DEF 14A of PROCEPT BioRobotics Corp, Apr 22, 2024

DEF 14A of PROCEPT BioRobotics Corp

Filed Apr 22, 2024 · FY20230001628280-24-017167

Open on EDGAR

  1. PROPOSAL NO. 1: ELECTION OF DIRECTORS

    PROPOSAL NO. 1: ELECTION OF DIRECTORS The Company’s Board of Directors is presently comprised of nine members, who are divided into three classes, designated as Class I, Class II and Class III. One class of directors is elected by the stockholders at each annual meeting to serve from the time of their election until the third annual meeting of stockholders following their election and until their successor is duly elected and qualified. Class I directors consist of Thomas Krummel, M.D., Elisabeth Little and Larry Wood; Class II directors consist of Antal Desai, Mary Garrett and Frederic Moll, M.D; and Class III directors consist of Amy Dodrill, Taylor Harris and Reza Zadno, Ph.D. Mr. Colby Wood resigned from our Board effective April 18, 2024. Mr. Larry Wood was appointed to our Board effective April 18, 2024. The Nominating and ESG Committee of the Board has recommended, and the Board has approved, the nomination of our Class III directors, Amy Dodrill, Taylor Harris and Reza Zadno, Ph.D., for re-election for three-year terms expiring at the 2027 annual meeting of stockholders and until their respective successors are duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. Each of Ms. Dodrill, Mr. Harris and Dr. Zadno is currently a director of the Company. Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement. If any nominee should become unavailable to serve for any reason, it is intended that votes will be cast for a substitute nominee designated by Nominating and ESG Committee and approved by the Board. We have no reason to believe that any nominee named will be unable to serve if elected.

  2. Nominees for Director and Continuing Directors

    Nominees for Director and Continuing Directors The names and ages of the nominees and continuing directors, and their length of service with the Company and Board committee memberships are set forth in the table below.

  3. Nominees for Director and Continuing Directors

    | Name | Age | Director Since | Class / Current Term Expires | Independent | AC | CC | NESG | | Nominees | | | | | | | | | Amy Dodrill | 51 | June 2021 | Class III / 2024 Annual Meeting | Yes | M | M | — | | Taylor Harris | 48 | December 2020 | Class III / 2024 Annual Meeting | Yes | F,C | — | — | | Reza Zadno, Ph.D. | 69 | February 2020 | Class III / 2024 Annual Meeting | No | — | — | — | | Continuing Directors | | | | | | | | | Antal Desai | 46 | June 2015 | Class II / 2026 Annual Meeting | Yes | — | M | M | | Mary Garrett | 65 | December 2021 | Class II / 2026 Annual Meeting | Yes | — | — | C | | Thomas Krummel, M.D. | 72 | December 2010 | Class I / 2025 Annual Meeting | Yes | — | M | — | | Frederic Moll, M.D.* | 72 | August 2011 | Class II / 2026 Annual Meeting | Yes | — | — | — | | Elisabeth Little | 62 | October 2021 | Class I / 2025 Annual Meeting | Yes | — | C | M | | Larry Wood | 58 | April 2024 | Class I / 2025 Annual Meeting | Yes | M | — | — |

  4. Nominees for Director and Continuing Directors

    | *: Chairman of the Board | F: Financial Expert | M: Committee Member | C: Committee Chair | | AC: Audit Committee | CC: Compensation Committee | NESG: Nominating and ESG Committee | |

  5. Nominees for Director and Continuing Directors

    A brief biography of each nominee and each continuing director is set forth below, which includes information, as of the Record Date, regarding specific and particular experience, qualifications, attributes or skills of each nominee that led the Nominating and ESG Committee and the Board to believe that the director should serve on the Board:

  6. Director Nominees

    Director Nominees Amy Dodrill. Ms. Dodrill has served as a member of our board of directors since June 2021. Ms. Dodrill has served as a member of the board of CTS Corporation since February 2024, where she is a member of the nominating, governance and sustainability and the technology and transactions committees. Ms. Dodrill served as the President, Global Surgical Solutions & Patient Support Systems at Baxter International, Inc., a public company with a portfolio of diagnostic, critical care, kidney care, nutrition, hospital and surgical products until October 2022. Previously, Ms. Dodrill worked at Hillrom Holdings, Inc., a company specializing in medical device innovation, from October 2012 until December 2021 when it was acquired by Baxter International, Inc. During her time at Hillrom, Ms. Dodrill held various positions including President, Global Surgical, and Vice President and General Manager of the US Surgical Division. Ms. Dodrill also previously served as Vice President and General Manager of Trumpf Medical Surgical Solutions NA. Ms. Dodrill holds a B.S. from Johns Hopkins University. We believe Ms. Dodrill is qualified to serve on our board of directors because of her expertise in managing medical device companies. Taylor Harris. Mr. Harris has served as a member of our board of directors since December 2020. Mr. Harris currently serves as the Chief Executive Officer of Cutera, Inc., a leading provider of medical aesthetic technologies, since August 2023. Mr. Harris served as the Chief Financial Officer for MyoKardia, Inc., a clinical-stage biopharmaceutical company, from April 2018 until that company's acquisition by Bristol Myers Squibb in November 2020. Previously, Mr. Harris served as Senior Vice President and Chief Financial Officer of Zeltiq Aesthetics, Inc., a company that markets and licenses devices used for cryolipolysis procedures, from March 2016 until that company’s acquisition by Allergan plc. in April 2017. Prior to Zeltiq, Mr. Harris served as Chief Financial Officer at Thoratec Corporation, until that company's acquisition by St. Jude Medical, Inc. Prior to joining Thoratec, Mr. Harris worked at JPMorgan Chase & Co. for over a decade in healthcare investment banking and equity research. Mr. Harris also serves as a member of the board of directors of two private companies. Mr. Harris holds a B.A. in Physics and Economics from the University of North Carolina at Chapel Hill, where he studied as a Morehead-Cain scholar. We believe that Mr. Harris is qualified to serve on our board of directors because of his extensive finance, accounting, and operations experience and experience in managing medical device companies. Reza Zadno, Ph.D. Dr. Zadno has served as our President and Chief Executive Officer and a member of our board of directors since February 2020. He previously served as President and Chief Executive Officer of Avedro, Inc., a ophthalmology company, from September 2016 to November 2020, where he also served as a member of the board of directors from September 2016 to November 2020. Dr. Zadno also previously served as Innovation Advisor and Venture Partner at InterWest Partners, a venture capital firm, from January 2012 to January 2018. Dr. Zadno has also served on the boards of directors of Invuity, Inc. from January 2013 to June 2017, where he was a member of the audit committee, and Carbylan Therapeutics, Inc. from June 2013 to November 2016, where he was a member of the audit committee. In addition, Dr. Zadno has served as a public trustee on the board of the American Academy of Ophthalmology, since January 2024. Dr. Zadno received both a Ph.D. and an M.Sc. in Mechanical Properties of Materials (Metallurgy) from Ecole Nationale Superieure des Mines de Paris. We believe that Dr. Zadno is qualified to serve on our board of directors based on his experience in managing medical device companies and his understanding of our business and operations and perspective as our Chief Executive Officer and President.

