Item 1.02 Termination of a Material Definitive Agreement.
In connection with the Merger, on January 5, 2023, SeaSpine is repaying all of
the outstanding obligations in respect of principal, interest and fees under the
Amended and Restated Credit Agreement (the "Credit Agreement"), dated July 27,
2018, among SeaSpine and Project Maple Leaf Holdings ULC, as guarantors, and
SeaSpine Orthopedics Corporation, SeaSpine, Inc., ISOTIS, Inc., SeaSpine Sales
LLC, ISOTIS Orthobiologics, Inc., Theken Spine, LLC, SeaSpine Orthopedics
Intermediate Co, Inc., 7D Surgical USA Inc. and 7D Surgical ULC, as borrowers,
the lenders party thereto and Wells Fargo Bank, National Association, as
administrative agent, and terminated all applicable commitments under the Credit
Agreement.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure in the Introductory Note of this Current Report on Form 8-K is
incorporated herein by reference.
Subject to the terms and conditions of the Merger Agreement, at the effective
time (the "Effective Time"), and as a result of the Merger, each share of common
stock of SeaSpine, par value $0.01 per share, issued and outstanding immediately
prior to the Effective Time was converted into the right to receive 0.4163
shares of common stock of Orthofix, par value $0.10 per share (the "Orthofix
common stock"). No fractional shares of Orthofix common stock were issued in the
Merger. As a result of the Merger, former SeaSpine common stockholders will
receive approximately 16 million shares of Orthofix common stock for their
SeaSpine common shares, excluding shares of Orthofix common stock underlying the
equity awards and stock options assumed by Orthofix as a result of the Merger.
In addition, at the Effective Time and as a result of the Merger, Orthofix
assumed SeaSpine's existing equity incentive plans in connection with the
Merger, and outstanding SeaSpine equity awards were automatically converted into
Orthofix equity awards (on the same vesting schedule and other terms and
conditions as existed prior to such conversion). The conversion of such equity
awards occurred at the same exchange ratio as applied to SeaSpine common stock
in the Merger, and the exercise price of converted SeaSpine stock options were
also correspondingly adjusted. The value of any fractional interests of shares
of Orthofix common stock to which a holder was otherwise entitled was paid in
cash, subject to applicable withholding taxes.
A copy of the Merger Agreement has been previously filed as Exhibit 2.1 to
Orthofix's Current Report on Form 8-K filed with the Securities and Exchange
Commission on October 11, 2022 and is incorporated herein by reference. The
foregoing description of the Merger Agreement and the transactions contemplated
thereby does not purport to be complete and is qualified in its entirety by
reference to the full text of the Merger Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure in Item 1.02 of this Current Report on Form 8-K is incorporated
herein by reference.
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Item 5.02 Departure of Directors of Principal Officers; Election of Directors;
Appointment of Principal Officers.
Appointment of Officers
On January 3, 2023, the board of directors of Orthofix (the "Board") appointed
Keith C. Valentine as Orthofix's President and Chief Executive Officer
(succeeding Jon C. Serbousek, who will now serve as Executive Chairman), John J.
Bostjancic as Orthofix's Chief Financial Officer (succeeding Douglas C. Rice in
such role) and Patrick L. Keran as Orthofix's Chief Legal Officer (succeeding
Kimberley A. Elting, who will now serve as President, Global Orthopedics). Each
of the foregoing appointments were contingent upon, and became effective as of,
the closing of the Merger at the Effective Time.
Keith C. Valentine, 55, served as SeaSpine's Chief Executive Officer from May
2015 to January 2023 and President from July 2015 to January 2023. He also
served on SeaSpine's board of directors from May 2015 to January 2023. While at
SeaSpine, Mr. Valentine oversaw SeaSpine's formational spin-off transaction and
oversaw the development and launch of numerous new products. Prior to joining
SeaSpine, Mr. Valentine served as President and Chief Operating Officer of
NuVasive, Inc. from January 2007 to January 2015 and as President from December
2004 to January 2007, prior to which he served in various senior executive roles
in marketing, development and operations since joining NuVasive in 2001.
