Document
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
 
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
BioTelemetry, 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.:
 
 
 
 
(3)
Filing Party:
 
 
 
 
(4)
Date Filed:
 
 
 
 



https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
Notice of 2020 Annual Meeting of Stockholders

The 2020 Annual Meeting of Stockholders of BioTelemetry, Inc. will be held*:
Friday, May 8, 2020
8:30 AM, local time
The Ritz-Carlton Philadelphia
10 Avenue of the Arts
Philadelphia, Pennsylvania 19102
The items of business are:
1.
Election of three Class I director nominees named in the proxy statement to hold office until the 2023 Annual Meeting of Stockholders or until their successors are elected and qualified;
2.
Vote on an advisory resolution to approve the compensation of our named executive officers;
3.
Approval of the BioTelemetry, Inc. Amended and Restated 2017 Employee Stock Purchase Plan;
4.
Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2020; and
5.
Conducting any other business properly brought before the meeting and any adjournment or postponement of the meeting.
Only stockholders of record of our common stock at the close of business on March 10, 2020, are entitled to vote at the meeting and any postponements or adjournments of the meeting.
March 24, 2020
Malvern, Pennsylvania
 
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatccsig.jpg
 
Cody Wm. Cowper
 
Vice President, Legal and Corporate Secretary
* As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the 2020 Annual Meeting of Stockholders may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance, and details on how to participate will be available at investors.gobio.com.
Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 8, 2020
We mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement and our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), on or about March 24, 2020. Our proxy statement and the 2019 Annual Report are available on our website at www.gobio.com in the “Investors - Financial Information - SEC Filings” section.



Your Vote is Important
It is important that your shares be represented at the meeting, regardless of the number you may hold. Whether or not you plan to attend, please vote using the proxy card or voting instruction card as promptly as possible in order to ensure your representation at the meeting. This will not prevent you from voting your shares in person if you are present at the meeting although attendance at the meeting will not by itself revoke a previously granted proxy.




Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

























[This Page Intentionally Left Blank]



Proxy Summary
Below are highlights of important information you will find in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
Summary of Stockholder Voting Matters and Recommendations
 
For More Information
Board Vote Recommendation
Page 52
    FOR Each Nominee
Joseph H. Capper
Joseph A. Frick
Colin Hill
 
 
Page 58
    FOR
Vote on an Advisory Resolution to Approve the Compensation of our Named Executive Officers
 
 
Page 60
    FOR
Approval of the BioTelemetry, Inc. Amended and Restated 2017 Employee Stock Purchase Plan
 
 
Page 62
    FOR
Ratification of Appointment of Ernst & Young LLP (“EY”) as our Independent Registered Public Accounting Firm for 2020
 
 

Our Director Nominees
You are being asked to vote on the election of Joseph H. Capper, Joseph A. Frick and Colin Hill as Class I directors to serve for a three-year term. The number of members of our Board of Directors (“Board”) is currently set at ten members and is divided into three classes, each of which has a three-year term. Class I and II are composed of three members, and Class III is composed of four members. Our Board, by a majority vote of sitting directors, may fill any vacancies unless our Board has determined, by resolution, that any such vacancies shall be filled by our stockholders. A director elected by our Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is elected and qualified.
The term of office of our Class I directors expires at the 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting”). We are nominating Messrs. Capper, Frick and Hill for re-election at the 2020 Annual Meeting to serve until the 2023 Annual Meeting of Stockholders and until each director’s successor is elected and qualified. Directors are elected by a majority of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. If no contrary indication is made, shares represented by executed proxies will be voted FOR the election of Messrs. Capper, Frick and Hill or, if any nominee becomes unavailable for election as a result of an unexpected occurrence, FOR the election of a substitute nominee designated by our Board. Each nominee has agreed to serve as a director if elected, and we have no reason to believe that any nominee will be unable to serve.

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
1
 
 


Detailed information about each director’s and director nominee’s background and areas of expertise can be found below at “Items To Be Voted On; Proposal 1 - Election of Three Directors as Class I Directors.”
 
 
 
 
 
 
 
 
Other Current Public Company Boards
 
 
 
 
 
Committee Memberships
 
 
Director
Since
 
 
Name
Age
Occupation
Independent
AC
CC
NCGC
Joseph H. Capper
56
2010
President and Chief Executive Officer, BioTelemetry, Inc.
No
0
Joseph A. Frick
67
2013
Senior Advisor, Diversified Search Inc.
Yes
C
1
Colin Hill
47
2016
Chairman and Chief Executive Officer, GNS Healthcare, Inc.
Yes
M
M
1
Committee:
 
Committee Role:
AC
Audit Committee
 
C
Chair
CC
Compensation and Talent Development Committee
 
M
Member
NCGC
Nominating and Corporate Governance Committee
 
 
 

2019 Performance and Compensation Highlights
Under the leadership of Joseph H. Capper, our President and Chief Executive Officer, and the rest of our management team, we had a record year, posting the highest revenue and adjusted EBITDA in our corporate history. During the year, we acquired Geneva Healthcare, Inc. (“Geneva”) and ADEA Medical AB (“ADEA”). The Geneva acquisition provides access to the monitoring of implantable devices and ADEA broadens our reach into Europe. We saw top-line growth across all segments, led by Healthcare services and also benefited from continued growth in our Research and digital population health businesses resulting in record revenue for the year. We invested in information technology, research and development and sales resources, which we expect will enhance our operations and drive growth for years to come. Compared to 2018, revenue grew by 9.9% and adjusted EBITDA grew by 9.1%.
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beat2019perf.jpg
(For a reconciliation of 2019 GAAP net income to adjusted EBITDA, please see “Executive Compensation; Non-GAAP Financial Measures” below).

2
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


The following table shows the components of 2019 compensation paid to our named executive officers (“NEOs”). This table is not a substitute for our 2019 Summary Compensation Table set forth within “Executive Compensation; Compensation Tables” below.
2019 Summary Compensation
Name and
Principal Position
 
Salary ($)
 
Grant Date Fair Value of
Stock
Awards ($)
 
Grant Date Fair Value of
Option
Awards ($)
 
Non-Equity
Incentive
Plan
Compensation ($)
 
All Other
Compensation ($)
 
Total ($)
Joseph H. Capper
President and Chief Executive Officer
 
654,692
 
1,776,535
 
1,148,393
 
540,790
 
12,745
 
4,133,155
Heather C. Getz
Executive Vice President, Chief Financial and Administrative Officer
 
404,541
 
640,435
 
413,980
 
200,490
 
11,654
 
1,671,100
Fred (Andy) Broadway III
President, BioTel Heart
 
356,411
 
322,490
 
208,466
 
147,190
 
21,034
 
1,055,591
Daniel Wisniewski
Senior Vice President, Technical Operations
 
348,411
 
252,052
 
162,948
 
143,910
 
14,221
 
921,542
Peter F. Ferola
Former Senior Vice President and General Counsel
 
345,411
 
249,942
 
161,494
 
142,680
 
12,145
 
911,672
For 2019, 80% of our Chief Executive Officer’s target total compensation and an average of 60% of our other NEOs’ target total compensation was variable or performance-based compensation. We believe this compensation design encourages our executives to achieve our stated financial goals while aligning with the long-term interests of our stockholders. The 2019 target compensation mix of our Chief Executive Officer and our other NEOs is presented in the charts below:
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beat2019ceovar.jpg https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beat2019neovar.jpg

Key Compensation Features
No tax gross-ups, including no excise tax gross-ups.
No “single trigger” feature on parachute payments in employment agreements.
No hedging of company stock or engaging in any speculative trading with respect to our common stock.
Engagement of independent compensation consultant.
Option repricing forbidden without stockholder approval.
Have not paid any dividend equivalents.
Maintain stringent stock-ownership requirements for NEOs.

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
3
 
 


Maintain a clawback policy allowing us to recoup incentive compensation paid in the event of a material restatement of our financial statements.

Auditors
EY has been our auditors since 2004. Below is summary information with respect to EY’s fees for services provided in 2019 and 2018.
Type of Fees
2019
 
2018
Audit Fees(1)
$
1,810,904

 
$
1,909,825

Audit-Related Fees(2)

 

Tax Fees(3)

 
10,000

All Other Fees(4)
5,200

 
5,200

Total
$
1,816,104

 
$
1,925,025

(1)
Audit fees were principally for services rendered for the audit and/or review of our consolidated financial statements.
(2)
Audit-related fees have historically consisted of professional services related to business combinations. There were no Audit-related fees in 2019 or 2018.
(3)
Tax fees consisted of fees billed for professional services performed by EY with respect to tax compliance, tax advice and tax planning.
(4)
All other fees consists of a subscription fee for EY’s accounting research tool.


4
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


General Information About the Meeting
Proxy Solicitation
Our Board is soliciting your vote on matters that will be presented at the 2020 Annual Meeting and at any adjournment or postponement thereof. This proxy statement contains information on these matters to assist you in voting your shares.

Stockholders Entitled to Vote
All stockholders of record of our common stock, par value $0.001 per share, at the close of business on March 10, 2020, are entitled to receive the Notice and to vote their shares at the 2020 Annual Meeting. As of that date, 34,077,819 shares of our common stock were outstanding. Each share is entitled to one vote on each matter properly brought to the meeting.

Voting Methods
You may vote at the 2020 Annual Meeting by delivering a proxy card in person or you may cast your vote in any of the following ways:
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-maila01.jpg
 
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-onlinea01.jpg
 
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-phonea02.jpg
 
 
 
 
 
Mailing your signed proxy card or voter instruction card.
 
Using the internet at www.voteproxy.com.
 
Calling toll-free from the United States, U.S. territories and Canada to 1-800-776-9437.

How Your Shares Will Be Voted
In each case, your shares will be voted as you instruct. If you return a signed card but do not provide voting instructions, your shares will be voted FOR each of the proposals. If you sign and return your proxy marked “abstain” on any proposal, your shares will not be voted on that proposal. If you are the record holder of your shares, you may revoke or change your vote any time before the proxy is exercised by submitting a later-dated proxy in one of the manners authorized and described in this proxy statement (i.e. via mail, internet or telephone). You may also provide our Corporate Secretary with notice of revocation or a duly executed proxy bearing a later date so long as it is delivered to our Corporate Secretary at our principal executive offices prior to the beginning of the Annual Meeting or given to our Corporate Secretary at the Annual Meeting prior to the time your proxy is voted at the Annual Meeting. You may also vote in person at the meeting, although attendance at the meeting will not by itself revoke a previously granted proxy. If your shares are held by your broker, bank or other holder of record as a nominee or agent (i.e. the shares are held in “street name”), you should follow the instructions provided by your broker, bank or other holder of record.
Deadline for Voting. The deadline for voting by telephone or internet is 11:59 PM Eastern Time on May 7, 2020. If you are a registered stockholder and attend the meeting, you may deliver your completed proxy card in person. “Street name” stockholders who wish to vote at the meeting will need to obtain a proxy form from the institution that holds their shares.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
5
 
 


Broker Voting
If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of shares held in street name. The Notice has been forwarded to you by your broker, bank or other holder of record who is considered the stockholder of record of those shares. As the beneficial owner, you may direct your broker, bank or other holder of record on how to vote your shares by using the proxy card included in the materials made available or by following their instructions for voting on the internet.
A broker non-vote occurs when a broker or other nominee that holds shares for another does not vote on a particular item because the nominee does not have discretionary voting authority for that item and has not received instructions from the beneficial owner of the shares. The following table summarizes how broker non-votes and abstentions are treated with respect to our proposals:
Proposal
 
Votes Required
 
Treatment of Abstentions and Broker Non-Votes
 
Broker
Discretionary
Voting
Proposal 1 – Election of three Class I Directors to hold office until the 2023 Annual Meeting of Stockholders
 
Majority of the shares present or represented by proxy and entitled to vote on the proposal
 
Abstentions will have the effect of negative votes.
Broker non-votes will not be taken into account in determining the outcome of the proposal.
 
No
Proposal 2 – Vote on an advisory resolution to approve the compensation of our named executive officers
 
Majority of the shares present or represented by proxy and entitled to vote on the proposal
 
Abstentions will have the effect of negative votes.
Broker non-votes will not be taken into account in determining the outcome of the proposal.
 
No
Proposal 3 – Approval of the BioTelemetry, Inc. Amended and Restated 2017 Employee Stock Purchase Plan
 
Majority of the shares present or represented by proxy and entitled to vote on the proposal
 
Abstentions will have the effect of negative votes.
Broker non-votes will not be taken into account in determining the outcome of the proposal.
 
