Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes: ☐ No: ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes: ☐ No: ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: ☑ No: ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months ~~(or~~
(or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☑ No ☐

~~Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K~~ (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this~~Form 10-K~~ ~~or any amendment to this Form10-K. ☐~~

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” inRule12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer ☐ ~~(Do not check if a small reporting company)~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined inRule12b-2 of the Act). Yes: ☐ No: ☑

The aggregate market value of the voting andnon-voting common stock held bynon-affiliates of the registrant ~~based on~~was $261,775,368 computed by reference to the last reported sale price ~~for such stock on June 30, 2017 was: $ $404,852,999.~~of $27.98 per share as reported by The Nasdaq Global Market as of the last business day of the registrant’s most recently completed second fiscal quarter. For purposes of this calculation, shares held by stockholders whose ownership exceeded 5% of the registrant’s common stock outstanding were deemed to be held by affiliates. Exclusion of such shares should not be construed to indicate that any such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the registrant or that such person is controlled by or under common control with the registrant.

At March 2, ~~2018,~~2020, the registrant had ~~19,281,268~~20,178,506 shares of common stock, par value $0.01 per share, outstanding.

LeMaitre Vascular, Inc. (the “Company” or “we”) are filing this Amendment No. 1 (“Amendment No. 1”) to our Annual Report on Form 10-K for the year ended December 31, 2019 originally filed with the U.S, Securities and Exchange Commission on March 12, 2020 (the “Original Form 10-K”) in order to provide the disclosure required by Part III of ~~this~~ Form10-K ~~incorporates information~~ (the “Part III Disclosure”). The Part III Disclosure was omitted from the Original Form 10-K on the basis that it would be incorporated by reference from ~~the registrant’s~~our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year covered by this annual report.

~~This Annual Report on Form10-K~~ contains forward-looking statements (within the meaning of the federal securities law) that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Annual Report on Form~~10-K~~ regarding our strategy, future operations, future financial position, future net sales, gross margin expectations, projected costs, projected expenses, prospects and plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations underlying any of our forward-looking statements are reasonable, these expectations may prove to be incorrect, and all of these statements are subject to risks and uncertainties. Should one or more of these risks and uncertainties materialize, or should underlying assumptions, projections, or expectations prove incorrect, our actual results, performance, or financial condition may vary materially and adversely from those anticipated, estimated, or expected. We have included important factors in the cautionary statements included in this Annual Report on Form~~10-K,~~ particularly in the section entitled “Risk Factors,” that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or terminations of distribution arrangements that we may make. These statements, like all statements in this report, speak only as of the date of this Annual Report on Form~~10-K~~ (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

~~The following discussion should be read in conjunction with our financial statements and the related notes contained elsewhere in this Annual Report onForm 10-K~~ ~~and in our other Securities and Exchange Commission filings.~~

~~Unless the context requires otherwise, references to “LeMaitre Vascular,” “LeMaitre,” “we,” “our,” and “us” in this Annual Report on Form10-K~~ ~~refer to LeMaitre Vascular, Inc. and its subsidiaries.~~

LeMaitre, AlboGraft, AnastoClip, AnastoClip GC, EndoRE, Expandable LeMaitre Valvulotome, Glow ‘N Tell, Inahara-Pruitt, InvisiGrip, LeverEdge, LifeSpan, MollRing Cutter, MultiTASC, Omniflow, ProcCol, Pruitt, Pruitt F3, Pruitt-Inahara, Reddick, RestoreFlow, VascuTape, TRIVEX, XenoSure, and the LeMaitre Vascular logo are registered trademarks of LeMaitre Vascular or one of its subsidiaries, and AlboSure, Flexcel, Periscope and VCS are unregistered trademarks of LeMaitre Vascular. This Annual Report on Form~~10-K~~ ~~also includes the registered and unregistered trademarks of other persons, which are the property of their respective owners.~~

LeMaitre Vascular is a global provider of medical devices and human tissue cryopreservation services for the treatment of peripheral vascular disease. We develop, manufacture, and market vascular devices to address the needs of vascular surgeons. Our diversified portfolio of peripheral vascular devices consists of brand name products that are used in arteries and veins outside of the heart and are well known to vascular surgeons, and includes the HYDRO Expandable LeMaitre Valvulotome, the XenoSure biologic patch, the Pruitt F3 Carotid Shunt and VascuTape Radiopaque Tape. Our principal product offerings are sold throughout the world, primarily in the United States, Europe and, to a lesser extent, Asia and the Pacific Rim. We estimate that the annual worldwide market that our core product lines address is approximately $870 million.

We sell our products and services primarily through a direct sales force. As of December 31, 2017 our sales force was comprised of 90 sales representatives in North America, Europe, Japan, China and Australia. We also sell our products in other geographies through distributors. Our worldwide headquarters is located in Burlington, Massachusetts. Our European operations are headquartered in Sulzbach, Germany. We also have sales offices located in Tokyo, Japan; Vaughn, Canada; Madrid, Spain; Milan, Italy; Shanghai, China; and North Melbourne, Australia. In 2017, approximately 93% of our net sales were generated in territories in which we employ direct sales representatives.

Based on industry statistics, we estimate that peripheral vascular disease affects more than 200 million people worldwide and that the annual worldwide market for all peripheral vascular devices exceeds $5 billion. The disease encompasses a number of conditions in which the arteries or veins that carry blood to or from the legs, arms, or organs other than the heart become narrowed, obstructed, weakened, or otherwise compromised. In many cases peripheral vascular disease goes undetected, sometimes leading to life-threatening events including stroke, ruptured aneurysm, pulmonary embolism or death. We believe that the peripheral vascular disease market will grow due to the increase in the incidence and diagnosis rates of peripheral vascular disease, a shift by doctors to prescribing higher-priced endovascular devices, and the adoption of western healthcare standards by the developing world. We believe that our strong brands, established sales force, evolving suite of peripheral vascular device offerings, and broad network of vascular surgeon customers position us to capture an increasing share of this large and growing market.

Clinical studies have identified several factors that increase the risk of peripheral vascular disease, including smoking, diabetes, obesity, high blood pressure, lack of exercise, coronary artery disease, high cholesterol, and being over the age of 65. Demographic trends suggest an increase in the prevalence of peripheral vascular disease over time, driven primarily by rising levels of obesity and diabetes and an aging population.

~~Vascular surgeons treat peripheral vascular disease and also perform vascular procedures associated with other diseases, such asend-stage~~ renal disease. We estimate that there are more than 3,300 board-certified vascular surgeons and several thousand general surgeons who perform vascular procedures in the United States, and that there are more than 3,000 vascular surgeons in Europe, Asia and the Pacific Rim. In contrast to other medical specialists, such as interventional cardiologists and interventional radiologists, vascular surgeons perform both conventional open vascular surgeries and endovascular procedures. Conventional open vascular surgery involves opening the body, cutting vessels, and suturing. Endovascular procedures typically are minimally invasive, catheter-based procedures involving repairing vessels from within using real-time imaging technologies. We estimate that in 2017, 89% of our net sales were from devices used in open vascular procedures.

We have grown our business by using a three-pronged strategy: focusing on the vascular surgeon call point, competing for sales in low rivalry niche markets, and expanding our growth platform through our worldwide direct sales force as well as acquiring and developing complementary vascular devices.

consistent quality of our products, allow for us to establish both higher selling prices and market share gains in these markets. In recent years we have also sought to sell complementary offerings into larger, more competitive market segments, particularly when we believe that our offerings in those segments are highly differentiated, such as the Omniflow biosynthetic graft or the RestoreFlow human tissue cryopreservation services

We were founded in 1983 by George D. LeMaitre, M.D., a vascular surgeon who designed and developed the predecessor to our 1.5mm HYDRO LeMaitre Valvulotome. Through a combination of strategic acquisitions and research and development efforts, we have expanded to 15 product lines.

With the exception of the remote endarterectomy devices, powered phlebectomy systems, cryopreserved allograft services, biosynthetic grafts and our ProCol biologic vascular grafts, we have relocated the manufacturing operations associated with our 19 acquisitions to our Burlington, Massachusetts headquarters and we continue to look at ways to make our operations more efficient. The manufacture of our biosynthetic vascular grafts take place in our North Melbourne, Australia facility and the human tissue processing and cryopreservation operations associated with RestoreFlow allografts take place in our Fox River Grove, Illinois facility.

We have a portfolio of 15 product lines, most of which are designed for use in open vascular surgery. We also provide services related to the processing and cryopreservation of human vascular tissue. Our products and services address various anatomical areas including the carotid, lower extremities, upper extremities, aorta and other areas. In 2017, the lower extremities product lines and services were 51% of revenues, the carotid product lines comprised 32% of our revenues, and other areas combined were 17%. In 2016, the lower extremities product lines and services were 51% of revenues, the carotid product lines comprised 31% of our revenues, and other areas combined were 18%. In 2015, the lower extremities product lines were 53% of revenues while the carotid product lines were 29% and other areas combined were 18%. No single product line accounted for more than 25% of our revenues in 2017, 2016 or 2015.

Of our 15 product offerings, three are biologic devices that are implanted in the patient, and one is the service of processing and cryopreserving human tissue for implantation into the patient. These include the XenoSure patch (bovine pericardium), ProCol graft (bovine mesenteric vein), Omniflow II biosynthetic graft (ovine tissue and synthetic mesh) and the RestoreFlow Allograft cryopreserved graft (human tissue). As a percentage of sales, these product lines represented 34% in 2017, 27% in 2016 and 21% in 2015.

~~The LeMaitre Disposable Angioscope is a fiberoptic catheter used for viewing the lumen of a blood vessel. It also provides direct visualization of valves duringin-situ~~ ~~bypass procedures.~~

Our LeMaitre line of embolectomy catheters is used to remove blood clots from arteries or veins. We manufacture single-lumen latex and latex-free embolectomy catheters as well as dual-lumen latex embolectomy catheters. The dual-lumen embolectomy catheter allows clot removal and simultaneous irrigation or guide-wire trackability. Occlusion catheters temporarily occlude blood flow to allow the vascular surgeon time and space to complete a given procedure. Perfusion catheters temporarily perfuse blood and other fluids into the vasculature. Our Pruitt line of occlusion and perfusion catheters reduces vessel trauma by using internal balloon fixation rather than traditional external clamp fixation.

Our Pruitt F3, Pruitt-Inahara and Flexcel carotid shunts are used to temporarily shunt blood to the brain while the surgeon removes plaque from the carotid artery in a carotid endarterectomy surgery. Our Pruitt F3 and Inahara-Pruitt shunts feature internal balloon fixation that eliminates the need for clamps, thereby reducing vessel trauma. Our Flexcel shunt is a~~non-balloon~~ ~~shunt offered for surgeons who prefer to secure their shunt with externally placed clamps.~~

Our TRIVEX powered phlebectomy system is comprised of capital equipment and disposables that enable removal of varicose veins. In this procedure, an illuminator is inserted through a small incision in the leg, enabling visualization of varicose veins. A second instrument removes the veins. Compared to conventional hook phlebectomy, this surgical procedure is faster and results in more complete vein removal through fewer incisions.

~~Our VascuTape Radiopaque Tape is a flexible, medical-grade tape with centimeter or millimeter markings printed with our proprietary radiopaque ink that is visible both to the eye and to anx-ray~~ machine or fluoroscope. VascuTape Radiopaque Tape is applied externally to the skin and provides interventionalists with a simple way to cross-reference between the inside and the outside of a patient’s body, allowing them to locate tributaries or lesions beneath the skin.

Our EndoRE line of remote endarterectomy devices are used to remove plaque from arteries in the leg in a minimally invasive procedure requiring a single incision in the groin. Our EndoRE devices are used to separate the plaque from the vessel, cut the far end of the plaque to free it for removal, and then withdraw it from the vessel.

~~Our 1.5mm HYDRO LeMaitre Valvulotomes,Over-The-Wire~~ ~~LeMaitre Valvulotomes,Tru-Incise~~ valvulotomes, and LeMills Valvulotomes cut valves primarily in the saphenous vein, a vein that runs from the foot to the groin, so the vein can function as an artery to carry blood past diseased arteries to the lower leg or the foot. We believe our valvulotomes reduce costs for hospitals by enabling less invasive bypass surgery to be performed with several small incisions rather than one continuous~~ankle-to-groin~~ ~~incision, thereby reducing the length of hospital stays and the likelihood of wound complications.~~

~~Our AlboGraft woven and knitted vascular grafts are collagen-impregnated polyester grafts used to bypass or replace diseased arteries. They are available in both straight tube and bifurcated versions.~~

Our LifeSpan ePTFE Vascular Graft is an expanded polytetrafluoroethylene (ePTFE) graft used to bypass or replace diseased arteries and to create dialysis access sites. They are available in both regular and thin wall options and with an optional full or partial external spiral support. Our stepped and tapered LifeSpan models are designed to reduce the risk of steal syndrome and high cardiac output, complications that may arise in dialysis access grafts.

Our Omniflow II Biosynthetic Vascular Graft is a composite of cross-linked ovine collagen with a polyester mesh endoskeleton. It is used to bypass or replace diseased leg arteries and to create dialysis access sites.

~~Our ProCol biologic graft is a bovine mesenteric vein vascular graft used for dialysis access in patients with a previously failed synthetic graft.~~

Through our RestoreFlow allograft business, we provide human tissue cryopreservation services, in particular the processing and cryopreservation of veins and arteries. Our RestoreFlow Allografts are cryopreserved human tissue grafts, including saphenous veins, femoral veins and arteries, and aortoiliac arteries. These allografts are used in variety of vascular reconstructions such as peripheral bypass, hemodialysis access, and aortic infections. Currently they are only available for distribution in the United States and Canada.

~~Our XenoSure Biologic Vascular Patch is made from bovine pericardium, and is used primarily for closure of vessels after surgical intervention.~~

~~Our AlboSure Vascular Patch is a polyester patch. Vascular surgeons use patches in conjunction with carotid endarterectomy, femoral endarterectomy, and other vascular reconstructions.~~

Our AnastoClip AC and AnastoClip GC vessel closure systems attach vessels to one another with titanium clips instead of sutures. These vessel closure systems create an interrupted anastomosis that expands and contracts as the vessel pulses, which surgeons believe improves the durability of the anastomosis. The AnastoClip AC closure system also facilitates compliant dura closure in neuro applications. It does not penetrate the dura, which eliminates cerebrospinal fluid leakage from suture holes allowing for reduced operating room time.

We also sell general surgery devices, primarily laparoscopic cholecystectomy devices. Our leading general surgery product is the Reddick Cholangiogram Catheter, which is used to inject dye into the cystic duct during laparoscopic cholecystectomy. In this procedure, the gall bladder is dissected and removed through small punctures in the abdomen. We also offer a laparoscopic accessory used in laparoscopic gall bladder removal.

As of December 31, 2017, we employed 90 field sales representatives. We believe that the expansion of our direct sales force since 1998 has been a key factor in our success, and it remains one of our primary long-term strategies.

Outside our direct markets, we generally sell our products through country-specific distributors. We seek to sign distribution agreements with distributors for terms of up to five years, frequently specifying minimum annual sales volumes. These agreements are renewable by mutual agreement between us and the distributor. From time to time, when we determine that it would be financially advantageous for us to sell directly in a country, we terminate our distributor(s) in that country. In August 2015, we agreed to terminate our agreement with a distributor in Finland in order to begin selling~~direct-to-hospital~~ in Finland as of January 1, 2016. In December 2015, we signed a master distribution agreement with Meheco Yonstron Pharmaceutical Co. Ltd., a Chinese distribution and logistics company, and began selling our Chinese market products to Meheco in 2016. Meheco then sold our products to multiple~~sub-distributors~~ ~~who then sold to Chinese hospitals. This agreement expired in December 2017, and we are currently in the process of signing distribution agreements with multiplesub-distributors~~ ~~in order to sell our products directly to thosesub-distributors.~~

In addition, we engage in direct marketing efforts, including direct mail and exhibitions at medical congresses, which we believe are important to our brand development and continued success. We believe that direct marketing allows us to market to vascular surgeons beyond the reach of our direct sales force.

We also provide training to medical professionals as means of promoting our products. We aim to add value to our vascular surgeon customers by providing training opportunities on specific vascular surgery procedures including, among others, in situ or peripheral bypass, carotid endarterectomy, phlebectomy and interrupted anastomosis.

Our research and development has historically focused on developing enhancements and extensions to our existing product lines. Our current product development efforts are primarily focused on the open vascular space and are largely improvements to our existing devices. In 2017, our efforts were primarily focused on expanding and enhancing our biologic product lines including XenoSure and Omniflow, as well as integrating newly acquired product lines. Considerable efforts were also made to improve the design of the HYDRO valvulotome as a result of our 2016 voluntary recall. In addition, we furthered our efforts around the AnastoClip product family, with substantial testing aimed at seeking future approval for the AnastoClip GC indication for dura repair during neurosurgery in the United States.

Our products are subject to our design control procedures throughout the various stages of product development. These procedures may include bench testing, animal testing, human procedures conducted by independent physicians, and post-market surveillance of product performance, as appropriate. We may use feedback received from independent physicians to demonstrate product functionality before commencing full-scale marketing of any product.

~~In 2017, 2016 and 2015 our research and development expenditures were $6.7 million, $6.1 million and $5.5 million, respectively.~~

Our manufacturing facilities are located in Burlington, Massachusetts, where most of our product lines are produced. We also have facilities in North Melbourne, Australia, where our Omniflow II product line is produced, and Fox River Grove, Illinois where RestoreFlow allografts are processed, cryopreserved, stored and distributed.

Following the acquisition of new product lines, we sometimes integrate manufacturing of the newly acquired lines into our Burlington operations. Our TRIVEX, EndoRE, and ProCol biologic graft products are currently manufactured by third parties, however, we expect the transition of the manufacturing of our ProCol biologic graft to be completed in 2018, subject to regulatory approval. We completed the renovation of our manufacturing facility in Burlington in 2017, in which we expect most of our biologic product lines will be produced.

We manufacture certain proprietary components, assemble most of our devices ourselves, and inspect, test, and package all of our finished products. By designing and manufacturing many of our products from raw materials, and assembling and testing as many of our subassemblies and products as practical, we believe we can maintain better quality control, ensure compliance with applicable regulatory standards and internal specifications, limit outside access to our proprietary technology, ensure adequate product supply, and make design modifications in a timely manner. We have custom-designed proprietary manufacturing and processing equipment and have developed proprietary enhancements for existing production machinery. Our products are built to stock.

We process and cryopreserve human tissue provided to us by qualified tissue procurement organizations in the United States. Donated human tissue is procured from deceased donors by these organizations. We have strict specifications regarding tissue we will accept for processing relating to, among other things, the physical condition and characteristics of the tissue and the donor, the medical history of the donor and certain test results of the donated tissue. We also use various supplies in connection with the processing and cryopreservation of human tissue, including certain proprietary solutions and antibiotics.

Our management information systems provide us with the ability to evaluate our performance, collect business intelligence, and make better strategic decisions. These systems include order entry, invoicing,~~on-line~~ ~~inventory management, lot traceability, purchasing, shop floor control, and shipping and distribution analysis, as well as various accounting-oriented functions. Duringday-to-day~~ ~~operations, these systems enable us to track our products from the inception of an order through the manufacturing process and then ultimately through delivery of the product to the customer.~~

We purchase components from, and have certain product lines manufactured by, third parties. Most of our components are readily available from several supply sources, but we do rely on single- and limited-source suppliers for several of our key product components and our third-party-manufactured products. We do not have contractual arrangements with many of these suppliers and manufacturers, and we order our supplies and product on an~~as-needed~~ basis. To date, we have not experienced any material disruption in the adequate supply from existing sources of product and components, but there is no guarantee that we will not experience such disruptions in the future.

Our Burlington and North Melbourne manufacturing facilities have been certified to ISO 13485 quality management system standards, which enables us to satisfy certain regulatory requirements of the European Union, Canada, and other foreign jurisdictions. Our Fox River Grove, Illinois facility has been accredited by the American Association of Tissue Banks for the processing, storage and distribution of cardiac and vascular tissue for transplantation and licensed by certain state agencies. Our manufacturing and processing facilities are subject to periodic inspections by various regulatory authorities and Notified Bodies (described below) to ensure compliance with domestic and~~non-U.S.~~ ~~regulatory requirements. See “Government Regulation” for further~~

information. In August 2017, our Burlington facilities were audited by the U.S. Food and Drug Administration (FDA), and in January 2018, we underwent inspections by our European Notified Body. In February 2016, our Fox River Grove facility was inspected by the FDA, and in February 2018 our Australian operations were inspected by our notified body, TUV Rheinland. The results of these inspections were satisfactory.

The segments in which our product lines compete are characterized by change resulting from technological advances and scientific discoveries. No one company competes against all of our product lines; rather, we compete with a range of companies. Notable larger competitors include Applied Medical Resources Corporation, Baxter International, Inc., Boston Scientific Corporation, Cardiovascular Systems, Inc., Medtronic, Becton, Dickinson and Company, CryoLife, Inc., Edwards Lifesciences Corporation, Getinge AB, LifeNet Health, Inc., Terumo Medical Corporation, and W. L. Gore & Associates.

The success of our products relies on effective service support as well as superior product technology, quality, product and service availability, reliability, ease of use, cost-effectiveness, physician familiarity, and brand recognition. While we also compete on the basis of price, we believe our products that are more technologically advanced than those of our competitors are sometimes sold at higher prices than those of our competitors. We believe that our continued success will depend on our ability to broaden and optimize our direct sales channel, acquire or develop additional complementary vascular device products, obtain regulatory and reimbursement approvals, maintain sufficient inventory, obtain patent or other product protections and attract and retain skilled personnel. We also compete on the basis of procedure type. The treatment of peripheral vascular disease has experienced a shift from open vascular surgery towards minimally invasive endovascular procedures, and many of our products are used primarily or exclusively in open vascular surgery procedures. Our ability to compete effectively with our competitors relies on keeping pace with existing or new product and technology offerings in the vascular device market, and the minimally invasive endovascular procedure segment in particular.

Many of our competitors have substantially greater financial, technological, research and development, regulatory, marketing, sales, and personnel resources than we do. Certain of these competitors are able to manufacture at lower costs and may therefore offer comparable products at lower prices, especially commodity products such as polyester and ePTFE grafts. Certain of these competitors may also have greater experience in developing and further improving products, obtaining regulatory approvals, and manufacturing and marketing such products. In the case of vascular allografts, certain competitors may have an advantage in sourcing tissue due to higher volume purchases and longer term relationships from tissue procurement organizations. Additionally, certain of our competitors may obtain patent protection or regulatory approval or clearance, or achieve product commercialization, before us, any of which could materially adversely affect us.

We believe that our success is dependent, to a certain extent, on the development and maintenance of proprietary aspects of our technologies. We rely on a combination of patents, trademarks, trade secret laws, and confidentiality and invention assignment agreements to protect our intellectual property rights.

We maintain patents in the United States, Europe and other strategic locations relating to various aspects of our products and/or manufacturing processes. The majority of our issued U.S. patents are set to expire at various times fromOn March 25, 2020, ~~to 2032.~~

Generally, for products that we believe are appropriate for patent protection, we will attempt to obtain patents in the United States and key markets of the European Union. However, depending on circumstances, we may not apply for patents in all or any of those jurisdictions.

Certain aspects of our products are covered by patents held by third parties. We manufacture, market, and sell these products pursuant to license agreements with these third parties. These arrangements require us to pay royalties, typically determined as a percentage of our net sales for the underlying product. If we fail to make these payments or otherwise fail to observe the terms of these agreements, we may lose our ability to sell these products. For example, we manufacture, market, and sell our LifeSpan Vascular Grafts, Periscope Dissectors and TRIVEX products pursuant to licenses with third-parties.

We believe that our strong brands have been an important factor in our success. We rely on common law and registered trademarks to protect our product brands. Some of our registered trademarks are LeMaitre, XenoSure, Pruitt, VascuTape, Glow ‘N Tell, RestoreFlow and Reddick, each of which is registered in the United States or the European Union or both, and in certain cases in other foreign countries.

We rely on trade secret protection for certain unpatented aspects of other proprietary technology. Many of our products are not protected by patents. Patent protection is not available where we acquire a commercialized product that is not patented, such as the ProCol vascular graft. In the past, other companies have independently developed or otherwise acquired comparable or substantially equivalent proprietary information and techniques, and there can be no assurance that others will not do so in the future or otherwise gain access to our proprietary technology or disclose such technology, or that we can meaningfully protect our trade secrets. We have a policy of requiring employees and consultants to execute confidentiality agreements upon the commencement of an employment or consulting relationship with us. Our confidentiality agreements also require our employees to assign to us all rights to any inventions made or conceived during their employment with us. We also generally require our consultants to assign to us any inventions made during the course of their engagement by us. There can be no assurance, however, that these agreements will provide meaningful protection or adequate remedies for us in the event of unauthorized use, transfer, or disclosure of confidential information or inventions.

The laws of foreign countries generally do not protect our proprietary rights to the same extent as do the laws of the United States and we may experience more difficulty enforcing our proprietary rights in certain foreign jurisdictions.

