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:

Payment of Filing Fee (Check all boxes that apply):

 

   , 2024

To our shareholders:

Surmodics, Inc. has entered into an agreement to be acquired by way of a merger. If the proposed merger is completed, we will become a wholly owned subsidiary of BCE Parent, LLC, an entity indirectly controlled by funds affiliated with GTCR LLC (“GTCR”), and each outstanding share of our common stock (other than (1) any shares of the Company issued as a restricted stock award pursuant to the Company’s 2009 Equity Incentive Plan or 2019 Equity Incentive Plan and, in each case, that remains unvested and subject to forfeiture thereunder, (2) any shares that are directly or indirectly owned by Parent, any of its subsidiaries, or any of our subsidiaries, and (3) any dissenting shares) will be converted into the right to receive $43.00 in cash, without interest and less any applicable withholding taxes.

Our board of directors unanimously approved the merger agreement and has called a special meeting of our shareholders at which shareholders will have the opportunity to consider and vote upon a proposal to approve the merger agreement. Shareholder approval is one of several conditions to the proposed merger. Our board of directors unanimously recommends that you vote “FOR” each of the proposals to be considered at the special meeting, including approval of the merger agreement. The attached notice of special meeting includes further details about the special meeting, which will be held virtually at www.virtualshareholdermeeting.com/SRDX24SM at     Central Time on   ,   , 2024.

You’re invited to attend the special meeting virtually but, whether or not you plan to attend, please vote your shares as promptly as possible. Depending on how you hold your shares, you’ll find voting instructions on page 17 of the enclosed proxy statement and on the enclosed proxy or voting instruction card. Your vote is very important, because the merger cannot be completed unless holders of a majority of all of the outstanding shares of our common stock vote in favor of the proposal to approve the merger agreement. A failure to vote your shares of our common stock on the proposal to approve the merger agreement will have the same effect as a vote against the proposal.

The attached proxy statement provides you with detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Appendix A. I encourage you to read the proxy statement, including its appendices and the documents incorporated by reference, carefully and in its entirety.

If you have any questions or need assistance in voting your shares, please contact our proxy solicitor, MacKenzie Partners, by telephone at (800) 322-2885, or by email at proxy@mackenziepartners.com.

Thank you for your continued support.

Sincerely,

 

Gary R. Maharaj

President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger, the merger agreement or the other transactions contemplated thereby or passed upon the adequacy or accuracy of the disclosure in this proxy statement. Any representation to the contrary is a criminal offense.

This proxy statement is dated     and is first sent to shareholders on or about   .

 

TO THE SHAREHOLDERS OF SURMODICS, INC.:

You are cordially invited to attend a special meeting of shareholders, to be held as a virtual meeting at www.virtualshareholdermeeting.com/SRDX24SM at     Central Time on    , 2024. The purpose of the special meeting is to consider and vote upon the following proposals:

Accompanying this notice of special meeting of shareholders is a proxy statement, which describes these proposals in more detail, and a form of proxy, which allows you to vote on these proposals. A copy of the merger agreement is attached as Appendix A to the proxy statement accompanying this notice and a summary of the merger agreement can be found in the section titled “The Merger Agreement” in the proxy statement accompanying this notice; the full text of such merger agreement and such summary are incorporated by reference into this notice. Please carefully review these materials, including the appendices and information incorporated by reference into the proxy statement.

We welcome you to attend the meeting, but whether or not you plan to attend, please submit your completed proxy via phone, mail or internet as soon as possible. Proxies are revocable and will not affect your right to vote virtually and attend or participate in the meeting, even if you have previously returned your proxy card or have submitted your proxy via the Internet or by telephone, and your virtual vote at the special meeting will revoke any proxy that you have previously submitted. Instructions on how to vote are found in the section entitled “The Special Meeting—How to Cast your Vote” on page 17. Our board of directors unanimously recommends our shareholders vote “FOR” each of these proposals.

Only shareholders of record as shown on our books at the close of business on    , 2024 will be entitled to vote at the special meeting. Each shareholder is entitled to one vote per share on all matters to be voted on at the meeting.

This document is being sent by Surmodics, Inc., a Minnesota corporation, which we refer to as “we,” “us,” “our,” “Surmodics,” or the “company,” and our board of directors to solicit proxies from our shareholders to vote their shares of our common stock at the special meeting of our shareholders to be held on    , 2024. At the special meeting, our shareholders will be asked, among other things, to approve the Merger Agreement, which, as it may be amended from time to time, we refer to as the “merger agreement,” entered into on May 28, 2024, by and among Surmodics, Inc., BCE Parent, LLC, which we refer to as “Parent,” and BCE Merger Sub, Inc., which we refer to as “Merger Sub.” Pursuant to the terms of the merger agreement, Merger Sub will merge with and into the company, with the company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent, which we refer to as the “merger.”

The merger agreement permits a party to assign the merger agreement in certain circumstances, as described under “The Merger Agreement—Assignment” on page 67. References in this proxy statement to a party to the merger agreement are also to its permitted successors and assigns.

For a description of the company and some of the other parties involved in the transactions described in this proxy statement, please see “Parties” on page 19.

We have elected to “incorporate by reference” certain information into this proxy statement, which means that we are disclosing important information to you by referring you to certain other documents that we have filed separately with the U.S. Securities and Exchange Commission, which we refer to as the “SEC,” and certain other documents that we may file with the SEC after the date of this proxy statement but prior to the special meeting. Because these documents contain important information and may subsequently amend this proxy statement, you should monitor and review our SEC filings until the special meeting is completed. References to this proxy statement are meant to include not only the main body of this proxy statement, but also the accompanying notice of special meeting and proxy card, each of the appendices, and all of the information incorporated by reference. See “Where You Can Find More Information” on page 75.

We have not authorized anyone to provide any information other than what is contained in or incorporated by reference in this proxy statement, and take no responsibility for, and can provide no assurances as to the reliability of, any information others may give you. You should not assume that the information contained or incorporated by reference in this proxy statement, or in any document incorporated by reference, is accurate as of any date other than the respective dates thereof. See “Other Information—Legal and Cautionary Disclosures—Other Information Not Authorized by the Company” on page 74.

This proxy statement contains forward-looking statements, including statements related to our financial projections, the consequences of the outcome of the proposals to be considered and voted upon at the special meeting, the completion of the merger, or the consequences thereof. Forward-looking statements can usually be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “evolve,” “expect,” “forecast,” “intend,” “looking ahead,” “may,” “opinion,” “plan,” “possible,” “potential,” “project,” “should,” “will” and other expressions which indicate future events or trends.

These forward-looking statements are based upon certain expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those anticipated as a result of various factors, including:

All forward-looking statements are qualified by, and should be considered together with, these cautionary statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which such statements were made.

Except as required by applicable law, we undertake no obligation to update forward-looking statements (whether as a result of new information, future events or otherwise). However, we do advise you to consult any future disclosures we make on related subjects as may be detailed in our other filings made from time to time with the SEC.

We expect that this proxy statement, the related form of proxy, and notice of special meeting will first be sent to shareholders on or about    , 2024.

Below are brief answers to some of the key questions that we anticipate you might have. These questions do not address all of the material topics covered by this proxy statement, nor do the answers include all of the material information provided by this proxy statement. Please refer to the complete proxy statement for additional information and before you vote.

In certain circumstances, the special meeting could be adjourned to another time or place. All references in our proxy materials to the special meeting include any adjournment or postponement of the special meeting.

If your shares are held through a broker, bank or other nominee, you are considered the “beneficial owner” of the shares of our common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, to be the shareholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares by following their instructions for voting. You are also invited to attend the special meeting and vote your shares virtually.

Under specified circumstances, we may receive payment from or be required to pay to Parent a termination fee upon or following the termination of the merger agreement, as described under “The Merger Agreement—Termination Fees” on page 66.

Stock Options. Each then-outstanding and unexercised option to purchase shares of our common stock, whether vested or unvested, will be cancelled in exchange for an amount in cash, without interest, equal to the product of (i) the excess, if any, of $43.00 over the exercise price per share of our common stock subject to such option multiplied by (ii) the number of shares of our common stock subject to such option, net of any taxes withheld. Each option to purchase shares of our common stock with a per share exercise price greater than or equal to $43.00 (so called “underwater” or out-of-the money options), whether vested or unvested, will be cancelled without consideration.

Restricted Stock Units. Each then-outstanding RSU will be cancelled in exchange for an amount in cash, without interest, equal to the product of (i) $43.00 multiplied by (ii) the number of shares of our common stock subject to such RSU, net of any taxes withheld.

Restricted Share. Each then-outstanding award of Restricted Share will be cancelled in exchange for an amount in cash, without interest, equal to the product of (i) $43.00 multiplied by (ii) the number of shares of our common stock subject to such restricted stock award, net of any taxes withheld.

We have “frozen” the ESPP during the pendency of the merger, which means (1) we will not commence any new offering periods under the ESPP after the current offering period expires, (2) existing payroll deductions will continue in effect until shortly prior to the effective time of the merger (or, if earlier, the expiration of the current offering period), (3) payroll deductions may not be increased (other than increases made in accordance with payroll deduction elections that were in effect as of the date of the merger agreement), and (4) individuals cannot commence participation in the ESPP.

A Non-U.S. Holder (as defined in the section of this information statement captioned “The Merger—Material U.S. Federal Income Tax Consequences”) will generally not be subject to U.S. federal income tax on any gain resulting from the exchange of our common stock pursuant to the merger, unless such holder has certain connections to the United States. However, the merger could be a taxable transaction to such holder under non-U.S. tax laws applicable to such holder.

Backup withholding may apply to the cash payment made pursuant to the merger unless the holder or other payee provides a valid taxpayer identification number or other applicable IRS form and complies with certain certification procedures or otherwise establishes an exemption from backup withholding.

A more complete description of the U.S. federal income tax consequences of the merger is provided under “The Merger—Material U.S. Federal Income Tax Consequences” on page 46.

For a discussion of the factors that our board of directors considered in determining to recommend the approval of the merger agreement, please see the section entitled “The Merger—Reasons for our Board’s Recommendation in Favor of the Merger” on page 29. In addition, in considering the recommendations of our board of directors, you should be aware that some of our directors and executive officers have potential interests that may be different from, or in addition to, the interests of our shareholders generally. For a discussion of these interests, please see the section entitled “The Merger—Interests of our Directors and Executive Officers in the Merger” on page 42.

The record date for shareholders entitled to vote at the special meeting is earlier than the consummation of the merger. If you transfer your shares of our common stock after the record date but before the closing of the merger, you will have the right to vote at the special meeting but not the right to receive the merger consideration. We urge you to vote even if you have subsequently transferred your shares.

No. If the merger is completed, the paying agent will send information to our shareholders of record explaining how to exchange shares of our common stock for the merger consideration. You should not send in your company stock certificates before you receive these transmittal materials. If your shares of our common stock are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to receive the merger consideration. Do not send in your certificates now.

We will hold a special meeting of shareholders virtually at www.virtualshareholdermeeting.com/SRDX24SM at     Central Time on   , 2024.

The purpose of the special meeting is to consider and vote upon the following proposals:

Our board of directors unanimously recommends our shareholders vote “FOR” each of these proposals.

Neither management nor the board of directors knows of any matters to be presented at the special meeting other than the matters described above. Applicable Minnesota law and our bylaws prohibit the transaction at the special meeting of any business that is not stated in the notice of special meeting.

Only shareholders and authorized guests may attend the meeting.

Although it is not currently expected, we may adjourn the special meeting one or more times, including if necessary or appropriate to solicit additional proxies if there are insufficient votes to approve the merger agreement at the time of the special meeting. The meeting may be adjourned either (1) pursuant to a vote of our shareholders on the adjournment proposal or (2) as otherwise permitted by the Minnesota Business Corporation Act or our bylaws.

All references in our proxy materials to the special meeting include any adjournment or postponement of the special meeting.

Our board of directors has fixed   , 2024 as the record date for the special meeting. Shareholders of record as shown on our books at the close of business on the record date will be entitled to vote at the special meeting. Persons who were not shareholders on the record date will not be eligible to vote.

At the close of business on the record date, there were    shares of our common stock issued and outstanding. The common stock is our only outstanding class of capital stock.

The company’s board of directors unanimously recommends that you vote “FOR” each of the proposals.

You may vote in one of the following ways:

If you have any questions or need assistance voting, please contact MacKenzie, our proxy solicitor assisting us in connection with the special meeting, toll-free at (800) 322-2885 or by email at proxy@mackenziepartners.com.

Proxies will be voted as directed therein. If you sign and return the enclosed proxy card or submit a proxy by telephone or over the internet and do not specify how your shares are to be voted, your shares will be voted “FOR” the merger proposal, “FOR” the golden parachute proposal and “FOR” the adjournment proposal.

Any shareholder of record giving a proxy may revoke it at any time prior to its use at the special meeting by giving written notice of the revocation to the Secretary of the company, or by submitting a subsequent proxy by internet, telephone or by mail. Attendance at the special meeting is not, by itself, sufficient to revoke a proxy unless written notice of the revocation or a subsequent proxy is delivered to the Secretary of the company before the revoked or superseded proxy is used at the special meeting. Proxies not revoked will be voted in accordance with the choices specified by shareholders on the proxy for that purpose.

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also revoke your previous voting instructions by voting online during the special meeting.

We currently expect that each of our directors and executive officers will vote their shares in favor of the merger proposal and the golden parachute proposal, although they have no obligation to do so.

Each share of our common stock is entitled to one vote on each matter to be voted upon at the special meeting. Holders of our common stock are not entitled to cumulative voting rights.

A “quorum” is the minimum number of shareholders who must be present at the special meeting for business to be conducted. The holders of least    shares of our common stock (which represents a majority of the voting power of the shares expected to be entitled to vote at the special meeting) will be a quorum for a vote to be taken on the merger proposal and the golden parachute proposal.

If a quorum is present when the special meeting is convened, the shareholders present may continue to transact business until adjournment, even if the withdrawal of shareholders originally present leaves less than a quorum.

If a shareholder indicates on their proxy that they wish to abstain from voting, including banks, brokers or other nominees holding their customers’ shares who cause abstentions to be recorded, these shares are considered present and entitled to vote at the special meeting and those shares will count toward determining whether or not a quorum is present at the meeting. An abstention will have the same effect as a vote against the merger proposal and the adjournment proposal, but will have no effect on the golden parachute proposal.

If a shareholder who holds their shares through a bank, broker or other nominee does not give instructions to the bank, broker or other nominee as to how to vote the shares, the bank, broker or other nominee has authority under applicable stock exchange rules to vote those shares for or against “routine” proposals. However, banks, brokers and other nominees without discretionary authority cannot vote on their customers’ behalf on “non-routine” proposals. All of the proposals to be considered at the special meeting are “non-routine.”

If a bank, broker or other nominee does not receive voting instructions as to a non-routine proposal and does not have discretionary authority to vote on the proposal, a “broker non-vote” may occur. Shares that are subject to broker non-votes are considered not entitled to vote, and therefore will not count toward determining whether or not a quorum is present at the meeting and will be ignored for purposes of determining the outcome of any vote on the golden parachute proposal or the adjournment proposal. However, a broker non-vote will have the same effect as a vote against the merger proposal.

The company will pay all solicitation expenses in connection with this proxy statement and related proxy soliciting material of the board of directors, including the preparation and assembly of the proxies and soliciting material and the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding common stock.

We have retained MacKenzie to assist our board of directors in the solicitation of proxies for the special meeting, and we expect to pay MacKenzie $20,000, plus reimbursement of out-of-pocket expenses. Proxies may be solicited by mail, personal interview, email, telephone, or via the internet by MacKenzie or, without additional compensation, by certain of our directors, officers and employees.

Surmodics, Inc. (referred to in this proxy statement as “we,” “us,” “our,” “Surmodics,” or the “company”) is a Minnesota corporation originally incorporated in June 1979.

