implants and instruments to obtain ISO 13485 certification. |
|
|
|
Dedication to Building and Supporting Human Capital |
|
We believe in the value of having an inclusive team with a range of experiences and strengths as an enabler for obtaining the best ideas, innovating, and creating great outcomes for our customers and their patients. To drive strong business results, we must have the right people in the right roles with great leadership, culture, training and rewards, all aligned with our values and business strategies. To achieve these goals, we are committed to developing great talent at all levels of the organization: by growing talent internally, hiring great external talent, and ensuring bench strength and succession plans at all levels throughout the organization. We have a number of initiatives in place to attract, develop and retain great talent in an engaging and rewarding culture. Some of the highlights of our approach are as follows: |
|
|
2025 PROXY STATEMENT |
21 |
Board of Directors and Corporate Governance
Talent Acquisition |
|
• As of December 31, 2024, we had 477 full-time employees. • As we recruit, we are innovatively expanding external talent pools, actively seeking to source qualified individuals from a broad pool of talent, and striving to provide a work environment where the best ideas are welcomed from anywhere. |
|
Talent Management and Development |
|
• Our leadership team participates in an annual talent review and succession planning exercise to identify organizational needs, development opportunities, and potential future leaders. • As a result of these efforts and our commitment to providing growth opportunities for our talent, o 11.5% of our employees were promoted or took new positions during 2024. o Our undesired turnover was only 7.5%. • Employees participate in annual performance management to provide self-assessments and create plans to support their career objectives. • We provide training and other development opportunities to help employees meet their objectives and have launched and expanded several programs that are developing technical skills, leadership skills, and helping our teams and leaders leverage the strengths of their people. In 2024, we continued our highly successful Treace Leadership Development Program, our strengths-based personal and team development programs, and our sales training programs. |
|
Total Rewards |
|
• Our human capital strategies, initiatives, and outcomes are reviewed on a regular basis with the Compensation Committee of our Board. • We partner with consulting firms to regularly benchmark our peer group companies and the broader market, and as a result of this analysis, we have implemented rewards practices that we believe allow us to maintain our competitiveness in the market. • We also believe strongly in providing employees the opportunity to participate as owners in the Company; this is done through broad-based equity programs granting stock options and restricted stock units, with approximately 80% of our employees having received at least one equity grant. |
|
Culture |
|
• We are committed to delivering an inclusive culture that fosters creativity and innovation, which allows employees to be their best at work. We offer a collegial, collaborative culture supported by competitive, performance-based compensation and benefits, equity awards, career development opportunities, and access to continual growth through live and remote training. • We conducted an employee engagement survey in 2024 that showed that 79% of our employees are engaged, which compares favorably with average engagement of 73% of the medical device and biotechnology companies in the benchmark compiled by the independent third-party consulting firm that conducted the engagement survey. • We have used these survey results to determine how we can continue to create work environments that energize our employees and enable them to develop and maintain a positive working culture. As part of our work to foster our outstanding culture, the Treace Culture Team of employees from various functions around the business have continued to promote engagement through peer-to-peer recognition programs and by partnering with Company leaders to develop and implement our first quarterly Treace Awards to recognize outstanding employee contributions. |
|
22 |
|
Board of Directors and Corporate Governance
Community Service |
|
• We participate in a number of team and community-building initiatives, including where functional teams volunteer with local nonprofits and company-wide charitable activities, such as food drives, a partnership with the Heart Walk, and staffing local charity events. |
|
Workplace Environment and Safety |
|
• Protecting the health and safety of our colleagues, agents, visitors, and the communities in which we operate is a business priority and is central to our values. • We operate from a state-of-the-art headquarters facility with many features to improve our employees' work experience, including well-equipped training and lab rooms, an onsite cafe, private health and wellness rooms, quiet areas, and collaboration zones. • Our Environmental, Health and Safety (EHS) department works to ensure that our organization complies with applicable EHS regulations. Our EHS team has implemented multiple safety programs, regularly performs safety hazard evaluations within our facility, develops and tests action plans for emergencies such as fire response, severe weather threats and shelter-in-place incidents, and trains our employees on maintaining safety in the workplace. |
|
DIRECTOR COMPENSATION
Non-employee Director Compensation Policy
In consultation with Compensia, our independent compensation consultant, and with reference to Compensia’s annual director compensation benchmarking review, our Board has adopted a non-employee director compensation policy which includes cash retainers for Board and committee service, an initial equity grant when the non-employee director first joins the Board (the "initial equity grant") and an annual equity grant awarded to non-employee directors (the "annual equity grant").
Cash Compensation. Effective January 17, 2024, all non-employee directors were entitled to receive the following cash compensation for their service:
Each annual cash retainer and additional annual fee is paid quarterly in arrears on a prorated basis. Between January 1, 2024 and January 17, 2024, the annual retainer was (1) $20,000 per year for the Audit Committee Chair; (2) $10,000 per year for Audit Committee members; (3) $15,000 for the Compensation Committee Chair; (4) $7,500 for Compensation Committee members; (5) $10,000 for the NCG Committee Chair; and (6) $5,000 for NCG Committee members. With the appointment of Mr. Mott to serve as lead independent director in August 2024, an annual retainer of $50,000 was established.
Equity Compensation. Non-employee directors are entitled to receive all types of awards (except incentive stock options) under the 2021 Incentive Award Plan (the "2021 Plan") (or the applicable equity plan in place at the time of grant), including discretionary awards not covered under the non-employee director compensation policy. For 2024, the allocation of director equity awards between options and restricted stock units was 50%/50%. Accordingly, under the non-employee director compensation policy in effect during 2024, nondiscretionary, automatic grants of stock options and restricted stock units are made to our non-employee directors as follows:
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2025 PROXY STATEMENT |
23 |
Board of Directors and Corporate Governance
For purposes of the non-employee director compensation policy, the "Black Scholes" value means the fair value of an option determined using the Black-Scholes pricing model based on the fair market value of our common stock and the volatility, risk-free rate and life expectancy assumptions in our financial statements disclosing those assumptions. The term of each option described above is ten years from the date of grant, subject to earlier termination as provided in the 2021 Plan. The exercise price per share of each option is equal to 100% of the fair market value of one share of our common stock on the date of grant.
Subject to the applicable provisions of the 2021 Plan, (1) the initial option grant will vest as to 1/36th of the underlying shares on each monthly anniversary of the grant date; (2) the initial restricted stock unit grant will vest as to one-third of the underlying shares on the first, second and third anniversaries of the grant date; (3) the annual option grant will vest as to 1/12th of the underlying shares on each monthly anniversary of the grant date, provided that the last installment will vest on the earlier of (a) the first anniversary of the grant date or (b) immediately before the next annual meeting of stockholders following the grant date; and (4) the annual restricted stock unit grant will vest on the earlier of (a) the first anniversary of the grant date or (b) immediately before the next annual meeting of stockholders following the grant date. In each case, vesting is subject to the non-employee director continuing to provide services on the applicable vesting date. Under the non-employee director compensation policy, all options and restricted stock units granted to members of our non-employee directors will fully vest if the Company experiences a merger or change in control, subject to the applicable non-employee director's continued service through the vesting date.
2024 Director Compensation
The following table sets forth information for 2024 regarding the compensation awarded to, earned by or paid to our non-employee directors. Certain directors have elected to decline to receive certain types of director compensation and/or have elected to defer the release of vested restricted stock units until either a fixed future date or their ceasing to serve as a director or the occurrence of a change in control event. Directors who are also our employees receive no additional compensation for their service as directors. During 2024, John T. Treace, who is one of our directors, served as our Chief Executive Officer and, accordingly, did not receive any additional compensation for service as director. See "Executive Compensation—Summary Compensation Table" for additional information about the compensation for Mr. John T. Treace for his service as an employee.
24 |
|
Board of Directors and Corporate Governance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Name |
|
Fees Earned |
|
|
Stock |
|
|
Option |
|
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
John K. Bakewell |
|
|
74,780 |
|
|
|
75,002 |
|
|
|
75,001 |
|
|
|
224,784 |
|
Lance A. Berry |
|
|
55,000 |
|
|
|
75,002 |
|
|
|
75,001 |
|
|
|
205,004 |
|
Lawrence W. Hamilton |
|
|
74,780 |
|
|
|
75,002 |
|
|
|
75,001 |
|
|
|
224,784 |
|
Elizabeth S. Hanna |
|
|
64,670 |
|
|
|
75,002 |
|
|
|
75,001 |
|
|
|
214,674 |
|
Deepti Jain |
|
|
74,560 |
|
|
|
75,002 |
|
|
|
75,001 |
|
|
|
224,564 |
|
Jane E. Kiernan |
|
|
54,890 |
|
|
|
75,002 |
|
|
|
75,001 |
|
|
|
204,894 |
|
Richard W. Mott |
|
|
75,723 |
|
|
|
75,002 |
|
|
|
75,001 |
|
|
|
225,727 |
|
James T. Treace(6) |
|
|
99,780 |
|
|
|
— |
|
|
|
— |
|
|
|
99,780 |
|
The table below shows the aggregate numbers of option awards (exercisable and unexercisable) and unvested stock awards held as of December 31, 2024 by each non-employee director as of December 31, 2024.
|
|
|
|
|
|
|
||
Name |
|
Options Outstanding at Fiscal Year End |
|
|
Unvested Outstanding |
|
||
|
|
|
|
|
|
|
||
John K. Bakewell |
|
|
191,607 |
|
|
|
15,091 |
|
Lance A. Berry |
|
|
59,004 |
|
|
|
16,035 |
|
Lawrence W. Hamilton |
|
|
191,607 |
|
|
|
15,091 |
|
Elizabeth S. Hanna |
|
|
82,540 |
|
|
|
15,486 |
|
Deepti Jain |
|
|
82,540 |
|
|
|
15,486 |
|
Jane E. Kiernan |
|
|
59,004 |
|
|
|
16,035 |
|
Richard W. Mott |
|
|
77,430 |
|
|
|
15,091 |
|
James T. Treace |
|
|
— |
|
|
|
— |
|
|
2025 PROXY STATEMENT |
25 |
Matters to Come before the Annual Meeting
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
Nominees
Our NCG Committee has recommended, and our Board has approved, Lawrence W. Hamilton and Deepti Jain, as nominees for election as Class I directors at the Annual Meeting. If elected, Mr. Hamilton and Ms. Jain will serve as Class I directors until our 2028 annual meeting of stockholders and until their respective successors are duly elected and qualified. Each of the nominees is currently a director of our Company. For information concerning the nominees, please see the section entitled "Board of Directors and Corporate Governance."
If you are a stockholder of record and you sign your proxy card or vote by telephone or over the internet but do not give instructions with respect to the voting of directors, your shares will be voted "FOR" the election of Lawrence W. Hamilton and Deepti Jain. We expect that Mr. Hamilton and Ms. Jain will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our Board to fill such vacancy. If you are a street name stockholder and you do not give voting instructions to your broker or nominee, your broker will leave your shares unvoted on this matter.
Required Vote
The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the two nominees receiving the highest number of affirmative "FOR" votes will be elected as Class I directors. Votes withheld and broker non-votes will have no effect on the outcome of the vote on this proposal.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR THE ELECTION OF EACH NOMINEE
UNDER PROPOSAL NO. 1.
26 |
|
Matters to Come before the Annual Meeting
PROPOSAL NO. 2:
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Company has designed its executive compensation to attract, motivate, reward and retain the senior management talent required to achieve our corporate objectives and to increase long-term stockholder value. We believe that our executive compensation program is designed to reward results relevant to our short-term and long-term success based on both corporate and individual performance.