~~See “Item 1A. Risk Factors” for a description of certain risks associated with our intellectual property.~~

~~Medical devices and human tissues are subject to regulation by the FDA, and, in some instances, other federal and state authorities and foreign governments.~~

Most of our products are medical devices subject to extensive regulation by the FDA under 21 United States Code Chapter 9, the Federal Food, Drug, and Cosmetic Act (the FDCA). FDA regulations govern, among other things, product development, testing, manufacturing, packaging, labeling, storage, clearance or approval, advertising and promotion, sales and distribution, and import and export.

Most medical devices must receive either 510(k) clearance or Premarket Application approval (PMA approval) from the FDA prior to commercial distribution. Devices deemed to pose relatively less risk are placed in either class I or II, which requires the manufacturer to submit a premarket notification requesting permission for commercial distribution; this is known as 510(k) clearance. Some~~low-risk~~ devices are exempted from this requirement. Class II devices may be subject to special controls, such as performance standards and FDA guidelines that are not applied to class I devices. Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting, or implantable devices, or devices deemed not substantially equivalent to a

~~previously 510(k)-cleared device or to apre-amendment~~ ~~class III device (~~~~i.e.~~, one in commercial distribution before May 28, 1976) for which PMA applications have not been called, are placed in class III, which generally requires PMA approval. In all cases, a user fee is required for 510(k) submissions and PMA applications, which in the case of PMA applications can be very costly.

~~510(k) Clearance.~~ To obtain 510(k) clearance, a manufacturer must submit a premarket notification demonstrating that the proposed device is substantially equivalent in intended use and performance to a “predicate device” (~~i.e.~~~~, a previously 510(k)-cleared class I or class II device or apre-amendment~~ class III device for which the FDA has not yet called for PMA applications). The FDA’s 510(k) clearance pathway usually takes from three to twelve months, but it can take longer. In reviewing a premarket notification, the FDA may request additional information, including clinical data. Nearly all of our devices currently sold in the United States are marketed pursuant to the 510(k) clearance, with the exception of our ProCol biologic vascular graft.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change as specified by FDA guidelines, requires a new 510(k) clearance. The FDA requires each manufacturer to make this determination in the first instance, but the FDA can review any such decision. If the FDA disagrees with a manufacturer’s decision not to seek a new 510(k) clearance, the agency may retroactively require the manufacturer to seek 510(k) clearance. The FDA also can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or PMA approval is obtained. Also, the manufacturer may be subject to significant regulatory fines or penalties.

~~PMA Approval.~~ The PMA approval pathway requires proof of the safety and effectiveness of the proposed device to the FDA’s satisfaction, making this pathway much more costly, lengthy, and uncertain. A PMA application must provide extensive preclinical and clinical trial data, as well as detailed information about the device and its components regarding, among other things, device design, manufacturing, and labeling. As part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation (QSR) which imposes elaborate testing, control, documentation, and other quality assurance procedures on the manufacturing process.

If the FDA approves a PMA, the approved indications or claims may be more limited than those originally sought. The PMA can include post-approval conditions that the FDA believes to be necessary to ensure the safety and effectiveness of the device including, among other things, restrictions on labeling, promotion, sale, and distribution. Failure to comply with the conditions of approval can result in material adverse enforcement action, including the loss or withdrawal of the approval. Even after approval of a PMA, a new PMA or PMA supplement is required if the device or its labeling or manufacturing process are modified. Supplements to a PMA often require the submission of the same type of information required for an original PMA, except that the supplement is generally limited to that information needed to support the proposed change from the product covered by the original PMA.

~~Clinical Trials.~~ A clinical trial is typically required to support a PMA application and is sometimes required to support 510(k) clearance. In some cases, one or more smaller feasibility Investigational Device Exemption (IDE) studies may precede a pivotal IDE clinical trial intended to comprehensively demonstrate the safety and effectiveness of the investigational device. All clinical studies of investigational devices must be conducted in compliance with the FDA’s extensive requirements. If an investigational device could pose a significant risk to patients (as defined in the regulations), the FDA, prior to initiation of clinical use, must approve an IDE application showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. A~~non-significant~~ ~~risk device does not require submission to the FDA of an IDE application. Both significant risk andnon-significant~~ risk investigational devices require approval from institutional review boards (IRBs) at the study centers where the device will be used. The FDA and the IRB at each institution at which a clinical trial is being performed may suspend a clinical trial at any time for various reasons, including a belief that the subjects are being exposed to an unacceptable health risk. During a study, the sponsor must comply with the FDA’s IDE requirements for investigator selection, trial monitoring, reporting, record keeping, and prohibitions on the

promotion of investigational devices. The investigators must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of investigational devices, and comply with all reporting and record-keeping requirements. Required records and reports are subject to inspection by the FDA. Prior to granting PMA approval, the FDA typically inspects the records relating to the conduct of the study and the clinical data supporting the PMA application for compliance with IDE requirements.

Although the QSR does not fully apply to investigational devices, the requirement for controls on design and development does apply. The sponsor also must manufacture the investigational device in conformity with the quality controls described in the IDE application and any conditions of IDE approval that FDA may impose with respect to manufacturing.

Historically, our products have been introduced into the market using the 510(k) clearance procedure, and we have not used the more burdensome PMA process for any of the products that we currently market or sell in the United States, other than our ProCol vascular graft, which had PMA approval at the time we acquired the device. If we were to seek approval for our Omniflow II biosynthetic vascular graft, for example, we would be required to follow the PMA process.

~~After a device is placed on the market, regardless of the classification or premarket pathway, significant regulatory requirements apply. These include:~~

We are subject to inspection and marketing surveillance by the FDA to determine our compliance with regulatory requirements. Our most recent FDA inspection was in July and August 2017, the result of which was satisfactory.~~Non-compliance~~ with applicable FDA requirements can result in, among other things, public warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the FDA to grant marketing approvals, withdrawal of marketing approvals, a recommendation by the FDA to disallow us to enter into government contracts, and criminal prosecutions. The FDA also has the authority to request repair, replacement, or refund of the cost of any device manufactured or distributed by us. In the event that one of our suppliers fails to maintain compliance with our quality requirements, we may have to qualify a new supplier and could experience manufacturing delays as a result.

~~Non-U.S.~~ sales of medical devices manufactured in the United States that are not approved or cleared by the FDA for use in the United States, or are banned or deviate from lawful performance standards, are subject to FDA export requirements. Before exporting such products to a foreign country, we must first comply with the FDA’s regulatory procedures for exporting unapproved devices.

Our allografts are subject to extensive regulation by the FDA under Title 21 of the Code of Federal Regulations, Part 1271 (Human Cells, Tissues, and Cellular and Tissue-Based Products). These regulations were promulgated under Section 361 of the Public Health Service Act, which authorized the FDA to issue regulations to prevent the spread of communicable disease. Under these regulations, the FDA requires registration of establishments that manufacture human cells, tissues, and cellular and tissue-based products and establishes donor-eligibility, current good tissue practice and other procedures to prevent the introduction, transmission, and spread of communicable diseases by such products, including through donor screening and testing. Our Fox River Grove, Illinois facility is registered with the FDA’s Center for Biologics Evaluation and Research as required by the regulations. The regulations also provide for the inspection of tissue establishments by the FDA. The FDA most recently inspected our Fox River Grove, Illinois facility in February 2016 and the results of that inspection were satisfactory. In the event of~~non-compliance~~ ~~with these regulations, the FDA may issue a warning letter, order the recall and/or destruction of tissues and/or order the suspension or cessation of processing and preservation of new tissues.~~

We voluntarily comply with the standards of the tissue bank industry’s accreditation organization, the American Association of Tissue Banks (the AATB). The AATB has established standards for tissue banking and administers an accreditation program. Compliance with the AATB’s standards are a predicate to accreditation, which must be renewed every three years. Our Fox River Grove, Illinois facility has been accredited by the AATB for the processing, storage and distribution of cardiac and vascular tissue for transplantation through May 13, 2018. The AATB is entitled to inspect accredited members at any time. The AATB most recently inspected our Fox River Grove, Illinois facility in January 2018, and the results of that inspection were satisfactory.

Under the National Organ Transplant Act, it is unlawful for any person or entity to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce. However, “valuable consideration” excludes the reasonable payments associated with the removal, transportation, implantation, processing, preservation, quality control, and storage of a human organ. We believe the compensation we receive for the processing and cryopreservation services we provide with respect to our vascular allografts falls within this statutory exception.

Certain states regulate the processing, storage and distribution of human tissue. We are licensed or registered, as applicable, with California, Delaware, Florida, Illinois, Maryland, New York and Oregon. The regulatory agencies of these states may inspect our Fox River Grove, Illinois facility from time to time to monitor compliance with applicable state regulations.

We, and our products and services, are also subject to a variety of state and local laws in those jurisdictions where our products and services are or will be marketed or distributed, and federal, state, and local laws relating to matters such as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We are subject to various federal and state laws governing our relationships with the physicians and others who purchase or make referrals for our products. For instance, federal law prohibits payments of any form that are intended to induce a referral for any

item payable under Medicare, Medicaid, or any other federal healthcare program. Many states have similar laws. There can be no assurance that we will not be required to incur significant costs to comply with such laws and regulations now or in the future or that such laws or regulations will not have a material adverse effect upon our ability to do business.

We are subject to federal, state, and local laws, rules, regulations, and policies governing the use, generation, manufacture, storage, air emission, effluent discharge, handling, and disposal of certain hazardous and potentially hazardous substances used in connection with our operations. Although we believe that we have complied with these laws and regulations in all material respects and to date have not been required to take any action to correct any noncompliance, there can be no assurance that we will not be required to incur significant costs to comply with environmental regulations in the future.

Sales of medical devices are subject to regulatory requirements in many countries. The regulatory review process may vary greatly from country to country. The European Union has adopted numerous directives and standards relating to medical devices regulating their design, manufacture, clinical trials, labeling, and adverse event reporting, including the Medical Devices Directive (93/42/EEC) (the Directive), which is applicable to our products. Devices that comply with the requirements of the Directive are entitled to bear a CE mark, indicating that the device conforms with the essential requirements of the applicable directive and can be commercially distributed in countries that are members of the European Union, as well as Iceland, Lichtenstein, Norway, and Switzerland. Each member state of the European Union has implemented the directives into its respective national law and has each established a “Competent Authority” to apply the directive in its territory.

The Directive defines a classification system placing devices into Class I, IIa, IIb, or III, depending on the risks and characteristics of the medical device. The Directive also defines the essential requirements that devices must meet before being placed on the market, establishes assessment procedures for approving a device for marketing, and creates mechanisms for national authorities to manage implementation or to intervene when public health requires. Essential requirements include manufacturing, design, performance, labeling, and safety requirements, and may include providing certain clinical data. These requirements vary based on the type of the device and other related factors.

~~A manufacturer oflow-risk~~ devices typically may demonstrate conformity to the essential requirements based on a self-declaration. The European Standardization Committees have adopted numerous harmonized standards for specific types of medical devices. Compliance with relevant standards establishes a presumption of conformity with the essential requirements. Manufacturers of higher-risk devices generally must use a “Notified Body”—an appointed independent third party to assess conformity. This third-party assessment may consist of an audit of the manufacturer’s quality system and specific testing of the manufacturer’s devices. An assessment by a Notified Body in one country within the European Union is generally required in order for a manufacturer to commercially distribute the product throughout the European Union. Most of our devices are considered higher-risk devices that require Notified Body assessment.

The European medical device laws also address the advertising and promotion of medical devices, clinical investigations, and requirements for handling adverse events. Post-market surveillance of medical devices in the European Union is generally conducted on a~~country-by-country~~ basis; however, the Directive sets forth certain specific requirements for reporting adverse events. The Medical Device Vigilance system is the mechanism by which adverse event reporting is managed and monitored in the European Union.

In April 2017, the European Union adopted new regulations for medical devices (MDR), which replace the Directive and apply after a three year transition period. Our products will be subject to the MDR, which require all of our products, regardless of classification, obtain a new CE mark in accordance with the new, more stringent standards under the MDR. For example, as a condition to CE mark approval, clinical evidence from clinical

investigations will be required for Class III and implantable devices. If we fail to obtain the CE marks on our products under the MDR in a timely manner, or at all, future sales of our products could be impacted.

In the event that any of our products proves to be defective, we can voluntarily recall, or the FDA or foreign equivalent could require us to implement a recall of, any of our products and, if someone is harmed by a malfunction or a product defect, we may experience product liability claims for such defects. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital and may harm our reputation and financial results. Future recalls or claims could also result in significant costs to us and significant adverse publicity, which could harm our ability to market our products in the future.

~~In some cases, we rely on ournon-U.S.~~ distributors or third party agents to obtain premarket approvals, complete product registrations, comply with clinical trial requirements, and complete those steps that are customarily taken in the applicable jurisdictions to comply with governmental and quasi-governmental regulation. In the future, we expect to continue to rely on distributors and agents in this manner where appropriate.

Canada regulates the import and sale of medical devices through Health Canada (HC). HC classifies medical devices into four classifications, with Class I being the lowest risk and Class IV being the highest. Class I and II devices are often cleared for sale after they are CE marked or listed on the company’s ISO certification and filed via~~fax-back~~ applications, which are typically processed relatively quickly. Higher classification risk devices (Class III and IV) require filing of dossiers that resemble US 510(k) applications. These applications can range in cost and typically take longer for approval.

In Japan, the Ministry of Health, Labor and Welfare (MHLW) regulates medical devices through the Pharmaceutical Affairs Law, which was reformed effective April 1, 2005. The revisions to Japan’s regulations have resulted in longer lead times for product registration.

Australia regulates the import and sale of medical devices through the Therapeutic Goods Administration (TGA). The TGA has built its regulatory framework around similar requirements to those issued in Europe. As such, many medical devices (those with a lower risk profile) may gain relatively fast marketing clearance using their existing~~EU-issued~~ CE marking. Higher risk devices (those in EU/Aus Class III) must go through a full design review which can be costly and take longer to complete. Issued licenses for medical devices do not require renewal, but do require an annual fee to remain active in the TGA registry of devices. Australia requires all foreign manufacturers to have an in country ‘sponsor’ who must have a licensed business inside of Australia. After the formation of our Australian subsidiary in 2013, we transferred out licenses from our third-party license holders to our subsidiary.

In China, the China Food and Drug Administration (CFDA) Medical Device Division regulates and must approve all medical devices to be marketed and sold in China. China has a three-class risk classification system, with Class I being the lowest risk and Class III being the highest risk. Home country approval (510(k) or PMA clearance) is required as a prerequisite to any application. Additionally, the CFDA often tests finished devices at its own testing laboratory to confirm each device’s specifications. The approval process is typically lengthy and requires clinical trials. As of December 31, 2017, CFDA licenses are valid for five years from date of issuance and require renewal prior to expiration. The CFDA requires all companies located outside of China to appoint a legal entity who maintains a registered business inside of China as the license holder. After the formation of our Chinese subsidiary in 2015, we transferred our licenses from our third-party license holders to our subsidiary.

There can be no assurance that new laws or regulations or new interpretations of laws and regulations regarding the release or sale of medical devices will not delay or prevent sale of our current or future products.

Healthcare providers that purchase medical devices generally rely on third-party payors, including the Medicare and Medicaid programs and private payors (such as indemnity insurers, employer group health insurance programs, and managed care plans) to reimburse all or part of the cost of those products. As a result, demand for our products is and will continue to be dependent in part on the coverage and reimbursement policies of these payors. The manner in which reimbursement is sought and obtained varies based upon the type of payor involved and the setting in which the product is furnished and utilized. For example, Medicare reimbursement policies favor outpatient treatment. Furthermore, payments from Medicare, Medicaid, and other third-party payors are subject to legislative and regulatory changes and are susceptible to budgetary pressures.

In the United States, third-party payors generally pay healthcare providers directly for the procedures they perform and in certain instances for the products they use. Our sales volumes depend on the extent to which third-party payors cover our products and the procedures in which they are used. In general, a third-party payor only covers a medical product or procedure when the plan administrator is satisfied that the product or procedure is medically necessary because it improves health outcomes, including quality of life or functional ability, in a safe and cost-effective manner. Even if a device has received clearance or approval for marketing by the FDA, there is no assurance that third-party payors will cover the cost of the device and related procedures in which the device is used.

In many instances, third-party payors cover the procedures performed using our products using price fee schedules that do not vary reimbursement to reflect the cost of the products and equipment used in performing those procedures. In other instances, payment or reimbursement is separately available for the products and equipment used, in addition to payment or reimbursement for the procedure itself. Even if coverage is available, third-party payors may place restrictions on the circumstances in which they provide coverage or may offer reimbursement that is not sufficient to cover the cost of our products. Many of the products that compete with ours are less expensive. Therefore, although coverage may be available for our products and the related procedures, the levels of approved coverage may not be sufficient to justify using our products instead of those of competitors.

In addition, many third-party payors are moving to managed care systems in which providers contract to provide comprehensive healthcare for a fixed cost per person rather than the traditional fee for service model. Managed care providers often attempt to control the cost of healthcare by authorizing fewer elective surgical procedures. Under current prospective payment systems, such as the diagnosis-related group system and the hospital~~out-patient~~ prospective payment system, both of which are used by Medicare and in many managed care systems used by private third party payors, the reimbursement for our products will be incorporated into the overall reimbursement of a procedure, and there will be no separate reimbursement for our products. As a result, we cannot be certain that hospital administrators and physicians will purchase our products.

If hospitals and physicians cannot obtain adequate reimbursement for our products or the procedures in which they are used, our business, financial condition, and results of operations could suffer a material adverse impact.

~~Our success innon-U.S.~~ markets will depend largely upon the availability of reimbursement from the third-party payors through which healthcare providers are paid in those markets. Reimbursement and healthcare payment systems in~~non-U.S.~~ markets vary significantly by country. The main types of healthcare payment systems are government sponsored healthcare and private insurance. As in the United States, reimbursement is subject to legislative and regulatory changes and is susceptible to budgetary pressures. Reimbursement approval must be obtained individually in each country in which our products are marketed. Outside the United States, we

may pursue reimbursement approval in those countries in which we sell directly to the hospital. In other markets, we generally rely on the distributors who sell our products to obtain reimbursement approval in those countries in which they will sell our products. There can be no assurance that reimbursement approval will be received.

We may directly or indirectly be subject to various federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws. In particular, the federal healthcare program Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending a good or service for which payment may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs. Penalties for violations include criminal penalties and civil sanctions such as fines, imprisonment, and possible exclusion from Medicare, Medicaid, and other federal healthcare programs. The Anti-Kickback Statute is broad and prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. In implementing the statute, the Office of Inspector General, or OIG, has issued a series of regulations, known as the “safe harbors.” These safe harbors set forth provisions that, if all their applicable requirements are met, will assure healthcare providers and other parties that they will not be prosecuted under the Anti-Kickback Statute. The failure of a transaction or arrangement to fit precisely within one or more safe harbors does not necessarily mean that it is illegal or that prosecution will be pursued. However, conduct and business arrangements that do not fully satisfy each applicable element of a safe harbor may result in increased scrutiny by government enforcement authorities, such as the OIG.

In March 2010, significant reforms to the U.S. healthcare system were adopted in the form of the Patient Protection and Affordable Care Act (the PPACA). Since January 20, 2017, the Trump administration has taken measures that create uncertainty around the future of PPACA. However, we continue to comply with its requirements that have not been explicitly suspended or repealed by legislative or executive action. For example, we continue to comply with the Physician Payments Sunshine Act, which was enacted as part of the PPACA and requires detailed public disclosure of certain payments and “transfers of value” from us to healthcare professionals, such as the payment of royalties, compensation for services provided such as training, consulting, and reimbursement for travel and meal expenses. Certain states also require us to disclose similar information or even prohibit some forms of these payments and may continue to do so regardless of the repeal or replacement the PPACA.

~~We had 423 employees, including 400 full-time employees, at December 31, 2017.~~

We operate in one reportable industry segment: the design, marketing, sales, service and technical support of medical devices and implants for the treatment of peripheral vascular disease. Our chief operating decision maker is our chief executive officer. Our chief executive officer reviews financial information, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. Information about segment revenue, revenue by geographic area and long-lived assets by geographic area is included in Note 11 to our Consolidated Financial Statements which are included elsewhere in this Annual Report. For information regarding risks associated with our international operations, please refer to the section entitled “Risk Factors” in Item 1A of Part I in this Annual Report on Form~~10-K.~~

Our sales are not dependent on any single customer or distributor, and we continue to expand our distribution channel worldwide through direct and indirect sales forces. No single customer accounted for more than 2% of our net sales in 2017.

We were incorporated in Massachusetts on November 28, 1983, as Vascutech, Inc. On June 16, 1998, we were reincorporated in Delaware, and on April 6, 2001, we changed our name to LeMaitre Vascular, Inc. On October 19, 2006, we executed our initial public offering, and our common stock trades under the symbol “LMAT.” Our principal executive offices are located at 63 Second Avenue, Burlington, Massachusetts 01803, and our telephone number is~~(781) 221-2266.~~

~~Our Annual Reports on Form10-K,~~ ~~Quarterly Reports onForm 10-Q,~~ ~~Current Reports onForm 8-K,~~ and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available through the investor relations portion of our website (www.lemaitre.com) free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission ~~(SEC). Information on our investor relations page and on our website is not part~~(the “SEC”) issued an order (Release No. 34-88465) (the “SEC Order”) granting exemptions from specified provisions of ~~this Annual Report on Form10-K~~ or any of our other securities filings unless specifically incorporated herein or therein by reference. In addition, our filings with the Securities and Exchange Commission may be accessed through the Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system at www.sec.gov. You may also read and copy any materials filed with the Commission at the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. Please call the SEC at~~1-800-SEC-0330~~ for further information on the operation of the Public Reference Room. All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. In addition, our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Charters of our Audit, Compensation and Nominating and Corporate Governance Committees are available on our website and are available in print to any stockholder who requests such information.

~~The following important factors, among others, could cause our actual operating results to differ materially from those indicated or suggested by forward-looking statements made in this Form10-K~~ or presented elsewhere by management from time to time. Investors should carefully consider the risks described below before making an investment decision. The risks described below are not the only ones we face. Additional risks not presently known to us or that we currently believe are not material may also significantly impair our business operations. Our business could be harmed by any of these risks. The trading price of our common stock could decline due to any of these risks, and investors may lose all or part of their investment.

~~We may experience significant fluctuations in our quarterly and annual results.~~

~~Fluctuations in our quarterly and annual financial results have resulted and will continue to result from numerous factors, including:~~

These factors, some of which are not within our control, may cause the price of our common stock to fluctuate substantially. If our quarterly operating results fail to meet or exceed the expectations of securities analysts or investors, our stock price could drop suddenly and significantly. We believe the quarterly comparisons of our financial results are not always meaningful and should not be relied upon as an indication of our future performance.

While we reported growth in operating and net income in each of the years ended December 31, 2017, 2016 and 2015, there can be no assurance we will continue to achieve significant net sales growth and/or profit growth in the future. If, for example, we are unable to effectively manage our operating expenses due to, for example, increased headcount, we may need to reduce our operating expenses in other areas in order to maintain or improve operating profitability. Decreased investment levels may inhibit future growth in net sales and earnings.

~~Additionally, our ability to maintain and increase profitability will be influenced by many factors, including:~~

~~If we are unable to expand our product and service offerings, we may not achieve our growth objectives and our results of operations could suffer.~~

The treatment of peripheral vascular disease is shifting from open vascular surgery to minimally invasive endovascular procedures, and many of our products are used primarily or exclusively in open vascular surgery procedures. We market and sell our products primarily to vascular surgeons, and the majority of our marketing efforts and sales relate to products used in open vascular surgery rather than in endovascular procedures. We estimate that in 2017, 89% of our net sales were from devices used in open vascular procedures.

We may not be able to compete effectively with our competitors unless we can keep pace with existing or new products, services and technologies in the vascular device market and the minimally invasive endovascular procedure segment, in particular. Our success in developing and commercializing new products and new versions of our existing products and services is affected by our ability to:

~~If we are unable to expand our product or service offerings, we may not achieve our growth objectives and our results of operations as well as our stock price could suffer.~~

~~Our call point focus on the vascular surgeon with a product portfolio largely used in open surgical procedures may be too narrow, which may adversely affect our future sales.~~

The treatment of peripheral vascular disease continues to shift from open vascular surgery to minimally invasive endovascular procedures. We market and sell our products primarily to vascular surgeons, and the majority of our marketing efforts and sales relate to products used in open vascular surgery rather than in endovascular procedures. We estimate that in 2017, 89% of our net sales were from devices used in open vascular procedures.

In addition to performing traditional open surgical procedures, vascular surgeons in growing numbers also perform minimally invasive, image-guided interventional procedures for peripheral vascular disease. However, vascular surgeons may not adopt these procedures in the numbers we expect and instead these procedures may be largely performed by interventional cardiologists and interventional radiologists. Many of our competitors have focused their sales efforts on these interventionalists. If interventional cardiologists and interventional radiologists perform a greater percentage of these new procedures than we expect, our net sales may decline.

Moreover, demographic trends and other factors, such as reimbursement rates, are also driving vascular surgeons in the United States and potentially in other markets to increasingly specialize in certain kinds of

procedures, such as the creation and maintenance of dialysis access sites and endovascular therapies. Vascular surgeon training programs may focus on those therapies to the exclusion of open vascular procedures. If there is a decline in vascular surgeons training in open vascular procedures in favor of training in minimally invasive endovascular procedures, this could limit the number of vascular surgeons using our products due to lack skills in of open vascular procedures. Further, even those physicians trained in open procedures may discontinue performing them if there is a lack of demand. If this trend continues, it could lead to the fragmentation of our customer base, which would reduce cross-selling opportunities and the efficiency of each sales call by our sales representatives, which in turn could negatively impact our business.