Surmodics is a leading provider of performance coating technologies for intravascular medical devices and chemical and biological components for in vitro diagnostic immunoassay tests and microarrays. Surmodics develops and commercializes highly differentiated vascular intervention medical devices that are designed to address unmet clinical needs and engineered to the most demanding requirements. This key growth strategy leverages the combination of the company’s expertise in proprietary surface modification and drug-delivery coating technologies, along with its device design, development and manufacturing capabilities. The company’s mission is to improve the detection and treatment of disease. Surmodics is headquartered in Eden Prairie, Minnesota.

Our common stock is currently listed on Nasdaq under the ticker symbol “SRDX.”

The members of our board of directors are:

Our current executive officers are:

Our principal executive offices are located at 9924 West 74^th Street, Eden Prairie, Minnesota 55344, and our telephone number is +1 (952) 500-7000. Our investor website is surmodics.gcs-web.com. The information contained on, or accessible through, our website is not incorporated into this proxy statement. More information about the company, our board of directors, and our executive officers is available as described under “Where You Can Find More Information” on page 75.

BCE Parent, LLC (referred to in this proxy statement as “Parent”) is a Delaware limited liability company controlled by funds affiliated with GTCR and will be capitalized, in part, by such funds. It was formed on May 23, 2024 for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement.

BCE Merger Sub, Inc. (referred to in this proxy statement as “Merger Sub”) is a Minnesota corporation and a wholly owned subsidiary of Parent. Merger Sub was formed on May 23, 2024 solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement, and it currently has no other business or operations. Upon completion of the merger, Merger Sub will cease to exist and the company will continue as the surviving corporation.

GTCR LLC (referred to in this proxy statement as “GTCR”) is a Delaware limited liability company. GTCR is a leading private equity firm with a long track record of investment expertise across healthcare and healthcare technology. GTCR is not a party to the merger agreement, but Parent is controlled by the following funds affiliated with GTCR and will be capitalized, in part, by such funds: GTCR Strategic Growth Fund I/B LP, GTCR Strategic Growth Fund I/C LP and GTCR Strategic Growth Co-Invest I LP, each of which is a Delaware limited partnership (collectively, the “GTCR Funds”).

In connection with the merger, the GTCR Funds have agreed to capitalize Parent with up to $287,300,000, subject to the terms and conditions set forth in an equity commitment letter entered into by the GTCR Funds and Parent. For more information about the equity commitment letter, see “The Merger—Financing of the Merger.”

The principal executive offices for GTCR, Parent and Merger Sub are located at 300 North LaSalle, Suite 5600, Chicago, IL 60654, and its telephone number is (312) 382-2200.

If the merger agreement is approved by our shareholders and the other conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the company, and the separate corporate existence of Merger Sub will cease. The company will be the surviving corporation in the merger and will continue its corporate existence as a Minnesota corporation and a wholly owned subsidiary of Parent.

Upon the terms and subject to the conditions of the merger agreement, at the effective time of the merger, each share of our common stock issued and outstanding immediately before the effective time of the merger (other than cancelled shares, dissenting shares and shares subject to restricted stock awards) will be converted into the right to receive $43.00 in cash, without interest and less any applicable withholding taxes. At the effective time of the merger, our current shareholders will cease to have ownership interests in the company or rights as its shareholders. Therefore, our current shareholders will not participate in any of our future earnings or growth and will not benefit from any appreciation in our value.

Our common stock is currently registered under the Exchange Act and is quoted on Nasdaq under the symbol “SRDX.” As a result of the merger, the company will cease to be a publicly traded company and will be a wholly owned subsidiary of Parent. Following the consummation of the merger, our common stock will be delisted from Nasdaq and deregistered under the Exchange Act, and the company will no longer be required to file periodic reports with the SEC with respect to our common stock, in each case in accordance with applicable law, rules and regulations.

If the merger agreement is not approved by our shareholders or if the merger is not consummated for any other reason, our shareholders will not receive any payment for their shares of our common stock. Instead, we will remain a public company, our common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act and we will continue to file periodic reports with the SEC. In addition, if the merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that our shareholders will continue to be subject to the same risks and opportunities as they currently are, including, among other things, general industry, economic and market conditions. If the merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of our common stock. From time to time, if the merger is not consummated, our board of directors will evaluate and review our business operations, properties, dividend policy and capitalization and, among other things, make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to maximize shareholder value. If the merger agreement is not approved by our shareholders or if the merger is not consummated for any other reason, there can be no assurance that any other transaction acceptable to us will be offered or that our business, prospects or results of operations will not be adversely impacted.

If the merger agreement is terminated, under specified circumstances, we may receive from or be required to pay Parent a termination fee, as described under “The Merger Agreement—Termination Fees.”

The following chronology summarizes certain key events and contacts that led to the signing of the merger agreement. It does not purport to catalogue every conversation among our board of directors, members of our management, or the company’s representatives and other parties.

During the past several years, as part of the company’s ongoing strategic-planning process, our board and management regularly reviewed and assessed, among other things, the company’s long-term strategic goals and opportunities, the competitive environment for our products, short- and long-term performance in light of the company’s strategic plan, our liquidity and capital resources, and the market performance of our common stock, with the goal of enhancing shareholder value.

On October 26, 2022, at its first regularly scheduled meeting of our 2023 fiscal year, our board discussed the need to balance enhancing near-term shareholder value with investments in our strategic initiatives to create long-term shareholder value. These discussions included concerns about balancing the potential benefits that could be realized from successful development and commercialization of a portfolio of drug-coated balloon (“DCB”) devices,

including our SurVeil DCB, and of a portfolio of medical devices for vascular interventional treatments, including our Pounce thrombectomy systems and Sublime radial access platform (the “VI Products”), against the significant risk, uncertainty and cost associated with those opportunities.

In October and November 2022, in response to the discussion at the October 2022 board meeting, our management worked informally with two investment banking firms, as potential financial advisors, to identify potential strategic options for enhancing shareholder value.

On December 1, 2022, at a regularly scheduled meeting of our board, Timothy J. Arens (our Chief Financial Officer) presented management’s perspective, informed by its work with the two investment banking firms, on several potential corporate actions for enhancing shareholder value, an overview of the potential advantages and disadvantages of each, and critical factors to be considered in those potential actions.

In December 2022 through early February 2023, the company’s management met with representatives of three potential financial advisors, including Jefferies, one of the two investment banks mentioned above and another investment bank, regarding potential transactions to enhance shareholder value.

On January 19, 2023, the company announced that it had received a letter from the U.S. Food and Drug Administration (the “FDA”) indicating that the premarket approval (“PMA”) application for the company’s SurVeil DCB was not then approvable in the form it had been submitted to the FDA. The price of the company’s common stock fell from $37.34 per share on the trading day before the announcement to close at $26.38 per share on the day of the announcement.

On January 30, 2023, in light of the decision of the FDA to request additional information and data related to the PMA application for the company’s SurVeil DCB product, the company initiated certain organizational changes designed to align its human resources with its business needs and to reduce its use of cash.

On February 9, 2023, at a regularly scheduled meeting of our board, Mr. Arens presented the perspectives of the three investment banking firms with which management recently had met regarding a potential asset sale of the company’s VI Products, a potential sale of the remaining company after the dispositions of the assets of the VI Products, the order and timetable of such potential transactions, and other potential alternatives that could enhance shareholder value. The board directed Mr. Arens to continue to work with the three investment banking firms to review various potential strategic alternatives.

On April 11, 2023, at a special meeting of our board, which was also attended in part by Mr. Arens and Gordon S. Weber (our Senior Vice President of Legal), Mr. Arens reported that management forecasted that the company eventually would need to borrow additional funds to implement its existing long-term strategy. Mr. Arens presented a variety of alternative potential transactions that management had developed with input from the three investment banking firms to enhance shareholder value or increase the company’s capital resources over the near term, noting the estimated time frame and potential values associated with each.

On June 17, 2023, the company received an unsolicited letter from a Party A, a financial sponsor, expressing interest in acquiring all outstanding shares of the company’s common stock at a cash purchase price in the range of $31.00 to $33.00 per share. The closing price of the company’s common stock was $25.08 per share on June 16, 2023, the last trading day before the letter was received.

Early on June 20, 2023, before the open of the United States stock markets, the company announced that the FDA had approved a revised PMA application for the company’s SurVeil DCB. The price of the company’s common stock closed at $29.12 per share on the day of the announcement.

On June 22, 2023, at a regularly scheduled meeting of our board, the board considered and discussed the unsolicited proposal received from Party A. At the meeting, Gary S. Maharaj (our Chief Executive Officer and one of our directors) also presented information on potential alternative strategic scenarios either to enhance long-term shareholder value by continuing to pursue the company’s strategic initiatives or to realize short-term shareholder value by pursuing one or more corporate transactions. Mr. Arens reported on the requirements and status of preparation for a variety of transactions to enhance near-term shareholder value or increase the company’s capital resources. Mr. Arens also reported on certain financial metrics in selected precedent transactions related to certain of the alternative strategic scenarios that he presented. The board unanimously directed the company’s management to reject the unsolicited indication of interest from Party A, after concluding that it did not adequately reflect the company’s value. The board also directed management to continue its development and analysis of various potential

strategic alternatives. As a follow-up, shortly after the meeting, the chair of the board sent Mr. Maharaj a list of questions regarding different potential corporate transactions to enhance near-term shareholder value or increase the company’s capital resources that the board requested management to address at a subsequent special meeting of the board of directors.

On June 26, 2023, Mr. Maharaj notified Party A that our board had rejected its unsolicited proposal.

On July 20, 2023, at a special meeting of our board, which was also attended by Mr. Weber and in part by Mr. Arens and representatives of Jefferies, the board discussed various potential corporate transactions involving different groups of the company’s assets and different transaction structures, and their potential impact on shareholder value and timetables. The potential corporate transactions included, among others, a possible sale of the VI Products and a possible sale of the entire company in an equity transaction either following or in lieu of a sale of the VI Products. Mr. Weber reviewed the legal implications of the alternative corporate transactions and Mr. Arens discussed additional financial aspects of those transactions. Management also addressed the questions raised by the board following its June 22 board meeting. During the meeting, the board directed management to engage Jefferies as a financial advisor to the company given, among other things, Jefferies’ substantial experience in merger and acquisition transactions and familiarity with the industry in which the company operates. The board also directed management to initiate a process to seek to sell the assets of the VI Products in an initial transaction.

In August and early September 2023, Mr. Maharaj initiated informal discussions with representatives of two medical device companies regarding their interest in acquiring some or all of assets of the VI Products. Both parties were referred to Jefferies for inclusion in the subsequent process and were among the 19 potential acquirors described below.

Throughout August and September 2023, the company prepared marketing materials for the sale of the VI Products assets.

On September 21, 2023, at a regularly scheduled meeting of our board, the board received an update on the developments since its last meeting and approved the terms of Jefferies’ engagement to act as the company’s financial advisor in connection with a potential sale of the VI Products and a potential sale of the company as a whole, whether following or in lieu of a sale of the VI Products. Later that day, the company and Jefferies executed a formal letter agreement related to the engagement.

From September 21 to October 4, 2023, our management worked with Jefferies to continue preparing marketing materials for the sale of the assets of the VI Products and to identify parties potentially interested in acquiring such assets. In developing the list of potentially interested parties, given the state of development of the VI Products and the significant ongoing cash needs and medical device scale that would be needed for development and commercialization, management focused on operating companies with existing businesses that could be a complementary strategic fit.

On October 5, 2023, management authorized Jefferies to begin an outreach on behalf of the company to potentially interested parties, which outreach was commenced later that day. Ultimately, approximately 19 potential acquirors of the VI Products were contacted, all of which were strategic acquirors. Of the 19 parties contacted, five expressed interest in learning more about the VI Products and ultimately executed non-disclosure agreements with the company. Each of these non-disclosure agreements contained “standstill” restrictions that automatically ceased to apply upon the public announcement of certain transactions (including the merger). During October and November 2023, management met, together with Jefferies, with four of the five parties that had expressed interest in the VI Products and provided certain additional confidential information regarding the VI Products to those parties.

On October 23, 2023, our board held a special meeting, which was also attended in part by Messrs. Arens and Weber. At the meeting, the board received an update from Mr. Arens regarding the process and timing for a potential sale of the VI Products and for a potential sale of the entire company either following or in lieu of a sale of the VI Products.

By the end of November 2023, each of the four parties that had received a management presentation declined to proceed with a transaction. The fifth party, Party B, became engaged in the process later than the others, and had not yet indicated whether it was interested in receiving more information about the VI Products.

On December 5, 2023, our board held a regularly scheduled meeting, which was also attended in part by Messrs. Arens and Weber, Joel Suiter (our Director of Corporate Development), and representatives of Jefferies. At

the meeting, Messrs. Maharaj, Arens, Suiter and Weber and Jefferies provided the board with an update on the VI Products sale process. Jefferies also discussed with the board various potential strategic alternatives for the company if the VI Products sale did not occur. Those alternatives included the potential sale of the company as a whole, including the VI Products. A discussion then ensued regarding certain risks and considerations associated with conducting a broadly marketed process for a sale of the company, including risks of management distractions at a critical time in the commercialization of the company’s SurVeil DCB product and VI Products, risks of widespread disclosure of the company’s trade secrets and other confidential information, and risks of maintaining the confidentiality of an auction process. At the conclusion of the meeting, the board authorized management to prepare materials regarding a potential sale of the entire company for evaluation by a selected group of potential counterparties discussed with the board at the meeting and to work with Jefferies to provide the materials to those parties if Party B declined to proceed with an acquisition of the VI Products.

On January 16, 2024, management representatives made a presentation to representatives of Party B regarding the VI Products.

On January 23, 2024, at a special meeting of our board, which was also attended in part by Mr. Arens, management provided an update on discussions with Party B regarding a potential acquisition of the VI Products and the anticipated timeframe for feedback from that party. Mr. Maharaj described the process management intended to take, if Party B declined to pursue an acquisition of the VI Products, to explore the interest of a selected group of counterparties in an acquisition of the company, as authorized by the board at its December 5, 2023 meeting. Management reviewed a preliminary draft of the projections that the company anticipated including in the materials to be provided to parties potentially interested in acquiring the company, which projections were subsequently refined and included in the confidential information package provided to interested parties.

On January 24, 2024, Party B informed the company that it did not intend to pursue an acquisition of the VI Products.

On January 24 and 25, 2024, management worked with Jefferies to identify a short list of financial sponsors that would be appropriate for a targeted outreach soliciting interest in an acquisition of the company as a whole, ultimately identifying three financial sponsors, including GTCR, Party C and Party D.

On January 25, 2024, in accordance with the company’s directives, Jefferies began contacting the three financial sponsors. Each of the three parties negotiated and executed a non-disclosure agreement with the company and, on February 9, 2024, received a confidential information package regarding the company. These non-disclosure agreements, and the non-disclosure agreements subsequently executed by Party E and Party A, each contained “standstill” restrictions that automatically ceased to apply upon the public announcement of certain transactions (including the merger). Party C very shortly thereafter declined to participate further in the process, but each of GTCR and Party D continued to engage and scheduled a meeting with management to learn more about the company.

On January 28, 2024, an investment bank acting on behalf of another third-party financial sponsor, Party E, separately reached out to the company to request a meeting regarding the future of the company. The company referred this unsolicited inquiry to Jefferies, and Party E executed a non-disclosure agreement with the company and received the confidential information package on February 9, 2024.

Company management, together with Jefferies, then met with each of GTCR, Party D and Party E between February 14 and 15, 2024 for management presentations. Shortly following the management presentations, Party D declined to participate further in the process.

In light of Parties C and D declining to participate further in the process, on February 23, 2024, Jefferies suggested to company management that a fifth financial sponsor, Party F, be contacted to maintain a competitive dynamic in the sale process. Party F was suggested because an acquisition of the company was believed to fit the investment profile for one of its funds. Mr. Maharaj agreed and Jefferies contacted Party F later that day. Party F signed a non-disclosure agreement with the company (which did not contain any “standstill” provision) and received the confidential information package on February 29, 2024. Ultimately, Party F indicated that it was not interested in an acquisition of the entire company.