  7. Continuing Directors

    Continuing Directors Antal Desai. Mr. Desai has served as a member of our board of directors since June 2015. Mr. Desai joined Cardinal Investment Company, Inc. in September 2004, the predecessor firm to CPMG, Inc., an investment firm that invests in publicly-traded and private companies globally, were he currently serves as a Managing Director. Mr. Desai is a member of the board of directors of several private companies. Mr. Desai received both a B.S. in Economics and an M.B.A. from the Wharton School at the University of Pennsylvania. We believe Mr. Desai is qualified to serve on our board of directors due to his experience as a director of several companies and his experience investing in publicly-traded companies in the healthcare industry. Mary Garrett. Ms. Garrett has served as a member of our board of directors since December 2021. Ms. Garrett has served as a member of the board of Omnicell, Inc. since March 2022, where she is a member of the corporate governance committee. Ms. Garrett previously served on the board of Hillrom Corporation from March 2017 until it was acquired by Baxter International in December 2021, serving as chair of the governance committee during 2021 and serving on the audit committee of Hillrom during her tenure. She also previously served as a board member and was on the audit committee of Ethan Allen Interiors, Inc. from January 2016 until November 2021. Prior to these roles and her retirement in December 2015, Ms. Garrett was the Chief Marketing Officer, Global Markets for IBM Corporation. Ms. Garrett holds a B.S. in Biomedical Engineering from Boston University and an M.S. in Bioelectrical Engineering from Brown University. We believe Ms. Garrett is qualified to serve on our board of directors because of her extensive management and directorship experience, including in the healthcare industry. Thomas Krummel, M.D. Dr. Krummel has served as a member of our board of directors since December 2010. Dr. Krummel is the Emile Holman Professor Emeritus and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine. Since March 2021, Dr. Krummel has served as Venture Partner at Santé Ventures, an early stage medical technology investment firm. Previously, he was the co-director of the Stanford Byers Center for Biodesign Program from 2006 through 2021. From December 1998 through August 2021, Dr. Krummel served as a professor at Stanford University. He has been a member of the board of directors of California Water Service Group, a public utility company, since July 2010, where he serves as a member of the nominating/corporate governance committee and serves as Chair of the organization and compensation committee. In addition, Dr. Krummel serves on the board of directors of a number of private companies. Dr. Krummel received a B.S. in Chemistry from University of Wisconsin at Parkside and an M.D. from the Medical College of Wisconsin. We believe Dr. Krummel is qualified to serve on our board of directors due to his expertise with medical, public health and science issues. Frederic Moll, M.D. Dr. Moll has served as a member of our board of directors since August 2011 and has served as Chair since March 2021. From April 2019 to March 2023, Dr. Moll served as Chief Development Officer for Johnson & Johnson Medical Devices Companies. Dr. Moll was also a co-founder, and, from September 2012 to 2019, was the Chairman and Chief Executive Officer of Auris Health, Inc., a robotics medical device company, that was acquired by Johnson and Johnson in 2019. Dr. Moll is also the Founding Partner of Sonder Capital Management, LLC, a healthcare venture capital investment firm. He serves on the boards of Shockwave Medical, Inc., since March 2011, where he is a member of the nominating and corporate governance committee, and INSIGHTEC Ltd., since June 2020, where he is a member of the audit committee. Dr. Moll previously served as member and as Chairman of the board of Restoration Robotics, Inc., from November 2002 until its merger with Venus Concept in November 2019. Dr. Moll previously served on the board of directors at Intersect ENT, Inc. from March 2010 to February 2021, where he was a member of the nominating and corporate governance committee. Dr. Moll received a B.A. in economics from the University of California at Berkeley, an M.S. in management from Stanford University and an M.D. from the University of Washington. We believe Dr. Moll is qualified to serve on our board of directors because of his deep experience in the healthcare sector, his experience as a director of multiple healthcare companies, and his medical background and experience. Elisabeth Little. Ms. Little has served as a member of our board of directors since October 2021. Ms. Little currently serves as a consultant to the pharmaceutical industry and is a member of the board of directors of Vyne Therapeutics, Inc., since March 2019, where she serves as a chair of the compensation committee and as a member of the audit committee. Ms. Little was previously a member of the boards of directors of Satsuma Pharmaceuticals until its acquisition by SNBL in June 2023 and Intersect ENT, Inc. until its acquisition by Medtronic plc in May 2022. Ms. Little previously served as the Chief Commercial Officer and Executive Vice President of Corporate Strategy at Alder Biopharmaceuticals, a public biopharmaceutical company, from August 2016 until March 2019. Prior to that, she was Chief Commercial Officer for Kythera Biopharmaceuticals, a public biopharmaceutical company, from March 2012 until October 2015 and spent over 20 years at Allergan in a variety of commercial leadership roles of increasing responsibility. Ms. Little holds a B.S. in Biology from University of California at Irvine and an M.B.A. from Pepperdine University. We believe Ms. Little is qualified to serve on our board of directors because of her extensive management experience in the healthcare industry. Larry Wood. Mr. Wood has served as a member of our board of directors since April 2024. Since February 2007, Mr. Wood has been Corporate Vice President, Transcatheter Aortic Valve Replacement, and since 2023, as Group President for Surgical Structural Heart, at Edwards Lifesciences, a global leader in patient-focused medical innovations for structural heart disease and critical care and surgical monitoring. Mr. Wood has more than 35 years of experience in the medical technology industry at both Edwards Lifesciences and Baxter Healthcare Corporation in positions including manufacturing management, regulatory affairs and strategic and clinical marketing, primarily for the surgical heart valve therapy business. Mr. Wood received an M.B.A. from Pepperdine Graziadio Business School. We believe Mr. Wood is qualified to serve on our board of directors because of his extensive management experience in the healthcare industry. OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE THREE CLASS III DIRECTOR NOMINEES LISTED ABOVE.

  8. INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE This section describes key Corporate Governance Guidelines and practices that we have adopted. Complete copies of our Corporate Governance Guidelines, the charters of the committees of the Board and our Code of Ethics and Conduct, described below, can be found in the Governance section of the Investor Relations section of our website at www.procept-biorobotics.com. Alternatively, you can request a copy of any of these documents free of charge by writing to: Alaleh Nouri, EVP, Chief Legal Officer & Corporate Secretary, c/o PROCEPT BioRobotics Corporation, 150 Baytech Drive, San Jose, CA 95134. Information on or accessible through our website is not incorporated by reference in this Proxy Statement.