No
Proposal 4 – Ratification of appointment of EY as our independent registered public accounting firm for the year ending December 31, 2020
 
Majority of the shares present or represented by proxy and entitled to vote on the proposal
 
Abstentions and broker non-votes will have the effect of negative votes.
 
Yes


6
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Board Facts
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-independence2020.jpghttps://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-gender2020.jpg
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-age2020.jpghttps://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-tenure2020.jpg
Qualifications and Skills Represented by Our Directors
 
 
 
 
Executive and Clinical Leadership
Healthcare Industry Experience
Technology Expertise
Complex/Diversified Organizations
Financial Experience
Regulatory & Policy Setting Experience
Institutional Investor Expertise
Strategic Planning
Risk Management
Marketing Expertise
Global Operations
Human Resources
Other Board Highlights
Mandatory retirement policy at age 75, absent special circumstances.
Stock ownership requirements equal to five times each director’s base annual retainer.
None of our directors serve on more than one other public company board.
Strong Board oversight of risk management and compliance process.
No material related person transactions in 2019.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
7
 
 


Quorum
We must have a quorum to conduct business at the 2020 Annual Meeting. A quorum consists of the presence at the meeting either in person or represented by proxy of the holders of a majority of the outstanding shares of our common stock entitled to vote. For the purpose of establishing a quorum, abstentions, including brokers holding customers’ shares of record who cause abstentions to be recorded at the meeting, and broker non-votes are considered stockholders who are present and entitled to vote, and count toward the quorum.  If there is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy or the chairperson of the meeting may adjourn the meeting to another date.

Mailings to Multiple Stockholders at the Same Address
We have adopted a procedure called “householding.” Under this procedure, stockholders of record who share the same last name and address will receive only one copy of the Notice unless we are notified that one or more of these stockholders wishes to continue receiving additional copies.
We will continue to make a proxy card available to each stockholder of record. If you prefer to receive multiple copies of the Notice at the same address, or if you are eligible for householding but you and other stockholders of record with whom you share the same last name and address currently receive multiple copies of the Notice, or if you hold stock in more than one account, and in either case you wish to receive only a single copy, please contact us in writing: Corporate Secretary, BioTelemetry, Inc., 1000 Cedar Hollow Road, Malvern, PA 19355, or by telephone: (610) 729-7000. Beneficial stockholders can request information about householding from their broker, bank or other holder of record.

Proxy Solicitation Costs
We pay the cost of soliciting proxies. Proxies will be solicited on behalf of our Board by mail, telephone, and other electronic means or in person. Directors and employees will not be paid any additional compensation for soliciting proxies. We have engaged D.F. King & Co., a professional proxy solicitation firm, located at 48 Wall Street - 22nd Floor, New York, New York 10005, to assist with the solicitation of proxies for a fee of $7,500 plus reasonable out-of-pocket expenses. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

Results of the 2020 Annual Meeting
We will report final voting results from the 2020 Annual Meeting on a Current Report on Form 8-K to be filed with the U.S. Securities and Exchange Commission (the “SEC”) within four business days after the conclusion of the 2020 Annual Meeting.


8
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Corporate Governance and Board Matters
During 2019, our Board met four times and had periodic calls on key business and organizational topics. Each director attended at least 75% of our Board meetings and the meetings of our Board committees on which they served. It is our policy to invite our directors and nominees for director to attend our annual meetings of stockholders. All of our directors then in office attended our 2019 Annual Meeting of Stockholders, and we expect that all of our current directors and nominees for director will attend our 2020 Annual Meeting.
Our principal governance documents are our Board committee charters, Code of Business Conduct and Ethics and Corporate Governance Guidelines. Aspects of our governance documents are summarized below.
We encourage our stockholders to read our governance documents, as they present a comprehensive picture of how our Board addresses its governance responsibilities to ensure our vitality and success. The documents are available in the “Investors—Corporate Governance” section of our website at www.gobio.com and copies of these documents may be requested by writing to our Corporate Secretary, BioTelemetry, Inc., 1000 Cedar Hollow Road, Malvern, PA 19355.

Code of Business Conduct and Ethics
All of our employees, officers and directors are required to comply with our Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics covers fundamental ethical and compliance-related principles and practices such as accurate accounting records and financial reporting, avoiding conflicts of interest, the protection and use of our property and information and compliance with legal and regulatory requirements. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.

Board Leadership Structure
Our Board is currently composed of an independent Chairperson of the Board and independent committees of the Board. Kirk E. Gorman has served as a member of our Board since 2008 and the Chairperson of our Board since October 2011.
As Chairperson, Mr. Gorman leads the activities of our Board, including:
calling meetings of the Board and independent directors;
setting the agenda for Board meetings in consultation with the Chief Executive Officer and Corporate Secretary;
chairing executive sessions of the independent directors; and
acting as an advisor to Mr. Capper on strategic aspects of the Chief Executive Officer role with regular consultations on major developments and decisions likely to interest our Board.
Our Board believes its leadership structure effectively allocates authority, responsibility and oversight between management and the independent members of our Board. It gives primary responsibility for the operational leadership and strategic direction of the Company to our Chief Executive Officer, while the Chairperson facilitates our Board’s independent oversight of management, promotes communication between management and our Board, and leads our Board’s consideration of key governance matters.

Our Board’s Role in Risk Oversight
Our Board recognizes the importance of effective risk oversight in running a successful business, and in fulfilling its fiduciary responsibilities to us and our stockholders. While the Chief Executive Officer, the Vice President, Legal and other members

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
9
 
 


of our senior leadership team are responsible for the day‑to‑day management of risk, our Board is responsible for ensuring that an appropriate culture of risk management exists within the Company and for setting the right “tone at the top,” overseeing our aggregate risk profile and assisting management in addressing specific risks, such as strategic and competitive risks, financial risks, brand and reputation risks, legal risks, regulatory risks, climate-related risks, operational risks and cybersecurity risks. While our Board focuses on the overall risks affecting us, each committee has been delegated the responsibility for the oversight of specific risks that fall within its area of responsibility. For example:
our Compensation and Talent Development Committee (the “Compensation Committee”) is responsible for overseeing the management of risks relating to our executive compensation policies, plans and arrangements and the extent to which those policies or practices increase or decrease risk for the Company;
our Audit Committee oversees management of financial reporting, compliance and litigation risks as well as the steps management has taken to monitor and control such exposure; and
our Nominating and Corporate Governance Committee manages risks associated with the independence of our Board, potential conflicts of interest and the effectiveness of our Board.
Although each committee is responsible for evaluating certain risks and overseeing the management of those risks, the full Board is regularly informed about those risks through committee reports.
Our Board believes that our current leadership structure best facilitates its oversight of risk by combining independent leadership, through the independent Chairperson, independent Board committees and majority independent Board composition. The Chairperson, independent committee chairs and other independent directors also are experienced professionals or executives who can and do raise issues for Board consideration and review. Our Board believes there is a well‑functioning and effective balance between the independent Chairperson and non‑executive Board members, which enhances risk oversight. 


10
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Committees
Our Board has three standing committees: the Audit Committee; the Compensation Committee; and the Nominating and Corporate Governance Committee. Each committee consists solely of independent directors. Each committee has a written charter, each of which is posted in the “Investors—Corporate Governance” section of our website at www.gobio.com. You may request a printed copy of each committee’s charter from our Corporate Secretary.
Audit Committee
 
 
 
 
Anthony J. Conti (Chair)
Laura N. Dietch
Kirk E. Gorman
Robert J. Rubin, M.D.

2019 Meetings: 6
 
Our Audit Committee assists our Board in its oversight of (1) our corporate accounting and financial reporting processes; (2) our systems of internal control over financial reporting and audits of our financial statements; (3) the quality and integrity of our financial statements and reports; and (4) the qualifications, independence and performance of the firm or firms of certified public accountants engaged as our independent outside auditors for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. In carrying out these responsibilities, our Audit Committee, among other things:
•    reviews and discusses our annual and quarterly financial statements with management and the independent auditors;
•    manages our relationship with the independent auditors, including having sole authority for their appointment, compensation, retention and oversight;
•    reviews the scope of their work; approving audit and non-audit services; and confirming the independence of the independent auditors;
•    confers with management and the independent auditors, as appropriate, regarding the scope, adequacy and effectiveness of our internal control over financing reporting; and
•    reports to our Board with respect to material issues that arise regarding the quality or integrity of our financial statements, our compliance with legal or regulatory requirements, the performance or independence of the independent auditors or such other matters as our Audit Committee deems appropriate from time to time.
Pursuant to the NASDAQ Marketplace Rules (the “NASDAQ Listing Rules”), each member of our Audit Committee must be able to read and understand fundamental financial statements, including a balance sheet, income statement, and cash flow statement. In addition, our Board has determined that both Messrs. Conti and Gorman are “audit committee financial experts” within the meaning of SEC regulations and have financial sophistication in accordance with the NASDAQ Listing Rules. All members of our Audit Committee are independent within the meaning of applicable SEC rules and regulations and the NASDAQ Listing Rules.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
11
 
 


Compensation Committee
 
 
 
 
Joseph A. Frick (Chair)
Colin Hill
Tiffany Olson
Rebecca W. Rimel

2019 Meetings: 4

 
Our Compensation Committee develops our overall compensation philosophy, and, either as a committee or together with the other independent directors:
•    recommends to our Board our executive compensation programs;
•    makes all decisions about the compensation of our executive officers (with the exception of our Chief Executive Officer);
•    evaluates the Chief Executive Officer’s performance in light of the goals and objectives approved by our Board and recommends to the full Board the Chief Executive Officer’s base salary, and short-term and long-term incentive compensation;
•    oversees our cash and equity-based incentive compensation plans;
•    oversees and approves our management continuity planning process;
•    reviews our workforce demographics and metrics related to hiring, promotions, employee turnover and diversity; and
•    reviews our initiatives related to employee training and development, culture and mission, employee engagement and civic involvement, including our formal, three-part training program that substantially all of our manager-level and above employees partake in and our yearly company-wide anti-corruption and compliance training.
Additional information about the roles and responsibilities of our Compensation Committee can be found under the heading “Executive Compensation; Compensation Discussion and Analysis.”  All members of our Compensation Committee are independent within the meaning of the NASDAQ Listing Rules.
Nominating and Corporate Governance Committee
 
 
 
 
Rebecca W. Rimel (Chair)
Laura N. Dietch
Colin Hill
Tiffany Olson
Robert J. Rubin, M.D.

2019 Meetings: 4
 
Our Nominating and Corporate Governance Committee oversees all aspects of our corporate governance functions on behalf of our Board, including:
•    making recommendations to our Board regarding corporate governance issues;
•    identifying, reviewing and evaluating candidates to serve as Board members consistent with criteria approved by our Board and reviewing and evaluating incumbent directors;
•    serving as the focal point for communication among Board candidates, non-committee directors and our management;
•    nominating candidates to serve as directors;
•    making recommendations to our Board regarding affairs relating to our directors;
•    overseeing our director orientation and continuing education programs;
•    overseeing our available defense mechanisms; and
•    overseeing matters impacting our image and reputation and our standing as a responsible corporate citizen.
All members of our Nominating and Corporate Governance Committee are independent within the meaning of the NASDAQ Listing Rules.


12
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Director Independence
The NASDAQ Listing Rules require that a majority of our Board and all members of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee be composed of directors who are “independent,” as such term is defined by the NASDAQ Listing Rules. Each year, our Board undertakes a review of director independence, which includes a review of each director’s responses to questionnaires asking about any relationships with us. This review is designed to identify and evaluate any transactions or relationships between a director or any member of their immediate family and us, or members of our senior management or other members of our Board, and all relevant facts and circumstances regarding any such transactions or relationships. Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of their family members, and us, in early 2020 our Board affirmatively determined that all of our directors are “independent” other than Mr. Capper, our President and Chief Executive Officer, who is not an independent director by virtue of his employment with us and Dr. Rietiker who is not an independent director by virtue of his prior employment with LifeWatch, which is a subsidiary of the Company. Dr. Rietiker's employment ceased on October 31, 2018. At such time, Dr. Rietiker and LifeWatch GmbH entered into a Termination Agreement, which entitled Dr. Rietiker to a CHF 675,000 payment for notice and bonus pay, a CHF 9,000 payment for expenses, and a CHF 38,259 pension contribution. All of these payments were made in 2018 with the exception of CHF 450,000, which was paid on January 15, 2019.

Compensation Committee Interlocks and Insider Participation
None of our executive officers or employees serve as a member of the compensation committee, or other committee serving an equivalent function, of any entity that has one or more of its executive officers serving as a member of our Board or our Compensation Committee. None of the members of our Compensation Committee has ever been an officer or employee of ours.