On March 1, 2024, a process letter was sent to each of GTCR and Party E, requesting that preliminary non-binding indications of interest, including the per share price at which they would be willing to acquire the company, be submitted by March 18, 2024.

On March 18, 2024, GTCR submitted a written preliminary non-binding indication of interest to acquire the company at a price per share of $38.00 to $40.00. Also on March 18, 2024, Party E submitted a written preliminary non-binding indication of interest to acquire the company at a price per share of $41.50 to $43.50. Each indication of interest was expressly subject to completion of due diligence and the negotiation and execution of definitive transaction documents. The reported closing price per share of the company’s common stock on that date was $27.47.

On March 20, 2024, a special meeting of our board was held to review the two written proposals. Messrs. Arens, Suiter and Weber also attended, together with representatives of Jefferies and Faegre Drinker Biddle & Reath LLP (“Faegre Drinker”), outside counsel to the company. At the meeting, Jefferies discussed with the board certain preliminary financial analyses relating to the company and Faegre Drinker reviewed and led a discussion regarding the directors’ fiduciary duties in the context of a potential sale of the company. After discussion, the board directed Jefferies to invite Party E to engage in further due diligence and discussions with the company regarding a potential acquisition, but to communicate to GTCR that its proposal was insufficient for GTCR to advance in the process and encourage GTCR to increase its indicative value range. The board also directed that Mr. Maharaj participate in those conversations along with Jefferies.

The next day, in accordance with our board’s directives, Mr. Maharaj and representatives of Jefferies had calls with Party E and GTCR to convey the board’s feedback. On the call with GTCR, Mr. Maharaj indicated that GTCR’s proposal was below the range required to advance to the next stage of the process.

On March 25, 2024, GTCR submitted a revised written non-binding indication of interest to acquire the company at a price per share of $41.50 to $43.00. The reported closing price per share of the company’s common stock on that date was $27.44.

On March 26, 2024, a special meeting of our board was convened, with certain members of management and representatives of Jefferies and Faegre Drinker in attendance, to review the updated proposal from GTCR. Following discussion, the board directed management and Jefferies to invite GTCR also to engage in further due diligence and discussions regarding a potential acquisition. The board also considered the advantages and disadvantages of soliciting interest from potential strategic acquirors (that is, operating companies not owned by a financial sponsor) of the entire company. The board also considered outreach to additional financial sponsors and discussed with Jefferies the likelihood (or lack thereof) that other financial sponsors might be interested in a transaction at a higher valuation than GTCR or Party E. The board considered a list of potential strategic acquirors, ultimately directing Jefferies and Mr. Maharaj to contact a targeted group of at least three potential strategic acquirors to gauge their interest in an acquisition of the entire company.

Following the board meeting, in accordance with our board’s directives, company management worked with Jefferies to identify a short list of potential strategic acquirors for the additional outreach based on perceived strategic interest and ability to execute a transaction. Five potential strategic acquirors were selected, none of which had been involved in the earlier process exploring a sale of the VI Products.

On March 28, 2024, in accordance with our board’s directives, Jefferies began contacting the five potential strategic acquirors. Ultimately, only two parties – Party G and Party H – expressed interest in learning more about the opportunity to acquire the company. Party G executed a non-disclosure agreement on April 9, 2024, and Party H executed a non-disclosure agreement on April 15, 2024. Party G and Party H each received the confidential information package that had been provided to other interested parties.

On April 1, 2024, a virtual data room containing additional confidential due diligence information regarding the company was made available to GTCR and Party E.

On April 10, 2024, GTCR participated in an in-person due diligence meeting with company management in Eden Prairie, Minnesota.

On April 12, 2024, Party E notified Jefferies that it was withdrawing from the process and declined to further pursue an acquisition of the company based on Party E’s additional due diligence review.

Also on April 12, 2024, Jefferies received an unsolicited inbound inquiry from Party A, expressing interest in a possible acquisition of the company.

On April 16, 2024, a draft of the merger agreement prepared by Faegre Drinker was uploaded to the virtual data room and made available to GTCR. GTCR was requested to provide a detailed markup of the merger agreement prior to submission of a final written acquisition proposal.

On April 17, 2024, Party E contacted Mr. Maharaj to share its reasons for withdrawing from the process.

Later on April 17, 2024, our board met to review recent developments, including Party E’s stated reasons for its withdrawal from the process and the prospects that it might nonetheless reengage in negotiations, the progress that GTCR had made in its due diligence review, and the new unsolicited inquiry from Party A. At the conclusion of the meeting, the board determined to continue to advance discussions with Parties G and H and to commence discussions with Party A.

From April 17 to April 18, 2024, in an effort to reengage Party E in the process, company management had additional due diligence discussions and provided additional due diligence information to Party E.

On April 18, 2024, company management met virtually with each of Parties G and H for a management presentation. The following week, each of them communicated to Jefferies that they were not interested in participating further in the process.

On April 19, 2024, Party A signed a non-disclosure agreement with the company and shortly thereafter received the confidential information package.

On April 23, 2024, Party E communicated to Jefferies reaffirming its decision to withdraw from the process. Party E reiterated this decision in a call with Mr. Maharaj on April 25, 2024.

On April 24, 2024, representatives of GTCR visited the company’s facility in Ireland as part of its confirmatory due diligence.

Later on April 25, 2024, our board met with management and representatives of Jefferies and Faegre Drinker to receive an update on the process, including the progress made with GTCR and Party A, the decisions of Parties G and H not to proceed in the process, the unsuccessful attempt made to reengage with Party E, and process and timing considerations for managing interest from those parties that remained engaged.

On April 29, 2024, company management met virtually with Party A for a management presentation.

Early on May 1, 2024, before the open of the United States stock markets, the company publicly reported its second-quarter earnings and revised full-year forecast. The company also reported the completion of a limited market evaluation and commercial launch of two new mechanical thrombectomy systems for the peripheral venous and arterial vasculatures, the Pounce Venous Thrombectomy System and the Pounce LP Thrombectomy System. On that day, the company’s closing stock price was $33.33 per share, up from $25.69 the prior trading day.

The revised full-year forecast included in our second-quarter earnings release was developed in April 2024 as part of our ordinary course financial planning and analysis, as part of which our management reviewed the company’s actual fiscal year-to-date performance and expectations for the remainder of 2024 and developed a refined annual operating plan, which implied earnings before income tax, depreciation and amortization (EBITDA) 17% lower than the 2024 EBITDA included in the projections previously provided to bidders, primarily due to an increase in forecast operating expenses associated with our VI Products. In response to a request from GTCR regarding alignment between those projections and the year-to-date performance, we provided updated projections for fiscal year 2024 to conform to the refined annual operating plan, without changing the forecasts for future years (which remained the same). These updated projections, which are included in our projections summarized under “Certain Prospective Financial Information,” were provided to the GTCR on May 8, 2024. Our projections, as so updated, were also provided to our board and to Jefferies for its use and reliance in connection with its financial analyses and opinion summarized under “Opinion of Our Financial Advisor.”

On May 8, 2024, representatives of Kirkland & Ellis LLP (“K&E”), outside counsel to GTCR, sent a detailed markup of the merger agreement to representatives of Faegre Drinker. Among other things, the markup (1) provided that Parent would not be obligated to accept any “burdensome condition” in order to avoid any order under antitrust laws that would prevent, impair or delay the closing, (2) introduced the concept of a regulatory reverse termination fee payable by Parent in an amount equal to 5.0% of the company’s equity value, as an exclusive remedy in the case of a failure of the transaction to be completed due to antitrust impediments, (3) introduced provisions relating to Parent’s proposed debt financing, including the concept of a reverse termination fee payable by Parent, in an amount equal to 5.0% of the company’s equity value, as an exclusive remedy and cap on liability in the case of a failure to close due to Parent’s breach of the merger agreement, and (4) proposed an increase of the company termination fee from 2.5% to 3.5% of the company’s equity value.

On May 10, 2024, Faegre Drinker responded in writing to K&E’s markup by reserving comment on the document as a whole but communicating that certain items, including the four points noted above, were most likely to negatively distinguish GTCR’s bid when considered by the company’s board of directors and requested that K&E work with GTCR to include an improved markup as part of GTCR’s May 15 final written bid submission. With respect to the four points noted above, Faegre Drinker communicated that (1) if there is to be any condition on antitrust efforts relating to a “burdensome condition,” it must be a much higher standard such as a material adverse effect on the combined company, (2 & 3) the Parent regulatory reverse termination fee and Parent reverse termination fee should each be on the higher end of the market range (around 8% of the company’s equity value), and (4) the company termination fee should be no more than 3% of the company’s equity value.

On May 13, 2024, Party A submitted a preliminary written non-binding indication of interest to acquire the company at a price per share of $41.00. The indication of interest was expressly subject to completion of due diligence and the negotiation and execution of definitive transaction documents. The reported closing price per share of the company’s common stock on that date was $32.45.

On May 15, 2024, GTCR submitted an updated written non-binding indication of interest to acquire the company at $42.25 per share, the midpoint of the range provided in its most recent prior written non-binding indication of interest. The proposal was accompanied by an updated markup of the merger agreement, which reflected concessions on each of the items identified in Faegre Drinker’s May 10 communication to K&E, and by drafts of debt and equity commitment papers and a limited guarantee to be executed by certain GTCR funds in favor of the company. As part of the proposal, GTCR requested an exclusivity period of five business days to finalize due diligence and transaction documents, including the merger agreement. The reported closing price per share of the company’s common stock on that date was $33.56.

On May 17, 2024, our board met with management and representatives of Jefferies and Faegre Drinker to review the written indications of interest received earlier that week from Party A and GTCR. After discussion, the board directed Jefferies to communicate to Party A that its bid was meaningfully inferior to others received, both in terms of value and remaining due diligence required. The board also directed Jefferies to communicate to GTCR that the company would not be willing to engage in exclusive negotiations with GTCR at its current per share price and to encourage GTCR to submit an improved proposal. That evening, in accordance with the board’s directives, representatives of Jefferies conveyed these messages to representatives of Party A and to representatives of GTCR. Representatives of Faegre Drinker and representatives of Cleary Gottlieb Steen & Hamilton LLP, special antitrust counsel to GTCR, also connected by telephone to discuss certain matters relating to certainty and timing of closing of a transaction with GTCR.

On May 18, 2024, a representative of GTCR called a representative of Jefferies to revise GTCR’s acquisition proposal to $42.50 per share, an increase of 25 cents per share from GTCR’s May 15 proposal. The reported closing price per share of the company’s common stock on May 17, 2024, the most recent trading day, was $34.62. Following discussions among representatives of Jefferies and company management, Mr. Maharaj contacted GTCR to discuss the background for its revised proposal and to assess GTCR’s willingness to further increase the price in exchange for a period of exclusive negotiations.

On May 19, 2024, our board met with management and representatives of Jefferies and Faegre Drinker to discuss the revised GTCR proposal. Following discussion, the board directed Jefferies to communicate to GTCR that the company would be willing to enter exclusivity with GTCR if it increased its proposal to $43.00 per share. Following the meeting, in accordance with the board’s directives, representatives of Jefferies conveyed this message to GTCR.

On May 20, 2024, a representative of GTCR called a representative of Jefferies to deliver a further increased proposal of $43.00 per share, contingent upon exclusivity through May 28, 2024. Thereafter, representatives of K&E and Faegre Drinker negotiated the terms of an exclusivity agreement, which was executed that evening. Following execution of the exclusivity agreement, Faegre Drinker sent revised drafts of the merger agreement, the debt and equity commitment letters, and the guarantee to K&E. Additional due diligence materials, previously withheld given confidentiality considerations, were made available to K&E and GTCR in the virtual data room. The reported closing price per share of the company’s common stock on that date was $35.06.

Thereafter and continuing until the signing of the merger agreement on May 28, 2024, the parties and their representatives engaged in frequent communication to complete due diligence review by GTCR, its financing sources, and the underwriter of its third-party representations and warranties insurance policy, to negotiate and resolve remaining points in the transaction documents, and to align on future public communications relating to the transaction.

On May 23, 2024, K&E sent Faegre Drinker a revised draft of the merger agreement and certain other transaction documents. The revised draft of the merger agreement reflected, among other things, (1) a definition of “burdensome condition,” which limited Parent’s obligations under the antitrust-efforts covenant, tied to a $5 million revenue threshold, (2) a Parent Regulatory Termination Fee equal to 8.0% of the company’s equity value, (3) a Parent Termination Fee equal to 7.5% of the company equity value, and providing that it would serve as an exclusive remedy and cap on liability in the case of a failure to close due to Parent’s breach of the merger agreement, and (4) a company Termination Fee equal to 3.25% of the company’s equity value.

On May 24, 2024, representatives of GTCR spoke with representatives of Jefferies. Among other things, GTCR reconfirmed its proposed purchase price, subject to agreement on the other material terms in the transaction documents.

On May 27, 2024, our board of directors and the compensation committee of the board held a joint meeting that was attended by members of management and representatives of Jefferies and Faegre Drinker. Prior to the meeting, Jefferies provided the board with certain information regarding Jefferies’ material investment banking relationships during the preceding two-year period with GTCR and certain related entities (which information had been updated from information previously provided by Jefferies to the board). Also prior to the meeting, members of the board were provided with the proposed execution version of the merger agreement and other transaction-related documents. At this meeting, Faegre Drinker presented a summary of the material terms of the merger agreement and certain other legal matters, and reviewed with the directors their fiduciary duties under Minnesota law in connection with their consideration of the merger. Also at this meeting, Jefferies reviewed its financial analysis of the merger consideration with our board of directors and rendered an oral opinion, confirmed by delivery of a written opinion dated May 27, 2024, to our board of directors to the effect that, as of such date and based on and subject to the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as set forth in such opinion, the merger consideration to be received by holders of our common stock (other than, as applicable, Parent, Merger Sub and their respective affiliates) pursuant to the merger agreement was fair, from a financial point of view, to such holders.

Following consideration and discussion of the proposed merger agreement and the transactions contemplated thereby, the compensation committee of the board unanimously approved the acceleration and cash-out of the company’s equity awards, as contemplated by the merger agreement. In addition, the board unanimously (1) declared that the merger agreement and the transactions contemplated thereby are fair, advisable and in the best interests of the company and its shareholders; (2) approved and declared the merger agreement advisable in accordance with the relevant provisions of the Minnesota Business Corporation Act, (3) directed that the approval of the merger agreement be submitted to a vote, as promptly as practicable, of the shareholders of the company, and (4) recommended that the company’s shareholders approve the merger agreement in accordance with relevant provisions of the Minnesota Business Corporation Act.

Later that day, representatives of K&E and GTCR communicated to representatives of Faegre Drinker and Jefferies that, in light of the Memorial Day holiday, GTCR would need to convene its investment committee for final approval of transaction on the following day.

After the close of the United States stock markets on May 28, 2024, representatives of K&E communicated to representatives of Faegre Drinker that GTCR had obtained the requisite investment committee approval and was prepared to execute the transaction documents. The merger agreement was executed that evening and announced with a joint press release early the following day, May 29, 2024. The reported closing price per share of the company’s common stock on May 28, 2024 was $35.10.

In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, our board of directors consulted with our executive management and our outside legal and financial advisors.

In recommending that our shareholders vote in favor of the merger proposal, our board of directors also considered a number of factors potentially weighing in favor of the merger, including the following (which are not presented in order of relative importance):

In its deliberations concerning the merger and the other transactions contemplated by the merger agreement, our board of directors also considered and balanced against the factors potentially weighing in favor of the merger a number of uncertainties, risks, restrictions and other factors potentially weighing against the merger, including the following (not necessarily in order of relative importance):

After taking into account all of the factors set forth above, as well as others, our board of directors concluded that the risks, uncertainties, restrictions and potentially negative factors associated with the merger were outweighed by the potential benefits of the merger to our shareholders.

