DEF 14A of Treace Medical Concepts, Inc., Apr 2, 2024

DEF 14A of Treace Medical Concepts, Inc.

Filed Apr 2, 2024 · FY20230000950170-24-040228

Open on EDGAR

  1. Nominees for Election to a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders

    Nominees for Election to a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders John K. Bakewell has served as a member of our Board since November 2020. From January 2016 to November 2016, Mr. Bakewell served as the Chief Financial Officer of Exact Sciences Corporation (NASDAQ: EXAS), a molecular diagnostics company. From June 2014 to December 2015, he served as Chief Financial Officer of Lantheus Holdings, Inc. (NASDAQ: LNTH), a diagnostic medical imaging company. Mr. Bakewell has also previously served at Interline Brands, Inc., RegionalCare Hospital Partners, 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 Neuronetics, Inc. (NASDAQ: STIM), a medical technology company, since May 2020 and 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 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). 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. Richard W. 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 has served as chairman of its board since 2021. 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 Co. (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 Endologix, LLC, 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. 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. John T. 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. 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.

  2. Class I Directors whose terms in office expire at the 2025 Annual Meeting of Stockholders

    Class I Directors whose terms in office expire at the 2025 Annual Meeting of Stockholders Lawrence W. Hamilton has served as a member of our Board since November 2020. Mr. Hamilton has served as an Executive Coach and Adjunct Faculty with the Center for Creative Leadership 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. 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 College of Executive Coaching. 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. Deepti 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 has 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, since January 2021. 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. 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. James T. 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). 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. Class II Directors whose terms in office expire at the 2026 Annual Meeting of Stockholders. Lance A. 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 2022, 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 currently serves on the board of directors of Vapotherm Inc. (OTCQX: VAPO), a publicly traded developer and manufacturer of advanced respiratory technology. 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. 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. Elizabeth "Betsy" S. 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. 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.

  3. Class I Directors whose terms in office expire at the 2025 Annual Meeting of Stockholders

    Jane E. 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). She currently serves on the board of directors of Axonics, Inc. (NASDAQ: AXNX), a publicly traded medical technology company developing products for women with bladder and bowel dysfunction where she sits on the audit committee, and is chair of the compensation committee. She previously served on the board of directors of Salona Global Medical Device Corp (TSXV: SGMD), a publicly traded medical device company; 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. 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 of other medical technology companies.

  4. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  5. Non-employee Director Compensation Policy

    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 included 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 20, 2023, all non-employee directors were entitled to receive the following cash compensation for their services: • $45,000 per year for services as a Board member; • $45,000 per year additionally for service as chairperson of the Board; • $20,000 per year additionally for service as chairperson of the Audit Committee; • $10,000 per year additionally for service as an Audit Committee member; • $15,000 per year additionally for service as chairperson of the Compensation Committee; • $7,500 per year additionally for service as a Compensation Committee member; • $10,000 per year additionally for service as chairperson of the NC & ESG Committee; and • $5,000 per year additionally for service as a NC & ESG Committee member. Each annual cash retainer and additional annual fee is paid quarterly in arrears on a prorated basis. Between January 1, 2023 and January 19, 2023, the annual retainer was $40,000 and the retainer for members of the Compensation Committee was $7,000. 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 2023, the allocation of director equity awards between options and restricted stock units was changed from a 75%/25% allocation to a 50%/50% allocation. Accordingly, under the non-employee director compensation policy in effect during 2023, nondiscretionary, automatic grants of stock options and restricted stock units are made to our non-employee directors as follows: • Initial option grant: Upon joining our Board, the director is granted an award of stock options with a "Black-Scholes" value of $125,000 (50% of the targeted $250,000 value for the initial equity grant), rounded up to the nearest multiple of five. • Initial restricted stock unit grant: Upon joining our Board, the director is granted an award of restricted stock units with a target value of $125,000 (50% of targeted $250,000 value for the initial equity grant) with the number of restricted stock units to be determined based on the closing price of our common stock on the grant date, rounded up to the nearest whole number. • Annual option grant: On the date of each annual meeting of stockholders, beginning with the 2022 annual meeting, the director is granted an award of stock options. For 2023, the "Black-Scholes" value for the annual stock option grant was $72,500 (50% of the targeted $145,000 value for the initial equity grant), rounded up to the nearest multiple of five. • Annual restricted stock unit grant: On the date of each annual meeting of stockholders, beginning with the 2022 annual meeting, the director is granted an award of restricted stock units. For 2023, the target value for the annual restricted stock unit award was $72,500 (50% of the targeted $145,000 value for the initial equity grant) with the number of restricted stock units to be determined based on the closing price of our common stock on the grant date, rounded up to the nearest whole number. 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.

