UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

 

Check the appropriate box:

Preliminary Proxy Statement    

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))  

Definitive Proxy Statement  

Definitive Additional Materials  

Soliciting Material Pursuant to §240.14a-12

 

VIVEVE MEDICAL, INC.

(Name of Registrant as Specified In Its Charter) 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

  

1.

Title of each class of securities to which transaction applies:

  

2.

Aggregate number of securities to which transaction applies:

  

3.

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

  

4.

Proposed maximum aggregate value of transaction:

  

5.

Total fee paid:

 

☐    Fee paid previously with preliminary materials:

 

☐    Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.  Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

 

  

1.

Amount previously paid:

  

2.

Form, Schedule or Registration Statement No.:

  

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Filing Party:

  

4.

Date Filed:

    

 

 

 

Viveve Medical, Inc.

 

345 Inverness Drive South

Building B, Suite 250

Englewood, Colorado 80112

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

To Be Held May 22, 2018

 

Dear Stockholder:

 

You are invited to attend the Annual Meeting of Stockholders of Viveve Medical, Inc. (“Viveve”, the “Company”, “we”, “us”, “our”) on May 22, 2018, which will be held at our Colorado headquarters located at 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado, 80112 at 8:00 a.m., local time (the “Annual Meeting”). Enclosed with this letter are your Notice of Annual Meeting of Stockholders, proxy statement and proxy voting card.  The proxy statement included with this notice discusses each of the proposals to be considered at the Annual Meeting. We have included with these materials our Annual Report on Form 10-K for the year ended December 31, 2017.

 

At this year’s meeting, you will be asked to: (1) elect one Class I director to hold office until the 2021 annual meeting or until the election and qualification of his successor; (2) ratify the appointment of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018; (3) approve, on an advisory basis, the compensation of our named executive officers; and (4) transact such other business as may properly come before the Annual Meeting or any adjournments and postponements thereof.

 

The Company’s Board of Directors has fixed the close of business on April 3, 2018 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting and any adjournments and postponements thereof.

 

I hope that you attend the Annual Meeting in person. Whether or not you plan to be with us, please vote over the Internet, by telephone, or by completing and returning the enclosed proxy card promptly in the enclosed envelope.

 

 

Sincerely,

 

  

 

/s/ Patricia Scheller

 

Patricia Scheller

  

Chief Executive Officer

Englewood, Colorado

April 16, 2018

 

 

 

 

Viveve Medical, Inc.

 

345 Inverness Drive South

Building B, Suite 250

Englewood, Colorado 80112

 

Notice of Annual Meeting of Stockholders

to be held May 22, 2018

 

To the Stockholders of Viveve Medical, Inc.:

 

The 2018 Annual Meeting of Stockholders will be held at our Colorado headquarters located at 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado, 80112 at 8:00 a.m., local time on May 22, 2018. During the Annual Meeting, stockholders will be asked to:

 

 

1.

elect one Class I director to hold office until the 2021 annual meeting or until the election and qualification of his successor;

 

 

2.

ratify the appointment of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018;

 

 

3.

approve, on an advisory basis, the compensation of our named executive officers; and

 

 

4.

transact such other business as may properly come before the Annual Meeting or any adjournments and postponements thereof.

  

If you are a stockholder as of April 3, 2018, you may vote at the meeting. The date of mailing this Notice of Meeting and proxy statement is on or about April 16, 2018.

 

By order of our Board of Directors:

 

/s/ Scott Durbin

 

Scott Durbin

 

Chief Financial Officer and Secretary

April 16, 2018

 

 

 

   

PROXY STATEMENT

 

This proxy statement and the accompanying proxy card are first being mailed on or about April 16, 2018 to owners of shares of common stock of Viveve Medical, Inc. (which may be referred to in this proxy statement as “we,” “us,” “Viveve,” or the “Company”) in connection with the solicitation of proxies by our Board of Directors (the “Board of Directors” or “Board”) for our annual meeting of stockholders to be held on May 22, 2018 at our Colorado headquarters located at 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado, 80112 at 8:00 a.m., local time (referred to as the “Annual Meeting”). This proxy statement is deemed to form part of and is incorporated into the attached Notice of Annual Meeting of Stockholders. This proxy procedure permits all stockholders, many of whom are unable to attend the Annual Meeting, to vote their shares at the Annual Meeting. Our Board encourages you to read this document thoroughly and to take this opportunity to vote on the matters to be decided at the Annual Meeting.

 

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TABLE OF CONTENTS

 

About The Meeting: Questions and Answers 4

Executive Compensation

21
Security Ownership of Certain Beneficial Owners and Management 27
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 28
Report of the Audit Committee 30
Proposal 1 – Election of Director 31
Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm 32
Proposal 3 – Non-Binding Advisory Proposal Regarding Executive Compensation  34
Requirements for Advance Notification of Nominations and Stockholder Proposals 35
OTHER MATTERS 35

 

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IMPORTANT NOTICE

 

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO VOTE OVER THE INTERNET, BY TELEPHONE OR MARK, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE.

 

THANK YOU FOR ACTING PROMPTLY

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 22, 2018: The Notice of Annual Meeting of Stockholders, proxy statement and Annual Report on Form 10-K for the year ended December 31, 2017 are also available at http://www.viveve.com, which does not have “cookies” that identify visitors to the site.

 

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About The Meeting: Questions And Answers

 

What am I voting on?

 

At this year’s meeting, you will be asked to:

 

 

1.

elect one Class I director to hold office until the 2021 annual meeting or until the election and qualification of his successor;

 

2.

ratify the appointment of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018;

 

3.

approve, on an advisory basis, the compensation of our named executive officers; and

 

4.

transact such other business as may properly come before the Annual Meeting or any adjournments and postponements thereof.

 

Who is entitled to vote at the Annual Meeting, and how many votes do they have?

 

Stockholders of record at the close of business on April 3, 2018 (the “Record Date”) may vote at the Annual Meeting. Pursuant to the rights of our stockholders contained in our charter documents each share of our common stock has one vote. There were 31,233,972 shares of common stock outstanding on the Record Date. From May 11, 2018 through May 21, 2018 you may inspect a list of stockholders eligible to vote. The list of stockholders will be made available at our offices during normal business hours. If you would like to inspect the list, please call Jim Robbins, our Vice President of Finance and Administration, at (720) 696-8100 to arrange a visit to our offices. In addition, the list of stockholders will be available for viewing by stockholders at the Annual Meeting.

 

How do I vote?

 

You may vote over the Internet, by mail or in person at the Annual Meeting. Please be aware that if you vote over the Internet, you may incur costs such as Internet access charges for which you will be responsible.

 

Vote by Internet.    Registered stockholders can vote via the Internet at www.proxyvote.com. You will need to use the control number appearing on your proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions up until 11:59 p.m. Eastern Time on Monday, May 21, 2018. Internet voting is available 24 hours a day. If you vote via the Internet, you do not need to return a proxy card.

 

Vote by Telephone.    Registered stockholders can vote by telephone by calling the toll-free telephone number 1-800-690-6903. You will need to use the control number appearing on your proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone telephone up until 11:59 p.m. Eastern Time on Monday, May 21, 2018. Telephone voting is available 24 hours a day. If you vote by telephone, you do not need to vote over the Internet or return a proxy card.

 

Vote by Mail.    If you are a registered stockholder and received a printed proxy card, you can vote by marking, dating and signing it, and returning it in the postage-paid envelope provided to Broadridge Financial Solutions, Inc. Please promptly mail your proxy card to ensure that it is received prior to the closing of the polls at the Annual Meeting.

 

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Vote in Person at the Meeting.    If you attend the Annual Meeting and plan to vote in person, we will provide you with a ballot at the Annual Meeting. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote in person at the Annual Meeting. If your shares are held in the name of your broker or other nominee, you are considered the beneficial owner of shares held in street name. As a beneficial owner, if you wish to vote at the Annual Meeting, you will need to bring to the Annual Meeting a legal proxy from your broker or other nominee authorizing you to vote those shares.

 

If your shares are held in the name of a bank, broker or other nominee (a “Nominee”), you will receive separate voting instructions from your Nominee describing how to vote your shares. The availability of Internet voting will depend on the voting process of your Nominee. Please check with your Nominee and follow the voting instructions it provides.

 

You should instruct your Nominee how to vote your shares. If you do not give voting instructions to the Nominee, the Nominee will determine if it has the discretionary authority to vote on the particular matter. Under applicable rules, brokers have the discretion to vote on routine matters, such as the ratification of the selection of accounting firms, but do not have discretion to vote on non-routine matters. As a result, if you are a beneficial owner and hold your shares in street name, but do not give your Nominee instructions on how to vote your shares with respect to any non-routine matters, votes may not be cast on your behalf.  If your Nominee indicates on its proxy card that it does not have discretionary authority to vote on a particular proposal, your shares will be considered to be “broker non-votes” with regard to that matter. Broker non-votes and abstentions will be counted as present for purposes of determining whether enough stockholders are present to hold our Annual Meeting. A broker non-vote will not have any effect on a proposal where the requirement for approval is the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote.

 

What is a proxy?

 

A proxy is a person you appoint to vote on your behalf. By using the methods discussed above, you will be appointing Patricia Scheller, our Chief Executive Officer, and Scott Durbin, our Chief Financial Officer, as your proxies. They may act together or individually to vote on your behalf, and will have the authority to appoint a substitute to act as proxy. If you are unable to attend the Annual Meeting, please vote by proxy so that your shares of common stock may be voted. Submitting a proxy will not affect your right to attend the Annual Meeting and vote in person.

 

How will my proxy vote my shares?