The foregoing discussion of factors considered by our board of directors is not intended to be exhaustive but summarizes the material factors considered by our board of directors. In light of the variety of factors considered in connection with its evaluation of the merger, our board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. Moreover, each member of our board of directors applied his or her own personal business judgment to the process and may have given different weight to different factors. Our board of directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. Our board of directors based its recommendation on the totality of the information presented. It should be noted that this explanation of the reasoning of our board of directors and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth under “Introduction—Forward-Looking Statements” on page iii.

We retained Jefferies as financial advisor to Surmodics in connection with the merger. In connection with this engagement, our board of directors requested that Jefferies evaluate the fairness, from a financial point of view, of the merger consideration to be received by holders of our common stock (other than, as applicable, Parent, Merger Sub and their respective affiliates) pursuant to the merger agreement. At a meeting of our board of directors held on May 27, 2024 to evaluate the merger, Jefferies rendered an oral opinion, confirmed by delivery of a written opinion dated May 27, 2024, to our board of directors to the effect that, as of such date and based on and subject to the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as set forth in such opinion, the merger consideration to be received by holders of our common stock (other than, as applicable, Parent, Merger Sub and their respective affiliates) pursuant to the merger agreement was fair, from a financial point of view, to such holders.

The full text of Jefferies’ opinion, which describes the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Jefferies, is attached as Appendix B to this proxy statement and is incorporated herein by reference. Jefferies’ opinion was provided for the use and benefit of our board of directors (in its capacity as such) in its evaluation of the merger consideration from a financial point of view and did not address any other aspect of the merger or any other matter. Jefferies’ opinion did not address the relative merits of the merger or other transactions contemplated by the merger agreement as compared to any alternative transaction or opportunity that might be available to Surmodics, nor did it address the underlying business decision by Surmodics to engage in the merger. Jefferies’ opinion did not

constitute a recommendation to our board of directors, and does not constitute a recommendation to any securityholder, as to how to vote or act with respect to the merger or any other matter. The following summary is qualified in its entirety by reference to the full text of Jefferies’ opinion.

In arriving at its opinion, Jefferies, among other things:

In its review and analysis and in rendering its opinion, Jefferies assumed and relied upon, but did not assume any responsibility to independently investigate or verify, the accuracy and completeness of all financial and other information that was supplied or otherwise made available by Surmodics or that was publicly available to Jefferies (including, without limitation, the information described above) or otherwise reviewed by Jefferies. Jefferies relied on assurances of the management and other representatives of Surmodics that they were not aware of any facts or circumstances that would make such information incomplete, inaccurate or misleading. In its review, Jefferies did not make or obtain an independent evaluation or appraisal of any of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise), nor did Jefferies conduct a physical inspection of any of the properties or facilities, of Surmodics or any other entity and Jefferies was not furnished with, and assumed no responsibility to obtain or conduct, any such evaluations, appraisals or physical inspections. Jefferies also did not evaluate the solvency or fair value of Surmodics or any other entity under any state or federal laws relating to bankruptcy, insolvency or similar matters. In addition, Jefferies’ analyses and opinion did not consider any actual or potential arbitration, litigation, claims or possible unasserted claims, audits, investigations or other proceedings involving or affecting Surmodics or any other entity.

With respect to the financial forecasts and estimates provided to and reviewed by Jefferies, Jefferies noted that projecting future results of any company is inherently subject to uncertainty. However, Jefferies was advised, and Jefferies assumed, that the financial forecasts and estimates relating to Surmodics that Jefferies was directed to utilize for purposes of its analyses and opinion were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of Surmodics as to, and were an appropriate basis upon which to evaluate, the future financial performance of Surmodics and the other matters covered thereby. Jefferies expressed no opinion as to any financial forecasts or estimates or the assumptions on which they were based.

Jefferies relied upon the assessments of the management of Surmodics as to, among other things, (i) the potential impact on Surmodics of market, competitive, macroeconomic, geopolitical and other conditions, trends and developments in and prospects for, and governmental, regulatory and legislative matters relating to or otherwise affecting, the healthcare industry, including the medical device and manufacturing sector thereof, or the operations of Surmodics, (ii) the products, product candidates and services of, and technology, patents and other intellectual property utilized in, Surmodics’ business (including, without limitation, with respect to the development, manufacturing, commercialization and licensing of such products and product candidates), and (iii) existing and future agreements and other arrangements involving, and ability to attract, retain and/or replace, key employees, customers, suppliers, licensees, distributors and other commercial relationships of Surmodics. Jefferies assumed that there would not be any developments with respect to any such matters that would be meaningful in any respect to Jefferies’ analyses or opinion.

Jefferies’ opinion was based on economic, monetary, regulatory, market and other conditions existing, and which could be evaluated, as of the date of Jefferies’ opinion. Jefferies expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which Jefferies becomes aware after the date of its opinion. As our board of directors was aware, the credit, financial and stock markets, the industry and sectors in which Surmodics operates and the securities of Surmodics have experienced and may continue to experience volatility and disruptions and Jefferies expressed no view or opinion as to any potential effects of such volatility or disruptions on Surmodics or the merger.

Jefferies made no independent investigation of, and Jefferies expressed no view or opinion as to, any legal, regulatory, accounting or tax matters affecting or relating to Surmodics or the merger and Jefferies assumed the correctness in all respects meaningful to its analyses and opinion of all legal, regulatory, accounting and tax advice given to Surmodics and/or our board of directors, including, without limitation, with respect to changes in, or the impact of, accounting standards or tax and other laws, regulations and governmental and legislative policies affecting Surmodics or the merger and legal, regulatory, accounting and tax consequences to Surmodics or its securityholders of the terms of, and transactions contemplated by, the merger agreement. Jefferies also assumed that the merger would be consummated in accordance with its terms without waiver, modification or amendment of any material term, condition or agreement and in compliance with all applicable laws, documents and other requirements and that, in the course of obtaining the necessary governmental, regulatory or third-party approvals, consents, waivers and releases for the merger or otherwise, including with respect to any divestitures or other requirements, no delay, limitation, restriction or condition would be imposed or occur that would have an adverse effect on Surmodics or the merger or that otherwise would be meaningful in any respect to Jefferies’ analyses or opinion. Jefferies further assumed that the final merger agreement, when signed by the parties thereto, would not differ from the proposed execution version reviewed by Jefferies in any respect meaningful to Jefferies’ analyses or opinion.

In connection with its engagement, at our board of directors’ direction, Jefferies was requested to contact selected third parties to solicit their potential interest in a possible acquisition of all or a part of Surmodics. Jefferies’ opinion did not address the relative merits of the merger or other transactions contemplated by the merger agreement as compared to any alternative transaction or opportunity that might be available to Surmodics, nor did it address the underlying business decision by Surmodics to engage in the merger or the terms of the merger agreement, including the form or structure of the merger or any term, aspect or implication of any agreements, arrangements or understandings entered into in connection with, or contemplated by or resulting from, the merger or otherwise. Jefferies’ opinion was limited to the fairness, from a financial point of view and as of the date of such opinion, of the merger consideration to be received by holders of our common stock (to the extent expressly specified in such opinion), without regard to individual circumstances of specific holders (whether by virtue of control, voting or consent, liquidity, contractual arrangements or otherwise) that may distinguish such holders or the securities of Surmodics held by such holders, and Jefferies’ opinion did not in any way address proportionate allocation or relative fairness among such holders, holders of any other securities of Surmodics or otherwise. Jefferies was not asked to, and its opinion did not, address the fairness, financial or otherwise, of any consideration to the holders of any class of securities, creditors or other constituencies of Surmodics or any other party. Furthermore, Jefferies did not express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation or other consideration payable to or to be received by any officers, directors or employees, or any class of such persons, in connection with the merger relative to the merger consideration or otherwise. Jefferies also expressed no view or opinion as to the prices at which shares of our common stock or any other securities of Surmodics may trade or otherwise be transferable at any time, including following announcement or consummation of the merger. The issuance of Jefferies’ opinion was authorized by the Fairness Committee of Jefferies LLC.

In connection with rendering its opinion to our board of directors, Jefferies performed a variety of financial and comparative analyses, including those described below. The following summary is not a complete description of all analyses performed and factors considered by Jefferies in connection with its opinion. The preparation of a financial opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. With respect to the selected public companies and selected precedent transactions analyses summarized below, no company or transaction used as a comparison was identical or directly comparable to Surmodics or the merger. These analyses necessarily involved complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies or transactions concerned.

Jefferies believes that its analyses and the summary below must be considered as a whole and in context and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Jefferies’ analyses and opinion. Jefferies did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion, but rather arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole.

The estimates of the future performance of Surmodics in or underlying Jefferies’ analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than those estimates. In performing its analyses, Jefferies considered industry performance, general business and economic conditions and other matters, many of which were beyond the control of Surmodics. Estimates of the financial value of companies do not purport to be appraisals or necessarily reflect the prices at which companies or securities actually may be sold or acquired. Accordingly, the estimates used in, and the implied reference ranges resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as Jefferies’ view of the actual value of Surmodics or its business or securities.

The merger consideration payable pursuant to the merger agreement was determined through negotiations between Surmodics and GTCR, and the decision by Surmodics to enter into the merger agreement was solely that of our board of directors. Jefferies’ opinion and financial analyses were only one of many factors considered by our board of directors in its evaluation of the merger consideration and should not be viewed as determinative of the views of our board of directors or Surmodics’ management with respect to the merger or the consideration payable in the merger.

The summary of the financial analyses described below under the heading “—Financial Analyses” is a summary of the material financial analyses reviewed with our board of directors and performed by Jefferies in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand Jefferies’ financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Jefferies’ financial analyses. The order in which the financial analyses summarized below appear does not necessarily reflect the relative importance or weight given to such analyses. For purposes of the analyses described below, the term (i) “EBITDA” means earnings before interest, taxes, depreciation and amortization and (ii) “adjusted EBITDA” means EBITDA, adjusted for certain non-recurring and non-cash items.

Selected Public Companies Analysis. Jefferies reviewed publicly available financial, stock market and operating information of Surmodics and the following six selected publicly traded companies with operations in the medical manufacturing industry that Jefferies considered generally relevant for purposes of analysis (collectively, the “selected companies”):

Jefferies reviewed, among other information, enterprise values, calculated as fully diluted equity values based on closing stock prices on May 24, 2024 plus total debt and less cash and cash equivalents and short-term investments, as multiples of calendar year 2024 and calendar year 2025 estimated EBITDA. Financial data of the selected companies were based on Wall Street research analysts’ estimates, public filings and other publicly available information. Financial data of Surmodics was based on financial forecasts and estimates of the management of Surmodics (as calendarized).

The overall low to high calendar year 2024 and calendar year 2025 estimated EBITDA multiples observed for the selected companies were 9.6x to 24.0x (with a median of 16.0x) and 8.9x to 21.7x (with a median of 14.5x), respectively. Jefferies then applied selected ranges of calendar year 2024 and calendar year 2025 estimated EBITDA

multiples derived from the selected companies of 16.0x to 19.5x and 14.5x to 17.5x, respectively, to calendar year 2024 and calendar year 2025 estimated adjusted EBITDA of Surmodics, respectively.

This analysis indicated the following approximate implied per share equity value reference ranges for Surmodics, as compared to the merger consideration:

Selected Precedent Transactions Analysis. Using publicly available information, Jefferies reviewed financial data relating to the following 15 selected transactions involving target companies with operations in the medical manufacturing industry that Jefferies considered generally relevant for purposes of analysis (collectively, the “selected transactions”):

Jefferies reviewed transaction values, based on the upfront value of the consideration paid or payable in the selected transactions (or, to the extent sufficient information was publicly available, the implied enterprise value of the target company), as a multiple of the latest 12 months revenue of the target companies as of the announcement date of the applicable selected transaction. Financial data of the selected transactions were based on public filings and other publicly available information. Financial data of Surmodics was based on financial forecasts and estimates of the management of Surmodics.

The overall low to high latest 12 months revenue multiples observed for the selected transactions was 1.3x to 6.9x (with a median of 3.5x). Jefferies then applied a selected range of latest 12 months revenue multiples derived from the selected transactions of 3.0x to 4.0x to the latest 12 months (as of March 31, 2024) revenue of Surmodics, excluding revenue recognized from one-time milestone payments.

This analysis indicated the following approximate implied per share equity value reference range for Surmodics, as compared to the merger consideration:

Discounted Cash Flow Analysis. Jefferies performed a discounted cash flow analysis of Surmodics by calculating the estimated present value of the standalone unlevered, after-tax free cash flows that Surmodics was forecasted to generate during the last two quarters of the fiscal year ending September 30, 2024 through the full fiscal year ending September 30, 2028 based on financial forecasts and estimates of the management of Surmodics. For purposes of this analysis, stock-based compensation was treated as a cash expense. Jefferies calculated terminal values for Surmodics by applying to Surmodics’ fiscal year 2028 estimated adjusted EBITDA a selected range of adjusted EBITDA multiples of 13.0x to 15.0x. The present values (as of March 31, 2024) of the cash flows and terminal values were then calculated using a selected range of discount rates of 13.1% to 14.1%.

This analysis indicated the following approximate implied per share equity value reference range for Surmodics, as compared to the merger consideration:

Surmodics has agreed to pay Jefferies for its financial advisory services in connection with the merger an aggregate fee currently estimated to be approximately $7.5 million, of which a portion was payable upon delivery of Jefferies’ opinion to our board of directors and approximately $6 million is payable contingent upon consummation of the merger. In addition, Surmodics agreed to reimburse Jefferies for Jefferies’ expenses, including fees and expenses of counsel, incurred in connection with Jefferies’ engagement and to indemnify Jefferies and related parties against certain liabilities, including liabilities under federal securities laws, arising out of or in connection with the services rendered and to be rendered by Jefferies under its engagement.

As our board of directors was aware, Jefferies and its affiliates in the past have provided, currently are providing, and in the future may provide, certain financial advisory or financing services to GTCR and/or certain of its affiliates and portfolio companies, for which services Jefferies and its affiliates have received and may receive compensation, including, during the approximate two-year period prior to the date of Jefferies’ opinion, having acted or acting as (i) financial advisor to GTCR and/or certain of its portfolio companies in connection with merger and acquisition transactions, (ii) joint bookrunner for equity and debt securities offerings of an entity in which GTCR has an equity investment, and (iii) joint lead arranger and/or joint bookrunner for credit facilities of a portfolio company of GTCR, an entity in which GTCR has an equity investment and a subsidiary of such entity, for which services described in the foregoing clauses (i) through (iii) Jefferies and its affiliates have received or expect to receive aggregate fees of approximately $15 million. Although Jefferies and its affiliates had not provided financial advisory or financing services to Surmodics unrelated to the merger during the two-year period prior to the date of Jefferies’ opinion for which Jefferies and its affiliates received compensation, Jefferies and its affiliates in the future may provide such services to Surmodics and/or its affiliates for which services Jefferies and its affiliates would expect to receive compensation. In the ordinary course of business, Jefferies and its affiliates may trade or hold securities or financial instruments (including loans and other obligations) of Surmodics, GTCR and/or their respective affiliates or portfolio companies or entities in which GTCR has an equity investment, as the case may be, for Jefferies’ own account and for the accounts of Jefferies’ customers and, accordingly, may at any time hold long or short positions or otherwise effect transactions in those securities or financial instruments.

Jefferies was selected as a financial advisor to Surmodics in connection with the merger because, among other things, Jefferies is an internationally recognized investment banking firm with substantial experience in merger and acquisition transactions and based on its familiarity with the industry in which Surmodics operates. Jefferies is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities and private placements.