Previously, Mr. Valentine served as Vice President of Marketing at ORATEC
Interventions, Inc., a medical device company acquired by Smith & Nephew PLC,
and spent eight years in various roles with Medtronic Sofamor Danek including,
Vice President of Marketing for the Rods Division and Group Director for the BMP
Biologics program, the Interbody Sales Development Effort, and International
Sales and Marketing. Mr. Valentine currently serves on the board of directors of
SI-BONE, Inc., a publicly traded medical device company focused on the treatment
of musculoskeletal disorders of the sacro-pelvic anatomy, and serves as chair of
its nominating and governance committee. Mr. Valentine received a B.B.A. in
Management and Biomedical Sciences from Western Michigan University. We believe
that Mr. Valentine adds value to our board of directors based on his extensive
experience as an executive officer and director of multiple public and private
companies in our industry.
John J. Bostjancic, 52, served as SeaSpine's Chief Financial Officer from March
2015 to January 2023, Treasurer from July 2015 to January 2023, and Senior Vice
President from February 2018 to January 2023. While at SeaSpine, Mr. Bostjancic
oversaw investor relations, business development, certain treasury functions and
finance operations, including accounting, business planning and forecasting,
external and internal reporting, tax and competitive intelligence. Previously,
Mr. Bostjancic served as Integra LifeSciences Holdings Corporation's Senior Vice
President of Global Supply Chain from February 2012 through November 2014, where
he was responsible for global planning, kitting, distribution, logistics and
customer service functions and led the project team implementing the U.S. Food
and Drug Administration's "unique device identifier" rule in 2014. From 2008
until January 2012, Mr. Bostjancic was Senior Vice President of Financial
Planning & Analysis at Integra. Since Mr. Bostjancic joined Integra in 1999
through his departure in 2014, he held roles of increasing responsibility in the
finance organization, including corporate controller from 2003 through 2006.
Before joining Integra, Mr. Bostjancic was a manager in the accounting standards
team at Merck & Co., Inc., a publicly traded global health care company, from
1998 through 1999 and worked in the business assurance organization at
PricewaterhouseCoopers from 1993 through 1998. He received his B.S. in
accounting from the College of New Jersey.
Patrick L. Keran, 51, served as SeaSpine's General Counsel from October 2015 to
January 2023, Secretary from June 2016 to January 2023, and Senior Vice
President from June 2020 to January 2023. While at SeaSpine, Mr. Keran, oversaw
all legal, corporate governance, and compliance matters. Prior to joining
SeaSpine, Mr. Keran provided strategic and business advisory services to a
variety of life sciences companies, including acting as Chief Legal Officer to
NAIA Pharmaceuticals, Inc., a privately held international drug development
company. From February 2010 to February 2015, Mr. Keran served as President and
Chief Operating Officer of Mast Therapeutics, Inc., a publicly held clinical
stage biopharmaceutical company, and from August 2006 to February 2010, he
served as its General Counsel. He also served as Mast's Secretary from September
2006 to February 2015 and as its principal financial officer from July 2009 to
January 2013. Previously, from 2004 to 2006, Mr. Keran was Associate General
Counsel at Ionis Pharmaceuticals, Inc. (formerly known as Isis Pharmaceuticals,
Inc.), a publicly held drug discovery and development company. From 1999 to
2004, Mr. Keran practiced corporate law at the law firms of Heller Ehrman LLP
and Brobeck Phleger & Harrison LLP, specializing in public and private
financings, licensing arrangements, mergers and acquisitions and corporate
governance matters. Mr. Keran is licensed to practice law in the State of
California. Mr. Keran received a B.A. from the University of California at San
Diego and a J.D. from the University of California at Berkeley, Boalt Hall
School of Law.
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Other than pursuant to the Merger Agreement, there were no arrangements or
understandings between Orthofix's newly appointed officers and any person
pursuant to which they were appointed. None of Orthofix's newly appointed
officers has a direct or indirect material interest in any transaction required
to be disclosed pursuant to Item 404(a) of Regulation S-K.
Offer Letters
In connection with the consummation of the Merger, Orthofix entered into offer
letters (the "Offer Letters") with each of Mr. Valentine, Mr. Bostjancic and
Mr. Keran. The respective Offer Letters describe the applicable executive
officer's base salary, target bonus, and equity grants being made in connection
with consummation of the Merger, and include certain other terms related to the
applicable executive officer's employment following the Merger.