  9. NON-EMPLOYEE DIRECTOR COMPENSATION

    NON-EMPLOYEE DIRECTOR COMPENSATION Our directors play a critical role in guiding our strategic direction and overseeing the management of PROCEPT. The many responsibilities and risks and the substantial time commitment of being a director require that we provide adequate compensation commensurate with our directors’ responsibilities and opportunity costs. We maintain a non-employee director compensation program (“Director Compensation Program”), pursuant to which non-employee directors are eligible to receive annual cash retainers and equity awards in the form of options or restricted stock units ("RSUs"), as described further below. Cash Compensation. We pay an annual retainer to our non-employee directors of $45,000. We also pay an additional $45,000 retainer to the Chairman of the Board. Each non-employee director receives an additional retainer for service on the committees, as follow:

  10. NON-EMPLOYEE DIRECTOR COMPENSATION

    | Committee | Chair | Membership | | | Retainer | Retainer | | Audit | $20,000 | $10,000 | | Compensation | $15,000 | $7,500 | | Nominating and ESG | $10,000 | $5,000 |

  11. NON-EMPLOYEE DIRECTOR COMPENSATION

    Equity Compensation. Our non-employee directors are also eligible to receive the following equity compensation: Initial Grant: Each non-employee director who is initially elected or appointed to serve on the Board automatically shall be granted equity awards with an aggregated value of approximately $300,000, in the form of 50% RSU and 50% stock options to purchase PROCEPT's common stock. The Board will make the initial grant on the date on which such director is appointed or elected to serve on the Board, and shall vest in substantially equal installments on each of the first, second, and third anniversary of the applicable grant date, subject to such director’s continued service through the applicable vesting date. Annual Grant: A non-employee director who is serving on the Board as of the date of the annual meeting of the Company’s stockholders each calendar year shall receive equity awards on such annual meeting date. For 2023, based on peer group and other market data provided by our compensation consultant, the Board approved an increase in value to approximately $180,000 (from $150,000). For 2023, the Board granted such awards in the form of 50% RSUs and 50% stock options to purchase PROCEPT's common stock. The RSUs and stock options granted to non-employee directors shall vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date, and (ii) the date of the next annual meeting following the grant date, subject to continued service through the applicable vesting date. The number of RSUs granted in each circumstance is determined based on the grant value divided by the average closing price of PROCEPT's stock in the thirty-days immediately prior to the date of grant. The number of stock options granted in each circumstances is determined based on the grant value divided by the grant date fair value of each stock option, calculated in accordance with the Black-Scholes option valuation methodology advised by our compensation consultant. The exercise price per share of each option will equal the closing trading price of a share of our common stock on the date of grant. Each RSU and stock option award granted to non-employee directors that is not assumed will vest in full upon a change of control of our Company (as defined in the Equity Incentive Award Plan (the “2021 Plan”)).

  12. 2023 Director Compensation Table

    2023 Director Compensation Table The following table sets forth information for the year ended December 31, 2023, regarding the compensation awarded to, earned by or paid to our non-employee directors who served on our Board of Directors during 2023. Dr. Zadno, who served as our President and Chief Executive Officer during the year ended December 31, 2023, and continues to serve in that capacity, does not receive additional compensation for his service as a director, and therefore is not included in the Director Compensation table below. All compensation paid to Dr. Zadno is reported below in the “Summary Compensation Table.”

  13. Director Compensation in 2023

    Director Compensation in 2023

  14. Director Compensation in 2023

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($) (1)(2)(4) | Stock Awards ($) (1)(3)(4) | Total ($) | | Current Directors | | | | | | Antal Desai(5) | 57,500 | 94,787 | 95,129 | 247,416 | | Amy Dodrill | 62,500 | 94,787 | 95,129 | 252,416 | | Mary Garrett | 55,000 | 94,787 | 95,129 | 244,916 | | Taylor Harris | 65,000 | 94,787 | 95,129 | 254,916 | | Thomas Krummel, M.D. | 60,000 | 94,787 | 95,129 | 249,916 | | Frederic Moll, M.D. | 87,720 | 94,787 | 95,129 | 277,636 | | Elisabeth Little | 52,242 | 94,787 | 95,129 | 242,158 | | Larry Wood(6) | — | — | — | — | | Former Director | | | | | | Colby Wood(7) | 55,000 | 94,787 | 95,129 | 244,916 |

  15. Director Compensation in 2023

    (1)Amounts shown in this column do not reflect dollar amounts actually received by our non-employee directors. Instead, these amounts reflect the aggregate grant date fair value of each equity award granted in 2023, computed in accordance with the provisions of FASB ASC Topic 718. (2)Represents grant date fair value of stock options calculated in accordance with ASC 718 of 4,865 shares of stock options granted to each of the non-employee directors listed in the table above. Assumptions used in the calculation of these amounts for each stock option are included in Note 7 to our financial statements included in our annual report on Form 10-K for the year ended December 31, 2023 (3)Represents grant date fair value calculated in accordance with ASC 718 of 2,711 RSUs granted to each non-employee director listed in the table above, which was determined based on the closing trading price of our common stock on the grant date. (4)The table below shows the aggregate numbers of option awards (exercisable and unexercisable) and RSUs held as of December 31, 2023 by each of our non-employee directors on December 31, 2023:

  16. Director Compensation in 2023

    | Name | Option Awards Outstanding at Year End | Stock Awards Outstanding at Year End | | Current Directors | | | | Antal Desai | 72,442 | 2,711 | | Amy Dodrill | 56,438 | 2,711 | | Mary Garrett | 11,323 | 2,711 | | Taylor Harris | 114,851 | 2,711 | | Thomas Krummel, M.D. | 36,170 | 2,711 | | Frederic Moll, M.D. | 120,028 | 2,711 | | Elisabeth Little | 10,715 | 2,711 | | Larry Wood(6) | | | | Former Director | | | | Colby Wood(7) | 40,828 | 2,711 |

  17. Director Compensation in 2023

    (5)Fees earned by Mr. Desai are remitted to CPMG, Inc. and not retained by Mr. Desai personally. (6)Mr. Larry Wood was appointed to our Board on April 18, 2024 and did not earn any compensation during 2023. (7)Mr. Colby Wood resigned from our Board on April 18, 2024.

  18. OTHER INFORMATION RELATED TO PROCEPT, THE DIRECTORS AND EXECUTIVE OFFICERS

    OTHER INFORMATION RELATED TO PROCEPT, THE DIRECTORS AND EXECUTIVE OFFICERS

  19. Role of Compensation Committee

    Role of Compensation Committee The Compensation Committee establishes our compensation philosophy and objectives, determines the structure, components and other elements of executive compensation, and reviews and approves the compensation of our NEOs, other than the Chief Executive Officer, and for the Chief Executive Officer, reviews and recommends it for approval by the Board. Our Compensation Committee has created an executive compensation program that combines cash and equity, short-term and long-term incentives as well as fixed and variable/at-risk elements in the proportions that it believes achieves the compensation philosophy described above. The Compensation Committee evaluates the executive compensation program to verify alignment with desired compensation objectives, reviews practices of peer companies and ensure that the programs overall drive the desired direction of the company in alignment with the corporate strategy and stockholder interests. It then makes any changes that would be appropriate. The factors considered by the Compensation Committee in determining the compensation of our executives, including our NEOs, for 2023 included: ▪the recommendations of our Chief Executive Officer (except with respect to his own compensation); ▪our performance against the short-term and long-term financial, operational and strategic objectives established by the Compensation Committee and our Board; ▪the need to retain executives; ▪a review of the relevant competitive market analysis prepared by its compensation consultant and advisors; ▪historical compensation provided to our executives; and ▪the knowledge, skills, experience, qualifications, tenure and expected future contribution of the individual executive officer. Each year, the Compensation Committee obtains input from the executive team regarding the annual operating plan including the range of expected financial and operating results and the attendant risks and opportunities in order to establish the performance metrics associated with our performance based annual cash incentive plan. For each metric, the Compensation Committee approves appropriate threshold, target and maximum levels of performance designed to motivate performance without incentivizing undue risk taking. The Compensation Committee reviews progress periodically and following the end of the performance period, the Compensation Committee evaluates achievement relative to the targets to determine payouts.