The Securities and Exchange Commission has adopted requirements commonly referred to as the "Say-on-Pay" rules. As required by those rules, the Company is presenting the following proposal, which gives you as a stockholder the opportunity to endorse or not endorse our pay program for our executive officers identified in the Executive Compensation section of this proxy statement by voting for or against the following resolution (a "say-on-pay" vote). While the vote on the resolution is advisory in nature and therefore will not bind us to take any particular action, our Board intends to carefully consider the stockholder vote resulting from the proposal in making future decisions regarding our compensation program. Accordingly, we will ask our stockholders to vote "FOR" the following advisory resolution at the Annual Meeting:
"RESOLVED, that the stockholders approve, on an advisory, non-binding basis, the compensation of the named executive officers, as disclosed in the Executive Compensation section contained in the Company’s proxy statement for the 2025 annual meeting of stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission."
Required Vote
This proposal requires the approval of the majority of votes cast. Abstentions and broker non-votes are not considered to be votes cast and accordingly, will have no effect on the outcome of the vote on this proposal.
Unless otherwise determined by our Board, the next say-on-pay vote will be held at our 2026 annual meeting of stockholders.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR THE APPROVAL, ON AN ADVISORY, NON-BINDING BASIS, OF
THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
UNDER PROPOSAL NO. 2.
|
2025 PROXY STATEMENT |
27 |
Matters to Come before the Annual Meeting
PROPOSAL NO. 3:
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has appointed Grant Thornton LLP, independent registered public accountants, to audit our financial statements for our fiscal year ending December 31, 2025.
Neither our Bylaws nor other governing documents or law require stockholder ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm. However, as a matter of good corporate governance, the Board is requesting that our stockholders ratify the Audit Committee’s and the Board's appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2025. Grant Thornton LLP has served as our independent registered public accounting firm since 2018. The Audit Committee and the Board believe that the continued retention of Grant Thornton LLP as our independent auditor is in the best interests of the Company and its stockholders. The Audit Committee carefully considered the selection of Grant Thornton LLP as our independent auditor. In connection with this selection, the Audit Committee considered whether there should be a rotation of the independent audit firm. The Audit Committee charter requires the Audit Committee to periodically consider whether the independent audit firm should be rotated. In addition to evaluating rotation of the independent auditor, the Audit Committee oversees the selection of the new lead audit partner, and the Audit Committee Chair participates directly in the selection of the new lead audit partner.
If the stockholders fail to ratify the selection, the Audit Committee will reconsider its selection. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and our stockholders.
Representatives from Grant Thornton LLP are expected to be present at the Annual Meeting and will have an opportunity to make a statement at the Annual Meeting if they desire to do so and are expected to be available to respond to appropriate questions at the Annual Meeting.
Required Vote
This proposal requires the approval of the majority of votes cast. Abstentions will have no effect on the proposal. Because brokers have discretionary authority to vote on the ratification of the appointment of Grant Thornton LLP, we do not expect any broker non-votes in connection with this proposal.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP
AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE FISCAL YEAR ENDING December 31, 2025
UNDER PROPOSAL NO. 3.
28 |
|
Matters to Come before the Annual Meeting
Report of the Audit Committee
The material in the report below is not "soliciting material," is not deemed "filed" with the SEC, and is not to be incorporated by reference into any filing of TMCI under the Securities Act or the Exchange Act.
Audit Committee Report to Stockholders
The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2024 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board ("PCAOB") and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence from the Company and its management.
Based upon the Audit Committee’s discussions with management and the independent registered public accounting firm, and the Audit Committee’s review of the representations of management and the independent registered public accounting firm, the Audit Committee has recommended that the Board include the audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC.
Respectfully submitted,
THE AUDIT COMMITTEE
John K. Bakewell, Chair
Lance A. Berry
Lawrence W. Hamilton
Deepti Jain
Principal Accountant Fees and Services
The following table represents aggregate fees billed to the Company for 2023 and 2024 by Grant Thornton LLP, our independent registered public accounting firm.
|
|
Fiscal Year Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Audit Fees(1) |
|
$ |
913.7 |
|
|
$ |
1,027.1 |
|
Audit-Related Fees |
|
— |
|
|
— |
|
||
Tax Fees(2) |
|
|
85.8 |
|
|
|
56.6 |
|
All Other Fees |
|
— |
|
|
— |
|
||
|
|
|
|
|
|
|
||
Total Fees |
|
$ |
999.5 |
|
|
$ |
1,083.7 |
|
Pre-Approval Policies and Procedures
The Audit Committee has procedures in place for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, Grant Thornton LLP. The Audit Committee generally pre-approves specified services in the defined categories of audit services, audit-related services, and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.
The Audit Committee has determined that the rendering of services other than audit services by Grant Thornton LLP is compatible with maintaining the principal accountant’s independence.
|
2025 PROXY STATEMENT |
29 |
Executive Officers
EXECUTIVE OFFICERS
Name |
|
Age |
|
Title |
|
|
|
|
|
John T. Treace |
|
53 |
|
Chief Executive Officer, Founder and Director |
Mark L. Hair |
|
55 |
|
Chief Financial Officer |
Scot M. Elder |
|
50 |
|
Chief Legal & Compliance Officer, Corporate Secretary |
Sean F. Scanlan |
|
43 |
|
Chief Innovation Officer |
Gaetano M. Guglielmino |
|
55 |
|
Chief Commercial Officer |
Aaron J. Berutti |
|
46 |
|
Senior Vice President, Sales |
John T. Treace's biographical information is set forth above in the section entitled "Board of Directors and Corporate Governance—Directors and Nominees" in this proxy statement.
Mark L. Hair has served as our Chief Financial Officer since September 2020. From January 2018 to February 2020, Mr. Hair served as the Chief Financial Officer of Restoration Robotics, Inc., a medical device company. From May 2016 to August 2017, Mr. Hair served as the Vice President and Chief Accounting Officer of Zeltiq Aesthetics, Inc., a medical device company, including through its acquisition by Allergan plc in April 2017. From September 2014 to January 2016, Mr. Hair served as the Vice President and Corporate Controller of Thoratec Corporation, a medical device company, including through its acquisition by St. Jude Medical in October 2015. Mr. Hair has also served as Senior Vice President, Finance and Corporate Controller at Diamond Foods, Inc., and also held positions at StoneTurn Group, LLP, and Deloitte, LLP. Mr. Hair holds a BS in Accounting and a Masters of Accountancy from Brigham Young University.
Scot M. Elder has served as our Chief Legal & Compliance Officer, Corporate Secretary since October 2022. He joined the Company as Chief Compliance Officer in October 2021. From May 2019 until October 2021, Mr. Elder served as the Vice President and Chief Ethics and Compliance Officer of Medtronic plc (NYSE: MDT). He spent over 12 years at Medtronic plc in roles of progressively increasing responsibility, including as Vice President, General Counsel for the Restorative Therapies group and as Vice President, Chief Counsel, Compliance & Privacy Officer for the Surgical Technologies business. In addition, he serves on the AdvaMed Steering Committee. Mr. Elder holds a BA in History from the University of Utah and a JD from the University of California, Los Angeles (UCLA) Law School.
Sean F. Scanlan, Ph.D. has served as our Chief Innovation Officer since January 2023. From September 2021 until January 2023, he served as our Senior Vice President, Marketing, and from March 2021 to September 2021, he served as our Senior Vice President, Marketing & Medical Education. From January 2018 to March 2021, Dr. Scanlan served as our Vice President, Marketing & Medical Education, after serving in various marketing roles of increasing responsibility since December 2014. From June 2011 to April 2014, Dr. Scanlan served as Product Development Engineer Advanced Surgical Devices at Smith & Nephew (NYSE: SNN), focusing on product development and early-stage technology assessment. From January 2006 to May 2011, Dr. Scanlan led an interdisciplinary clinical research study at Stanford University, focusing on orthopaedic surgery and engineering and, from October 2009 to May 2011, served as a consultant for Moximed Inc., an early-stage orthopaedics start-up company. Dr. Scanlan holds a BS in Engineering Science (Biomechanics) from the University of Florida and an MS and PhD in Mechanical Engineering (Biomechanical Engineering division) from Stanford University.
Gaetano M. Guglielmino has served as our Chief Commercial Officer since December 2024. Before joining the Company, Mr. Guglielmino was President, Recovery Sciences at Enovis Corporation (NYSE: ENOV), a medical technology company, from January 2023 to December 2024. Before that, he held roles as Vice President Global Marketing, Bracing and Supports at Enovis from March 2021 to January 2023, Vice President of Global Marketing and Medical Education for Lower Extremities at Wright Medical Group Inc. (which was acquired by Stryker Corporation (NYSE: SYK) in November 2020) from April 2017 to March 2021, and held a series of progressively more senior marketing roles culminating as Vice President Marketing, US Vision Care, at Bausch + Lomb from 2012 to 2017. Mr. Guglielmino received his Bachelor of Science in Business & Entrepreneurship and his MBA from the Rochester Institute of Technology.
Aaron J. Berutti has served as our Senior Vice President, Sales since August 2021. From November 2018 to July 2021, Mr. Berutti held various positions at Orthofix Medical Inc. (NASDAQ: OFIX), including most recently as the Vice President Sales & Marketing, Extremities-U.S. and Canada. From February 2018 to October 2018, Mr. Berutti served as the Vice President of Business Development at Cartiva, Inc. From 2003 to 2017, Mr. Berutti held various positions at Wright Medical Group, Inc., which was acquired by Stryker Corporation (NYSE: SYK) in November 2020, including most recently as the Vice President Sales, Lower Extremity & Biologics, from September 2016 to November 2017. Mr. Berutti holds a BE in Mechanical Engineering from Vanderbilt University and an MS and MBA from the Kelly School of Business at Indiana University.
30 |
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Executive Compensation
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
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33 |
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35 |
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40 |
Introduction
This Compensation Discussion and Analysis discusses our compensation philosophy and explains how our executive compensation program is structured to advance our goal of aligning our executives' compensation with the long-term interests of our stockholders. We also explain how the Board’s Compensation Committee determined compensation for our named executive officers (our "NEOs") and the Compensation Committee’s rationale for specific pay decisions. Our NEOs for fiscal year 2024 were as follows:
2024 Named Executive Officers
Mr. Guglielmino commenced his employment with us in December 2024 as our Chief Commercial Officer.
2024 Performance and pay highlights
At TMCI, we are proud to be advancing the standard of care for the surgical treatment of bunions and related midfoot deformities. Our five-point strategy that includes rapid product innovations, a bunion-focused direct sales channel, surgeon education programs, direct-to-patient education, and supportive clinical evidence, has made us a leader in the rapidly growing bunion segment of the foot and ankle market.
In 2024, we achieved $209.4 million in annual revenue, an increase of 12% compared to the prior year. Our net loss in 2024 was ($55.7) million compared to ($49.5) million in 2023 with net loss in the fourth quarter 2024 of ($0.5) million compared to ($6.3) million for same period in 2023. Our Adjusted EBITDA improved substantially in 2024 to a loss of ($11.0) million, compared to a loss of ($24.4) million in 2023. This included our most profitable quarter ever in the fourth quarter of 2024, at $11.1 million in Adjusted EBITDA compared to $2.6 million for the same period in 2023, an improvement of 322%. For a reconciliation of GAAP net loss to Adjusted EBITDA, see Appendix 1. Our active surgeon base increased 10% year-over-year to a record 3,135 active surgeons at year-end.