We may acquire businesses and assets in the future. We may experience difficulties in completing the integration of these acquisitions into our business, or we may not realize the anticipated benefits of these acquisitions.

In order to expand our product offerings, we have completed 19 acquisitions, and a key part of our strategy is to acquire additional businesses, products, or technologies in the future. Our growth strategy depends, in part, upon our ability to identify, negotiate, complete, and integrate suitable acquisitions. If we are unable to complete acquisitions on satisfactory terms or at all, our growth objectives and sales could be negatively affected.

We could also discover deficiencies withheld from us due to fraud or otherwise not uncovered in our due diligence prior to an acquisition, including but not limited to deficiencies in internal controls, data adequacy and

integrity, product quality, and regulatory compliance, as well as undisclosed contractual or other liabilities and product liabilities, any of which could result in us becoming subject to penalties or other liabilities. Any of these difficulties could negatively impact our ability to realize the intended and anticipated benefits that we currently expect from our acquisitions or from acquisitions we complete in the future and could harm our financial condition and results of operations.

For instance, in August 2014, we acquired all of the capital stock of Xenotis Pty Ltd, the parent company of Bio Nova International, which was the manufacturer of our Omniflow II biosynthetic vascular graft. Bio Nova’s operations are located in North Melbourne, Australia, and we currently expect to continue operations in Australia for the foreseeable future. Our ability to manage these operations efficiently and effectively may be impaired due to their distance from our Burlington, Massachusetts headquarters.

In 2016, we acquired the ProCol vascular graft, which continues to be manufactured by the company from which we acquired the device. We expect to complete the transfer of manufacturing of the ProCol vascular graft to Burlington in 2018, subject to regulatory approval; however there can be no assurances that this will be achieved on the expected timetable or that transfer costs will not exceed our expectations.

We also acquired the processing, preservation and distribution operations of RestoreFlow allografts in 2016, and we intend to continue conducting such operations at our Fox Rover Grove, Illinois facility. See “Our tissue processing and preservation services are subject to a variety of risks, including those related to the procurement of human tissue and regulatory requirements” below for risks associated with our tissue processing and preservation services.

~~For any of these reasons or as a result of other factors, we may not realize the anticipated benefits of our acquisitions and our operating results may be harmed.~~

~~Our tissue processing and preservation services are subject to a variety of risks, including those related to the procurement of human tissue and regulatory requirements.~~

In November 2016, we acquired the processing, preservation and distribution operations for the RestoreFlow allograft. Prior to the acquisition, we did not provide any services related to human tissue. Our ability to successfully provide such services may be affected by the following:

~~Our failure in any one or more of these areas could adversely impact our ability to provide processing, preservation and distribution services related to allografts and therefore our operations.~~

Our dependence on sole- and limited-source suppliers could hinder our ability to deliver our products and services to our customers on a timely basis or at all and could harm our results of operations.

We rely on sole- and limited-source suppliers for some of our important product components and certain products. For example, our TRIVEX system and associated disposables, as well as components of our EndoRE remote endarterectomy product line, are manufactured for us by third-party suppliers. Additionally, we rely on a sole-source supplier for the ovine material used for our Omniflow II biosynthetic vascular graft, and the ProCol vascular graft continues to be manufactured by the company from which we acquired the device.

There are relatively few, or in some cases no, alternative, validated sources of supply for these components and products. And in some cases, we do not have supply agreements with these suppliers, instead placing orders on an~~as-needed~~ basis. At any time, these suppliers could discontinue or become incapable of the manufacture or supply of these components or products on acceptable terms or otherwise. We do not ordinarily carry a significant inventory of these components and products. Identifying and qualifying additional or replacement suppliers, if required, may not be accomplished quickly or at all and could involve significant additional costs. Any supply interruption from our suppliers or failure to obtain replacement suppliers would interrupt our ability to manufacture our products and result in production delays and increased costs and may limit our ability to deliver products to our customers. This could lead to customer dissatisfaction and damage to our reputation, and our financial condition or results of operations may be harmed.

With respect to our RestoreFlow allografts, we rely on tissue procurement organizations to provide donated tissue to us for processing and cryopreservation. While we have relationships with multiple tissue procurement organizations, we cannot be sure that the supply of suitable human tissue will be available to us at the levels we need, in which case our revenues from allografts could be adversely affected.

~~Any disruption in our manufacturing facilities could harm our results of operations.~~

Our principal worldwide executive, distribution, and manufacturing operations are located in four leased facilities located in Burlington, Massachusetts. We also have a manufacturing site in North Melbourne, Australia and a tissue processing and preservation and distribution facility in Fox River Grove, Illinois. These facilities and the manufacturing equipment we use to produce our products would be difficult to replace and could require substantial lead-time to repair or replace in the event of a natural or~~man-made~~ disaster. In such event, we could not shift production or processing to alternate manufacturing facilities, and we would be forced to rely on third-party manufacturers, if available at all. Although we carry insurance for damage to our property and the disruption of our business from casualties, such insurance may not be sufficient to cover all of our potential losses, including potential damage to our reputation, and may not continue to be available to us on acceptable terms, or at all.

We depend on our senior management team and other key sales and technical personnel, and if we are unable to retain them or recruit additional qualified personnel we may not be able to manage our operations and meet our strategic objectives.

We depend on the continued services of our senior management team and other key sales and technical personnel, as well as our ability to continue to attract and retain additional highly qualified personnel. Each of our key employees may terminate his or her employment with us at any time, and the loss of any of our senior management team or key employees could harm our business. Because we compete for such personnel with other companies, academic institutions, government entities, and other organizations, we may not be able to meet our future hiring needs or retain existing personnel on acceptable terms. Any loss or interruption of the services of our key personnel could also significantly reduce our ability to effectively manage our operations and meet our commercial or strategic objectives, because we cannot assure you that we would be able to find an appropriate replacement on a timely basis when the need arises. For example, the role of Vice President, Sales, The Americas has been vacant since July 8, 2017 due to the departure of the individual formerly filling that role. While we

search for a replacement, our Chairman and Chief Executive Officer, George W. LeMaitre is filling that role on an interim basis, which requires significant time and attention from him. If we cannot fill that role promptly and effectively, then his time and attention will continue to be diverted to that role and our business could be adversely impacted.

~~Certain of our products contain materials derived from animal sources and may become subject to additional regulation.~~

Our AlboGraft vascular graft, AlboSure vascular patch, XenoSure biologic patch and ProCol vascular graft products contain bovine tissue or material derived from bovine tissue, and our Omniflow II Biosynthetic Vascular Graft contains ovine tissue. Products that contain materials derived from animal sources, including food, pharmaceuticals and medical devices, are increasingly subject to scrutiny in the media and by regulatory authorities. Regulatory authorities are concerned about the potential for the transmission of disease from animals to humans via those materials. This public scrutiny has been particularly acute in Japan and Western Europe with respect to products derived from animal sources, because of concern that bovine materials infected with the agent that causes bovine spongiform encephalopathy, otherwise known as BSE or mad cow disease, may, if ingested or implanted, cause a variant of the human Creutzfeldt-Jakob Disease, an ultimately fatal disease with no known cure. Cases of BSE in cattle discovered in Canada and the United States have increased awareness of the issue in North America. Certain regions or countries have issued regulations that require products to be processed from bovine tissue sourced from countries, like Australia or New Zealand, where no cases of BSE have occurred. Products that contain materials derived from animals, including our products, may become subject to additional regulation, or even be banned in certain countries, because of concern over the potential for the transmission of infectious agents. Significant new regulation, or a ban of our products, could impair our current business or our ability to expand our business, and in the case of a ban or suspension, could materially and adversely affect our results of operations.

~~We face intense competition from other companies, technologies, and alternative medical procedures and we may not be able to compete effectively.~~

The segments in which we compete are highly competitive, subject to change, and significantly affected by new product introductions and other activities of industry participants. Although no one company competes against us in all of our product lines or services, a number of manufacturers of peripheral vascular devices have substantially greater capital resources, larger customer bases, broader product lines, larger sales forces, greater marketing and management resources, larger research and development staffs, and larger facilities than ours; have established reputations with our target customers; and have developed worldwide distribution channels that are more effective than ours. Our competitors could elect to devote additional resources to the segments in which we currently enjoy less competition. Also, although we currently have leading positions in the segments for some of our products, this is not true for all of our products. From time to time, we have experienced difficulties competing against large companies.

Recent industry consolidation could make the competitive environment more difficult for smaller companies like ours. Our competitors may be companies who are larger than us and who have substantially greater financial, technological, research and development, regulatory, marketing, sales, and personnel resources than we do. Certain of these competitors are able to manufacture at lower costs and may therefore offer comparable products at lower prices. Certain of these competitors may also have greater experience in developing and further improving products, obtaining regulatory approvals, and manufacturing and marketing such products. Certain of these competitors may obtain patent protection or regulatory approval or clearance, or achieve product commercialization, before us, any of which could materially adversely affect us. Further, if the trend towards endovascular procedures versus open vascular procedures continues or accelerates, our competitors may be better poised to take advantage of that trend, since our main product lines are used primarily in open vascular procedures. Because of the size of the vascular disease market opportunity, competitors and potential competitors have dedicated, and we believe will continue to dedicate, significant resources to aggressively promote their

products. Also, new product developments that could compete with us more effectively are likely because the vascular disease market is characterized by extensive research efforts and technological progress. Competitors may develop technologies and products that are safer, more effective, easier to use, less expensive, or more readily accepted than ours. Their products could make our technology and products obsolete or noncompetitive. Our competitors may also be able to achieve more efficient manufacturing and distribution operations than we can. In addition, many of our products face competition from alternative procedures that utilize a different kind of medical device that we do not currently sell. Increased competition could also result in price reductions and loss of market share, any of which could result in lower revenues and reduced gross profits.

~~If we are unable to increase our selling prices to customers, or if we are required to make price concessions, our rate of net sales growth could be reduced and our operating results could suffer.~~

In the years ended December 31, 2017, 2016 and 2015, a material portion of our increases in net sales was driven by higher average selling prices to our hospital customers across several of our product lines, particularly with respect to sales of our 1.5mm HYDRO LeMaitre Valvulotome and with respect to sales occurring in the United States. In the past, we have been able to rely upon our intellectual property position, our well-known brands, and our established reputation in the vascular surgery device marketplace to implement price increases. We implemented a significant price increase in 2015 for our 1.5mm HYDRO LeMaitre Valvulotome, and our ability to implement additional price increases with respect to that product in the future may be limited. We also experienced an increase in net sales of our XenoSure biologic patch in 2016, which was due in part to the recall of a competitive product. That recall has since been resolved, and we have only retained a portion of the customers who switched to our product during the recall. If we are unable to retain those customers, then our XenoSure biologic patch sales could be lower than expected.

~~Additionally, we may become unable to implement further increases in the selling prices of our products:~~

We also expect marketplace changes to increasingly place pressure on medical device pricing as hospitals join group purchasing organizations, integrated delivery networks, managed care organizations and other groups that seek to aggregate purchasing power and as hospitals are given financial incentives to improve quality and reduce costs. Due to pricing pressures, surgeons may even perform alternative procedures in which our products are unnecessary.

~~If we become unable to raise selling prices, or if we are required to make price concessions, it could reduce our rate of net sales growth and harm our operating results.~~

The risks inherent in operating internationally and the risks of selling and shipping our products and of purchasing our components and products internationally may adversely impact our net sales, results of operations, and financial condition.

We derive a significant portion of our net sales from operations in markets outside of the United States. For the year ended December 31, 2017, 42% of our net sales were derived from our operations outside of the United States. Our international sales operations expose us and our representatives, agents, and distributors to risks inherent in operating in foreign jurisdictions. These risks include:

We cannot assure you that one or more of these factors will not harm our business. Any material decrease in our international sales would adversely impact our net sales, results of operations, and financial condition.

~~The use or misuse of our products and tissues we distribute may result in injuries that lead to product liability suits, which could be costly to our business.~~

If our products or the tissue we process and preserve are defectively designed, manufactured, processed or labeled, contain defective components, or are misused, or if our products or the tissues we process and preserve are found to have caused or contributed to injuries or death, we may become subject to costly litigation by our customers or their patients. Although we offer training for physicians, we do not require that physicians be trained in the use of our products or the tissues we distribute, and physicians may use our products or the tissues we distribute incorrectly or in procedures not contemplated by us. We are from time to time involved in product liability claims. Product liability claims could divert management’s attention from our core business, be expensive to defend, and result in sizable damage awards against us. Claims of this nature may also adversely affect our reputation, which could damage our position in the market and subject us to recalls.

We cannot assure you that our product liability insurance coverage will be sufficient to satisfy any claim made against us. Further, we may not be able to maintain the same level of coverage, and we may not be able to obtain adequate coverage at a reasonable cost and on reasonable terms, if at all. Any product liability claim brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing coverage in the future. Additionally, if any such product liability claim or series of claims is brought against us for uninsured liabilities or is in excess of our insurance coverage, our business could be harmed.

~~From time to time, we are involved in litigation where the outcome is uncertain and which could entail significant expense.~~

We are subject, from time to time, to legal proceedings and litigation, including, but not limited to, actions relating to product liability, employment matters, intellectual property, contract disputes and other commercial matters. Because the outcome of litigation is inherently difficult to predict, it is possible that the outcome of litigation, or even simply the defense of litigation, could entail significant cost for us and harm our business. The fact that we operate in international markets also increases the risk that we may face legal exposures as we seek to comply with a large number of varying legal and regulatory requirements. If any such proceedings were to result in an unfavorable outcome, it could adversely affect our business, financial condition and results of operations.

~~If we fail to convert additional countries or products from distributor sales to direct sales, or encounter difficulties in effecting such conversions, our results of operations could suffer.~~

~~We have a history of converting international distributor sales todirect-to-hospital~~ sales by buying out our foreign distributor agreements and selling directly to hospitals through our own established sales representatives. In the future, we may elect to convert select additional countries and products from distributor sales to direct sales. Such conversions sometimes result in disruptions in our sales in the applicable geographies. These transitions may also have an adverse effect on our cash flow from operations because distributors, unlike direct sales personnel, pay us for inventory that they stock for later sale. In addition, switching to a direct sales force may subject us to longer customer collection times and larger bad debt expense, since we would be required to collect customer payments directly rather than through a distributor.

Our distribution agreements are exclusive, where permissible, with terms of up to five years. These agreements may temporarily constrain our ability to convert certain countries or products from a distributor to a direct sales model. In order to ensure a successful market transition, we may compensate a distributor in connection with the termination of their distributorship, even where the payment of compensation is not required by contract or local law.

Following termination of any distribution agreement, we may encounter difficulties in transitioning to a direct-sales model in any country in question. The transition to a direct sales model may require us to meet regulatory requirements that were previously the responsibility of the distributor, which may subject us to additional costs. It also may take us longer than expected to find sufficient qualified sales personnel to establish an effective sales force, which could negatively impact projected sales. If a distributor sold our products through a network of sales agents, rather than exclusively through its own personnel, we may not be able to establish relationships with all members of that network, temporarily limiting our access to the existing market. Similarly, failure to maintain or quickly~~re-establish~~ a distributor’s close relationships with the physicians who use our products could reduce sales. Further, it may be difficult or impossible to transfer the assignment of a distributor’s rights to sell our products, and as a result, sales to customers may be delayed until a new agreement or approval is obtained. The transition to a direct sales model may also require us to incur additional expenses and may be time-consuming to manage remotely, as is the case with our sales office in China. As a result of these risks, there can be no assurance that we will be successful in transitioning to a direct sales model in the countries that we select, and difficulties that we encounter in these transitions could negatively affect our business.

~~Fluctuations in the exchange rate of the U.S. dollar and other currencies may adversely impact our results of operations.~~

Our results of operations are reported in U.S. dollars. While the majority of our revenue is denominated in U.S. dollars, a portion of our revenue and costs is denominated in other currencies, such as the Euro, the British pound, the Japanese yen, the Canadian dollar and the Australian dollar. As of December 31, 2017, 42% of our net sales were derived from our operations outside of the United States. As a result, we face exposure to movements in currency exchange rates. Our results of operations and our operating expenses are exposed to foreign exchange rate fluctuations as the financial results of those operations are translated from local currency into U.S. dollars upon consolidation. If the U.S. dollar weakens against the local currency, the translation of these foreign currency-based local operations will result in increased net assets, revenue, operating expenses, and net income. Similarly, our local currency-based net assets, revenue, operating expenses, and net income will decrease if the U.S. dollar strengthens against local currency. Additionally, transactions denominated in currencies other than the functional currency may result in gains and losses that may adversely impact our results of operations.

~~Oversight of the medical device industry might affect the manner in which we may sell medical devices and compete in the marketplace.~~

There are laws and regulations that govern the means by which companies in the healthcare industry may market their products and services to healthcare professionals and may compete by discounting the prices of their products and services, including for example, the federal Anti-Kickback Statute, the federal False Claims Act, the federal Health Insurance Portability and Accountability Act of 1996, state law equivalents to these federal laws that are meant to protect against fraud and abuse and analogous laws in foreign countries. Violations of these laws are punishable by criminal and civil sanctions, including, but not limited to, civil and criminal penalties, damages, fines, exclusion from participation in federal and state healthcare programs, including Medicare and Medicaid. Although in structuring our sales and marketing practices and customer discount arrangements we strive to comply with those laws and regulations, we cannot assure you that:

~~Federal and state laws are also sometimes open to interpretation, and from time to time we may find ourselves at a competitive disadvantage if our interpretation differs from that of our competitors.~~

~~Our business is subject to complex, costly, and burdensome regulations. We could be subject to significant penalties if we fail to comply.~~

The production and marketing of our products and services and our ongoing research and development are subject to extensive regulation and review by numerous governmental authorities both in the United States and abroad. U.S. and foreign regulations applicable to medical devices and human tissues are wide-ranging and govern, among other things, the testing, marketing, and premarket clearance or approval of new medical devices and services related to human tissues, as applicable, in addition to regulating manufacturing and processing practices, reporting, promotion and advertising, importing and exporting, labeling, and record-keeping procedures.

~~Our failure to comply with applicable regulatory requirements could result in governmental agencies or a court taking action, including any of the following:~~

~~If any or all of the foregoing were to occur, our business, results of operations, and reputation could suffer.~~

If we are not successful in obtaining and maintaining clearances and approvals from governmental agencies for our medical devices, we will not be able to sell our products, and our future growth will be significantly hampered.

Our products require premarket clearance or approval in the United States and the CE Mark or other approvals in foreign countries where they are sold. Each medical device that we wish to market in the United States generally must receive either 510(k) clearance or approval of a premarket application, or PMA, from the FDA before the product can be marketed or sold. Either process can be lengthy and expensive. The FDA’s 510(k) clearance procedure usually takes from three to twelve months from the date the FDA receives the application, but may take significantly longer. Although 510(k) clearances have been obtained for nearly all of our current products that require 510(k) clearances, the FDA may condition, limit or prohibit our sales of these products if safety or effectiveness problems develop with the devices. Our new products or significantly modified marketed products could be denied 510(k) clearance and required to undergo the more burdensome PMA approval process if they are not found to be substantially equivalent.

The PMA approval process is much more costly, lengthy, and uncertain than the premarket notification process. It generally takes from six months to three years from the date the application is submitted to, and filed with, the FDA, and may take even longer. Achieving premarket approval typically requires extensive clinical trials and may require the filing of numerous amendments with the FDA over time. We do not have significant experience in obtaining PMA approval for our products.

The FDA has previously proposed changes for which FDA clearance to market would possibly require clinical data, more extensive manufacturing information and post market data. As part of the 510(k) reform, the FDA proposes to issue regulations defining grounds and procedures for rescission of 510(k) applications that have previously been cleared to market. The FDA may also require the more extensive PMA process for certain products. Our ability to market our products outside the United States is also subject to regulatory approval, including our ability to demonstrate the safety and effectiveness of our products in the clinical setting. Even if regulatory approval or clearance of a product is granted, the approval or clearance could limit the uses or the claims for which the product may be labeled and promoted, which may limit the market for our products. If we do not obtain and maintain foreign regulatory or FDA approval with respect to our products, as applicable, we will not be able to sell our products, and our future growth will be significantly hampered.

If we or some of our suppliers fail to comply with the FDA’s Quality System Regulation and other applicable requirements, our manufacturing or processing operations could be disrupted, our sales and profitability could suffer, and we may become subject to a wide variety of FDA enforcement actions.

We are subject to inspection and marketing surveillance by the FDA to determine our compliance with all regulatory requirements. If the FDA finds that we have failed to comply with any regulatory requirements, it can institute a wide variety of enforcement actions.

We and some of our suppliers must comply with the FDA’s Quality System Regulation, which governs the methods used in, and the facilities and controls used for, the design, testing, manufacture, control, quality assurance, installation, servicing, labeling, packaging, storage, and shipping of medical devices. Our Fox River Grove operations must comply with the FDA’s current Good Tissue Practices, which are the FDA regulatory requirements for the processing of human tissue. The FDA enforces its regulations through~~pre-announced~~ and unannounced inspections. We have been, and anticipate in the future being, subject to such inspections by the FDA and other regulatory bodies. The timing and scope of future audits is unknown and it is possible, despite our belief that our quality systems and the operation of our manufacturing facilities will remain in compliance with U.S, and~~non-U.S.~~ regulatory requirements, that a future audit may result in one or more unsatisfactory results. If we or one of our suppliers fails an inspection, or if a corrective action plan adopted by us or one of our suppliers is not sufficient, the FDA may bring an enforcement action against us, and our operations could be disrupted and our manufacturing delayed.

~~We are also subject to the FDA’s general prohibition against promoting our products for unapproved oroff-label~~ uses and to the medical device reporting regulations that require us to report to the FDA if our products may have caused or contributed to a death or serious injury, or if our device malfunctions and a recurrence of the malfunction would likely result in a death or serious injury. We must also file reports with the FDA of some device corrections and removals, and we must adhere to the FDA’s rules on labeling and promotion. If we fail to comply with these or other FDA requirements or fail to take adequate corrective action in response to any significant compliance issue raised by the FDA, the FDA can take significant enforcement actions, which could harm our business, results of operations, and our reputation.

In addition, most other countries, such as Japan, require us to comply with manufacturing and quality assurance standards for medical devices that are similar to those in force in the United States before marketing and selling our products in those countries. If we fail to comply, we would lose our ability to market and sell our products in those foreign countries.

Even after our products have received marketing approval or clearance, our products and the tissue we process may be subject to product recalls. Licenses, registrations, approvals and clearances could be withdrawn or suspended due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial approval.

Our products, services, marketing, sales and development activities, and manufacturing processes are subject to extensive and rigorous regulation by the FDA, by comparable agencies in foreign countries, and by other regulatory agencies and governing bodies. These authorities have been increasing their scrutiny of our industry. If those regulatory bodies feel that we have failed to comply with regulatory standards or if we encounter unforeseen problems following initial approval, licensure or registration, there can be no assurance that any approval, licensure or registration will not be subsequently withdrawn, suspended or conditioned upon extensive post-market study requirements, even after having received marketing approval or clearance or licenses and registrations. Further, due to the increased scrutiny of our industry by the various regulatory agencies and the interconnectedness of the various regulatory agencies, particularly within the European Union, there is also no assurance that withdrawal or suspension of any of our approvals, licenses or registrations by any single regulatory agency will not precipitate one or more additional regulatory agencies from also withdrawing or suspending their approval, license or registration.

In the event that any of our products proves to be defective, we can voluntarily recall, or the FDA or foreign equivalent could require us to implement a recall of or prohibit the sale of, any of our products. For example, in 2016 and in early 2017, we voluntarily recalled certain lots of our HYDRO LeMaitre valvulotome due to an issue with the product’s closure mechanism. In February 2017, we voluntarily recalled certain lots of our Reddick cholangiogram catheter due to a labeling issue. While we took corrective actions to address these issues, there can be no assurance that there will not be a recurrence or that other problems related to our products will not develop in the future. And though the aggregate cost of these recalls to us was only $0.2 million, recalls could

~~result in significant costs to us and significant adverse publicity, which could harm our ability to market our products in the future.~~

~~With respect to our RestoreFlow allografts, we may voluntarily recall tissue, and in the event ofnon-compliance~~ with the regulations governing human tissue, the FDA may issue a warning letter, order the recall and/or destruction of tissues and/or order the suspension or cessation of processing and preservation of new tissues.

Additionally, if someone is harmed by a malfunction or a product defect, we may experience product liability claims for such defects. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital and may harm our reputation and financial results. Future recalls or claims could also result in significant costs to us and significant adverse publicity, which could harm our ability to market our products in the future.

Domestic and foreign legislative or administrative reforms resulting in restrictive reimbursement practices of third-party payors and cost containment measures could decrease the demand for products purchased by our customers, the prices that our customers are willing to pay for those products and the number of procedures using our devices.