 

If you are a stockholder of record, your proxy will vote according to your instructions. If you choose to vote by mail and complete and return the enclosed proxy card but do not indicate your vote, your proxy will vote “FOR” the election of the nominated slate of directors (see Proposal 1); “FOR” the ratification of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018 (see Proposal 2); and “FOR” the approval of the non-binding, advisory proposal regarding the compensation of our named executive officers (see Proposal 3). We do not intend to bring any other matter for a vote at the Annual Meeting, and we do not know of anyone else who intends to do so. Your proxies are authorized to vote on your behalf, however, using their best judgment, on any other business that properly comes before the Annual Meeting. If your shares are registered in "street name" (i.e., held in a brokerage account or by a bank or other nominee), you will receive a voting instruction card or other information from your broker or other holder of record seeking instruction regarding how to vote your shares. If you do not provide such instruction, your broker or nominee may vote your shares at its discretion on your behalf on the ratification of the selection of the Company's independent registered public accounting firm for fiscal year 2018, but not on the other proposals.

 

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How do I change my vote?

 

If you are a stockholder of record, you may revoke your proxy at any time before your shares are voted at the Annual Meeting by:

 

 

notifying our Vice President of Finance, Jim Robbins, in writing at 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado 80112, that you are revoking your proxy;

 

 

 

 

submitting a proxy at a later date via the Internet, or by signing and delivering a proxy card relating to the same shares and bearing a later date than the date of the previous proxy prior to the vote at the Annual Meeting, in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or

 

 

 

 

attending and voting by ballot at the Annual Meeting.

   

If your shares are held in the name of a Nominee, you should check with your Nominee and follow the voting instructions your Nominee provides.

 

Who will count the votes?

 

A representative from Broadridge Financial Solutions, Inc. will act as the inspector of election and count the votes.

  

What constitutes a quorum?

 

In accordance with Article I, Section 5 of our Amended and Restated Bylaws, or Bylaws, a majority of the shares entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. A quorum is necessary in order to conduct the Annual Meeting. If you choose to have your shares represented by proxy at the Annual Meeting, you will be considered part of the quorum. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. If a quorum is not present at the Annual Meeting, the stockholders present in person or by proxy may adjourn the meeting to a later date. If a meeting of Stockholders is adjourned for less than 30 days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that it is adjourned. If an adjournment is for more than 30 days or a new record date is fixed for the adjourned meeting, we will provide notice of the adjourned meeting to each stockholder of record entitled to vote at the meeting.

 

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What vote is required to approve each proposal?

 

Election of Director. For Proposal 1, the election of the director, the nominee will be elected by a plurality of the votes cast on the resolution. A properly executed proxy or voting instructions marked “WITHHOLD” with respect to the election of the director will not be counted as a vote cast with respect to such director, although it will be counted for the purposes of determining whether there is a quorum.

 

Ratification of the Appointment of Independent Registered Public Accounting Firm. For Proposal 2, the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock represented in person or by proxy at the Annual Meeting is required for approval.

 

Approval of the non-binding, advisory proposal to approve the compensation of our named executive officers. For Proposal 3, the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock represented in person or by proxy at the Annual Meeting is required for approval, however, the vote is non-binding.  

 

Other Proposals. Any other proposal that might properly come before the meeting will require the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock represented in person or by proxy at the Annual Meeting in order to be approved, except when a different vote is required by law, our certificate of incorporation or our Bylaws.

  

Abstentions. If you specify that you wish to "abstain" from voting on an item, your shares will not be voted on that particular item.

 

Broker Non-Votes. If your broker holds your shares in its name and does not receive voting instructions from you, your broker may only vote these shares on certain "routine" matters, such as the ratification of the selection of the Company's independent registered public accounting firm. However, on non-routine matters, such as the election of directors, your broker cannot vote your shares unless it has received voting instructions from you, as it does not have discretionary voting power for those particular items.

 

Abstentions and broker non-votes with respect to any matter will be counted as present and entitled to vote on that matter for purposes of establishing a quorum. A broker non-vote will not have any effect on a proposal where the requirement for approval is the affirmative vote of the majority of votes cast by the holders of all of the shares present in person or represented by proxy at the meeting and entitled to vote on such matter, while abstentions will be treated as a vote against such proposal. Accordingly, broker non-votes will not have any effect on Proposals 2 and 3, while abstentions will be treated as votes against Proposals 2 and 3. Neither abstentions nor broker non-votes will have any effect on Proposal 1.

 

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What percentage of our common stock do our directors and officers own?

 

As of April 3, 2018, our directors, director-nominees and named executive officers beneficially owned approximately 23.3% of our outstanding common stock, excluding shares of common stock that are not issuable within sixty days. See the discussion under the heading “Security Ownership of Certain Beneficial Owners and Management” on page 27 for more details.

 

Who is soliciting proxies, how are they being solicited, and who pays the cost?

 

We, on behalf of our Board, through our directors, officers, and employees, are soliciting proxies primarily by mail and the Internet. Further, proxies may also be solicited in person, by telephone or facsimile.  We will pay the cost of soliciting proxies. We will also reimburse stockbrokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the owners of our common stock.

 

Who is our Independent Registered Public Accounting Firm, and will they be represented at the Annual Meeting?

 

BPM LLP served as the independent registered public accounting firm auditing and reporting on our consolidated financial statements for the fiscal year ended December 31, 2017 and has been appointed to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2018. We expect that representatives of BPM LLP will be physically present or be available via phone at the Annual Meeting. They will have an opportunity to make a statement, if they desire, and will be available to answer appropriate questions at the Annual Meeting.

 

What are the recommendations of our Board?

 

The recommendations of our Board are set forth together with the description of each proposal in this proxy statement. In summary, the Board recommends a vote:

 

 

FOR the election of the nominated director (see Proposal 1);

 

 

 

 

FOR the ratification of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018 (see Proposal 2); and

     
 

FOR the approval, on an advisory basis, of the compensation of our named executive officers (see Proposal 3).

 

With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.

 

If you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board.

 

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EXECUTIVE OFFICERS, DIRECTORS AND CORPORATE GOVERNANCE

 

The following table sets forth the names and ages of all of our directors and executive officers as of April 16, 2018. Our officers are appointed by, and serve at the pleasure of, the Board.

 

Name

 

Age

 

Position

 

 

 

 

 

Patricia Scheller

 

57

 

Director and Chief Executive Officer

Lori Bush (1)

 

61

 

Director

Daniel Janney

 

52

 

Chairman of the Board

Debora Jorn

 

59

 

Director

Arlene Morris

 

66

 

Director

Jon Plexico

 

49

 

Director

Scott Durbin

 

49

 

Chief Financial Officer

James Atkinson

 

60

 

Chief Business Officer and President

 

 

(1)

Ms. Bush will not stand for re-election at the Annual Meeting.

 

Biographical information with respect to our executive officers and directors is provided below. There are no family relationships between any of our executive officers or directors.

 

Nominee for Director 

 

Class I

 

Daniel Janney. Mr. Janney joined our Board on September 18, 2014 (with his service beginning following the merger with PLC Systems Acquisition Corporation that was completed on September 23, 2014 and appointed Chairman if the Board on September 28, 2017. Since November 2012, Mr. Janney has served as a director of Esperion Therapeutics, Inc. (NASDAQ: ESPR). Mr. Janney is a managing director at Alta Partners (“Alta”), a life sciences venture capital firm, which he joined in 1996. Prior to joining Alta, from 1993 to 1996, he was a Vice President in Montgomery Securities’ healthcare and biotechnology investment banking group, focusing on life sciences companies. Mr. Janney is a director of a number of companies including Alba Therapeutics Corporation, Lithera, Inc., Prolacta Bioscience, Inc., Sutro Biopharma and ViroBay, Inc. He holds a Bachelor of Arts in History from Georgetown University and an M.B.A. from the Anderson School at the University of California, Los Angeles. We determined that Mr. Janney should serve as a director because of his experience working with and serving on the board of directors of various life sciences companies and his experience working in the venture capital industry.

 

Other Directors and Executive Officers

 

Class II: Currently Serving Until the 2019 Annual Meeting

 

Debora Jorn. Ms. Jorn joined our Board on May 11, 2016. Ms. Jorn has over 30 years of experience in the pharmaceutical industry building specialty businesses in numerous therapeutic areas including women’s healthcare, allergy and respiratory, cardiology and ophthalmology. Most recently, Ms. Jorn served as Executive Vice President Corporate and Commercial Development at pSivida Corp. From August 2013 through March 2016, Ms. Jorn was Executive Vice President and Group Company Chair of Valeant Pharmaceuticals International, Inc. (“Valeant”) where she led the dermatology, aesthetics and gastroenterology businesses. Prior to that, Ms. Jorn served as Chief Global Marketing Officer of Bausch & Lomb Pharmaceuticals, Inc. (acquired by Valeant) from June 2010 to August 2013. Ms. Jorn began her career at Merck and Co., Inc and for more than 20 years held roles of increasing responsibility in R&D, Marketing and Sales. Since May 2016, Ms. Jorn has served as a director of Orexigen Therapeutics, Inc. Ms. Jorn received her M.B.A from NYU Stern Graduate School of Business and her B.A. in Biochemistry from Rutgers University. We determined that Ms. Jorn should serve as a director because of her extensive executive and marketing experience in the healthcare industry.

 

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Jon Plexico. Mr. Plexico joined our Board on March 14, 2016. Mr. Plexico is currently one of two Managing Members of Stonepine Capital Management, LLC (“Stonepine Management”). Stonepine Management is the General Partner of Stonepine Capital, L.P. (“Stonepine”), a holder of approximately 25% of the outstanding common stock of the Company. Mr. Plexico was appointed to the Board of Directors as a representative of Stonepine, at Stonepine’s election, under the terms of that certain letter agreement dated May 12, 2015 (the “Letter Agreement”) by and between the Company and Stonepine, pursuant to which, among other things, for so long as Stonepine owns at least 15% of the Company’s outstanding equity securities, Stonepine shall have the option, but not the obligation, to designate a Stonepine representative to serve on the Board. The Company and Stonepine entered into the Letter Agreement in connection with a private offering of our securities undertaken in May 2015.