Executive Sessions of Independent Directors
Our Board also holds regular executive sessions of only independent directors to conduct a self-assessment of its performance and to review management’s strategy and operating plans, the criteria by which our Chief Executive Officer and other senior executives are measured, management’s performance against those criteria and other relevant topics. In 2019, our independent directors held four executive sessions.

Communicating with Our Board
Our Board has adopted a formal process by which stockholders may communicate with our Board or any of its directors. Stockholders wishing to communicate with our Board or an individual director may send a written communication to our Board or such director at our corporate office. Each communication will be reviewed by our Corporate Secretary to determine whether it is appropriate for presentation to our Board or such director. Communications determined by the Corporate Secretary to be appropriate for presentation to our Board or such director will be submitted to our Board or such director on a periodic basis. Additionally, stockholders may contact our Chairperson directly as detailed in our Corporate Governance Guidelines. This information is available in the “Investors—Corporate Governance” section of our website at www.gobio.com.

Nomination of Director Candidates
Candidates for nomination to our Board are selected by our Nominating and Corporate Governance Committee in accordance with its charter, our Amended and Restated Certificate of Incorporation and our Bylaws. All persons recommended for nomination to our Board, regardless of the source of the recommendation (including director candidates recommended by stockholders), are evaluated in the same manner by our Nominating and Corporate Governance Committee.

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
13
 
 


Our Board and our Nominating and Corporate Governance Committee consider, at a minimum, the following candidate qualifications:
ability to read and understand basic financial statements;
diversity;
personal integrity and ethics;
background, skills and experience;
expertise upon which to be able to offer advice and guidance to management;
ability to devote sufficient time to the affairs of the Company;
ability to exercise sound business judgment; and
commitment to rigorously represent the long‑term interests of our stockholders.
Candidates for director are reviewed in the context of the current composition of our Board, our operating requirements and the long-term interests of stockholders. In conducting its assessment, our Nominating and Corporate Governance Committee considers diversity, age, skills, and such other factors as it deems appropriate given the current needs of us and our Board, in an effort to maintain a balance of knowledge, experience and capability.
Our Nominating and Corporate Governance Committee places a high priority on identifying individuals with diverse skill sets and types of experience, including identification of individuals from the medical professional and medical device communities. In the case of incumbent directors whose terms of office are set to expire, our Nominating and Corporate Governance Committee reviews each director’s overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair the director’s independence. In the case of new director candidates, our Nominating and Corporate Governance Committee also determines whether the nominee is independent.
Our Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates but may also engage, if it deems appropriate, a professional search firm. Our Nominating and Corporate Governance Committee typically conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of our Board. Our Nominating and Corporate Governance Committee typically meets to discuss and consider the candidates’ qualifications and then selects a nominee by majority vote.
Under the heading “Items to Be Voted On; Proposal 1 - Election of Three Directors as Class I Directors; Director Qualifications and Biographies” below in this proxy statement, we provide an overview of each director’s and director nominee’s principal occupation, business experience and other directorships of publicly traded companies, together with the qualifications, experience, key attributes and skills our Nominating and Corporate Governance Committee and our Board believe will best serve the interests of our Board, the Company and our stockholders.
Stockholders who wish to recommend or nominate director candidates must provide information about themselves and their candidates and comply with procedures and timelines contained in our Bylaws. These procedures are described under “Other Information; 2021 Stockholder Proposals or Nominations” below in this proxy statement.

Related Person Transactions and Procedures
Our Board has adopted a written policy and procedures relating to our Audit Committee’s review and approval of transactions with related persons that are required to be disclosed in proxy statements under SEC regulations. A “related person” includes our directors, executive officers, 5% stockholders, as well as immediate family members of such persons and any entity owned or controlled by such persons.
Under the policy, where a transaction has been identified as a related person transaction, management must present information regarding the proposed related person transaction to our Audit Committee, or, where review by our Audit Committee would be inappropriate, to another independent body of our Board, for review. The presentation must include a

14
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


description of, among other things, the material facts, the direct and indirect interests of the related persons, the benefits of the transaction to us and whether any alternative transactions are available.
In approving a transaction, our Audit Committee will take into account, among other factors, the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products and the terms available to or from, as the case may be, unrelated third parties or to or from our employees generally. Our policy requires that, in reviewing a related person transaction, our Audit Committee must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of us and our stockholders, as our Audit Committee determines in the good faith exercise of its discretion.
Our Audit Committee reviews and pre-approves certain types of related person transactions, including the following:
director and executive officer compensation that is otherwise required to be reported in our proxy statement under SEC regulations;
certain transactions with companies at which the related person is an employee only; and
charitable contributions that would not disqualify a director’s independent status.
We have no related person transactions required to be reported under applicable SEC rules.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
15
 
 


Director Compensation
2019 Director Compensation
Under our compensation program for non-employee directors, our non-employee directors receive the following forms of consideration for service on our Board, consistent with those received in 2018:
an annual retainer of $55,000, payable, at the director’s election, in cash, restricted stock units (“RSUs”) or 50% cash and 50% RSUs;
an annual grant of RSUs with a grant date fair value of $130,000;
fees for committee membership in the following amounts: (i) $7,500 for Audit Committee membership, (ii) $7,500 for Compensation Committee membership and (iii) $7,500 for Nominating and Corporate Governance Committee membership, in each case payable, at the director’s election, in cash, RSUs or 50% cash and 50% RSUs; and
fees for committee chair positions in the following amounts: (i) $20,000 for Audit Committee Chair, (ii) $17,500 for Compensation Committee Chair and (iii) $15,000 for Nominating and Corporate Governance Committee Chair, in each case payable, at the director’s election, in cash, RSUs or 50% cash and 50% RSUs.
Our Chairperson also receives an additional retainer of $55,000, payable, at his election, in cash, RSUs or 50% cash and 50% RSUs.
Historically, all RSU grants, including those paid in connection with the annual retainer and committee fees, had a 100% retention requirement since shares were not to be delivered until Board service terminated. Therefore, upon termination of Board service, a director would receive all common stock underlying the RSUs that had vested as of that date. In connection with our Board’s adoption of a stock ownership and holding policy applicable to directors in 2018, our Board eliminated the retention requirement for RSU grants in connection with the annual retainer, annual grant of RSUs and the retainer paid to our Chairperson so long as prior to the grant date such director elects to take distribution in the form of common stock when the RSU vesting occurs.
2019 Non-Employee Director Compensation
Name
Fees Earned
or Paid
in Cash
($)
Stock Awards
($)
Total
($)
Kirk E. Gorman
86,250

192,604

278,854

Anthony J. Conti
75,000

130,048

205,048

Laura N. Dietch
31,250

130,048

161,298

Joseph A. Frick
36,250

166,369

202,619

Colin Hill
70,000

130,048

200,048

Tiffany Olson
15,625

161,326

176,951

Stephan Rietiker, M.D.
55,000

147,055

202,055

Rebecca W. Rimel
77,500

130,048

207,548

Robert J. Rubin, M.D.
15,000

185,093

200,093

Fees Earned or Paid in Cash
The amounts in the “Fees Earned or Paid in Cash” column are retainers earned and elected to be paid in cash for serving on our Board, its committees and as committee chairs and as our Chairperson. All cash payments are paid in four quarterly installments on the first business day of each calendar quarter beginning with the first calendar quarter following the date of the annual meeting.

16
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Stock Awards
The amounts in the “Stock Awards” column reflect the grant date fair value of RSUs awarded in 2019. The fair value of stock-based compensation is determined in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. The fair value per unit of the RSUs granted to the directors on May 3, 2019 was $53.65.
Historically, all RSUs vested in four successive quarters following the award date and were distributed in the form of common stock on the earliest to occur of the non-employee director’s death, disability, separation from service or a change in the ownership or effective control of the Company. For all RSU grants made to directors since 2017, vesting occurs in full on the first anniversary of the award date. Additionally, beginning with the RSU grants made to directors in 2018, but excluding those RSU grants in connection with service on a committee, each non-employee director may elect at the time of grant to take distribution in the form of common stock when (i) the RSU vesting occurs or (ii) the earliest to occur of the non-employee director’s death, disability, separation from service or a change in the ownership or effective control of the Company.
All Other Compensation
We reimburse our non-employee directors for their travel, lodging and other reasonable expenses incurred in attending meetings of the Board and committees of the Board.
Outstanding Director Equity Awards at December 31, 2019
The following table contains information on the equity awards granted to our directors that remained outstanding as of December 31, 2019.
 
Aggregate Number of Unvested RSUs
Name
(#)
Kirk E. Gorman
3,590

Anthony J. Conti
2,424

Laura N. Dietch
2,424

Joseph A. Frick
3,101

Colin Hill
2,424

Tiffany Olson
3,007

Stephan Rietiker, M.D.
2,741

Rebecca W. Rimel
2,424

Robert J. Rubin, M.D.
3,450




2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
17
 
 


Executive Officers
Executive Officer Biographies
The following are biographical summaries of our executive officers and their ages, except for Mr. Capper, whose biography is included under the heading “Items To Be Voted On; Proposal 1 - Election of Three Directors as Class I Directors; Our Nominees” in this proxy statement.
Heather C. Getz , CPA
 
 
Age: 45

Executive Vice President, Chief Financial and Administrative Officer
Ms. Getz is our Executive Vice President, Chief Financial and Administrative Officer. She joined us in 2009 as our Vice President, Finance, was promoted to Chief Financial Officer in May 2010, and subsequently expanded her role in 2019 to include the responsibilities of Chief Administrative Officer. From April 2008 to May 2009, Ms. Getz was Vice President of Finance at Alita Pharmaceuticals, Inc., a privately held specialty pharmaceutical company, where she was responsible for all areas of finance, accounting and information systems. Prior to joining Alita Pharmaceuticals, Inc., from March 2002 to April 2008, Ms. Getz held various financial leadership positions at VIASYS Healthcare Inc., a healthcare technology company acquired by Cardinal Health, Inc. in July 2007, including directing the company’s global financial planning, budgeting and analysis, and external reporting functions. From June 1997 to February 2002, Ms. Getz began her career at Sunoco, Inc., where she held various positions of increasing responsibility. Ms. Getz received her undergraduate degree in Accountancy and a Master of Business Administration degree from Villanova University. 
Fred (Andy) Broadway III 
 
 
Age: 50

President, BioTel Heart
Mr. Broadway was named President, BioTel Heart in January 2018. In this role, Mr. Broadway has leadership for all sales, marketing, customer service, monitoring, contracting, reimbursement and distribution teams supporting the Healthcare Services business.
Mr. Broadway joined us in June 2009 as our Vice President, Marketing, bringing 15 years of progressive leadership experience in sales and marketing, including extensive therapeutic knowledge in Cardiology and Neurology. In September 2012, Mr. Broadway was promoted to Senior Vice President, Marketing, and in January 2013, Mr. Broadway became our Senior Vice President, Sales and Marketing. Prior to joining us, from 2006 to June 2009, Mr. Broadway was Director of Marketing at Bristol Myers Squibb, leading the commercialization launch efforts of a potential new therapy for the treatment of stroke prevention in atrial fibrillation.
Earlier in his career, Mr. Broadway was on the marketing team at Pfizer, responsible for developing yearly and long-term strategic plans, brand and portfolio positioning, asset life cycle development, and overseeing commercialization tactics for several leading brands. Mr. Broadway started his career with Sanofi Pharmaceuticals, where he held numerous positions of increasing responsibility including sales, marketing, and eventually leadership positions in both sales and marketing. Mr. Broadway received his undergraduate degree in Zoology from Auburn University.

18
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Manish Wadhwa, M.D., F.H.R.S.
 
 
Age: 50

Chief Medical Officer

Dr. Wadhwa joined our family of companies in March 2019 as part of the Geneva acquisition. He is an actively practicing, board-certified cardiologist and cardiac electrophysiologist. After interviewing for medical school at the age of 16, Dr. Wadhwa enrolled in Penn State University’s Thomas Jefferson Medical College Six Year BSc-MD program. Upon completion, Dr. Wadhwa trained in internal medicine and general cardiology at Thomas Jefferson University Hospital in Philadelphia, PA. He completed his cardiology training with two years of advanced fellowship in cardiac electrophysiology at the University of California at San Diego. Dr. Wadhwa has expertise in both implanted device management and follow-up as well as invasive and non-invasive treatments of arrhythmias. He has been serving the San Diego community in private practice since 2000. Dr. Wadhwa has served on the physician advisory boards of Medtronic, Boston Scientific, Biotronik, St. Jude Medical and Sanofi-Aventis, and is a fellow of the Heart Rhythm Society (F.H.R.S.). Dr. Wadhwa has authored numerous medical papers, lectures on clinical issues in cardiac electrophysiology and continues to be involved with post-market evaluations of commercially available implanted device leads and generators.