  20. Role of Compensation Consultant

    Role of Compensation Consultant The Compensation Committee recognizes that there is value in receiving independent, objective expertise and counsel in connection with fulfilling its duties and has the authority to retain an independent compensation consultant to assist it in carrying out its responsibilities and duties. Since 2021, the Compensation Committee has engaged Aon as its independent compensation consultant for compensation decisions. Aon reports directly to the Committee, and the Compensation Committee has the sole authority to retain, terminate and obtain the advice of Aon. The Compensation Committee worked with Aon to develop our compensation philosophy and peer group, evaluate a competitive market analysis of the base salary, annual cash incentive awards and long-term incentive compensation of our executive officers compared to the compensation peer group, report on share utilization, and review other market practices and trends. In addition, Aon assisted with reviewing and benchmarking our non-employee director compensation and assisting on other ad hoc matters throughout the year. While the Compensation Committee took into consideration the review and recommendations of Aon when making decisions about our executive compensation program, ultimately, the Compensation Committee made its own independent decisions in determining our executive officers’ compensation. The Compensation Committee assessed the independence of Aon pursuant to SEC and Nasdaq rules. In doing so, the Compensation Committee considered each of the factors set forth by the SEC and Nasdaq with respect to an adviser’s independence and concluded that there were no conflicts, and that Aon was independent.

  21. Compensation Peer Group and Peer Selection Process

    Compensation Peer Group and Peer Selection Process The Compensation Committee believes that obtaining relevant market data is important to determine executive compensation. Such information provides helpful context and a reference point when making compensation decisions. The Compensation Committee takes into consideration the structure and components of, and the amounts paid under, the executive compensation programs of other comparable peer companies. However, the Compensation Committee also recognizes the unique aspects of PROCEPT and our business that may ultimately drive compensation decisions that differ from our peers. Historically, with assistance from Aon, the Compensation Committee developed and approved a compensation peer group to support pay decisions, including base salary and annual performance-based incentive compensation. In selecting the peer group, the Compensation Committee, in consultation with Aon established various criteria to ensure there was a meaningful cross-section from which to benchmark executive compensation. The peer group was selected using the following criteria: •Industry: publicly traded, medical device or other life science companies with a focus on differentiated research and development business models or biotechnology companies with a medical device product focus, including companies in the healthcare equipment, healthcare services, healthcare supplies, health care technology and life sciences tools and services sectors; •Revenue: companies within a similar revenue range; •Market Capitalization: companies within a similar market capitalization range; and •Location: U.S. headquartered with a preference for companies headquartered in the San Francisco Bay Area or other talent ‘hub’ locations. In September 2022, we reevaluated our peer group consistent with the criteria listed above and anticipated for us. In consultation with Aon, we added 10x Genomics, Inspire Medical Sytems, OrthoPediatrics, Paragon 28, Revance Therapeutics, Schrodinger, STAAR Surgical Company, Twist Bioscience and Veracyte; and we removed Intersect ENT, Personalis, Pulmonx, Semler Scientific, SI-BONE, Sight Sciences and ViewRay from the peer group. This resulted in the following set of 21 companies included in our peer group which were used to inform decisions for 2023 executive officers and directors compensation:

  22. Compensation Peer Group and Peer Selection Process

    | 10x Genomics AtriCure Axonics Castle Biosciences Glaukos Inari Medical Inspire Medical Systems | iRhythm Technologies LeMaitre Vascular Nevro OrthoPediatrics Outset Medical Paragon 28 Revance Therapeutics | Schrodinger ShockWave Medical Silk Road Medical STAAR Surgical Company TransMedics Group Twist Bioscience Veracyte |

  23. Compensation Peer Group and Peer Selection Process

    The Compensation Committee intends to review the peer group annually considering changes in our business as well as in those of the companies in our peer group to see if any updates are needed, while maintaining some year over year continuity in the list for comparability purposes. In addition to the selected peer groups, as discussed above, the Compensation Committee references general and specific industry surveys from other sources.

  24. Annual Incentive Cash Compensation

    Annual Incentive Cash Compensation During 2023, all of our employees including our NEOs, were eligible to receive performance-based cash incentive compensation. We believe that performance-based cash incentives motivate our employees, including our NEOs, to achieve both annual and long-term goals. This approach is important to the execution of our overall business strategy which, if achieved, has the potential to enhance shareholder value. Annual bonuses are not guaranteed and may vary materially from year-to-year. Target Opportunities. Consistent with our compensation philosophy and objectives, the Compensation Committee generally sets the target incentive opportunity within the median range of annual cash incentive target pay for comparable executives at our peer groups. For 2023, based on a review of the market data, the Compensation Committee (or for our Chief Executive Officer, the Board on the recommendation of the Compensation Committee) approved an increase to our NEOs' target incentive opportunities as follows:

  25. Annual Incentive Cash Compensation

    | Named Executive Officer | 2022 Target Incentive Opportunity (as a % of Base Salary) | | 2023 Target Incentive Opportunity (as a % of Base Salary) | | | Reza Zadno, Ph.D. | | 75% | | 100% | | Kevin Waters | | 50% | | 60% | | Hisham Shiblaq | | 50% | | 60% | | Alaleh Nouri | | 50% | | 55% |

  26. Annual Incentive Cash Compensation

    Performance Measures. Typically, the Compensation Committee establishes bonus opportunities pursuant to a formal cash bonus plan that measures and rewards our executives for our actual corporate performance over our fiscal year. The bonus plan is designed to pay above-target bonuses when we exceed our annual corporate objectives and below-target bonuses when we do not achieve these objectives. The Compensation Committee sets targets that the Compensation Committee and management deem challenging, yet possible, to attain. The determination of the annual targets for 2023 was based on financial and strategic measures that the Compensation Committee and the Board considered important for both the short-term and long-term health of the business. For fiscal 2023, the amount of the payout was based 80% upon achievement of financial and operational metrics and 20% on strategic product related metrics, as determined by the Compensation Committee in its sole discretion. Specifically, the following metrics were used to determine payouts for fiscal 2023:

  27. Annual Incentive Cash Compensation

    | Performance Measures | Weight | Unweighted Minimum Payout Level | Minimum Payout Achievement | Unweighted Target Payout Level | Target Payout Achievement | Unweighted Maximum Payout Level | Maximum Payout Achievement | | Revenue $ | 40% | 63% | $125,600,000 | 100% | $139,500,000 | 212.5% | $174,400,000 | | U.S. Procedures | 20% | 75% | 13,898 | 100% | 16,350 | 200% | 21,255 | | Adjusted EBITDA $ | 10% | 50% | $(73,300,000) | 100% | $(63,700,000) | 100% | N/A | | Gross Margin | 10% | 50% | 50.4% | 100% | 56.0% | 250% | 61.60% | | Product Related Goal | 20% | —% | N/A | 100% | If Achieved | 100% | N/A |