 

Mr. Plexico has approximately 25 years of life science industry operational and advisory experience, including ten years as Managing Member and Founder of Stonepine Management. Previously, Mr. Plexico was Managing Director at Merriman Curhan Ford & Co., now known as Merriman Capital, where he managed healthcare corporate finance focusing on private investments in public equity, secondary offerings, and mergers and acquisitions. Prior to that, Mr. Plexico was co-founding partner of Venture Ready Partners, a life science advisor providing capital raising services to private biotechnology companies. Mr. Plexico served as director of business development at Chemdex Corporation, an electronic life-science commerce company that grew to 500 employees and completed an initial public offering during his tenure. He began his career at Quidel Corporation, where he became National Sales Manager for the Autoimmune Division. He has served on the boards of directors of Zila, Inc. and Immunetech, Inc. Mr. Plexico is a graduate of Colgate University. We determined that Mr. Plexico should serve as a director because of his extensive experience in advising life sciences companies and in raising funds for them.

 

Class III: Currently Serving Until the 2020 Annual Meeting

 

Arlene Morris. Ms. Morris joined our Board on May 11, 2016. Ms. Morris has served as the CEO of Willow Advisors, LLC since May 2015. From May 2011 to April 2015, Ms. Morris was the President and CEO and a member of the board of directors of Syndax Pharmaceuticals, Inc. (“Syndax”), a Boston based epigenetic company. Prior to her employment with Syndax, from June 2003 to February 2011 she was the President, CEO and a member of the board of directors of Affymax, Inc. (“Affymax”). During her eight years at Affymax, Ms. Morris led the company through the development of OMONTYS peginesatide, a strategic collaboration with Takeda, an initial public offering, and several follow-on offerings. Prior to Affymax, Ms. Morris was the President and CEO of Clearview Projects Inc., an advisory firm which counsels biopharmaceutical and biotechnology companies on strategic transactions. Before that, she was the Senior Vice President of Business Development at both Coulter Pharmaceuticals, Inc. and Scios, Inc.. Ms. Morris began her career at Johnson & Johnson as a sales representative, rising to Vice President of Business Development. Ms. Morris serves on the board of directors of Neovacs SA, Palatin Technologies, Inc., miRagen Therapeutics, Inc. and the Medical University of South Carolina Foundation for Research and Development. We determined that Ms. Morris should serve as a director because of her many years serving as a senior executive with companies in the biopharma industry and her extensive experience serving on boards of directors.

 

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Patricia Scheller. Ms. Scheller joined our Board on September 18, 2014 (with her service beginning following our merger with PLC Systems Acquisition Corporation) and has been a director of our wholly-owned subsidiary, Viveve, Inc., since June 2012. Ms. Scheller also serves as our Chief Executive Officer and, since May 2012, as Chief Executive Officer of Viveve, Inc. Prior to joining Viveve, Inc., she served as the Chief Executive Officer of Prescient Medical, Inc. (“PMI”), a privately held company that developed diagnostic imaging catheters and coronary stents designed to reduce deaths from heart attacks, from September 2004 through April 2012 and as a director of PMI from July 2004 to September 2011. Prior to joining PMI, from August 2003 to September 2004, she was the Chief Executive Officer of SomaLogic, a biotechnology company focused on the development of diagnostic products using aptamer technology. From December 2000 to April 2003, Ms. Scheller also managed several business units at Ortho-Clinical Diagnostics, a Johnson & Johnson company, and from October 1997 to November 2000 served in key executive positions at Dade Behring, a clinical diagnostics firm. While at Dade Behring Holdings, Inc., she directed the commercialization of the hsCRP diagnostic test, a screening test for systemic inflammation, which has been shown to increase the risk of heart attacks. The hsCRP test was the first diagnostic test added to the cardiac test panel by the Centers for Disease Control and Prevention and the American Heart Association in over 30 years. As Director of Cardiology Systems at Cordis Corporation (a Johnson & Johnson company) from February 1994 to February 1996, Ms. Scheller managed the launch of the first Palmaz-Schatz® balloon-expandable coronary stent, the first major product entry into what became a $6 billion market. Ms. Scheller received a B.S.E. degree in Biomedical Engineering from Duke University and completed executive business education programs at Harvard University, Massachusetts Institute of Technology, Columbia University and Northwestern University. We determined that Ms. Scheller should serve as a director because of her extensive experience in the healthcare industry. 

 

Current Class I Director Not Standing for Re-election

 

Lori Bush. Ms. Bush joined our Board on May 11, 2016. Since January 2016, Ms. Bush has been a consultant, speaker, advisor and activist for micro-entrepreneurship and women’s leadership. From October 2007 to January 2016, Ms. Bush served as the President and General Manager, then President and CEO of Rodan & Fields, LLC (Rodan & Fields). Prior to joining Rodan & Fields, Ms. Bush served as Chief Operating Officer of Helix BioMedix, Inc., a biopharmaceutical discovery and development company from October 2006 to October 2007, and was the Managing Director of the Gremlin Group, a health and consumer product consulting company from March 2006 to October 2007. From May 2001 to May 2006, Ms. Bush served as President of Nu Skin, a division of Nu Skin Enterprises, a NYSE-listed direct selling company that markets premium quality personal care and nutrition products through a global network of sales representatives. Ms. Bush served as Vice President of Marketing of Nu Skin from February 2000 to May 2001. Prior to joining Nu Skin, she worked at Johnson & Johnson Consumer Products Companies as the worldwide executive director over skin care ventures from May 1998 to February 2000. She also served as Vice President of Professional Marketing at Neutrogena Corporation. Ms. Bush earned a Masters of Business Administration from Temple University and a Bachelor of Science degree from The Ohio State University. Until its merger with Wonder Holdings Acquisition Corp., Ms. Bush was a director of Matrixx Initiatives Inc., formerly a publicly traded company. We determined that Ms. Bush should serve as a director because of her extensive executive and marketing experience in the over-the-counter healthcare industry.

 

11

 

 

Executive Officers

 

Scott Durbin. Mr. Durbin joined Viveve, Inc., a wholly owned subsidiary of Viveve Medical, Inc., as its Chief Financial Officer in February 2013 and was appointed as the Chief Financial Officer and Secretary of Viveve Medical, Inc. on September 23, 2014. From June 2012 to January 2013, he served as an advisor and Acting Chief Financial Officer for Viveve, Inc. Prior to joining Viveve, Inc., from June 2010 to October 2011, he was Chief Financial Officer of Aastrom Biosciences, (now known as Vericel Corporation) (“Aastrom”), a publicly traded, cardiovascular cell therapy company. Before Aastrom, he spent six years as Chief Operating and Financial Officer for Prescient Medical (“Prescient”) from May 2004 to June 2010, a privately held company that developed diagnostic imaging catheters and coronary stents designed to reduce deaths from heart attacks. Prior to Prescient, from January 2003 to April 2004, he spent several years as a financial consultant for two publicly traded biotech companies, Scios Inc., a Johnson & Johnson company, and Alteon Inc. Mr. Durbin began his career in corporate finance as an investment banker in the Healthcare and M&A groups at Lehman Brothers Inc. from August 1999 to January 2003, where he focused on mergers and acquisitions and financings for the life science industry. At Lehman, he successfully executed over $5 billion in transactions for medical device and biotechnology companies. He began his career as a Director of Neurophysiology for Biotronic, Inc. Mr. Durbin received a B.S. from the University of Michigan and an M.P.H. in Health Management with Honors from the Yale University School of Medicine and School of Management.

   

James Atkinson. Mr. Atkinson was appointed to serve as the Chief Business Officer and President of the Company and Viveve, Inc., a wholly owned subsidiary of Viveve Medical, Inc., effective as of February 4, 2015. Mr. Atkinson has over 30 years of experience in medical device sales, marketing and business development with both Fortune 50 and start-up medical device companies. Mr. Atkinson was a founding principal at Ulthera, Inc. where he served as Senior Vice President of Sales and Marketing from October 2006 through April 2014. While at Ulthera, he assisted in growing the company from 3 to 165 employees and established a global distribution network that included 42 distributors, covering 52 countries. Mr. Atkinson’s prior experience includes various executive positions, including (i) Vice President of Sales and Marketing for the Cardiac Surgery Division at St. Jude Medical, Inc. from October 2004 to October 2006 where his responsibilities included launching the Biocor® stented tissue valve, recognized as the fastest growing heart valve brand in the industry, (ii) Vice President of Sales for Medtronic Vascular, a $200 million division of Medtronic, Inc., a company whose stock is traded on the New York Stock Exchange (Ticker: MDT), from January 2003 to September 2004 and (iii) co-founder and Vice President of Sales and Business Development for Medical Simulation Corporation. Mr. Atkinson’s career began as a sales representative at Ethicon Endosurgery, a Johnson & Johnson company, where he progressed through positions with increasing responsibility to Regional Manager.

 

Legal Proceedings

 

To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

 

12

 

 

Code of Ethics

 

The Company has adopted a Code of Business Conduct and Ethics that applies to every director, officer and employee of the Company. Such Code of Business Conduct and Ethics includes written standards that are reasonably designed to deter wrongdoing and to promote:

 

 

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

     
  full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Commission and in other public communications made by the Company;
     
  compliance with applicable governmental laws, rules and regulations;
     
  the prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
     
  accountability for adherence to the code.

 

A current copy of the code is posted on the Corporate Governance section of our website, which is located at www.viveve.com. If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions, or any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.

 

Board of Directors

 

Our Board may establish the authorized number of directors from time to time by resolution. The number of directors may not be fewer than three and not more than twenty. Currently our Board consists of six directors. Our current directors, if elected, will continue to serve as directors until the next annual meeting of stockholders and until his or her successor has been elected and qualified, or until his or her earlier death, resignation, or removal. 

 

Our Board held seven meetings during 2017. During 2017, each of the directors then in office attended at least 75% of the aggregate of the number of board of director meetings and the number of meetings held by all committees of the board of directors on which such director then served. Members of our Board are invited and encouraged to attend each annual meeting of stockholders.