The foregoing description of the Offer Letters does not purport to be complete
and is qualified in its entirety by reference to the full text of the Offer
Letters, which are filed as Exhibits 10.2, 10.3 and 10.4, respectively, to this
Current Report on Form 8-K and are incorporated herein by reference.
Resignations of Directors
In connection with the Merger and effective as of the Effective Time, Wayne
Burris, Lilly Marks, John E. Sicard and Thomas A. West resigned as directors of
Orthofix. The decision to resign by each of Ms. Marks and Messrs. Burris,
Sicard, and West is not because of a disagreement with Orthofix or the Board on
any matter relating to Orthofix's operations, policies or practices.
Appointment of Directors
On January 3, 2023, consistent with the terms of the Merger Agreement, the Board
approved the appointments of Mr. Valentine, Stuart M. Essig, Ph.D., John B.
Henneman, III and Shweta Singh Maniar to fill the vacancies created by
resignations of Mr. Burris, Ms. Marks, Mr. Sicard, and Mr. West, in each case
subject to consummation of the Merger and effective immediately following the
Effective Time. These appointments, which were consistent with recommendations
made by the Board's Nominating, Governance and Sustainability Committee, became
effective on January 5, 2023. Catherine M. Burzik, Jason M. Hannon, James F.
Hinrichs, Michael E. Paolucci and Mr. Serbousek remain as continuing directors.
Each new and continuing director will serve until the 2023 annual meeting of
Orthofix's stockholders and until his or her successor is duly elected and
qualified. Ms. Burzik, who previously served as Chair of the Board, was
appointed Lead Independent Director, and Mr. Serbousek was appointed as
Executive Chairman of the Board.
The Board also determined on January 3, 2023, taking into account the
consummation of the Merger, that each of Ms. Burzik, Dr. Essig, Mr. Hannon,
Mr. Henneman, Mr. Hinrichs, Ms. Maniar and Mr. Paolucci are independent
directors under applicable Nasdaq listing standards.
The January 3, 2023 actions by the Board also approved the following Board
committee compositions as of immediately following the Effective Time:
. . .
Item 8.01 Other Events.
On January 4, 2023, Orthofix issued a press release announcing the completion of
the Merger. A copy of the press release is furnished herewith as Exhibit 99.1
and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The financial information required by this Item 9.01 is not being filed
herewith. It will be filed not later than 71 days after the date on which this
Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information
The financial information required by this Item 9.01 is not being filed
herewith. It will be filed not later than 71 days after the date on which this
Current Report on Form 8-K is required to be filed.
(d) Exhibits
2.1 Agreement and Plan of Merger, dated as of October 10, 2022, by and among
Orthofix Medical Inc., Orca Merger Sub Inc. and SeaSpine Holdings
Corporation (filed as Exhibit 2.1 to Orthofix's Current Report on Form
8-K dated October 11, 2022 and incorporated herein by reference ).
4.1 Orthofix Medical Inc. Inducement Plan for SeaSpine Employees (filed as
Exhibit 4.3 to Orthofix's Registration Statement on Form S-8
(Registration No. 333-269116) filed January 4, 2023 and incorporated
herein by reference ).
4.2 Orthofix Medical Inc. Inducement Plan for SeaSpine Employees - Stock Unit
Grant Agreement (filed as Exhibit 4.4 to Orthofix's Registration
Statement on Form S-8 (Registration No. 333-269116) filed January 4, 2023
and incorporated herein by reference ).
4.3 Orthofix Medical Inc. Inducement Plan for SeaSpine Employees -
Nonqualified Stock Option Grant Agreement (filed as Exhibit 4.5 to
Orthofix's Registration Statement on Form S-8 (Registration
No. 333-269116) filed January 4, 2023 and incorporated herein by
reference ).
10.1* Form of Indemnification Agreement between Orthofix Medical Inc. and its
directors and officers.
10.2* Offer Letter between the Company and Keith C. Valentine.
10.3* Offer Letter between the Company and John J. Bostjancic.
10.4* Offer Letter between the Company and Patrick L. Keran.
99.1* Press release, dated January 4, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* Filed herewith
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