  28. Annual Incentive Cash Compensation

    Based on the above metrics, the weighted minimum payout level was 50% of target, and the weighted maximum payout level was 180% of target. Adjusted EBITDA is a financial measure that is not prepared in accordance with generally accepted accounting principles in the United States (GAAP). We define Adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization and stock-based compensation. U.S. Procedures is the aggregate of all surgical procedures performed in the United States using an AquaBeam Robotic System during the most recently completed fiscal year. Payout Determination. In February 2024, the Compensation Committee reviewed and confirmed the Company’s performance against each of these objectives, and determined the achievement percentage against each metric within the applicable performance range. Following this approach, the Compensation Committee approved (or for our Chief Executive Officer, recommended that the Board approve) payouts of 2023 annual bonuses at 83.7% of target to our NEOs pursuant to the bonus plan based on the achievement levels set forth below:

  29. Annual Incentive Cash Compensation

    | Performance Measures | Weight | | Unweighted Actual Achievement Level | Weighted Actual Achievement Level | | Revenue | 40% | | 91.0% | 36.4% | | U.S. Procedures | 20% | | 103.5% | 20.7% | | Adjusted EBITDA | 10% | | —% | —% | | Gross Margin | 10% | | 66.0% | 6.6% | | Product Related Goal | 20% | | 100.0% | 20.0% | | Total | 100% | —% | N/A | 83.7% |

  30. Annual Incentive Cash Compensation

    The Board approved the determination of the 83.7% overall achievement percentage with respect to our Chief Executive Officer. The actual incentive payouts for each executive were determined by multiplying such NEO’s eligible base salary by the target incentive opportunity, and then by the overall achievement percentage. The following table summarizes the 2023 compensation earned by our NEOs under the annual cash incentive program:

  31. Annual Incentive Cash Compensation

    | Named Executive Officer | Base Salary Earned | Bonus Target | Bonus Basis (Salary X Target) | Bonus Achievement | Actual Bonus Payout | | Reza Zadno, Ph.D. | $612,575 | 100% | $612,575 | 83.7% | $512,730 | | Kevin Waters | $448,750 | 60% | $269,250 | 83.7% | $225,360 | | Hisham Shiblaq | $430,000 | 60% | $258,000 | 83.7% | $215,950 | | Alaleh Nouri | $410,750 | 55% | $225,913 | 83.7% | $189,090 |

  32. Long-Term Incentives

    Long-Term Incentives As described above, the third and largest primary component of our executive compensation program is long-term equity incentives. The Compensation Committee designed this long-term incentive opportunity to motivate executive officers to achieve multi-year strategic goals and to deliver sustained, long-term value to stockholders. Our long-term incentives create a strong link between payouts and performance and align our executive officers’ interests with the interests of our stockholders. Long-term equity incentives promote retention, as executive officers will only receive value if they remain employed by us over the required term. In addition, they foster an ownership culture among our executive officers by making executive officers’ stockholders with a personal stake in the value they intend to create. In fiscal 2023, we granted equity awards to our executive officers in the form of 50% RSUs and 50% stock options. The Compensation Committee determined that this mix was appropriate given the current stage of our business and balancing the various objectives of our equity compensation. Beginning in fiscal 2024, the Compensation Committee approved a change in the mix of long-term executive compensation to be granted to executives, and determined that future awards would take the form of a mix of 50% RSUs, 25% stock options and 25% performance stock units ("PSUs“). Both RSUs and stock options have time-based vesting with RSUs vesting annually over 4 years and stock options vesting monthly over 4 years. PSUs may be earned over a multi-year performance periods based on our actual results as measured against the targets established for such period, including revenue target and relative total stockholder return as compared to Russell 2000 Index. The Compensation Committee will continue to evaluate and select the form and mix of long-term incentive compensation that it believes best accomplishes the goals discussed above. Long-Term Incentive Values. The Compensation Committee established long-term incentive values for each of the executive officers in February 2023. In establishing the size of these long-term incentive values, the Compensation Committee intended to provide long-term incentive opportunities that generally align with the median of the long-term incentive opportunities awarded by our peer group companies to their similarly situated executives. The Compensation Committee intends to make grants of long-term incentive awards annually. Special, one-time awards may be granted to our executive officers in certain circumstances, including, as may be necessary to attract, retain and motivate them or as recognition of an increase in the scope of an executive’s responsibilities or significant accomplishments. For specific amounts of long-term incentive awards granted to our NEOs in 2023, see "Grants of Plan-Based Awards" below.

  33. Severance and Other Benefits Payable Upon Termination of Employment or Change of Control

    Severance and Other Benefits Payable Upon Termination of Employment or Change of Control Pursuant to their respective change of control and severance agreements, each of our executive officers is entitled to certain payments and benefits in certain termination situations or upon a change of control. See “Potential Payments Upon Termination or Change-In-Control” for more information on these payments and benefits.

  34. Accounting Considerations

    Accounting Considerations ASC Topic 718 requires us to calculate the grant date “fair value” of our stock-based awards using a variety of assumptions. ASC Topic 718 also requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options, restricted stock, RSUs and performance units under our equity incentive award plans will be accounted for under ASC Topic 718. The Compensation Committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align the accounting expense of our equity awards with our overall executive compensation philosophy and objectives.

  35. Summary Compensation Table

    Summary Compensation Table The following table discloses compensation paid by us during fiscal years 2023, 2022 and 2021 to our NEOs:

  36. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Reza Zadno, Ph.D., President & Chief Executive Officer | 2023 | 612,575 | — | 2,435,509 | 2,527,999 | 512,730 | — | 6,088,813 | | | 2022 | 575,000 | — | 1,375,527 | 1,496,965 | 683,960 | — | 4,131,452 | | | 2021 | 490,000 | — | — | 615,245 | 269,500 | — | 1,374,745 | | Kevin Waters, EVP, Chief Financial Officer | 2023 | 448,750 | — | 974,181 | 1,011,015 | 225,360 | 6,000 | 2,665,306 | | | 2022 | 415,000 | — | 276,911 | 301,294 | 329,100 | — | 1,322,305 | | | 2021 | 388,130 | — | — | 309,169 | 155,252 | — | 852,551 | | Hisham Shiblaq EVP, Chief Commercial Officer | 2023 | 430,000 | — | 974,181 | 1,011,004 | 215,950 | — | 2,631,135 | | | 2022 | 400,000 | 40,000(1) | 136,951 | 149,023 | 317,200 | — | 1,043,174 | | | 2021 | 350,000 | — | — | 309,169 | 157,500 | — | 816,669 | | Alaleh Nouri, EVP, Chief Legal Officer & Corporate Secretary | | | | | | | | | | | 2023 | 410,750 | — | 779,345 | 808,776 | 189,090 | 6,000 | 2,193,961 | | | 2022 | 398,000 | — | 119,106 | 129,531 | 315,610 | — | 962,247 |

  37. Summary Compensation Table

    (1)A one-time bonus award of $40,000 was approved by the Compensation Committee for Mr. Shiblaq in April 2022 considering a variety of factors in connection with his recognition and compensation, including his leadership in commercial overachievement in 2021 and the higher compensation paid by several high growth medical device companies. (2)Amounts shown in this column do not reflect dollar amounts actually received by our executive officers. Instead, these amounts reflect the aggregate grant date fair value of RSUs granted in the applicable year, computed in accordance with the provisions of FASB ASC Topic 718, which was deteremined based on the closing trading price of our common stock on the grant date. (3)Represents the grant date fair value of stock options to purchase shares of our common stock granted in the applicable year, computed in accordance with Financial Accounting Standards Board, or FASB, ASC 718. See Note 7 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2023 for a description of the assumptions used in valuing our stock options. (4)For 2023, amounts represent bonuses earned under our 2023 annual bonus plan. (5)For 2023, amounts represent matching contributions paid by us pursuant to our 401(k) plan.