2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
19
 
 


Executive Compensation
Executive Summary
Our Compensation Philosophy and Goals
We believe that our long-term success is directly related to our ability to attract, motivate and retain highly talented individuals with outstanding ability and potential who are committed to continually improving financial performance, achieving profitable growth and enhancing stockholder value.
To that end, our compensation program is generally designed to provide performance-oriented incentives that fairly compensate our executive officers and enable us to attract, motivate and retain executives with outstanding ability and potential. Our compensation program consists of both short-term and long-term components, including cash and equity-based compensation, and is intended to reward consistent performance that meets or exceeds formally established corporate and financial performance goals and objectives. Our Compensation Committee and our senior management are focused on providing an appropriate mix of short-term and long-term incentives. Our compensation program provides long-term incentives to ensure that our executives continue in employment with us and directly tie executive compensation to the generation of long-term stockholder value.
The Management Incentive Plan (“MIP”), our annual cash incentive bonus plan, is based primarily on two financial measures and several corporate performance objectives. The two financial measures are revenue and adjusted EBITDA, which is our earnings before interest, taxes, depreciation and amortization, adjusted to exclude loss from noncontrolling interest, total other expense, net, other charges and stock compensation expense (for the 2019 reconciliation of GAAP net income to adjusted EBITDA, see “Non-GAAP Financial Measures” below). The corporate performance objectives vary by year and are intended to encourage our executives to build and maintain an infrastructure that supports growth and strategy and increases revenues. In 2019, these corporate performance objectives included achieving volume growth in certain products and services, expanding the sales force, consolidating certain software programs and accomplishment of certain strategic initiatives.
The same metrics utilized for our MIP are referenced for determining initial awards under our Long-Term Incentive Plan (“LTIP”). Historically, the long-term incentive awards were split equally between RSUs and stock options. Beginning in 2018, the long-term incentive awards are allocated between RSUs, stock options and performance-based stock units (“PSUs”). The RSUs vest in full on the third anniversary of the grant date, 25% of the stock options vest annually on the anniversary of the grant date over a four-year period and the PSUs vest at the end of a three-year period only if long-term financial goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period. We believe that the time-vested aspect of the RSUs, stock options and PSUs promotes the retention of key talent and encourages stock ownership. Additionally, the PSUs encourage the achievement of long-term performance objectives and total return to shareholders.
Other companies may calculate adjusted EBITDA in a different manner.

Most Recent Say-on-Pay Results
We have determined that our stockholders should vote on a say-on-pay proposal every year, consistent with the preference expressed by our stockholders at our 2019 Annual Meeting of Stockholders. At our 2019 Annual Meeting of Stockholders, we held a stockholder “Say-on-Pay” advisory vote to approve the compensation of our NEOs as disclosed in our proxy statement. Stockholders expressed overwhelming support for the compensation of our NEOs, with approximately 97% of the votes (present at the meeting and entitled to vote) approving NEO compensation.
Our Compensation Committee considered this vote as demonstrating strong support for our compensation programs and continued to apply the same effective principles and philosophies that have been applied in prior years when making compensation decisions for 2019. These principles and philosophies are highlighted above and described more fully below.

20
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


The next advisory vote on executive compensation will take place at our 2021 Annual Meeting of Stockholders, and the frequency of the advisory vote on executive compensation will take place at our 2023 Annual Meeting of Stockholders.

2019 Financial Highlights
2019 was a record year for us. We delivered exceptional financial performance in 2019, posting the highest revenue and adjusted EBITDA in our corporate history. Compared to 2018, revenue grew by 9.9% and adjusted EBITDA grew by 9.1%.
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beat2019growthrate2d.jpg

Non-GAAP Financial Measures
The following table reconciles 2019 GAAP net income to adjusted EBITDA for short-term and long-term incentive purposes relating to the MIP and LTIP financial metrics set forth in this proxy statement. Management uses adjusted EBITDA so that investors have the same financial data that management uses with the belief that it will assist the investment community in properly assessing the performance of the Company for the period being reported. Adjusted EBITDA excludes certain non-cash and non-operating items to facilitate comparisons and provides a meaningful measurement that is focused on the performance of our ongoing operations.
2019 Financial Measures
Consolidated Performance (in thousands)
 
Net income  GAAP
$
29,844

Provision for income taxes
9,884

Total other expense
13,023

Other charges(1)
15,004

Depreciation and amortization expense(2)
42,575

Stock compensation expense
13,376

Adjusted EBITDA(3)
$
123,706

(1)
For the year ended December 31, 2019, other charges were due primarily to $7.0 million of patent litigation and other legal costs, $4.9 million of integration and other expenses related to our acquisitions, $3.0 million of charges related to our October 2019 information technology incident and $0.4 million for other non-recurring activities, partially offset by a $0.2 million favorable change in the fair value of acquisition-related contingent consideration.
(2)
For the year ended December 31, 2019, depreciation and amortization expense excludes approximately $0.4 million of expense related to the write-off of assets as a result of the dissolution of entities acquired as part of the LifeWatch acquisition in 2017. This expense is included in Other charges.
(3)
A full discussion of components of adjusted EBITDA is found in our fourth-quarter 2019 earnings press release furnished on our Current Report on Form 8-K with the SEC on February 26, 2020.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
21
 
 


Executive Compensation Elements
Compensation
Element
Objectives
Key Features
Base Salary
Fair and competitive compensation to attract, retain and reward executive officers by providing a fixed level of cash compensation tied to responsibility, experience, skills and capability relative to the market.
•    Annual cash compensation that is not at risk.
•    Targeted to the 50th percentile of our peer group, with variations based on experience, skills and other factors.
•    Adjustments considered annually based on level of pay relative to our peer group, individual responsibilities and individual and corporate performance.
MIP Award
Focuses executives on annual results by rewarding them for achieving key budgeted financial and corporate performance targets.
Links executives’ interests with those of stockholders by promoting profitable growth.
Helps retain executives by providing market-competitive compensation.
•    At-risk cash awards based on revenue, adjusted EBITDA and certain corporate performance objectives.
•    Annual awards vary from 0% to 200% of the targeted amount.
•    Cash bonuses are generally paid out within the first quarter.
•    Targeted so that the total of base salary and bonus approximates the 50th percentile of our peer group if the earned bonus is 100% of the targeted amount.
LTIP Award (RSUs, Stock Options and PSUs)
Aligns executives’ interests with those of stockholders by linking compensation with financial and corporate performance.
Drives stockholder value.
Provides a retention incentive for key employees through multi-year RSU, stock option and PSU vesting.
Promotes a sensible balance of risk and reward, without encouraging unnecessary or unreasonable risk-taking.
Rewards key employees for demonstrated value creation.
•    At-risk, long-term compensation.
•    Targeted so that total compensation approximates the 50th percentile of our peer group (actual grant values may vary from the LTIP Target Value, as defined below, based on consideration of both company and individual executive performance).
•    RSUs vest on the third anniversary of the grant date; stock options vest in annual increments over a four-year period; and PSUs vest at the end of a three-year period only if long-term financial goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period.
•    Performance-based equity awards encourage the achievement of long-term performance objectives and total return to shareholders.
•    Time-based equity awards encourage stock ownership and promote the retention of NEOs.


22
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


2019 MIP Bonuses (Cash)
MIP payouts for all executives, including the NEOs, are based on our performance against revenue, adjusted EBITDA and certain corporate performance objectives. The target bonus is set as a percentage of base salary, which for the NEOs, ranges from 50% to 100%. 2019 MIP target goals were set by our Compensation Committee based on the budget approved by our Board and our Compensation Committee’s determination that the targets contained sufficient “stretch.” After the acquistion of Geneva, certain of the targets were modified in order to properly assess the performance of the combined Company. For 2019, our Compensation Committee determined that the financial and corporate performance objectives under the MIP were to be weighted as indicated below, and in early 2020, our Compensation Committee increased the weighting of each of revenue and adjusted EBITDA to 35% and reduced the weighting of corporate performance objectives to 30% for the 2020 MIP:
Goal
Percent of Payout
Revenue
30%
Adjusted EBITDA
30%
Corporate objectives
40%
For 2019, our Compensation Committee determined that we achieved 76.7% of our revenue target, 86.7% of our adjusted EBITDA target as shown in the tables below, as well as 82.5% of our corporate objectives. See footnotes to “Compensation Discussion and Analysis; Part 1 - 2019 Performance, Compensation Committee Actions, Compensation Practices and Decisions; Our Management Incentive Plan; Financial Results for MIP Purposes” below.
2019 MIP and LTIP Performance Against Primary Financial Metrics
Threshold, Target and Actual Performance
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beat2019rev2d.jpg https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beat2019aebitda2d.jpg

2019 LTIP Awards (RSUs, Stock Options and PSUs)
Long-term incentive compensation opportunities for our executives, including the NEOs, are delivered entirely in equity and are based on the achievement of key value drivers of our business, including: (i) revenue, (ii) adjusted EBITDA and (iii) certain corporate performance objectives. Our LTIP grants are designed to encourage stock ownership and promote the retention of key talent. Under our LTIP, eligible executives receive an award of time-vested RSUs, stock options and PSUs, approximately equal in LTIP Target Value. The grants made in a particular year are made considering the Company’s prior year performance against the financial and corporate performance objectives discussed above. The RSUs vest in full on the third anniversary of the grant date; 25% of the stock options vest annually on the anniversary of the grant date over a four-year period; and the PSUs vest at the end of a three-year period only if long-term financial goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period. The LTIP Target Value of each NEO’s LTIP grant is determined by our Compensation Committee based on its review of peer-group market data, the executive’s roles and responsibilities, their impact on our results and advancement potential. LTIP Target Value (“LTIP Target Value”) is computed as the NEO’s base salary, multiplied by their LTIP grant target percentage, multiplied by our Compensation Committee’s target equity payout

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
23
 
 


percentage, and is used as the numerator for the determination of the number of RSUs, stock options and PSUs to be granted. Our achievement levels with respect to our financial performance goals are set forth above.

Our Compensation Practices
We continue to incorporate leading practices into our compensation programs:
Our compensation philosophy targets total direct compensation of our NEOs at the 50th percentile of peer group companies.
We prohibit our employees, officers and directors from hedging or engaging in any speculative trading with respect to our common stock.
We do not provide tax “gross-ups” for perquisites provided to our executive officers.
Our equity-incentive plan prohibits the repricing or exchange of equity awards without stockholder approval.
We do not have “single trigger” features on parachute payments in any employment agreements, with the exception of our Chief Executive Officer whose equity awards immediately accelerate and become fully vested upon a change in control.
We have not provided golden parachute excise tax gross-ups in any employment agreements offered to executives.
We require our executive officers to meet stock-ownership guidelines with respect to shares acquired upon vesting or exercise. The ownership guideline for our Chief Executive Officer is five times base salary, the guideline for our Chief Financial Officer is three times base salary and the guideline for our other executive officers is one times base salary. Executive officers must retain 100% of the shares (on a net, after-tax basis) acquired upon the exercise of options or vesting of other equity awards until the guideline is satisfied.
Our Compensation Committee has engaged an independent outside compensation consultant. See “Compensation Discussion and Analysis; Part 2 - Compensation Framework; Role of the Compensation Consultant and Executives” below.
In the event of a material restatement of our financial results, our Board or our Compensation Committee will review the incentive compensation that was paid or awarded, with respect to the period to which the restatement relates, to our current and former officers who engaged in fraud or other misconduct that resulted in the restatement, and may, in its sole discretion recoup any incentive-based compensation paid or awarded to the current or former officer(s) in excess of the amount that would have been paid or awarded to the current or former officer(s) under our restated financial statements.

Compensation Discussion and Analysis
This section discusses our executive compensation program for 2019, the compensation decisions made under those programs and the factors that were considered by our Compensation Committee in making those decisions. It focuses on the compensation for each of our NEOs for 2019:
Joseph H. Capper, President and Chief Executive Officer;
Heather C. Getz, Executive Vice President, Chief Financial and Administrative Officer;
Fred (Andy) Broadway III, President, BioTel Heart;
Daniel Wisniewski, Senior Vice President, Technical Operations; and
Peter F. Ferola, Former Senior Vice President and General Counsel.