  6. 2023 Director Compensation

    2023 Director Compensation The following table sets forth information for 2023 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 vesting of future 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 2023, 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.

  7. 2023 Director Compensation

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Option Awards ($)(4)(5) | Total ($) | | John K. Bakewell | 69,736 | 72,514 | 72,539 | 214,789 | | F. Barry Bays(6) | — | — | — | — | | Lance A. Berry | 54,736 | 72,514 | 72,539 | 199,789 | | Lawrence W. Hamilton | 69,736 | 72,514 | 72,539 | 214,789 | | Elizabeth S. Hanna | 57,210 | 72,514 | 72,539 | 202,263 | | Deepti Jain | 64,736 | 72,514 | 72,539 | 209,789 | | Jane E. Kiernan | 52,210 | 72,514 | 72,539 | 197,263 | | Richard W. Mott | 52,210 | 72,514 | 72,539 | 197,263 | | Thomas E. Timbie(7) | 27,236 | — | — | 27,236 | | James T. Treace(8) | 94,736 | — | — | 94,736 |

  8. 2023 Director Compensation

    (1) The amounts reported represent the aggregate dollar amount of all fees earned or paid in cash to each non-employee director for their service as a director during 2023, including any annual retainer fees and committee and/or chairmanship fees. Cash fees are paid quarterly in arrears. (2) Amounts shown represent the grant date fair value of restricted stock units granted during fiscal year 2023 as calculated in accordance with FASB ASC 718, Compensation —Stock Compensation (ASC Topic 718). (3) The restricted stock units granted to Directors Bakewell, Berry, Hamilton, Hanna, Jain, Kiernan, and Mott represent the annual grants of restricted stock units described in the narrative above and will vest on May 21, 2024, the date of the 2024 Annual Meeting, since it is earlier than May 23, 2024, which is the first anniversary of the grant date, subject to the respective director's continued service on the vesting date. (4) Amounts shown represent the grant date fair value of options granted during fiscal year 2023 as calculated in accordance with ASC Topic 718 and the assumptions outlined in Note 11 of our financial statements included in our 2023 Annual Report. All options were granted under the 2021 Plan and have an exercise price equal to the closing price of our common stock on the Nasdaq stock market on the grant date. The options granted to Directors Bakewell, Berry, Hamilton, Hanna, Jain, Kiernan, and Mott represent the annual option grant described in the narrative above and 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 May 21, 2024, the date of the 2024 Annual Meeting, since it is earlier than May 23, 2024, which is the first anniversary of the grant date, subject to the respective director's continued service on the vesting date. Retired director Bays elected to decline any cash compensation or equity grants that would be payable under the non-employee director compensation policy. The election went into effect prior to April 2021. Mr. Bays retired from the Board in May 2023. (7) Mr. Timbie retired from the Board in May 2023. Upon his retirement, Mr. Timbie exercised all his vested and exercisable stock options, and any unvested stock awards were forfeited, as shown in the table below. (8) Director James T. Treace has elected to decline the option and restricted stock unit grants that would be awarded under the non-employee director compensation policy. The table below shows the aggregate numbers of option awards (exercisable and unexercisable) and unvested stock awards held as of December 31, 2023 by each non-employee director as of December 31, 2023.

  9. 2023 Director Compensation

    | Name | Options Outstanding at Fiscal Year End | Unvested Outstanding Stock Awards at Fiscal Year End | | John K. Bakewell | 158,347 | 2,753 | | F. Barry Bays | — | — | | Lance A. Berry | 25,744 | 4,641 | | Lawrence W. Hamilton | 158,347 | 2,753 | | Elizabeth S. Hanna | 49,280 | 3,544 | | Deepti Jain | 49,280 | 3,544 | | Jane E. Kiernan | 25,744 | 4,641 | | Richard W. Mott | 44,170 | 2,753 | | Thomas E. Timbie | — | — | | James T. Treace | — | — |

  10. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  11. Summary Compensation Table