  38. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth information regarding grants of plan-based awards to our executive officers during the fiscal year ended December 31, 2023.

  39. GRANTS OF PLAN-BASED AWARDS FOR 2023

    GRANTS OF PLAN-BASED AWARDS FOR 2023

  40. GRANTS OF PLAN-BASED AWARDS FOR 2023

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/sh) | Grant Date Fair Value of Stock and Option Awards ($)(1)(2) | | Named Executive Officers | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | | | | | Reza Zadno, Ph.D. | — | 306,288 | 612,575 | 1,102,635 | — | — | — | — | | | 2/16/2023 | — | — | — | 65,789 | — | — | 2,435,509 | | | 2/16/2023 | — | — | — | — | 119,332 | 37.02 | 2,527,999 | | Kevin Waters | — | 134,625 | 269,250 | 484,650 | | — | — | — | | | 2/16/2023 | — | — | — | 26,315 | — | — | 974,181 | | | 2/16/2023 | — | — | — | — | 47,732 | 37.02 | 1,011,015 | | Hisham Shiblaq | — | 129,000 | 258,000 | 464,400 | — | — | — | — | | | 2/16/2023 | — | — | — | 26,315 | — | — | 974,181 | | | 2/16/2023 | — | — | — | — | 47,732 | 37.02 | 1,011,004 | | Alaleh Nouri | — | 112,957 | 225,913 | 406,643 | — | — | — | — | | | 2/16/2023 | — | — | — | 21,052 | — | — | 779,345 | | | 2/16/2023 | — | — | — | — | 38,186 | 37.02 | 808,776 |

  41. GRANTS OF PLAN-BASED AWARDS FOR 2023

    (1)Amounts shown in this column do not reflect dollar amounts actually received by our executive officers. Instead, these amounts reflect the aggregate grant date fair value of RSUs granted in the applicable year, computed in accordance with the provisions of FASB ASC Topic 718, which was determined based on the closing trading price of our common stock on the grant date. (2)Represents the grant date fair value of stock options to purchase shares of our common stock computed in accordance with Financial Accounting Standards Board, or FASB, ASC 718. See Note 7 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2023 for a description of the assumptions used in valuing our stock options.

  42. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table sets forth information concerning the number of shares of common stock underlying outstanding equity incentive plan awards for the executive officers named in the Summary Compensation Table as of the end of our fiscal year ended December 31, 2023.

  43. OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR END

    OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR END

  44. 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 ($) | Option Expiration Date | Numbers of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(8) | | Reza Zadno, Ph.D. | 2/1/2020(1) | 1,217,212 | 55,881 | 4.37 | 2/19/2030 | — | — | | | 8/10/2020(2) | 207,109 | 47,368 | 5.18 | 8/9/2030 | — | — | | | 6/22/2021(2) | 107,896 | 64,734 | 7.27 | 6/22/2031 | — | — | | | 3/15/2022(6) | 34,818 | 44,766 | 34.99 | 3/30/2032 | — | — | | | 3/15/2022(7) | — | — | — | — | 29,484 | 1,235,674 | | | 3/5/2023(6) | 22,374 | 96,958 | 37.02 | 2/15/2023 | — | — | | | 3/5/2023(7) | — | — | — | — | 65,789 | 2,757,217 | | Kevin Waters | 10/8/2018(1) | 121,167 | — | 4.52 | 10/22/2028 | — | — | | | 12/12/2019(3) | 70,990 | — | 4.56 | 12/11/2029 | — | — | | | 8/10/2020(2) | 58,516 | 11,703 | 5.18 | 8/9/2030 | — | — | | | 6/22/2021(2) | 53,949 | 32,366 | 7.27 | 6/22/2031 | — | — | | | 3/15/2022(6) | 7,008 | 9,012 | 34.99 | 3/30/2032 | — | — | | | 3/15/2022(7) | — | — | — | — | 5,936 | 248,778 | | | 3/5/2023(6) | 8,949 | 38,783 | 37.02 | 2/15/2033 | — | — | | | 3/5/2023(7) | — | — | — | — | 26,315 | 1,102,862 | | Hisham Shiblaq | 3/25/2019(4) | 145,496 | — | 4.56 | 4/4/2029 | — | — | | | 12/16/2020(5) | 47,370 | 15,786 | 5.18 | 12/15/2030 | — | — | | | 6/22/2021(2) | 53,950 | 32,365 | 7.27 | 6/22/2031 | — | — | | | 3/15/2022(6) | 3,466 | 4,458 | 34.99 | 3/30/2032 | — | — | | | 3/15/2022(7) | — | — | — | — | 2,936 | 123,048 | | | 3/5/2023(6) | 8,949 | 38,783 | 37.02 | 2/15/2033 | — | — | | | 3/5/2023(7) | — | — | — | — | 26,315 | 1,102,862 | | Alaleh Nouri | 7/9/2018 | 65,452 | — | 4.52 | 9/27/2028 | — | — | | | 12/12/2019 | 29,697 | — | 4.56 | 12/11/2029 | — | — | | | 8/10/2020 | 33,438 | 6,687 | 5.18 | 8/9/2030 | — | — | | | 6/22/2021 | 36,184 | 21,710 | 7.27 | 6/22/2031 | — | — | | | 3/15/2022(6) | 3,014 | 3,876 | 34.99 | 3/30/2032 | — | — | | | 3/15/2022(7) | — | — | — | — | 2,553 | 106,996 | | | 3/5/2023(6) | 7,159 | 31,027 | 37.02 | 2/15/2033 | — | — | | | 3/5/2023(7) | — | — | — | — | 21,052 | 882,289 |

  45. OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR END

    (1)Consist of stock options granted under the Amended & Restated 2008 Equity Incentive Plan (the "2008 Plan"). These options vest and become exercisable as to 25% of the shares subject to the option on the first anniversary of the vesting commencement date and as to 1/48th of the shares each month thereafter. (2)Consist of stock options granted under the 2008 Plan. These options vest and becomes exercisable as to 6/48th of the shares subject to the option on the six month anniversary of the vesting commencement date and as to 1/48th each month thereafter. (3)Consist of stock options granted under the 2008 Plan. These options vest and become exercisable with respect to 1/48th of the shares subject to the option on each monthly anniversary of the vesting commencement date. (4)Consist of stock options granted under the 2008 Plan. This option vests and becomes exercisable as to 10/46th of the shares subject to the option on the ten-month anniversary of the vesting commencement date and as to 1/46th each month thereafter. (5)Consist of stock options granted under the 2008 Plan. 31,579 shares underlying this option vest and become exercisable as to 25% of such shares subject to the option on the first anniversary of the vesting commencement date and as to 1/48th of the remainder of such shares each month thereafter. The remaining 31,578 shares subject to this option vest and become exercisable with respect to 1/48th of such shares on each monthly anniversary of the vesting commencement date. (6)Consist of stock options granted under the 2021 Plan. These options vest and become exercisable with respect to 1/48th of the shares subject to the option on each monthly anniversary of the vesting commencement date. (7)Consist of RSUs granted under the 2021 Plan. 1/4th of the RSUs will vest on each anniversary of the vesting commencement date. (8)The market value of the RSUs that have not vested is calculated by multiplying the closing trading price of our common stock on December 29, 2023 ($41.91) by the number of RSUs outstanding under the award.