 

Independence of Directors

 

In determining the independence of our directors, we apply the definition of “independent director” provided under the listing rules of The NASDAQ Stock Market LLC (“NASDAQ”). Pursuant to these rules, and after considering all relevant facts and circumstances, the Board affirmatively determined that all of the directors currently serving on the Board, including those nominated for election at the Annual Meeting, are independent within the meaning of NASDAQ Listing Rule 5605 with the exception of Patricia Scheller, who is an executive officer of the Company.

  

13

 

 

Committees of our Board

 

The Board has three standing committees: the Audit Committee, the Compensation Committee and the Governance and Nominating Committee.

 

Audit Committee

 

The Audit Committee consists of three directors, Daniel Janney (Chairperson), Jon Plexico and Arlene Morris. The Board has determined that each of the members of the Audit Committee meets the requirements for independence set forth in NASDAQ Listing Rule 5605(c)(2). In addition, the Board has determined that Daniel Janney qualifies as an “audit committee financial expert” as defined in the rules of the SEC. The Audit Committee operates pursuant to a charter, which can be viewed on our website at http://www.viveve.com (under Investors/Corporate Governance/Governance Docs). The Audit Committee met four times. during 2017. The role of the Audit Committee is to:

 

 

retain the independent registered public accounting firm, evaluate their independence, qualifications and performance, and approve the terms of engagement for audit services and nonaudit services. In all events, it is the Audit Committee that has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the Company’s outside independent registered public accounting firm;

 

 

 

 

review with management and the independent registered public accounting firm, as appropriate, the Company’s financial reports and other financial information provided by the Company to any governmental body or the public, and the Company’s compliance with legal and regulatory requirements;

 

 

 

 

establish and review complaint procedures regarding accounting, internal auditing controls and auditing matters;

 

 

 

 

serve as an independent and objective party to monitor the Company’s financial reporting process and internal control systems; and

 

 

 

 

provide an open avenue of communication among the independent registered public accounting firm, financial and senior management, and the Board.

 

Compensation Committee

 

The Compensation Committee consists of three directors, Arlene Morris (Chairperson), Lori Bush and Daniel Janney. The Compensation Committee met eight times during 2017. The role of the Compensation Committee is to:

 

 

review and reassess periodically (and where appropriate, make such recommendations to the Board as the Committee deems advisable with regard to) the Company’s processes and procedures for the consideration and determination of director and executive compensation, and review and discuss with management any description of such processes and procedures to be included in the Company’s proxy statement;

 

14

 

 

 

determine and approve on at least an annual basis the compensation package for the Company’s CEO and the officers that directly report to the CEO including base salary, stock options, performance goals, and other compensation, annual performance objectives and goals relevant to compensation for such officers, and evaluate the performance of such officers in light of these goals and objectives;

 

 

 

 

make recommendations to the Board regarding incentive-based or equity-based compensation plans in which the Company’s officers and employees participate and review and approve all grants of incentive-based or equity‐based grants for compensation and all grants of stock options (other than those specifically designated for approval by the full Board), in each case consistent with the terms of such plans;

 

 

 

 

on an annual basis, at least one member of the committee shall meet with individual company executives for input on general management and operational activities;

 

 

 

 

periodically review both regional and industry-wide compensation practices and trends in order to assess the adequacy and competitiveness of the Company’s compensation programs for the CEO, other executive officers and directors, relative to comparable companies in the Company’s industry;

 

 

 

 

approve all guidelines for employment, severance, or change-in-control agreements, special or supplemental benefits, or provisions including the same, applicable to all employees; and

 

 

 

 

provide oversight regarding the Company’s public disclosure of director and executive compensation information, and prepare an annual report on executive and director compensation for inclusion in the Company’s proxy statement for its annual meeting of stockholders or annual report on Form 10-K in accordance with the applicable rules and regulations of the Securities and Exchange Commission, any securities exchange on which the Company’s securities are traded, and any other rules and regulations applicable to the Company.

  

A copy of the charter of the Compensation Committee is available on our website at http://www.viveve.com (under Investors/Corporate Governance/Governance Docs). 

 

The Compensation Committee may engage outside advisers, including outside auditors, attorneys and consultants, as it deems necessary to discharge its responsibilities. The Compensation Committee has sole authority to retain and terminate any compensation adviser, including sole authority to approve the fees of any adviser and other retention terms. In addition, the Compensation Committee considers, but is not bound by, the recommendations of our Chief Executive Officer with respect to the compensation packages of our other executive officers.

 

In 2017, our Compensation Committee engaged Radford to provide guidance on our executive compensation programs. Radford served at the discretion of the Compensation Committee and did not provide any other services to the Company during fiscal year 2017 other than those for which they were engaged by the Compensation Committee.

 

Our Compensation Committee requires that its compensation consultants be independent of Company management and performs an annual assessment of the compensation consultants’ independence to determine whether the consultants are independent. Our Compensation Committee has determined that Radford is independent and that its work has not raised any conflicts of interest.

 

15

 

 

Governance and Nominating Committee

 

The Governance and Nominating Committee, or the “Governance Committee”, consists of four directors, Daniel Janney, Jon Plexico, Lori Bush and Debora Jorn (Chairperson). The Governance Committee met two times during 2017. The role of the Governance Committee is to: 

 

 

identify, review and evaluate individuals qualified to become Board members;

 

 

 

 

recommend nominees to the Board and to each committee of the Board;

 

 

 

 

develop and recommend to the Board criteria for selecting qualified director candidates (including an assessment of any minimum qualifications a nominee for the Board should possess and any specific qualities or skills the Committee believes are necessary for one or more directors to possess);

 

 

 

 

recommend corporate governance principles, codes of conduct and compliance mechanisms applicable to the Company, and monitor compliance with them; and

 

 

 

 

assist the Board in its annual reviews of the performance of the Board, and each committee.

 

A copy of the charter of the Governance Committee is available on our website at http://www.viveve.com (under Investors/Corporate Governance/Governance Docs).

 

Stockholder Communications

 

Stockholders may communicate with the members of the Board, either individually or collectively, by writing to the Board at 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado 80112.  These communications will be reviewed by the Corporate Secretary as agent for the non-employee directors in facilitating direct communication to the Board.  The Corporate Secretary will disregard communications that are bulk mail, solicitations to purchase products or services not directly related either to us or the non-employee directors’ roles as members of the Board, sent other than by stockholders in their capacities as such or from particular authors or regarding particular subjects that the non-employee directors may specify from time to time, and all other communications which do not meet the applicable requirements or criteria described below, consistent with the instructions of the non-employee directors.

 

General Communications. The Corporate Secretary will summarize all stockholder communications directly relating to our business operations, the Board, our officers, our activities or other matters and opportunities closely related to us. This summary and copies of the actual stockholder communications will then be circulated to the Board.

 

Stockholder Proposals and Director Nominations. Stockholders may make proposals for consideration at the Annual Meeting, so long as any such proposal adheres to Regulation 14a-8 promulgated under the Securities Exchange Act of 1934 (“Exchange Act”).

 

The Governance Committee will consider director candidates recommended by stockholders. If a director candidate is recommended by a stockholder, the Governance Committee expects to evaluate such candidate in the same manner it evaluates director candidates it identifies. Stockholders desiring to make a recommendation to the Governance Committee should follow the procedures set forth below regarding stockholder nominations for directors.

 

16

 

 

Any stockholder who meets the requirements of the proxy rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), may submit proposals to the Board of Directors to be presented at the 2019 annual meeting. Such proposals must comply with the requirements of Rule 14a-8 under the Exchange Act and be submitted in writing by notice delivered or mailed by first-class United States mail, postage prepaid, to our Secretary at our principal executive offices at the address set forth above no later than December 17, 2018 in order to be considered for inclusion in the proxy materials to be disseminated by the Board of Directors for such annual meeting. If the date of the 2019 annual meeting is moved by more than 30 days from the date contemplated at the time of the previous year's proxy statement, then notice must be received within a reasonable time before we begin to print and send proxy materials. If that happens, we will publicly announce the deadline for submitting a proposal in a press release or in a document filed with the U.S. Securities and Exchange Commission (the "SEC"). A proposal submitted outside the requirements of Rule 14a-8 under the Exchange Act will be considered untimely if received after February 23, 2019.

 

Our Amended and Restated Bylaws ("Bylaws") also provide for separate notice procedures to recommend a person for nomination as a director or to propose business to be considered by stockholders at a meeting. To be considered timely under these provisions, the stockholder's notice must be received by our Secretary at our principal executive offices at the address set forth above no earlier than January 22, 2019 and no later than February 21, 2019. Our Bylaws also specify requirements as to the form and content of a stockholder's notice.

 

The Board will determine whether the nomination was made in accordance with these requirements. If the Board determines that a nomination was not made in accordance with these requirements, the nominating stockholder shall be so notified by the Secretary and the defective nomination shall be disregarded.

 

Copies of the nominations or recommendations are circulated to the Chairman of the Governance Committee.

 

Retention of Stockholder Communications. Any stockholder communications which are not circulated to the Board because they do not meet the applicable requirements or criteria described above will be retained by the Corporate Secretary for at least ninety days from the date on which they are received, so that these communications may be reviewed by the directors generally if such information relates to the Board as a whole, or by any individual to whom the communication was addressed, should any director elect to do so.

 

Distribution of Stockholder Communications. Except as otherwise required by law or upon the request of a non-employee director, the Chairman or Lead Independent Director of the Board will determine when and whether a stockholder communication should be circulated among the Board and Company management.

 

Director Qualifications and Diversity

 

The Board seeks independent directors who represent a diversity of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. Candidates should have substantial experience with one or more publicly traded companies or should have achieved a high level of distinction in their chosen fields.  The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and senior executives, particularly those with experience in medical device manufacture and distribution; research and development; finance, accounting and banking; or marketing and sales.

