DEF 14A of NeuroPace Inc
Filed Apr 22, 2024 · FY20230001140361-24-021062
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board of Directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board of Directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. There are currently seven members of the Board. There are three directors who are in the class term of office that expires in 2024. Upon the recommendation of our Nominating and Corporate Governance Committee, our Board has nominated the following individuals for reelection to serve as a Class III director. All nominees are currently directors. Ms. Ryan was previously elected by the stockholders pursuant to the provisions of an amended and restated voting agreement, which terminated upon the closing of our initial public offering in April 2021. Dr. Geiger was appointed to the Board of Directors in 2023 and Ms. Kumar was appointed to the Board of Directors in 2021, each upon recommendation of our Nominating and Corporate Governance Committee.
ELECTION OF DIRECTORS
| • | Uri Geiger |
ELECTION OF DIRECTORS
| • | Rakhi Kumar |
ELECTION OF DIRECTORS
| • | Renee Ryan |
ELECTION OF DIRECTORS
The biographies below under “Information Regarding Director Nominees and Continuing Directors” include information, as of the date of this proxy statement, regarding the specific and particular experience, qualifications, attributes or skills of each director nominee that led the Nominating and Corporate Governance Committee to believe that the nominee should continue to serve on the Board of Directors. If you elect the nominees listed above, they will each hold office until the 2027 Annual Meeting of Stockholders and until the director’s successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. The nominees have consented to being named in this proxy statement and to serve if elected. Our management has no reason to believe that any nominee will be unable to serve. There are no family relationships among any of our executive officers or directors.
INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS
INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS The following is a brief biography of each Class III nominee and each director whose term will continue after the Annual Meeting:
Class III Director Nominees for Election at the 2027 Annual Meeting
Class III Director Nominees for Election at the 2027 Annual Meeting Uri Geiger, age 56, has served as a member of our Board of Directors since January 2023. Dr. Geiger co-founded and has served as the Managing Partner of Accelmed Partners, a private equity firm focused on medical device companies, since 2009. Prior to founding Accelmed Partners, Dr. Geiger served as the Chief Executive Officer of Exalenz Bioscience Ltd., the developer of a technology for diagnosing liver and gastrointestinal disorders, from 2006 until its acquisition by Meridian Bioscience in December 2008, and co-founded and served as the Chief Executive Officer of GalayOr Networks, a developer of optical components, from 2001 until its acquisition by MEMSCAP in 2003. Dr. Geiger was also the founding partner of Dragon Variation Fund in 2000, one of Israel’s first hedge funds, which was sold to Migdal in 2007. Dr. Geiger has served on the boards of directors of Minerva Surgical Inc. since February 2023 and of Strata Skin Sciences, Inc. since May 2018, including as the chairman of the board of directors of Strata Skin Sciences, Inc. from May 2018 to April 2021. Dr. Geiger also served as the chairman of the board of directors of Cogentix Medical, Inc. from November 2016 until its sale in April 2018. Dr. Geiger currently also serves on the board of directors of a number of private medical device companies. Dr. Geiger earned a Ph.D. in Economics from Columbia University’s Center for Law & Economics, where he majored in global equity markets. We believe Dr. Geiger is qualified to serve on our Board of Directors because of his extensive experience in the medical device industry and on the boards of directors of public companies. Rakhi Kumar, age 44, has served as a member of our Board of Directors since 2021. Since June 2018, Ms. Kumar has served as Chief Accounting Officer at Roivant Sciences Ltd., a biopharmaceutical company, where she leads Roivant’s accounting and financial operations and related internal controls functions. Ms. Kumar joined Roivant in September 2015, previously serving as Vice President, Finance and External Reporting, from December 2016 to June 2018, and as Senior Director, from September 2015 to December 2016. Ms. Kumar has also served on the board of directors of Roivant Social Ventures since 2018. Prior to joining Roivant, Ms. Kumar was with The Medicines Company, from June 2013 to September 2015, where she was responsible for external reporting and corporate and technical accounting. Earlier in her career, Ms. Kumar was in the assurance services at Ernst and Young. Ms. Kumar earned an M.S in Accounting and Taxation from the University of Hartford. Ms. Kumar is a member of the Financial Accounting Standards Board’s Small Business Advisory Committee. She is a certified public accountant and a Chartered Professional Accountant in Ontario, Canada. We believe Ms. Kumar is qualified to serve on our Board of Directors because of her leadership and extensive life sciences industry experience. Renee Ryan, age 55, has served as a member of our Board of Directors since 2013. Ms. Ryan is currently serving as a strategic advisor to several medical technology companies. From August 2019 to August 2023, Ms. Ryan served as Chief Executive Officer at Cala Health, Inc., a medical technology company. From 2011 to August 2019, Ms. Ryan served as Vice President, Investments, at Johnson & Johnson Development Corp., the venture investing arm of Johnson & Johnson. From 2008 to 2011, Ms. Ryan served as Managing Director at Robert W. Baird & Co., a private equity firm and financial services company. Ms. Ryan has served on the board of directors of RefleXion Medical, Inc. since January 2021. We believe Ms. Ryan is qualified to serve on our Board of Directors because of her leadership experience and extensive experience in the medical device industry.
