DEF 14A of Airsculpt Technologies, Inc.
Filed Mar 27, 2024 · FY20230001870940-24-000016
What vote is required to approve the election of directors (“Proposal 1”)?
What vote is required to approve the election of directors (“Proposal 1”)? Director nominees are elected by plurality vote. Therefore, if you do not vote for a nominee, or you “withhold” authority to vote for a nominee, your vote will not count either “for” or “against” the nominee. Broker non-votes will have no effect on the outcome of Proposal 1. What vote is required to ratify the selection of Grant Thornton as the Company’s independent registered public accounting firm for Fiscal Year 2024 (“Proposal 2”)? Proposal 2 will be approved if a majority of the votes cast affirmatively or negatively on the matter is cast “for” the proposal. You may vote “for” or “against,” or abstain from voting on Proposal 2. Abstentions and broker non-votes will have no effect on the outcome of Proposal 2.
Election of Directors
Election of Directors Our business operates under the direction of the Board, which currently consists of eight directors. In accordance with our Amended and Restated Certificate of Incorporation, the Board consists of three classes of approximately equal size: Classes I, II, and III, with terms expiring in the fiscal year ending December 31, 2025 (“Fiscal 2025”), the fiscal year ending December 31, 2026 (“Fiscal 2026”), and the fiscal year ending December 31, 2024 (“Fiscal 2024”), respectively. Dr. Aaron Rollins and Caroline Chu are the Class III directors whose terms expire at the Annual Meeting. Pursuant to our Stockholders Agreement (as defined below) and subject to the maintenance of certain ownership requirements, Dr. Rollins has a contractual right to designate one nominee to our Board. The Board has nominated, and stockholders are being asked to reelect, Dr. Aaron Rollins and Caroline Chu for three-year terms expiring at our fiscal year ending December 31, 2027 (“Fiscal 2027”) annual meeting of stockholders. If elected, the nominees will each hold office until the conclusion of our Fiscal 2027 annual meeting of stockholders and a successor is duly elected and qualified or until earlier death, resignation, or removal. Each of the two nominees currently serves as a director of the Company. The Board is not aware of any nominee who will be unable or unwilling to serve as a director if elected at the Annual Meeting. In the event that one or more nominees is unexpectedly not available to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors to be elected at the Annual Meeting. Information relating to each nominee for election as director and for each continuing director, including period of service as a director of the Company, principal occupation and other biographical material, is shown later in this Proxy Statement. The Board recommends a vote FOR the election of each of the nominees as director.
BOARD OF DIRECTORS
BOARD OF DIRECTORS The following table sets forth the name, age, and position, as of March 18, 2024, of individuals who currently serve as directors on the Board.
BOARD OF DIRECTORS
| Name | Age | Position | | Dr. Aaron Rollins | 49 | Executive Chairman of the Board | | Todd Magazine | 59 | Director, President and Chief Executive Officer | | Adam Feinstein | 52 | Director and Lead Independent Director of the Board | | Daniel Sollof | 40 | Director | | Caroline Chu | 43 | Director | | Thomas Aaron | 62 | Director | | Pamela Netzky | 49 | Director | | Kenneth Higgins | 58 | Director |
Class I—Directors with Terms Expiring in Fiscal 2025
Class I—Directors with Terms Expiring in Fiscal 2025 Todd Magazine has served as a member of the Board since January 2023. Todd has served as the Company's President and Chief Executive Officer since January 2023. Mr. Magazine brings to AirSculpt more than 30 years of experience in retail operations and brand-building. Prior to joining the company, he served as the CEO of Blink Fitness, a subsidiary of Equinox, for 10 years in which he led the company of over 1,500 employees from four locations to over 100 and increased membership 25x. Previously, he was North American President of Pfizer's OTC business, held president's roles for Gatorade and Quaker Oats at PepsiCo, and led various marketing teams at Procter & Gamble. Mr. Magazine received a BA from The University of Michigan and his MBA from Northwestern