We do not, as a matter of course, publicly disclose long-term projections or internal projections of our future financial performance, revenues, earnings, financial condition or other results given, among other reasons, the uncertainty of the underlying assumptions and estimates. In connection with its evaluation of the merger, our board of directors considered certain non-public unaudited prospective financial information prepared by our management relating to Surmodics for the fiscal years ending September 30, 2024 through 2028, which we refer to as our “projections.” Our projections, as finalized in May 2024, were also provided to GTCR as described under “Background to the Merger” and to Jefferies for its use and reliance in connection with its financial analyses and opinion summarized under “—Opinion of Our Financial Advisor.”

Our projections were not prepared with a view to public disclosure but are included in this proxy statement because such projections were made available to our board of directors, GTCR and Jefferies and were used in the process leading to the execution of the merger agreement. The inclusion of this information should not be regarded as an indication that our board of directors, our financial advisor or any other recipient of this information considered, or now considers, our projections to be material information of the company or necessarily predictive of actual future results nor should it be construed as financial guidance, and it should not be relied upon as such. The summary of our projections is not included in this proxy statement in order to induce any shareholder to vote in favor of the merger proposal or other proposals to be voted on at the special meeting or to influence any shareholder to make any investment decision, including whether or not to seek dissenters’ rights with respect to shares of our common stock.

Our projections should be evaluated, if at all, in conjunction with the limitations, assumptions and other factors disclosed in this proxy statement, and with the historical financial statements and other information regarding Surmodics contained in our public filings with the SEC, including the audited annual financial statements included in our Form 10-K for the year ended September 30, 2023 and the quarterly financial statements included in our Form 10-Q for the three months ended December 31, 2023 and the three months ended March 31, 2024.

Our projections were not prepared with a view to compliance with generally accepted accounting principles as applied in the United States (which we refer to as “GAAP”), the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, neither our independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.

Although a summary of our projections and certain of the underlying assumptions is presented with numerical specificity, this information is not fact and should not be relied upon as necessarily predictive of actual future results. Our projections reflect numerous assumptions and estimates, many of which are highly uncertain or even speculative. Our projections cover an extended period, and such information by its nature becomes less predictive with each successive year (both because of the inherent limitations on predicting the more distant future and because the effects of assumptions or estimates that are not appropriate may compound and become magnified).

Our projections are forward-looking statements. Important factors that may affect actual results and cause our projections not to be achieved include general economic conditions, accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures, changes in tax laws and the other factors described under “Introduction—Forward-Looking Statements.” As a result, there can be no assurance that our projections will be realized, and actual results may be materially better or worse than those contained in our projections. Neither the company nor any of its affiliates, directors, officers, advisers or other representatives has made or makes any representation to any of our shareholders regarding the ultimate performance of the company compared to the information contained in our projections or that our projections will be achieved.

Because our projections are based in part on assumptions about the development and commercialization of products that have not, or have only recently, been commercialized, they are not based solely on historical financial results or operational history.

Our projections do not take into account any circumstances or events occurring after the date that they were prepared and do not give effect to the merger. Except to the extent required by applicable federal securities laws, we do not intend, and

expressly disclaim any responsibility, to update or otherwise revise our projections to reflect circumstances existing after the date when we prepared our projections or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying our projections are shown to be not appropriate. We can give no assurance that, had our projections been prepared either as of the date of the merger agreement or as of the date of this proxy statement, similar estimates and assumptions would be used.

In light of the foregoing factors and the uncertainties inherent in our projections, shareholders are cautioned not to rely on our projections included in this proxy statement.

Our projections reflect numerous assumptions and estimates, many of which are highly uncertain or even speculative. Among other things, some of these assumptions include:

Our projections, as provided to relevant parties in May 2024, included the following estimates of our future financial performance:

Certain of the measures included in or derived from our projections may be considered non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the company may not be comparable to similarly titled amounts used by other companies. These non-GAAP measures are included in this proxy statement because such information was made available to our board, Jefferies, GTCR and certain other parties and used in the process leading to the execution of the merger agreement, as described elsewhere in this proxy statement.

The non-GAAP financial measures include EBITDA, adjusted EBITDA and unlevered free cash flow.

Below is reconciliation of projected GAAP operating (loss) income to projected EBITDA and adjusted EBITDA.

Unlevered free cash flow was calculated by reducing projected adjusted EBITDA by projected cash taxes, capital expenditures and changes in net working capital. A reconciliation of unlevered free cash flow to a relevant GAAP measure was not provided to or relied upon by our board, Jefferies or GTCR in connection with the merger. Accordingly, and because our disclosure in this context of a non-GAAP measure is not subject to SEC rules that would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure, no reconciliation of the unlevered free cash flow to a relevant GAAP financial measure is provided in this proxy statement.

We anticipate that the total amount of funds necessary to consummate the merger and the related transactions will be funded through a combination of (1) equity financing to be provided by the GTCR Funds, which has agreed to capitalize Parent with up to $287,300,000, subject to the terms and conditions set forth in an equity commitment letter entered into by the GTCR Funds and Parent and (2) debt financing to be provided pursuant to a debt commitment letter among GTCR BC Purchaser, Inc., an affiliate of Parent, and the commitment parties, pursuant to which the commitment parties have agreed to provide Parent and its affiliates with up to $450,000,000 of borrowings under

committed borrowing facilities to finance the merger and refinance certain existing indebtedness, including existing indebtedness of affiliates of Parent, subject to the terms and conditions set forth in such debt commitment letter. The merger is not conditioned upon receipt of financing by Parent.

In connection with entry into the merger agreement, Parent has entered into an equity commitment letter with the GTCR Funds pursuant to which such GTCR Funds have collectively committed, on the terms and subject to the conditions set forth in the equity commitment letter, to provide equity financing in an aggregate amount of up to $287,300,000, or such lesser amount which, when aggregated with the aggregate value of any cash investment in Parent, directly or indirectly, by executives or other equityholders of the company at the closing, is sufficient to fund all amounts payable pursuant to the merger agreement.

Funding of the equity financing is subject to the conditions provided in the equity commitment letter, which include:

The company is an express third party beneficiary of the equity commitment letter for the purpose of, in accordance with the terms and conditions of the merger agreement, seeking specific performance of the GTCR Funds’ obligation to fund the equity commitment to Parent (as further described in “The Merger Agreement—Specific Enforcement”).

Subject to certain limitations, the obligations of the GTCR Funds to fund the equity financing under the equity commitment letter will terminate upon the earliest to occur of:

Concurrently with the execution of the merger agreement, the GTCR Funds executed and delivered a limited guarantee in favor of the company. The limited guarantee is in full force and effect and is a valid and binding obligation of the guarantors, enforceable against the guarantors in accordance with its terms. Pursuant to the limited guarantee, the GTCR Funds have agreed to guarantee the due and punctual payment and performance of Parent of the parent termination fee and the parent regulatory fee subject to (i) the terms and conditions set forth in the merger agreement and the limited guarantee and (ii) a maximum aggregate liability amount of $53,170,000 (the “maximum amount”).

Subject to specified exceptions, the limited guarantee will terminate and be of no further force and effect, and the company will have no rights under the limited guarantee, upon the earliest to occur of (i) the payment by the GTCR Funds of the maximum amount under the limited guarantee; (ii) full funding of the commitment under the equity commitment letter; (iii) the consummation of the closing; (iv) the date that is the 90^th day after the termination of the merger agreement in accordance with its terms unless prior to the 90^th day after such termination, the company has commenced a legal proceeding against Parent or the GTCR Funds under the terms of the limited guarantee; or (v) the company or any of its representatives institutes a legal proceeding or makes a claim (x) asserting that certain

provisions of the limited guarantee are illegal, invalid or unenforceable or that the GTCR Funds are liable in excess or to a greater extent than the maximum amount or (y) arising under, or in connection with, the limited guarantee, the merger agreement, the equity commitment letter or the confidentiality agreement between the parties, or the transactions contemplated thereby, that does not constitute a retained claim in the limited guarantee.

In connection with its entry into the merger agreement, GTCR BC Purchaser, Inc., an affiliate of Parent, has entered into a debt commitment letter with the commitment parties, pursuant to which the commitment parties have agreed to provide Parent and its affiliates with up to $450,000,000 of borrowings under committed borrowing facilities to finance the merger and refinance certain existing indebtedness, including existing indebtedness of affiliates of Parent, subject to the terms and conditions set forth in such debt commitment letter.

The obligations of the commitment parties to provide the debt financing under the debt commitment letter are subject solely to certain customary and express conditions set forth therein, including but not limited to, (i) the absence of a Company Material Adverse Effect (as defined in the merger agreement); (ii) the receipt of certain specified financial statements of the company and its subsidiaries; (iii) the delivery of documentation required under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act; (iv) the accuracy of certain representations in the merger agreement and customary specified representations in the debt commitment letter; and (v) the repayment and release of liens of certain existing indebtedness of the company and its subsidiaries and certain existing indebtedness of affiliates of Parent.

The commitment of the commitment parties under the debt commitment letter expires upon the earliest of (i) the earlier of 11:59 p.m., New York City time on the date that is five (5) business days after the outside date set forth in the merger agreement and subject to any automatic extension mechanic set forth in the merger agreement, (ii) the initial funding of the credit facilities provided for in the debt commitment letter, (iii) the consummation of the merger without the use or funding of the debt financing, and (iv) the valid termination of the merger agreement prior to the consummation of the merger.

When considering the recommendation of our board of directors that you vote for the proposal to approve the merger agreement, you should be aware that certain of our directors and executive officers may have interests in the merger that are different from, or in addition to, your interests as a shareholder. Our board of directors was aware of these interests in approving the merger agreement and the merger and in recommending that the merger agreement be approved by the shareholders of the company.

Our current executive officers are listed on page 72. For purposes of determining Golden Parachute Compensation, our “named executive officers” are:

The compensation that may become payable to our named executive officers in connection with the merger is subject to a non-binding advisory vote of the company’s shareholders, as described below in “The Golden Parachute Proposal (Proposal #2).”

As of the date of this proxy statement, no executive officer of the company has entered into an agreement with Parent or the surviving corporation or any of their respective affiliates regarding employment with, or the right to purchase or participate in the equity of, the surviving corporation or one or more of its affiliates following the consummation of the merger. Prior to or following the closing of the merger, however, the executive officers may discuss or enter into such agreements with Parent, the surviving corporation and/or any of their respective affiliates, regarding employment with, or the right to purchase or participate in the equity of, Parent or one or more of its affiliates.

Under the merger agreement, the equity-based awards held by our directors and executive officers under our equity incentive plans will be treated as follows:

Stock Options. At the effective time of the merger, each option to purchase shares of our common stock outstanding immediately prior to the effective time of the merger, whether vested or unvested, will be cancelled with the holder becoming entitled to receive a cash payment, without interest, equal to the product of (1) the excess, if any, of $43.00 over the exercise price per share of our common stock subject to such option multiplied by (2) the number of shares of our common stock subject to such option, net of any taxes withheld. Each option to purchase shares of our common stock with a per share exercise price greater than or equal to $43.00 that is outstanding and unexercised immediately prior to the effective time of the merger, whether vested or unvested, will be cancelled without consideration.

Restricted Stock Units. At the effective time of the merger, each RSU outstanding immediately prior to the effective time of the merger, whether vested or unvested, will be cancelled with the holder becoming entitled to receive a cash payment, without interest, equal to the product of (1) $43.00 multiplied by (2) the number of shares of our common stock subject to such RSU award at the effective time of the merger, net of any taxes withheld.

Restricted Stock. At the effective time of the merger, each restricted stock award that is outstanding immediately prior to the effective time of the merger will be cancelled with the holder becoming entitled to receive a cash payment, without interest, equal to the product of (1) $43.00 multiplied by (2) the number of shares of our common stock subject to such restricted stock award at the effective time of the merger, net of any taxes withheld.

For an estimate of the amounts that would be payable to each of our named executive officers in settlement of their outstanding equity awards, see the “Equity” column in the “Golden Parachute Compensation” table on page 45. All amounts payable with respect to the company equity awards will be subject to deduction for any required tax withholding.

Maharaj Severance Agreement

We are party to a severance agreement, dated as of December 14, 2010, with Mr. Maharaj, which provides for certain severance benefits upon a qualifying termination that are enhanced following a “change of control” (as defined in Mr. Maharaj’s severance agreement), which would include the merger. Under Mr. Maharaj’s severance agreement, he will be eligible for the following severance benefits upon a termination of employment without “cause” or for “good reason” (each as defined in Mr. Maharaj’s severance agreement), in either case, on or within 12 months following a change of control:

The severance benefits are subject to Mr. Maharaj timely executing and not revoking a release of claims in favor of the company.

Other Executive Officer Change of Control Agreements

Other than with respect to Mr. Maharaj, we are party to change of control agreements (referred to in this proxy statement as “CIC agreements”) with each of our executive officers. Under the CIC agreements, each of our executive officers will be eligible for the following severance benefits upon a termination of employment without “cause” (including the executive officer’s death or disability) or for “good reason,” in either case, on or within 12 months following a “change of control” (each as defined in the CIC agreement), which would include the merger:

The severance benefits are subject to the executive officer timely executing and not revoking a release of claims in favor of the company. Each executive officer is also required to continue to comply with the terms of the executive officer’s restrictive covenants, including perpetual confidentiality, assignment of inventions, non-competition and non-solicitation or customer, potential customers and employees.

Mr. Maharaj’s severance agreement and the CIC agreements further provide that if an executive officer receives any amount that is subject to the “golden parachute” excise tax imposed pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the amount of the payments to be made to the executive officer will be reduced to the extent necessary to avoid imposition of the excise tax, but only if the after-tax amount of the reduced payments exceeds the after-tax amount that the executive officer would receive without any such reduction following imposition of the excise tax and all income and related taxes. Based on preliminary calculations, we do not currently expect merger-related payments to be subject to the “golden parachute” excise tax or such “cutback” provisions.

In connection with the proposed merger, our board of directors adopted a new executive transaction bonus program and approved awards of cash bonuses thereunder (each, a “transaction bonus”) to certain of the company’s officers, including a $75,000 award to each executive officer. Each transaction bonus is governed by the executive transaction bonus program plan and a bonus agreement and is contingent upon a “change of control” (as defined therein), which would include the merger. In order to receive a transaction bonus, the executive officer must remain continuously employed through the effective date of the merger. The transaction bonuses, if earned, will be payable no later than the first regularly scheduled payroll payment occurring at least one full week after the effective date of the merger.

In accordance with Item 402(t) of Regulation S-K under the Securities Act, the table below and its footnotes set forth the estimated amounts of payments and benefits that each named executive officer would receive if the individual experiences a qualifying termination in connection with a hypothetical closing of the merger on June 19, 2024, based on their compensation levels and outstanding equity awards and pursuant to the arrangements described above under “—Interests of our Directors and Executive Officers in the Merger.” This information is intended to comply with Item 402(t) of Regulation S-K, which requires disclosure of information about certain compensation for each named executive officer of the company that is based on, or otherwise relates to, the merger, as described more fully above under “—Interests of our Directors and Executive Officers in the Merger.”

The amounts reflected in the table and the footnotes are determined using a per share price for the company’s common stock of $43.00, the merger consideration as specified in the merger agreement. The compensation summarized in the table and footnotes below in respect of the named executive officers is subject to a non-binding advisory vote of the company’s shareholders, as described below in “The Golden Parachute Proposal (Proposal #2)” on page 69.

The estimated amounts below are based on multiple assumptions that may not actually occur or be accurate on the relevant date, including the assumptions described below and in the footnotes to the table, and do not reflect certain compensation actions that may occur before completion of the merger. For purposes of calculating such amounts, the following assumptions were used: (i) a closing date of June 19, which is the assumed date of closing of the merger solely for purposes of the disclosures in this section; (ii) each executive officer of the company experiences a qualifying termination of employment (i.e., a termination of employment by the company and/or Parent without “cause” or by the executive officer for “good reason,” as such terms are defined in the relevant plans and agreements) at or immediately following the merger effective time; (iii) potential payments and benefits described in this section are not at a level subject to a “cutback” to avoid the “golden parachute” excise tax that may be imposed under Section 4999 of the Code; and (iv) each of the company’s executive officers has properly executed any required releases and complied with all requirements (including any applicable restrictive covenants) necessary in order to receive such payments and benefits. In addition, certain amounts will vary depending on the actual date of closing of the merger, which is presently expected to occur in the second half of calendar year 2024. As a result, the actual amounts, if any, to be received by an applicable individual may differ in material respects from the amounts set forth in the following table and accompanying footnotes.