Class I Directors Continuing in Office Until the 2025 Annual Meeting
Class I Directors Continuing in Office Until the 2025 Annual Meeting Joel Becker, age 56, has served as our President, Chief Executive Officer and a member of our Board of Directors since July 2023. From October 2022 to July 2023, Mr. Becker served as President at Viking North Ventures, a firm providing advisory services to medical technology and healthcare companies and investors, in which role he was responsible for providing advisory, leadership and strategy development services. From April 2019 to October 2022, Mr. Becker served as President of the Cardiac Rhythm Management and Neuromodulation product category of Integer Holdings Corporation, a global medical device company, in which role he was responsible for overseeing commercial and operational strategy and execution. Prior to joining Integer, Mr. Becker served as Chief Executive Officer of Xchange Labs, LLC, a healthcare technology SaaS company that develops connectivity products and services focused on providing caregivers access to patient management data and integration with health plan medication management services, from May 2017 to August 2018, in which role he was responsible for commercial and operational execution. From 2004 to 2016, Mr. Becker served in various leadership roles at St. Jude Medical, a global medical device manufacturer acquired by Abbott Laboratories in 2017, including President, Americas Division, from 2013 to 2016, and President, United States Division, from 2011 to 2013. Mr. Becker earned a B.A. in Business Administration from Augustana College and an M.B.A from the University of Minnesota. We believe that Mr. Becker’s business expertise and his daily insight into corporate matters as our President and Chief Executive Officer qualify him to serve on our Board. Frank Fischer, age 82, has served as a member of our Board of Directors since 1997 and as the Chairman of our Board of Directors since August 2019. From 2000 to July 2019, Mr. Fischer served as our President and Chief Executive Officer and as a part-time employee of ours from July 2019 to January 2020. Prior to that, Mr. Fischer was President and Chief Executive Officer of Heartport, Inc., a medical device company, from 1998 to 1999, and served on Heartport’s board of directors from 1992 to 1999. Previously, Mr. Fischer was President and Chief Executive Officer of Ventritex, Inc., a company that pioneered implantable cardiac defibrillators, from 1987 until the sale of the company to St. Jude Medical, Inc. in 1997. Mr. Fischer has served as a member of the board of directors of Nevro Corp., a medical device company, since 2012. Mr. Fischer previously served a member of the board of directors of Tenon Medical, Inc., a medical device company, from April 2022 to December 2023. Mr. Fischer received a B.S. in Mechanical Engineering and a M.S. in Management from Rensselaer Polytechnic Institute. We believe that Mr. Fischer is qualified to serve on our Board of Directors because of his extensive experience with medical device companies and the historical knowledge and continuity he brings to our Board of Directors.