Our products and our tissue preservation services are purchased principally by hospitals or physicians which typically bill various third-party payors, such as governmental programs (e.g., Medicare, Medicaid and comparable foreign programs), private insurance plans and managed care plans, for the healthcare services provided to their patients. The ability of our customers to obtain appropriate reimbursement for products and services from third-party payors is critical to the success of our products and services because it affects which products customers purchase and the prices they are willing to pay. Reimbursement varies by country and can significantly impact the acceptance of new technology. Implementation of healthcare reforms in the United States and in significant overseas markets such as Germany, Japan, France and other countries may limit, reduce or eliminate reimbursement for our products and services and adversely affect both our pricing flexibility and the demand for our products and services. Even when we develop or acquire a promising new product or service, we may find limited demand for the product or service unless reimbursement approval is obtained from private and governmental third-party payors.

Major third-party payors for hospital services in the United States and abroad continue to work to contain healthcare costs through, among other things, the introduction of cost containment incentives and closer scrutiny of healthcare expenditures by both private health insurers and employers. For example, in an effort to decrease costs, certain hospitals and other customers may resterilize our products intended for a single use or purchase reprocessed products from third-party reprocessors in lieu of purchasing new products from us.

Further legislative or administrative reforms to the reimbursement systems in the United States and abroad, or adverse decisions relating to our products by administrators of these systems in coverage or reimbursement, could significantly reduce reimbursement for procedures using our medical devices or result in the denial of coverage for those procedures. Examples of these reforms or adverse decisions include price regulation, competitive pricing, coverage and payment policies, comparative effectiveness of therapies, technology assessments and managed-care arrangements. Any of such reforms or adverse decisions resulting in restrictive reimbursement practices or denials of coverage could have an adverse impact on the acceptance of our products and the prices that our customers are willing to pay for them.

~~If we do not comply with foreign regulatory requirements to market our products outside the United States, our business will be harmed.~~

Sales of medical devices outside the United States are subject to international regulatory requirements that vary from country to country. These requirements and the amount of time required for approval may differ from

~~our experiences with the FDA in the United States. In some cases, we rely on ournon-U.S.~~ distributors to obtain premarket approvals, complete product registrations, comply with clinical trial requirements, and complete those steps that are customarily taken in the applicable jurisdictions to comply with governmental and quasi-governmental regulation. In the future, we expect to continue to rely on distributors in this manner in those countries where we continue to market and sell our products through them. Failure to satisfy these foreign regulations would impact our ability to sell our products in these countries and could cause our business to suffer. There can be no assurance that we will be able to obtain or maintain the required regulatory approvals in these countries.

Our products are regulated in the European Union under the European Medical Devices Directive (93/42/EC as amended by 2007/47/EC). In order to market our medical devices in the European Union, we are required to obtain CE mark certification, which denotes conformity to the essential requirements of the Medical Devices Directive. We have received CE mark certification to sell nearly all of our products. However, in April 2017, the European Union adopted new regulations for medical devices (MDR), which replace the Directive and apply after a three year transition period. Our products will be subject to the MDR, which require all of our products, regardless of classification, obtain a new CE mark in accordance with the new, more stringent standards under the MDR. For example, as a condition to CE mark approval, clinical evidence from clinical investigations will be required for Class III and implantable devices. There can be no assurance that we will be able to obtain a CE mark for products in the future or for modifications to our existing products or in the manufacturing of our products, and obtaining a CE mark may involve a significant amount of time and expense, stringent clinical and preclinical testing, or modification of our products and could result in limitations being placed on the use of our products in order to obtain approval. If we fail to obtain new CE marks on our products under the MDR in a timely manner, or at all, future sales of our products could be impacted.

Maintaining a CE mark is contingent upon our continued compliance with applicable European medical device requirements, including limitations on advertising and promotion of medical devices and requirements governing the handling of adverse events. There can be no assurance that we will be successful in maintaining the CE mark for any of our current products. In particular, adverse event reporting requirements in the European Union mandate that we report incidents which led or could have led to death or serious deterioration in health. Under certain circumstances, we could be required to or could voluntarily initiate a recall or removal of our product from the market in order to address product deficiencies or malfunctions. Any recall of our products may harm our reputation with customers and divert managerial and financial resources.

Failure to receive or maintain approval would prohibit us from selling these products in member countries of the European Union, and would require significant delays in obtaining individual country approvals. If we do not receive or maintain these approvals, our business could be harmed.

Our manufacturing facilities are subject to periodic inspection by European regulatory authorities and Notified Bodies, and we must demonstrate compliance with the Medical Devices Directive. Our most recent inspections by our European Notified Bodies were conducted in January and February 2018. Any failure by us to comply with European requirements in this regard may entail our taking corrective action, such as modification of our policies and procedures. In addition, we may be required to cease all or part of our operations for some period of time until we can demonstrate that appropriate steps have been taken. There can be no assurance that we will be found in compliance with such standards in future audits.

We also pursue registrations in other jurisdictions in which we sell our devices directly, such as Japan and China. In 2015, the China Food and Drug Administration significantly increased the application fees for product registrations and imposed additional requirements for obtaining product approval, which includes requirements for conducting clinical trials to support the registration application process on newly introduced products in China. As a result, we may not seek registration for certain products where the cost is not justified. Any delay in product registrations could have a negative impact on our results of operations.

If we fail to adequately protect our intellectual property rights, or prevent use of our intellectual property by third parties, we could lose a significant competitive advantage and our business may suffer.

Our success depends in part on obtaining, maintaining, and enforcing our patents, trademarks, and other proprietary rights, and our ability to avoid infringing on the proprietary rights of others. We take precautionary steps to protect our technological advantages and intellectual property. We rely upon patent, trade secret, copyright,~~know-how,~~ and trademark laws, as well as license agreements and contractual provisions, to establish our intellectual property rights and protect our products. These measures may only afford limited protection and may not:

The issuance of a patent is not conclusive as to its validity or enforceability. Any patents we have obtained or will obtain in the future might also be invalidated or circumvented by third parties. In addition, any pending patent applications may not issue as patents or, if issued, may not provide commercially meaningful protection, as competitors may be able to design around our patents to produce alternative,~~non-infringing~~ designs. Should such challenges to our patents be successful, competitors might be able to market products and use manufacturing processes that are substantially similar to ours. Furthermore, patents expire after a certain duration, depending on the jurisdiction in which issued. To the extent any manufacturers are successful in challenging our patents or they enter the market following the expiration of our patents, this could have an adverse impact on our business and harm our sales and operating results.

Additionally, we may not be able to effectively protect our rights in unpatented technology, trade secrets, and confidential information. We have a policy of requiring key employees and consultants and corporate partners with access to trade secrets or other confidential information to execute confidentiality agreements. Our confidentiality agreements also require our employees to assign to us all rights to any inventions made or conceived during their employment with us. We also generally require our consultants to assign to us any inventions made during the course of their engagement by us. There can be no assurance, however, that these agreements will provide meaningful protection or adequate remedies for us in the event of unauthorized use, transfer, or disclosure of confidential information or inventions.

In addition, the laws of foreign countries may not protect our intellectual property rights effectively or to the same extent as the laws of the United States. If our intellectual property rights are not adequately protected, we may not be able to commercialize our technologies, products, or services and our competitors could commercialize similar technologies, which could result in a decrease in our sales and market share.

~~If third parties claim that we infringe upon their intellectual property rights, we may incur liabilities and costs, and we may have to redesign or discontinue selling the affected product.~~

The medical device industry is litigious with respect to patents and other intellectual property rights. Companies operating in our industry routinely seek patent protection for their product designs, and many of our principal competitors have large patent portfolios. Companies in the medical device industry have used intellectual property litigation to gain a competitive advantage. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. We face the risk of claims that we have infringed on third parties’ intellectual property rights, and we cannot assure you that our products or methods do not infringe the patents or other intellectual property rights of third parties. Our efforts to identify and avoid infringing on third parties’ intellectual property rights may not always be successful. Any claims of patent or other intellectual property infringement, even those without merit, could:

It is also possible that one of our competitors could claim that our manufacturing process violates an existing patent. If we were unsuccessful in defending such a claim, we may be forced to stop production at one or more of our manufacturing facilities.

In addition, new patents obtained by our competitors could threaten a product’s continued life in the market even after it has already been introduced. If our business is successful, the possibility may increase that others will assert infringement claims against us.

If we believe our product is or may be the subject of a patent with a third party, we may attempt to reach a license agreement with them to manufacture, market, and sell these products. If we fail to reach an agreement with a third party patent holder that covers a product we offer, we could be required to pay significant damages to third parties for past use of the asserted intellectual property and may be forced to cease making or selling products that incorporate the challenged intellectual property.

In addition, we may become subject to interference proceedings conducted in the United States Patent Office or opposition proceedings conducted in foreign patent offices challenging the priority of invention or the validity of our patents.

~~Our stock price may be volatile, and an investment in our common stock could suffer a decline in value.~~

There can be significant volatility in the market price and trading volume of equity securities that is unrelated to the financial performance of the companies issuing the securities. These broad market fluctuations may negatively affect the market price of our common stock. Shareholders may not be able to resell their shares at or above the price at which they purchased them due to fluctuations in the market price of our common stock caused by changes in our operating performance or prospects, a reduced volume of trading in our common stock, and other factors.

~~Some factors that may have a significant effect on our common stock market price include:~~

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

~~Our chief executive officer has significant voting power and may take actions that may not align with the interests of our other stockholders.~~

Our chief executive officer and the LeMaitre Family LLC collectively control approximately 19% of our outstanding common stock as of December 31, 2017. As a result, these stockholders, if they were to act together, would have significant influence on many matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control, might adversely affect the market price of our common stock, and may not be fully aligned with the interests of our other stockholders.

~~We have not established a minimum dividend payment level for our common stockholders and there are no assurances of our ability to pay dividends to common stockholders in the future.~~

In February 2011, our Board of Directors adopted a quarterly dividend program for the purpose of returning capital to our stockholders. However, we have not established a minimum dividend payment level for our common stockholders and our ability to pay dividends may be harmed by the risks and uncertainties described in this Annual Report on Form~~10-K~~ and in the other documents we file from time to time with the SEC. Future dividends, if any, will be authorized by our Board of Directors and declared by us based upon a variety of factors deemed relevant by our directors, including, among other things, our financial condition, liquidity, earnings projections and business prospects. In addition, financial covenants in any credit facility to which we become a party may restrict our ability to pay future quarterly dividends. We can provide no assurance of our ability to pay dividends in the future.

Our principal worldwide executive, distribution, and manufacturing operations are located at three adjacent 27,098 square foot, 27,289 square foot and 15,642 square foot leased facilities, as well as a nearby 12,878 square foot leased facility, in Burlington, Massachusetts. Each of our Burlington leases expires in December 2023. In addition, our international operations are headquartered at a 12,841 square foot leased facility located in Sulzbach, Germany, with a lease which expires in 2023. We also own a 6,140 square foot manufacturing facility in North Melbourne, Australia and lease an 8,732 square foot processing and distribution facility in Fox River Gove, Illinois. In addition, we have smaller leased sales and marketing offices located in Canada, China, Italy, Japan, and Spain. Based on our current operating plans, we believe our current facilities are adequate for our needs.

In the ordinary course of business, we are from time to time involved in lawsuits, claims, investigations, proceedings, and threats of litigation consisting of intellectual property, commercial, employment, and other matters. While the outcome of these proceedings and claims cannot be predicted with certainty, there are no matters, as of December 31, 2017, that, in the opinion of management, would be reasonably expected to have a material adverse effect on our financial position, results of operations or cash flows.

Our common stock began trading on The Nasdaq Global Market under the symbol “LMAT” on October 19, 2006. The following table sets forth the high and low sales prices of our common stock as reported on The Nasdaq Global Market for the eight quarters ended December 31, 2017:

On March 2, 2018, the closing price per share of our common stock was $35.15 as reported on The Nasdaq Global Market, and we had approximately 182 stockholders of record. In addition, we believe that a significant number of beneficial owners of our common stock hold their shares in street name.

In February 2011, our Board of Directors approved a policy for the payment of quarterly cash dividends on our common stock. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by our Board of Directors on a quarterly basis. The dividend activity for the periods presented is as follows:

On February 15, 2018, our Board of Directors approved a quarterly cash dividend on our common stock of $0.07 per share payable on April 5, 2018, to stockholders of record at the close of business on March 22, 2018, which will total approximately $1.4 million in payments.

Set forth below is a graph comparing the cumulative total stockholder return on LeMaitre’s common stock with the Nasdaq US Composite Index, the Nasdaq Medical Equipment Index and a peer group for the period covering from December 31, 2012, through the end of LeMaitre’s fiscal year ended December 31, 2017. The graph assumes an investment of $100.00 made on December 31, 2012, in (i) LeMaitre’s common stock, (ii) the stocks comprising the Nasdaq US Composite Index, (iii) the stocks comprising the Nasdaq Medical Equipment Index and (iv) the stocks comprising our peer group. This graph is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of LeMaitre under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended ~~whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.~~

LeMaitre’s fiscal year ends on the last day of December each year; data in the above table reflects market values for our stock and Nasdaq and peer group indices as of the close of trading on the last trading day of year presented.

The 2016 peer group includes the following companies: AngioDynamics, Inc., Avinger, Inc., Cardiovascular Systems Inc., Cryolife Inc., Endologix, Inc., Spectranetics Corp., Lombard Medical Systems Inc., Penumbra, Inc.(“Exchange Act”), and ~~Vascular Solutions, Inc.~~

The 2017 peer group includes the following companies: AngioDynamics, Inc., Avinger, Inc., Cardiovascular Systems Inc., Cryolife Inc., Endologix, Inc., Penumbra, Inc., and Vascular Solutions, Inc. This new peer group differs from our old peer group. Specifically, we removed Spectranetics Corp. as they were acquired by another company during 2017, and we removed Lombard Medical Systems, Inc. ascertain rules thereunder, providing conditional relief to public companies unable to timely comply with their ~~market value declined significantly.~~

~~In the quarter ended December 31, 2017, we did not repurchase any shares of our common stock.~~

You should read the following selected consolidated financial data in conjunction with our consolidated financial statements and the related notes which are included elsewhere in this Annual Report and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Annual Report. We have derived the consolidated statement of operations data for the years ended December 31, 2017, 2016 and 2015 and the consolidated balance sheet data as of December 31, 2017 and 2016, from our audited consolidated financial statements, which are included elsewhere in this Annual Report. We have derived the consolidated statement of operations data for the years ended December 31, 2014 and 2013, and the consolidated balance sheet data as of December 31, 2015, 2014 and 2013 from our audited consolidated financial statements, which are not included in this Annual Report. Our historical results for any prior period are not necessarily indicative of results to be expected for any future period.

   Year ended December 31,
   2017    2016    2015    2014    2013
   (in thousands)
Consolidated Balance Sheet Data:

Cash and cash equivalents
   $ 19,096    $ 24,288    $ 27,451    $ 18,692    $ 14,711
Short-term marketable securities
   22,564    —      —      —      —
Current assets
   80,311    59,027    58,184    48,588    41,725
Total assets
   126,323    101,924    90,704    81,492    70,492
Current liabilities
   13,189    10,482    10,368    10,041    10,220
Long-term liabilities
   3,364    3,942    2,452    3,244    3,710
Total liabilities
   16,553    14,424    12,820    13,285    13,930
Total stockholders’ equity
   109,770    87,500    77,884    68,207    56,562

~~The following discussion should be read in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Annual Report onForm 10-K~~ and in our other Securities and Exchange Commission filings. The following discussion may contain predictions, estimates, and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this Annual Report on Form~~10-K.~~ ~~These risks could cause our actual results to differ materially from any future performance suggested below.~~

We are a medical device company that develops, manufactures, and markets medical devices and implants for the treatment of peripheral vascular disease. We also provide processing and cryopreservation services of human tissue for implantation to patients. Our principal product offerings are sold throughout the world, primarily in the United States, Europe and, to a lesser extent, Asia and the Pacific Rim. We estimate that the annual worldwide market for all peripheral vascular devices exceeds $5 billion, within which our core product lines address roughly $870 million. We have grown our business by using a three-pronged strategy: 1) pursuing a focused call point, 2) competing for sales of~~low-rivalry~~ niche products, and 3) expanding our worldwide direct sales force while acquiring and developing complementary vascular devices. We have used acquisitions as a primary means of further accessing the larger peripheral vascular device market, and we expect to continue to pursue this strategy in the future. Additionally, we have increased our efforts to expand our vascular device offerings through new product development. We currently manufacture most of our product lines at our Burlington, Massachusetts headquarters.

Our products are used primarily by vascular surgeons who treat peripheral vascular disease through both open surgical methods and endovascular techniques. In contrast to interventional cardiologists and interventional radiologists, neither of whom are certified to perform open surgical procedures, vascular surgeons can perform both open surgical and minimally invasive endovascular procedures, and are therefore uniquely positioned to provide a wider range of treatment options to patients.

Our principal product lines include the following: valvulotomes, biologic vascular patches, carotid shunts, balloon catheters, biologic vascular grafts, anastomotic clips, radiopaque marking tape, powered phlebectomy devices, laparoscopic cholecystectomy devices, prosthetic vascular grafts, and remote endarterectomy devices. With the November 10, 2016 acquisition of the RestoreFlow allografts business from Restore Flow Allografts, LLC, we also provide services related to the processing and cryopreservation of human vascular tissue.

To assist us in evaluating our business strategies, we regularly monitor long-term technology trends in the peripheral vascular device market. Additionally, we consider the information obtained from discussions with the medical community in connection with the demand for our products, including potential new product launches. We also use this information to help determine our competitive position in the peripheral vascular device market and our manufacturing capacity requirements.

We sell our products and services primarily through a direct sales force. As of December 31, 2017 our sales force was comprised of 90 sales representatives in North America, Europe, Japan, China, Australia and New Zealand. We also sell our products in other countries through distributors. Our worldwide headquarters is located in Burlington, Massachusetts. Our international operations are headquartered in Sulzbach, Germany. We also have sales offices located in Tokyo, Japan; Vaughn, Canada; Madrid, Spain; Milan, Italy; Shanghai, China; and North Melbourne, Australia, and we have a processing facility in Fox River Grove, Illinois and a manufacturing facility in North Melbourne, Australia. During the years ended December 31, 2017 and 2016, approximately 93% and 92%, respectively, of our net sales were generated in territories in which we employ direct sales representatives.

Historically we have experienced success in lower-rivalry niche product segments, for example the market segments for biologic vascular patches and valvulotome devices. In the biologic vascular patch market segment the number of competitors is limited, and we believe that we have been able to increase segment share and to a lesser extent increase selling prices, mainly due to strong sales service. In the valvulotome market segment, we believe we have been able to materially increase our selling prices without losing significant market share. In contrast, we have experienced less success in highly competitive segments such as laparoscopic cholecystectomy devices and polyester grafts, where we face stronger competition from larger companies with greater resources and lower production costs. While we believe that these challenging market dynamics can be mitigated by our strong relationships with vascular surgeons, there can be no assurance that we will be successful in these highly competitive market segments.

In recent years we have also experienced success in geographic markets outside of the United States, such as Europe, where we generally offer comparatively lower average selling prices. If we continue to seek growth opportunities outside of the United States, we may experience downward pressure on our gross margin.

~~Because we believe thatdirect-to-hospital~~ sales engender closer customer relationships, and allow for higher selling prices and gross margins, we periodically enter into transactions with our distributors to transition their sales of our medical devices towards our direct sales organization:

We anticipate that the expansion of our sales organization in China will result in increased sales, marketing and regulatory expenses during 2018. As of December 31, 2017 we had seven employees in China.

Our strategy for growing our business includes the acquisition of complementary product lines and companies and occasionally the discontinuance or divestiture of products or activities that are no longer complementary:

In addition to relying upon acquisitions to grow our business, we also rely on our product development efforts to bring differentiated technology and next-generation products to market. These efforts have led to the following recent product developments:

In addition to our sales growth strategies, we have also executed several operational initiatives designed to consolidate and streamline manufacturing within our Burlington, Massachusetts facilities. We expect that these plant consolidations will result in improved control over our production capacity as well as reduced costs over the long-term. Our most recent manufacturing transitions included:

Our execution of these business opportunities may affect the comparability of our financial results from period to period and may cause substantial fluctuations from period to period as we incur related process engineering and other charges, as well as longer term impacts to revenues and operating expenditures.

Fluctuations in the rate of exchange between the U.S. dollar and foreign currencies, primarily the Euro, affect our financial results. For the year ended December 31, 2017, approximately 42% of our sales took place outside the United States. We expect that foreign currencies will continue to represent a similarly significant percentage of our sales in the future. Selling, marketing, and administrative costs related to these sales are largely denominated in the same respective currency, thereby partially mitigating our exposure to exchange rate fluctuations. However, as most of our foreign sales are denominated in local currency, if there is an increase in the rate at which a foreign currency is exchanged for U.S. dollars, it will require more of the foreign currency to equal a specified amount of U.S. dollars than before the rate increase. In such cases we will receive less revenue in U.S. dollars than we did before the rate increase went into effect. For the year ended December 31, 2017, we estimate that the effects of changes in foreign exchange rates increased sales by approximately $0.4 million, as compared to rates in effect for the year ended December 31, 2016.

~~The following is a description of the primary components of our net sales and expenses:~~

~~Net sales.~~ We derive our net sales from the sale of our products and services, less discounts and returns. Net sales include the shipping and handling fees paid for by our customers. Most of our sales are generated by our direct sales force and are shipped and billed to hospitals or clinics throughout the world. In countries where we do not have a direct sales force, sales are primarily generated by shipments to distributors, who in turn sell to hospitals and clinics. In certain cases our products are held on consignment at a hospital or clinic prior to purchase; in those instances we recognize revenue at the time the product is used in surgery rather than at shipment.

~~Cost of sales.~~ We manufacture nearly all of the products that we sell. Our cost of sales consists primarily of manufacturing personnel, raw materials and components, depreciation of property and equipment, and other allocated manufacturing overhead, as well as freight expense we pay to ship products to customers.

~~Sales and marketing.~~ Our sales and marketing expense consists primarily of salaries, commissions, stock based compensation, travel and entertainment, attendance at medical society meetings, training programs, advertising and product promotions, direct mail and other marketing costs.

~~General and administrative.~~ General and administrative expense consists primarily of executive, finance and human resource expense, stock based compensation, legal and accounting fees, information technology expense, intangible asset amortization expense and insurance expense.

~~Research and development.~~ Research and development expense includes costs associated with the design, development, testing, enhancement and regulatory approval of our products, principally salaries, laboratory testing and supply costs. It also includes costs associated with design and execution of clinical studies, regulatory submissions and costs to register, maintain, and defend our intellectual property, and royalty payments associated with licensed and acquired intellectual property.

~~Other income (expense).~~ ~~Other income (expense) primarily includes interest income and expense, foreign currency gains (losses), and other miscellaneous gains (losses).~~

~~Income tax expense.~~ We are subject to federal and state income taxes for earnings generated in the United States, which include operating losses in certain foreign jurisdictions for certain years depending on tax elections made, and foreign taxes on earnings of our wholly-owned foreign subsidiaries. Our consolidated tax expense is affected by the mix of our taxable income (loss) in the United States and foreign subsidiaries, permanent items, discrete items, unrecognized tax benefits, and amortization of goodwill for U.S tax reporting purposes.

~~Comparison of the year ended December 31, 2017 to the year ended December 31, 2016~~

~~The following tables set forth, for the periods indicated, our results of operations and the change between the specified periods expressed as a percentage increase or decrease:~~

~~Net sales.~~ Net sales increased 13% or $11.7 million to $100.9 million for the year ended December 31, 2017, compared to $89.2 million for the year ended December 31, 2016. Sales increases were primarily driven by increased sales of our biologic vascular patches of $3.6 million, carotid shunts of $1.0 million, and biologic vascular grafts of $0.8 million. We also had an increase in human tissue cryopreservation service revenues from our RestoreFlow allograft business acquired in late 2016 of $5.5 million. These and other product line increases were partially offset by decreased sales of powered phlebectomy devices of $0.5 million, radiopaque tape of $0.4 million and ePTFE vascular grafts of $0.4 million.

~~Direct-to-hospital~~ ~~net sales were 93% for the year ended December 31, 2017 and 92% for the year ended December 31, 2016.~~

~~Net sales by geography.~~ Net sales in the Americas increased $9.0 million for the year ended December 31, 2017. The increase was primarily driven by increased human tissue cryopreservation services of $5.5 million related to our RestoreFlow allograft business acquired in late 2016. We also had increased sales of biologic vascular patches of $2.3 million and carotid shunts of $0.7 million. International net sales increased $2.7 million for the year ended December 31, 2017. The increase was primarily driven by increased sales of our biologic vascular patches of $1.3 million, valvulotomes of $0.7 million and biologic vascular grafts of $0.6 million. These and other product line increases were partially offset by decreased sales of ePTFE vascular grafts of $0.4 million.