  46. Option Exercises and Stock Vested During Fiscal 2023

    Option Exercises and Stock Vested During Fiscal 2023 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 for the fiscal year ending December 31, 2023.

  47. Option Exercises and Stock Vested During Fiscal 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (2) | | Reza Zadno, Ph.D. | 45,165 | $1,173,776 | 9,828 | $312,432 | | Kevin Waters | 86,550 | $3,099,284 | 1,978 | $62,881 | | Hisham Shiblaq | — | — | 978 | $31,091 | | Alaleh Nouri | 51,122 | $1,633,194 | 851 | $27,053 |

  48. Option Exercises and Stock Vested During Fiscal 2023

    (1)Values were determined based on the difference between the closing trading price of our shares on the date of exercise and the exercise price of the options. (2)Values were determined based on the closing trading price of our shares on the date of vesting.

  49. Potential Payments Upon Termination Or Change of Control

    Potential Payments Upon Termination Or Change of Control We are party to change of control and severance agreements with each of our executive officers, the terms of which are described below. The severance payments and benefits described below are subject to the executive’s timely execution and non-revocation of a release of claims in our favor. Change of Control and Severance Agreement with Reza Zadno, Ph. D. The agreement provides that, if Dr. Zadno’s employment is terminated by us without “cause” or by the executive for “good reason” within 3 months prior to, or within 12 months following a “change of control” (each, as defined in the executive’s change of control and severance agreement), he will receive the following severance payments and benefits: (i) continued payments of base salary for 24 months; (ii) payment of 150% of his target annual cash bonus for the year in which his termination occurs; (iii) 100% accelerated vesting and exercisability of all outstanding unvested stock awards then held by him; and (iv) COBRA continuation payments for up to 18 months. In addition, outstanding stock options will remain outstanding and exercisable for the earlier of 12 months following the separation date or the original expiration date of the stock option. If Dr. Zadno’s employment is terminated by us without “cause” or by the executive for “good reason” outside of the change of control period described above, he will receive the following severance payments and benefits: (i) continued payment of base salary for 12 months; and (ii) COBRA continuation payments for up to 12 months. Change of Control and Severance Agreement with Kevin Waters. The agreement provides that if Mr. Waters' employment is terminated by us without “cause” or by the executive for “good reason” within 3 months prior to, or within 12 months following a “change of control,” the executive will receive the following severance payments and benefits: (i) continued payments of base salary for 18 months; (ii) payment of 150% of the executive’s target annual cash bonus for the year in which his termination occurs; (iii) 100% accelerated vesting and exercisability of all outstanding unvested stock awards then held by the executive; and (iv) COBRA continuation payments for up to 18 months. In addition, outstanding stock options will remain outstanding and exercisable for the earlier of 12 months following the separation date or the original expiration date of the stock option. If Mr. Waters’ employment is terminated by us without “cause” or by the executive for “good reason” outside of the change of control period described above, he will receive (i) continued payment of base salary for 6 months; and (ii) COBRA continuation payments for up to 6 months. Change of Control and Severance Agreement with Hisham Shiblaq. The agreement provides that if Mr. Shiblaq’s employment is terminated by us without “cause” or by the executive for “good reason” within 3 months prior to, or within 12 months following a “change of control,” the executive will receive the following severance payments and benefits: (i) continued payments of base salary for 12 months; (ii) payment of 100% of the executive’s target annual cash bonus for the year in which his termination occurs; (iii) 100% accelerated vesting and exercisability of all outstanding unvested stock awards then held by the executive; and (iv) COBRA continuation payments for up to 12 months. In addition, outstanding stock options will remain outstanding and exercisable for the earlier of 12 months following the separation date or the original expiration date of the stock option. If Mr. Shiblaq’s employment is terminated by us without “cause” or by the executive for “good reason” outside of the change of control period described above, he will receive (i) continued payment of base salary for 6 months; and (ii) COBRA continuation payments for up to 6 months. Change of Control and Severance Agreement with Alaleh Nouri The agreement provides that if Ms. Nouri’s employment is terminated by us without “cause” or by the executive for “good reason” within 3 months prior to, or within 12 months following a “change of control,” the executive will receive the following severance payments and benefits: (i) continued payments of base salary for 12 months; (ii) payment of 100% of the executive’s target annual cash bonus for the year in which his termination occurs; (iii) 100% accelerated vesting and exercisability of all outstanding unvested stock awards then held by the executive; and (iv) COBRA continuation payments for up to 12 months. In addition, outstanding stock options will remain outstanding and exercisable for the earlier of 12 months following the separation date and the original expiration date of the stock option. If Ms. Nouri’s employment is terminated by us without “cause” or by the executive for “good reason” outside of the change of control period described above, she will receive (i) continued payment of base salary for 6 months; and (ii) COBRA continuation payments for up to 6 months. 2008 Plan and 2021 Plan Under the terms of the 2008 Plan and the 2021 Plan, the vesting of unvested equity awards will accelerate on a change of control, if the awards are not assumed or substituted by the acquiring company.

  50. Summary of Potential Payments

    Summary of Potential Payments The following table summarizes the payments and other benefits that would be provided to our executive officers upon the occurrence of certain qualifying terminations of employment or a change of control, in any case, occurring on December 31, 2023. Amounts shown do not include (i) accrued but unpaid base salary through the date of termination, or (ii) other benefits earned or accrued during employment that are available to all salaried employees, such as accrued vacation, and assume that any successor company in a change of control assumed or substituted awards for any outstanding awards under the 2008 Plan and 2021 Plan:

  51. Summary of Potential Payments

    | Name and Event | Cash Severance ($)(1) | Stock Option Acceleration ($)(2) | Restricted Stock Unit Acceleration ($)(2) | COBRA Premiums ($)(3) | Total ($) | | Reza Zadno, Ph.D. | | | | | | | Termination Without Cause / For Good Reason with a Change of Control | 2,187,850 | 12,979,820 | 3,992,891 | 47,920 | 19,208,481 | | Termination Without Cause / For Good Reason without a Change of Control | 625,100 | — | — | 31,947 | 657,047 | | Kevin Waters | | | | | | | Termination Without Cause / For Good Reason with a Change of Control | 1,104,000 | 3,850,020 | 1,351,639 | 67,607 | 6,373,266 | | Termination Without Cause / For Good Reason without a Change of Control | 230,000 | — | — | 22,536 | 252,536 | | Hisham Shiblaq | | | | | | | Termination Without Cause / For Good Reason with a Change of Control | 704,000 | 3,830,239 | 1,225,909 | 45,071 | 5,805,219 | | Termination Without Cause / For Good Reason without a Change of Control | 220,000 | — | — | 22,536 | 242,536 | | Alaleh Nouri | | | | | | | Termination Without Cause / For Good Reason with a Change of Control | 643,250 | 2,652,903 | 989,286 | 15,330 | 4,300,769 | | Termination Without Cause / For Good Reason without a Change of Control | 207,500 | — | — | 7,665 | 215,165 |