Class II Directors Continuing in Office Until the 2026 Annual Meeting
Class II Directors Continuing in Office Until the 2026 Annual Meeting Joseph S. Lacob, age 68, has served as a member of our Board of Directors since 1997. Since 2010, Mr. Lacob has served as Governor, Co-Executive Chairman and Chief Executive Officer of the Golden State Warriors. Mr. Lacob has served as a director of Align Technology, Inc., a global medical device company, since 1997. Mr. Lacob earned a B.S. from the University of California, Irvine, an M.P.H. from the University of California, Los Angeles, and an M.B.A from the Stanford Graduate School of Business. We believe Mr. Lacob is qualified to serve on our Board of Directors because of the historical knowledge and continuity he brings to our Board of Directors. Lisa Andrade, age 52, has served as a member of our Board of Directors since 2021. Since March 2018, Ms. Andrade has served as Chief Executive Officer at M33, LLC, an executive coaching and leadership development company, where she oversees all aspects of the business and provides executive coaching and business consulting services. From January 2017 to February 2018, Ms. Andrade served as Divisional Vice President at Abbott Laboratories, a global medical device and healthcare company, where she led the ongoing medical device commercial activities and supported integration efforts associated with the acquisition of St. Jude Medical, Inc. From January 2014 to January 2017, Ms. Andrade served as Chief Marketing Officer at St. Jude Medical, a global medical device company, where she had global leadership responsibility for strategy, marketing, education, healthcare economics and reimbursement across all of its therapy areas. Ms. Andrade earned a B.S. in Biomedical and Electrical Engineering, an M.S. in Biomedical Engineering from Duke University and an M.B.A. from the Wharton School of Business at the University of Pennsylvania. We believe Ms. Andrade is qualified to serve on our Board of Directors because of her extensive leadership, strategy, commercialization and life sciences industry experience.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Compensation Committee
| • | reviewing and recommending to our Board of Directors the compensation of our directors; |
Summary Compensation Table
Summary Compensation Table The following table shows for the fiscal years ended December 31, 2023 and December 31, 2022, compensation awarded to or paid to, or earned by, our named executive officers:
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Stock Awards(1)(2) ($) | Option Awards ($)(1)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | | Joel Becker(4) President and Chief Executive Officer | 2023 | 248,333 | — | 1,023,341 | 240,000 | — | 1,511,674 | | Rebecca Kuhn(5) Chief Financial Officer, Vice President, Finance and Administration, and Corporate Secretary | 2023 | 403,545 | 380,000 | — | 211,366 | — | 994,911 | | Martha Morrell, M.D. Chief Medical Officer | 2023 | 468,502 | 380,000 | — | 260,174 | — | 1,108,676 | | | 2022 | 453,000 | 381,094 | 378,797 | 102,538 | — | 1,315,429 | | Michael Favet(6) Former President and Chief Executive Officer | 2023 | 288,470 | 1,201,500 | — | — | 689,204 (7) | 2,179,174 | | | 2022 | 538,667 | 1,256,148 | 1,249,945 | 161,543 | — | 3,206,303 |
Summary Compensation Table
| (1) The amounts disclosed represent the aggregate grant date fair value of the awards granted in 2023 and 2022, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the stock options are set forth in Note 10 to our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. This amount does not reflect the actual economic value that may be realized by our named executive officers. |
Summary Compensation Table
| (2) See “—Narrative Disclosure to Summary Compensation Table—Equity-Based Incentive Awards” below for a description of the material terms of the program pursuant to which this compensation was awarded. |
Summary Compensation Table
| (3) The amounts reported in this column represent annual performance-based bonuses earned based on the achievement of company and individual performance goals and other factors deemed relevant by our Board and Compensation Committee. For additional information, see “–Narrative Disclosure to Summary Compensation Table – Annual Performance-Based Cash Compensation.” |
Summary Compensation Table
| (4) Mr. Becker was appointed as our President and Chief Executive Officer effective as of July 10, 2023. |
Summary Compensation Table
| (5) Ms. Kuhn was not a named executive officer for fiscal year 2022 and, as a result, her compensation for that year has been omitted pursuant to applicable SEC rules and regulations. |
Summary Compensation Table
| (6) Mr. Favet resigned as our President and Chief Executive Officer effective as of July 10, 2023. |
Summary Compensation Table
| (7) The amounts reported included termination payments, consulting fees, bonus payment, accrued vacation payout upon termination, and company-paid COBRA. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table shows for the fiscal year ended December 31, 2023, certain information regarding outstanding equity awards at year end for the named executive officers.