2024 was also a year of business transformation as we accelerated our strategic initiative to become a comprehensive bunion solutions company. To address the evolving needs of surgeons and patients, we have launched a series of innovations that we believe will advance the standard of care for minimally-invasive osteotomies, arthritic great toe joints,
|
2025 PROXY STATEMENT |
31 |
Executive Compensation
and patient-specific bunion surgeries. We have also right-sized our operations, thereby reducing expenses, and improved our Adjusted EBITDA loss by more than 50%. While we made significant progress toward our strategic plans, ultimately our short-term performance metrics fell short of our challenging goals, and our annual cash incentive for the CEO and other NEOs with respect to 2024 was determined to be 12.3% of target.
In 2024, we increased the performance-based elements of our annual executive compensation program by replacing a portion of the stock options in our annual equity grant mix with performance stock units (with vesting aligned to our relative total stockholder return compared to other companies in our industry) for our CEO (with performance stock units comprising 50% of his annual grant mix) and NEOs (with performance stock units comprising 25% of their annual grant mix). These changes were made to more closely align the interests of our CEO and NEOs with stockholders and incentivize them to deliver on strategies and tactics expected to facilitate our long-term success.
As our strategic business transformation accelerated during 2024, we also took steps to retain key executives responsible for leading our transformation, with long-term retention awards of restricted stock units granted to NEOs (other than our CEO) in August 2024. We recognize that retention awards should be used in limited circumstances. Our Compensation Committee believed these grants were necessary to maintain leadership continuity during this period of business transformation and took these awards into account when setting 2025 target annual equity values.
In addition to reducing targeted annual equity values for 2025, we are continuing to evolve our policies and practices to improve the durability of our compensation program while continuing to closely tie our NEOs' interests with stockholders by (1) implementing new stock ownership guidelines, (2) eliminating stock options as a portion of the NEOs' annual equity grants, and (3) adjusting our 2025 annual incentive bonus plan to focus on only two financial goals in 2025: revenue growth and Adjusted EBITDA (before bonus).
Compensation Guiding Principles
We seek to ensure that the total compensation paid to our executive officers is reasonable and competitive. The objectives of our compensation programs are to:
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Executive Compensation
Compensation Design
The compensation program for our NEOs in 2024 was structured as shown below.
Type of Compensation |
Compensation Component |
Terms/Matrix |
Purpose |
Fixed, annual |
Salary |
Competitive amount that reflects the executive’s skill set, experience, role, and responsibilities |
Compensate executives for day-to-day performance |
Performance-based, annual |
Annual cash incentive award |
Payouts vary based on performance against prescribed targets for: • Revenue (70%) • Adjusted EBITDA before bonus (15%) • Active Surgeon Count (15%) |
Motivate NEOs to achieve short-term financial and strategic performance goals |
Variable, long-term |
Restricted stock units ("RSUs") (50% of target grant) |
RSUs vest 25% on each of the first four anniversaries of the grant date so long as the recipient remains employed by the Company |
Motivate NEOs to remain with the Company and align their interests with those of our stockholders |
Performance-based, long-term |
Performance stock units ("PSUs") • 50% of target grant for the CEO • 25% of target for the other NEOs |
Payouts, if any, vary based on our three-year relative total shareholder return ("TSR") compared to the S&P Health Care Equipment Select Index |
Motivate NEOs to achieve long-term performance goals and align their interests with those of our stockholders |
Stock options (25% of target grant for NEOs other than the CEO) |
Options vest 25% on each of the first four anniversaries of the grant date so long as the recipient remains employed by the Company on each applicable vesting date, and will remain exercisable for 10 years from the grant date |
Motivate NEOs to pursue actions that will increase the stock price and stockholder return |
|
Variable, long-term |
Retention restricted stock units for NEOs other than the CEO |
RSUs vest 33% on each of the first three anniversaries of the grant date so long as the recipient remains employed by the Company |
Special, non-recurring award to retain and motivate NEOs during a period of significant business transformation |
Compensation-Setting Process
Role of the Compensation Committee. The Compensation Committee is responsible for establishing and administering the annual incentive programs for the NEOs, overseeing and administering our equity incentive plans, and setting the compensation for the NEOs other than the CEO. The Compensation Committee recommends the compensation for our CEO to the independent members of our Board for their approval.
Role of Outside Consultants. From time to time, the Compensation Committee may use outside compensation consultants to assist it in analyzing our compensation programs and in determining appropriate levels of compensation and benefits. The Compensation Committee first engaged Compensia, Inc., a compensation consulting firm, to provide advice on compensation before TMCI became a publicly traded company. Since that time, Compensia also has advised the Compensation Committee regarding the selection of a group of peer companies to use for compensation benchmarking purposes, and advised on cash and equity compensation levels and methods for our executives (as well as our directors and other employees) based on current market practices.
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2025 PROXY STATEMENT |
33 |
Executive Compensation
Compensia reports directly to the Compensation Committee and does not provide any non-compensation-related services to TMCI. Compensia has affirmed its independence on executive compensation matters. The Compensation Committee has evaluated Compensia on each of the six independence factors established by the SEC, and based on this assessment, the Compensation Committee determined that the engagement of Compensia does not raise any conflict of interest or similar concerns.
The Compensation Committee has evaluated the independence of its other outside advisors, including outside legal counsel, considering the same independence factors, and concluded that their work for the Compensation Committee does not raise any conflict of interest.
Role of Management. In performing its responsibilities, the Compensation Committee consults with members of our management, including our CEO, our CFO and our Chief Human Resources Officer. Management assists the Compensation Committee by providing information on corporate and individual performance, market compensation data, and management’s perspective on compensation matters. The Compensation Committee solicits and reviews our CEO’s recommendations and viewpoints with respect to adjustments to total direct compensation opportunities, program structures, and other compensation-related matters for our NEOs, other than with respect to the CEO’s own compensation. Our CEO is not present during any deliberations or decision-making regarding his own compensation.
Role of Market Data. The Compensation Committee considers compensation benchmarking data provided by Compensia and approves a compensation comparator group annually. Our comparator group includes direct competitors as well as a broader mix of medical device, medical equipment, and health care technology companies. TMCI was in the 49th percentile of the comparator group for revenue at the time we established the 2024 peer group and at the 25th percentile for market capitalization.
Alphatec Holdings |
Inspire Medical Systems |
PROCEPT BioRobotics |
AtriCure |
LeMaitre Vascular |
Pulmonx |
Atrion |
Nevro |
Quanterix |
AxoGen |
NuVasive |
SI-BONE |
Axonics |
OrthoPediatrics |
Silk Road Medical |
Castle Biosciences |
Outset Medical |
STAAR Surgical Company |
Glaukos |
Paragon 28 |
TransMedics Group |
Inari Medical |
|
|
For 2025, after considering advice and market data prepared by Compensia, the Compensation Committee decided to adjust the comparator group by removing three companies and adding two companies. The 2025 comparator group is shown below.
Alphatec Holdings |
LeMaitre Vascular |
Quanterix |
AtriCure |
Nevro |
RxSite* |
Atrion |
OrthoPediatrics |
SI-BONE |
AxoGen |
Outset Medical |
Silk Road Medical |
Axonics |
Paragon 28 |
STAAR Surgical Company |
Castle Biosciences |
PROCEPT BioRobotics |
Tactile Systems Technology* |
Inari Medical |
Pulmonx |
TransMedics Group |
* Added for 2025
Glaukos and Inspire Medical Systems were removed because their revenue and market capitalization are higher than our selection parameters permit, and NuVasive was removed because it was acquired.
The Compensation Committee uses data drawn from our compensation peer group to evaluate the competitive market when determining the total direct compensation packages for our executive officers, including salary, target short-term annual cash incentive award opportunities and long-term incentive compensation opportunities.
Setting Target Total Direct Compensation. The Compensation Committee conducts an annual review of the compensation arrangements of our NEOs, typically during the first quarter of each fiscal year. As part of this review, the Compensation Committee evaluates base salaries, annual cash incentive opportunities, long-term equity incentive opportunities and all performance criteria associated with such incentives. In developing its recommendations, the Compensation Committee
34 |
|
Executive Compensation
aims to provide market competitive total direct compensation, taking into consideration the market data discussed above. In addition to market competitiveness, the Compensation Committee also considers various factors, including the scope and complexity of each executive's role; each executive's experience, qualifications, and skills; historic compensation levels; corporate performance against our financial, operational and strategic objectives; individual performance as compared to our expectations and objectives; our desire to motivate NEOs to achieve results that contribute to our long-term success and are in stockholders’ best interests; internal equity; and the retention risk (and replacement cost) of each NEO. These factors provide a framework for decision-making regarding compensation opportunities and final compensation determinations for each NEO. No single factor is determinative in the Compensation Committee’s decision-making, or weighted in any predetermined manner.
Previous Say-on-Pay Vote. In setting the form and amount of compensation for our NEOs, the Compensation Committee also considered the voting results from our most recent non-binding, advisory stockholder vote on the compensation of our NEOs (a “Say-on-Pay vote”) as well as feedback received from stockholders throughout the year. 91.78% of our stockholders voted to support our 2023 executive compensation program at our 2024 Annual Meeting of Stockholders, which did not lead us to make any fundamental changes to our executive compensation program in 2024. We are conducting a Say-on-Pay vote on the compensation of our NEOs at the 2025 Annual Meeting (see Proposal No. 2). The Compensation Committee will continue to consider stockholder feedback and the results of our Say-on-Pay votes when making compensation decisions for our executive officers, including our NEOs, in the future.
2024 Executive Compensation Decisions
Salary
The Compensation Committee approves salaries for the NEOs other than our CEO, and recommends to the independent directors the approval of our CEO’s salary.
The salary payable to each NEO is intended to provide a fixed component of compensation that reflects the executive’s skill set, experience, role, and responsibilities. Salaries are generally established in the first quarter of each fiscal year, but our Board and Compensation Committee may adjust base salaries from time to time in their discretion, typically after considering recent performance, changes to roles and responsibilities, and market, industry and peer trends information. In making these decisions, the Compensation Committee considers the factors described in "Compensation-Setting Process" above and reviews an analysis of competitive market data drawn from the compensation peer group as approved for use in 2024. The following table sets forth the base salaries of each of our NEOs as of February 2024, when our Compensation Committee (or for the CEO, the Board) approved the salary adjustments, and includes the prior salaries in effect before such change and the percentage of change (except for Mr. Guglielmino, who assumed his role as Chief Commercial Officer in December 2024).
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Executive |
|
February 2024 Salary |
|
Prior Salary |
|
% Change |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
John T. Treace |
|
|
$ |
728,000 |
|
|
|
|
$ |
700,000 |
|
|
|
4.0% |
Mark L. Hair |
|
|
$ |
495,000 |
|
|
|
|
$ |
465,000 |
|
|
|
6.5% |
Scot M. Elder |
|
|
$ |
415,000 |
|
|
|
|
$ |
380,000 |
|
|
|
9.2% |
Sean F. Scanlan |
|
|
$ |
425,000 |
|
|
|
|
$ |
390,000 |
|
|
|
9.0% |
Gaetano M. Guglielmino(1) |
|
|
$ |
440,000 |
|
|
|
|
N/A |
|
|
|
N/A |
|
2024 Annual Cash Incentive Plan
Our NEOs each participate in the annual cash incentive plan that provides for cash compensation based on achievement of prescribed annual performance goals, as established by our Compensation Committee and confirmed by our Board.