University's Kellogg School of Management. We believe that Mr. Magazine’s industry knowledge, as well as his leadership experience, make him an appropriate member of our Board. Daniel Sollof has served as a member of the Board since June 2021 and served as a member of the board of managers of Elite Body Sculpture from October 2018 until the IPO. Mr. Sollof joined VSCP in August 2014 and serves as a General Partner for the firm. In addition to sourcing and evaluating potential investment opportunities, Mr. Sollof works closely with VSCP’s portfolio companies. He has been a Board Observer at HealthChannels (ScribeAmerica) since October 2016. From July 2015 to August 2017, he served as a member of the board of directors of Imedex, Inc. Prior to joining VSCP, Mr. Sollof served as Vice President and Research Analyst for Barclays Capital/Lehman Brothers August 2007 to August 2014, focusing on the Healthcare Facilities and Medical Supplies & Devices Sectors. Prior to Barclays Capital/Lehman Brothers, Mr. Sollof worked as a Valuation and Business Modeling Analyst in the Transaction Advisory Services group at Ernst & Young from September 2005 to July 2007. Mr. Sollof received a B.S. in Management Science from the University of California – San Diego and is a CFA charterholder. We believe that Mr. Sollof’s industry knowledge, as well as his leadership experience, make him an appropriate member of our Board. Pamela Netzky has served as a member of our Board since October 2021. Ms. Netzky co-founded Skinny Pop Popcorn in 2010 and served as its President until July 2014. In 2014, SkinnyPop Popcorn sold a majority stake to TA Associates, a leading private equity firm, and changed its name to Amplify Snack Brands. Ms. Netzky transitioned to become a Senior Advisor of Amplify Snack Brands in 2014 and was named a board member of the company. In 2015, Amplify Snack Brands went public on the New York Stock Exchange (formerly NYSE: BETR). Ms. Netzky continued to serve on the board of directors until its sale to The Hershey Company (NYSE: HSY) in 2018 in a transaction valued at approximately $1.6 billion. Ms. Netzky has shown dedicated support to the City of Chicago as well as the arts, education and health care. She has been recognized for her philanthropic pursuits by The Illinois Holocaust Museum. Ms. Netzky earned a BA from DePaul University. We believe that Ms. Netzky’s leadership experience makes her an appropriate member of our Board.
Class II—Directors with Terms Expiring in Fiscal 2026
Class II—Directors with Terms Expiring in Fiscal 2026 Adam Feinstein has served as a member of the Board since June 2021 and as lead independent director since March 2023. He previously served as the non-executive chairman of the Board from September 2021 to January 2023 and as non-executive chairman of the board of managers of Elite Body Sculpture from October 2018 until the IPO. Mr. Feinstein founded Vesey Street Capital Partners, L.L.C. (VSCP) in 2014 and serves as Managing Partner. He has been a member of the board of directors of HealthChannels (ScribeAmerica), a provider of medical scribe support and value-based healthcare solutions, since October 2016. He has served as chairman of the board of directors of QualityMetric, a provider of health and disease specific surveys, from August 2020 until August 2023. He has served as a member of the board of directors of Pathgroup, a leading pathology services company since August 2016. Mr. Feinstein has served as a board member of Safecor Health, which provides pharmaceutical unit dose packaging services for hospitals and health systems, since August 2021. He was a board member of Surgery Partners, Inc. (Nasdaq: SGRY) from September 2015 to December 2019 and Imedex, Inc. from July 2015 to August 2017. Prior to founding VSCP, Mr. Feinstein was the Senior Vice President of Corporate Development, Strategic Planning and Office of the Chief Executive Officer at LabCorp from June 2012 to August 2014. Prior to LabCorp, Mr. Feinstein served as the Managing Director in Equity Research at Barclays Capital/Lehman Brothers for 14 years. Mr. Feinstein is a CFA charterholder and has a B.S. in Business from the Smith School at the University of Maryland. He also completed the Nashville Healthcare Council Fellows program. We believe that Mr. Feinstein’s public company experience, industry knowledge, as well as his leadership