Outstanding Equity Awards at Fiscal Year End
| | Option Awards | | | | | | Stock Awards | | | Name | Grant Date | Vesting Commencement Date | Number of Securities Underlying Unexercised Options Exercisable(6) | Number of Securities Underlying Unexercised Options Unexercisable(7) | 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 ($)(8) | | Joel Becker President and Chief Executive Officer | 7/18/2023(1) | 7/18/2023 | — | 380,424 | $4.39 | 7/17/2033 | — | — | | Rebecca Kuhn Chief Financial Officer, Vice President, Finance and Administration, and Corporate Secretary | 10/30/2020(4) | 8/19/2020 | 163,461 | 32,692 | $0.026 | 10/29/2030 | — | — | | | 11/30/2020 | (3) | 10,634 | — | $0.026 | 12/1/2027 | — | — | | | 6/4/2021(1) | 4/22/2021 | 11,080 | 5,540 | $21.67 | 6/3/2031 | — | — | | | 3/3/2022(1) | 3/3/2022 | 40,898 | 52,582 | $8.15 | 3/2/2032 | — | — | | | 6/4/2021(2) | 4/22/2021 | — | — | — | — | 3,116 | 32,126 | | | 3/3/2022(2) | 3/3/2022 | — | — | — | — | 26,291 | 271,060 | | | 2/20/2023(5) | 2/20/2023 | — | — | — | — | 80,000 | 824,800 | | Martha Morrell Chief Medical Officer | 10/30/2020 | 8/19/2020 | 262,714 | — | $0.026 | 10/29/2030 | | | | | 11/30/2020 | (3) | 192 | — | $0.026 | 4/21/2024 | — | — | | | 11/30/2020 | (3) | 192 | — | $0.026 | 10/12/2024 | — | — | | | 11/30/2020 | (3) | 192 | — | $0.026 | 7/23/2025 | — | — | | | 11/30/2020 | (3) | 12,234 | — | $0.026 | 12/1/2027 | — | — | | | 6/4/2021(1) | 4/22/2021 | 11,080 | 5,540 | $21.67 | 6/3/2031 | — | — | | | 3/3/2022(1) | 3/3/2022 | 40,920 | 52,610 | $8.15 | 3/2/2032 | — | — | | | 6/4/2021(2) | 4/22/2021 | — | — | — | — | 3,116 | 32,126 | | | 3/3/2022(2) | 3/3/2022 | — | — | — | — | 26,302 | 271,174 | | | 2/20/2023(5) | 2/20/2023 | — | — | — | — | 80,000 | 824,800 | | Michael Favet Former President and Chief Executive Officer | 10/30/2020 | 8/19/2020 | 131,244 | — | $0.026 | 10/29/2030 | — | — | | | 6/4/2021 | 4/22/2021 | 30,375 | — | $21.67 | 6/3/2031 | — | — | | | 3/8/2022 | 3/8/2022 | 87,793 | — | $8.10 | 3/7/2032 | — | — |
Outstanding Equity Awards at Fiscal Year End
| (1) 1/4th of the shares subject to this option will vest on the first anniversary of the vesting commencement date, and the remaining shares will vest in equal monthly installments thereafter over 36 months, subject to the named executive officer’s continued service with us. |
Outstanding Equity Awards at Fiscal Year End
| (2) 1/4th of the shares subject to the restricted stock unit will vest on the first anniversary of the vesting commencement date, and the remaining shares will vest in equal quarterly installments thereafter over 36 months, subject to the named executive officer’s continued service with us. |
Outstanding Equity Awards at Fiscal Year End
| (3) This option was fully vested upon issuance pursuant to an option repricing. |
Outstanding Equity Awards at Fiscal Year End
| (4) 1/48th of the shares subject to the option will vest on a monthly basis over the four-year period following the Vesting Commencement Date, provided, in each case, subject to the named executive officer’s continued service with us. |
Outstanding Equity Awards at Fiscal Year End
| (5) 1/3rd of the shares subject to the restricted stock unit shall vest on the first anniversary of the vesting commencement date, and the remaining shares will vest in equal quarterly installments thereafter over 2 years, subject to the named executive officer’s continued service with us. |
Outstanding Equity Awards at Fiscal Year End
| (6) Because all options (other than Mr. Becker’s outstanding options) are exercisable immediately pursuant to an early exercise feature, subject to a repurchase right in favor of the Company which lapses as the option vests, this column reflects the number of options held by our named executive officers that were exercisable and vested as of December 31, 2023. |
Outstanding Equity Awards at Fiscal Year End
| (7) Because all options (other than Mr. Becker’s outstanding options) are exercisable immediately pursuant to an early exercise feature, subject to a repurchase right in favor of the Company which lapses as the option vests, this column reflects the number of options held by our named executive officers that were exercisable and unvested as of December 31, 2023. |
Outstanding Equity Awards at Fiscal Year End
| (8) Market value is calculated based on the closing price of our common stock on December 31, 2023, which was $10.31 as reported on Nasdaq. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Our named executive officers did not participate in, or earn any benefits under, any nonqualified deferred compensation plan sponsored by us during the year ended December 31, 2023. Our Board of Directors may elect to provide our officers and other employees with nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interests.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy In April 2021, our Board of Directors approved a policy for setting annual non-employee director compensation. Pursuant to the policy, we pay each of our non-employee directors annual cash retainers, paid quarterly in arrears, as follows:
Non-Employee Director Compensation Policy