Target Opportunities. Each NEO’s annual bonus opportunity is stated as a percentage of salary. The target short-term annual cash incentive award opportunities for our executive officers, including our NEOs, were recommended to the Compensation Committee by our CEO (except with respect to his own target short-term annual cash incentive award opportunity), and
|
2025 PROXY STATEMENT |
35 |
Executive Compensation
approved by the Compensation Committee (or for the CEO, the Board). The determination of target short-term annual cash incentive award opportunities was based on the factors described in "Compensation-Setting Process" above and a review of an analysis of competitive market data drawn from the compensation peer group as approved for use in 2024. For 2024, the NEOs’ bonus opportunities (other than Mr. Guglielmino) were as follows:
Executive |
|
2024 Target Bonus (%) |
|
2024 Target Bonus ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John T. Treace |
|
100% |
|
|
728,000 |
|
Mark L. Hair |
|
50% |
|
|
247,500 |
|
Scot M. Elder |
|
50% |
|
|
207,500 |
|
Sean F. Scanlan |
|
50% |
|
|
212,500 |
|
Mr. Guglielmino did not participate in the 2024 cash incentive plan since he joined the Company in December 2024.
Performance Metrics. Our 2024 annual cash incentive plan provided for compensation based upon achievement of performance goals for revenue growth, Adjusted EBITDA (before bonus), and active surgeon count.
Performance Metric |
Weighting |
Why this Metric was chosen |
Revenue Growth |
Key financial metric used by investors to evaluate the Company's growth and adoption of our products |
|
Adjusted EBITDA (before bonus) |
Key financial metric used by investors to measure the Company's path to profitability and ability to meet its debt service obligations |
|
Active Surgeon Count |
Key operational metric to support continued adoption of our products |
For each performance metric, the Compensation Committee, after consultation with the management team, established threshold, target, and maximum goals, as shown below.
|
|
|
|
|
|
|
|
|
Metric |
|
Weight |
|
Threshold |
|
Target |
|
Maximum |
|
|
|
|
|
|
|
|
|
Revenue growth(1) |
|
70% |
|
12.4% |
|
24.9% |
|
37.4% |
Adjusted EBITDA (before bonus)(2) |
|
15% |
|
($7,380) |
|
$1,037 |
|
$9,453 |
Increase in active surgeon count(3) |
|
15% |
|
2.5% |
|
13.8% |
|
25.2% |
36 |
|
Executive Compensation
2024 Performance Results and Payouts. Our Compensation Committee determined in early 2025 the performance results for purposes of the 2024 annual cash incentive plan as shown below.
|
|
|
|
|
|
|
|
|
|
|
Metric |
|
Weight |
|
Target |
|
Results |
|
Achievement (% of target) |
|
Weighted payout |
|
|
|
|
|
|
|
|
|
|
|
Revenue growth |
|
70% |
|
24.9% |
|
11.9% |
|
Below threshold |
|
0% |
Adjusted EBITDA (before bonus) |
|
15% |
|
$1,037 |
|
($7,689) |
|
Below threshold |
|
0% |
Increase in active surgeon count |
|
15% |
|
13.8% |
|
9.8% |
|
96.5% |
|
12.3% |
Final Payout |
|
|
|
|
|
|
|
|
|
12.3% |
Based on the 12.3% payout earned, in early 2025 the Compensation Committee (and for our CEO, the Board) approved the following annual cash incentives for the NEOs in 2024:
Executive |
|
2024 Target Bonus |
|
|
2024 Actual Bonus |
|
||
John T. Treace |
|
$ |
728,000 |
|
|
$ |
89,880 |
|
Mark L. Hair |
|
$ |
247,500 |
|
|
$ |
30,557 |
|
Scot M. Elder |
|
$ |
207,500 |
|
|
$ |
25,618 |
|
Sean F. Scanlan |
|
$ |
212,500 |
|
|
$ |
26,236 |
|
Mr. Guglielmino was not eligible for a bonus since he joined the Company in December 2024.
Enhancements for 2025. For 2025, consistent with its increased emphasis on financial performance, the Compensation Committee eliminated the “active surgeon count” metric and adjusted the weighting of the revenue metric to 60% and the Adjusted EBITDA (before bonus) metric to 40%. Full details regarding the 2025 annual cash incentive plan will be provided in next year’s proxy statement.
Long-Term Equity Incentive Compensation
Annual Long-Term Incentive Awards. The Compensation Committee generally grants equity awards to the NEOs every year in the first fiscal quarter. Long-term incentive compensation opportunities in the form of equity awards are granted by the Compensation Committee (except for the CEO, which is granted by the Board). The amount and forms of such equity awards are determined by the Compensation Committee after considering the factors described in "Compensation-Setting Process" above and reviewing an analysis of competitive market data drawn from the compensation peer group as approved for use in 2024. As shown below, for 2024, our CEO was granted RSUs and PSUs in equal proportions. The NEOs other than the CEO received the target value of their equity grants in RSUs (50%), PSUs (25%), and options to purchase our common stock (25%).
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|
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|
||||
Executive |
|
Options (#) |
|
|
RSUs (#) |
|
|
PSUs (#) |
|
|
Target Grant Value ($)(1) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
John T. Treace |
|
— |
|
|
|
178,325 |
|
|
|
178,325 |
|
|
$ |
4,800,000 |
|
|
Mark L. Hair |
|
|
104,600 |
|
|
|
92,875 |
|
|
|
46,450 |
|
|
$ |
2,500,000 |
|
Scot M. Elder |
|
|
69,050 |
|
|
|
61,300 |
|
|
|
30,650 |
|
|
$ |
1,650,000 |
|
Sean F. Scanlan |
|
|
73,200 |
|
|
|
65,025 |
|
|
|
32,525 |
|
|
$ |
1,750,000 |
|
|
2025 PROXY STATEMENT |
37 |
Executive Compensation
Restricted Stock Units. 25% of the RSUs will vest on each of the first four anniversaries of the grant date subject to the recipient's continued service with the Company on the applicable vesting date.
Stock Options. 25% of the shares subject to the Option will vest on each of the first four anniversaries of the grant date subject to the recipient's continued service with the Company on the applicable vesting date and will remain exercisable for 10 years from the grant date.
Performance Stock Units. The PSUs vest, if at all, based on our relative total shareholder return performance as compared to the S&P Health Care Equipment Select Index over a three-year performance period, with interim earning opportunities after the first and second years of the performance period. The relative return factor for each performance period is calculated based on the following scale:
|
|
|
|
|
|
|
TMCI 3-year relative TSR vs. Index |
|
PSU Funding |
|
|
|
|
|
Max |
|
75th percentile |
|
200% |
Target |
|
50th percentile |
|
100% |
Threshold |
|
25th percentile |
|
50% |
The number of PSUs that are deemed to be earned at the end of each one- and two-year performance periods is determined by taking one-third of the NEO’s target PSUs multiplied by the relative return factor for the relevant performance period measured as of the end of such interim performance periods, although such amount is capped at 100% of one-third of the NEO's target PSUs. The number of PSUs that vests at the end of the three-year performance period is determined by taking the total number of the NEO’s target PSUs multiplied by the relative return factor for the three-year performance period, and then subtracting any shares of our common stock earned in the one-year and two-year performance periods from the result. The total number of shares vested in the one-year and two-year periods is not retroactively adjusted if the three-year calculation, less shares earned in prior periods, is a negative number.
Our relative TSR will be measured based on 30-trading-day average stock price immediately before the beginning of the performance period to the 30-trading-day average stock price at the end of the performance period, measured cumulatively over the given performance period beginning January 1, 2024.
In the event that a change in control (as defined in the 2021 Plan) occurs before the end of the performance period and subject to the applicable NEO’s continued service immediately before the closing of such change in control, then the
38 |
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Executive Compensation
performance stock units will convert into time-based restricted stock units immediately before the change in control with the number of converted time-based RSUs equal to the greater of (1) the interim earned performance stock units or (2) the number of performance stock units that would have vested based on actual performance using the change in control price. The time-based restricted stock units granted in 2024 will then vest on December 31, 2026, subject to the NEO’s continued service through the vesting date.
Regardless of our relative TSR performance, individual payouts (taking into account the performance multiplier and any increases in the stock price) cannot exceed 7.5 times the target value of the recipient’s grant.
Since our relative TSR did not meet 25th percentile for the one-year performance period ending December 31, 2024, none of the target shares were deemed earned at the end of the one-year performance period.
Long-Term Retention Awards. In August 2024, the Compensation Committee granted retention awards in the form of RSUs to all of the NEOs other than the CEO. These awards, which are intended to retain and motivate our talented senior management team through our business transformation that was underway, will vest in three equal installments over three years on the first, second and third anniversaries of the grant date (subject to the applicable NEO's continued service through the vesting date.) When making these grants, the Compensation Committee considered the Company’s minimal use of time-based equity prior to 2023 and the fact that outstanding stock option awards from prior years are unlikely to provide significant value due to a significant number of such options being underwater, which diminishes their usefulness as a tool for retention or motivation.
The 2024 retention awards were granted in the target amounts shown below
Executive |
|
2024 Target Retention Award |
|
No. of RSUs granted |
|
||
John T. Treace |
|
N/A |
|
— |
|
||
Mark L. Hair |
|
$ |
1,200,000 |
|
|
207,260 |
|
Scot M. Elder |
|
$ |
750,000 |
|
|
129,540 |
|
Sean F. Scanlan |
|
$ |
700,000 |
|
|
120,900 |
|
Mr. Guglielmino was not an officer at the time the 2024 retention awards were made.
In late October 2024, when seeking to recruit Mr. Guglielmino to join the Company as Chief Commercial Officer, the Compensation Committee set the target award value for Mr. Guglielmino's initial equity grant at 330,000 RSUs (with a target award value of $1,750,000). Additionally, to compensate Mr. Guglielmino for incentive pay that he would be foregoing with his former employer, the Compensation Committee approved offering him a signing bonus consisting of $100,000 in cash and a grant of 33,000 RSU (with a target award value of $175,000). The RSUs were granted on December 1, 2024 which coincided with Mr. Guglielmino's first day of employment. These RSUs vest over four years from the grant date in 25% annual installments on the first four anniversaries of the grant date, subject to Mr. Guglielmino's continued service through each such vesting date.
Enhancements for 2025. We recognize that retention awards should only be used in limited circumstances. To minimize the need for retention grants in the future, we have evolved the structure of our 2025 long-term equity awards for NEOs (other than the CEO) to eliminate the use of stock options. Accordingly, in 2025, awards for all NEOs will consist of only RSUs and PSUs as follows:
Officer Role |
|
RSUs (% of target grant) |
|
PSUs (% of target grant) |
Chief Executive Officer |
|
50% |
|
50% |
Other NEOs |
|
75% |
|
25% |
The Compensation Committee believes the elimination of stock options will improve the durability of our long-term incentive program across market and business conditions, while continuing to focus NEOs on our long-term success and align their interests with those of our stockholders.
Previously Granted in-Cycle Long-Term Equity Awards. As previously disclosed in the proxy statement filed in 2023, in July 2023, we granted PSU awards to our senior management team, including the NEOs. The actual number of PSUs that vest, if
|
2025 PROXY STATEMENT |
39 |
Executive Compensation
any, will be determined in July 2025 based on the Company's TSR relative to the TSR of the S&P Health Care Equipment Select Index. Accordingly, the performance results of this award will be disclosed in next year’s proxy statement.