experience, make him an appropriate member of our Board. Thomas Aaron has served as a member of our Board since October 2021. Mr. Aaron joined Cincinnati Financial Corporation (Nasdaq: CINF) in November 2019 and currently serves as a member of the board of directors, as a member of CINF’s audit committee, as a member of CINF’s compensation committee, and as a member of the boards of directors of CINF’s property casualty insurance companies and other subsidiaries. From 2016 to 2017, Mr. Aaron served as Senior Vice President of Finance of Community Health Systems, Inc. (NYSE: CYH). Mr. Aaron was appointed to serve as Executive Vice President and Chief Financial Officer of CYH in May 2017, a position in which he served through December 2019. Prior to joining CYH, Mr. Aaron had a distinguished, 32-year career at Deloitte leading audit and consulting services to, among others, national healthcare organizations. Mr. Aaron is a Certified Public Accountant and holds a B.S. in Accounting from the University of Kentucky. We believe that Mr. Aaron’s leadership experience makes him an appropriate member of our Board. Kenneth Higgins has served as a member of our Board since October 2021. Mr. Higgins currently serves as the managing director and co-founder of Northborne Partners, LLC, a middle market-focused mergers and acquisitions advisory firm. Previously, Mr. Higgins spent 4.5 years at BMO Capital Markets Corp. (a subsidiary of Bank of Montreal (NYSE: BMO)) from 2016 to 2021. Mr. Higgins received his Bachelor of Business Administration from the University of Michigan School of Business and his Juris Doctor degree from Harvard Law School. We believe that Mr. Higgin’s leadership experience makes him an appropriate member of our Board.
Class III—Directors with Terms Expiring in Fiscal 2024
Class III—Directors with Terms Expiring in Fiscal 2024 Dr. Aaron Rollins is our founder, previously served as our Chief Executive Officer from 2012 to January 2023, and has served as Executive Chairman of the Board since January 2023. Dr. Rollins is the cosmetic surgeon to the stars, as well as the founder of Elite Body Sculpture. He currently serves as a board adviser to Safecor Health, a portfolio company affiliated with Vesey Street Capital Partners, L.L.C., our private equity sponsor ("Sponsor"). Dr. Rollins is considered a specialist in body sculpting and has performed thousands of laser liposuction procedures. He is a life-long art lover who studied sculpture and to fulfill his dream of combining art and science, he eventually attended medical school. Dr. Rollins went to medical school at the McGill University Faculty of Medicine in Montreal, Canada after completing his undergraduate studies at McGill University. He has received many awards for his distinguished work, including the I.D.E.A. Bronze Medal for medical inventions and the “Great Distinction” honor at McGill University. He is affiliated with the American College of Surgeons, American Board of Laser Surgery, American Academy of Cosmetic Surgery and the American Society of Liposuction Surgery. He is also a member of the World Academy of Cosmetic Surgery. Dr. Rollins was awarded the Compassionate Doctor certification in 2013. We believe that Dr. Rollins’ industry knowledge, as well as his leadership experience, make him an appropriate member and Executive Chairman of our Board. Caroline Chu has served as a member of our Board since October 2021. Previously, Ms. Chu spent 16 years at Goldman Sachs Group, Inc. from June 2002 to February 2018. She served as an investment analyst in Equity Research, a public equities investor in Goldman Sachs Principal Strategies and portfolio manager and Managing Director in Goldman Sachs Investment Partners. Ms. Chu also served as Co-Head of Equities and Managing Director for Alwyne Management LP from May 2018 to January 2020. Ms. Chu received her B.S. degrees in Economics and Management Science from the Massachusetts Institute of Technology in 2002. We believe that Ms. Chu’s leadership experience makes her an appropriate member of our Board.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Corporate Governance Highlights
Corporate Governance Highlights Corporate governance is key to a strong and accountable Board. We strive to adopt practices that will promote the long-term interests of the Company and its stockholders, including the below examples.