24
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


This Compensation Discussion and Analysis is divided into two parts:
Part 1 discusses our 2019 performance, our Compensation Committee’s actions, our compensation practices and the compensation decisions for our NEOs.
Part 2 discusses our compensation framework in more detail, including how we apply our compensation philosophy and determine competitive positioning of our executive compensation and other policies.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
25
 
 



Part 1 – 2019 Performance, Compensation Committee Actions, Compensation Practices and Decisions

2019 Performance Overview
2019 was an outstanding year for the Company and our stockholders. Among the accomplishments of our executive team, led by Mr. Capper, were:
Acquiring Geneva and ADEA;
Exceptional financial performance in 2019, achieving record annual revenue of $439.1 million and record adjusted EBITDA of $123.7 million;
Significant mobile cardiac telemetry and extended-wear Holter volume growth; and
30th consecutive quarter of year-over-year revenue growth.

Executive Compensation Elements
The following chart summarizes the key features of each element of our executive compensation program: Cash (salary and MIP); Equity (LTIP); and Retirement (retirement benefit program). Each type is discussed in detail in the remainder of this Compensation Discussion and Analysis, and the accompanying tables.
Compensation
Element
Type
Key Features
Cash
Salary

•    Fixed amount of compensation based on experience, contribution and responsibilities.
•    Salaries reviewed annually and adjusted based on market practice, individual performance and contribution, length of service and other internal factors.
 
MIP

•    Cash awards based on revenue, adjusted EBITDA and certain corporate performance objectives. See “Our Management Incentive Plan; Financial Results for MIP Purposes” below.
•    Annual awards vary from 0% to 200% of the targeted amount.
Equity
LTIP (RSUs, stock options and PSUs (approx. equal in LTIP Target Value))
•    Grant values vary from target considering revenue, adjusted EBITDA and certain corporate performance objectives.
•    RSUs vest on the third anniversary of the grant date.
•    Options vest annually on the anniversary of the grant date in equal amounts over a four-year period and expire ten years from the grant date.
•    PSUs vest at the end of a three-year period only if long-term financial goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period.
Retirement
401(k) Plan
•    Qualified 401(k) plan that provides participants the opportunity for beneficial tax treatment on a portion of their income, up to code limits, and receive a matching Company contribution (which vests immediately) of 100% on the first 3% of compensation deferred under the 401(k) plan and 50% on the next 2% of compensation deferred under the 401(k) plan.

26
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 



Summary of Key 2019 Compensation Decisions
The following highlights our Compensation Committee’s key NEO compensation decisions for 2019, as reported in the “Executive Compensation; Compensation Tables; Summary Compensation Table” below. The compensation decisions were made after considering input from our Compensation Committee’s independent compensation consultant, which at such time was Willis Towers Watson & Co. (“Willis Towers Watson”).
Chief Executive Officer Compensation
In January of 2019, our Compensation Committee took the following actions on Mr. Capper’s compensation:
His base salary was $659,500 (an increase of 3.0% over 2018).
His MIP target award opportunity was $659,500 (100% of base salary).
His LTIP Target Value was $1,978,500 (300% of base salary).
After benchmarking Mr. Capper’s compensation with our peer group, our Compensation Committee determined that Mr. Capper’s compensation approximates the 50th percentile for overall compensation.
Compensation of Other NEOs
In January of 2019, our Compensation Committee approved salaries and set incentive-compensation targets of the other NEOs taking into account the Chief Executive Officer’s recommendations, the advice of Willis Towers Watson, peer group salary data, relative duties and responsibilities, advancement potential and impact on our financial and strategic performance. Consistent with the approach for the Chief Executive Officer, our Compensation Committee: (i) provided no increases in target MIP, (ii) provided no increases in target LTIP, and (iii) increased the base salary (in each case, a nominal increase over 2018) of Ms. Getz and Messrs Broadway, Wisniewski, and Ferola to $407,500, $359,000, $351,000 and $348,000, respectively.
2018-2020 NEO Base Salaries and MIP Target
Name
2018 Base Salary
2019 Base Salary
2020 Base Salary
MIP 2019 Target
as % of
Salary
Joseph H. Capper
$640,000
$659,500
$680,000
100%
Heather C. Getz
$395,500
$407,500
$419,500
60%
Fred (Andy) Broadway III
$348,500
$359,000
$370,000
50%
Daniel Wisniewski
$340,500
$351,000
$358,000
50%
Peter F. Ferola
$337,500
$348,000
$—
50%
Engaged a New Independent Compensation Consultant
In May of 2019, our Compensation Committee engaged Pay Governance LLC (“Pay Governance”) as its new independent compensation consultant to continue to closely monitor developments and trends in executive compensation and to provide recommendations for appropriate adjustments to our compensation program, policies, and practices in line with our business and talent strategies and investor expectations. Other than the services it provided to our Compensation Committee, Pay Governance did not provide any services to us. Our Compensation Committee has considered and assessed all relevant factors that could give rise to a potential conflict of interest with respect to the work performed. Based on this review, our Compensation Committee has determined that Pay Governance is independent of us and our management, and did not identify any conflict of interest. Prior to May of 2019, Willis Towers Watson served as our Compensation Committee’s independent compensation consultant.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
27
 
 


Our Management Incentive Plan
Plan Criteria and Rationale
The annual incentives for all MIP participants, including the NEOs, are based on our financial and corporate performance as a whole measured primarily by revenue, adjusted EBITDA and certain corporate performance objectives.
In 2019, as in past years, our Compensation Committee evaluated the continued use of the MIP financial and corporate performance objectives using the following principles:
Metrics that support achievement of an annual Board-approved operating plan;
Metrics that support profitable growth while maintaining access to cash for longer-term investment;
Metrics that provide a clear line of sight—i.e. that are clearly understood and can be affected by the performance of our executives and employees;
Metrics that are consistent with market practice and commonly used within our peer group; and
Corporate performance metrics that encourage our executives to build and maintain an infrastructure that supports our growth and financial performance.
Following this review, our Compensation Committee concluded that the continued use of these measures supports these principles because they are linked to top-line growth, the creation of stockholder value and encourage our executives to continue to build a successful and growing commercial organization. For 2019, our Compensation Committee determined that the financial and corporate performance goals under the MIP were weighted as follows:
Goal
Percent of Payout
Revenue
30%
Adjusted EBITDA
30%
Corporate objectives
40%
Target Setting
The target MIP awards for our NEOs are set as a percentage of base salary. Target awards are reviewed annually to ensure alignment with our compensation philosophy to target total direct compensation at the market median. Variances from this goal are based on an evaluation of competitive market data, internal equity considerations among the Chief Executive Officer’s direct reports and individual performance evaluations.
For 2019, target MIP opportunities for the NEOs ranged from 50% to 100% of their year-end base salary rate, as follows:
NEO
Target %
Joseph H. Capper
100%
Heather C. Getz
60%
Fred (Andy) Broadway III, Daniel Wisniewski and Peter F. Ferola
50%

28
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Our Compensation Committee has historically approved achievement of MIP as set forth below:
Year
MIP Achievement % of Target
2010
57.5%
2011 and 2012
50.0%
2013 and 2014
85.0%
2015, 2016 and 2017
100.0%
2018
120.0%
Financial Results for MIP Purposes
Our Compensation Committee set the MIP targets based on its evaluation of the budget amounts and its assessment that the targets contained a sufficient degree of “stretch.” The MIP targets set forth below reflect the revised targets approved by our Compensation Committee after the acquistion of Geneva. The targets were modified in order to evaluate the performance of the combined Company.
2019 Performance Metrics, Weight and Achievement
 
 
 
 
 
 
Milestone
MIP Objective
Metric
Objectives
 
Achievement
($ millions, except percentages)
Weight
Threshold
Target
Maximum
Results
% of Target
Revenue
30%
400.0
450.0
484.0
439.1
76.7%
Adjusted EBITDA(1)
30%
115.0
125.0
150.0
123.7
86.7%
Corporate objectives(2)
40%
82.5%
(1)
For a reconciliations of 2019 GAAP net income to adjusted EBITDA for short-term and long-term incentive purposes relating to the MIP and LTIP financial metrics, please see “Executive Compensation; Executive Summary; Non-GAAP Financial Measures” above.
(2)
Our 2019 corporate performance objectives included achieving volume growth in certain products and services, expanding the sales force, consolidating certain software programs and accomplishing certain strategic initiatives.
2019 MIP Awards
In 2020, our Compensation Committee evaluated the level of achievement of our financial and corporate performance objectives relating to operational commitments relative to the executive officer’s position, and approved achievement of the 2019 MIP award at 82% of target. In making its decision to approve 2019 MIP awards, our Compensation Committee acknowledged the management team’s achievement of the corporate performance objectives and the revenue of $439.1 million and adjusted EBITDA of $123.7 million.
The table below sets forth 2019 target MIP opportunities for our NEOs and the actual payout amounts and percentage of achievement of the target amounts. The actual payout amounts are computed based on the actual performance.
2019 MIP Target and Actual Payouts and Achievement
Name
2019 Target Award ($)
2019 Actual Award ($)
Actual Achievement % of Target
Joseph H. Capper
659,500
540,790
82%
Heather C. Getz
244,500
200,490
82%
Fred (Andy) Broadway III
179,500
147,190
82%
Daniel Wisniewski
175,500
143,910
82%
Peter F. Ferola
174,000
142,680
82%


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
29
 
 


Our Long-Term Incentive Plan
Plan Criteria and Rationale
Long-term compensation for all of our executives, including our NEOs, is entirely equity-based. Our LTIP is structured to align our executives’ interests with stockholders and to emphasize our Compensation Committee’s expectation that our executive officers should focus their efforts on growing our business while carefully managing capital.
The objectives of the LTIP are as follows:
drive growth in stockholder value;
reward key employees for demonstrated value creation;
encourage the achievement of long-term performance objectives and stock appreciation;
promote retention for key employees; and
build equity ownership among the executive team.
We believe that providing our executives the opportunity to increase their ownership of our stock is in the best interests of our stockholders because it will better align our executives with our stockholders and will encourage achievement of long-term performance objectives.
To help further these objectives, our Compensation Committee considers the same financial and corporate performance objectives that we use for non-equity based compensation under our MIP in determining LTIP Target Values relative to the target awards. At the beginning of each calendar year, awards are granted following our Compensation Committee’s evaluation of the achievement of the goals under our MIP. For the 2019 performance year, these LTIP targets were revenue of $450.0 million, adjusted EBITDA of $125.0 million and certain corporate performance objectives.
LTIP awards are granted as follows:
(i)
approximately one-third of the target long-term incentive award is granted in the form of RSUs, based on the closing stock price on the grant date and will vest in full on the third anniversary of the grant date;
(ii)
approximately one‑third of the target long-term incentive award is granted in the form of stock options, based on a ratio of peer grant fair value relative to stock price at the time of grant and will vest annually on the date of the grant in equal amounts over a four-year period; and
(iii)
approximately one-third of the target long-term incentive award is granted in the form of PSUs, based on target performance and the closing stock price on the grant date and will vest at the end of a three-year period and vest only if long-term performance goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period.
Stock awards enable our executive officers to participate in any increase in stockholder value and personally participate in the risks of business setbacks. It is our belief that long-term incentives motivate and reward successful long-term value creation and the achievement of financial goals for us and our stockholders, as well as help us retain top executive talent.
All executive officers and other employees selected by our Compensation Committee are eligible to receive awards under the LTIP. The participants in the LTIP will receive awards based on each individual’s LTIP Target Value, which is determined by our Compensation Committee.