Our directors and officers benefit from statutory indemnification under Minnesota law, indemnification and exculpation provisions in our bylaws, and directors and officers insurance that we maintain.

See “The Merger Agreement—Indemnification and Insurance” for a summary of the obligations of Parent and the surviving corporation with respect to insurance indemnification of directors and executive officers after the effective time of the merger.

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which we refer to as the “HSR Act,” and the rules promulgated thereunder, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the U.S. Federal Trade Commission, which we refer to as the “FTC,” and the Antitrust Division of the U.S. Department of Justice, which we refer to as the “DOJ,” and all statutory waiting period requirements have been satisfied. Completion of the merger is subject to the expiration or termination of the applicable waiting period under the HSR Act.

Under the HSR Act, the merger may not be completed until the expiration or termination of a 30-calendar day waiting period after the filing of Premerger Notification and Report Forms under the HSR Act. The waiting period could be extended by refiling the Premerger Notification and Report Form or the DOJ or the FTC may extend the 30-day waiting period for a transaction notifiable under the HSR Act by issuing a Request for Additional Information and Documentary Material, which we refer to as a “second request.” If either agency issues a second request, the waiting period with respect to the merger will be extended until the 30th calendar day following the date of the filing parties’ substantial compliance with that second request. After expiration of the waiting period, absent agreement from the filing parties, the acquisition can be blocked only by court order.

At any time (regardless of whether before or after the expiration or termination of the statutory waiting periods under the HSR Act, or before or after the effective time of the merger), the FTC or the DOJ may take action under the antitrust laws, including seeking to enjoin the completion of the merger, to rescind the merger, or to conditionally permit completion of the merger subject to regulatory conditions or other remedies. In addition, U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. Although we do not believe that the merger will violate the antitrust laws, there can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

Applicable law or the terms and conditions of certain of our licenses and permits may impose requirements to notify or obtain approval of the applicable regulator in connection with the merger. However, the merger is not conditioned upon making or obtaining any such notices or approvals.

It is common for transactions such as the merger to become subject to litigation. We undertake no duty to disclose any such litigation except as otherwise expressly required by law. The merger agreement provides that we would control the defense of any such litigation brought against us, subject to certain consultation and consent rights in favor of Parent. See “Coordination on Litigation.”

Our bylaws generally provide that the state or federal courts located in Hennepin County, Minnesota are the sole and exclusive forums for (i) any derivative action brought on behalf of the company, (ii) any action asserting a claim for breach of a fiduciary duty owed by any of our directors, officers, employees, or agents to us or our shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Minnesota Business Corporation Act, our articles of incorporation, or our bylaws, and (iv) any action asserting a claim governed by the internal affairs doctrine.

The following is a general discussion of certain material U.S. federal income tax consequences of the merger to holders of our common stock whose shares are exchanged for cash pursuant to the merger.

This discussion is general in nature and does not discuss all aspects of U.S. federal income taxation that may be relevant to a holder of shares of our common stock in light of such holder’s particular circumstances. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010, nor does it address any tax considerations under state, local or non-U.S. laws or U.S. federal laws other than those pertaining to U.S. federal income tax.

This discussion is based on the provisions of the Code, applicable U.S. Treasury Regulations promulgated under the Code, judicial opinions and administrative rulings and published positions of the Internal Revenue Service, which we

refer to as the “IRS,” each as in effect as of the date of the merger agreement. These authorities are subject to change or differing interpretations, possibly on a retroactive basis, and any such change or interpretation could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion is not binding on the IRS or the courts and, therefore, could be subject to challenge, which could be sustained. We have not, and do not intend to seek, any ruling from the IRS with respect to the merger.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of our common stock that is for U.S. federal income tax purposes:

The term “Non-U.S. Holder” refers to any beneficial owner of our common stock, other than a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes, that is not a U.S. holder.

This discussion applies only to holders of shares of our common stock who hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that may be relevant to a holder in light of its particular circumstances, or that may apply to holders subject to special treatment under U.S. federal income tax laws (including, for example, insurance companies, dealers or brokers in securities or non-U.S. currencies, traders in securities who elect the mark-to-market method of accounting, holders subject to the alternative minimum tax, holders that have a functional currency other than the U.S. dollar, tax-exempt organizations, tax-qualified retirement plans, banks and other financial institutions, mutual funds, U.S. expatriates or former citizens or long term residents of the United States, S corporations, or other pass-through entities, or investors in such S corporations or other pass-through entities, real estate investment trusts, regulated investment companies, holders who hold shares of our common stock as part of a hedge, straddle, constructive sale, conversion or other risk reduction strategy or integrated transaction, holders who will hold (actually or constructively) an equity interest in Parent immediately after the merger, holders who acquired their shares of our common stock through the exercise of employee stock options, through a tax qualified retirement plan or other compensation arrangements, and dissenters (as defined under “Dissenters’ Rights”)).

If a partnership (including for this purpose any entity or arrangement treated as a partnership or flow-through entity for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partners and the activities of the partnership. If you are, for U.S. federal income tax purposes, a partner in a partnership holding shares of our common stock, you should consult your tax advisor.

This summary of U.S. federal income tax consequences is intended only as a general summary of certain material U.S. federal income tax consequences of the merger to holders and is not tax advice. Holders of our common stock are urged to consult their own tax advisors to determine the particular tax consequences to them of the merger, including federal estate, gift and other non-income tax consequences, the applicability and effect of the alternative minimum tax, the unearned income Medicare contribution tax and any other U.S. federal, and tax consequences under state, local, non-U.S. or other tax laws, including tax treaties.

The receipt of cash by U.S. holders in exchange for shares of our common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S. holder who receives cash in exchange for shares of our common stock pursuant to the merger will recognize capital gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received plus the amount used to satisfy any applicable withholding taxes and (2) the U.S. holder’s adjusted tax basis in such shares.

Any such gain or loss will be long-term capital gain or loss if a U.S. holder’s holding period in the shares of our common stock surrendered in the merger is greater than one year as of the date of the merger. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations. If a U.S. holder acquired different blocks of our common stock at different times and different prices, such U.S. holder must determine its adjusted tax basis, gain or loss and holding period separately with respect to each block of our common stock.

Subject to the discussion below regarding backup withholding, a Non-U.S. Holder that receives cash for shares of our common stock pursuant to the merger generally will not be subject to U.S. federal income tax on any gain realized on the disposition, unless (i) such Non-U.S. Holder is an individual who is present in the United States for 183 or more days during the taxable year of the merger and certain other conditions are met; (ii) the gain is effectively connected with the conduct of a trade or business in the United States by the Non-U.S. Holder (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base within the United States); or (iii) such Non-U.S. Holder owned, directly or under certain constructive ownership rules of the Code, more than 5% of our common stock at any time during the shorter of the five-year period preceding the merger or the period that the Non-U.S. Holder held our common stock, and the company is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding the merger or the period that the Non-U.S. Holder held our common stock. The company believes it has not been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the five-year period preceding the merger.

If you are a Non-U.S. Holder who is an individual and has been present in the United States for 183 or more days during the taxable year of the merger and certain other conditions are satisfied, you will be subject to tax at a rate of 30% (or such lower rate as may be specified in an applicable income tax treaty) on any gain realized, which generally may be offset by certain United States source capital losses.

If you are a Non-U.S. Holder and your gain is effectively connected with a U.S. trade or business (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base within the United States), you will be subject to U.S. federal income tax on any gain realized on a net basis in the same manner as U.S. holders. Non-U.S. Holders that are corporations may also be subject to a branch profits tax on their effectively connected income at a rate of 30% (or such lower rate as may be specified in an applicable income tax treaty), subject to adjustments.

Payments made in exchange for shares of our common stock pursuant to the merger generally will be subject to information reporting and backup withholding at the applicable rate. To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return to the applicable exchange agent an Internal Revenue Service (“IRS”) Form W-9, certifying that such U.S. holder is a United States person, that the taxpayer identification number provided is correct and that such U.S. holder is not subject to backup withholding. A Non-U.S. Holder generally may establish an exemption from backup withholding by certifying its status as a non-United States person under penalties of perjury on an IRS Form W-8BEN or IRS Form W-8BEN-E or other applicable IRS Form W-8.

Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

Holders should consult their own tax advisors regarding the application of U.S. federal income tax laws and non-U.S. tax laws, including information reporting and backup withholding, to their particular situations.

The following is a summary of certain material terms of Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act. The summary is not complete and must be read together with the actual statutory provisions, copies of which are attached as Appendix C. We encourage you to read Sections 302A.471 and 302A.473 carefully and in its entirety because the rights and obligations of the company and our shareholders are governed by the express terms

of these statutory provisions and other applicable law, and not by this summary or any other information contained in this proxy statement. This summary may not contain all the information about these statutory provisions that is important to you.

As a Minnesota corporation, the company is governed by the Minnesota Business Corporation Act. The Minnesota Business Corporation Act provides a shareholder who is entitled to vote and who objects to a merger with the right to dissent from such action and instead obtain payment for the “fair value” of his or her shares of our common stock. This right is set forth in Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act.

Any company shareholder contemplating an attempt to assert and exercise dissenters’ rights in connection with the merger should review carefully the provisions of Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act (copies of which are attached as Appendix C), particularly the specific procedural steps required to perfect such rights. Dissenters’ rights are lost if the procedural requirements of Section 302A.473 are not fully and precisely satisfied.

In view of the complexity of these statutory provisions, any shareholders who may wish to pursue dissenters’ rights should consult their legal and financial advisors.

Under Section 302A.473, subdivision 3, a shareholder who wishes to exercise dissenters’ rights, which we refer to as a “dissenter,” must file with us, before the vote on the merger proposal, a written notice of intent to demand the “fair value” of shares of our common stock owned by the shareholder.

The written notice of intent should be sent to the attention of Gordon S. Weber, Senior Vice President of Legal, General Counsel and Secretary, at Surmodics, Inc., 9924 West 74th Street, Eden Prairie, Minnesota 55344 and a copy (which copy will not constitute notice) should also be sent to the attention of Brandon Mason at Faegre Drinker Biddle & Reath LLP, 2200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota 55402.

To be effective, the notice must be filed with us before the vote on the merger proposal. In addition, the shareholder must not vote his or her shares in favor of the merger. A vote against the merger does not in itself constitute such a written notice and a failure to vote does not affect the validity of a timely written notice. However, the submission of a properly signed blank proxy will constitute a vote in favor of approving the merger and a waiver of statutory dissenters’ rights.

Under Section 302A.471, subdivision 2, beneficial owners of shares who desire to exercise statutory dissenters’ rights must obtain and submit the registered owner’s written consent at or before the time the notice of intent to demand fair value is due.

If the merger is approved by our shareholders, we will send to all dissenters who timely filed the necessary notice of intent to demand the fair value of their shares and who did not vote their shares in favor of such proposal a notice, which we refer to as a “notice of procedure,” containing certain information required by Section 302A.473, subdivision 4, including the address to which a dissenter must send a demand for payment and certificates representing shares in order to obtain payment for such shares and the date by which they must be received and a form to be used to certify the date on which the dissenter (or the beneficial owner on whose behalf the dissenter dissents) acquired such shares of stock (or an interest in them) and to demand payment.

In order to receive the fair value of the shares under Section 302A.473, a dissenter must demand payment and deposit certificates representing shares within 30 days after our notice of procedure is given. Under Minnesota law, notice by mail is given by a corporation when deposited in the United States mail. A shareholder who fails to timely make demand for payment and to deposit certificates as required by Section 302A.473, subdivision 4, loses the right to receive the fair value of his or her shares under such section notwithstanding the timely filing of notice of intent to demand payment under Section 302A.473, subdivision 3.

Except as provided below, if demand for payment and deposit of stock certificates is duly made by a dissenter as required by the notice, then after our receipt of such demand or the effective date of the merger, whichever is later, we must pay the dissenter an amount which we estimate to be the fair value of the dissenter’s shares of our common stock, with interest, if any. For the purpose of a dissenter’s rights under Sections 302A.471 and 302A.473, “fair value” means the value of the shares of stock immediately before the effective date of such merger. It is possible that the fair value of shares of our common stock as determined pursuant to dissenters’ rights procedures may be determined to be less than the value of the merger consideration. Additionally, “interest” means interest commencing five days after the effective date of such merger until the date of payment, calculated at the rate provided in Minnesota Statutes Section 549.09 subdivision 1, paragraph (c), clause (1), which is currently 5.0%.

If a dissenter believes this payment is less than the fair value of the shares of our common stock, with interest, if any, such dissenter must give written notice to us of his or her own estimate of the fair value of the shares of stock, with interest, if any, within 30 days after the date we mail the payment, and must demand payment of the difference between his or her estimate and our payment. If such dissenter fails to give written notice of such estimate to us, or fails to demand payment of the difference, within the 30 day time period, such dissenter is entitled only to the amount of our payment.

We may withhold such payment with respect to shares of our common stock for which a dissenter demanding payment (or persons on whose behalf such dissenter acts) was not the beneficial owner as of the first public announcement date of the merger, which is May 29, 2024. As to each such dissenter who has validly demanded payment, following the effective date of such merger or the receipt of demand, whichever is later, we must mail our estimate of the fair value of such dissenter’s shares of stock and offer to pay this amount with interest, if any, to the dissenter upon receipt of such dissenter’s agreement to accept this amount in full satisfaction. If such dissenter believes that our offer is for less than the fair value of the shares of stock, with interest, if any, such dissenter must give written notice to us of his or her own estimate of the fair value of the shares of stock, with interest, if any, and demand payment of this amount. This demand must be mailed to us within 30 days after the mailing of our offer. If the dissenter fails to make this demand within the 30-day time period, such dissenter is entitled only to the amount we offered.

If we and a dissenter (including both a dissenter who held shares of our common stock on or prior to May 29, 2024, which was the date the merger was first publicly announced, and a dissenter who purchased shares of our common stock after such date who have complied with their respective demand requirements) do not settle the dissenter’s demand within 60 days after we receive the dissenter’s estimate of the fair value of his or her shares of stock, then we must file a petition in a court of competent jurisdiction in the county in which our registered office is located, requesting that the court determine the statutory fair value of stock with interest, if any. Our registered office is currently located in Hennepin County, Minnesota, but is subject to change at any time. All dissenters whose demands are not settled within the applicable 60 day settlement period must be made parties to this proceeding.

The court will then determine whether each dissenter in question has fully complied with the provisions of Section 302A.473, and for all dissenters who have fully complied and not forfeited statutory dissenters’ rights, will determine the fair value of the shares, taking into account any and all factors the court finds relevant (including, without limitation, the recommendation of any appraisers which may have been appointed by the court), computed by any method that the court, in its discretion, sees fit to use, whether or not used by us or a dissenter. The fair value of the shares as determined by the court is binding on all dissenters. However, under the statute, dissenters are not liable to us for the amount, if any, by which payments remitted to the dissenters exceed the fair value of such shares determined by a court, with interest. The costs and expenses of such a court proceeding are assessed against us, except that the court may assess part or all of those costs and expenses against a dissenter whose action in demanding payment is found to be arbitrary, vexatious or not in good faith.

Under Section 302A.471, subdivision 2, a shareholder may not assert dissenters’ rights with respect to less than all of the shares of our common stock registered in such shareholder’s name, unless the shareholder dissents with respect to all shares beneficially owned by another person and discloses the name and address of such other person.

Under Section 302A.471, subdivision 4, a shareholder has no right at law or in equity to have the merger agreement set aside or rescinded, except if approval or consummation of such merger agreement is fraudulent with respect to such shareholder or us.