 

17

 

 

In evaluating nominations to the Board of Directors, the Board also looks for depth and breadth of experience within the Company’s industry and otherwise, outside time commitments, special areas of expertise, accounting and finance knowledge, business judgment, leadership ability, experience in developing and assessing business strategies, corporate governance expertise, and for incumbent members of the Board, the past performance of the incumbent director. Each of the candidates nominated for election to our Board was recommended by the Governance Committee.

 

 Risk Oversight

 

Our Board provides risk oversight for our entire company by receiving management presentations, including risk assessments, and discussing these assessments with management. The Board’s overall risk oversight, which focuses primarily on risks and exposures associated with current matters that may present material risk to our operations, plans, prospects or reputation, is supplemented by the various committees. The Audit Committee discusses with management and our independent registered public accounting firm our risk management guidelines and policies, our major financial risk exposures and the steps taken to monitor and control such exposures. Our Compensation Committee oversees risks related to our compensation programs and discusses with management its annual assessment of our employee compensation policies and programs.

 

Board Leadership Structure

 

Our governance documents provide the Board with flexibility to select the appropriate leadership structure of the Company. In determining the leadership structure, the Board considers many factors, including the specific needs of the business, fulfilling the duties of the Board, and the best interests of the Company’s stockholders. Currently, the offices of Chairman of the Board and Chief Executive Officer are separated. The Company has no fixed policy with respect to the separation of the offices of the Chairman of the Board and Chief Executive Officer.

 

Currently, Mr. Janney serves as Chairman of the Board, at the pleasure of the Board. As Chairman of the Board, Mr. Janney will:

 

 

approve the meeting agendas for the Board;

   

 

  ● 

advise the CEO director regarding the sufficiency, quality, quantity and timeliness of information provided to the Board;

   

 

  ● 

ensure that meeting schedules permit sufficient time for discussion of all agenda items;

   

 

  ● 

be available for consultation and direct communication with major shareholders, if requested; and

   

 

  ● 

preside at meetings of the Board, including executive sessions.

 

18

 

 

The chairs of Board committees also play an active role in the leadership structure of the Board. The Governance and Nominating Committee and the Board endeavor to select independent committee chairs who will provide strong leadership to guide the important work of the Board committees. Committee chairs work with the Company’s senior executives to ensure the committees are discussing the key strategic risks and opportunities for the Company.

 

Director Compensation

  

On December 23, 2016, the Board of Directors adopted an independent director compensation policy designed to compensate non-employee directors of the Company for their time, commitment and contributions to the Board. The Board amended and restated the independent director compensation policy effective May 10, 2017 (as amended and restated, the “Director Compensation Policy”). Under the Director Compensation Policy, all independent directors are eligible to receive cash compensation as set forth below, pro-rated to reflect the number of days served during any calendar quarter:  

 

 

 

Annual
Retainer($)

 

Board of Directors:

 

 

 

 

All Independent Directors

   

35,000

 

Chairperson Additional Retainer

 

 

25,000

 

Audit Committee:

 

 

 

 

All Audit Committee Members

 

 

10,000

 

Chairperson

 

 

20,000

 

Compensation Committee:

 

 

 

 

All Compensation Committee Members

 

 

5,000

 

Chairperson

 

 

10,000

 

Governance and Nominating Committee:

 

 

 

 

All Governance and Nominating Committee Members

 

 

3,750

 

Chairperson

 

 

7,500

 

 

Under the Director Compensation Policy, all independent directors eligible to receive the cash compensation have the option to elect to receive all or any portion of such cash compensation in the form of a stock award, in lieu of a cash payment. Such election is to be made quarterly until the 2018 annual meeting and annually thereafter. Such restricted stock awards have a fair market value equal to the value of the cash retainer to be paid during such period and are fully vested upon grant.

 

In addition, under the policy, each new non-employee director who is initially appointed or elected to the Board after effectiveness of the policy is granted an equity-based award with a value at the time of issuance equal to two times the Subsequent Award (defined below) in effect at the time of election, which vests in three equal annual installments on each of the first three anniversaries of the date of grant, subject to the director’s continued service on the Board (the “Initial Award”). In addition, on the date of each annual meeting of the Company’s stockholders, each continuing non-employee director is eligible to receive an annual option grant to purchase 17,500 shares of common stock, which vests in full on the first anniversary of the grant date, subject to the director’s continued service on the Board (each a “Subsequent Award”). A non-employee director elected for the first time to the Board at an annual meeting of the Company’s stockholders shall only receive an Initial Award in connection with such election, and shall not receive a Subsequent Award until the annual meeting for the next fiscal year. In the event a non-employee director’s service on the Board terminates, the vesting and exercise of such director’s unvested stock options shall be subject to the terms of the applicable award agreement.

   

19

 

 

The Company has also agreed to reimburse all reasonable out-of-pocket expenses incurred by non-employee directors in attending board of directors and committee meetings.

 

2017 Director Compensation Table

 

The following table presents information regarding the compensation of our non-employee directors for the year ended December 31, 2017. Patricia Scheller, our Chief Executive Officer, serves on our Board of Directors but did not receive compensation for her service as a director and the compensation paid to Ms. Scheller as an employee during the year ended December 31, 2017 is set forth in the “2017 Summary Compensation Table” below.

 

Name

 

Fees

Earned or

Paid in

Cash

($)

 

 

Stock

Awards

($)(1)(2)(3)

 

 

Option

Awards

($)(1)(4)

 

 

Total

($)

 

Lori Bush

 

 

30,000

 

 

 

10,004

 

 

 

53,393

 

 

 

93,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daniel Janney

 

 

-

 

 

 

71,888

 

 

 

53,393

 

 

 

125,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debora Jorn

 

 

4,844

 

 

 

35,800

 

 

 

53,393

 

 

 

94,037

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arlene Morris

 

 

55,000

 

 

 

-

 

 

 

53,393

 

 

 

108,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jon Plexico

 

 

-

 

 

 

48,760

 

 

 

53,393

 

 

 

102,154

 

 

 

(1)

The amounts reported represent the aggregate grant date fair value of stock awards and stock options granted to our non-employee directors in 2017, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), excluding the impact of estimated forfeitures related to service-based vesting. See Note 10 of the notes to our consolidated financial statements in the annual report on Form 10-K filed March 16, 2018 for a discussion of our assumptions in determining the grant date fair values of equity awards. These amounts do not correspond to the actual value that may be recognized by the directors.

 

(2)

On May 17, 2017, we made grants of shares of fully vested common stock to certain of our non-employee directors with respect to services for the first quarter of 2017 in the following amounts: Mr. Janney – 2,387; Ms. Jorn – 686; and Mr. Plexico – 1,724. On September 6, 2017, we made grants of shares of fully vested common stock to certain of our non-employee directors with respect to services for the second quarter of 2017 in the following amounts: Mr. Janney – 3,025; Ms. Jorn – 1,737; and Mr. Plexico – 2,185. On October 2, 2017, we made grants of shares of fully vested common stock to certain of our non-employee directors with respect to services for the third quarter of 2017 in the following amounts: Ms. Bush – 901; Mr. Janney – 2,872; Ms. Jorn – 1,915; and Mr. Plexico – 2,196. On January 2, 2018, we made grants of shares of fully vested common stock to certain of our non-employee directors with respect to services for the fourth quarter of 2017 in the following amounts: Ms. Bush – 964; Mr. Janney – 4,276; Ms. Jorn –2,048; and Mr. Plexico – 2,349.

 

(3)

Mses. Bush and Jorn elected to receive a portion of their 2017 director fees in cash and a portion of their 2017 director fees in the form of a stock award in lieu of cash. Messrs. Janney and Plexico elected to receive all of their 2017 director fees in the form of stock awards in lieu of cash. Ms. Morris elected to receive all of her 2017 director fees in cash. The number of shares covered by the stock awards made in lieu of cash compensation are set forth in footnote 2 above.

 

(4)

As of December 31, 2017, each of our non-employee directors serving on that date held outstanding stock options to purchase 52,500 shares of common stock.

 

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EXECUTIVE COMPENSATION

 

This section provides information about compensation for:

 

 

Patricia Scheller, our Chief Executive Officer

 

 

Scott Durbin, our Chief Financial Officer

 

 

James Atkinson, our Chief Business Officer and President

 

We refer to these individuals as our “named executive officers”.

 

2017 Summary Compensation Table

 

The following table provides information regarding the total compensation for services rendered in all capacities that was earned during the fiscal years indicated by our named executive officers.

 

Name and Principal Position

 

Year

 

Salary
($)

   

Bonus

($)(1)

   

Option

Awards

($)(2)

   

Non-Equity

Incentive

Plan

Compensation
($)

   

All Other

Compensation
($)(3)

   

Total
($)

 

Patricia Scheller,

 

2017

    402,000       242,106       -       -       30,924       675,030  

Chief Executive Officer

 

2016

    380,000       190,000       335,337       -       25,393       930,730  
                                                     

Scott Durbin,

 

2017

    336,000       198,095       260,033       -       21,000       815,128  

Chief Financial Officer

 

2016

    323,440       130,000       111,779       -       27,368       592,587  
                                                     

James Atkinson,

 

2017

    343,000       146,000       -       -       6,596       495,596  

Chief Business Officer and President

 

2016

    329,600       132,000       172,699       -       -       634,299  

 

(1) The amounts reported represent bonuses awarded with respect to the years indicated based upon the achievement of corporate performance goals related to (a) strengthening financial position; (b) expanding market opportunities and ensure competitiveness; (c) providing clinically proven solutions; and (d) ensuring reliable quality supply of products for the years indicated.

 

(2) The amounts reported represent the aggregate grant date fair value of option awards granted to our named executive officers computed in accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures related to service-based vesting. See Note 10 of the notes to our consolidated financial statements in the annual report on Form 10-K filed March 16, 2018 for a discussion of our assumptions in determining the grant date fair values of equity awards. These amounts do not correspond to the actual value that may be recognized by the named executive officers.