30
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


For our NEOs, the individual LTIP Target Values approved by our Compensation Committee for fiscal 2018 and 2019 performance, expressed as a percentage of each person’s base salary, were as follows:
NEO
2020 LTIP Grant Target % Considering 2019 Results
2019 LTIP Grant Target % Considering 2018 Results
Joseph H. Capper
430%
300%
Heather C. Getz
175%
175%
Fred (Andy) Broadway III
175%
100%
Daniel Wisniewski
80%
80%
Peter F. Ferola
—%
80%
In 2019, our Compensation Committee awarded at 130% of the target equity payout to executives under the 2019 LTIP considering our 2018 results. In 2020, our Compensation Committee awarded at 100% of target equity payout to executives under the 2020 LTIP considering our 2019 results. All unvested RSUs, options and PSUs granted to Mr. Ferola, including the 2019 LTIP awards, were forfeited upon his departure from BioTelemetry. Additionally, Mr. Ferola was not eligible for awards under the 2020 LTIP.
LTIP Target Values
 
2020 LTIP Grant
 
(considering 2019 performance)
 
100% of Target Value
 
Grant date price of $53.22(1)(2)
 
LTIP Target
 
 
PSUs
 
Value(3)
Options
RSUs
Threshold
Target
Max
 
($)
(#)
(#)
(#)
(#)
(#)
Joseph H. Capper
2,835,850
42,291
17,762
6,661
17,762
35,524
Heather C. Getz(4)
713,125
10,635
9,467
1,675
4,467
8,934
Fred (Andy) Broadway III
628,250
9,369
3,935
1,476
3,935
7,870
Daniel Wisniewski
280,800
4,188
1,759
660
1,759
3,518
(1)
The 2020 LTIP grant date fair values computed in accordance with FASB ASC Topic 718 will be reported in the 2020 Summary Compensation Table of the proxy statement for the 2021 Annual Meeting of Stockholders.
(2)
Grant date of February 17, 2020; however, since the U.S. stock market was closed on this day, the grants were priced using the February 18, 2020, closing price.
(3)
LTIP Target Value is computed as the NEO’s base salary, multiplied by their LTIP grant target percentage, multiplied by our Compensation Committee’s target equity payout percentage and is used as the numerator for the determination of the number of RSUs, stock options and PSUs to be granted. The LTIP Target Value is not the sum of the fair values computed in accordance with FASB ASC Topic 718.
(4)
Ms. Getz received an additional LTIP grant of 5,000 RSUs to reflect the increased responsibilities related to the Chief Administrative Officer role she assumed during 2019.

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
31
 
 


 
2019 LTIP Grant
 
(considering 2018 performance)
 
130% of Target Value
 
Grant date price of $76.01(5)(6)
 
LTIP Target
 
 
PSUs
 
Value(7)
Options
RSUs
Threshold
Target
Max
 
($)
(#)
(#)
(#)
(#)
(#)
Joseph H. Capper
2,496,000
26,062
10,946
4,105
10,946
21,892
Heather C. Getz
899,763
9,395
3,946
1,480
3,946
7,892
Fred (Andy) Broadway III
453,050
4,731
1,987
745
1,987
3,974
Daniel Wisniewski
354,120
3,698
1,553
582
1,553
3,106
Peter F. Ferola
351,000
3,665
1,540
578
1,540
3,080
(5)
The 2019 LTIP grant date fair values computed in accordance with FASB ASC Topic 718 are reflected in the “2019 Summary Compensation Table” appearing below.
(6)
Grant date of February 14, 2019.
(7)
LTIP Target Value is computed as the NEO’s base salary, multiplied by their LTIP grant target percentage, multiplied by our Compensation Committee’s target equity payout percentage and is used as the numerator for the determination of the number of RSUs, stock options and PSUs to be granted. The LTIP Target Value is not the sum of the fair values computed in accordance with FASB ASC Topic 718.
Equity Award Grant Practices
LTIP Target Values used to determine the number of units to be awarded are ultimately determined by our Board and are not formulaic based on prior year performance, which allows them to vary from target considering prior year performance, year-over-year performance and other factors. There also is not a minimum grant requirement.
Our Compensation Committee also delegates authority to our Chief Executive Officer to make a limited number of equity grants between meetings to certain employees, including in connection with the hiring or promotion of employees, annual sales meeting awards or for retention purposes.

Equity Plans
2017 Omnibus Incentive Plan
In 2017, we adopted the BioTelemetry, Inc. 2017 Omnibus Incentive Plan (the “2017 OIP”). The 2017 OIP is available to all executive officers on the same basis as our other employees.
Our 2017 OIP authorizes us to grant stock options, stock appreciation rights, restricted stock, RSUs, deferred stock units, unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards. All stock options granted to our employees and directors were granted with an exercise price that was no less than the fair market value of a share of our common stock on the grant date. All new grants vest over at least one year, generally in annual 25% increments over a four-year period and all grants have a ten‑year term (unless terminated earlier due to termination of service with us).
We previously maintained the 2008 Equity Incentive Plan (the “2008 EIP”). Following the approval of the 2017 OIP, we terminated the 2008 Plan with respect to grants of new awards.
2017 Employee Stock Purchase Plan
In 2017, we adopted the BioTelemetry, Inc. 2017 Employee Stock Purchase Plan, which became effective on May 11, 2017. The BioTelemetry, Inc. 2017 Employee Stock Purchase Plan is available to all executive officers on the same basis as our other employees. We previously maintained the 2008 Employee Stock Purchase Plan. Following the approval of the BioTelemetry, Inc. 2017 Employee Stock Purchase Plan, we terminated the 2008 Employee Stock Purchase Plan.


32
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Part 2 – Compensation Framework

Compensation Philosophy and Objectives
Our compensation philosophy is to provide competitive executive pay opportunities tied to the Company’s success. This overriding pay-for-performance approach enables us to attract, motivate and retain the type of executive leadership that will help us achieve our strategic objectives and realize increased stockholder value. To reach these goals, we have adopted the following program objectives:
Have a strong pay-for-performance element with a major portion of executive pay “at risk” based on achievement of financial and corporate performance goals.
Support achievement of both operating performance and strategic corporate performance objectives.
Link management compensation with the interests of stockholders.
Be fair and market-competitive to assure access to needed talent.
Provide compensation opportunities that are consistent with each executive’s responsibilities, experience and performance.
Promote retention of key employees.
Design compensation incentive programs that promote a sensible risk/reward balance, and that do not encourage unnecessary or unreasonable risk-taking.

Applying our Compensation Philosophy
We believe our approach to goal setting, setting of targets with payouts at multiple levels of performance, and evaluation of performance results assist in mitigating excessive risk‑taking that could harm our value or reward poor judgment by our executives. The features of these practices and programs also reflect sound risk management practices. We believe we have allocated our compensation among base salary, and short-term and long‑term compensation target opportunities in such a way as to not encourage excessive risk taking. This is based on our belief that applying company‑wide metrics encourages decision-making that is in the best long‑term interests of us and our stockholders. In addition, we believe that the mix of equity award instruments used under our LTIP, including stock options, RSUs and PSUs, in each case, that vest over multi‑year periods also mitigates risk and properly accounts for the time horizon of risk.

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
33
 
 


We apply our compensation philosophy and objectives as follows:
Compensation Component 
Objectives
Base Salary
Fair and competitive compensation to attract, retain and reward executive officers by providing a fixed level of cash compensation tied to experience, skills and capability relative to the market.
MIP Award
At-risk, cash bonuses focus NEOs on annual results by rewarding them for achieving key budgeted financial and corporate performance targets.
Links interests of NEOs with those of stockholders by promoting strong profitable growth.
Helps retain NEOs by providing market-competitive compensation.
LTIP Award (RSUs, Stock Options and PSUs)
At-risk, long-term compensation aligns interests of NEOs with those of stockholders by linking compensation with financial and corporate performance, including contingent long-term compensation based on long-term performance.
Retains NEOs through multi-year RSU, stock option and PSU vesting.
Promotes a sensible balance of risk and reward, without encouraging unnecessary or unreasonable risk-taking.

Competitive Positioning
In support of our compensation philosophy, the Compensation Committee reviews executive officer total compensation relative to market practices for a peer group of publicly traded companies in the medical products and services sector and compensation survey data for technology and life sciences companies. Generally, our Compensation Committee’s consultant conducts a market analysis every other year. The Compensation Committee aims to provide competitive total compensation for executive officers targets around the median of the market. The most recent market analysis was completed during the fall of 2019. The results of this analysis were used by our Compensation Committee in determining executive officer compensation and LTIP awards made in 2020. The results of the 2017 analysis were used by our Compensation Committee in determining executive officer compensation for 2018 and 2019. As described more fully below, the market references are among many different factors considered by our Compensation Committee when setting executive officer compensation.
Given our size and diverse business portfolio, identifying peer companies using conventional criteria such as revenues and industry classification can be challenging. Our Compensation Committee believes that using a peer group that includes companies that we compete for business and capital, and more broadly, those that we compete for talent, provides our Compensation Committee with decision-quality data and context, and is a reasonable representation of our labor market for executive talent. Our Compensation Committee regularly evaluates and, if appropriate, updates the composition of the peer group. In addition to the peer group data, we also consider pay data from compensation surveys for technology and life sciences companies to provide additional perspective.
The peer group used in the 2017 study were recommended by Willis Towers Watson and approved by our Compensation Committee. Information from the Radford Global Life Sciences and Global Technology compensation surveys were also used in the 2017 study.
All companies in the 2017 peer group were classified within one of the following sub-industries by Standard & Poor’s: Health Care Equipment, Health Care Supplies, Health Care Services and Health Care Technology. In addition, the peer group considered whether companies used us as a peer in their market analyses of executive officer compensation.

34
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


The peer group companies in the 2017 study used as a reference when establishing officer compensation for 2018 and 2019 consisted of the following:
Abaxis, Inc.
Almost Family, Inc.
Analogic Corporation
AngioDynamics, Inc.
AtriCure, Inc.
Cardiovascular Systems, Inc.
CONMED Corporation
CryoLife, Inc.
Haemonetics Corporation
HMS Holdings Corp.
ICU Medical, Inc.
Landauer, Inc.
Meridian Bioscience, Inc.
Natus Medical, Inc.
NXSTAGE Medical, Inc.
Omnicell, Inc.
Orthofix International N.V.
Quidel Corp.
 
 
The 18 peer group companies in the 2017 study reflected the following criteria as of the most recent fiscal year completed at the time the study was completed(1):
2017 Study
Revenue
EBITDA
Employees
Market Cap
(in millions, except employees)
($)
($)
(#)
($)
High
886
138
15,500
2,406
Median
274
52
1,205
926
Low
149
(42)
500
427
(1)
Revenue, EBITDA and employees all were reported as of the most recent fiscal year completed at the time the study was conducted. Market capitalization values were calculated as of October 2017 using the most recent common stock outstanding reported and an average share price over the prior 200 days.
In 2019, our Compensation Committee determined that the peer group should be updated to reflect the growth in size of the Company and because several peers were no longer publicly traded. In the fall of 2019, Pay Governance provided a new peer group study used as a reference when establishing officer compensation and LTIP awards made in 2020, in addition to the Radford Global Life Sciences and Global Technology compensation survey data. All companies in the 2019 peer group were classified within one of the following sub-industries by Standard & Poor’s: Health Care Equipment; Health Care Supplies and Health Care Technology. In addition, the proposed peer group considered whether companies used us as a peer in market analysis of executive officer compensation:
AngioDynamics, Inc.
AtriCure, Inc.
Cardiovascular Systems, Inc.
CONMED Corporation
CryoLife, Inc.
Haemonetics Corporation
HMS Holdings Corp.
ICU Medical, Inc.
*iRhythm Technologies, Inc.
Meridian Bioscience, Inc.
Natus Medical, Inc.
Omnicell, Inc.
Orthofix International N.V.
*Tandem Diabetes Care, Inc.
Quidel Corp.
 
*
New companies included in 2019 peer group.
The 15 peer group companies in the 2019 study reflected the following criteria as of the most recent fiscal year completed at the time the study was completed(2):
2019 Study
Revenue
Employees
Market Cap
(in millions, except employees)
($)
(#)
($)
High
1,400
8,100
5,171
Median
453
1,200
1,680
Low
147
660
737
(2)
Revenue and employees were reported as of the most recent fiscal year completed at the time the study was conducted. Market capitalization values were calculated as of September 2019 using the most recent common stock outstanding reported and an average share price over the prior 200 days.
Setting Compensation
Our Compensation Committee annually reviews the total compensation of each executive officer—i.e. cash compensation (salary and target MIP opportunity) and long-term equity compensation (LTIP Target Value). Our Compensation Committee, with input from Pay Governance, then sets the executive’s compensation target for the current year. Salary adjustments, if any, typically become effective in February of each year. In making its decisions, our Compensation Committee uses several

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
35
 
 


resources and tools, including competitive market information and compensation trends within the peer group, compensation survey data for relevant industries and the larger executive compensation environment.
To achieve its objectives for our executive compensation program, our Compensation Committee evaluates our executive compensation program with the goal of setting compensation at levels our Compensation Committee believes are competitive with those of other similarly situated companies that compete with us for executive talent and has engaged Pay Governance to provide additional assurance that our executive compensation programs are reasonable and consistent with its objectives. Pay Governance reports directly to our Compensation Committee, periodically participates in committee meetings, and advises our Compensation Committee with respect to compensation trends and best practices, plan design and the reasonableness of individual compensation awards. Although our Compensation Committee reviews the compensation practices of the companies in our peer group as described above, our Compensation Committee does not adhere to strict formulas or survey data to determine the mix of compensation elements. Instead, our Compensation Committee considers various factors in exercising its discretion to determine compensation, including the experience, responsibilities and performance of each of our executive officers, as well as our overall financial performance. Our Compensation Committee believes this flexibility is particularly important in designing compensation arrangements to attract and retain executives.
Evaluating Performance
Determinations about corporate performance are based on the achievement of certain corporate performance objectives. Individual performance against goals are more subjective and are based on the judgments made at the discretion of our Compensation Committee and our Board, with input from our Chief Executive Officer, except as it relates to his own compensation. For our executive officers, other than himself, our Chief Executive Officer evaluates the performance of the executive officers on an annual basis and makes recommendations to our Compensation Committee with respect to annual salary adjustments, bonuses and annual equity awards. These recommendations are reviewed by our Compensation Committee on an aggregated basis so that our Compensation Committee can evaluate the compensation paid to our executives on a total compensation basis. While our Compensation Committee reviews the recommendations of our Chief Executive Officer with respect to executive officers other than himself, our Compensation Committee exercises its own discretion in approving salary adjustments for the upcoming year and discretionary cash and equity awards for all executives and communicates its final determination to our Board.
Stockholder Feedback
We value the feedback provided by our stockholders and have discussions with many of them on an ongoing basis regarding various corporate governance topics, including executive compensation. Stockholders are also provided the opportunity to cast an annual advisory vote on executive compensation. At our 2019 Annual Meeting of Stockholders, stockholders indicated their overwhelming support for the compensation of our NEOs, with over 97% support for the say-on-pay proposal. Our Compensation Committee considered this result and stockholder feedback in connection with establishing the compensation program. Our Compensation Committee will continue to consider stockholder feedback and the results of say-on-pay votes when making future compensation decisions.