~~Gross Profit.~~ Gross profit increased $7.8 million to $70.7 million for the year ended December 31, 2017, while gross margin decreased by 50 basis points to 70.1% in the period. The gross margin was favorably impacted by higher average selling prices across nearly all product lines, lower~~per-unit~~ manufacturing costs of our biologic patch products as well as other products, increased sales of biologic patches, and lower sales to China where average selling prices are comparatively lower. These increases were offset, however, by the newly introduced RestoreFlow product line, as well as higher sales into~~non-direct~~ ~~markets where we typically realize lower gross margins than in the United States. The gross profit increase was a result of higher sales offset slightly by the lower gross margin.~~

~~Sales and marketing~~. For the year ended December 31, 2017, sales and marketing expense decreased $0.2 million or 1% to $25.9 million. The decrease was primarily driven by reduced discretionary spending for professional services, sales meetings, trade shows, advertising and product samples, offset in part by increased compensation-related expense. As a percentage of net sales, sales and marketing expense decreased to 26% in 2017 from 29% in 2016.

~~General and administrative.~~ For the year ended December 31, 2017, general and administrative expense increased $2.7 million or 19%, to $17.0 million. General and administrative expense increases were primarily related to compensation costs (including a charge in 2017 of $0.5 million related to a stock option modification associated with the departure of our President of International Operations), facilities costs and acquisition-related expenses, and to a lesser extent recruiting costs and professional fees. As a percentage of net sales, general and administrative expense increased to 17% for the year ended December 31, 2017 as compared to 16% for the prior period. We expect our general and administrative expense to increase in 2018 due to the reinstatement of our Chief Executive Officer’s salary and bonus opportunity for 2018, which he had forgone (except as to the amount legally required under relevant Department of Labor regulations) beginning in June 2017.

~~Research and development.~~ For the year ended December 31, 2017, research and development expense increased $0.5 million or 8%, to $6.6 million. Clinical and regulatory expenses increased $0.5 million primarily related to compensation costs and professional fees, including costs related to regulatory submission for new products in geographies such as China. Product development expenses in total were unchanged, with decreases in compensation costs offset by increased product testing. We expect our clinical and regulatory expenses to increase in 2018 due to increased costs of applications related to our XenoSure product line as well as compliance with new medical device regulations (MDR) adopted in the European Union.

~~Other income (expense).~~ ~~Interest income was $0.2 million and $0.1 million, respectively for 2017 and 2016. Foreign exchange losses for both 2017 and 2016 were $0.2 million.~~

~~Income tax expense~~.~~We recorded a provision for taxes of $3.9 million onpre-tax~~ ~~income of $21.1 million in 2017 as compared to $5.7 million onpre-tax~~ income of $16.2 million in 2016. The 2017 provision was comprised of Federal tax provision in the United States of $2.2 million, a state tax provision of $0.7 million and a foreign tax provision of $1.0 million. The 2016 provision was comprised of Federal tax in the United States of $4.6 million, a state tax provision of $0.6 million and a foreign tax provision of $0.5 million. Our effective tax rate differed from the U.S. statutory tax rate in 2017 principally because of stock option exercises, U.S. tax

reform legislation, deferred tax remeasurement, and certain permanent differences. While it is often difficult to predict the final outcome or timing of the resolution of any particular tax matter, we believe that our tax reserves reflect the probable outcome of known contingencies.

We assess the likelihood that our deferred tax assets will be realized through future taxable income and record a valuation allowance to reduce gross deferred tax assets to an amount we believe is more likely than not to be realized. As of December 31, 2017, we have provided a valuation allowance of $2.0 million for deferred tax assets primarily related to Australian net operating loss and capital loss carry forwards and Massachusetts tax credit carry forwards that are not expected to be realized.

~~Refer to Note 8 to our consolidated financial statements for additional information about income tax expense (benefit) including information related to U.S. tax reform legislation.~~

~~Comparison of the year ended December 31, 2016 to the year ended December 31, 2015~~

~~The following tables set forth, for the periods indicated, our results of operations and the change between the specified periods expressed as a percentage increase or decrease:~~

~~Net sales.~~ Net sales increased 14% or $10.8 million to $89.2 million for the year ended December 31, 2016, compared to $78.4 million for the year ended December 31, 2015. Sales increases were primarily driven by increased sales of our biologic vascular patches of $5.2 million (of which we estimate that $2.3 million was related to a safety alert initiated by a competitor), valvulotomes of $1.9 million, vessel closure systems of $1.5 million and ProCol biologic vascular grafts, acquired in 2016, of $1.0 million. We also had human tissue cryopreservation service revenues from our RestoreFlow allograft business, acquired in late 2016, of $0.5 million. These and other product line increases were partially offset by decreased sales of radiopaque tape of $0.4 million (related primarily to the inclusion in 2015 of $0.6 million of OEM tape sales).

~~Direct-to-hospital~~ ~~net sales were 92% for both of the years ended December 31, 2016 and December 31, 2015.~~

~~Net sales by geography.~~ Net sales in the Americas increased $5.7 million for the year ended December 31, 2016. The increase was primarily driven by biologic vascular patches, valvulotomes, vessel closure systems ProCol biologic vascular grafts, and was partially offset by decreased sales of carotid shunts and radiopaque tape. We also had human tissue cryopreservation service revenues in the U.S. from our RestoreFlow allograft business of $0.5 million. International net sales increased $5.1 million for the year ended December 31, 2016. The increase occurred across most product lines but was primarily driven by sales of our biologic vascular patches and grafts, valvulotomes, ePTFE vascular grafts and shunts.

~~Gross Profit.~~ Gross profit increased $8.8 million to $62.9 million for the year ended December 31, 2016, while gross margin increased by 150 basis points to 70.6% in the period. The gross margin was favorably impacted by higher average selling prices across nearly all product lines, increased sales of XenoSure and valvulotome devices, and lower~~per-unit~~ manufacturing costs of our biologic patch products as well as other products. These increases were partially offset by higher sales in Europe as well as other markets where we sometimes realize lower gross margins than in the United States. The gross profit increase was a result of higher sales and improved gross margin.

~~Sales and marketing~~. For the year ended December 31, 2016, sales and marketing expense increased $3.3 million or 15% to $26.1 million. The increases were primarily driven by compensation-related expenses and travel, due to an increase in the number of sales representatives from 81 at January 1, 2015 to 96 at December 31, 2016. As a percentage of net sales, sales and marketing expense was 29% for both comparative periods.

~~General and administrative.~~ For the year ended December 31, 2016, general and administrative expense increased $0.3 million or 2%, to $14.4 million. General and administrative expense increases were primarily related to compensation costs and acquisition-related expenses, which were partially offset by decreases in recruiting costs, professional fees and bad debt expense. As a percentage of net sales, general and administrative expense decreased to 16% for the year ended December 31, 2016 as compared to 18% for the prior period.

~~Research and development.~~ For the year ended December 31, 2016, research and development expense increased $0.7 million or 12%, to $6.1 million. Product development expenses increased $0.3 million primarily driven by compensation costs, including costs to support efforts to transition the manufacturing of certain acquired product lines to our Burlington, Massachusetts headquarters. These increases were partially offset by lower spending on supplies and testing. Clinical and regulatory expenses increased $0.3 million primarily related to compensation costs and professional fees, including costs related to regulatory submission for new products in geographies such as China.

~~Medical device excise tax.~~ The medical device excise tax was $0.7 million in 2015. On December 18, 2015, the Consolidated Appropriations Act of 2016 was signed into law, which suspended the medical device tax for the period beginning January 1, 2016 and ending December 31, 2017.

~~Other income (expense).~~ ~~Foreign exchange losses for 2016 were $0.2 million as compared to $0.1 million for 2015.~~

~~Income tax expense~~.~~We recorded a provision for taxes of $5.7 million onpre-tax~~ ~~income of $16.2 million in 2016 as compared to $3.7 million onpre-tax~~ income of $11.4 million in 2015. The 2016 provision was comprised of Federal tax provision in the United States of $4.6 million, state tax provision of $0.6 million and a foreign tax provision of $0.5 million. The 2015 provision was comprised of Federal tax in the United States of $3.2 million, a state tax benefit of $0.1 million and foreign taxes of $0.6 million. Our effective tax rate differed from the U.S. statutory tax rate in 2016 principally due to the release of valuation allowances on foreign deferred tax assets, manufacturing deductions, uncertain tax positions, effect of foreign taxes,~~Subpart-F~~ ~~income, foreign~~

deferred tax liability offset, state taxes, other permanent differences, and other. While it is often difficult to predict the final outcome or timing of the resolution of any particular tax matter, we believe that our tax reserves reflect the probable outcome of known contingencies.

We have assessed the need for a valuation allowance against our deferred tax assets and concluded that as of December 31, 2016, we will continue to carry a valuation allowance against $1.8 million of deferred tax assets, principally foreign net operating loss and capital loss carry-forwards; based on the weight of available evidence, we believe it is more likely than not that such assets will not be realized.

~~In 2016, a federal tax audit resulted in a $0.2 million tax adjustment, which also required a $0.2 million increase to our uncertain tax positions for a Massachusetts tax credit.~~

At December 31, 2017, we held $19.1 million in cash and cash equivalents and $22.6 million in a short-term managed income mutual fund investment, as compared to $24.3 million in cash and cash equivalents at December 31, 2016. Our cash and cash equivalents are highly liquid investments with maturities of 90 days or less at the date of purchase, consist of money market funds, and are stated at cost, which approximates fair value. Our short-term marketable securities consist of a managed income mutual fund investing mainly in short-term investment grade, U.S.-dollar denominated fixed and floating-rate debt. All of our cash held outside of the United States is available for corporate use, with the exception of $8.6 million held by subsidiaries in jurisdictions for which earnings are planned to be permanently reinvested.

On July 25, 2017, our Board of Directors approved a stock repurchase program under which the Company is authorized to repurchase up to $7.5 million of its common stock through transactions on the open market, in privately negotiated purchases or otherwise. This program may be suspended or discontinued at any time, and expires on the earlier of July 25, 2018 or when the authorized aggregate $7.5 million repurchase limit is reached. To date we have not made any repurchases under this program.

We require cash to pay our operating expenses, make capital expenditures, and pay our long-term liabilities. Since our inception, we have funded our operations through public offerings and private placements of equity securities, short-term and long-term borrowings, and funds generated from our operations.

We recognized operating income of $21.1 million for the year ended December 31, 2017. For the year ended December 31, 2016, we recognized operating income of $16.3 million. We expect to fund any increased costs and expenditures from our existing cash and cash equivalents, though our future capital requirements depend on numerous factors. These factors include, but are not limited to, the following:

Our cash balances may decrease as we continue to use cash to fund our operations, make acquisitions, make payments under our quarterly dividend program, repurchase shares of our common stock and make deferred payments related to prior acquisitions. We believe that our cash, cash equivalents, investments and the interest we earn on these balances will be sufficient to meet our anticipated cash requirements for at least the next twelve months. If these sources of cash are insufficient to satisfy our liquidity requirements beyond the next twelve months, we may seek to sell additional equity or debt securities or borrow funds from, or establish a revolving credit facility, with a financial institution. The sale of additional equity and debt securities may result in dilution to our stockholders. If we raise additional funds through the issuance of debt securities, such securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations and possibly our ability to pay dividends. We may require additional capital beyond our currently forecasted amounts. Any such required additional capital may not be available on reasonable terms, if at all.

~~Net cash provided by operating activities.~~ ~~Net cash provided by operating activities was $22.9 million for the year ended December 31, 2017, and consisted of $17.2 million net income, adjusted fornon-cash~~ items of $7.3 million (including primarily depreciation and amortization of $4.1 million, stock-based compensation of $2.3 million, provisions for inventory write-offs and doubtful accounts of $0.6 million, and a provision for deferred taxes of $0.3 million), as well as working capital uses of $1.6 million. The net cash used for working capital was driven by increases in accounts receivable of $1.5 million, inventory of $1.3 million and other current assets of $0.3 million, offset by an increase in accounts payable and other liabilities of $1.5 million.

~~Net cash provided by operating activities was $16.9 million for the year ended December 31, 2016, and consisted of $10.6 million net income, adjusted fornon-cash~~ items of $5.9 million (including depreciation and amortization of $3.6 million, stock-based compensation of $1.7 million, provisions for inventory write-offs and doubtful accounts of $0.5 million and provision for deferred taxes of $0.1 million), as well as changes in working capital of $0.4 million. The net cash provided by changes in working capital was driven by decreases in other current assets of $1.5 million, including primarily prepaid taxes, partially offset by increases in accounts receivable of $0.9 million and inventory of $0.1 million, and a decrease in accounts payable and other liabilities of $0.1 million.

~~Net cash used in investing activities.~~ Net cash used in investing activities was $29.0 million for year ended December 31, 2017, driven by a $22.5 million purchase of a short-term investment, as well as purchases of property and equipment of $6.4 million primarily associated with the expansion of our Burlington, Massachusetts headquarters.

Net cash used in investing activities was $17.2 million for year ended December 31, 2016, driven by $14.4 million of cash paid in connection with our acquisitions of the ProCol biologic vascular graft and RestoreFlow allograft businesses, as well as purchases of property and equipment of $2.8 million primarily associated with the expansion of our Burlington, Massachusetts headquarters.

~~Net cash provided by (used in) financing activities.~~ Net cash provided by financing activities was $0.1 million for the year ended December 31, 2017, driven primarily by proceeds from stock option exercises of $5.5 million, offset by the acquisition of $0.8 million of treasury shares to cover minimum withholding taxes on restricted stock unit vestings by payments of common stock dividends of $4.2 million. We also made payments related to our prior acquisitions of $0.4 million.

Net cash used in financing activities was $2.6 million for the year ended December 31, 2016, driven primarily by payments of common stock dividends of $3.3 million, partially offset by proceeds from stock option exercise, net of shares repurchased for taxes, of $1.1 million. We also made payments related to our prior acquisitions of $0.4 million.

~~Dividends.~~In February 2011, our Board of Directors approved a policy for the payment of quarterly cash dividends on our common stock. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by our Board of Directors on a quarterly basis. The dividend activity for the periods presented is as follows:

~~Contractual~~filing obligations. ~~Our principal contractual obligations consist of operating leases and inventory purchase commitments. The following table summarizes our commitments under operating leases as of December 31, 2017:~~

The commitments under our operating leases consist primarily of lease payments for our corporate headquarters and manufacturing facility in Burlington, Massachusetts, expiring in 2023; our Mississauga, Canada office, expiring in 2018; our Vaughn, Canada office expiring in 2023, our Sulzbach, Germany office, expiring in 2023; our Tokyo, Japan office, expiring in 2019; our Milan, Italy office, expiring in 2020; our Madrid, Spain office, expiring in 2018 at which point it becomes renewable annually; our Australia facility expiring in 2020; our Shanghai, China office, expiring in 2020; and our Fox River Grove offices, expiring in 2018. They also include automobile and equipment leases.

We also inventory purchase commitments of approximately $1.3 million as of December 31, 2017. These commitments are for product be used in operations in the normal course of business and do not represent excess commitments or loss contracts.

We have adopted various accounting policies to prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Our most significant accounting policies are described in Note 1 to our consolidated financial statements included elsewhere in this Annual Report on~~Form 10-K.~~ The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Our estimates and assumptions, including those related to bad debts, inventories, intangible assets, sales returns and discounts, and income taxes are reviewed on an ongoing basis and updated as appropriate. Actual results could differ from those estimates.

Certain of our more critical accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, and observance of trends in the industry, as appropriate. Different, reasonable estimates could have been used in the current period. Additionally, changes in accounting estimates are reasonably likely to occur from period to period. Both of these factors could have a material impact on the presentation of our financial condition, changes in financial condition, or results of operations.

We believe that the following financial estimates and related accounting policies are both important to the portrayal of our financial condition and results of operations and require subjective or complex judgments. Further, we believe that the items discussed below are properly recorded in our consolidated financial statements for all periods presented. Management has discussed the development, selection and disclosure of our most critical financial estimates with the audit committee of our board of directors and our independent registered public accounting firm. The judgments about those financial estimates are based on information available as of the date of our consolidated financial statements. Those financial estimates and related policies include:

Our revenue is derived primarily from the sale of disposable or implantable devices used during vascular surgery. We sell primarily directly to hospitals and to a lesser extent to distributors, as described below. We also occasionally enter into consigned inventory arrangements with either hospitals or distributors on a limited basis. In connection with our acquisition of the RestoreFlow allograft business, we also derive revenues from human tissue cryopreservation services. These revenues are recognized when services have been provided and the tissue has been shipped to the customer, provided all other revenue recognition criteria discussed below have been met.

We recognize revenue when four basic criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. We generally use customer purchase orders or contracts to determine the existence of an arrangement. Sales transactions are based on prices that are determinable at the time that the customer’s purchase order is accepted by us. In order to determine whether collection is reasonably assured, we assess a number of factors, including past transaction history with the customer and the creditworthiness of the customer. If we determine that collection is not reasonably assured, we would defer the recognition of revenue until collection becomes reasonably assured, which is generally upon receipt of payment. We provide for product returns at the time revenue is recognized based on our historical product return history. Based on these policies, we recognize revenue, net of allowances for returns and discounts, as products are shipped, based on shipping point terms, or at the time consigned inventory is consumed at which time title passes to customers. We recognize revenue net of allowances for returns and discounts as well as any sales and value added taxes required to be invoiced, at the time of shipment of our products to our distributors.

Our accounts receivable are with customers based in the United States and internationally. Accounts receivable generally are due within 30 to 90 days of invoice and are stated at amounts due from customers, net of an allowance for doubtful accounts and sales returns, other than in certain European markets where longer payment terms are customary and may range from 90 to 240 days. We perform ongoing credit evaluations of the financial condition of our customers and adjust credit limits based upon payment history and the current creditworthiness of the customers, as determined by a review of their current credit information. We continuously monitor aging reports, collections, and payments from customers, and maintain a provision for estimated credit losses based upon historical experience and any specific customer collection issues we identify.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers such as hospitals, distributors and agents, in Southern Europe, specifically Italy and Spain may be subject to significant payment delays due to government austerity measures impacting funding and payment practices. As of December 31, 2017 our receivables in Italy and Spain totaled $1.1 million and $0.6 million, respectively. Receivables balances with certain publicly-owned hospitals and government supported customers in these countries can accumulate over a period of time and then subsequently be settled as large lump sum payments. While we believe our allowance for doubtful accounts in these countries is adequate as of December 31, 2017, if significant changes were to occur in the payment practices of these European governments or if government funding becomes unavailable, we may not be able to collect on receivables due to us from these customers and our write offs of uncollectible amounts may increase.

We write off accounts receivable when they become uncollectible. While such credit losses have historically been within our expectations and allowances, we cannot guarantee the same credit loss rates will be experienced in the future. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We review our allowance for doubtful accounts on a monthly basis and all past due balances are reviewed individually for collectability. The provision for the allowance for doubtful accounts is recorded in general and administrative expenses.

~~Inventory consists of finished products,work-in-process,~~ ~~and raw materials. We value inventory at the lower of cost or market value. Cost includes materials, labor, and manufacturing overhead and is determined using thefirst-in,first-out~~ (FIFO) method. On a quarterly basis, we review inventory quantities on hand and analyze the provision for excess and obsolete inventory based primarily on product expiration dating and our estimated sales forecast, which is based on sales history and anticipated future demand. Our estimates of future product demand may not be accurate, and we may understate or overstate the provision required for excess and obsolete inventory. Accordingly, any significant unanticipated changes in demand could have a significant impact on the value of our inventory and results of operations.

In connection with our 2016 acquisition of the RestoreFlow allograft business, other deferred costs include costs incurred for the preservation of human vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending release to implantable status. By federal law human tissues cannot be bought or sold. Therefore, the tissues we preserve are not held as inventory, and the costs we incur to procure and process human vascular tissues are instead accumulated and deferred.

options will be outstanding. The computation of expected volatility is based on the historical volatility of the company’s stock. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. Historical data on exercise patterns is the basis for estimating the expected life of an option. The expected annual dividend rate was calculated by dividing our annual dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date.

We also issue restricted stock units (RSUs) as an additional form of equity compensation to our employees, officers, and directors, pursuant to our stockholder-approved Second Amended and Restated 2006 Stock Option and Incentive Plan. RSUs entitle the grantee to an issuance of stock at no cost and generally vest over a period of time determined by our Board of Directors at the time of grant based upon the continued service to the company. The fair market value of the award is determined based on the number of RSUs granted and the market value of our common stock on the grant date and is amortized to expense over the period of vesting. Unvested RSUs are forfeited and canceled as of the date that employment or service to the company terminates. RSUs are settled in shares of our common stock upon vesting. We may repurchase common stock upon our employees’ vesting in RSUs in order to cover any minimum tax withholding liability as a result of the ~~RSUs having vested.~~

~~Share-based compensation charges had in prior years been recorded net~~coronavirus (“COVID-19”) pandemic. As a result of the ~~estimated forfeitures based upon historical forfeiture rates,~~COVID-19 pandemic, we have taken steps to reduce the number of personnel physically present at our corporate headquarters and ~~was adjusted in subsequent periods~~management attention has been focused on modification of manufacturing operations to ~~reflect~~permit social distancing, the ~~results of actual forfeitures~~health and vesting. In March 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard that changes the accounting for certain aspects of share-based payments to employees, including a provision allowing companies to make an election to account for award forfeitures as they occur, rather than estimating them at the time of grant. We early-adopted the new guidance in the third quarter of fiscal year 2016, which required us to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. In connection with this early adoption we made the election to account for award forfeitures as they occur, and we recorded a cumulative-effect adjustment to beginning retained earnings of $0.1 million, net of tax. Share-based compensation charges are recorded across the consolidated statement of operations based upon the grantee’s primary function.

As disclosed more fully in the notes to our consolidated financial statements, we recorded expense of approximately $2.3 million in connection with share-based payment awards for the year ended December 31, 2017. The future expense of~~non-vested~~ share-based awards of approximately $8.3 million is to be recognized over a weighted-average period of 4.0 years. During 2017, we granted stock options at a weighted average fair value of $10.37 and RSUs with weighted average fair value of $31.59.

Goodwill represents the amount of consideration paid in connection with business acquisitions in excess of the fair value of assets acquired and liabilities assumed. Goodwill is evaluated for impairment annually or more frequently if indicators of impairment are present or changes in circumstances suggest that an impairment may exist. Our assessment is performed as of December 31 each year based on a single reporting unit. We first perform an assessment of qualitative factors to determine if it is “more likely than not” that the fair valuesafety of our ~~reporting unit is less than its carrying value as~~employees, cost-cutting measures (including a ~~basis~~reduction in force and salary reductions) and cash conservation efforts. Management’s focus on these activities and measures has, in turn, delayed our ability to prepare our proxy statement for ~~determining whether it is necessary to perform thetwo-step~~ ~~goodwill impairment test. The “more likely than not” threshold is defined as having~~our 2020 Annual Meeting of Stockholders. As a ~~likelihood of more than 50 percent. If required, the next step of the goodwill impairment test is to determine the fair value of the reporting unit. The implied fair value of goodwill is determined~~result and in reliance on the same basis as the amount of goodwill recognized in connection with a business combination. Specifically, the fair value of a reporting unit is allocated to all of the assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination as of the date of the impairment review and as if the fair value of the reporting unit was the price paid to acquire the reporting unit. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. Goodwill was $23.8 million and $23.4 million as of December 31,

2017 and 2016, respectively. Our annual impairment testing indicated no significant risk of impairment based upon changes in value that are reasonably likely to occur. However, changes in these estimates and assumptions could materially affect the estimated fair value of our reporting unit.

Other intangible assets consist primarily of purchased developed technology, patents, customer relationships and trademarks, and are amortized over their estimated useful lives, ranging from 3 to 13 years. We review intangible assets quarterly to determine if any adverse conditions exist for a change in circumstances has occurred that would indicate impairment. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of the asset, a change in the operating cash flows associated with the asset, or adverse action or assessment by a regulator. If an impairment indicator exists we test the intangible asset for recoverability. If the carrying value of the intangible asset exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset, we will write the carrying value down to the fair value in the period in which it is identified. We generally calculate the fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset. These estimates and assumptions require significant judgment and actual results may differ from assumed or estimated amounts. Other intangible assets, net of accumulated amortization, were $8.2 million as of December 31, 2017 and $9.9 million as of December 31, 2016.

In the normal course of business, we are subject to proceedings, lawsuits, and other claims and assessments for matters related to, among other things, patent infringement, business acquisitions, employment, product liability and product recalls. We assess the likelihood of any adverse judgments or outcomes to these mattersSEC Order as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters. We record charges for the costsCompliance and Disclosure Interpretation 104.18, dated April 6, 2020, we anticipate incurring in connection with litigation and claims against us when we determine a loss is probable and we can reasonably estimate these costs. During the years ended December 31, 2017, 2016, and 2015, we were not subject to any material litigation, claims or assessments.

We record restructuring charges incurred in connection with consolidation or relocation of operations, exited business lines, reductions in force, or distributor terminations. These restructuring charges, which reflect our commitment to a termination or exit plan that will begin within twelve months, are based on estimates of the expected costs associated with site closure, legal matters, contract terminations, severance payments, or other costs directly related to the restructuring. If the actual cost incurred exceeds the estimated cost, an additional charge to earnings will result. If the actual cost is less than the estimated cost, a credit to earnings will be recognized.

As part of the process of preparing our consolidated financial statements we are required to determine our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax expense together with assessing temporary differences resulting from recognition of items for income tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet. We must then assess the likelihood that our deferred tax assets will be recovered from taxable income during the carryback period or in the future; and to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or increase this

allowance in a period, we must reflect this increase as an expense within the tax provision in the statement of operations. We do not provide for income taxes on undistributed earnings of foreign subsidiaries, as our current intention is to permanently reinvest these earnings.