 

(3) The amounts reported for 2017 represent cash-out of accrued PTO hours in accordance with the Company’s PTO Policy. 

 

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Employment Agreements, Severance and Change in Control Arrangements

 

In February and March 2018, we entered into employment agreements with each of our named executive officers that provide for specified payments and benefits in connection with a termination of employment by us without cause or a resignation by the executive officer for good reason (as each such term is defined in the employment agreement). Our goal in providing these severance and change in control payments and benefits is to offer sufficient cash continuity protection such that our named executive officers will focus their full time and attention on the requirements of the business rather than the potential implications for their respective positions. We prefer to have certainty regarding the potential severance amounts payable to the named executive officers, rather than negotiating severance at the time that a named executive officer’s employment terminates. We have also determined that accelerated vesting provisions with respect to outstanding equity awards in connection with a qualifying termination of employment are appropriate because they encourage our named executive officers, to stay focused on the business in those circumstances, rather than focusing on the potential implications for them personally. In addition, these employment agreements with our named executive officers contain confidentiality provisions, and require the named executive officers to execute a general release of claims to receive any payments and benefits.

 

Patricia Scheller

 

Pursuant to our agreement with Ms. Scheller, she serves as our Chief Executive Officer on an at-will basis and as a director. Ms. Scheller currently receives a base salary of $414,250, which is subject to periodic review and adjustment. Ms. Scheller is also eligible for an annual performance bonus targeted at 50% of her base salary and to participate in the employee benefit plans generally available to employees, subject to the terms of those plans.

 

The agreement further provides that if Ms. Scheller’s employment is terminated by us without cause or Ms. Scheller terminates her employment with us for good reason, she will be entitled to receive: (i) base salary continuation for 12 months following termination, (ii) if Ms. Scheller was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of her monthly health insurance premium until the earliest of 12 months following the date of termination, the expiration of her continuation coverage under COBRA or the date she becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) accelerated vesting of all stock options and other stock-based awards held by Ms. Scheller that would have vested has she remained employed for an additional six months following termination. In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Ms. Scheller’s employment is terminated by us without cause or she terminates her employment with us for good reason, in either case within 12 months following a change in control (as defined in her employment agreement), she will be entitled to receive: (i) a lump sum cash amount equal to 1.5 times the sum of (A) her current base salary (prior to any reduction triggering good reason, if applicable, or her base salary in effect prior to the change in control if higher) plus (B) Ms. Scheller’s target annual cash incentive compensation for the year of termination, (ii) if Ms. Scheller was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of her monthly health insurance premium until the earliest of 18 months following the date of termination, the expiration of her continuation coverage under COBRA or the date she becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Ms. Scheller as of the date of termination. Receipt of the severance payments and benefits described above is conditioned upon Ms. Scheller entering into an effective separation agreement, containing, among other provisions, a general release of claims against the Company and our affiliates, confidentiality, return of property and non-disparagement.

 

22

 

 

Scott Durbin

 

Pursuant to our agreement with Mr. Durbin, he serves as our Chief Financial Officer on an at-will basis. Mr. Durbin currently receives a base salary of $346,100, which is subject to periodic review and adjustment. Mr. Durbin is also eligible for an annual performance bonus targeted at 40% of his base salary and to participate in the employee benefit plans generally available to employees, subject to the terms of those plans.

 

The agreement further provides that if Mr. Durbin’s employment is terminated by us without cause or Mr. Durbin terminates his employment with us for good reason, he will be entitled to receive: (i) base salary continuation for 10 months following termination, (ii) if Mr. Durbin was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of 10 months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) accelerated vesting of all stock options and other stock-based awards held by Mr. Durbin that would have vested has he remained employed for an additional six months following termination. In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Mr. Durbin’s employment is terminated by us without cause or he terminates his employment with us for good reason, in either case within 12 months following a change in control (as defined in his employment agreement), he will be entitled to receive: (i) a lump sum cash amount equal to one times the sum of (A) his current base salary (prior to any reduction triggering good reason, if applicable, or his base salary in effect prior to the change in control if higher) plus (B) Mr. Durbin’s target annual cash incentive compensation for the year of termination, (ii) if Mr. Durbin was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of 12 months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Mr. Durbin as of the date of termination. Receipt of the severance payments and benefits described above is conditioned upon Mr. Durbin entering into an effective separation agreement, containing, among other provisions, a general release of claims against the Company and our affiliates, confidentiality, return of property and non-disparagement.

 

23

 

 

James Atkinson

 

Pursuant to our agreement with Mr. Atkinson, he serves as our Chief Business Officer and President on an at-will basis. Mr. Atkinson currently receives a base salary of $353,500, which is subject to periodic review and adjustment. Mr. Atkinson is also eligible for an annual performance bonus targeted at 40% of his base salary and to participate in the employee benefit plans generally available to employees, subject to the terms of those plans.

 

The agreement further provides that if Mr. Atkinson’s employment is terminated by us without cause or Mr. Atkinson terminates his employment with us for good reason, he will be entitled to receive: (i) base salary continuation for nine months following termination, (ii) if Mr. Atkinson was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of nine months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) accelerated vesting of all stock options and other stock-based awards held by Mr. Atkinson that would have vested has he remained employed for an additional six months following termination. In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Mr. Atkinson’s employment is terminated by us without cause or he terminates his employment with us for good reason, in either case within 12 months following a change in control (as defined in his employment agreement), he will be entitled to receive: (i) a lump sum cash amount equal to one times the sum of (A) his current base salary (prior to any reduction triggering good reason, if applicable, or his base salary in effect prior to the change in control if higher) plus (B) Mr. Atkinson’s target annual cash incentive compensation for the year of termination, (ii) if Mr. Atkinson was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of 12 months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Mr. Atkinson as of the date of termination. Receipt of the severance payments and benefits described above is conditioned upon Mr. Atkinson entering into an effective separation agreement, containing, among other provisions, a general release of claims against the Company and our affiliates, confidentiality, return of property and non-disparagement.

 

24

 

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table sets forth certain information regarding outstanding equity awards granted to our named executive officers that were outstanding as of December 31, 2017. These awards were granted under the our Amended and Restated 2006 Stock Plan and our Amended and Restated 2013 Stock Option and Incentive Plan.

 

 

 

Option Awards

 

 

 

 

Number of Securities
Underlying
Unexercised Options (#)(1)

 

 

Option
Exercise

 

Option

Name

 

Vesting

Start Date

 

Exercisable

 

 

Unexercisable

 

 

 

Price
($) 

 

Expiration
Date

Patricia Scheller

                             
 

 

12/23/2016

 

 

37,500

 

 

 

112,500

 

 

 

5.22

 

12/23/2026

 

 

12/16/2015

 

 

121,001

 

 

 

121,000

 

 

 

6.00

 

12/16/2025

 

 

9/26/2014

 

 

95,401

 

 

 

22,015

 

 

 

4.80

 

9/26/2024

 

 

10/24/2012 (2)

 

 

27,711

 

 

 

 

 

 

9.92

 

10/24/2022

Scott Durbin                              

 

 

 03/03/2017

 

 

 24,911

 

 

 

 107,949

 

 

 

4.46

 

 03/03/2027

 

 

12/23/2016

 

 

12,500

 

 

 

37,500

 

 

 

5.22

 

12/23/2026

 

 

12/16/2015

 

 

48,376

 

 

 

48,375

 

 

 

6.00

 

12/16/2025

 

 

9/26/2014

 

 

38,840

 

 

 

8,963

 

 

 

4.80

 

9/26/2024

 

 

2/2/2013 (2)

 

 

10,323

 

 

 

 

 

 

9.92

 

2/2/2023

James Atkinson

                             
 

 

12/23/2016 (3)

 

 

2,250

 

 

 

 

 

 

5.22

 

12/23/2026

 

 

12/23/2016

 

 

18,750

 

 

 

56,250

 

 

 

5.22

 

12/23/2026

 

 

12/16/2015

 

 

44,001

 

 

 

44,000

 

 

 

6.00

 

12/16/2025

 

 

2/4/2015 (4)

 

 

47,371

 

 

 

19,505

 

 

 

3.76

 

2/4/2025

  

(1) Except as otherwise set forth below, the shares of our common stock underlying each of the outstanding stock options vest and become exercisable in equal monthly installments over 48 months following the grant date.

 

(2) This stock option was fully vested upon the merger that took place on September 23, 2014 between PLC Systems Inc., Viveve, Inc. and PLC Systems Acquisition Corp. Prior to merger, the Board voted to accelerate the vesting of all unvested options that were outstanding as of the date of the merger such that all options would be immediately vested and exercisable by the holders.

 

(3) This stock option was fully vested on the date of grant.

 

(4) The shares of common stock underlying this stock option vest and become exercisable as follows: ¼ of the shares vested on the one-year anniversary of the grant date and the remaining shares vest in equal monthly installments over the following 36 months.

 

25

 

 

Equity Compensation and Plan Information

 

The following table provides information as of December 31, 2017 regarding shares of common stock that may be issued under the Company’s 2005 Stock Option and Incentive Plan, 2006 Stock Option and Incentive Plan, and Amended and Restated 2013 Stock Option and Incentive Plan:

 

Plan Category

 

Number of

securities
to be issued

upon

exercise of

outstanding

options,
warrants and

rights

 

 

Weighted
average

exercise
price of
outstanding
options,

warrants
and rights

 

 

Number of
securities

remaining
available for

future
issuance

under
equity

compensation
plans

 

Equity compensation plans approved by security holders (2005 Plan)

 

 

-

 

 

$

-

 

 

 

-

 

Equity compensation plans not approved by security holders (2006 Plan)

 

 

38,378

 

 

$

10.49

 

 

 

-

 

Equity compensation plans approved by security holders (2013 Plan)

 

 

2,655,846

 

 

$

5.73

 

 

 

1,186,527

 

Total

 

 

2,694,224

 

 

 

 

 

 

 

1,186,527

 

 

 

26

 

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth certain information as of April 3, 2018 regarding the beneficial ownership of our common stock by the following persons:

 

 

each person or entity who, to our knowledge, owns more than 5% of our common stock;

 

 

 

 

our executive officers named in the Summary Compensation Table above;

 

 

 

 

each director; and

 

 

 

 

all of our executive officers and directors as a group.