The following is a summary of certain material terms of the merger agreement. The summary is not complete and must be read together with the actual merger agreement, a copy of which is attached as Appendix A. We encourage you to read the merger agreement carefully and in its entirety because the rights and obligations of the parties are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement. This summary may not contain all the information about the merger agreement that is important to you.

Please note that the representations, warranties, covenants and agreements in the merger agreement were made only for purposes of the merger agreement, and may not represent the actual state of facts. See “Other Information—Legal and Cautionary Disclosures—Context for Assertions Embodied in Agreements” on page 74.

At the effective time of the merger, Merger Sub will merge with and into the company, and the separate corporate existence of Merger Sub will cease. The company will be the surviving corporation in the merger and will continue its corporate existence as a Minnesota corporation and a wholly owned subsidiary of Parent.

At the effective time of the merger, the articles of incorporation and bylaws of the company will be amended and restated. Also at the effective time, the individuals holding positions as directors of Merger Sub immediately before the effective time of the merger will become the directors of the surviving corporation, and the individuals holding positions as officers of the company immediately before the effective time of the merger will continue as the officers of the surviving corporation, in each case until their resignation or removal or their respective successors are duly elected and qualified.

The closing of the merger is expected to take place on the third business day after the satisfaction or waiver (to the extent permitted by applicable law) of the conditions set forth in the merger agreement (other than those conditions that by their nature only can be satisfied on the closing date of the merger, but subject to the satisfaction or waiver of such conditions). These conditions are described under “Conditions to Completion of the Merger.” We and Parent may mutually agree in writing on another date or time for the closing to take place. The date on which the anticipated closing occurs is sometimes referred to as the closing date.

At the closing, we will file articles of merger with the Secretary of State of the State of Minnesota. The merger will become effective at the time when the articles of merger are filed or at such later date or time as may be agreed in writing by us and Parent and specified in the articles of merger.

As of the date of the filing of this proxy statement, we expect to complete the merger in the second half of calendar year 2024. However, completion of the merger is subject to the satisfaction or waiver of the conditions to the completion of the merger, and factors outside of our control or the control of Parent may delay the completion of the merger, or prevent it from being completed at all. There can be no assurances as to whether or when the merger will be completed.

Each share of our common stock that is issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive $43.00 in cash, without interest and less any applicable withholding taxes, except for (1) any shares that are directly or indirectly owned by Parent, any of its subsidiaries, or any of our subsidiaries (which we refer to in this proxy statement as cancelled shares), (2) any dissenting shares, and (3) any Restricted Shares. At the effective time of the merger, the shares will no longer be outstanding and will automatically be cancelled and will cease to exist, and each holder thereof will cease to have any rights with respect thereto, except the right to receive the merger consideration.

At the effective time of the merger, each cancelled share will be cancelled and cease to exist, and no consideration will be delivered in exchange for such cancellation.

In this proxy statement, we use the term “dissenting shares” to describe shares of our common stock issued and outstanding immediately prior to the effective time of the merger that are held by a record or beneficial holder who (1) has not voted in favor of approval of the merger agreement, (2) has properly demanded and perfected such

holder’s right to dissent from the merger and to be paid the fair value of such shares in accordance with Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act, and (3) as of the effective time of the merger, has not effectively withdrawn or lost such dissenters’ rights. At the effective time of the merger, any dissenting shares will not be converted into or represent the right to receive the merger consideration, but if such holder complies in all respects with Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act, such holder will be entitled to the payment of the fair value of such dissenting shares determined in accordance with Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act (including interest determined in accordance with Section 302A.473 of the Minnesota Business Corporation Act). However, if any such holder fails to perfect or otherwise waives, withdraws or loses the right to dissent under such statutory provisions, then the right of such holder to be paid the fair value of such holder’s dissenting shares will cease and such dissenting shares will be deemed to have been converted as of the effective time of the merger into, and to have become exchangeable solely for the right to receive, the merger consideration, without interest thereon and subject to any applicable withholding taxes. For more information regarding dissenters’ rights, see “The Merger—Dissenters’ Rights.”

Any shares subject to a restricted share award will be treated as described under “Treatment of Company Equity Awards.”

At the effective time of the merger, each share of common stock of Merger Sub outstanding immediately prior to the effective time of the merger will be converted into and become one validly issued, fully paid and nonassessable share of common stock of the surviving corporation.

Substantially concurrently with or prior to the effective time of the merger, Parent will, or will take all steps necessary to enable and cause Merger Sub to, deposit cash in U.S. dollars sufficient to pay the aggregate merger consideration with our transfer agent (Broadridge Corporate Issuer Solutions, Inc.) or another reputable financial institution jointly selected by Parent and the company, which we refer to as the “paying agent,” in trust for the benefit of the holders of our common stock.

Promptly after the effective time of the merger, Parent will cause the paying agent to mail to each holder of record of shares of our common stock whose shares were converted into the right to receive the merger consideration (1) a letter of transmittal and (2) instructions for effecting the surrender of certificates or book-entry shares formerly representing shares of our common stock in exchange for the merger consideration. Upon surrender of certificates (or effective affidavits of loss in lieu of certificates and, if required, the posting of a bond) or book-entry shares, as applicable, to the paying agent together with the letter of transmittal, completed and executed in accordance with the instructions to the letter of transmittal, and such other documents as may customarily be required by the paying agent, the holder of such certificates (or effective affidavits of loss in lieu of certificates) or book-entry shares will be entitled to receive the merger consideration for all such shares, and such shares will be cancelled.

Stock Options. At the effective time of the merger, each option to purchase shares of our common stock outstanding immediately prior to the effective time of the merger, whether vested or unvested, will be cancelled with the holder becoming entitled to receive a cash payment, without interest, equal to the product of (1) the excess, if any, of $43.00 over the exercise price per share of our common stock subject to such option multiplied by (2) the number of shares of our common stock subject to such option, net of any taxes withheld. Each option to purchase shares of our common stock with a per share exercise price greater than or equal to $43.00 that is outstanding and unexercised immediately prior to the effective time of the merger, whether vested or unvested, will be cancelled without consideration.

Restricted Stock Units. At the effective time of the merger, each RSU outstanding immediately prior to the effective time of the merger will be cancelled with the holder becoming entitled to receive a cash payment, without interest, equal to the product of (1) $43.00 multiplied by (2) the number of shares of our common stock subject to such RSU award at the effective time of the merger, net of any taxes withheld.

Restricted Shares. At the effective time of the merger, each Restricted Share that is outstanding immediately prior to the effective time of the merger will be cancelled with the holder becoming entitled to receive a cash payment, without interest, equal to the product of (1) $43.00 multiplied by (2) the number of shares of our common stock subject to such Restricted Share at the effective time of the merger, net of any taxes withheld.

With respect to our Employee Stock Purchase Plan, or ESPP, the merger agreement provides that:

The merger agreement contains representations and warranties of the company, subject to certain exceptions in the merger agreement, in the confidential disclosure letter delivered to Parent in connection with the merger agreement and in certain of our public filings, as to, among other things:

The merger agreement also contains representations and warranties of Parent and Merger Sub, subject to certain exceptions in the merger agreement, as to, among other things:

Some of the representations and warranties in the merger agreement are qualified by materiality or knowledge qualifications or a “material adverse effect” qualification with respect to either us or Parent, as discussed below.

For purposes of the merger agreement, a “material adverse effect” with respect to us means any effect, event, condition, change, occurrence, development or state of facts or circumstances that, individually or in the aggregate, has had, or would reasonably be expected to have, a material adverse effect on the condition (financial or otherwise), assets, operations, liabilities or results of operations of us and our subsidiaries, taken as a whole; provided that none of the following shall constitute, or be taken into account in determining whether there has been, a material adverse effect (except, in the case of the items described in the first five bullets below, to the extent such condition has had a materially disproportionate effect on us and our subsidiaries, taken as a whole, compared to other participants in the industries in which we and our subsidiaries conduct business):

For purposes of the merger agreement, a “material adverse effect” with respect to Parent means any change, event, occurrence, development or state of facts that, individually or in the aggregate, has had or would reasonably be expected to prevent or materially impair or delay, the ability of Parent or Merger Sub to perform its obligations under the merger agreement.

The merger agreement provides that, during the pre-closing period, except as Parent otherwise consents (such consent not to be unreasonably withheld, conditioned or delayed), as expressly permitted or required pursuant to the merger agreement or set forth in the confidential disclosure letter, or required by applicable law or judgment, we will use, and cause our subsidiaries to:

The merger agreement also provides that, during the period from the date of the merger agreement to the closing date, except as Parent otherwise consents (such consent not to be unreasonably withheld, conditioned or delayed), as expressly permitted or required pursuant to the merger agreement or set forth in the confidential disclosure letter or as required by applicable law or judgment, we will not, and will cause our subsidiaries not to, subject in each case to certain specified exceptions:

We and our board of directors will generally not be permitted to solicit or participate in discussions regarding any inquiry, indication of interest or proposal that would reasonably be expected to lead to a takeover proposal. For purposes of the merger agreement:

Except as permitted by the merger agreement, during the pre-closing period, the merger agreement requires that we will not and will cause our controlled affiliates and our and their directors and executive officers not to, and will use our reasonable best efforts to cause our other representatives not to, directly or indirectly:

Notwithstanding these restrictions, which we refer to as “no-shop restrictions,” or anything else to the contrary in the merger agreement, if at any time prior to the time the requisite shareholder vote is obtained we receive a bona fide written takeover proposal that was not solicited in violation of the merger agreement, we and our representatives will be permitted to participate in discussions regarding such takeover proposal.

In addition, prior to the time, but not after, the requisite shareholder vote is obtained, we and our representatives may enter into and participate in discussions or negotiations with such third party in response to an unsolicited bona fide written takeover proposal made after the date of the merger agreement that has not been withdrawn and that did not result from a breach of no-shop restrictions by us, our subsidiaries, or representatives and may furnish access and nonpublic information to such third party if (A) our board has determined in good faith, after consultation with outside legal counsel and our financial advisor, that such takeover proposal is likely to constitute a superior proposal; (B) any nonpublic information furnished to such third party is (1) subject to an executed confidentiality agreement

in a customary form that is no less favorable to us than the confidentiality agreement with Parent and that does not contain any provision that would prevent us from complying with our obligation to provide disclosure to Parent required pursuant to the merger agreement and (2) is furnished to Parent substantially concurrently with (but not more than 24 hours after) such nonpublic information is furnished to such person.

Furthermore, during the pre-closing period, we shall promptly (and in any event within 24 hours after the occurrence thereof) advise Parent of the receipt of any takeover proposal or any inquiries, proposals or offers with respect to a takeover proposal, or any non-public information with regard to a takeover proposal that is requested from, or any discussions or negotiations sought to be initiated regarding such takeover proposal that is made or submitted by any person during the pre-closing period, specifying the material terms and conditions thereof (including the identity of the party making the takeover proposal, inquiry, proposal offer or request and unredacted copies of the takeover proposal) and all material related documents (including all financing commitments and other documents relating to any financing), and if such takeover proposal or any portion thereof was not provided in writing, a summary of the material terms and conditions thereof, and thereafter shall advise and confer with Parent and keep Parent reasonably informed, on a prompt basis (and in any event within 24 hours after the occurrence of any material changes), regarding any material changes to the status or material terms of any such inquiries, proposal or offers (including any modifications to the financial or other material terms and conditions of such takeover proposal). Notwithstanding the foregoing, the company shall not, and shall cause its subsidiaries and its and their respective representatives to not, provide any commercially sensitive non-public information to any competitor in connection with the actions contemplated by the merger agreement, except in a manner consistent with the company’s past practices in dealing with the disclosure of such information in the context of considering takeover proposals prior to the date of the merger agreement and subject to the limitations placed on Parent, Merger Sub and/or their representatives with respect to such information in connection with the transactions contemplated by the merger agreement.

Notwithstanding anything to the contrary in this agreement, prior to the time, but not after, the requisite shareholder vote is obtained, our board of directors or any committee thereof may modify, waive, amend or release any existing standstill obligations owed by any person to Surmodics or any of its subsidiaries if our board or such committee has determined in good faith, after consultation with outside legal counsel and financial advisor, as applicable, that the failure to do so would be inconsistent with our board’s or such committee’s fiduciary duties under applicable law.

As described under “The Merger—Reasons for our Board’s Recommendation in Favor of the Merger,” and subject to the provisions described below, our board of directors has unanimously recommended that our shareholders vote “FOR” the proposal to approve the merger agreement.

The merger agreement provides that, except as described below, our board may not (any of the following, a “company adverse change recommendation”):

Notwithstanding any of the restrictions described above and in “—No Solicitation; Alternative Proposals,” at any time prior to the time the requisite shareholder vote is obtained, our board may, in response to a superior proposal received on an unsolicited basis or an intervening event, (x) make a change in recommendation and/or (y) terminate the merger agreement in order to enter into a definitive agreement providing for the implementation of a superior proposal. Our board is permitted to take these actions solely if:

As used in the merger agreement, “intervening event” means a material event, fact, development or occurrence (other than any event, fact, development or occurrence resulting from a breach of the merger agreement by us) that (i) was not known by or reasonably foreseeable (or if known or reasonably foreseeable, the probability or magnitude of consequences of which were not known or reasonably foreseeable) to our board of directors prior to the execution of the merger agreement and (ii) does not relate to (A) any takeover proposal or any inquiry, offer or proposal that constitutes or would reasonably be expected to lead to a takeover proposal, (B) the fact, in and of itself, that we meet or exceed any internal or analysts’ expectations or projections for the results of operations for any period ending on or after the date of the merger agreement (provided that this clause (B) shall not prevent or otherwise affect any such event, fact development or occurrence underlying the company meeting or exceeding such metrics from being taken into account in determining whether an intervening event has occurred), and (C) any changes after the date of the merger agreement in the market price or trading volume of our common stock (provided that the exception in this clause (C) shall not prevent or otherwise affect any such event, fact, development or occurrence underlying such change in market price or trading value from being taken into account in determining whether an intervening event has occurred).

Subject to the relevant provisions of the merger agreement, including our board of directors’ right to change its recommendation in favor of the merger and our right to terminate the merger agreement to enter into a definitive agreement with respect to a superior proposal, as described in the section entitled “Change in Board Recommendation,” we have agreed to (1) convene and hold the special meeting as promptly as reasonably practicable, (2) recommend that our shareholders vote to approve the merger agreement, and (3) use our commercially reasonable efforts to solicit from our shareholders proxies in favor of the approval of the merger agreement. The adoption of the merger agreement and related transactions and a non-binding advisory vote on executive compensation will be the only matters (other than procedural matters) that we may propose to be acted on by you at the special meeting, unless other items are proposed and consented to by Parent.

The merger agreement provides that for a period of one year following the effective time of the merger (or until the employment of a company employee terminates, if earlier), Parent, the surviving corporation or any of their

respective subsidiaries will provide to each employee of the company who remains employed by the surviving corporation or one of its subsidiaries after the effective time of the merger, whom we refer to as “company employees”:

From and after the effective time of the merger, the surviving corporation will honor all employment, severance and termination plans and contracts, including those set forth in the disclosure letter delivered to Parent, in each case in accordance with their terms.