| Retainer for each non-employee member of the Board: | $40,000 | | Additional retainer for Chair of the Board: | 35,000 | | Additional retainer for Chair of Audit Committee: | 20,000 | | Additional retainer for Chair of Compensation Committee: | 15,000 | | Additional retainer for Chair of Nominating and Corporate Governance Committee: | 10,000 | | Additional retainer for non-Chair members of Audit Committee: | 10,000 | | Additional retainer for non-Chair members of Compensation Committee: | 7,500 | | Additional retainer for non-Chair member of Nominating and Corporate Governance Committee: | 5,000 |
Non-Employee Director Compensation Policy
Each new non-employee director who joins our Board of Directors will receive an option to purchase shares of common stock under the 2021 Plan, for the number of shares as shall equal $185,000 divided by fair market value per share of our common stock, based on the closing price on the date of grant, and having an exercise price per share equal to the per share fair market value of the underlying common stock based on the closing price on the date of grant. One-thirty-sixth of the shares subject to the option will vest on a monthly basis over the three-year period following the date of grant, subject to the non-employee director’s continuous service with us on each applicable vesting date. On the date of each annual meeting of our stockholders, each continuing non-employee director will receive an option to purchase shares of common stock under the 2021 Plan for the number of shares as shall equal $115,000 divided by fair market value per share of our common stock based on the closing price on the date of grant, and having a per share exercise price equal to the per share fair market value of the underlying common stock based on the closing price on the date of grant. The shares subject to this option will vest upon the earlier of the one-year anniversary of the grant date or immediately prior to the next annual meeting. All then outstanding non-employee director options will vest upon a change in control of us, subject to the non-employee director’s continuous service with us through the date of our change in control. In November 2022, our Board of Directors approved an update to the policy, allowing each non-employee director to elect to receive fully vested restricted stock unit award in lieu of his or her annual cash retainer.
Director Compensation
Director Compensation The following table shows for the fiscal year ended December 31, 2023 certain information with respect to the compensation of all of our non-employee directors:
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(2)(3) | Total ($) | | Lisa Andrade | 58,915 | 66,533 | 125,448 | | Frank Fischer | 86,319(1) | 66,533 | 152,852 | | Greg Garfield | 28,214 | — | 28,214 | | Uri Geiger | 43,800(1) | 175,002(4) | 218,802 | | Rakhi Kumar | 60,000(1) | 66,533 | 126,533 | | Joseph S. Lacob | 45,000(1) | 66,533 | 111,533 | | Renee Ryan | 57,500 | 66,533 | 124,033 |
Director Compensation
| (1) Each of Mr. Fischer ($67,569), Mr. Geiger ($34,245), Ms. Kumar ($45,000), and Mr. Lacob ($33,750) elected to receive a fully vested restricted stock unit (“RSU”) award in lieu of a portion of the cash retainers described above. Mr. Fischer, Mr. Geiger, Ms. Kumar, and Mr. Lacob received an RSU award representing 9,212 shares, 4,708 shares, 6,335 shares, and 4,752 shares, respectively, of our common stock. Pursuant to an arrangement between Mr. Geiger and Accelmed Partners, the remainder of Mr. Geiger's cash fees were remitted to Accelmed Partners. |
Director Compensation
| (2) The amounts disclosed represent the aggregate grant date fair value of the stock options, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the stock options are set forth in Note 10 to our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. This amount does not reflect the actual economic value that may be realized by our non-employee directors. Amounts exclude the aggregate grant date fair value of the RSU awards granted in lieu of cash fees since the fees have been separately reported as “Fees Earned or Paid in Cash.” |
Director Compensation
| (3) As of December 31, 2023, each of the above non-employee directors held options to purchase shares of our common stock as follows: Ms. Andrade, 57,469 shares; Mr. Fischer, 67,331 shares; Mr. Geiger, 147,901 shares; Ms. Kumar, 67,331 shares; Mr. Lacob, 67,331 shares; and Ms. Ryan, 67,331 shares. |
Director Compensation
| (4) Dr. Geiger was elected to our Board of Directors as a Class III director in January 2023. In accordance with our non-employee director compensation policy, in addition to the annual grant, Dr. Geiger was granted a non-statutory stock option to purchase 120,521 shares of our common stock with an exercise price per share equal to $1.535, the per share fair market value of the underlying common stock on the date of grant, subject to Dr. Geiger’s continued service with us on each applicable vesting date. The shares subject to the option will vest on a monthly basis over the three-year period (1/36th per month) following the date of grant. |