   

Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power over the securities reported and that person’s address is c/o Viveve Medical, Inc., 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado 80112. Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of April 3, 2018 are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding the options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder.

 

Name and Address of Beneficial Owner

 

Amount and Nature of

Beneficial Ownership

 

 

Percent of Class (1)

 

 

 

 

 

 

 

 

 

 

Named Executive Officers and Directors

 

 

 

 

 

 

 

 

 

 

Patricia Scheller

 

 

420,984

(2)

 

 

1.3

%

Scott Durbin

 

 

216,641

(3)

 

 

*

 

James Atkinson

 

 

1,104,470

(4)

 

 

3.5

%

Daniel Janney

 

 

1,424,275

(5)(12)

 

 

4.6

%

Jon Plexico

 

 

3,878,979

(6)(10)

 

 

12.4

%

Arlene Morris

 

 

17,844

(7)

 

 

*

 

Lori Bush

 

 

20,726

(8)

 

 

*

 

Debora Jorn

 

 

26,746

(9)

 

 

*

 

All executive officers and directors as a group (9 persons)

 

 

7,287,839

 

 

 

23.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of More than 5% of Our Common Stock

 

 

 

 

 

 

 

 

 

 

Stonepine Capital, L.P.

919 NW Bond Street, Suite 208

Bend, Oregon 97701

 

 

3,849,711

(10)

 

 

12.3

%

RTW Investments, LP

250 West 55th Street, 16th Floor

Suite A

New York, NY 10019

   

 

 

 

1,672,998

(11)

 

 

5.4

%

 

 

27

 

 

*Less than 1%

(1)

Based on 31,233,972 shares of common stock issued and outstanding as of April 3, 2018.

(2)

Included in this amount are (i) 45,164 shares of common stock and (ii) warrants and options to purchase 375,820 shares of common stock exercisable within 60 days of April 3, 2018.

(3)

Included in this amount are (i) 11,568 shares of common stock and (ii) warrants and options to purchase 205,073 shares of common stock exercisable within 60 days of April 3, 2018.

(4)

Included in this amount are (i) 621,237shares of common stock owned of record by Charles Schwab & Co. Inc. for the benefit of James Gregory Atkinson IRA Contributory Account #3027-4954, of which James Atkinson is the sole beneficiary, (ii) 285,599 shares of common stock owned of record by the Atkinson Family Revocable Trust Dated 08/26/2013, of which Mr. Atkinson is co-trustee, (iii) 3,825 shares of common stock owned of record by Mr. Atkinson as custodian for the account of a minor child, (iv) 11,525shares of common stock owned of record by Mr. Atkinson, and (v) warrants and options to purchase 182,284 shares of common stock that are exercisable within 60 days of April 3, 2018.

(5)

Included in this amount are (i) 1,404,019 shares of common stock and (ii) options to purchase 20,256 shares of common stock exercisable within 60 days of April 3, 2018.

(6)

Included in this amount are (i) 3,863,617 shares of common stock and (ii) options to purchase 15,362 shares of common stock exercisable within 60 days of April 3, 2018.

(7)

Included in this amount are (i) 2,482 shares of common stock and (ii) options to purchase 15,362 shares of common stock exercisable within 60 days of April 3, 2018.

(8)

Included in this amount are (i) 5,364 shares of common stock and (ii) options to purchase 15,362 shares of common stock exercisable within 60 days of April 3, 2018.

(9)

Included in this amount are (i) 11,384 shares of common stock and (ii) options to purchase 15,362 shares of common stock within 60 days of April 3, 2018.

(10)

Based on information disclosed in a Form 13D/A filed with the Securities and Exchange Commission on February 12, 2018 on behalf of Stonepine Capital, L.P. Includes 2,599,711 shares of common stock owned of record by Stonepine Capital, L.P. Stonepine Capital Management, LLC is the general partner of Stonepine Capital, L.P. Jon M. Plexico and Timothy P. Lynch are the Managing Members of Stonepine Capital Management, LLC and may be deemed to have shared voting and investment power over the shares beneficially owned by Stonepine Capital, L.P.

(11)

Based on information disclosed in a Form 13G filed with the Securities and Exchange Commission on February 14, 2018 on behalf of RTW Investments, LP.

(12)

Includes 1,381,955 shares of common stock directly beneficially owned by Alta Bioequities, L.P. Includes a 10-year warrant to purchase 25,250 shares of common stock. Alta BioEquities Management, LLC is the general partner of Alta BioEquities, L.P. Daniel Janney, one of our directors, is the Managing Director of Alta BioEquities Management, LLC and has voting and investment power over the shares beneficially owned by Alta BioEquities, L.P.

 

Section 16(a) Beneficial Ownership Reporting Compliance 

 

Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership (Forms 3, 4 and 5) with the SEC. Officers, directors and greater than 10% stockholders are required to furnish us with copies of all such forms which they file.

 

We believe that, during the year ended December 31, 2017, our directors, executive officers and beneficial owners of more than 10% of the Company’s common stock complied with all Section 16(a) filing requirements.

 

 

28

 

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

The Board of Directors reviews issues involving potential conflicts of interest, and reviews and approves all related party transactions, including those required to be disclosed as a “related party” transaction under applicable federal securities laws. The Board has not adopted any specific procedures for conducting reviews of potential conflicts of interest and considers each transaction in light of the specific facts and circumstances presented. However, to the extent a potential related party transaction is presented to the Board, the Company expects that the Board would become fully informed regarding the potential transaction and the interests of the related party, and would have the opportunity to deliberate outside of the presence of the related party. The Company expects that the Board would only approve a related party transaction that was in the best interests of the Company, and further would seek to ensure that any completed related party transaction was on terms no less favorable to the Company than could be obtained in a transaction with an unaffiliated third party. Other than as described below, no transaction requiring disclosure under applicable federal securities laws occurred from January 1, 2016 through the date of this proxy statement that was submitted to the Board of Directors for approval as a “related party” transaction.

   

Related Party Transactions

 

Securities and Exchange Commission regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship, or any proposed transaction, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest. A related person is: (i) an executive officer, director or director nominee, (ii) a beneficial owner of more than 5% of our common stock, (iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial ownership interest or control.

 

For the period from January 1, 2016, through the date of this proxy statement (the “Reporting Period”), described below are certain transactions or series of transactions between us and certain related persons.

 

Employment and Consulting Agreements

 

Refer to the discussion under the heading “Employment Agreements, Severance and Change-in Control Arrangements” beginning on page 22 of this proxy statement, which is incorporated herein by reference.

 

Agreement for Consulting Services

 

On November 11, 2014, Viveve, Inc. entered into an Independent Contractor Agreement for Rendering Consulting Services with James Atkinson (the “Consulting Agreement”), which provided that Mr. Atkinson shall provide certain consulting services related to product distribution and international sales in exchange for (i) $30,000 per month to be paid in cash, 5-year warrants to purchase the Company’s common stock at an exercise price of $0.53 per share, or a combination thereof, to be determined by the board of directors, (ii) reimbursement of any costs and expenses incurred by Mr. Atkinson for travel in connection with the performance of his services under the Consulting Agreement and (iii) compensation at a rate of 35% of the total annual cash compensation for each zone director hired by the Company as a result of a direct introduction by Mr. Atkinson, to be paid solely in equity securities of the Company. The Consulting Agreement was terminated effective as of February 3, 2015. On February 27, 2018, we entered into an employment agreement with James Atkinson in connection with his appointment as Chief Business Officer and President of the Company. For information on the offer letter, see the discussion under the heading “Executive Compensation and Related Information” beginning on page 24 of this proxy statement, which is incorporated herein by reference.

 

29

 

 

Public Offering

 

On March 22, 2017, the Company completed a public offering pursuant to which it issued 8,625,000 shares of common stock, no par value, at a per share purchase price of $4.00 for net proceeds of approximately $31,503,000 after the deduction of underwriting discounts, commissions, and other offering expenses, pursuant to the terms of an underwriting agreement, by and among the Company and Cowen and Company, LLC, as the representative of the several underwriters, dated as of March 17, 2017 (the “Public Offering”). Metolius Capital LP and Tumalo Capital LP, each of which is an affiliate of Stonepine Capital Management, LLC and Jon Plexico, a director of the Company, purchased 833,333 and 416,667 shares of common stock, respectively, in the Public Offering. Stonepine Capital Management, LLC is the General Partner of Metolius Capital LP and Tumalo Capital LP, and Jon Plexico is one of two Managing Members of Stonepine Capital Management, LLC.

 

Report of the Audit Committee

 

The Audit Committee of the Board has:

 

 

reviewed and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2017 with management;

 

 

 

 

discussed with the Company’s independent registered public accounting firm the matters required to be discussed by Public Accounting Oversight Board (“PCAOB”) Auditing Standard No. 16, “Communication with Audit Committees,” including a discussion with management and the independent public accountants about the quality (and not merely the acceptability) of the Company’s accounting principles, the reasonableness of significant estimates, judgments and the transparency of disclosures in the Company’s consolidated financial statements; and

 

 

 

 

received the written disclosures and letter from the independent registered public accounting firm required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence, and has discussed with BPM LLP matters relating to its independence. The Audit Committee concluded that BPM LLP is independent from the Company and management.

  

In reliance on the review and discussions referred to above, the Audit Committee recommended to the Board that the consolidated financial statements audited by BPM LLP for the fiscal year ended December 31, 2017 be included in its Annual Report on Form 10-K for such fiscal year.