Special Performance-Based Incentive for Chief Legal Officer. During 2024, Mr. Elder, our Chief Legal and Compliance Officer, assumed significant additional work in managing a complex and significant lawsuit, the outcome of which was critical to the execution of our future business objectives. Given Mr. Elder’s institutional knowledge of the matters involved and importance of retaining him, the Compensation Committee determined that a special incentive arrangement for Mr. Elder was necessary and appropriate to retain and compensate him for these additional responsibilities while directly aligning his incentives with the successful navigation of this litigation. Accordingly, the Compensation Committee approved (1) in September 2024, the grant to Mr. Elder restricted stock units for 200,000 shares with a target value of $1,200,000, which vest over three years from the grant date in equal annual installments on the first three anniversaries of the grant date, subject to Mr. Elder's continued service through each applicable vesting date, and (2) in November 2024, a special incentive arrangement for Mr. Elder that provided for cash payments of up to $500,000 and the grant of restricted stock units for up to 31,100 shares upon achievement of certain milestones in the lawsuit. In accordance with this arrangement, Mr. Elder was awarded a portion of these incentives upon filing of the lawsuit, which included a cash incentive payment of $125,000 and the grant of 15,550 shares of restricted stock units that vested on November 11, 2024. In the event of a change in control (as defined in the 2021 Plan) before vesting in full of the cash bonus and equity awards, the then-unvested restricted stock units will vest in full and the then-unpaid bonus will be paid in full as of immediately prior to the closing of such change in control, subject to Mr. Elder's continued employment through such date.
Other Elements of Compensation
Retirement Savings and Health and Welfare Benefits. All of our full-time employees, including our NEOs, are eligible to participate in our health and welfare plans.
We maintain a 401(k) profit-sharing plan for our employees, including our NEOs, who satisfy certain eligibility requirements. Our NEOs participate in the 401(k) plan on the same terms as other full-time employees. We match employee contributions to the 401(k) plan at a rate equal to 100% of the first 3% of the employee’s pre-tax salary contributed and 50% of any additional contributions up to 5% of the employee’s pre-tax salary, subject to a maximum Company contribution of 4% of the participant’s pre-tax salary per year. Participants become vested in their Company matching contributions 100% immediately after meeting the eligibility requirements for participation. We believe that providing a vehicle for tax-deferred retirement savings through our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our NEOs, in accordance with our compensation policies.
Perquisites and Other Personal Benefits. We determine perquisites on a case-by-case basis and will provide a perquisite when we believe it is necessary to attract or retain a particular NEO. We did not provide any perquisites or other personal benefits for our NEOs in 2024. Although we note that Mr. Guglielmino is eligible for relocation benefits, none were paid in 2024.
Compensation-Related Policies
Clawback Policy. Our clawback policy, which went into effect in October 2023, applies to current or former Section 16 officers. The policy requires us, subject to limited exemptions provided by the Listing Rules, to recoup incentive-based compensation erroneously received after October 2, 2023, and within the three fiscal years preceding the date an accounting restatement is determined to be required. For these purposes, incentive compensation will be considered “erroneously received” if the amount awarded was calculated based on financial information that is later determined to have been wrong. Our policy does not require any finding of negligence or fault on the part of a recipient before we recoup erroneously awarded compensation.
Anti-Hedging and Anti-Pledging Policy. Our insider trading compliance policy prohibits our directors, executive officers, and other employees from engaging in hedging transactions, such as zero-cost collars and forward sale contracts, or other inherently speculative transactions with respect to Company securities, such as short sales or transactions in publicly traded put or call options. Our directors, executive officers, and other employees also are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.
40 |
|
Executive Compensation
Stock Ownership Guidelines. On February 19, 2025, our Board adopted stock ownership guidelines for our directors (defined in the guidelines to mean any non-employee member of the Board) and executive officers (defined in the guidelines as executive officers under Section 16 of the Exchange Act). Under these guidelines, each director and executive officer should own shares of our common stock having an aggregate value consistent with the following levels:
Participant |
|
Annual Base Pay Threshold |
Directors |
|
3X Board Cash Retainer* |
Chief Executive Officer |
|
5X Salary |
Other Executive Officers |
|
1X Salary |
*Excludes fees for Committee or Board leadership service.
Shares of our common stock that count toward the minimum ownership requirement will include
Shares that count toward satisfaction of the minimum ownership requirement will not include (i) shares subject to outstanding and unexercised stock options, whether vested or unvested and whether exercisable or unexercisable; (ii) performance-based vesting restricted common stock or other performance-based incentive awards with respect to the extent applicable performance goals have not been achieved; and (ii) all other forms of derivative securities.
The executive officers and directors are expected to achieve the applicable ownership level no later than December 31, 2030 or, if later, the fifth anniversary of their appointments to such roles. Compliance with the stock ownership guidelines will be measured as of the last trading day before December 31 of each year, beginning December 31, 2030. As of the record date for the Annual Meeting, all of our executive officers and directors were still within the five-year accumulation period under the stock ownership guidelines, and therefore in compliance with the stock ownership guidelines.
Equity Award Timing Policies and Practices.
There were no grants of options to our NEOs within four business days before or one business day after the release of MNPI on Forms 8-K, 10-Q or 10-K in 2024. As such, no table of such option grants is presented under Item 402(x) of Regulation S-K.
|
2025 PROXY STATEMENT |
41 |
Executive Compensation
Tax and Accounting Considerations
Deductibility of Executive Compensation. Generally, Section 162(m) of the Code (“Section 162(m)”) disallows a federal income tax deduction for public corporations of remuneration in excess of $1 million paid in any fiscal year to certain specified current and former executive officers. These executive officers include our chief executive officer, chief financial officer, and any employee who is among the three highest compensated executive officers for the taxable year (other than the chief executive officer and chief financial officer), regardless of whether the executive officer is serving at the end of the public company’s taxable year and regardless of whether the executive officer’s compensation is subject to disclosure for the last completed fiscal year under the applicable SEC rules (a “Covered Employee”). In addition, once an individual becomes a Covered Employee for any taxable year beginning after December 31, 2016, that individual will remain a Covered Employee for all future years, including following any termination of employment.
While we may take into account deductibility of compensation when making compensation decisions, our Compensation Committee believes that stockholder interests are best served if our Compensation Committee retains maximum flexibility to design an executive compensation program that meets stated business objectives. Therefore, our Compensation Committee has approved base salaries and other compensation awards for our executive officers that may not be fully deductible because of the deduction limit of Section 162(m) and expects in the future to approve additional compensation that is not deductible for federal income tax purposes.
Accounting for Stock-Based Compensation. We follow ASC Topic 718 for our stock-based compensation awards. ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and non-employee members of our Board, including options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.
Compensation Risk Assessment. Our Compensation Committee assesses and considers the potential risks associated with the compensation program for our executive officers and employees. Based upon this assessment, our Compensation Committee believes that our compensation plans, policies and practices for our NEOs and other employees do not create risks that are reasonably likely to have a material adverse effect on our Company.
Compensation Committee Report to Stockholders
The Compensation Committee has reviewed and discussed with management the section entitled “Compensation Discussion and Analysis” contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to our Board that the section entitled “Compensation Discussion and Analysis” be included in this proxy statement.
Respectfully submitted,
THE COMPENSATION COMMITTEE
Lawrence W. Hamilton, Chair
Elizabeth S. Hanna
Jane E. Kiernan
Richard W. Mott
42 |
|
Executive Compensation
Summary Compensation Table
The following table sets forth total compensation paid to our NEOs for services performed in 2022, 2023 and 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position |
|
Year |
|
Salary |
|
Bonus |
|
Stock |
|
Option |
|
Non-Equity |
|
All Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John T. Treace |
|
2024 |
|
723,410 |
|
— |
|
5,768,814 |
|
— |
|
89,880 |
|
15,056 |
(3) |
6,597,160 |
|
Chief Executive Officer, |
|
2023 |
|
684,384 |
|
— |
|
5,350,966 |
|
1,977,589 |
|
393,000 |
|
16,696 |
|
8,422,635 |
|
Director and Founder |
|
2022 |
|
568,219 |
|
— |
|
648,706 |
|
1,931,854 |
|
457,000 |
|
11,470 |
|
3,617,249 |
|
Mark L. Hair |
|
2024 |
|
490,082 |
|
— |
|
3,327,573 |
|
625,822 |
|
30,557 |
|
11,268 |
(4) |
4,485,302 |
|
Chief Financial Officer |
|
2023 |
|
457,973 |
|
— |
|
2,987,977 |
|
1,098,837 |
|
130,500 |
|
11,222 |
|
4,686,509 |
|
|
|
2022 |
|
404,109 |
|
— |
|
228,843 |
|
680,527 |
|
213,500 |
|
10,991 |
|
1,537,970 |
|
Scot M. Elder |
|
2024 |
|
409,262 |
|
— |
|
3,571,932 |
(5) |
413,126 |
|
150,619 |
(5) |
5,676 |
(6) |
4,550,615 |
|
Chief Legal & Compliance |
|
2023 |
|
376,822 |
|
— |
|
2,008,556 |
|
659,196 |
|
106,750 |
|
5,292 |
|
3,156,616 |
|
Officer, Corporate Secretary |
|
2022 |
|
309,466 |
|
— |
|
200,718 |
|
616,659 |
|
190,000 |
|
5,015 |
|
1,321,857 |
|
Sean F. Scanlan |
|
2024 |
|
419,262 |
|
— |
|
2,189,645 |
|
437,956 |
|
26,235 |
|
12,337 |
(7) |
3,085,435 |
|
Chief Innovation Officer |
|
2023 |
|
380,630 |
|
— |
|
1,898,436 |
|
549,683 |
|
109,500 |
|
11,629 |
|
2,949,878 |
|
|
|
2022 |
|
321,370 |
|
— |
|
203,397 |
|
607,841 |
|
195,000 |
|
10,574 |
|
1,338,182 |
|
Gaetano M. Guglielmino (8) |
|
2024 |
|
37,268 |
|
100,000 |
(9) |
3,092,760 |
|
— |
|
— |
|
70 |
(10) |
3,230,098 |
|
Chief Commercial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 PROXY STATEMENT |
43 |
Executive Compensation
Grants of Plan-Based Awards for 2024
The following table sets forth information regarding grants of plan-based awards to our NEOs during 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated future payouts under non- |
|
Estimated future payouts under |
|
|
|
|
|
||||||||
Name |
Grant |
Threshold |
|
Target |
|
Maximum |
|
Threshold |
|
Target |
|
Maximum |
All other |
|
All other |
Exercise |
Grant date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
(b) |
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
(i) |
|
(j) |
(k) |
(l) |
John T. |
— |
364,000 |
|
728,000 |
|
1,092,000 |
|
— |
|
— |
|
— |
— |
|
— |
— |
— |
Treace |
1/10/2024 |
— |
|
— |
|
— |
|
89,163 |
|
178,325 |
|
356,650 |
— |
|
— |
— |
3,368,559 |
|
1/10/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
178,325 |
|
— |
— |
2,400,255 |
Mark L. Hair |
— |
123,750 |
|
247,500 |
|
371,250 |
|
— |
|
— |
|
— |
— |
|
— |
— |
— |
|
1/10/2024 |
— |
|
— |
|
— |
|
23,225 |
|
46,450 |
|
92,900 |
— |
|
— |
— |
877,441 |
|
1/10/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
92,875 |
|
— |
— |
1,250,098 |
|
1/10/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
104,600 |
13.46 |
625,822 |
|
8/9/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
207,260 |
|
— |
— |
1,200,035 |
Scot M. Elder |
— |
103,750 |
|
207,500 |
|
311,250 |
|
— |
|
— |
|
— |
— |
|
— |
— |
— |
|
1/10/2024 |
— |
|
— |
|
— |
|
15,325 |
|
30,650 |
|
61,300 |
— |
|
— |
— |
578,979 |
|
1/10/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
61,300 |
|
— |
— |
825,098 |
|
1/10/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
69,050 |
13.46 |
413,126 |
|
8/9/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
129,540 |
|
— |
— |
750,037 |
|
9/30/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
200,000 |
|
— |
— |
1,160,000 |
|
11/11/2024 |
125,000 |
(5) |
500,000 |
(5) |
N/A |
|
15,550 |
(6) |
31,100 |
(6) |
N/A |
— |
|
— |
— |
257,819 |
Sean F. |
— |
106,250 |
|
212,500 |
|
318,750 |
|
— |
|
— |
|
— |
— |
|
— |
— |
— |
Scanlan |
1/10/2024 |
— |
|
— |
|
— |
|
16,263 |
|
32,525 |
|
65,050 |
— |
|
— |
— |
614,397 |
|
1/10/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
65,025 |
|
— |
— |
875,237 |
|
1/10/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
73,200 |
13.46 |
437,956 |
|
8/9/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
120,900 |
|
— |
— |
700,011 |
Gaetano M. |
12/1/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
330,000 |
|
— |
— |
2,811,600 |
Guglielmino |
12/1/2024 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
33,000 |
|
— |
— |
281,160 |
44 |
|
Executive Compensation
|
2025 PROXY STATEMENT |
45 |
Executive Compensation
Outstanding Equity Awards at 2024 Fiscal Year-End
The following table sets forth information regarding outstanding stock options and stock awards held by our NEOs as of December 31, 2024. The market value of the awards is determined by multiplying the number of unvested shares or units by $7.44, the closing price of the Company’s common stock on Nasdaq on December 31, 2024, the last trading day of 2024. For those awards that are subject to performance-based conditions as described in the footnotes below, the number of shares reflects performance assuming achievement at target unless otherwise noted. The equity awards below are subject to certain vesting acceleration provisions as provided in the applicable equity award agreements or an individual agreement with the applicable NEO, as discussed in the sections entitled “Executive Compensation Arrangements” and the “Potential Payments Upon Termination or Change in Control."