Our 2017 tax provision includes an estimate for the impact of US tax reform. The final impact of US tax reform may differ from these estimates because of changes in interpretations, analysis, and assumptions made by management, updates or changes to our transition tax calculation, and/or additional guidance that may be issued by the IRS.

~~We recognize, measure, present and disclose in our financial statements, uncertain tax positions that we have taken or expect to take~~disclosed on a ~~tax return. We operate in multiple taxing jurisdictions, both within~~Current Report on Form 8-K dated April 29, 2020 our reliance on the ~~United States~~SEC Order and ~~outside~~our intention to file either (i) our proxy statement for our 2020 Annual Meeting of Stockholders, including the United States and may be subject to audits from various tax authorities regarding transfer pricing, the deductibility of certain expenses, intercompany transactions, and other matters. Management’s judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, liabilities for uncertain tax positions, and any valuation allowance recorded against our net deferred tax assets.

~~Our policy is to classify interest and penalties related to unrecognized tax benefits as income tax expense.~~

~~In January 2017, the Financial Accounting Standards Board (“FASB”) issued~~Part III Disclosure, or (ii) an ~~accounting standards update, ASU2017-01,~~ ~~which changes the definition of a business for purposes of determining whether a business has been acquired or sold. The~~ amendment is intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard is effective for us beginning January 1, 2018, with early adoption permitted. The adoption of this standard is not expected to have a material impact on our financial statements.

~~In August 2016, the FASB issued an accounting standards update, ASU2016-15,~~ which changes the classification of certain cash receipts and cash payments within the statement of cash flows. The new standard is effective for us beginning January 1, 2018, with early adoption permitted. The adoption of this standard is not expected to have a material impact on our financial statements.

~~In February 2016, the FASB issued its new lease accounting guidance in Accounting Standards Update (ASU)No. 2016-02,~~~~Leases (Topic 842)~~. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a~~right-of-use~~ asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of~~off-balance~~ sheet financing. The standard is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Early application is permitted. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. We have not yet determined the impact on our consolidated financial statements.

~~In May 2014, the FASB and the International Accounting Standards Board issued substantially converged final standards on revenue recognition. The FASB’s ASUNo. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606), as amended from time to time, outlines a single comprehensive model for entities to use in~~

accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new revenue recognition guidance becomes effective for us on January 1, 2018, with early adoption permitted on January 1, 2017. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in the ASU. Our assessment of the impact to our financial statements of adopting this standard is now complete. We engaged external consultants to assist us with our analysis, which included evaluating our standard arrangements with customers, as well as arrangements specific to certain customer bases or product offerings, and reviewing a sample of actual contracts to determine whether there are additional attributes to consider beyond our standard arrangements. We have concluded that adoption of Topic 606 will not have a material impact on our consolidated financial statements. We expect that substantially all of our revenue will continue to be recognized when products are shipped from our premises. However, there will be changes to our revenue recognition accounting policy as well as other disclosures. We have determined that we will use the modified retrospective method of adoption under which the comparative information will not be restated and will continue to be reported under the standard in effect for those periods.

~~We did not have anyoff-balance~~ sheet arrangements as of December 31, 2017. We do not currently have, nor have we ever had, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating~~off-balance~~ ~~sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involvingnon-exchange~~ ~~traded contracts. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.~~

In the ordinary course of conducting business, we are exposed to certain risks associated with potential changes in market conditions. These market risks include changes in currency exchange rates and interest rates which could affect operating results, financial position and cash flows.

During fiscal 2017 and 2016, 42% and 44%, respectively, of our total revenue was from customers outside of the United States. In addition, a significant portion of our operating costs incurred outside the United States are denominated in currencies other than the U.S. dollar. We conduct business on a worldwide basis and as a result, a portion of our revenue, earnings, net assets, and net investments in foreign affiliates is exposed to changes in foreign currency exchange rates. We measure our net exposure for cash balance positions and for cash inflows and outflows in order to evaluate the need to mitigate our foreign exchange risk. We may enter into foreign currency forward contracts to minimize the impact related to unfavorable exchange rate movements, although we have not done so during fiscal 2017 and fiscal 2016. Our largest exposures to foreign currency exchange rates exist primarily with the Euro, British Pound, Canadian dollar, Australian dollar and Japanese yen.

During fiscal 2017 and fiscal 2016, we recorded $0.2 million and $0.2 million of net foreign currency exchange losses related to the settlement and remeasurement of transactions denominated in currencies other than the functional currency of our operating subsidiaries. Our analysis of operating results transacted in various foreign currencies indicated that a hypothetical 10% change in the foreign currency exchange rates could have increased or decreased the consolidated results of operations by approximately $0.7 million for fiscal 2017.

At December 31, 2017, we held $19.1 million in cash and cash equivalents and $22.6 million in a short-term managed income mutual fund investment. Due to the short maturities on any instruments held, a hypothetical 10% increase or decrease in interest rates would not have a material impact on our financial position, results of operations or cash flows.

~~See the consolidated financial statements filed as part of this~~ Annual Report on Form10-K ~~as listed under Item 15 below, which~~ to include the Part III Disclosure, in either case within 45 days after the April 29, 2020 date when this information would have otherwise been due. We are ~~incorporated by reference herein.~~relying on the SEC Order in filing the Part III Disclosure in this Amendment No. 1.

~~Our management, with~~In addition, as required by Rule 12b-15 under the ~~participation and supervision of our~~Exchange Act, the Company is including in this Amendment No. 1 currently dated certifications from its Chief Executive Officer and Chief Financial Officer ~~is responsible for our disclosure controls and procedures pursuant to Rules13a-15(e)~~ ~~and15d-15(e)~~ ~~under the Exchange Act. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information~~as required ~~to be disclosed in our reports filed~~by Rule 13a-14(a) or ~~submitted under~~Rule 15d-14(a) of the Exchange Act ~~is recorded, processed, summarized~~as exhibits to this Amendment. We are not including the certifications under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment No. 1.

This Amendment No. 1 includes only Part III, the Exhibit Index in Part IV, Item 15 and ~~reported, within~~Exhibits 31.1 and 31.2. Those sections of the ~~time periods specified under SEC rules~~Original Form 10-K that are unaffected by this Amendment No. 1 are not included herein. Except as otherwise indicated herein, this Amendment No. 1 continues to speak as of the date of the Original Form 10-K and ~~forms. Disclosure controls~~does not reflect events occurring after the date of the Original Form 10-K.

The following table identifies our directors, executive officers, and ~~procedures include controls~~certain individuals that we believe are our key employees, and ~~procedures designed~~sets forth the positions with us held by each such person currently and the age of each such person.

George W. LeMaitre has served as our Chief Executive Officer and as a member of our Board of Directors since 1992, serving as our Chairman since 2004. Previously, Mr. LeMaitre was an investment banking analyst at Lehman Brothers, an associate at the leveraged buyout firm McCown De Leeuw and a credit analyst for Connecticut National Bank. Mr. LeMaitre received a B.A. in History from Stanford University and an M.B.A. from the Stanford University Graduate School of Business. The Board has concluded that Mr. LeMaitre should serve on our Board due to ~~ensure that information required to be disclosed in~~his extensive knowledge of our ~~reports filed under the Exchange Act is accumulated and communicated to~~business, his role since 1992 as our principal executive officer, and his corporate vision, operational knowledge and his strategic guidance to the Board.

David B. Roberts has served as our ~~principal financial officer,~~President since 2007 and as appropriate, to allow timely decisions regarding required disclosure. We design our disclosure controls and procedures to ensure, at reasonable assurance levels, that such information is timely recorded, processed, summarized and reported, and then accumulated and communicated appropriately.

~~Based on an evaluation~~a member of our ~~disclosure controls~~Board of Directors since 2001. Mr. Roberts joined us in 1997 as Vice President of Business Development and ~~procedures~~was promoted to Chief Financial Officer in 2000, which position he held until 2007. From 1994 to 1997, Mr. Roberts held several positions at BUCA, Inc., an operator of Buca di Beppo restaurants, most recently serving as Vice President of ~~December 31,~~Development and prior to that as Director of Finance. From 1992 to 1994, Mr. Roberts held several positions at Hancock Venture Partners, most recently serving as an Associate. Mr. Roberts received a B.A. in Business Economics and History from Brown University and an M.B.A. from the Stanford University Graduate School of Business. Mr. Roberts is a director of Parasole Restaurant Holdings, Inc., owner of several restaurants in the Minneapolis/St. Paul area including, among others, Manny’s Steakhouse. The Board has concluded that Mr. Roberts should serve on our Board due to his extensive knowledge of our business, his responsibility within the organization for strategic transactions, and his thorough understanding of the industry in which we operate and the opportunities and challenges that we face.

Bridget A. Rosshasserved as a member of our Board of Directors since April 2020. Since February 2020, Ms. Ross has served as CEO of ChroniSense Medical,Ltd., developer of a wearable medical-grade disease management device, and since January 2020, she has also served as advisor to Picomole, Inc., a medical technology company focused on developing a breath test for lung cancer. Additionally, Ms. Ross serves on the steering committee of MassMedic and as the Executive in Residence for the association's IGNITE accelerator program. From 2017 to 2018, Ms. Ross was President of the Global Medical Group and member of the Executive Management team at Henry Schein, Inc., an international medical and dental product distributor/solutions provider. From 1988 to 2017 she held numerous senior leadership roles at Johnson & Johnson, Inc., including, most recently VP of Commercial Operations for Medical Devices, North America. Ms. Ross holds a Bachelor of Commerce degree from the University of Alberta. The Board has concluded that Ms. Ross should serve on our Board due to her strong executive management skills, knowledge of the medical device industry and breadth of functional, geographic, and therapeutic experience gained during her 30+ year career.

John A. Roush has served as a member of our Board of Directors since 2014. Mr. Roush serves as an operating executive advisor to ACON Investments, LLC, a private equity firm. He serves as chairman of the board of International Imaging Materials, Inc., a privately held portfolio company of ACON Investments, which supplies consumable products to the industrial marking/printing and medical device industries. He also serves as a board director and member of the Compensation Committee and Nominating & Corporate Governance Committee for Advanced Energy Industries, Inc. (Nasdaq: AEIS). Mr. Roush also serves as a board director Pine Environmental, a privately held portfolio company of ACON Investments, which provides equipment solutions for the environmental testing market. Mr. Roush also serves as a board director for Applied Life Sciences & Systems, a privately held company that is developing vaccine delivery technology for animal health markets. Mr. Roush served as Chief Executive Officer and a member of the Board of Directors of Novanta Inc., a global supplier of precision photonic components and subsystems to original equipment manufacturers (OEMs) in the medical, industrial, scientific and microelectronics markets, from 2010 to 2016. Prior to joining Novanta Inc., he was a corporate officer and served in several senior leadership positions for twelve years with PerkinElmer, Inc., a provider of technology and services to the diagnostics, research, environmental, safety and security, industrial and laboratory services markets. Prior to joining PerkinElmer, Mr. Roush held management positions with Outboard Marine Corporation; AlliedSignal, Inc., now Honeywell International; McKinsey & Company Inc. and General Electric. Mr. Roush received a B.S. in Electrical Engineering from Tufts University and an M.B.A. from the Harvard Business School. The Board has concluded that Mr. Roush should serve on our Board due to his experience at an executive level and his more than 15 years of experience supplying products into the medical device and life sciences industries.

Lawrence J. Jasinski has served as a member of our Board of Directors since 2003. Mr. Jasinski is the Chief Executive Officer of ReWalk Robotics Ltd. (formerly Argo Medical Technologies), a Nasdaq–listed company that has created and commercialized the first Exoskeleton Technology, which enables paralyzed individuals the ability to walk again. He has also served on the Board of Directors of ReWalk Robotics since 2012. From 2005 until 2012, he was President and Chief Executive Officer of Soteira, Inc., a company that offered products which treated individuals with vertebral compression fractures. From 2000 to 2005, he was President and Chief Executive Officer of Cortek, Inc., a company that developed next-generation treatments for degenerative disc disease. From 1985 to 2000, Mr. Jasinski worked at Boston Scientific Corporation (“BSC”) and served as its Vice President of Global Marketing, BSC Vascular, from 1998 to 2000. Mr. Jasinski received a B.S. in Marketing from Providence College and an M.B.A. from the University of Bridgeport. Mr. Jasinski is also a member of the Board of Directors for Massachusetts Bay Lines, a company that offers commuter services and other commercial vessel services in the Boston Harbor and Islands. The Board has concluded that Mr. Jasinski should serve on our Board due to his experience serving in a variety of executive level positions, coupled with his more than 20 years of experience in the medical device industry, which provides the Board with an understanding of the current trends as well as provides us with deeper contacts in the industry. Mr. Jasinski also provides the Board with operational experience, including building and organizing an effective sales force, seeking and obtaining regulatory approvals for medical devices, and managing significant manufacturing operations.

John J. O’Connor has served as a member of our Board of Directors since 2008. Prior to his retirement in December 2006, Mr. O’Connor was a partner at PricewaterhouseCoopers LLP, an independent public accounting firm, from 1982 to December 2006, most recently serving as Vice Chairman of Services from June 2002 to November 2006. Mr. O’Connor served as the leader of the U.S. audit practice at PricewaterhouseCoopers from September 2000 to June 2002, and served as the Managing Partner of the firm’s Boston office from 1995 to September 2000. He is a director of mTuitive, Inc., a developer of clinical data capture and synoptic reporting software for use by healthcare professionals, Segue Manufacturing Services, LLC, a manufacturing services company, Health Data Analytics, Inc., a healthcare analytics company and Abt Associates, a mission driven global leader in research and program implementation in the fields of health, social and economic policy and international development. Mr. O’Connor has also served as a director of Aspect Medical Systems, Inc., a publicly-traded brain monitoring device company that was acquired by Covidien plc. in November 2009, and Open Pages, Inc., a provider of enterprise governance, risk and compliance management solutions that was acquired by IBM in October 2010. Mr. O’Connor is a graduate of Suffolk University and has attended the Harvard Business School’s Leadership in Professional Service Firms program and the executive M.B.A. program at the Amos Tuck School at Dartmouth College. The Board has concluded that Mr. O’Connor should serve on our Board due to his extensive capabilities in public financial accounting, his financial expertise, his experience and knowledge of operational management and strategic planning, and his insight into the operational challenges of a public company finance department. In addition, this experience qualifies Mr. O’Connor as an “audit committee financial expert.”

Joseph P. Pellegrino, Jr. has served as our Chief Financial Officer ~~concluded that,~~since 2007 and as ~~of such date, our disclosure controls and procedures were effective at reasonable assurance levels.~~

~~Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined inRules 13a-15(f)~~ ~~and15d-15(f)~~ ~~under the Exchange Act) to provide reasonable assurance regarding the reliability~~a member of our ~~financial reporting and the preparation~~Board of ~~financial statements for external purposes~~Directors since October 2016. Mr. Pellegrino joined us as our Executive Vice President, Finance, in ~~accordance with GAAP.~~

~~Management assessed the effectiveness~~2005. From 2003 to 2004, he served as temporary Chief Executive Officer of ~~our internal controls over financial reporting as of December 31, 2017. Management based its assessment on criteria established in the~~~~Internal Control~~ ~~— Integrated Framework~~~~issued~~Affordable Luxuries, Inc., a direct marketing company. From 1997 to 2003, Mr. Pellegrino worked at Zoots, Inc., a consumer services company founded by the ~~Committee~~founders of ~~Sponsoring Organizations~~Staples, Inc., where most recently he served as Senior Vice President of Operations. Previously, Mr. Pellegrino built and sold a regional mall-based specialty retailing company. Mr. Pellegrino has also served as an investment banking analyst at Lehman Brothers, as part of their mergers and acquisitions group. Mr. Pellegrino is a director of Access Vascular, Inc., a medical device company focused on venous access devices. Mr. Pellegrino received an A.B. in Economics from Harvard College and an M.B.A. from the Treadway Commission (2013 Framework). Management’s assessment included evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.

~~Based on this assessment under the criteria set forth in the~~~~Internal Control~~ ~~— Integrated Framework~~~~, management~~Harvard Business School. The Board has concluded that Mr. Pellegrino should serve on our ~~internal control over financial reporting was effective as~~Board due to his extensive knowledge of ~~December 31, 2017.~~

Our internal control over financial reporting as of December 31, 2017 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their respective report which is included herein.

~~There was no change in~~ our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2017 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

Notwithstanding the foregoing, our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,business, his responsibility within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

We have audited the internal control over financial reporting of LeMaitre Vascular, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in the 2013~~Internal Control—Integrated Framework~~ issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013~~Internal Control—Integrated Framework~~ ~~issued by COSO.~~

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2017, and our report dated March 9, 2018 expressed an unqualified opinion on those financial statements.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basisorganization for our ~~opinion.~~

~~Definition~~finances and ~~limitations of internal control over~~his operational and financial ~~reporting~~

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordanceexperience gained with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~The information responsive to this item is incorporated by reference herein from the information to be contained in the sections entitled “Directors,~~Other Executive Officers and Key Employees~~” “Corporate Governance,”~~

Trent G. Kamke has served as our Senior Vice President, Operations since 2005. Mr. Kamke joined us in 1997 as Quality Assurance Manager. From 1999 to 2005, Mr. Kamke served as our Vice President, Operations. Prior to joining us in 1997, Mr. Kamke was employed by Haemonetics Corporation, which designs, manufacturers, and ~~“Meetings~~markets automated blood processing equipment. Mr. Kamke received a B.A. in Physics from Colby College and ~~Committees~~a B.E. from the Thayer School of Engineering at Dartmouth College.

George W. LeMaitre, David B. Roberts and Joseph P. Pellegrino, Jr. are also executive officers of the Company. See “Directors” above for additional information. Our executive officers are appointed by, and serve at the discretion of, our Board of ~~Directors”~~Directors.

Laurie A. Churchill has served as our Senior Vice President and General Counsel since 2016. Ms. Churchill joined us in 2012 as Director of Legal Affairs and was promoted to Vice President and General Counsel in 2014. Prior to joining LeMaitre Vascular, Ms. Churchill served as Assistant General Counsel of Avid Technology, Inc. from 2011 to 2012. From 1999 to 2011, she was an attorney with Ropes & Gray, LLP. Ms. Churchill received a B.A. in English Education from the University of North Carolina at Chapel Hill and a J.D. from New York University School of Law.

Kimberly L. Cieslak has served as our Vice President, Marketing since 2003. Ms. Cieslak joined us in 1998 and was promoted to Director of Marketing in 2001. Prior to joining LeMaitre Vascular, Ms. Cieslak worked in the insurance division of General Electric. Previously, Ms. Cieslak was employed by the law firm Hudson and Co. in London, England. Ms. Cieslak received a B.A. in Economics from the University of Michigan.

Ryan H. Connelly has served as our Vice President, Research and Development since 2011. Mr. Connelly joined us in 2002 and has held the positions of R&D Engineer, Senior R&D Engineer, and Co-General Manager of our Phoenix facility during that time. In 2006, Mr. Connelly was promoted to Director, Research and Development. From 2001 to 2002, Mr. Connelly worked as a research and development engineer at Panduit Corporation, a network and electrical solutions provider. Mr. Connelly received a B.S. in Mechanical Engineering and an M.S. in Manufacturing Engineering from Boston University.

Giovannella Deiure has served as our Vice President, Sales - Southern Europe since May 2019. Ms. Deiure joined us in 2009 as our Country Manager, Italy and was promoted to Director, Italy and Iberia in 2014. In 2018 she assumed responsibility for France as well, with the title Director, Southern Europe. From 2004 to 2009, she served as Sales and Marketing Manager of Arrow Italy S.p.A. From 2001 to 2004 she worked in the Business Unit of Cardiac Surgery Business of Medtronic Italia S.p.A. in a variety of marketing and sales positions. Previously she was employed by DePuy Italia S.r.L in the marketing department. Ms. Deiure received a degree in Electronic Engineering from Politecnico of Milan University and an M.B.A. from the same institution.

Helen Goulding has served as our Director, Sales - Northern Europe since October 2019. Ms. Goulding joined us in 2006 and has held the positions of UK Sales Representative, UK Sales Manager and Sales Director UK/Benelux. Prior to joining LeMaitre Vascular, Ms. Goulding worked for Edwards Lifesciences in the Vascular and Endovascular market.

Andrew Hodgkinson has served as our Senior Vice President, Clinical, Regulatory and Quality Affairs since 2013. Mr. Hodgkinson joined us in 2000 as Production Supervisor and was promoted to Production Manager in 2003, Director, Manufacturing in 2006, Director, Clinical Affairs in 2007, Vice President, Clinical and Regulatory Affairs in 2008 and Vice President, Clinical, Regulatory and Quality Affairs in 2011. Mr. Hodgkinson received a B.A. in Economics from the Whittemore School of Business and Economics at the University of New Hampshire.

Chance Kriesel has served as our Vice President of Sales, The Americas, since November 2018. Mr. Kriesel joined us in 2003 and has held the positions of Sales Representative, Regional Sales Manager and Director of Sales—West. Prior to joining LeMaitre Vascular, Mr. Kriesel was a Captain in the U.S. Army and a UH60 Blackhawk pilot responsible for leading various teams as an operations officer, logistics officer and personnel officer. Following his service in the military, Mr. Kriesel worked at Ethicon Endo-Surgery. Mr. Kriesel has a BS in Environmental Engineering from the United States Military Academy at West Point and an MBA in Health Care Management from the University of Phoenix.

Roli Kumar-Choudhury has served as our Vice President, Quality Affairs since December 2019. Ms. Kumar-Choudhury joined us in 2002 and has held the positions of Quality Engineer, Quality Supervisor, Quality Manager and Director, Quality Assurance. Ms. Kumar-Choudhury received a B.E. in Biomedical Engineering from Vanderbilt University, an M.S. in Biomedical Engineering from the University of Connecticut and an M.B.A. from the University of Massachusetts – Isenberg School of Management.

Stéphane Maier has served as our Vice President, EMEA Operations since January 2018. Mr. Maier joined us in 2000 and held the position of Manager, European IT, in our ~~2018 definitive proxy statement (2018 Definitive Proxy Statement)~~French facility. In 2003, he joined our European headquarters in Germany as Manager, International IT. Mr. Maier was promoted to Director, International IT and Administration in 2011, then to Director, International Operations in 2013. From 1999 to 2000, he worked as IT project manager for ~~the 2018 annual meeting of stockholders to be filed with the Securities~~Total S.A. headquarters in Paris, France. Mr. Maier received a Diploma in Sales and ~~Exchange Commission within 120 days after the fiscal year ended December 31, 2017.~~

~~The information required by this item concerning compliance with Section 16(a) of the Exchange Act is incorporated herein by reference~~Administration and a technical degree in IT Management from the IPI Colmar, France.

Jonathan W. Ngau has served as our Vice President, Information Technology since 2003 and previously served as our Director of Information Technology from 2000 to 2003. Since joining us in 1996, Mr. Ngau has implemented and managed all information ~~contained~~technology, business management software solutions, and network security for all of LeMaitre Vascular’s facilities. Mr. Ngau received a B.A.B.S. in Marketing and Information Systems from Boston University.

Jacob Petersen has served as our Vice President, Asia-Pac since October 2018, at which time he established our Asia-Pac headquarters in Singapore. Prior to joining LeMaitre Vascular, Mr. Petersen was employed in the ~~section entitled “Section 16(a) Beneficial Ownership Reporting Compliance”~~Surgical Workflow division of Getinge from 2007 to 2018, most recently in the positon of Senior Director from 2016 to 2018. Mr. Petersen has 13 years working experience in Asia-Pac in the Philippines, Thailand and Singapore. Mr. Petersen received an M.A. in International Business and Modern Languages from University of Southern Denmark.

James Russell has served as our ~~2018 Definitive Proxy Statement.~~Director, Operations since 2017. Mr. Russell joined us in 2004 and has held the positions of Buyer/Planner and Materials Manager during that time. In 2010, Mr. Russell was promoted to Operations Manager. From 1999 to 2002 Mr. Russell worked as a Materials Planner for Pacific Scientific a Danaher Corporation and from 2002 to 2004, worked as a Buyer/Planner for CMC Torque Systems, a motion control systems provider. Mr. Russell received a B.A. in Business Administration from Merrimack College.

Xiang Zhang has served as our Vice President, Regulatory Affairs since 2016. He first joined us as Regulatory Affairs Specialist in 2009 and was promoted to Senior Regulatory Specialist in 2010. From 2011 to 2012, he served as Director of ~~Ethics~~Regulatory Affairs at Smith & Nephew. He rejoined our Company in 2012 as Director of Regulatory and was promoted to Global Director of Regulatory in 2014. Mr. Zhang received a Ph.D. in Chemistry from Rutgers University in 2001.

Certain documents relating to our corporate governance, including our Code of Business Conduct and Ethics, which is applicable to our directors, officers, and employees, and the charters of the Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee of our Board of Directors, are available on our website athttp://www.lemaitre.com. We intend to disclose substantive amendments to or waivers (including implicit waivers) of any provision of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions, by posting such information on our website available athttp://www.lemaitre.com.Our website is not incorporated into this Amendment No. 1.

There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since we last provided disclosure about procedures to be followed by security holders in submitting recommendations for nominees to the Board.