For purposes of vesting, eligibility to participate and solely with respect to vacation, paid-time off and severance, level of benefits under analogous employee benefit plans maintained by Parent in which such continuing employees become participants, each company employee will be credited with such continuing employee’s years of employment or service with the company or any of its subsidiaries, to the same extent and for the same purpose as such Company employee was entitled, before the effective time of the merger, to credit for such service under any similar employee benefit plan in which such Company employee participated immediately prior to the effective time of the merger, other than with respect to the excluded benefits or to the extent such recognition would result in a duplication of benefits or compensation. In addition, (i) each company employee will be immediately eligible to participate, without any waiting period, in all Parent employee benefit plans providing group welfare benefits that replace a comparable company employee benefit plan in which such company employee participated as of the effective time of the merger (except to the extent any waiting period under the comparable company employee benefit plan would not have been satisfied); (ii) Parent will use commercially reasonable efforts to cause any pre-existing conditions exclusions and actively at work requirements under any corresponding group health or similar plan of Parent providing medical, dental, pharmaceutical, or vision benefits to be waived with respect to continuing employees and their eligible dependents to the same extent waived under the comparable company employee benefit plan; and (iii) any eligible expenses incurred by and credited to a company employee and his or her covered dependents under a company employee benefit plan providing group health benefits during the portion of the plan year in which the effective time of the merger occurs may be taken into account under the corresponding benefit plan of Parent for purposes of satisfying the analogous deductible, coinsurance and maximum out-of-pocket requirements applicable to such company employee and his or her covered dependents for the applicable plan year, as if such amounts had been paid in accordance with such Parent plan.

Parent and we have agreed to use reasonable best efforts to purchase a “tail” or “runoff” officers’ and directors’ liability insurance policy in respect of acts or omissions occurring prior to the effective time of the merger covering our directors and officers currently covered by our officers’ and directors’ liability insurance policy. The merger agreement contemplates that the new policy, subject to certain exceptions, will be no less favorable than our policy currently in effect with respect to coverage, deductibles and amounts and will last for six years following the effective time of the merger and that its price will not exceed 300% of the amount per annum we paid in our last full fiscal year prior to the date of the merger agreement.

From and after the effective time of the merger, Parent will cause the surviving corporation to fulfill and honor all obligations of the company and our subsidiaries pursuant to (1) each indemnification agreement in effect between us and our officers and directors that was made available to Parent and included on the disclosure schedules, and (2) any indemnification provision and any exculpation provision set forth in our charter documents in effect on the date of the merger agreement, in each case, to the fullest extent permitted by applicable law. Any beneficiaries of such indemnification are the “indemnified parties.”

From the effective time of the merger through the sixth anniversary of the date of the merger agreement, the charter documents of the surviving corporation will contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of each indemnified party as are set out in our charter documents in effect as of the date of the merger agreement.

Except as otherwise required by applicable law, from and after the effective time of the merger, the surviving corporation (and any successor corporation) will indemnify and hold harmless, and provide advancement of expenses to, each indemnified party in respect of acts or omissions in their capacity as a director or officer of the company or our subsidiaries or as an officer, director, employee, fiduciary or agent of another enterprise if the indemnified party was serving in such capacity at our request, to the fullest extent permitted by applicable law or provided under our charter documents, any indemnification agreements and any other governing documents of the company and our subsidiaries in effect on the date of the merger agreement.

Pursuant to the merger agreement, the company will use commercially reasonable efforts to provide, and will cause its subsidiaries and representatives to use commercially reasonable efforts to provide, in each case at Parent’s sole cost and expense, such reasonable cooperation as is customary for the type of financings contemplated by the debt commitment letter and reasonably requested by Parent, including:

The financing cooperation efforts described above are conditioned upon certain limitations set forth in the merger agreement. Parent is required to promptly reimburse the company for all reasonable and documented out-of-pocket costs and expenses incurred by the company, its subsidiaries and affiliates related to the financing cooperation described above and Parent and Merger Sub must indemnify and hold harmless the company (subject to certain limitations set forth in the merger agreement), its subsidiaries and affiliates from and against any and all damages, claims, awards and judgments suffered by them in connection with the performance of their financing cooperation obligations set forth above.

We and Parent have each agreed to use our respective commercially reasonable efforts to take, or cause to be taken, all actions necessary to consummate, as promptly as practicable, the merger and the other transactions contemplated by the merger agreement.

These commercially reasonable efforts include taking certain steps to secure necessary consents, approvals, waivers and authorizations of governmental authorities and third parties.

We have agreed to promptly advise Parent of any material developments regarding any litigation that may be commenced or threatened against any party to the merger agreement or any of its affiliates relating to the merger agreement, the merger, or any of the other transactions contemplated by the merger, which we refer to as the “transaction litigation.” We will be entitled to control the defense or settlement of any transaction litigation brought against us, any of our subsidiaries or any of their or our representatives, but the merger agreement prohibits us from compromising, settling or coming to a settlement arrangement regarding any transaction litigation without Parent’s written consent (which may not be unreasonably withheld, delayed or conditioned).

The merger agreement contains additional covenants, including, among others, covenants relating to the filing of this proxy statement, elimination of any applicable takeover statutes, and exemptions of dispositions of our securities in connection with the merger under Rule 16b-3 of the Exchange Act.

Each party’s obligation to complete the transactions contemplated by the merger agreement is subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following conditions:

The obligations of Parent and Merger Sub to complete the merger are further subject to the satisfaction or waiver (to the extent permitted by applicable law) at the effective time of the merger of the following additional conditions:

Our obligation to complete the merger is further subject to the satisfaction or waiver (to the extent permitted by applicable law) at the effective time of the merger of the following additional conditions:

In general, all fees and expenses incurred in connection with the merger, the merger agreement, and all related transactions shall be paid by the party incurring such fees or expenses, whether or not the merger or any of the other related transactions are consummated. However, Parent has agreed to pay all filing fees under the HSR Act and any other merger control law that may be applicable and will bear and timely pay all fees and expenses associated with any financing for the transactions contemplated by the merger agreement, subject to the cap on Parent’s and Merger Sub’s liabilities, as described under “Limitations on Remedies,” and all transfer, documentary, sales, use, stamp, registration and other similar taxes imposed with respect to the transactions contemplated by the merger agreement (other than any such taxes required solely by reason of a request by a holder of shares that payment of the merger consideration be made to a person other than the registered holder of such shares).

In general, the merger agreement may be terminated at any time prior to the effective time of the merger, whether before or after approval of the proposal to approve the merger agreement by our shareholders, (1) by the mutual written consent of the company and Parent or (2) by written notice of either the company or Parent in certain circumstances as summarized in the table below:

If the merger agreement is terminated as described above, the merger agreement will become void and of no effect, without any liability of any party to any other party, except for certain specified provisions of the merger agreement that survive such termination, and subject to the limitations set forth in the provisions of the merger agreement related to termination fees, specific performance and non-recourse for non-parties, nothing in the merger agreement will relieve us from liability for any fraud or intentional breach of this Agreement.

In certain circumstances, we or Parent may be obligated to pay the other a fee in connection with the termination of the merger agreement, as described below. No more than one termination fee will be payable under the merger agreement. In general, payment of a termination fee under the circumstances in which it is payable will preclude the parties from other remedies under the merger agreement, except that the company termination fee will not relieve us from any liability for fraud or intentional breach.

We will be required to pay Parent a termination fee in an amount equal to $20,380,000 (the “company termination fee”):

Parent will be required to pay us a termination fee in an amount equal to $47,030,000 (the “parent termination fee”):

Parent will be required to pay us a termination fee in an amount equal to $50,170,000 (the “parent regulatory termination fee”):

The merger agreement provides that any claim or cause of action based upon, arising out of, or related to the merger agreement may only be brought against persons that are expressly named as parties to the merger agreement, and only with respect to the specific obligations set forth in the merger agreement. In addition, we have specifically waived

any claims or rights against any financing source, agreed not to support any suit, action or proceeding made against any financing source, and agreed to cause dismissal or termination of any suit, action or proceeding against any financing source by or on behalf of the company, its subsidiaries and representatives, in each case, relating to the merger agreement, related financing documentation and related transactions.

If paid, the payment of any termination fees (as described above under “Termination Fees”) are deemed to be liquidated damages in a reasonable amount that will compensate the recipient for any and all losses or damages suffered or incurred by the non-paying party in connection with the merger, merger agreement, and related transactions. Upon payment of any such termination fee, the party paying such termination fee shall not have any further liability, whether pursuant to a claim in contract or tort, at law or in equity or otherwise, except that these provisions do not relieve us from any liability for fraud or intentional breach of the merger agreement.

Regardless of whether the termination fees are payable, the aggregate liability of Parent and Merger Sub under the merger agreement is limited to an amount equal to the parent termination fee or parent regulatory termination fee, as applicable, plus up to $3,000,000 of enforcement costs.

Parent, Merger Sub and we are entitled to an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the performance of terms and provisions of the merger agreement. Importantly, however, we are not entitled to enforce or seek enforcement of Parent obligations to cause the equity financing to be consummated or to consummate the merger unless certain circumstances are met, including (1) the merger agreement has not been validly terminated; (2) all conditions precedent have been satisfied or waived by Parent (other than those conditions that by their nature only can be satisfied at the closing but which are then capable of being satisfied at the closing on such date, and those conditions the failure of which to be satisfied is caused by or results from a breach by Parent); (3) Parent fails to consummate the closing by the closing date; (4) the debt financing has been or will be funded pursuant to the terms of the debt commitment letter at the closing if the equity financing is funded at the closing; (5) the company has irrevocably confirmed in writing to Parent that it would take such actions required by the merger agreement to cause the closing to occur if specific performance is granted and the equity and debt financings are funded; and (6) Parent has failed to consummate the closing within 2 business days following receipt of such written notice; except that the company is not permitted or entitled to receive both a grant of specific performance as discussed above and the termination fee from Parent as described in “Termination Fees.”

Except as provided in the following sentence, the merger agreement may not be assigned, in whole or in part, by any of the parties to the merger agreement without the prior written consent of the other parties to the merger agreement.

However, Parent may assign all or any of its rights or obligations under the merger agreement to any of its direct or indirect wholly-owned subsidiary without our written consent or collaterally assign its rights, interests or obligations under the merger agreement to any of its affiliates, for collateral security purposes to debt financing sources or to any third-party acquirer of Parent or us.

No assignment by any party to the merger agreement will relieve such party of any of its obligations under the merger agreement.

The merger agreement may be amended at any time by an instrument in writing signed on behalf of each of Parent, Merger Sub, and the company, except that after the merger agreement has been adopted by our shareholders, any amendment that requires further shareholder approval may not be made without such further approval. At any time prior to the effective time of the merger, the parties may extend the time for performance of any obligations, to the extent permitted by law, waive any inaccuracies in the representations and warranties of the parties, and to the extent permitted by law, waive compliance with any of the agreements or conditions in the merger agreement.

Amendments or waivers to certain sections of the merger agreement that may be materially adverse to the financing sources of Parent and Merger Sub must be approved by such financing sources.

The merger agreement will be governed by and construed in accordance with the laws of the State of Minnesota.

The information below regarding the merger proposal should be read together with the rest of this proxy statement, especially “The Special Meeting” on page 16, “The Merger” on page 21, “The Merger Agreement” on page 51, and the copy of the merger agreement attached as Appendix A.

We are asking you to approve a proposal to approve the merger agreement and thereby adopt the merger agreement as a plan of merger. A copy of the merger agreement is attached as Appendix A. For a discussion of the terms and conditions of the merger agreement, see the section entitled “The Merger Agreement” on page 51. For a discussion of other considerations related to the merger, see the section entitled “The Merger” on page 21.

To be approved, the merger proposal must receive the affirmative vote of holders of at least     shares of our common stock, which represents a majority of all shares of our common stock outstanding as of the record date.

Abstentions, broker non-votes, and shares not present will all have the effect of a vote against this proposal.

Our board of directors unanimously recommends that you vote “FOR” approval of the merger proposal. For a summary of the reasons for our board of directors’ recommendation, see “The Merger—Reasons for our Board’s Recommendation in Favor of the Merger.”

The information below regarding the golden parachute proposal should be read together with the rest of this proxy statement, especially “The Special Meeting” on page 16 and “The Merger—Interests of our Directors and Executive Officers in the Merger” on page 42.

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and Rule 14A-21(c) promulgated under the Exchange Act, the company is required to submit a proposal to our shareholders to approve, on an advisory, non-binding basis, the “golden parachute” compensation payments that will or may be made by the company to its named executive officers in connection with the merger. This proposal, commonly known as a “say on golden parachute” proposal, gives shareholders the opportunity to vote on an advisory, non-binding basis on the “golden parachute” compensation payments that will or may be paid or become payable to its named executive officers in connection with the merger.

For purposes of this proposal, our named executive officers are the persons identified in the table under the “Golden Parachute Compensation” on page 45. Their merger-related compensation that is the subject of the golden parachute proposal is set forth in “The Merger—Interests of our Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to Named Executive Officers,” including the footnotes to the table and related narrative discussion.

Our board of directors encourages you to review carefully the “golden parachute” compensation information disclosed in this proxy statement.

Our board of directors unanimously recommends that the company’s shareholders vote to approve the following resolution:

RESOLVED, that the shareholders approve, on a nonbinding, advisory basis, the compensation that will or may be paid or become payable to our named executive officers in connection with the merger, in each case as disclosed pursuant to Item 402(t) of Regulation S-K in the Golden Parachute Compensation table and the related narrative disclosures.

The vote on this proposal is separate and apart from the vote on the proposal to approve the merger agreement, and is not a condition to completion of the merger. Accordingly, you may vote to approve the merger agreement and vote not to approve the golden parachute proposal and vice versa.

This proposal gives our shareholders the opportunity to express their views on the merger-related compensation of our named executive officers. Because the vote on this proposal is advisory only, it will not be binding on the company or the executive officers. Accordingly, if the merger proposal is approved and the merger is consummated, the compensation payments that are contractually required to be paid by the company to its named executive officers will be paid, subject only to the terms of their compensation agreements and arrangements, regardless of the outcome of this non-binding advisory vote of the company’s shareholders.

Because the golden parachute proposal is a non-binding advisory vote, and not a binding act of our shareholders, we will consider the proposal to be approved if more shares are voted “FOR” the proposal than “AGAINST.” For the vote to occur, a quorum must be present at the convening of the special meeting.

An abstention will have no effect on this proposal. Assuming a quorum is present, a broker non-vote or a failure to vote shares will have no effect on this proposal.

Our board of directors unanimously recommends that you vote “FOR” approval of the golden parachute proposal.

The information below regarding the adjournment proposal should be read together with the rest of this proxy statement, particularly “The Special Meeting—Adjournment” on page 16.

We are asking our shareholders to approve adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the merger agreement at the time of the special meeting. The adjournment proposal is in addition to, and not in lieu of, any authority under the Minnesota Business Corporation Act or our bylaws to adjourn the meeting without a vote of shareholders in appropriate circumstances.

If our shareholders approve the adjournment proposal, we could adjourn the special meeting and any adjourned session of the special meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from shareholders that have previously returned properly executed proxies voting against adoption of the merger agreement. Among other things, approval of the adjournment proposal could mean that, even if we had received proxies representing a sufficient number of votes against adoption of the merger agreement such that the proposal to approve the merger agreement would be defeated, we could adjourn the special meeting without a vote on the adoption of the merger agreement and seek to convince the holders of those shares to change their votes to votes in favor of adoption of the merger agreement. Additionally, we may seek to adjourn the special meeting if a quorum is not present at the special meeting.

For the adjournment proposal to be approved, the proposal must receive the affirmative vote of holders of the greater of (a)     shares (which represents a majority of the minimum number of shares entitled to vote that would constitute a quorum) and (b) a majority of all shares of our common stock represented at the special meeting, virtually or by proxy, and entitled to vote at the special meeting. A quorum may, but need not, be present.

An abstention will have the effect of a vote against this proposal, but a broker non-vote or a failure to vote shares will have no effect on this proposal.

Our board of directors unanimously recommends that you vote “FOR” approval of the adjournment proposal.

In making its recommendation, our board of directors considered a variety of factors including:

The following table provides information concerning persons known to the company to be the beneficial owners of more than 5% of the company’s outstanding common stock as of June 19, 2024. Unless otherwise indicated, the shareholders listed in the table have sole voting and investment power with respect to the shares indicated.

The following table sets forth the number of shares of common stock beneficially owned as of June 19, 2024, by each named executive officer of the company, by each current director of the company and by all directors and executive officers (including the named executive officers) as a group. Unless otherwise indicated, the shareholders listed in the table have sole voting and investment power with respect to the shares indicated.