Post-Employment Compensation Arrangements
Retirement Plans
Consistent with our compensation philosophy, we intend to continue to maintain broad-based retirement and welfare employee benefit programs for all of our employees, in which our NEOs are also eligible to participate. However, our Compensation Committee, in its discretion, may in the future revise, amend or add to the benefits of any executive officer if it deems it advisable. Under our 401(k) retirement plan, there is a matching contribution (which vests immediately) of 100% on the first 3% of compensation deferred under the plan and 50% on the next 2% of compensation deferred under the plan (up to the applicable statutory limits under the Internal Revenue Code).
Termination Payments
The employment agreements for each of our NEOs provide for payments in the event that the executive is terminated by us without cause or by the executive for good reason, in each case, without regard to whether the termination occurs in the context of a change in control. With the exception of Mr. Capper, if the executive’s employment is terminated by us without cause or by the executive for good reason in connection with a change in control, all of the executive’s equity awards will immediately accelerate and become fully vested. All of Mr. Capper’s equity awards will immediately accelerate and become

36
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


fully vested upon a change in control without regard to a termination of employment (unless he is terminated for cause). Payments and benefits to Messrs. Capper, Broadway, Wisniewski and Ferola and Ms. Getz will be modified to avoid any excise tax under Section 409A of the Internal Revenue Code to the extent the modification would result in a greater net after tax benefit to the executive. We believe these severance and change-in-control benefits are an essential element of our overall executive compensation package. The severance and change-in-control benefits were also determined through comparison to companies in our peer group. See “Executive Compensation; Estimated Payments Following Termination or Change in Control” below for further information regarding the payments and benefits under the employment agreements.
We believe that our existing arrangements help executives remain focused on our business in the event of a threat or occurrence of a change in control and encourage them to act in the best interests of the stockholders in assessing a transaction.
We do not have any “single trigger” features on parachute payments in any employment agreements, with the exception of our Chief Executive Officer whose equity awards immediately accelerate and become fully vested upon a change in control. We also have not provided golden parachute excise tax gross-ups in any employment agreements offered to executives.

Other Compensation Policies
Personal Benefits
We provide our NEOs with other benefits that we believe are reasonable and competitive so that we may attract and retain talented senior executives. In total, they represent a small percentage of each NEOs’ overall compensation. We do not provide perquisite gross-ups. These benefits are reflected in the “All Other Compensation” column of the “2019 Summary Compensation Table” below.
Stock-Ownership Requirements
Stock-ownership goals align executives with the interests of stockholders and encourage a long-term focus. All of our executive officers must retain shares acquired upon vesting or exercise if their ownership level is below the value equal to particular multiples of their base salary. Our Compensation Committee established a goal of five-times base salary for the Chief Executive Officer, three-times base salary for the Chief Financial Officer and one-time base salary for all other executive officers. Executive officers must retain 100% of the shares (on a net, after-tax basis) acquired upon the exercise of options or vesting of other equity awards until the guideline is satisfied. All NEOs, excluding Mr. Ferola who is no longer an executive officer, met these guidelines when last assessed pursuant to our policy.
Policy on Hedging and Speculative Trading
Our insider trading policy prohibits directors, officers, employees and consultants from engaging in short sales, transactions in put or call options, hedging transactions or other inherently speculative transactions with respect to our stock at any time. In addition, our insider trading policy prohibits our officers, directors, employees and consultants from margining, or making any offer to margin, any of our stock, including without limitation, borrowing against such stock, at any time.
Clawback Policy
In the event of a material restatement of our financial results, we will review the incentive compensation that was paid or awarded, with respect to the period to which the restatement relates, to our current and former officers who engaged in fraud or other misconduct that resulted in the restatement. To the extent permitted by law and as our Compensation Committee in its sole discretion deems appropriate and in our best interests, we may seek the recoupment or forfeiture of any incentive-based compensation paid or awarded to the officer in excess of the amount that would have been paid or awarded to the officer under our restated financial statements.

Risk Considerations in Our Compensation Programs
Our Compensation Committee considers potential risks when reviewing and approving compensation programs. We have designed our compensation programs, including our incentive compensation plans, with specific features to address potential risks while rewarding employees for achieving long‑term financial and corporate performance objectives through prudent

2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
37
 
 


business judgment and appropriate risk taking. The following elements have been incorporated in our programs available for our executive officers:
A Balanced Mix of Compensation Components—The target compensation mix for our executive officers is composed of salary, annual cash incentives and long‑term equity incentives, representing a mix that is not overly weighted toward short‑term cash incentives.
Multiple Performance Factors—Our incentive compensation plans use company‑wide metrics, which encourage focus on the achievement of objectives for our overall benefit.
The MIP and LTIP awards are each dependent on multiple performance metrics, including revenue and adjusted EBITDA, as well as corporate goals related to specific strategic or operational objectives.
The LTIP awards are equity‑based and have two components: (1) achievement of certain financial and corporate performance objectives and (2) time-based vesting. The RSUs vest on the third anniversary of the grant date; the stock options vest annually on the grant date over a four-year period; and the PSUs vest at the end of a three-year period only if long-term financial goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period.
We have a stock ownership and holding policy to better align the financial interests of our executives with those of our stockholders.
We have adopted a clawback policy allowing us, in certain circumstances, to recoup incentive compensation paid in the event of a material restatement of our financial statements.
Additionally, our Compensation Committee considered an assessment of compensation‑related risks for all of our employees. Based on this assessment, our Compensation Committee concluded that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on us. In making this evaluation, our Compensation Committee reviewed the key design elements of our compensation programs in relation to industry norms as well as the means by which any potential risks may be mitigated, such as through our internal controls and oversight by management and our Board.

Role of the Compensation Committee, Consultant and Executives
Our Compensation Committee approves all compensation decisions for our NEOs, other than our Chief Executive Officer, whose base salary and incentive compensation are approved by our Board with a recommendation from our Compensation Committee.
Our Compensation Committee has the sole authority to retain or replace, as necessary, compensation consultants to provide it with independent advice. Our Compensation Committee previously engaged Willis Towers Watson as its independent compensation consultant to advise it on executive and non-employee director compensation matters. In May 2019, our Compensation Committee engaged Pay Governance as its independent compensation consultant. This selection was made without the input or influence of management.
During 2019, our compensation consultants performed the following tasks for our Compensation Committee:
Prepared competitive market data for the compensation of the executive officer group;
Reviewed executive officer and director stock ownership guidelines;
Updated our Compensation Committee on executive compensation trends and regulatory developments; and
Provided input on compensation program design and philosophy, incentive-pay mix and peer group companies against which executive pay is benchmarked.
Neither consultant provides any services to us other than its advice to our Compensation Committee on executive and director compensation matters. Our Compensation Committee determined that each of Willis Towers Watson and Pay Governance to be independent from us under the NASDAQ Listing Rules and SEC regulations.

38
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


Our Chief Executive Officer annually reviews the performance of each of the other executive officers, including the other NEOs. He then recommends annual merit salary adjustments and any changes in annual or long-term incentive opportunities for other executives. Our Compensation Committee considers the Chief Executive Officer’s recommendations in addition to data and recommendations presented by the consultant.
The Chief Executive Officer and other members of management also work with our Compensation Committee and consultant in determining the companies to be included in the peer group.

Compensation Committee Report
Our Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis. Based on its review and discussions with management, our Compensation Committee recommended to our Board, and our Board approved, the inclusion of the Compensation Discussion and Analysis in this proxy statement and incorporated by reference in our 2019 Annual Report.
 
Compensation Committee
 
Joseph A. Frick, Chairperson
 
Colin Hill
 
Tiffany Olson
 
Rebecca W. Rimel

Pay Ratio Disclosure
In accordance with Item 402(u) of Regulation S-K, promulgated by the Dodd-Frank Wall Street Reform Act and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), we determined the ratio of the annual total compensation of Mr. Capper, our Chief Executive Officer, relative to the annual total compensation of our median employee.
The Company chose December 31, 2018, as the date for establishing the employee population used in identifying the median employee. As of that date, we had 1,552 employees, with 1,521 employees based in the U.S. and 31 employees located outside of the U.S. As permitted by Item 402 of Regulation S-K, the employee population excluded all non-U.S. employees in accordance with the “de minimis” exemption, representing approximately 2.0% of our total U.S. and non-U.S. employees. The excluded employees worked in the following jurisdictions: the Republic of North Macedonia (29), Belgium (1), and United Kingdom (1).
The Company identified the median employee using gross earnings (unreduced by any pre-tax medical or other benefits) as the consistently applied compensation measure. Permanent employees who joined in 2018 and permanent employees who were on leave during 2018 were assumed to have worked for the entire year.
For purposes of reporting annual total compensation and the ratio of annual total compensation of the Chief Executive Officer to the median employee, both the Chief Executive Officer’s and median employee’s annual total compensation were calculated consistent with the disclosure requirement of executive compensation under the Summary Compensation Table.
After applying the methodology described above, our median employee compensation using the Summary Compensation Table requirements was $55,450. Our Chief Executive Officer’s compensation in the Summary Compensation Table was $4,133,155. Therefore, our Chief Executive Officer to median employee pay ratio is 75:1.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
39
 
 


Compensation Tables
The following tables, narrative and footnotes discuss the compensation of the NEOs during 2019, 2018 and 2017.
2019 Summary Compensation Table
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock Awards
($)(1)
Option
Awards
($)(1)
Non-Equity
Incentive Plan
Compensation
($)(2)
All Other
Compensation
($)(3)
Total
($)
Joseph H. Capper
President and Chief Executive Officer
2019
654,692
1,776,535
1,148,393
540,790
12,745
4,133,155
2018
634,819
1,482,131
979,428
768,000
11,180
3,875,558
2017
577,089
667,793
717,683
723,750
11,002
2,697,317
Heather C. Getz
Executive Vice President, Chief Financial and Administrative Officer
2019
404,541
640,435
413,980
200,490
11,654
1,671,100
2018
394,184
567,484
374,976
284,760
11,180
1,632,584
2017
371,101
155,246
166,850
285,000
11,002
989,199
Fred (Andy) Broadway III
President, BioTel Heart
2019
356,411
322,490
208,466
147,190
21,034
1,055,591
2018
344,636
258,594
170,853
209,100
24,231
1,007,414
2017
301,981
87,310
93,827
189,375
11,002
683,495
Daniel Wisniewski
Senior Vice President, Technical Operations
2019
348,411
252,052
162,948
143,910
14,221
921,542
2018
339,905
227,648
150,456
204,300
12,789
935,098
2017
332,905
97,959
105,268
166,750
11,002
713,884
Peter F. Ferola
Former Senior Vice President and General Counsel
2019
345,411
249,942
161,494
142,680
12,145
911,672
2018
336,396
221,530
146,389
202,500
11,180
917,995
2017
323,821
94,952
102,048
178,475
11,002
710,298
(1)
The amounts in these columns do not reflect compensation actually received by the NEO nor do they reflect the actual value that will be recognized by the NEO. Instead the amounts reflect the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions regarding the RSU awards and the option awards, please refer to the tables below. Beginning in 2018, the Stock Awards amount represents the grant date fair value of both RSUs and PSUs. All of the 2019 LTIP awards granted to Mr. Ferola were forfeited upon his departure from BioTelemetry.
(2)
The amounts reported in this column reflect compensation earned for 2019, 2018 and 2017 performance under our MIP. We make payments under this program in the first quarter of the fiscal year following the fiscal year in which they were earned after finalization of our audited financial statements.
(3)
These amounts reflect our contributions to our 401(k) Plan and the amount of life insurance premiums paid by us on behalf of each NEO. Additionally, for Mr. Broadway, such amounts include $8,990 and $13,051 for 2019 and 2018, respectively, and for Mr. Wisniewski, such amounts include $1,551 and $1,609 for 2019 and 2018, respectively, related to the fair value of their compensation related to their participation in the BioTelemetry, Inc. 2017 Employee Stock Purchase Plan.