|
|
Option Awards |
|
Stock Awards |
||||||||||||||
Name |
|
Vesting |
|
Number of |
|
Number of |
|
Option |
|
Option |
|
Number of |
|
Market Value |
|
Equity |
|
Equity |
John T. |
|
03/08/2022 |
|
120,284 |
|
120,282 |
|
$19.15 |
|
3/8/2032 |
|
16,937 |
|
$126,011 |
|
— |
|
— |
Treace |
|
03/08/2022 |
|
10,442 |
|
10,442 |
|
$21.07 |
|
3/8/2027 |
|
— |
|
— |
|
— |
|
— |
|
|
03/10/2023 |
|
46,725 |
|
140,175 |
|
$24.07 |
|
3/10/2033 |
|
61,856 |
|
$460,209 |
|
— |
|
— |
|
|
07/24/2023 |
(2) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
107,225 |
|
$797,754 |
|
|
01/10/2024 |
(3) |
— |
|
— |
|
— |
|
— |
|
178,325 |
|
$1,326,738 |
|
178,325 |
|
$1,326,738 |
Mark L. Hair |
|
9/21/2020 |
|
320,999 |
|
— |
|
$5.84 |
|
9/21/2030 |
|
— |
|
— |
|
— |
|
— |
|
|
10/20/2020 |
|
214,000 |
|
— |
|
$5.84 |
|
10/20/2030 |
|
— |
|
— |
|
— |
|
— |
|
|
2/02/2021 |
|
8,025 |
|
2,675 |
|
$7.03 |
|
2/2/2031 |
|
— |
|
— |
|
— |
|
— |
|
|
4/22/2021 |
|
70,219 |
|
23,406 |
|
$17.00 |
|
4/22/2031 |
|
— |
|
— |
|
— |
|
— |
|
|
3/8/2022 |
|
46,050 |
|
46,050 |
|
$19.15 |
|
3/8/2032 |
|
5,974 |
|
$44,447 |
|
— |
|
— |
|
|
3/10/2023 |
|
25,963 |
|
77,887 |
|
$24.07 |
|
3/10/2033 |
|
34,368 |
|
$255,698 |
|
— |
|
— |
|
|
7/24/2023 |
(2) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
60,050 |
|
$446,772 |
|
|
1/10/2024 |
(3) |
— |
|
104,600 |
|
$13.46 |
|
1/10/2034 |
|
92,875 |
|
$690,990 |
|
46,450 |
|
$345,588 |
|
|
8/9/2024 |
(4) |
— |
|
— |
|
— |
|
— |
|
207,260 |
|
$1,542,014 |
|
— |
|
— |
Scot M. |
|
10/25/2021 |
|
75,000 |
|
25,000 |
|
$22.13 |
|
10/25/2031 |
|
2,500 |
|
$18,600 |
|
— |
|
— |
Elder |
|
3/8/2022 |
|
11,050 |
|
11,050 |
|
$19.15 |
|
3/8/2032 |
|
1,437 |
|
$10,691 |
|
— |
|
— |
|
|
10/1/2022 |
|
23,500 |
|
23,500 |
|
$22.07 |
|
10/1/2032 |
|
3,300 |
|
$24,552 |
|
— |
|
— |
|
|
3/10/2023 |
|
15,575 |
|
46,725 |
|
$24.07 |
|
3/10/2033 |
|
20,625 |
|
$153,450 |
|
— |
|
— |
|
|
7/24/2023 |
(2) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
42,900 |
|
$319,176 |
|
|
1/10/2024 |
(3) |
— |
|
69,050 |
|
$13.46 |
|
1/10/2034 |
|
61,300 |
|
$456,072 |
|
30,650 |
|
$228,036 |
|
|
8/9/2024 |
(4) |
— |
|
— |
|
— |
|
— |
|
129,540 |
|
$963,778 |
|
— |
|
— |
|
|
9/30/2024 |
(4) |
— |
|
— |
|
— |
|
— |
|
200,000 |
|
$1,488,000 |
|
— |
|
— |
|
|
11/11/2024 |
(5) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
15,550 |
|
$115,692 |
Sean F. |
|
7/28/2015 |
|
33,437 |
|
— |
|
$0.72 |
|
7/28/2025 |
|
— |
|
— |
|
— |
|
— |
Scanlan |
|
1/26/2016 |
|
53,500 |
|
— |
|
$0.72 |
|
1/26/2026 |
|
— |
|
— |
|
— |
|
— |
|
|
1/30/2017 |
|
66,875 |
|
— |
|
$1.05 |
|
1/30/2027 |
|
— |
|
— |
|
— |
|
— |
|
|
1/23/2018 |
|
124,148 |
|
— |
|
$1.05 |
|
1/23/2028 |
|
— |
|
— |
|
— |
|
— |
|
|
1/22/2019 |
|
33,819 |
|
— |
|
$1.57 |
|
1/22/2029 |
|
— |
|
— |
|
— |
|
— |
|
|
4/23/2019 |
|
46,992 |
|
— |
|
$1.57 |
|
4/23/2029 |
|
— |
|
— |
|
— |
|
— |
|
|
1/21/2020 |
|
42,131 |
|
— |
|
$4.02 |
|
1/21/2030 |
|
— |
|
— |
|
— |
|
— |
|
|
2/2/2021 |
|
22,068 |
|
7,356 |
|
$7.03 |
|
2/2/2031 |
|
— |
|
— |
|
— |
|
— |
|
|
4/22/2021 |
|
50,157 |
|
16,718 |
|
$17.00 |
|
4/22/2031 |
|
— |
|
— |
|
— |
|
— |
|
|
3/8/2022 |
|
50,650 |
|
25,324 |
|
$19.15 |
|
3/8/2032 |
|
3,287 |
|
$24,455 |
|
— |
|
— |
|
|
10/24/2022 |
|
11,500 |
|
11,500 |
|
$22.79 |
|
10/24/2032 |
|
1,700 |
|
$12,648 |
|
— |
|
— |
|
|
3/10/2023 |
|
12,988 |
|
38,962 |
|
$24.07 |
|
3/10/2033 |
|
17,193 |
|
$127,916 |
|
— |
|
— |
|
|
7/24/2023 |
(2) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
42,900 |
|
$319,176 |
|
|
1/10/2024 |
(3) |
— |
|
73,200 |
|
$13.46 |
|
1/10/2034 |
|
65,025 |
|
$483,786 |
|
32,525 |
|
$241,986 |
|
|
8/9/2024 |
(4) |
— |
|
— |
|
— |
|
— |
|
120,900 |
|
$899,496 |
|
— |
|
— |
Gaetano M. |
|
12/1/2024 |
|
— |
|
— |
|
— |
|
— |
|
330,000 |
|
$2,455,200 |
|
— |
|
— |
Guglielmino |
|
12/1/2024 |
|
— |
|
— |
|
— |
|
— |
|
33,000 |
|
$245,520 |
|
— |
|
— |
46 |
|
Executive Compensation
Options Exercised and Stock Vested
The following table sets forth information regarding options exercised, and the number of shares of common stock acquired upon the vesting of RSUs, in each case, by our NEOs during 2024.
|
|
Option awards |
|
|
Stock awards |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Name |
|
Number of shares |
|
|
Value realized on |
|
|
Number of shares |
|
|
Value realized on |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
John T. Treace |
|
|
— |
|
|
|
— |
|
|
|
29,088 |
|
|
|
375,534 |
|
Mark L. Hair |
|
|
— |
|
|
|
— |
|
|
|
14,445 |
|
|
|
186,111 |
|
Scot M. Elder |
|
|
— |
|
|
|
— |
|
|
|
27,294 |
|
|
|
247,139 |
|
Sean F. Scanlan |
|
|
33,750 |
|
|
|
167,495 |
|
|
|
8,226 |
|
|
|
99,260 |
|
Gaetano M. Guglielmino |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
2025 PROXY STATEMENT |
47 |
Executive Compensation
Executive Compensation Arrangements
NEO Change in Control Severance Agreements
In April 2021, we entered into a change in control severance agreement with each of Messrs. Treace, Hair, Scanlan and other executive officers, and in the case of Mr. Hair, replacing his existing change in control severance agreement. We also entered into a change in control severance agreement with Mr. Elder when he joined the Company in October 2021 and with Mr. Guglielmino when he joined the Company in December 2024. Under each of these agreements, if, within a period of three months before or 18 months after a "change in control" (the "change in control period"), we terminate the employment of the applicable NEO without "cause" (excluding by reason of the employee’s death or "disability") or the NEO resigns for "good reason" (as such terms are defined in the applicable NEO’s change in control severance agreement), the NEO is entitled to receive (1) continued payment of the NEO’s annual salary for 12 months (18 months in the case of the Chief Executive Officer), (2) a payment equal to 100% (150% in the case of the Chief Executive Officer) of the NEO’s annual target bonus for the year in which the termination occurs, payable in a lump sum on the first payroll date after the NEO’s release of claims becomes effective, (3) reimbursement of COBRA premiums for 18 months, and (iv) accelerated vesting of each outstanding and unvested equity award (excluding any such awards that vest in whole or in part based on the attainment of performance-vesting conditions) as set forth in the applicable equity plan. Additionally, in connection with any involuntary termination of employment without "cause," death or “disability” or by the NEO with "good reason," the NEO will be entitled to up to $10,000 in outplacement services.
The agreements also provide that if, outside of a change of control period, we terminate the employment of the applicable NEO without "cause" or the NEO resigns for "good reason," the NEO is entitled to receive (1) continued payment of the NEO’s annual salary for 12 months, (2) payment equal to 100% of the NEO’s annual target bonus for the year in which the termination occurs, pro-rated based on the number of days that we employed the NEO during that year, payable at the same time annual bonuses are paid generally to our other executives, and (3) reimbursement of COBRA premiums for 12 months. Additionally, in connection with any termination of employment without "cause," death or "disability" or by the NEO with "good reason," the NEO will be entitled to up to $10,000 in outplacement services.