The Audit Committee of the Board of Directors was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act, to oversee our corporate accounting and financial reporting processes and audits of our financial statements. The Audit Committee currently consists of Messrs. Jasinski, O’Connor and Roush. Mr. O’Connor serves as chairperson of the Audit Committee. The Board reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of our Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A)(i) and (ii) of the Nasdaq listing standards). The Board has also determined that each member of the Audit Committee is financially sophisticated and is able to read and understand consolidated financial statements and that Mr. O’Connor is an “audit committee financial expert” as defined in SEC rules. Stockholders should understand that this designation is a disclosure requirement of the SEC related to Mr. O’Connor’s experience and understanding with respect to certain accounting and auditing matters. The designation does not impose upon Mr. O’Connor any duties, obligations, or liabilities that are greater than those generally imposed on him as a member of the Audit Committee and the Board of Directors, and his designation as audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations, or liabilities of any other member of the Audit Committee or the Board of Directors.

The ~~information responsive~~Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis that appears below. Based on such review and discussion with management, the Compensation Committee recommended to ~~this item~~the Board of Directors that the Compensation Discussion and Analysis be included in LeMaitre Vascular’s Annual Report on Form 10-K for the year ended December 31, 2019.

This report shall not constitute “soliciting material,” shall not be deemed “filed” with the SEC and is not to be incorporated ~~herein~~ by reference ~~from~~into any of our other filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate this report by reference therein.

This Compensation Discussion and Analysis (“CD&A”) explains our compensation philosophy, policies and practices for our executive officers, who are referred to in this CD&A and in the following tables as our “named executive officers.” Our named executive officers for 2019 are:

Messrs. LeMaitre, Pellegrino, Roberts and Kamke were our only executive officers for the fiscal year ended December 31, 2019.

This CD&A should be read in conjunction with the compensation tables below, which provide a detailed view of compensation paid to our named executive officers for the fiscal year ended December 31, 2019.

We have designed our executive compensation program to attract, retain, and motivate highly qualified executives and to align their interests with the interests of our stockholders. The ultimate goal of our program is to increase stockholder value by providing executives with appropriate incentives to achieve our business objectives. We seek to achieve this goal through a program that rewards executives for superior performance, as measured by both financial and non-financial factors, and includes major compensation components that are linked to the achievement of certain operational, financial, product development, and clinical objectives that are aimed at increasing both long-term and short-term stockholder value.

The Compensation Committee’s executive compensation philosophy embraces three core objectives:

The Compensation Committee of our Board of Directors typically determines the annual cash compensation for officers at a regular meeting held in the quarter preceding the start of the fiscal year or in the first quarter of a fiscal year for that year. Generally, the Compensation Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. In undertaking this process, the Compensation Committee considers the degree to which each executive’s entire compensation package should be variable and based on either personal performance or company performance. For executives other than our Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Committee by our Chief Executive Officer, who provides significant input on the compensation of the other executive officers and his other direct reports. In the case of our Chief Executive Officer, the evaluation of his performance is conducted by the Compensation Committee, which determines any adjustments to his compensation. For all executives, as part of its deliberations, the Compensation Committee may review and consider, as appropriate, materials such as financial reports and projections, operational data, total compensation that may become payable to executives in various hypothetical scenarios, executive stock ownership information, company stock performance data, analyses of historical executive compensation levels, current company-wide compensation levels and external compensation surveys. In addition to external data, the Compensation Committee considers internal assessments, including the assessment of the company’s performance, assessments of each executive officer’s performance, significant changes in roles and responsibilities and retention risk.

In 2016, the Compensation Committee engaged an outside consultant, J. Thelander Consulting, Inc. (Thelander), as a compensation consultant. The Compensation Committee directly engaged Thelander to review the compensation of our officers in view of market trends and peer companies’ compensation practices and to make recommendations about the compensation, in both cash and equity, of our officers in 2016 and 2017. Thelander provided no other services to us in 2016 (and no services to us in 2017 2018 or 2019), and our Compensation Committee did not identify any conflicts of interest with Thelander under relevant SEC rules.

At our 2019 Annual Meeting of Stockholders, our stockholders indicated their strong support of our executive compensation with more than 99% of the votes cast in favor of our executive compensation program. The Board of Directors and the Compensation Committee view this strong support as indicating general approval of our approach to executive compensation, and as such we did not make any substantial changes to our executive compensation arrangements and programs as a result of the vote.

In 2019, we reported strong sales of $117.2 million, representing 11% growth over 2018. We reported a decline in operating income and net income in 2019 versus 2018 due to one-time gains recorded in 2018 associated with the divestiture of our Reddick cholangiogram catheter and Reddick-Saye screw product lines and the acquisition of the polyester vascular graft and certain other product lines of Cardial, a subsidiary of Becton, Dickinson and Company. Due to their non-recurring nature, these gains were taken into account when setting goals for certain of our named executive officers for 2019.

As of December 31, 2019, the average tenure of our named executive officers was approximately 21 years, demonstrating our ability to retain top talent, even in a competitive hiring environment in 2019. We believe that our compensation program has been instrumental in securing and retaining the services of our executives and in driving our strong performance.

In addition to the compensation components listed above, our executive officers are eligible to participate in the same comprehensive benefits program offered to our broad-based employee population. Our benefits include a health plan, dental plan, 401(k) plan with a company matching contribution, health savings account and the opportunity to enroll in short term disability, long term disability, vision and life insurance plans.

The compensation components referenced above are described in more detail below.

Our named executive officers are eligible for the same annual increases in base salary as all of our other employees. For 2019, the Compensation Committee approved a 4% increase in total compensation (base salary plus variable compensation) for company employees. Managers are given discretion to allocate a higher percentage increase to one employee as long as they offset that increase by giving other employee(s) increases lower than the target percentage. The percentage increases in base salary for 2019 (compared to their base salary in effect at the end of 2018) for our named executive officers were between 0% and 5.5%.

Under our Management Incentive Compensation Plan, or our bonus plan, annual cash bonus objectives are linked to certain operational, financial, product development, regulatory and quality goals that have been approved by the Compensation Committee. Frequently these align with our company “planks,” which are our key corporate performance objectives for the fiscal year. We seek to ensure that each objective is directly linked to increasing either short-term or long-term stockholder value. These key performance objectives are intended to be ~~contained~~directional in nature and challenging to achieve in the aggregate, as corporate resource constraints may not always permit the necessary investment to achieve all of the objectives in a single year.

The bonus plan compensation of many of our senior officers is based, in part, on overall company financial performance metrics.

For Messrs. LeMaitre, Pellegrino and Roberts, those metrics were the achievement of target levels of net sales of $113.3 million, operating income of $22.5 million and net income of $16.9 million.

Mr. Kamke’s target bonus opportunity, however, was tied to operational metrics instead of company financial performance metrics in view of his position as Senior Vice President, Operations.

A bonus was separately payable for each financial performance metric; thus, our failure to reach the minimum threshold for one performance metric would result in no bonus payable for that metric, but could still result in a bonus payable for other performance metrics, presuming we reached the minimum threshold performance for such metrics. Additionally, these bonuses are earned based upon a continuously functioning, sliding scale; thus, failure to reach the targeted performance level could still result in a lesser bonus payable, provided that a certain minimum threshold had been achieved. Similarly, exceeding the targeted performance level could result in a greater bonus payable. In 2019, our net sales and our net income exceeded the target amounts set forth above resulting in payouts higher than plan for those metrics, and our operating income was lower than the target amount set forth above, resulting in lower payouts to our named executive officers based on that metric. For purposes of determining bonus achievement, sales, acquisition-relates expense and costs of goods sold in each case attributable to products acquired in 2019 were excluded.

The remaining percentage of each named executive officer’s bonus opportunity for 2019 was tied to the achievement of individual objectives. Notwithstanding that the objectives are individualized, in establishing those objectives, we seek to maximize the performance of our executive officers in furthering Company planks. Individual performance measures for 2019 cash bonuses varied in scope and subject matter based on each named executive officer’s department and area of functional responsibility.

Target cash bonuses under the Management Incentive Compensation Plan for each of the named executive officers for 2019 are set forth in the table below. Additionally, each named executive officer was provided the opportunity to earn additional amounts by way of performance beyond targeted performance expectations.

Amounts earned pursuant to our Management Incentive Compensation Plan by our named executive officers are reflected in the “Non-Equity Incentive Plan Compensation” payments column in the Summary Compensation Table.

The Compensation Committee typically makes annual equity grants to our executive officers. These equity grants vest in equal annual installments over a period of five years, subject to continued employment.

Our Board approved annual equity awards to the named executive officers in the fourth quarter of 2019. The value of the annual equity awards made to our named executive officers in 2019 appears below:

Each stock option award was intended to be an incentive stock option to the maximum extent permitted by applicable laws and regulations, with a per share exercise price equal to the closing price of our common stock on Nasdaq on the date of grant, and subject to a seven-year term except in the case of Mr. LeMaitre, whose incentive stock options have a per share exercise price equal to 110% of the closing price of our common stock on Nasdaq on the date of grant and are subject to a five-year term. All non-qualified stock options, including those granted to Mr. LeMaitre, have a per share exercise price equal to the closing price of our common stock on Nasdaq on the date of grant and are subject to a seven-year term. Each stock option and restricted stock unit award vests in equal annual installments over a period of five years.

In 2017, the Compensation Committee adjusted the proportion of fixed and variable recommended pay for the top three employee levels in the company. This change impacted the named executive officers as well as other employees that fall within our top three employee levels. The increase to variable pay percentage is in line with one of our core objectives in executive pay philosophy, paying for performance. The current structure puts more emphasis on the variable pay for named executive officers.

We are party to employment agreements with Messrs. LeMaitre, Pellegrino and Roberts. These agreements do not contain ongoing contractual obligations relating to annual salary and bonus. Such employment agreements do contain ongoing severance arrangements, the material terms of which are described in the section ~~entitled “Compensation~~titled “Severance Arrangements Pursuant to Agreements” below.

The following table sets forth summary information concerning the compensation paid or earned for services rendered to us in all capacities during the years ended December 31, 2019, December 31, 2018 and December 31, 2017, to our Chief Executive Officer, Chief Financial Officer and each of ~~Executive Officers~~the other two most highly compensated persons serving as our executive officers (collectively, the “named executive officers”).

The following table sets forth information concerning non-equity incentive plan awards and ~~Directors” in~~grants of our ~~2018 Definitive Proxy Statement.~~common stock and stock options made to our named executive officers during the fiscal year ended December 31, 2019.

The following table presents information regarding outstanding option and stock awards held by our named executive officers as of December 31, 2019.

The following table provides certain information regarding option exercises and stock vested during the fiscal year ended December 31, 2019 with respect to our named executive officers.

Pursuant to agreements with Messrs. LeMaitre, Pellegrino and Roberts, we have severance arrangements as follows:

Pursuant to the terms of his employment agreement, dated October 10, 2005, Mr. LeMaitre is an at-will employee and either we or Mr. LeMaitre may terminate his employment at any time. If Mr. LeMaitre terminates his employment for good reason, as defined in the agreement, or if we terminate his employment without cause, as defined in the agreement, he is entitled to (i) a lump sum payment equivalent to two weeks of his then-current base salary for each completed twelve-month period of service as of the date of termination, but in no event to exceed 52 weeks of such base salary and (ii) for the same period, our payment of our customary share of premiums for Mr. LeMaitre’s health insurance coverage. Mr. LeMaitre’s severance payment is conditioned upon his delivery of a signed non-disparagement agreement and release of known and unknown claims related to his employment, his resignation as an officer and director, and his delivery to us of all company property in his possession. Additionally, if Mr. LeMaitre is at any time found to have breached the terms of his obligations agreement, which includes non-competition and non-solicitation covenants that continue for two years following Mr. LeMaitre’s termination, then Mr. LeMaitre must reimburse us for any severance payments made after the first date on which Mr. LeMaitre’s breach occurred.

Pursuant to the terms of his employment agreement, dated April 20, 2006, Mr. Pellegrino is an at-will employee and either we or Mr. Pellegrino may terminate his employment at any time. If we terminate his employment without cause, as defined in the agreement, he is entitled to a lump sum payment equal to the greater of $100,000 or the equivalent of two weeks of base salary for each completed twelve-month period of service as of the date of termination. Mr. Pellegrino’s severance payment is conditioned upon his delivery of a signed non-disparagement agreement and release of known and unknown claims related to his employment, his resignation as an officer, and his delivery to us of all company property in his possession. Additionally, if Mr. Pellegrino is at any time found to have breached the terms of his obligations agreement, which includes non-competition and non-solicitation covenants that continue for two years following Mr. Pellegrino’s termination, then Mr. Pellegrino must reimburse us for any severance payments made after the first date on which Mr. Pellegrino’s breach occurred.

Pursuant to the terms of his employment agreement, dated June 20, 2006, Mr. Roberts is an at-will employee and either we or Mr. Roberts may terminate his employment at any time. If we terminate Mr. Roberts’s employment without cause, as defined in the agreement, he is entitled to (i) a lump sum payment equivalent to four weeks of his then-current base salary for each completed twelve-month period of service as of the date of termination, but in no event to exceed 52 weeks of such base salary and (ii) for the same period, our payment of our customary share of premiums for Mr. Roberts’s health insurance coverage. Mr. Roberts’s severance payment is conditioned upon his delivery of a signed non-disparagement agreement and release of known and unknown claims related to his employment, his resignation as an officer and director, and his delivery to us of all company property in his possession. Additionally, we have the option to require that Mr. Roberts remain employed for a 180-day transition period in order to receive the severance payment. If Mr. Roberts is at any time found to have breached the terms of his obligations agreement, which includes non-competition and non-solicitation covenants that continue for two years following Mr. Roberts’s termination, then Mr. Roberts must reimburse us for any severance payments made after the first date on which Mr. Roberts’s breach occurred.

The following tables set forth potential payments payable to our named executive officers under their current employment agreements as at December 31, 2019, upon termination of employment or a change in control of our company.

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the ratio of the annual total compensation of our “median” employee to the annual total compensation of our Chief Executive Officer, George W. LeMaitre, for 2019.

As permitted by SEC rules, we used annual base pay and target bonus as the consistently applied compensation measure to compare the total compensation of our 455 full-time employees (excluding our CEO) as of December 31, 2019 and to identify our median employee. We annualized the base pay and target bonus for any permanent employees who commenced work during 2019 or who were on unpaid leave during the year. Additionally, compensation for employees outside of the U.S. was converted to U.S. dollars. Using this approach, we identified our median employee.

We collected annual total compensation for our median employee for 2019 using the same methodology we used for our named executive officers as disclosed in the Summary Compensation Table above. The annual total compensation of our median employee for 2019 was $75,176, and our CEO’s compensation as reported in the Summary Compensation Table was $1,397,744, resulting in a ratio of 19:1.

This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described above. Given that companies may use a range of methodologies to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.

As a public company subject to Section 304 of the Sarbanes-Oxley Act of 2002, if we are required to restate our financial results as the result of misconduct or due to our material noncompliance with any financial reporting requirements under the federal securities laws, our chief executive officer and chief financial officer may be legally required to reimburse us for any bonus or incentive-based or equity-based compensation they receive. In addition, we will comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and anticipate that we will adopt a compensation recovery policy once final regulations on the subject have been adopted both by the SEC and by the stock exchange upon which our common stock trades.

In support of the Compensation Committee’s oversight of the risks of our compensation policies and practices, management conducted a risk assessment of our compensation policies and practices for 2019, including our executive compensation programs. The primary focus of the assessment was on incentive compensation paid to employees. The Compensation Committee reviewed the assessment, and the Compensation Committee concurred with management’s assessment that our compensation policies and practices are not reasonably likely to have a material adverse effect on our company.

Section 162(m) of the Code generally provides that publicly held companies may not deduct compensation paid to certain of their top executive officers to the extent that such compensation exceeds $1 million per officer in any year. In connection with recently-enacted tax reform legislation, the exemption from the deduction limit under Section 162(m) of the Code for “performance-based compensation” has been repealed, such that compensation paid to our “covered employees” in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain “grandfathered” arrangements in place as of November 2, 2017. We will continue to monitor and review related guidance from the Internal Revenue Service as it becomes available, including as it relates to plans in effect as of an initial public offering. In determining the form and amount of compensation for our named executive officers, the Compensation Committee may continue to consider all elements of the cost of such compensation. While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee may also look at other factors in making its decisions, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the compensation is not deductible by us for tax purposes.

The accounting impact of our executive compensation program is one of many factors that the Compensation Committee considers in determining the size and structure of that program.

The following table sets forth the retainers, other cash fees, and equity compensation received by our non-employee directors for their service during the year ended December 31, 2019.

Employee directors do not receive cash compensation for their service as members of the Board of Directors. During 2019, in accordance with our compensation program for non-employee directors, non-employee directors received an annual retainer for Board membership of $10,000 and an annual retainer for each committee membership of $1,000, except that members of the Audit Committee receive an annual retainer for committee membership of $2,500. The chairmen of our committees receive an annual retainer of $5,000, except that the chairman of the Audit Committee receives an annual retainer of $15,000. Annual retainer payments are pro-rated based upon days of service in the event a non-employee director joins or leaves the Board of Directors during any calendar year. Non-employee directors also receive a fee of $2,500 for each regularly scheduled quarterly Board meeting attended in person, $1,000 for each regularly scheduled quarterly Board meeting attended by telephone or videoconferencing, $500 for each special Board meeting attended either in person or by telephone or videoconferencing, and $500 for each committee meeting attended either in person or by telephone or teleconference. Aggregate cash compensation paid to any non-employee director for any year may not exceed $40,000 without the approval of the Board.

Upon their initial election or appointment to the Board of Directors, non-employee directors receive an option to purchase 20,000 shares of our common stock, subject to vesting in three equal annual installments based upon continued service. In addition, thereafter, each non-employee director receives an option to purchase 7,500 shares of our common stock at the first Board meeting following each annual meeting of our stockholders, provided that he or she has served as a director for at least six months.

All of the directors are reimbursed for out-of-pocket expenses incurred on our behalf, and all of the directors are eligible to participate in the Third Amended and Restated 2006 Stock Option and Incentive Plan on an ad hoc basis from time to time at the discretion of the Board of Directors.

For 2019, the Compensation Committee consisted of Messrs. Jasinski and Thomas (until his death in September 2019). No member of the Compensation Committee is an officer or employee of the Company, and none of our executive officers serve as a director or member of a compensation committee of any entity that has one or more executive officers serving as a member of our Board or Compensation Committee.

The following table sets forth certain information ~~responsive~~regarding beneficial ownership of our common stock as of May 1, 2020:

Unless otherwise indicated below, each person listed below maintains a business address in the ~~section entitled “Security Ownership~~care of ~~Certain Beneficial Owners~~LeMaitre Vascular, Inc., 63 Second Avenue, Burlington, MA 01803 and ~~Management” in our 2018 Definitive Proxy Statement.~~has sole voting and investment power with respect to all shares of common stock owned.

The following table sets forth information regarding our equity compensation plans in effect as of December 31, ~~2017.~~2019. Each of our equity compensation plans is an “employee benefit plan” as defined by Rule 405 of Regulation C of the Securities Act of 1933, as amended.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

The ~~information required responsive~~Company has a written policy that any transaction that would require disclosure under Item 404(a) of Regulation S-K of the rules and regulations of the SEC, with a “related person” must be reviewed and approved or ratified by the Audit Committee and/or the Board of Directors, excluding any director interested in such transaction.

Except as otherwise disclosed below or herein under Item 11, there were no transactions with any of directors, executive officers, holders of more than 5% of our voting securities, or any member of the immediate family of the foregoing persons, since January 1, 2019. George W. LeMaitre, our Chairman of the Board and Chief Executive Officer, is the son of Cornelia W. LeMaitre, who serves as a human resources consultant to ~~this item is incorporated herein~~the Company for a fee of $10,000 per year.

Under The Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s Board of Directors must qualify as “independent,” as affirmatively determined by ~~reference~~the Board of Directors. The Board consults with our counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and us, our senior management and our independent auditors, the ~~information~~Board has affirmatively determined that the following four directors are independent directors within the meaning of the applicable Nasdaq listing standards: Lawrence J. Jasinski, John J. O’Connor, John A. Roush, and Bridget A. Ross. Prior to ~~be contained~~his death in September 2019, Michael Thomas served as an independent member of our Board. In making independence determinations, the ~~sections entitled “Certain Relationships and Related Transactions” and “Corporate Governance” in our 2018 Definitive Proxy Statement.~~Board found that none of these directors had a material or other disqualifying relationship with us.

The ~~information responsive~~following table shows the aggregate fees for professional services rendered by Grant Thornton LLP to ~~this item is incorporated herein~~the Company for the years ended December 31, 2019 and 2018, respectively.

Audit Fees for both years consist of fees for professional services associated with the annual consolidated financial statements’ audit, statutory filings, consents and assistance with, and review of, documents filed with the SEC.

Audit-Related Fees consist of fees for valuation and other reviews in connection with our acquisitions and divestitures undertaken in 2018 and 2019 and were not reported above under “Audit Fees.”

All of the fees referenced in the table above were pre-approved by ~~reference from~~our Audit Committee pursuant to the ~~information~~Pre-Approval Policy described below.

The Audit Committee of the Board of Directors has implemented procedures under our Audit Committee pre-approval policy to ensure that all audit and permitted non-audit services to be ~~contained in~~provided to us have been pre-approved by the ~~sections entitled “Ratification~~Audit Committee (the “Pre-Approval Policy”). Specifically, the Audit Committee pre-approves the use of ~~Independent Registered Public Accounting Firm”~~our independent registered public accounting firm for specific audit and ~~“Additional Information Regarding Our Independent Registered Public Accounting Firm” in~~non-audit services, within approved monetary limits. If a proposed service has not been pre-approved pursuant to the Pre-Approval Policy, then it must be specifically pre-approved by the Audit Committee before it may be provided by our ~~2018 Definitive Proxy Statement.~~

The Audit Committee has determined that the rendering of services other than audit services by our independent registered public accounting firm is compatible with maintaining the principal accountant’s independence.

~~Exhibit~~
~~Number~~

~~Exhibit Description~~

~~Incorporated By~~
~~Reference~~

~~Filed~~
~~Herewith~~

~~Form~~

~~Date~~

~~SEC~~
~~File~~
~~Number~~

~~101.INS~~

~~XBRL Instance Document.~~

~~101.SCH~~

~~XBRL Taxonomy Extension Schema Document.~~

~~101.CAL~~

~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

~~101.DEF~~

~~XBRL Taxonomy Extension Definition Linkbase Document.~~

~~101.LAB~~

~~XBRL Taxonomy Extension Label Linkbase Document.~~

~~101.PRE~~

~~XRBL Taxonomy Extension Presentation Linkbase Document.~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on ~~March 9, 2018.~~

~~KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints George W. LeMaitre and Joseph P. Pellegrino, Jr., and each of them, his true and lawfulattorneys-in-fact~~ and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said~~attorneys-in-fact~~ and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said~~attorneys-in-fact~~ ~~and agents, or either of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.May 20, 2020.

We have audited the accompanying consolidated balance sheets of LeMaitre Vascular, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013~~Internal Control—Integrated Framework~~ ~~issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 9, 2018 expressed an unqualified opinion thereon.~~

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Unless the context requires otherwise, references to LeMaitre Vascular, we, our, and us refer to LeMaitre Vascular, Inc. and our subsidiaries. We develop, manufacture, and market medical devices and implants used primarily in the field of vascular surgery. We also derive revenues from the processing and cryopreservation of human tissues for implantation in patients. We operate in a single segment in which our principal product lines include the following: valvulotomes, balloon catheters, carotid shunts, biologic vascular patches, biologic vascular grafts, radiopaque marking tape, anastomotic clips, remote endarterectomy devices, laparoscopic cholecystectomy devices, vascular grafts, angioscopes, and powered phlebectomy devices. Our offices are located in Burlington, Massachusetts; Fox River Grove, Illinois; Vaughn, Canada; Sulzbach, Germany; Milan, Italy; Madrid, Spain; North Melbourne, Australia; Tokyo, Japan; and Shanghai, China.

Our consolidated financial statements include the accounts of LeMaitre Vascular and the accounts of our wholly-owned subsidiaries, LeMaitre Vascular GmbH, LeMaitre Vascular GK, Vascutech Acquisition LLC, LeMaitre Acquisition LLC, LeMaitre Vascular SAS, LeMaitre Vascular S.r.l., LeMaitre Vascular Spain SL, LeMaitre Vascular Switzerland GmbH, LeMaitre Vascular ULC, LeMaitre Vascular AS, LeMaitre Vascular Pty Ltd, Xenotis Pty Ltd, LeMaitre Vascular, Ltd. and LeMaitre Medical Technology (Shanghai) Co. Ltd. All significant intercompany accounts and transactions have been eliminated in consolidation.

~~Balance sheet accounts of foreign subsidiaries are translated into U.S. dollars atyear-end~~ exchange rates. Operating accounts are translated at average exchange rates for each year. Net translation gains or losses are adjusted directly to a separate component of other comprehensive income (loss) within stockholders’ equity. Foreign exchange transaction gains (losses), substantially all of which relate to intercompany activity between us and our foreign subsidiaries, are included in other income (expense) in the accompanying consolidated statements of operations.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Our estimates and assumptions, including those related to bad debts, inventory and other deferred costs, intangible assets, sales returns and discounts, and income taxes are reviewed on an ongoing basis and updated as appropriate. Actual results could differ from those estimates.

