Business Context and Reporting Period
This Form 8-K Current Report was filed by Alphatec Holdings, Inc. on March 6, 2017. The filing discloses the appointment of a new Chief Financial Officer and details the associated compensatory arrangements.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation terms.
- Base Salary: $350,000 annually.
- Target Cash Bonus: 70% of annual base salary.
- Equity Grants: 75,000 Restricted Stock Units (RSUs) and options to purchase 75,000 shares.
Material Changes
Effective March 6, 2017, Jeffrey G. Black was appointed Executive Vice President and Chief Financial Officer of Alphatec Holdings, Inc. and Alphatec Spine Inc. Dennis Nelson, the previous Vice President of Finance and Corporate Controller, will continue to serve as the principal financial and accounting officer for filings until the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2016.
Guidance, Outlook, and Compensation Details
The filing outlines the terms of Mr. Black's employment, severance, and change in control agreements:
- Employment Status: At-will employment.
- Equity Vesting: RSUs vest in equal installments over four years. Stock options vest 25% on the first anniversary and monthly thereafter over three years. Both awards fully vest upon a change in control.
- Severance (Termination Without Cause): One times annual base salary, 18 months of COBRA coverage, and extended option exercise periods.
- Change in Control Severance: One times base salary plus the greater of the current target bonus or the highest bonus paid in the prior three years, prorated long-term incentive awards, 12 months of COBRA, and full acceleration of equity awards.
- Plan Amendment: The Board approved an amendment to the 2016 Employment Inducement Award Plan to increase reserved shares by 600,000 to 1,550,000 shares to accommodate these grants.
Investor Verification Checklist
- Verify the filing date of the Form 10-K for the fiscal year ended December 31, 2016, to confirm the exact date Mr. Black assumes the role of principal financial officer.
- Review the Form S-8 registration statement to confirm the issuance of the 75,000 RSUs.
- Examine the full text of the employment, severance, and change in control agreements when filed as exhibits to the Form 10-Q for the quarter ending March 31, 2017.
- Confirm the exercise price of the stock options granted, which is based on the closing stock price on the grant date.