    Summary Compensation Table

  12. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) | Total ($) | | John T. Treace | 2023 | 684,384 | — | 5,350,966 | 1,977,589 | 393,000 | 16,696(3) | 8,422,635 | | Chief Executive Officer, Director and Founder | 2022 | 568,219 | — | 648,706 | 1,931,854 | 457,000 | 11,470 | 3,617,249 | | Mark L. Hair | 2023 | 457,973 | — | 2,987,977 | 1,098,837 | 130,500 | 11,222(4) | 4,686,509 | | Chief Financial Officer | 2022 | 404,109 | — | 228,843 | 680,527 | 213,500 | 10,991(4) | 1,537,970 | | Aaron J. Berutti | 2023 | 365,233 | — | 2,063,917 | 714,218 | 104,000 | 14,990(5) | 3,262,358 | | Senior Vice President, Sales | 2022 | 333,644 | — | 228,843 | 680,527 | 173,000 | 12,771(5) | 1,428,785 |

  13. Summary Compensation Table

    (1) The amounts reported represent the aggregate grant-date fair value of the restricted stock units, performance-based restricted stock units or stock options awarded to the NEOs, calculated in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 11 to our financial statements in our 2023 Annual Report. For purposes of our performance-based restricted stock units, which vest based on the attainment of certain relative total shareholder return metrics (as further described below), the grant date fair value included is based on the probable achievement of such metrics. (2) Annual cash incentive amounts for all NEOs in 2023 were paid in March 2024, under our annual cash incentive plan for 2023, as described in the section below entitled "Executive Compensation—Non-Equity Incentive Plan and Bonus Payments for 2023." (3) The amount reported in 2023 for Mr. Treace includes $1,311 for life insurance premiums and $15,385 for the Company’s match of Mr. Treace's contributions to our 401(k) plan, which are available to the NEOs on the same basis as other full-time employees. (4) The amount reported in 2023 for Mr. Hair includes life insurance premiums of $837 and the Company’s match of his contributions to our 401(k) plan of $10,385. (5) The amount reported in 2023 for Mr. Berutti includes life insurance premiums of $421 and the Company’s match of his contributions to our 401(k) plan of $14,569.

  14. Outstanding Equity Awards at 2023 Fiscal Year-End

    Outstanding Equity Awards at 2023 Fiscal Year-End The following table sets forth information regarding outstanding stock options and stock awards held by our NEOs as of December 31, 2023. The market value of the awards is determined by multiplying the number of unvested shares or units by $12.75, the closing price of the Company’s common stock on Nasdaq on December 29, 2023, the last trading day of fiscal 2023. 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.

  15. Outstanding Equity Awards at 2023 Fiscal Year-End

    | | Option Awards | | | | | Stock Awards | | | | | Name | Vesting Commencement Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or units of stock that have not vested | Market Value of shares or units of stock that have not vested | Equity Incentive Plan Awards: Number of Shares or units of stock that have not vested | Equity Incentive Plan Awards: Market Value of shares or units of stock that have not vested | | John T. Treace | 3/8/2022(1) | 65,363 | 196,087 | $21.07 | 3/8/2032 | 25,406 | $323,927 | | | | | 3/10/2023(1) | - | 186,900 | $24.07 | 3/10/2033 | 82,475 | $1,051,556 | | | | | 7/24/2023(2) | | | | | | | 107,225 | $1,367,119 | | Mark L. Hair | 9/21/2020(3) | 240,750 | 80,249 | $5.84 | 9/20/2030 | | | | | | | 10/20/2020(3) | 160,500 | 53,500 | $5.84 | 10/19/2030 | | | | | | | 2/02/2021(3) | 5,350 | 5,350 | $7.03 | 2/21/2031 | | | | | | | 4/22/2021(1) | 46,813 | 46,812 | $17.00 | 4/21/2031 | | | | | | | 3/8/2022(1) | 23,025 | 69,075 | $19.15 | 3/8/2032 | 8,962 | $114,266 | | | | | 3/10/2023(1) | - | 103,850 | $24.07 | 3/10/2033 | 45,825 | $584,269 | | | | | 7/24/2023(2) | | | | | | | 60,050 | $765,638 | | Aaron J. Berutti | 8/3/2021(1) | 75,000 | 75,000 | $29.26 | 8/2/2031 | | | | | | | 3/8/2022(1) | 23,025 | 69,075 | $19.15 | 3/8/2032 | 8,962 | $114,266 | | | | | 3/10/2023(1) | - | 67,500 | $24.07 | 3/10/2033 | 29,800 | $379,950 | | | | | 7/24/2023(2) | | | | | | | 42,900 | $546,975 |

