Exhibit 10.26

Execution Version

 

       September 30, 2017

 

 

Patrick S. Miles

P. O. Box 1412

Rancho Santa Fe, CA 92067

 

Re:  Employment Terms

 

Dear Pat:

 

This letter (the “Agreement”) will confirm the terms of your employment by
Alphatec Holdings, Inc. (“Alphatec” or the “Company”).  

 

 

1.

Term.  The term of this Agreement will commence on October 2, 2017 (the
“Effective Date”) and will continue until terminated, according to the terms of
this Agreement.

 

2.

Position.  On the Effective Date, you will begin to serve as Executive Chairman
(“EC”) of the Company.  In this capacity, you will report directly to the Board
of Directors of the Company (the “Board”) and have all of the customary
authorities, duties and responsibilities that accompany your
position.  Throughout your employment with the Company, you agree to devote
substantially all of your business time and attention to the business and
affairs of the Company and to perform your duties in a diligent, competent,
professional and skillful manner and in accordance with applicable law and the
Company’s policies and procedures.  In addition to fulfilling your executive
responsibilities, you will be appointed to serve as Chairman of the Board and it
is expected that you will be nominated for re-election to the Board upon the
expiration of your term of service thereon.  

 

3.

Annual Compensation.  Your initial annual compensation will be as follows:

 

A.

Base Cash Salary.  Your initial base cash salary will be at a rate of $550,000
per year.

 

B.

Annual Cash Bonus.  You will be eligible to participate in the Company’s
discretionary annual bonus program with your annual target bonus opportunity
equal to 110% of base salary.  For fiscal year 2017, that annual target bonus
will be set at 50% of Base Salary ($275,000). The Board of Directors of the
Company (the “Board”) will determine the amount of your award based on its
assessment of a number of factors including Company and individual performance
which shall be established in consultation with you.    

 

C.

Long Term Incentive.  Commencing with the Company’s fiscal year starting January
1, 2018, you will be eligible, subject to your continued employment by the
Company, to participate in such long-term incentive programs that are made
available at the level determined by the Board,

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in its discretion, consistent with your role and responsibilities as Chief
Executive Officer of the Company.

 

4.

Benefits.  You will be eligible to participate in employee welfare and benefit
programs of the Company at the level available to other members of the Company’s
executive management.  Participation in Company benefits programs is subject to
meeting the relevant eligibility requirements, payment of the required premiums,
and the terms of the plans themselves.

 

5.

Equity Compensation.  In addition to your eligibility for regular grants of
long-term incentives, you will be granted the equity award defined and described
below.  All awards described in this Section 5 will in all cases be subject to
actual grant to you by the Compensation Committee of the Board (the
“Compensation Committee”) in its sole discretion, would be pursuant to the
applicable plan document and would be subject to terms and conditions
established by the Compensation Committee in its sole discretion that would be
detailed in separate agreements you would receive after any award is actually
made.  You acknowledge that the equity award are “employment inducement awards”
that will be granted to you outside of the Company’s 2016 Equity Incentive Plan
pursuant to NASDAQ Listing Rule 5635(c)(4).

 

A.

Sign-On RSUs.  You will be granted a one-time sign-on award of one million
(1,000,000) restricted stock units (the “Sign-On RSUs”).  Your Sign-On RSUs will
vest ratably over three (3) years, with automatic vesting upon a Change in
Control of the Company (as defined in the Company’s 2016 Equity Incentive Plan).

 

6.

Severance.  Your eligibility for severance upon a termination of employment will
be governed by the terms of the Alphatec Severance Agreement and Alphatec Change
in Control Agreement, forms of which are attached hereto as Annex A and Annex B,
respectively.

 

7.

Certain Post-Employment Covenants.  During your employment with the Company, and
for a period of one year following the termination of your employment with the
Company, you shall not, without the prior written consent of the Company: (i)
either individually or on behalf of or through any third party, directly or
indirectly, solicit, entice or persuade or attempt to solicit, entice or
persuade any employee, agent, consultant or contractor of the Company or any of
its affiliates (the “Company Group”) to leave the service of the Company Group
for any reason; or (ii) in a manner that is dependent upon the use of the
Company’s proprietary information, either individually or on behalf of or
through any third party, directly or indirectly, interfere with, or attempt to
interfere with, the business relationship between the Company Group and any
vendor, supplier, surgeon or hospital with which you have interacted during the
course of your employment with the Company.

 

8.

Indemnification and Cooperation.  During and after your employment, the Company
will indemnify you in your capacity as a director, officer, employee or agent of
the Company to the fullest extent permitted by applicable law and the Company’s
charter and by-laws, and will provide you with director and officer liability
insurance coverage (including post-termination/post-

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director service tail coverage) on the same basis as the Company’s other
executive officers.  

You agree (whether during or after your employment with the Company) to
reasonably cooperate with the Company in connection with any litigation or
regulatory matter or with any government authority on any matter, in each case,
pertaining to the Company and with respect to which you may have relevant
knowledge.  

 

9.

Withholding.  Tax will be withheld by the Company as appropriate under
applicable Federal tax requirements for any payments or deliveries under this
Agreement.

 

10.

No Guarantee of Employment or Fixed Compensation.  This Agreement is not a
guarantee of employment or a guarantee of compensation for the Term.  Your
employment will be on an “at-will” basis, meaning that you and the Company may
terminate your employment at any time and for any reason during the Term, with
or without prior notice, subject to the provisions of this Agreement (including
Annex A and Annex B).

 

11.

Entire Agreement.  This Agreement (including Annex A and Annex B) constitutes
the Company’s only statement relating to its offer of employment to you and
supersedes any previous communications or representations, oral or written, from
or on behalf of the Company or any of its affiliates.  

 

12.

Miscellaneous Representations.  You confirm and represent to the Company, by
signing this letter, that: (a) you are under no obligation or arrangement
(including any restrictive covenants with any prior employer or any other
entity) that would prevent you from becoming an employee of the Company or that
would adversely impact your ability to perform the expected services on behalf
of the Company; (b) you have not taken (or failed to return) any confidential
information belonging to your prior employer or any other entity, and, to the
extent you remain in possession of any such information, you will never use or
disclose such information to the Company or any of its employees, agents or
affiliates; and (c) you understand and accept all of the terms and conditions of
this offer.

 

13.

Offer Contingencies.  This offer is contingent upon (i) you successful
completion of a background check and drug screen; (ii) your execution of the
Company’s current form of Mutual Agreement to Arbitrate Claims, Confidential and
Proprietary Information Agreement, and those other forms that the Company
requests all of its employees to execute prior to the initiation of their
employment.

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We look forward to having you lead the Alphatec team.

 

 

Sincerely,

By:

Chairman of the Board of Directors

Alphatec Holdings, Inc.

 

 

 

 

I agree with and accept the foregoing terms.

 

 

 

 

Patrick S. Miles

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