 

Audit Committee of the Board

 

Daniel Janney

Jon Plexico

Arlene Morris

 

30

 

 

Proposal 1 Election Of Director

 

Nominee for Election

 

Our certificate of incorporation provides for a Board of Directors that is divided into three classes. The term for each class is three years, staggered over time. The composition of our Board currently is as follows: Class I: Daniel Janney and Lori Bush; Class II: Debora Jorn and Jon Plexico; Class III: Arlene Morris and Patricia Scheller. This year, the term of the directors in Class I expires. One of our Class I directors, Daniel Janney, is nominated for re-election this year. One of our Class I directors, Lori Bush, will not stand for re-election at the Annual Meeting.

 

If a quorum is present at the Annual Meeting, then the nominee will be elected by a plurality of the votes cast on the resolution. There is no cumulative voting in the election of the director. A properly executed proxy or voting instructions marked “WITHHOLD” with respect to the election of the director will not be counted as a vote cast with respect to such director, although it will be counted for the purposes of determining whether there is a quorum.

 

If elected, this individual will serve until the 2021 annual meeting and until his successor has been elected and qualified, or until his earlier death, resignation, or removal. In the event that the nominee for any reason is unable to serve, or for good cause will not serve, the proxies will be voted for such substitute nominee as our Board of Directors may determine. We are not aware of any reason that the nominee will be unable to serve, or for good cause will not serve, as a director.

 

The term of office of the Class I director will expire in 2021.

 

The relevant experiences, qualifications, attributes or skills of the nominee that led our Board of Directors to recommend the above person as the nominee for director are described in the section entitled “Executive Officers, Directors, and Corporate Governance.”

 

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” the election of the nominated director. 

 

31

 

 

Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm

 

The Audit Committee of the Board has appointed BPM LLP (“BPM”) as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2018. BPM has served as our independent registered public accounting firm since 2014.

 

Effective September 23, 2014, McGladrey LLP (“McGladrey”) resigned from the Company as its independent registered public accounting firm as a result of the merger with PLC Acquisition Corporation, which the Board accepted.

 

Neither the report of McGladrey for the years ended December 31, 2012 and 2013 (the “Audited Years”), nor subsequent interim periods contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, except that the Company's audited financial statements in its Annual Report on Form 10-K for the Audited Years contained a going concern qualification. The Company had no disagreements with McGladrey on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to McGladrey’s satisfaction would have caused them to make reference to the subject matter of the disagreement in connection with their reports on our financial statements.

  

There were no disagreements or other “reportable events” as that term is described in Item 304(a)(1)(iv) and Item 304(a)(1)(v), respectively, of Regulation S-K, occurring within the Audited Years and the subsequent interim periods through the date of dismissal.

 

On September 23, 2014, following stockholder approval at an annual meeting in connection with the merger with PLC Systems Acquisition Corporation, the Company engaged BPM as its independent registered public accounting firm. During the fiscal year ended December 31, 2013 and the interim periods preceding the engagement, the Company did not consult BPM regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.

 

Stockholder ratification of the selection of BPM as our independent registered public accounting firm is not required by our Bylaws or the Delaware General Corporation Law. The Board seeks such ratification as a matter of good corporate practice. Should the stockholders fail to ratify the selection of BPM as our independent registered public accounting firm, the Board will reconsider whether to retain that firm for fiscal year 2018. In making its recommendation to the Board that stockholders ratify the appointment of BPM as our independent registered public accounting firm for the fiscal year ending December 31, 2018, the Audit Committee considered whether BPM’s provision of non-audit services is compatible with maintaining the independence of our independent registered public accounting firm. The Audit Committee pre-approved the audit fees, audit-related fees, tax fees and all other fees described below in accordance with our pre-approval policy and believes such fees are compatible with the independence of BPM.

 

The following table sets forth fees billed and to be billed to us by our independent registered public accounting firm for the years ended December 31, 2017 and 2016 for (i) services rendered for the audit of our annual consolidated financial statements and the review of our quarterly condensed consolidated financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our consolidated financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.

 

 

 

Year Ended
December 31,

 

 

 

2017

 

 

2016

 

Audit fees

 

$

467,000

 

 

$

304,000

 

Audit-related fees

 

 

-

 

 

 

-

 

Tax fees

 

 

-

 

 

 

12,000

 

All other fees

 

 

-

 

 

 

-

 

Total fees

 

$

485,000

 

 

$

316,000

 

 

32

 

 

Audit Fees: Represents fees for professional services provided for the audit of our annual consolidated financial statements, review of our condensed consolidated financial statements included in our quarterly reports and services in connection with statutory and regulatory filings.

 

Audit-Related Fees: Represents the fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements.

 

The audit committee of the Board approves all auditing services and the terms thereof and non-audit services (other than non-audit services published under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Pubic Company Accounting Oversight Board) to be provided to us by the independent auditor; provided, however, the pre-approval requirement is waived with respect to the provisions of non-audit services for us if the "de minimis" provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied.

 

Tax Fees: Represents professional services rendered for tax compliance, tax advice and tax planning.

 

All Other Fees: Our independent registered public accounting firm was not paid any other fees for professional services during the fiscal years ended December 31, 2017 and 2016.

 

Pre-approval Policies and Procedures

 

The Audit Committee is required to review and approve in advance the retention of the independent auditors for the performance of all audit and lawfully permitted non-audit services and the fees for such services. The Audit Committee may delegate to one or more of its members the authority to grant pre-approvals for the performance of non-audit services, and any such Audit Committee member who pre-approves a non-audit service must report the pre-approval to the full Audit Committee at its next scheduled meeting. The Audit Committee is required to periodically notify the Board of their approvals. The required pre-approval policies and procedures were complied with during 2017.

 

 BPM LLP Representatives at Annual Meeting

 

We expect that representatives of BPM will be physically present or available via phone at the Annual Meeting. They will be given the opportunity to make a statement if they desire to do so, and they will be available to respond to appropriate questions after the meeting.

 

Vote Required and Recommendation

 

The affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock represented in person or by proxy at the Annual Meeting is required to approve this proposal.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” ratification of the appointment of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018. 

 

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Proposal 3 – NON-BINDING ADVISORY PROPOSAL REGARDING EXECUTIVE COMPENSATION

 

As required by Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to cast a non-binding, advisory vote to approve the compensation of our named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion, set forth in Item 11 of Part III of our Annual Report on Form 10-K for the year ended December 31, 2017. We believe that it is appropriate to seek the views of our stockholders on the design and effectiveness of the Company’s executive compensation program. This vote is not intended to address any specific item of compensation or the compensation of any particular officer, but rather the overall compensation of our named executive officers and our compensation philosophy, policies and practices, as discussed in Item 11of Part III our Annual Report on Form 10-K for the year ended December 31, 2017.

 

Our executive compensation policy is intended to further our interests, as well as those of our stockholders, by encouraging growth of our business through securing, retaining and motivating executives of a high caliber who possess the skills necessary for our development and growth.

 

Our Board of Directors encourages our stockholders to approve the following resolution:

 

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion is hereby APPROVED.

 

As an advisory vote, this proposal is not binding upon the Company, the Board or the Compensation Committee. However, the Board and the Compensation Committee value the opinions expressed by stockholders in their vote on this proposal and intend to take the outcome of the vote into account when considering future compensation decisions for our named executive officers.

 

Vote Required and Recommendation

 

This vote is advisory and not binding on the Company, the Board or the Compensation Committee. The affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock represented in person or by proxy at the Annual Meeting is required to approve the compensation of our named executive officers.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” the approval of the non-binding advisory proposal regarding executive compensation. 

 

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Requirements For Advance Notification of Stockholder Proposals

 

Stockholder proposals or stockholder nominations for election of directors submitted to us pursuant to Rule 14a-8 promulgated under the Exchange Act for inclusion in our proxy statement and form of proxy for our 2019 Annual Meeting of stockholders must be received by us no later than December 17, 2018, which is 120 calendar days before the one-year anniversary of the date on which the Company first mailed this proxy statement, and must comply with the requirements of the proxy rules promulgated by the SEC. Stockholder proposals and stockholder nominations for election of directors should be addressed to our Corporate Secretary at 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado 80112.

 

Recommendations or nominations from stockholders which are received after the deadline likely will not be considered timely for consideration by the Committee for next year’s Annual Meeting.

 

Other Matters

 

The Board does not intend to bring any other matters before the Annual Meeting and has no reason to believe any other matters will be presented.  If other matters properly do come before the Annual Meeting, however, it is the intention of the persons named as proxy agents in the enclosed proxy card to vote on such matters as recommended by the Board, of if no recommendation is given, in their own discretion.

 

The Company’s Annual Report on Form 10-K for the year ended December 31, 2017 is being mailed with this proxy statement to stockholders entitled to notice of the Annual Meeting. The Annual Report includes the consolidated financial statements, and management’s discussion and analysis of financial condition and results of operations. The costs of preparing, assembling, mailing and soliciting the proxies will be borne by us. Proxies may be solicited, without extra compensation, by our officers and employees by mail, telephone, facsimile, personal interviews and other methods of communication.

 

If you and other residents at your mailing address own shares in street name, your broker or bank may have sent you a notice that your household will receive only one copy of proxy materials for each company in which you hold shares through that broker or bank. This practice of sending only one copy of proxy materials is known as householding. If you did not respond that you did not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to you, your broker has sent one copy of our proxy statement to your address. If you want to receive separate copies of the proxy materials in the future, or you are receiving multiple copies and would like to receive only one copy per household, you should contact your stockbroker, bank or other nominee record holder, or you may contact us at the address or telephone number below. In any event, if you did not receive an individual copy of this proxy statement, we will send a copy to you if you address your written request to, or call, Jim Robbins, Vice President of Finance and Administration of Viveve Medical, Inc., 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado 80112, telephone number (720) 696-8100.

 

Copies of the documents referred to above that appear on our website are also available, without charge, upon request by any stockholder addressed to our Vice President of Finance, Viveve Medical, Inc., 345 Inverness Drive South, Building B, Suite 250, Englewood, Colorado 80112.

 

 

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