To be eligible for the severance benefits described above, the NEO must (1) execute a separation agreement and release of claims that becomes effective and irrevocable within 60 days following the NEO’s termination and (2) provide a written attestation that his confidentiality, nonsolicitation and noncompetition agreement is in effect and enforceable.
In the event any payment to the NEO under his change in control severance agreement would be subject to the excise tax imposed by Section 4999 of the Code (as a result of a payment being classified as a parachute payment under Section 280G of the Code), the NEO will receive a lump sum payment equal to 100% of such excise tax, plus an amount equal to the federal and state income tax, FICA, and Medicare taxes (based upon the NEO’s projected marginal income tax rates) on such lump sum payment.
Offer Letter Agreement for Gaetano M. Guglielmino
In connection with Mr. Guglielmino’s commencement of employment with us in December 2024, we entered into an offer letter agreement, which provides for an annual salary, annual bonus opportunity, a signing bonus consisting of $100,000 paid in cash and the grant of RSUs for 33,000 shares, eligibility to participate in our benefit plans, execution of change in control severance and indemnification agreements, and relocation benefits. Mr. Guglielmino’s initial annual salary under the offer letter agreement is $440,000, and his annual cash bonus is targeted at 50% of salary. Mr. Guglielmino was also eligible to receive a grant of RSUs for 330,000 shares. The RSUs vest over four years in 25% annual installments on the first four anniversaries of the grant date, subject to Mr. Guglielmino’s continued service through the applicable vesting date. In connection with Mr. Guglielmino’s relocation to the Ponte Vedra area, the offer letter agreement provided for (1) up to $3,000 per month of documented lodging or housing accommodation expenses until he relocates (but not longer than 12 months), (2) travel expenses between his residence in Dallas, TX and Ponte Vedra, FL for up to two return trips per month, (3) reimbursement of reasonable relocation expenses, up to $100,000, (4) a $15,000 allowance for miscellaneous and sundry relocation expenses, and (5) a tax gross-up payment for any taxes owed by Mr. Guglielmino related to reimbursements by us for the relocation, living and travel expenses.
48 |
|
Executive Compensation
Potential Payments upon Termination or Change in Control
As described above, we have entered into change in control severance agreements with each of our NEOs, and several of our individual award agreements provide for certain treatment upon a change in control as described above. The table below describes the payments that may be made to our NEOs upon certain types of termination events, assuming the termination event occurred on December 31, 2024, the last trading day of 2024 (except as otherwise noted). The table below also discusses certain potential payments on a change in control (assuming in such change in control all outstanding awards are assumed, substituted or continued by the successor entity). Potential payments associated with the PSUs are described in footnote 2 of the following table. Our NEOs are not entitled to any payments and benefits if their employment is terminated for cause or they resign without good reason, retire, or are terminated due to death or disability. Except for the cash and performance equity award to Mr. Elder made in November 2024, we do not have any agreements or other arrangements with our NEOs that provide for payments and benefits solely upon a change in control of the Company without an accompanying termination of employment.
|
|
|
|
|
|
|
|
|
Triggering Event |
|
Cash |
|
Value of |
|
Value of |
Fees and |
Total(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John T. Treace |
|
|
|
|
|
|
|
|
Termination without Cause or with Good Reason |
|
$1,456,000 |
|
— |
|
$34,578 |
$10,000 |
$1,500,578 |
|
|
|
|
|
|
|
|
|
Termination without Cause or with Good Reason within 3 months prior to or 18 months after a Change in Control |
|
$2,184,000 |
|
$4,037,450 |
|
$51,867 |
$10,000 |
$6,283,317 |
|
|
|
|
|
|
|
|
|
Change in Control |
|
— |
|
— |
|
— |
— |
— |
|
|
|
|
|
|
|
|
|
Mark L. Hair |
|
|
|
|
|
|
|
|
Termination without Cause or with Good Reason |
|
$742,500 |
|
— |
|
$34,578 |
$10,000 |
$787,078 |
|
|
|
|
|
|
|
|
|
Termination without cause or with Good Reason within 3 months prior to or 18 months after a Change in Control |
|
$742,500 |
|
$3,326,611 |
|
$51,867 |
$10,000 |
$4,130,978 |
|
|
|
|
|
|
|
|
|
Change in Control |
|
— |
|
— |
|
— |
— |
— |
|
|
|
|
|
|
|
|
|
Scot M. Elder |
|
|
|
|
|
|
|
|
Termination without Cause or with Good Reason |
|
$622,500 |
|
— |
|
$32,736 |
$10,000 |
$665,236 |
|
|
|
|
|
|
|
|
|
Termination without Cause or with Good Reason within 3 months prior to or 18 months after a Change in Control |
|
$622,500 |
|
$3,778,047 |
|
$49,104 |
$10,000 |
$4,459,651 |
|
|
|
|
|
|
|
|
|
Change in Control |
|
$375,000 |
(6) |
$115,692 |
(6) |
— |
— |
$490,692 |
|
|
|
|
|
|
|
|
|
Sean F. Scanlan |
|
|
|
|
|
|
|
|
Termination without cause or with Good Reason |
|
$637,500 |
|
— |
|
$18,107 |
$10,000 |
$665,607 |
|
|
|
|
|
|
|
|
|
Termination without cause or with Good Reason within 3 months prior to or 18 months after a Change in Control |
|
$637,500 |
|
$2,112,494 |
|
$27,161 |
$10,000 |
$2,787,155 |
|
|
|
|
|
|
|
|
|
Change in Control |
|
— |
|
— |
|
— |
— |
— |
|
|
|
|
|
|
|
|
|
Gaetano M. Guglielmino |
|
|
|
|
|
|
|
|
Termination without Cause or with Good Reason |
|
$330,000 |
(7) |
— |
|
$16,967 |
$10,000 |
$356,967 |
|
|
|
|
|
|
|
|
|
Termination without Cause or with Good Reason within 3 months prior to or 18 months after a Change in Control |
|
$440,000 |
(7) |
$2,700,720 |
|
$33,933 |
$10,000 |
$3,184,653 |
|
|
|
|
|
|
|
|
|
Change in Control |
|
— |
|
— |
|
— |
— |
— |
|
|
|
|
|
|
|
|
|
|
2025 PROXY STATEMENT |
49 |
Executive Compensation
Pay Ratio Disclosure
We are required to disclose in our proxy statement the annual total compensation of the median-compensated employee of, generally, all of our employees (excluding our CEO), the annual total compensation of our Chief Executive Officer, and the ratio of the CEO's compensation to the median employee's compensation. The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act.
We selected the median employee in 2024 based on an analysis of full-time and part-time workers employed by the Company as of December 31, 2024.
The 2024 annual total compensation as determined under Item 402 of Regulation S-K for our CEO was $6,597,160. The 2024 annual total compensation as determined under Item 402 of Regulation S-K for our median employee was $193,007. The ratio of our CEO's annual total compensation to our median employee’s total compensation for fiscal year 2024 was 34 to 1.
50 |
|
Executive Compensation
Pay Versus Performance
The following table and graphs provide information required under the SEC's "pay versus performance" rules over the last three years as required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K. The graphs below show the relationship of "compensation actually paid" to our principal executive officer ("PEO") and other NEOs (who are also referred to as "Non-PEO NEOs") in 2022, 2023 and 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Initial Fixed |
|
|
|
|
|
|||||||||
Year |
|
Summary |
Compensation |
Average |
Average |
TSR |
|
Peer Group |
|
Net Income |
|
|||||||||||||||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||||||
2023 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
||||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||||||
PEO |
2022 |
|
2023 |
|
2024 |
|
|||
Summary Compensation-Table Total Compensation |
$ |
|
$ |
|
$ |
|
|||
Less: Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year |
$ |
|
$ |
|
$ |
|
|||
Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year |
$ |
|
$ |
|
$ |
|
|||
Plus: Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
|
|
$ |
( |
) |
$ |
( |
) |
|
Plus: Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
|
|
|
|
|||
Plus: Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
$ |
|
$ |
|
|||
Less: Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
|
— |
|
|
— |
|
Equals: Compensation Actually Paid |
$ |
|
$ |
|
$ |
|
|||
Non-PEO NEOs |
2022 |
|
2023 |
|
2024 |
|
|||
Summary Compensation-Table Total Compensation |
$ |
|
$ |
|
$ |
|
|||
Less: Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year |
$ |
|
$ |
|
$ |
|
|||
Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year |
$ |
|
$ |
|
$ |
|
|||
Plus: Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
$ |
|
$ |
( |
) |
$ |
( |
) |
|
Plus: Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
|
|
$ |
|
|||
Plus: Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
$ |
|
$ |
( |
) |
$ |
( |
) |
|
Less: Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
|
— |
|
|
— |
|
Equals: Compensation Actually Paid |
$ |
|
$ |
( |
) |
$ |
|
||
|
2025 PROXY STATEMENT |
51 |
Executive Compensation
Relationship Between Compensation Actually Paid and Performance Measures
"Compensation actually paid" calculated per SEC Item 402(v) of Regulation S-K ("CAP") reflects cash compensation actually paid as well as changes to the fair values of equity awards during the years shown in the table based on year-end or vesting date stock prices, and various accounting valuation assumptions. Due to how CAP is calculated, the CAP as reported for each year does not reflect the actual amounts earned by our NEOs from their equity awards. CAP generally fluctuates annually due to the change in our stock price from year to year as well as varying levels of actual achievement of performance goals.
Because CAP does not reflect the actual amount earned by our NEOs on their equity compensation, we do not use this measure for understanding how NEO pay aligns with our Company performance. For a discussion of how our Compensation Committee assessed "pay-for-performance" and how our executive compensation program is designed to link executive compensation with the achievement of our financial and strategic objectives as well as stockholder value creation each year, see the Compensation Discussion and Analysis section above.
The following chart sets forth the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and the cumulative TSR over the three most recently completed fiscal years for the Company and the Peer Group TSR.
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
The following chart sets forth the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and our net income during the three most recently completed fiscal years.
52 |
|
Executive Compensation
Relationship Between PEO and Other NEO Compensation Actually Paid and Revenue
The following chart sets forth the relationship between CAP to our PEO, the average of CAP to our Non-PEO NEOs, and our Revenue during the three most recent fiscal years.
EQUITY COMPENSATION PLANS
As of December 31, 2024, our equity compensation plan information is as follows:
|
|
|
|
|
|
|
|
|
|
|||
|
|
Number of securities to |
|
|
Weighted-average |
|
|
Number of securities remaining |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Plan category |
|
(a) |
|
|
(b) |
|
|
(c) |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Equity compensation plans approved by security holders |
|
|
12,181,417 |
|
|
$ |
11.60 |
|
|
|
5,126,867 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Equity compensation plans not approved by security holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
12,181,417 |
|
|
$ |
11.60 |
|
|
|
5,126,867 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
2025 PROXY STATEMENT |
53 |
Certain Relationships and Related Party Transactions
RELATED PARTY TRANSACTIONS
Other than compensation arrangements, we describe below those transactions and series of similar transactions, since January 1, 2024, to which we were a party or will be a party, in which:
Compensation arrangements for our directors and NEOs are described elsewhere in this proxy statement.
Employment of Immediate Family
In October 2017, we hired Tori Dapas, the brother-in-law of John T. Treace, our Chief Executive Officer and a Director, as a Regional Sales Manager. During 2024, Mr. Dapas served as our Vice President, Sales Operations. For 2024, Mr. Dapas received total compensation of $0.6 million, including salary, annual incentive pay, and restricted stock units granted in 2024 for 12,550 shares that vest over three years and 14,860 shares that vest over four years.