Components of Compensation
Stock Awards
We estimate the fair value of our stock-based compensation awards in accordance with FASB ASC Topic 718. The fair value of the RSUs granted to our NEOs on February 14, 2019 was $76.01.
We estimate the grant date fair value of our PSUs using a Monte Carlo simulation. This model uses assumptions, including the risk free interest rate, expected volatility of our stock price and those of the performance group, dividends of the performance group members and expected life of the awards. If it is deemed probable that the PSU performance targets will be met, compensation expense is recorded for these awards ratably over the requisite service period. The PSUs are forfeited to the extent the performance criteria are not met within the service period. The fair value of the PSUs granted to our NEOs on February 14, 2019 was $86.29.

40
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 


The table below shows the grant date fair value for our performance-stock units granted on February 14, 2019:
2019 LTIP Performance-Stock Unit Grant Date Value Range(1) 
 
 
2019
 
 
Threshold
Target
Max
Name
($)
($)
($)
Joseph H. Capper
354,220

944,530

1,889,061

Heather C. Getz
127,709

340,500

681,001

Fred (Andy) Broadway III
64,286

171,458

342,916

Daniel Wisniewski
50,221

134,008

268,017

Peter F. Ferola
49,876

132,887

265,773

(1)
The amounts reflect the aggregate grant date fair value of PSUs computed in accordance with FASB ASC Topic 718.
Option Awards
We estimate the fair value of our stock options using the Black‑Scholes option valuation model. The Black‑Scholes option valuation model requires the use of certain subjective assumptions. The most significant of these assumptions are the estimates of the expected volatility of the market price of our stock and the expected term of the option. We base our estimates of expected volatility on the historical average of our stock price over the expected term of the option. The expected term represents the period of time that options granted are expected to be outstanding. Other assumptions used in the Black‑Scholes option valuation model include the risk‑free interest rate and expected dividend yield. The risk‑free interest rate for periods pertaining to the expected term of each option is based on the U.S. Treasury yield of a similar duration in effect at the time of grant. We have never paid, and do not expect to pay, dividends in the foreseeable future.
The grant date fair value of our stock options granted to our NEOs was estimated using the following assumptions:
 
Year Ended December 31,
Assumption
2019
 
2018
 
2017
Expected volatility
54.9
%
 
55.3
%
 
59.2
%
Expected term (in years)
7.2

 
7.4

 
7.3

Risk-free interest rate
2.54
%
 
2.75
%
 
2.08
%
Expected dividends
0.0
%
 
0.0
%
 
0.0
%
Grant date fair value per option
$
44.06

 
$
19.74

 
$
18.05

Non-Equity Incentive Plan Compensation
The amounts in the “Non-Equity Incentive Plan Compensation” column are MIP awards made with respect to 2019 performance. MIP awards are paid in cash in the first quarter of the fiscal year following the fiscal year in which they were earned after finalization of our audited financial statements.
All Other Compensation
The amounts in the “All Other Compensation” column consist of our contributions to our 401(k) Plan and the life insurance premiums paid by us on behalf of each NEO. Additionally, the amounts for Messrs. Broadway and Wisniewski include the fair value of their compensation related to their participation in the BioTelemetry, Inc. 2017 Employee Stock Purchase Plan. There were no tax gross-ups paid in 2019.


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
41
 
 


2019 Grants of Plan-Based Awards Table
Stock options granted to our NEOs consist of a mixture of incentive stock options and non-qualified stock options. The exercise price per share of each stock option granted to our NEOs was equal to the closing stock price of our common stock as reported on the grant date. All stock options granted before the effective date of the 2017 OIP on May 11, 2017, were granted under the 2008 EIP. The following table provides information on the RSUs, stock options and PSUs granted to our NEOs in 2019:
 
 
 
Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1)
All Other
Stock Awards:
Number of Shares of Stock or Units
(#)
All Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)
Exercise
or Base
Price
of
Option
Awards
($/Sh)
Grant
Date
Fair
Value of Stock
and
Option
Awards(2)  
($)
Name
Award
Type
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
Joseph H. Capper
Cash Incentive(1)
659,500
1,319,000
 
RSUs(3)
2/14/19
10,946
832,005
 
Stock Options(3)
2/14/19
26,062
76.01
1,148,393
 
PSUs(4)
2/14/19
10,946
944,530
Heather C. Getz
Cash Incentive(1)
244,500
489,000
 
RSUs(3)
2/14/19
3,946
299,935
 
Stock Options(3)
2/14/19
9,395
76.01
413,980
 
PSUs(4)
2/14/19
3,946
340,500
Fred (Andy) Broadway III

Cash Incentive(1)
179,500
359,000
 
RSUs(3)
2/14/19
1,987
151,032
 
Stock Options(3)
2/14/19
4,731
76.01
208,466
 
PSUs(4)
2/14/19
1,987
171,458
Daniel Wisniewski
Cash Incentive(1)
175,500
351,000
 
RSUs(3)
2/14/19
1,553
118,044
 
Stock Options(3)
2/14/19
3,698
76.01
162,948
 
PSUs(4)
2/14/19
1,553
134,008
Peter F. Ferola(5)
Cash Incentive(1)
174,000
348,000
 
RSUs(3)
2/14/19
1,540
117,055
 
Stock Options(3)
2/14/19
3,665
76.01
161,494
 
PSUs(4)
2/14/19
1,540
132,887
(1)
Amounts represent cash bonus opportunities provided to NEOs in 2019 under our MIP. The criteria used to determine the amount of the annual bonus payable to each executive is described under “Part 1 - 2019 Performance, Compensation Committee Actions, Compensation Practices and Decisions; Compensation Discussion and Analysis – Our Management Incentive Plan.” The actual bonuses earned by the NEOs in respect of the 2019 fiscal year are described above in the section titled “Executive Compensation; Executive Summary; 2019 MIP Bonuses (Cash).”
(2)
The amounts reflect the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions regarding the RSU awards, the option awards and the PSU awards, please refer to “Components of Compensation” above.
(3)
Represent the grants under our LTIP in 2019 considering service performed in 2018, which were payable one-third in RSUs, one-third in stock options and one-third in PSUs. The RSUs vest on the third anniversary of the grant date. The stock options vest 25% annually on the anniversary of the grant date over a four-year period.
(4)
Represent the PSU grants, at 100% of target, under our LTIP in 2019 considering service performed in 2018. The PSUs vest at the end of a three-year period only if long-term financial goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period.
(5)
All of the 2019 RSUs, stock options and PSUs granted to Mr. Ferola were forfeited upon his departure from BioTelemetry.


42
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
2020 Proxy Statement
 
 



Outstanding Equity Awards at December 31, 2019
The following table contains information on the equity awards granted to our NEOs that remained outstanding as of December 31, 2019.
 
 
Option Awards
 
RSUs
 
PSUs
Name
Grant Date
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(1)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(1)
Option
Exercise
Price
($)
Option
Expiration
Date
 
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
 
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(4)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
Joseph H. Capper
3/4/11
54,235


4.67

3/4/21

 


 


 
2/21/12
313,232


2.80

2/21/22

 


 


 
2/19/13
257,177


2.54

2/19/23

 


 


 
2/14/14
104,468


8.68

2/14/24

 


 


 
2/16/15
122,538


10.36

2/16/25

 


 


 
2/15/16
94,752


9.57

2/15/26

 


 


 
2/14/17
34,437

11,480

24.65

2/14/27

 


 


 
2/14/18
12,401

37,203

33.35

2/14/28

 


 


 
2/14/19

26,062

76.01

2/14/29

 


 


 
2/14/17




 
27,091

1,254,313

 


 
2/14/18




 
20,834

964,614

 
20,834

964,614

 
2/14/19




 
10,946

506,800

 
10,946

506,800

Heather C. Getz
2/14/14
23,578


8.68

2/14/24

 


 


 
2/16/15
29,040


10.36

2/16/25

 


 


 
2/15/16
22,455


9.57

2/15/26

 


 


 
2/14/17
8,004

2,671

24.65

2/14/27

 


 


 
2/14/18
4,747

14,244

33.35

2/14/28

 


 


 
2/14/19

9,395

76.01

2/14/29

 


 


 
2/14/17




 
6,298

291,597

 


 
2/14/18




 
7,977

369,335

 
7,977

369,335

 
2/14/19




 
3,946

182,700

 
3,946

182,700

Fred (Andy) Broadway III
2/14/14
12,058


8.68

2/14/24

 


 


 
2/16/15
15,558


10.36

2/16/25

 


 


 
2/15/16
11,367

3,791

9.57

2/15/26

 


 


 
2/14/17
4,500

1,503

24.65

2/14/27

 


 


 
2/14/18
2,163

6,490

33.35

2/14/28

 


 


 
2/14/19

4,731

76.01

2/14/29

 


 


 
2/14/17




 
3,542

163,995

 


 
2/14/18




 
3,635

168,301

 
3,635

168,301

 
2/14/19




 
1,987

91,998

 
1,987

91,998


2020 Proxy Statement
https://cdn.kscope.io/572f91d049edfc0877fe85744be3d9fa-beatlogoblank.jpg
43
 
 


 
 
Option Awards
 
RSUs
 
PSUs
Name
Grant Date
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(1)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)(1)
Option
Exercise
Price
($)
Option
Expiration
Date
 
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
 
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(4)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
Daniel Wisniewski
12/6/10
29,000


4.24

12/6/20

 


 


 
2/21/12
46,838


2.80

2/21/22

 


 


 
2/19/13
30,980


2.54

2/19/23

 


 


 
2/14/14
15,621


8.68

2/14/24

 


 


 
2/16/15
18,323


10.36

2/16/25

 


 


 
2/15/16
14,169


9.57

2/15/26

 


 


 
2/14/17
5,049

1,686

24.65

2/14/27

 


 


 
2/14/18
1,905

5,715

33.35

2/14/28

 


 


 
2/14/19

3,698

76.01

2/14/29

 


 


 
2/14/17




 
3,974

183,996

 


 
2/14/18




 
3,200

148,160

 
3,200

148,160

 
2/14/19




 
1,553

71,904

 
1,553

71,904

Peter F. Ferola(5)
 




 


 


(1)
The options granted in 2015, 2016 and 2017 vest at a rate of 25% on December 31 of each year, while the options granted in 2018 and after 2018 vest at a rate of 25% on each of the first four anniversaries of the grant date.
(2)
The RSUs will vest in full on the third anniversary of the grant date, subject to accelerated vesting upon certain terminations of employment following certain corporate transactions involving the Company. The shares of common stock underlying the RSUs will be issued when the RSUs vest.
(3)
Value based on the closing stock price of a share of our common stock on December 31, 2019 ($46.30).
(4)
The PSUs will vest at the end of a three-year period only if long-term financial goals have been achieved, with the number of vested shares then increased or decreased based on our total shareholder return relative to the companies in the Russell 2000 Index during the same period, subject to accelerated vesting upon certain terminations of employment following certain corporate transactions involving the Company. The shares of common stock underlying the PSUs will be issued when the PSUs vest.
(5)
All unvested RSUs, stock options and PSUs granted to Mr. Ferola were forfeited upon his departure from BioTelemetry.

2019 Option Exercises and Stock Vested Table
The following table provides information about the value realized by our NEOs on the vesting of stock awards (i.e. RSUs) and exercise of stock options during 2019.
 
 
Stock Awards
 
Stock Options
 
 
Number of Shares Acquired
on Vesting (1)
 
Value Realized on
Vesting (2)
 
Number of Shares Exercised
 
Value Realized Upon Exercise(3)