  16. Outstanding Equity Awards at 2023 Fiscal Year-End

    (1) The options and restricted stock units vest over four years from the grant date in 25% annual installments on the first four anniversaries of the grant date, subject to the applicable NEO’s continued service through each such vesting date. See the paragraphs below under the headings "NEO Change in Control Severance Agreements" for information about the impact of a change of control on vesting of these options. (2) The PSUs vest on July 24, 2025, the second anniversary of the grant date, subject to the applicable NEO’s continued service through such vesting date. The number of shares earned upon vesting (if any) will depend on the Company's TSR ranking relative to the TSR of the S&P Health Care Equipment Select Index as discussed in the paragraph above under the heading "Equity-Based Compensation." The individual PSU award agreements provide that in the event of a change-in-control before July 24, 2025, the Company's relative TSR performance and earned shares will be determined based on the final transaction price at deal closing. Those shares then convert to time-based RSUs, vesting on July 24, 2025. (3) The options vest over four years in 25% annual installments on the first four anniversaries of the vesting commencement date, subject to Mr. Hair’s continued service through each such vesting date. The vesting commencement date was the grant date for the September 2020 and February 2021 awards. The vesting commencement date was September 21, 2020 for the October 2020 grant. The individual option agreements provide that each option will accelerate upon a change in control (as defined in the Treace Medical Concepts, Inc. 2014 Stock Plan (the "2014 Plan")), subject to Mr. Hair’s continued service through immediately before such change in control.

  17. Pay Versus Performance

    Pay Versus Performance The following table and graphs provide information required under the SEC's "pay versus performance" rules over the last two 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 in 2022 and 2023.

  18. Pay Versus Performance

    | Year (1) | Summary Compensation Table Total for PEO (2) | Compensation Actually Paid to PEO (3) | Average Summary Compensation Table Total for Non-PEO NEOs (2) | Average Compensation Actually Paid to Non-PEO NEOs (4) | Total Shareholder Return: Value of Initial $100 Investment (5) | Net Income | | 2023 | $8,422,635 | $2,838,120 | $3,974,434 | $(236,975) | $68 | $(49,527,000) | | 2022 | $3,617,249 | $4,320,166 | $1,483,378 | $3,117,740 | $123 | $(42,815,000) |

  19. Pay Versus Performance

    (1) Mr. Treace was the PEO for each of the years presented. The Non-PEO NEOs for the years presented are Messrs. Hair and Berutti. (2) Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table for the indicated fiscal year in the case of our PEO and (ii) the average of the total compensation reported in the Summary Compensation Table for the other NEOs in the indicated year for such years. (3) Amounts reported in these columns represent the compensation actually paid to our PEO for the indicated fiscal year, as calculated under Item 402(v) of Regulation S-K based on their total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the tables below:

  20. Pay Versus Performance

    | PEO | 2022 | 2023 | | Summary Compensation-Table Total Compensation | $3,617,249 | $8,422,635 | | Less: Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $2,580,560 | $7,328,555 | | Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $3,283,477 | $3,172,507 | | Plus: Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $- | $(1,479,819) | | 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 | $- | $51,352 | | 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 | $4,320,166 | $2,838,120 |

  21. Pay Versus Performance

    Equity Award values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. (4) Amounts reported in this column represent the compensation actually paid to the Reported NEOs in the indicated fiscal year, as calculated under Item 402(v) of Regulation S-K based on the average total compensation for such NEOs reported in the Summary Compensation Table for the indicated fiscal year and adjusted as shown in the table below:

  22. Pay Versus Performance

    | (Non-PEO NEOs) | 2022 | 2023 | | Summary Compensation-Table Total Compensation | $1,483,378 | $3,974,434 | | Less: Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | $909,370 | $3,432,474 | | Plus: Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | $1,227,966 | $1,487,387 | | Plus: Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | $998,374 | $(1,634,619) | | 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 | $317,392 | $(631,703) | | 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 | $3,117,740 | $(236,975) |

  23. Pay Versus Performance

    Please see footnote 1 for the NEOs included in the average for each indicated fiscal year. Equity Award values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. (5) Pursuant to Item 402(v) of Regulation S-K, the comparison assumes $100 was invested in our common stock on December 31, 2021, using the closing stock price on that date. Historic stock price performance is not necessarily indicative of future stock price performance.

  24. Relationship Between Compensation Actually Paid and Performance Measures

    Relationship Between Compensation Actually Paid and Performance Measures "Compensation actually paid," as 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 Narrative to Summary Compensation Table section. Below are graphs showing the relationship of "Compensation Actually Paid" to our PEO and non-PEO NEOs for our fiscal years 2022 and 2023 to (1) TSR of our common stock and (2) our net income.