Corporate Governance Highlights
| ✓ | Accountability. Our common stock outstanding on the Record Date is entitled to one vote per matter presented to stockholders | ✓ | Annual Board and Committee Self-Evaluations | | ✓ | We meet Nasdaq’s definition of a controlled company, but we do not take advantage of the controlled company exemptions | ✓ | Annual Named Executive Officer Performance Evaluation by the Compensation Committee of the Board | | ✓ | Six of the eight members of our Board are “independent” under Nasdaq’s definition of independence | ✓ | “Pay for Performance” Philosophy Drives Executive Compensation | | ✓ | Our Audit, Compensation, and Nominating & Corporate Governance Committees are each composed entirely of unaffiliated independent directors | ✓ | Audit Committee Approval Required for Related Party Transactions | | ✓ | Regular Board and Committee Executive Sessions of Independent Directors | ✓ | No “Poison Pill” (Stockholder Rights Plan) | | ✓ | Lead Independent Director | ✓ | Commitment to Diversity, Equity and Inclusion | | ✓ | Independent Executive Compensation Consultant | ✓ | Commitment to Environmental, Social and Governance Leadership | | ✓ | Risk Oversight by the Board and the Audit Committee | ✓ | Established Whistleblower Policy |
Board Composition and Election of Directors
Board Composition and Election of Directors Our business and affairs are managed under the direction of our Board. The primary responsibilities of the Board are to provide oversight, strategic guidance, counseling and direction to our management. Our Board meets on a regular basis and additionally as required. The number of directors is fixed by our Board, subject to the terms of our amended and restated certificate of incorporation, our amended and restated bylaws and our Stockholders Agreement. Our Board consists of eight directors, six of whom qualify as “independent” under the Nasdaq listing standards. Directors are (except for the filling of vacancies and newly created directorships) elected by the holders of a plurality of the votes cast by the holders of shares present in person or represented by proxy at the meeting and entitled to vote on the election of such directors. Our Board is divided into three classes with staggered three-year terms. Only one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. This classification of our Board may have the effect of delaying or preventing changes in control of our company. Our directors are divided among the three classes as follows: •the Class I directors are Todd Magazine, Daniel Sollof and Pamela Netzky; •the Class II directors are Adam Feinstein, Kenneth Higgins and Thomas Aaron; and •the Class III directors are Dr. Aaron Rollins and Caroline Chu. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation, or removal. No decrease in the number of directors will shorten the term of any incumbent director. In addition, we entered into a stockholders agreement with affiliates of our Sponsor and Dr. Aaron Rollins in connection with our initial public offering (the “Stockholders Agreement”). This agreement grants affiliates of our Sponsor and Dr. Aaron Rollins the right to designate nominees to our Board subject to the maintenance of certain ownership requirements in us. See “Certain Relationships and Related Party Transactions—Stockholders Agreement.” In accordance with our corporate governance guidelines and subject to the Stockholders Agreement, our independent directors will designate a lead independent director in the event that the Company does not have an independent chairperson of the Board. With the transition of Dr. Aaron Rollins in 2023 into the Executive Chairman role, Adam Feinstein was designated as the lead independent director of the Board, responsible for coordinating the activities of the independent directors. The specific responsibilities of the lead independent director are to: •work with the Chief Executive Officer to develop and approve an appropriate Board meeting schedule; •work with the Chief Executive Officer to develop and approve Board meeting agendas; •provide the Chief Executive Officer feedback on the quality, quantity, and timeliness of the information provided to the Board; •develop the agenda and moderate executive sessions of the independent members of the Board; •preside over Board meetings when the Chief Executive Officer is not present or when Board or Chief Executive Officer performance or compensation is discussed; •act as principal liaison between the independent members of the Board and Chief Executive Officer; •convene meetings of the independent directors as appropriate; •be available for consultation and direct communication with stockholders as deemed appropriate; and •perform other duties as the Board may determine from time to time. Our corporate governance guidelines also provide that the independent directors shall meet periodically in executive session but no less than two times per year or whatever minimum has been set by the Nasdaq listing standards.
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation awarded to, earned by or paid to our named executive officers (“NEOs”) in respect of their service to us during Fiscal 2023 and the fiscal year ended December 31, 2022 (“Fiscal 2022”).