Indemnification Agreements and Directors’ and Officers’ Liability Insurance
We have entered into indemnification agreements with each of our directors and executive officers. These agreements will require us to, among other things, indemnify each of our directors and executive officers to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, penalties, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer. We also maintain directors’ and officers’ liability insurance pursuant to which our directors and officers are insured against liability for actions taken in their capacities as directors and officers.
Policies and Procedures for Related Party Transactions
Our Board has adopted a written related person transaction policy, which became effective upon the consummation of our initial public offering, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, a related person had or will have a direct or indirect material interest, including without limitation purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our Audit Committee is tasked to consider all relevant facts and circumstances, including but not limited to whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction with an unrelated third party and the extent of the related person’s interest in the transaction. All of the transactions described in this section occurred before the adoption of this policy. However, all of the transactions described above were entered into after presentation, consideration and approval by our Board.
54 |
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Stock Ownership
STOCK OWNERSHIP
The following table shows information regarding the beneficial ownership of our common stock for the following:
The number of shares beneficially owned by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days after the Record Date through the exercise of any stock option, warrants or other rights. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of our common stock held by that person.
Except as indicated in the footnotes to this table, the address for each beneficial owner is c/o Treace Medical Concepts, Inc., 100 Palmetto Park Place, Ponte Vedra, Florida 32081.
All information is as of the Record Date, except as noted otherwise.
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|
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Name of Beneficial Owners |
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No. of Shares of Common Stock |
|
Percentage of Total(1) |
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5% or Greater Stockholders |
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John T. Treace(2) |
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11,994,325 |
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19.14% |
Armistice Capital, LLC(3) |
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6,209,000 |
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9.95% |
BlackRock(4) |
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3,691,901 |
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5.92% |
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Directors and Executive Officers |
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|
|
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John T. Treace(2) |
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11,994,325 |
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19.14% |
John K. Bakewell(5) |
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684,046 |
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1.09% |
Lance A. Berry(6) |
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73,283 |
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* |
Lawrence W. Hamilton(7) |
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211,746 |
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* |
Elizabeth S. Hanna(8) |
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103,866 |
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* |
Deepti Jain(8) |
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128,866 |
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* |
Jane E. Kiernan(6) |
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92,639 |
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* |
Richard. W. Mott(9) |
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1,150,374 |
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1.84% |
James T. Treace(10) |
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1,779,624 |
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2.85% |
Mark L. Hair(11) |
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837,336 |
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1.33% |
Scot M. Elder(12) |
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210,988 |
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* |
Sean F. Scanlan(13) |
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579,948 |
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* |
Gaetano M. Guglielmino |
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— |
|
* |
All executive officers and directors as a group (14 persons)(14) |
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18,088,560 |
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27.72% |
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2025 PROXY STATEMENT |
55 |
Stock Ownership
* Less than one percent (1%)
56 |
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Stock Ownership
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers, directors and holders of more than 10% of our common stock to file with the SEC initial reports of ownership of our common stock on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5. Executive officers, directors and holders of more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. We submit all applicable Section 16(a) filing requirements on behalf of our executive officers and directors. To our knowledge, based solely on the reports filed by us, copies of such reports furnished to us and written representations made by our executive officers and directors regarding their filing obligations, all Section 16(a) filing requirements applicable to our executive officers and directors were satisfied with respect to the fiscal year ended December 31, 2024, except for one late transaction on Form 4 for Mr. Guglielmino.
STOCKHOLDER PROPOSALS FOR
2026 ANNUAL MEETING OF STOCKHOLDERS
Submission of Stockholder Proposals for Inclusion in Next Year’s Annual Meeting Proxy Statement
Stockholders wishing to include proposals in the proxy materials in relation to our 2026 annual meeting of stockholders under Rule 14a-8 of the Exchange Act must submit the proposal in writing so that it is received by the Company on or before December 8, 2025. Proposals should be addressed to Treace Medical Concepts, Inc., 100 Palmetto Park Place, Ponte Vedra, FL 32081, Attention: Corporate Secretary. Such proposals must also meet the other requirements and procedures prescribed by Rule 14a-8 under the Exchange Act relating to stockholders’ proposals and with the procedures set forth in our Bylaws. Nothing in this paragraph shall be deemed to require the Company to include in its proxy statement and proxy relating to the 2026 annual meeting of stockholders any stockholder proposal which may be omitted from the proxy materials according to applicable regulations of the SEC in effect at the time the proposal is received. We intend to file a proxy statement and WHITE proxy card with the SEC in connection with the solicitation of proxies for our 2026 annual meeting.
Other Stockholder Proposals for Presentation at Next Year’s Annual Meeting
Stockholders who intend to present a proposal at the 2026 annual meeting, outside the processes of Rule 14a-8 under the Exchange Act and thereby without including such proposal in our proxy statement, must timely deliver a written notice in accordance with the requirements, including eligibility and information required in such notice, set forth in our Bylaws. To be timely, such written notice must be received by our Corporate Secretary at our executive offices (Treace Medical Concepts, Inc., 100 Palmetto Park Place, Ponte Vedra, FL 32081) no earlier than January 20, 2026 and no later than February 19, 2026. However, if the date of the 2026 annual meeting is earlier than April 20, 2026 or later than July 19, 2026, notice by the stockholder (in order to be timely) must be received not later than the 90th day before the 2026 annual meeting or, if later, the 10th day following the day on which public disclosure of the date of the 2026 annual meeting was first made. In addition to satisfying the requirements under our Bylaws, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than March 21, 2026. We intend to file a proxy statement and WHITE proxy card with the SEC in connection with the solicitation of proxies for our 2026 annual meeting.
If the stockholder does not also comply with the requirements of Rule 14a-4(c) under the Exchange Act, we may exercise discretionary voting authority under proxies we solicit to vote in accordance with our best judgment on any such stockholder proposal or nomination.
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2025 PROXY STATEMENT |
57 |
Stock Ownership
DELIVERY OF DOCUMENTS TO STOCKHOLDERS
SHARING AN ADDRESS
We have adopted a procedure approved by the SEC called "householding." Under this procedure, we deliver a single copy of the Internet Notice and, if applicable, our proxy materials to stockholders of record who share the same address, unless we have received contrary instructions from any stockholder at that address. This practice is designed to eliminate duplicate mailings and reduce our printing and mailing costs. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards.
If you share an address with another stockholder and receive only a single copy of the Internet Notice or, if applicable, our proxy materials, but would like to request a separate copy of these materials, please contact our mailing agent, Broadridge Financial Solutions, Inc., by calling 1-866-540-7095 or writing to 51 Mercedes Way, Edgewood, New York 11717, Attention: Householding Department and an additional copy of the materials will be promptly delivered to you. Similarly, if you receive multiple copies of the Internet Notice or, if applicable, the proxy materials but would prefer to receive a single copy in the future, you may also contact Broadridge Financial Solutions, Inc. at the above telephone number or address. Beneficial owners should contact their broker, bank or other nominee to request information about householding procedures.
OTHER MATTERS
Our Board does not know of any matter to be brought before the Annual Meeting other than the matters set forth in the Notice of Annual Meeting of Stockholders and this proxy statement. If any other matters are properly brought before the Annual Meeting and you have properly submitted a proxy, the persons named in the accompanying proxy as proxy holders will have the discretion to vote all proxies on such matters for you.
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By Order of the Board of Directors, |
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Scot M. Elder Chief Legal and Compliance Officer, |
April 7, 2025
Treace Medical Concepts, Inc.
100 Palmetto Park Place
Ponte Vedra, Florida 32081
58 |
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Stock Ownership
Appendix 1
GAAP to Non-GAAP Reconciliation
This proxy statement refers to Adjusted EBITDA, which the Company defines as net loss before depreciation and amortization expense, interest income, interest expense, taxes, share-based compensation expense, acquisition-related costs, restructuring costs, customer credit loss, litigation costs, and debt extinguishment loss. Management uses non-GAAP financial measures to evaluate the Company’s operating performance and trends, as well as for making planning decisions. Our Board also uses Adjusted EBITDA as a key metric to assess the performance of management. The Company believes that Adjusted EBITDA helps to identify underlying trends in the Company’s business that may otherwise be masked by the effect of the income and expenses and other items that it excludes in its calculation of Adjusted EBITDA. Accordingly, the Company believes this non-GAAP financial measure provides useful information to investors and others in understanding and evaluating the Company’s operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by the Company’s management in their financial and operational decision-making. The Company also presents this non-GAAP financial measure because it believes investors, analysts and rating agencies consider it to be a useful metric in measuring the Company’s performance against other companies and its ability to meet its debt service obligations.
Non-GAAP financial measures such as Adjusted EBITDA are presented in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. There are limitations related to the use of non-GAAP financial measures such as Adjusted EBITDA because they are not prepared in accordance with GAAP, may exclude significant income and expenses required by GAAP to be recognized in the Company’s financial statements, and may not be comparable to non-GAAP financial measures used by other companies. The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business.
A reconciliation between GAAP and non-GAAP results is presented below.
Reconciliation of GAAP Net Loss to EBITDA & Adjusted EBITDA |
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Three Months Ended |
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Twelve Months Ended |
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December 31, |
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2024 |
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2023 |
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2023 |
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Net loss |
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Adjustments: |
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Interest income |
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Interest expense |
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Taxes |
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Depreciation & Amortization |
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EBITDA |
$ |
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$ |
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) |
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$ |
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) |
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$ |
( |
) |
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Share-based compensation expense |
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Acquisition-related costs |
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Restructuring costs(1) |
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Customer credit loss(2) |
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Litigation costs(3) |
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Adjusted EBITDA |
$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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(1) Restructuring charges primarily relate to severance payments and other post-employment benefits from a restructuring in June 2024.
(2) Customer credit loss consists of the write-off of accounts receivable due from a customer that filed for bankruptcy during the second quarter of 2024.
(3) Litigation costs related to the lawsuit the Company filed against Stryker Corporate and its subsidiary Wright Medical Technology, Inc. on October 14, 2024.
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2025 PROXY STATEMENT |
59 |
Company Logo TREACE MEDICAL CONCEPTS, INC. 100 PALMETTO PARK PLACE PONTE VEDRA, FL 32081 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, May 19, 2025. 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/TMCI2025 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, May 19, 2025. 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 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V69985-P26464 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY TREACE MEDICAL CONCEPTS, INC. The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: 01) Lawrence W. Hamilton 02) Deepti Jain 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 proposals: For Against Abstain 2. Approval, on an advisory, non-binding basis, of the compensation of the Company's named executive officers. 3. Ratification of the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2025. NOTE: Such other business that may properly come before the meeting or any adjournments or postponements thereof. The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR the election of each director nominee named herein and FOR Item 2 and Item 3, in each case, in accordance with the Board of Directors' recommendations. If any other matters properly come before the meeting, the person(s) named in this proxy will vote in their discretion. 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. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. V69986-P26464 TREACE MEDICAL CONCEPTS, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS MAY 20, 2025 The undersigned Stockholder(s) hereby appoint(s) Mark L. Hair and Scot M. Elder, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of Treace Medical Concepts, Inc. that the Stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 11:00 a.m., Eastern Time, on May 20, 2025, by means of a virtual meeting via live webcast on the Internet at www.virtualshareholdermeeting.com/TMCI2025, and any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS AS INDICATED ON THE REVERSE SIDE, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE CONTINUED AND TO BE SIGNED ON REVERSE SIDE