  52. Summary of Potential Payments

    (1)In the case of a qualifying termination of employment in connection with a change of control, represents severance payments of the executive officer’s annual base salary for 24 months (for Dr. Zadno), 18 months (for Mr. Waters) or 12 months (for Mr. Shiblaq and Ms. Nouri) plus a single payment of 150% (for Dr. Zadno and Mr. Waters) or 100% (for Mr. Shiblaq and Ms. Nouri) of the executive’s annual target bonus. In the case of a qualifying termination of employment not in connection with a change of control, represents severance payments of the executive officer’s annual base salary for 12 months (for Dr. Zadno) or 6 months (for Messrs. Waters and Shiblaq and Ms. Nouri). (2)The value of the accelerated stock options is calculated based on the number of shares of our common stock subject to accelerated unvested stock options multiplied by the difference between $41.91, the closing price for a share of our common stock on the Nasdaq Global Market on December 29, 2023, and the per share exercise price. The value of the accelerated restricted stock units is calculated based on the number of unvested restricted stock units multiplied by $41.91, the closing price for a share of our common stock on the Nasdaq Global Market on December 29, 2023. (3)In the case of a qualifying termination of employment in connection with a change of control, represents payment for the cost of the executive officer’s premiums for health continuation coverage under COBRA for a period of up to 18 months (for Dr. Zadno and Mr. Waters) or up to 12 months (for Mr. Shiblaq and Ms. Nouri). In the case of a qualifying termination of employment not in connection with a change of control, represents payments for the cost of the executive officer’s premiums for health continuation coverage under COBRA for a period of up to 12 months (for Dr. Zadno) or up to 6 months (for Messrs. Waters and Shiblaq and Ms. Nouri).

  53. Chief Executive Officer Pay Ratio Disclosure

    Chief Executive Officer Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the following presents information regarding the relationship of the median of the annual total compensation of our employees, other than our Chief Executive Officer, to the annual total compensation of our Chief Executive Officer, Dr. Zadno.

  54. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The following table sets forth additional information concerning the compensation of our Principal Executive Officer ("PEO") and our other NEOs for each of the fiscal years ended December 31, 2021, 2022 and 2023, and our financial and TSR performance for each such fiscal year. The amounts below shown for compensation actually paid do not represent the value of cash and shares of the Company’s common stock received by our PEO and other NEOs during the year, but rather is an amount calculated in accordance with SEC rules and includes, among other things, year-over-year changes in the value of unvested equity-based awards based on the value of our common stock. As a result of the calculation methodology required by the SEC, compensation actually paid amounts below differ from compensation actually earned, realized or received by the individuals.

  55. PAY VERSUS PERFORMANCE

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2)(5) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | Company Total Shareholder Return ($)(3) | Peer Group Index Total Shareholder Return ($)(3) | Net Income ($)(in '000s) | Revenue ($)(in '000s)(4) | | 2023 | 6,088,813 | 2,287,700 | 2,492,801 | 2,141,189 | 99.93 | 87.09 | (105,897) | 136,191 | | 2022 | 4,131,452 | 19,431,486 | 1,109,242 | 3,438,128 | 99.05 | 79.87 | (87,154) | 75,014 | | 2021 | 1,374,745 | 23,117,713 | 834,610 | 5,787,293 | 59.63 | 98.43 | (59,853) | 34,473 |

  56. PAY VERSUS PERFORMANCE

    (1)Amounts reported in these columns represent the total compensation as reported in the Summary Compensation Table for Dr. Zadno, our PEO for each year and the average of the total compensation as reported in the Summary Compensation Table for our remaining NEOs for the relevant fiscal year, which captures the individuals indicated in the table below for each fiscal year:

  57. PAY VERSUS PERFORMANCE

    | Year | PEO | Non-PEO NEOs | | 2023 | Reza Zadno, Ph.D | Kevin Waters, Hisham Shiblaq, and Alaleh Nouri | | 2022 | Reza Zadno, Ph.D | Kevin Waters, Hisham Shiblaq, and Alaleh Nouri | | 2021 | Reza Zadno, Ph.D | Kevin Waters and Hisham Shiblaq |

  58. PAY VERSUS PERFORMANCE

    (2)Amounts reported in these columns represent compensation actually paid (calculated in accordance with SEC rules) to Dr. Zadno for each year and average of the compensation actually paid to the remaining NEOs and reflects the following adjustments from total compensation reported in the Summary Compensation Table:

  59. PAY VERSUS PERFORMANCE

    | | 2021 | | 2022 | | 2023 | | | Adjustments | PEO ($) | Average Non-PEO NEOs ($) | PEO ($) | Average Non-PEO NEOs ($) | PEO ($) | Average Non-PEO NEOs ($) | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | (615,245) | (309,169) | (2,872,492) | (370,938) | (4,963,508) | (1,852,834) | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | 2,931,429 | 1,465,695 | 3,212,086 | 414,863 | 5,168,716 | 1,929,631 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | 416,062 | 208,050 | 80,297 | 10,365 | 4,897 | 1,828 | | Increase/deduction for Awards Granted during Prior FYs that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End (5) | 16,545,025 | 2,665,309 | 10,398,989 | 1,425,039 | 108,459 | 22,704 | | Increase/deduction for Awards Granted during Prior FYs that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | 2,465,697 | 922,798 | 4,481,154 | 849,557 | (4,119,677) | (452,941) | | TOTAL ADJUSTMENTS | 21,742,968 | 4,952,683 | 15,300,034 | 2,328,886 | (3,801,113) | (351,612) |

  60. PAY VERSUS PERFORMANCE

    The fair value valuation adjustments outlined above to calculate the compensation actually paid included assumptions that differed from those used in the Company’s grant date fair value calculations. For stock options, the fair value is measured using Black-Scholes option pricing model as of each measurement date including updated assumptions based on an analysis of the historical volatility of a peer group of publicly traded companies, the expected term for options that are expected to remain outstanding based on the simplified method, the measurement date stock price, and the risk-free interest rate based on U.S. Treasury yield for zero-coupon U.S. Treasury notes. For RSUs, the fair value is measured based on the closing fair market value of the Company’s common stock as of each measurement date. (3)Assumes $100 invested on September 15, 2021, the closing price on the first day of trading of our common stock, including reinvestment of dividends. Peer Group Index Total Shareholder Return represents the cumulative Total Shareholder Return of the S&P Health Care Equipment Index. (4)The Company selected Revenue as the Company-Selected Measure due to it being an important financial measure that helps link Compensation Actually Paid to the Company's executive officers for the most recently completed fiscal year. Specifically, Revenue is the largest component of the formula to determine annual incentive cash compensation. (5)Reflects the adjustments calculated in accordance with the methodology above to the value of options granted prior to our initial public offering in September 2021.

  61. Pay Versus Performance Tabular List

    Pay Versus Performance Tabular List We believe the following performance measures represent the most important performance measures used by us to link compensation actually paid to our executive officers for 2023: a.Revenue b.Adjusted EBITDA c.US Procedures Completed Using the AquaBeam Robotic System For additional details regarding our performance measures, please see the subsection titled “Annual Cash Incentive Program” in our "Executive Compensation - Compensation Discussion and Analysis" section elsewhere in this Proxy Statement.