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Special Cash Bonus ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Dr. Aaron Rollins | 2023 | 875,000 | 1,906,685 | 87,500 | 551,250 | 215,634 | 3,636,069 | | Chairman of the Board | 2022 | 875,000 | 2,276,023 | — | 340,375 | 200,668 | 3,692,066 | | Todd Magazine | 2023 | 631,346 | 4,131,960 | 65,800 | 414,540 | 447,227 | 5,690,873 | | Chief Executive Officer | 2022 | — | — | — | — | — | — | | Dennis Dean | 2023 | 500,000 | 544,767 | 37,500 | 236,250 | 7,884 | 1,326,401 | | Chief Financial Officer | 2022 | 500,000 | 650,298 | — | 145,875 | 22,402 | 1,318,575 |
Summary Compensation Table
(1) Amounts in this column for 2023 and 2022 represent the grant date fair value, as determined in accordance with FASB ASC Topic 718, of equity awards in connection with our annual executive long term compensation program made up of 50% restricted stock unit awards ("RSUs") and 50% performance-based restricted stock unit awards ("PSUs") granted pursuant to the Company’s 2021 Equity Incentive Plan (the “2021 Plan”). Each of the performance-based restricted stock unit award amounts are based on achievement of a relative Total Shareholder Return ("rTSR") as compared to a specified peer company group. These awards can range from 0% to 200% of the target amount reflected in this table. (2) The Board's compensation committee exercised its discretion in awarding a special supplemental cash bonus which was paid during the first quarter of Fiscal 2024 to each of Dr. Rollins, Mr. Magazine and Mr. Dean in recognition of the operational performance of the Company's new facilities opened in the United States during Fiscal 2023. (3) Amounts in this column reflect annual incentive compensation payments earned by our named executive officers in 2023 and 2022. (4) Amounts shown in the “All Other Compensation” column represent the surgical related service fees in the amount of $207,750 and $187,500 for 2023 and 2022, respectively, paid to Dr. Rollins related to surgical procedures he performed, a $265,000 sign-on bonus and $175,000 relocation fee related to the hiring of Todd Magazine in 2023 and medical, dental and vision insurance policy premiums paid by us.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End As of December 31, 2023, our named executive officers held outstanding equity-based awards of the Company as listed in the table below.
Outstanding Equity Awards at Fiscal Year-End
| | | Stock Awards | | | | | Name | Grant Date | Number of Shares or Units That Have Not Yet Vested (#)(1) | Market Value of Shares or Units That Have Not Yet Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market Value of Unearned Shares or Units That Have Not Vested ($)(2) | | Dr. Aaron Rollins | 11/4/2021 | 324,569 | 2,431,022 | — | — | | Executive Chairman | 11/4/2021 | — | — | 811,420 | 6,077,536 | | | 2/25/2022 | 42,924 | 321,501 | — | — | | | 2/25/2022 | — | — | 64,385 | 482,244 | | | 3/14/2023 | 147,805 | 1,107,059 | — | — | | | 3/14/2023 | — | — | 147,805 | 1,107,059 | | Todd Magazine | 1/31/2023 | 183,487 | 1,374,318 | — | — | | Chief Executive Officer | 1/31/2023 | — | — | 101,937 | 763,508 | | | 3/14/2023 | 118,244 | 885,648 | — | — | | | 3/14/2023 | — | — | 75,075 | 562,312 | | | 3/14/2023 | — | — | 118,244 | 885,648 | | Dennis Dean | 11/4/2021 | 162,285 | 1,215,515 | — | — | | Chief Financial Officer | 11/4/2021 | — | — | 405,710 | 3,038,768 | | | 2/25/2022 | 12,264 | 91,857 | — | — | | | 2/25/2022 | — | — | 18,396 | 137,786 | | | 3/14/2023 | 42,230 | 316,303 | — | — | | | 3/14/2023 | — | — | 42,230 | 316,303 |
Outstanding Equity Awards at Fiscal Year-End
(1) Includes RSU awards granted on November 4, 2021, which were granted in connection with the Company’s initial public offering and vest in three equal installments on each of November 2, 2022, November 2, 2023 and November 2, 2024, as described under “IPO Equity Awards” above. Includes RSU awards granted on February 25, 2022, January 31, 2023 and March 14, 2023 that vest in three equal installments one, two and three years after grant date. (2) Based on the closing sale price of AirSculpt common stock on NASDAQ of $7.49 per share on December 29, 2023. (3) PSU awards are included at 100% performance. PSU awards granted on November 4, 2021 were granted in connection with the Company’s initial public offering and vest based on achievement of performance conditions over a three-year performance period, as described under “IPO Equity Awards” above. PSU awards granted on February 25, 2022, January 31, 2023 and March 14, 2023 vest based on achievement of a relative total shareholder return, as described under “Annual Equity Awards” above.
Potential Payments and Benefits upon Termination or Change in Control
Potential Payments and Benefits upon Termination or Change in Control As discussed under “Employment Agreements,” the Amended and Restated Employment Agreements provide for certain severance payments in connection with our NEOs termination of employment under certain circumstances.
Director Compensation
Director Compensation The following table sets forth the compensation awarded to, earned by or paid to the non-employee members of our Board in respect of their service to our Board during our Fiscal 2023. Dr. Rollins’ and Mr. Magazine's compensation for Fiscal 2023 is included in the “Summary Compensation Table” above and as described in the accompanying narrative description. Other than as set forth in the table below, we did not pay any compensation to any of the members of our Board for Fiscal 2023.
Director Compensation
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | | Thomas Aaron | 102,500 | 156,251 | 1,046 | 259,797 | | Caroline Chu | 100,000 | 156,251 | 1,792 | 258,043 | | Kenneth Higgins | 107,500 | 156,251 | 1,853 | 265,604 | | Pamela Netzky | 82,500 | 156,251 | — | 238,751 |
Director Compensation
(1) The amounts in this column represent annual cash retainers, committee chair and committee membership fees. Any director who is an officer of the Company and any director who is nominated by Vesey Street Capital Partners, L.L.C., including Messrs. Feinstein and Sollof, did not receive any AirSculpt director compensation. (2) The amounts in this column represent the grant date fair value, as determined in accordance with FASB ASC Topic 718, of awards of restricted stock units granted under the 2021 Plan. Aggregate restricted stock unit awards outstanding as of December 31, 2023 are 29,762 for each of Mr. Aaron, Ms. Chu, Mr. Higgins and Ms. Netzky.
Narrative to Director Compensation Table
Narrative to Director Compensation Table In connection with our initial public offering, we adopted a formal policy governing the compensation of our non-employee directors. Any director who also serves as an employee receives no additional compensation for services as a director or as a member of a committee of our Board. Compensation for our non-employee directors (other than Adam Feinstein and Daniel Sollof, who are not compensated for their service as directors) includes an annual cash retainer of $75,000. In addition, non-employee directors (other than Adam Feinstein and Daniel Sollof, who are not compensated for their service as directors) also receive an additional cash retainer for service on the audit committee, compensation committee, or nominating and corporate governance committee of our Board. The chairman of the audit committee receives an additional cash retainer of $20,000, and the other members of the audit committee will receive an additional cash retainer of $10,000. The chairmen of the compensation committee or nominating and corporate governance committee each receive an additional cash retainer of $15,000, and each other member of such committee will receive an additional cash retainer of $7,500. All cash retainers for service on committees of our Board are payable quarterly. All cash retainers will be pro-rated for any partial periods of service. In addition to cash compensation, each non-employee director (other than Adam Feinstein and Daniel Sollof, who are not compensated for their service as directors) receives an annual RSU grant, which will be granted at each annual meeting of our stockholders and will vest upon the earlier of (i) the first anniversary of the date of grant or (ii) the day prior to our next annual meeting of stockholders. For Fiscal 2023, we granted 29,762 RSUs under the 2021 Plan to each of our non-employee directors which RSUs will vest on May 7, 2024, subject to each non-employee director's continued service through such date.