Our revenue is derived primarily from the sale of disposable or implantable devices used during vascular surgery. We sell primarily directly to hospitals and to a lesser extent to distributors, as described below, and, during the periods presented in our consolidated financial statements, entered into consigned inventory arrangements with either hospitals or distributors on a limited basis. With the recent acquisition of the RestoreFlow allograft business, we also derive revenues from the processing and cryopreservation of human tissues for implantation in patients. These revenues are recognized when services have been provided and the tissue has been shipped to the customer, provided all other revenue recognition criteria discussed in the succeeding paragraph have been met.

After the delivery of the product, there is no uncertainty about customer acceptance due to the nature of the product. There is no contingency for acceptance, warranty, or price protection. We do not recognize revenue on consigned sales until the customer notifies us that the products have been used. In order to determine whether collection is reasonably assured, we assess a number of factors, including past transaction history with the customer and the creditworthiness of the customer. If we determine that collection is not reasonably assured, we defer the recognition of revenue until collection becomes reasonably assured, which is generally upon receipt of payment. We provide for product returns at the time revenue is recognized based on our product return history.

Based on these policies, we recognize revenue, net of allowances for returns and discounts, as well as any sales and value added taxes required to be invoiced as products are shipped, based on shipping point terms, or at the time consigned inventory is consumed at which time title passes to customers. We recognize revenue net of allowances for returns and discounts, at the time of shipment of our products to our distributors. Customers returning products are entitled to full or partial credit based on the condition and timing of the return. To be accepted, a returned product must be unopened (if sterile), unadulterated, and undamaged, must have at least 18 months remaining prior to its expiration date, or twelve months for our hospital customers in Europe, and generally be returned within 30 days of shipment. These return policies apply to sales to both hospitals and distributors. The amount of products returned to us, either for exchange or credit, has not been material. Nevertheless, we provide for an allowance for future sales returns based on historical return experience. Our cost of replacing defective products has not been material and is accounted for at the time of replacement.

Research and development costs, principally salaries, laboratory testing, and supplies, are expensed as incurred and also include royalty payments associated with licensed and acquired intellectual property.

~~Shipping and handling fees paid by customers are recorded within net sales, with the related expense recorded in cost of sales.~~

~~Advertising costs are expensed as incurred and are included as a component of sales and marketing expense in the accompanying consolidated statements of operations. Advertising costs are as follows:~~

We consider all highly liquid instruments purchased with maturity dates of 90 days or less to be cash equivalents. Cash and cash equivalents are primarily invested in money market funds. These amounts are stated at cost, which approximates fair value.

~~Our short-term marketable securities areavailable-for-sale~~ ~~securities carried at fair value, with unrealized gains and losses recorded in other comprehensive income.~~

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash equivalents represent highly liquid investments with maturities of 90 days or less at the date of purchase. Credit risk related to cash and cash equivalents are limited based on the creditworthiness of the financial institutions at which these funds are held. We maintain cash balances in several banks. Accounts located in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. Certain of our account balances exceed the FDIC limit. Cash balances held outside the United States totaled approximately $11.8 million as of December 31, 2017.

We write off accounts receivable when they become uncollectible. Such credit losses have historically been within our expectations and allowances. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We review our allowance for doubtful accounts on a monthly basis and all past due balances are reviewed individually for collectability. The provision for the allowance for doubtful accounts is recorded in general and administrative expenses. The following is a summary of our allowance for doubtful accounts and sales returns:

Our financial instruments include cash and cash equivalents, short-term marketable securities, accounts receivable and trade payables. The fair value of these instruments approximates their carrying value based upon their short-term nature or variable rates of interest. Unrealized gains and losses on our short-term marketable securities are recorded in other comprehensive income and were not material to our consolidated financial statements for the year ended December 31, 2017.

~~Inventory and Other Deferred Costs consists of finished products,work-in-process,~~ raw materials and costs deferred in connection with human tissue cryopreservation services of our RestoreFlow allograft business. We value inventory and other deferred costs at the lower of cost or market value. Cost includes materials, labor and manufacturing overhead and is determined using the~~first-in,first-out~~ (FIFO) method. On a quarterly basis, we review inventory quantities on hand and analyze the provision for excess and obsolete inventory based primarily on product expiration dating and our estimated sales forecast, which is based on sales history and anticipated future demand. Our estimates of future product demand may not be accurate, and we may understate or overstate the provision required for excess and obsolete inventory. Accordingly, any significant unanticipated changes in demand could have a significant impact on the value of our inventory and results of operations.

~~Property and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets using straight-line method as follows:~~

Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are capitalized. When assets are retired or disposed, the asset’s original cost and related accumulated depreciation are eliminated from the accounts and any gain or loss is reflected in the statement of operations.

We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. We assess the fair value of assets, including intangible assets, using a variety of methods and are usually performed by an independent appraiser who measures fair value from the perspective of a market participant.

Acquisitions have been accounted for using the acquisition method, and the acquired companies’ results have been included in the accompanying consolidated financial statements from their respective dates of acquisition. Acquisition transaction costs have been recorded in general and administrative expenses, and are expensed as incurred. Allocation of the purchase price for acquisitions is based on estimates of the fair value of the net assets acquired and, for acquisitions completed within the past year, is subject to adjustment upon finalization of the purchase price allocation.

Our acquisitions have historically been made at prices above the fair value of the acquired assets, resulting in goodwill, due to expectations of synergies of combining the businesses. These synergies include use of our existing commercial infrastructure to expand sales of the acquired businesses’ products, use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of our products, and the elimination of redundant facilities, functions and staffing.

~~Contingent consideration for acquisitions is recognized at the date of acquisition, based on the fair value at that date, and thenre-measured~~ ~~periodically through adjustments to net income.~~

We review our long-lived assets (primarily property and equipment and intangible assets) subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Impairment is measured based on the fair market value of the affected asset using discounted cash flows.

Goodwill represents the amount of consideration paid in connection with business acquisitions in excess of the fair value of assets acquired and liabilities assumed. Goodwill is evaluated for impairment annually or more frequently if indicators of impairment are present or changes in circumstances suggest that an impairment may exist. We evaluate the December 31 balance of the carrying value of goodwill based on a single reporting unit annually. We perform an assessment of qualitative factors to determine if it is “more likely than not” that the fair value of our reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform the~~two-step~~ goodwill impairment test. The “more likely than not” threshold is defined as having a likelihood of more than 50 percent. If required, the next step of the goodwill impairment test is to determine the fair value of the reporting unit. The implied fair value of goodwill is determined on the same basis as the amount of goodwill recognized in connection with a business combination. Specifically, the fair value of a reporting unit is allocated to all of the assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination as of the date of the impairment review and as if the fair value of the reporting unit was the price paid to acquire the reporting unit. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. We have determined that no goodwill impairment charges were required for the years ended December 31, 2017, 2016 or 2015.

Other intangible assets consist primarily of patents, trademarks, technology licenses, and customer relationships acquired in connection with business acquisitions and asset acquisitions and are amortized over their estimated useful lives, ranging from 1 to 13 years.

We recognize, as expense, the estimated fair value of stock options to employees which is determined using the Black-Scholes option pricing model. We have elected to recognize the compensation cost of all share-based awards on a straight-line basis over the vesting period of the award. In periods that we grant stock options, fair value assumptions are based on volatility, interest, dividend yield, and expected term over which the stock options will be outstanding. The computation of expected volatility is based on the historical volatility of the company’s stock. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. Historical data on exercise patterns is the basis for estimating the expected life of an option. The expected annual dividend rate was calculated by dividing our annual dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date.

We also issue restricted stock units (RSUs) as an additional form of equity compensation to our employees, officers, and directors, pursuant to our stockholder-approved 2006 Plan. RSUs entitle the grantee to an issuance of stock at no cost and generally vest over a period of time determined by our Board of Directors at the time of grant based upon the continued service to the company. The fair market value of the award is determined based on the number of RSUs granted and the market value of our common stock on the grant date and is amortized to expense over the period of vesting. Unvested RSUs are forfeited and canceled as of the date that employment or service to the company terminates. RSUs are settled in shares of our common stock upon vesting. We may repurchase common stock upon our employees’ vesting in RSUs in order to cover any minimum tax withholding liability as a result of the RSUs having vested.

Share-based compensation charges had in prior years been recorded net of the estimated forfeitures based upon historical forfeiture rates, and was adjusted in subsequent periods to reflect the results of actual forfeitures and vesting. In March 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard that changes the accounting for certain aspects of share-based payments to employees, including a provision allowing companies to make an election to account for award forfeitures as they occur, rather than estimating them at the time of grant. We early-adopted the new guidance in the third quarter of fiscal year 2016, which required us to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. In connection with this early adoption we made the election to account for award forfeitures as they occur, and we recorded a cumulative-effect adjustment to beginning retained earnings of $0.1 million, net of tax. Share-based compensation charges are recorded across the consolidated statement of operations based upon the grantee’s primary function.

In the normal course of business, we are subject to proceedings, lawsuits, and other claims and assessments for matters related to, among other things, patent infringement, business acquisitions, employment, and product recalls. We assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters. We record charges for the losses we anticipate incurring in connection with litigation and claims against us when we conclude a loss is probable and we can reasonably estimate these losses. During the years ended December 31, 2017, 2016 and 2015, we were not subject to any material litigation or claims and assessments.

We account for income taxes under the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred taxes are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The provision for income taxes includes taxes currently payable and deferred taxes resulting from the tax effects of temporary differences between the financial statement and tax bases of assets and liabilities. We maintain valuation allowances where it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in the valuation allowances are included in our tax provision in the period of change. In determining whether a valuation allowance is warranted, we evaluate factors such as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset.

We recognize, measure, present and disclose in our financial statements, uncertain tax positions that we have taken or expect to take on a tax return. We recognize in our financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

~~Our policy is to classify interest and penalties related to unrecognized tax benefits as income tax expense.~~

~~Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances fromnon-owner~~ sources. Other than reported net income, comprehensive income includes foreign currency translation adjustments, which are disclosed in the accompanying consolidated statements of comprehensive income. There were no reclassifications out of comprehensive income for the years ended December 31, 2017 and 2016.

~~Accumulated other comprehensive loss consisted primarily of foreign currency translation adjustment losses of $2.3 million and $4.6 million as of December 31, 2017 and 2016, respectively.~~

We compute basic earnings per share by dividing net income available for common stockholders by the weighted average number of shares outstanding during the year. Except where the result would be anti-dilutive to net income per share, diluted earnings per share has been computed using the treasury stock method and reflects the potential vesting of restricted common stock and the potential exercise of stock options, as well as their related income tax effects.

~~In January 2017, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update, ASU2017-01,~~ which changes the definition of a business for purposes of determining whether a business has been acquired or sold. The amendment is intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard is effective for us beginning January 1, 2018, with early adoption permitted. The adoption of this standard is not expected to have a material impact on our financial statements.

(Topic 606), as amended from time to time, outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new revenue recognition guidance becomes effective for us on January 1, 2018, with early adoption permitted on January 1, 2017. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in the ASU. Our assessment of the impact to our financial statements of adopting this standard is now complete. We engaged external consultants to assist us with our analysis, which included evaluating our standard arrangements with customers, as well as arrangements specific to certain customer bases or product offerings, and reviewing a sample of actual contracts to determine whether there are additional attributes to consider beyond our standard arrangements. We have concluded that adoption of Topic 606 will not have a material impact on our consolidated financial statements. We expect that substantially all of our revenue will continue to be recognized when products are shipped from our premises. However, there will be changes to our revenue recognition accounting policy as well as other disclosures. We have determined that we will use the modified retrospective method of adoption under which the comparative information will not be restated and will continue to be reported under the standard in effect for those periods.

Acquisitions are accounted for using the acquisition method and the acquired companies’ results have been included in the accompanying consolidated financial statements from their respective dates of acquisition. In each case for the acquisitions disclosed below, pro forma information assuming the acquisition had occurred at the beginning of the earliest period presented is not included as the impact is immaterial.

Our acquisitions have historically been made at prices above the fair value of the acquired identifiable assets, resulting in goodwill, due to expectations of synergies that will be realized by combining businesses. These synergies include the use of our existing sales channel to expand sales of the acquired businesses’ products, consolidation of manufacturing facilities, and the leveraging of our existing administrative infrastructure.

The fair market valuations associated with these transactions fall within Level 3 (see Note 13) of the fair value hierarchy, due to the use of significant unobservable inputs to determine fair value. The fair value measurements were calculated using unobservable inputs, primarily using the income approach, specifically the discounted cash flow method. The amount and timing of future cash flows within our analysis was based on our due diligence models, most recent operational budgets, long range strategic plans and other estimates.

On November 10, 2016, we entered into an agreement to acquire the assets of Restore Flow Allografts, LLC, a provider of human vascular tissue processing and cryopreservation services, for an initial purchase price of $12 million, with three additional payments of up to $2 million each ($6 million in total), depending upon the satisfaction of certain contingencies. The first payment of $2 million is due not later than 15 days following the expiration of the 18 month period following the closing date, subject to reductions as specified in the agreement for each calendar month that certain retained employees are not employed by us due to resignation without good reason, or termination for cause, both as defined in the agreement. The portion of this payment that will be paid to retained employees and that is contingent on their continued employment, estimated at $0.9 million, is being accounted for as post-combination compensation expense rather than purchase consideration. The remaining $1.1 million that is payable to~~non-employee~~ investors but that is also contingent on the continued employment of certain retained employees has been accounted for as contingent consideration, at an acquisition-date fair value of $0.9 million. This valuation reflects management’s assessment of the likelihood that the retained employees will remain employed by us, discounted at a rate of 6.1% to account risk inherent in the probability estimate as well as for the time value of money between acquisition date and the payment date. This valuation is being~~re-measured~~ each reporting period until the payment requirement ends, with any adjustments reported in income from operations. For the year ended December 31, 2017, the amount of the adjustment was $0.1 million.

~~There are also two potentialearn-out~~ ~~payments under the agreement. The firstearn-out~~ was calculated at 50% of the amount by which net revenue in the first 12 months following the closing exceeded $6 million, with such payout not to exceed $2 million. This milestone was not met and accordingly no amount was paid out. The second~~earn-out~~ is calculated at 50% of the amount by which net revenue in the second 12 months following the closing exceeds $9 million, with such payout not to exceed $2 million. These earn-outs were accounted for as contingent consideration, at an acquisition-date fair value of $0.1 million for the two earn-outs combined. This valuation was derived by utilizing an option pricing model technique incorporating, among other inputs, management’s forecasts of future revenues, the expected volatility of revenues, and an estimated weighted average cost of capital 14.1% to account for the risk of achievement of the revenue forecasts as well as the time value of money between acquisition date and the payment date.

The RestoreFlow business derives revenue from human tissue preservation services, in particular the processing and cryopreservation of veins and arteries. By federal law, human tissues cannot be bought or sold. Therefore, the tissues we obtain and preserve are not held as inventory, and the costs we incur to procure and process vascular tissues are instead accumulated and deferred. Revenues are recognized for the provision of cryopreservation services rather than product sales.

The acquired assets included intellectual property, permits and approvals, data and records, equipment and furnishings, accounts receivable, inventory, literature, and customer and supplier information. We also assumed certain accounts payable. We accounted for the acquisition as a business combination.

~~The following table summarizes the purchase price allocation as of December 31, 2017:~~

~~The following table reflects the allocation of the acquired intangible assets and related estimated useful lives:~~

~~The weighted-average amortization period of the acquired intangible assets was 10.3 years.~~

On March 18, 2016, we acquired the ProCol biologic vascular graft (“ProCol”) business for $2.7 million from Hancock Jaffe Laboratories, Inc. (HJL) and CryoLife, Inc. (CRY). HJL was the owner and manufacturer of ProCol and CRY was the exclusive distributor of the ProCol graft. CRY also owned an option to purchase the ProCol business, which we acquired from CRY. We bought finished goods inventory and other ProCol related assets from CRY for $2.0 million, which was paid in full at closing. We bought other ProCol assets from HJL for $0.7 million, 50% of which was paid at closing, 25% of which was paid in the quarter ended September 30, 2016 and the remainder of which will be paid within one year of closing. Additional consideration is payable to HJL for a three-year period following the closing, calculated at 10% of ProCol revenues. This additional consideration was initially valued at $0.3 million and is being~~re-measured~~ each reporting period until the payment requirement ends, with any adjustments reported in income from operations. For the year ended December 31, 2017, the amount of the adjustment was not material to our financial statements.

~~Assets acquired included inventory, intellectual property and a related license, the ProCol trade name, customer lists,non-compete~~ ~~agreements and certain equipment and supplies. We did not assume any liabilities. We accounted for the acquisition as a business combination.~~

~~The following table summarizes the purchase price allocation as of December 31, 2017:~~

~~The following table reflects the allocation of the acquired intangible assets and related estimated useful lives:~~

~~The weighted-average amortization period of the acquired intangible assets was 8.6 years.~~

~~In May 2015, we entered into an asset purchase agreement with UreSil, LLC (UreSil) to acquire the production and distribution rights of UreSil’sTru-Incise~~ valvulotome for sales outside the United States for a purchase price of approximately $1.4 million. We paid $1.1 million at the closing and $0.2 million in 2016, and $0.1 million in 2017. We accounted for the acquisition as a business combination. Assets acquired included inventory and intellectual property. We did not assume any liabilities. The purchase accounting is complete.

~~The following table summarizes the purchase price allocation at the date of the acquisition:~~

~~The following table reflects the allocation of the acquired intangible assets and related estimated useful lives:~~

~~Following the May 2015Tru-Incise~~ ~~valvulotome acquisition, we entered into definitive agreements with seven UreSil distributors to terminate their distribution of theTru-Incise~~ ~~valvulotome for aggregate termination fees of $0.2 million. We recorded approximately $0.2 million of intangible assets with a weighted-average amortization period of 3.0 years.~~

In August 2015, we entered into a definitive agreement with Grex Medical Oy (Grex), our distributor in Finland to terminate their distribution of our products, and we began selling direct to hospitals in Finland as of January 1, 2016. The agreement required us to pay approximately $0.2 million in exchange for the purchase of customer lists and a~~non-compete~~ ~~agreement.~~

~~In July 2015, we entered into an asset sales agreement with Merit Medical Ireland Limited to sell our inventory, intellectual property, and customer lists associated with The UnBalloonnon-occlusive~~ modeling catheter product line for $0.4 million which was recognized as a gain on divestiture in the third quarter of 2015. During the year ended December 31, 2014, we had recognized an impairment charge of $0.2 million on The UnBalloon~~non-occlusive~~ ~~modeling catheter product line. Additionally, in 2014 we recognized a $0.3 million charge to cost of sales related to thenon-occlusive~~ ~~modeling catheter inventory.~~

~~We held inventory on consignment of $1.4 million and $1.1 million as of December 31, 2017 and 2016, respectively.~~

In connection with our recent acquisition of the RestoreFlow allograft business, other deferred costs include costs incurred for the preservation of human vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending release to implantable status. By federal law, human tissues cannot be bought or sold. Therefore, the tissues we preserve are not held as inventory, and the costs we incur to procure and process vascular tissues are instead accumulated and deferred. These costs include fixed and variable overhead costs associated with the cryopreservation process, including primarily direct labor costs, tissue recovery fees, inbound freight charges, indirect materials and facilities costs. General and administrative expenses and selling expenses associated with the provision of these services are expensed as incurred.

These assets are being amortized over useful lives ranging from 1 to 13 years. The weighted-average amortization period for these intangibles as of December 31, 2017, is 8.0 years. Amortization expense is included in general and administrative expense and is as follows:

~~Estimated amortization expense for each of the five succeeding fiscal years, based upon the intangible assets at December 31, 2017, is as follows:~~

We conduct the majority of our operations in leased facilities, which are accounted for as operating leases. Certain leases include renewal options. In addition, we lease automobiles and equipment under operating leases. There were no assets held under capital leases at December 31, 2017 and 2016.

~~At December 31, 2017, the minimum rental commitments under allnon-cancelable~~ ~~operating leases with initial or remaining terms of more than one year, for each of the following fiscal years, are as follows:~~

As part of our normal course of business, we have purchase commitments to purchase $1.3 million of inventory through 2019. The purchase commitments for inventory are to be used in operations over the normal course of business and do not represent excess commitments or loss contracts.

~~Certain of our foreign subsidiaries are included in the U.S. tax return as branches but are included as foreign for purposes of the table above.~~

We have reviewed the tax positions taken, or to be taken, in our tax returns for all tax years currently open to examination by a taxing authority. As of December 31, 2017, the gross amount of unrecognized tax benefits exclusive of interest and penalties was $0.5 million, which may increase within the twelve months ending December 31, 2018. We remain subject to examination until the statute of limitations expires for each respective tax jurisdiction. The statute of limitations will be open with respect to these tax positions through 2025. A reconciliation of beginning and ending amount of our unrecognized tax benefits is as follows:

~~We elected to early adopt ASU2016-09~~ during the third quarter of 2016. Consequently, we recorded excess tax benefits related to certain stock option exercises of $0.3 million and $3.7 million in 2016 and 2017 respectively. In 2015, these excess benefits were recorded to additional~~paid-in~~ ~~capital.~~

In 2015, we released approximately $0.4 million of valuation allowances on certain deferred assets associated with state research and development credits. In 2016, we released approximately $0.3 million of valuation allowances on deferred assets in Spain and Switzerland. In 2015 and 2016, our assessment considered evidence such as current profitability, utilization of certain available tax assets and liabilities, and projected future earnings. Based on this evidence, we concluded that it was more likely than not that we would generate sufficient~~pre-tax~~ income in future periods to utilize all of these deferred tax assets for which the valuation allowance was removed. In 2017, we increased our valuation by a net $0.2 million mainly attributable to Massachusetts credit carryforwards.

As of December 31, 2017, we have provided a valuation allowance of $2.0 million for deferred tax assets primarily related to Australian net operating loss and capital loss carry forwards and Massachusetts tax credit carry forwards that are not expected to be realized. The valuation allowance against our deferred tax assets may require adjustment in the future based on changes in the mix of temporary differences, changes in tax laws, and operating performance.

Realization of our deferred tax assets is dependent on our generating sufficient taxable income in future periods. Although we believe it is more likely than not that future taxable income will be sufficient to allow us to

recover substantially all of the value of our deferred tax assets remaining after we apply the valuation allowances, realization is not assured and future events could cause us to change our judgment. In the event that actual results differ from our estimates, or we adjust these estimates in the future periods, further adjustments to our valuation allowance may be recorded, which could materially impact our financial position and net income (loss) in the period of the adjustment.

As of December 31, 2017, we have net operating loss carryforwards in Australia of $2.3 million that do not expire, in France of $2.9 million that do not expire, in Spain of $1.1 million that do not expire, in Italy of $0.3 million that do not expire, in Sweden of $0.1 million that do not expire, in Norway of $0.1 million that do not expire and in Switzerland of $11,000 that begin to expire in 2021. We have a capital loss carryforward in Australia of $3.9 million that does not expire. We also have state tax credit carryforwards of approximately $1.3 million that are available to reduce future tax liabilities, which begin to expire in 2020, or can be carried forward indefinitely.

The Tax Cuts and Jobs Act (the Tax Act) was signed into law on December 22, 2017. The Tax Act changed many aspects of U.S. corporate income taxation and included reduction of the corporate income tax rate from 35% to 21%, implementation of a territorial tax system, and imposition of a tax on deemed repatriated earnings of foreign subsidiaries (the Transition Tax). Accounting for the income tax effects of the Tax Act which impact our current year tax provision has been estimated and included in our financial statements as of December 31, 2017. As a result, we recorded $0.6 million in tax expense related to the Transition Tax and recognized $1.0 million in tax benefit related to the remeasurement of deferred taxes to the 21% tax rate. In 2018, we may identify adjustments to our estimated tax provision while preparing the 2017 U.S. tax return, finalizing foreign earnings and profits calculations, or taking into account additional guidance issued by the IRS. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118.

We historically reinvested all the undistributed earnings of our international subsidiaries. With the enactment of the Tax Act, our undistributed foreign earnings were subject to the Transition Tax. As a result, we recognized a~~one-time~~ tax expense in the amount of $0.6 million. As of December 31, 2017, we had cash and cash equivalents of $19.1 million, of which $8.6 million was held by our international subsidiaries. We plan to keep these amounts permanently reinvested overseas. If these funds were repatriated, we would be required to accrue and pay additional U.S. tax (if any) and applicable~~non-U.S.~~ ~~taxes. It is not practicable to estimate the amount of deferred tax liability associated with the hypothetical repatriation of undistributed earnings.~~

~~A reconciliation of the Federal statutory rate to our effective tax rate is as follows:~~

In 2016 the Internal Revenue Service completed an audit of our 2013 and 2014 U.S. federal tax returns. As a result of the audit we paid $0.2 million in additional federal income taxes. Additionally, the adjustment settled on for this audit resulted in an additional $0.2 million increase to our uncertain tax provisions for a state carryforward. We are not currently under audit in any other tax jurisdictions.

~~As of December 31, 2017, a summary of the tax years that remain subject to examination in our most significant tax jurisdictions are:~~

Our Certificate of Incorporation, as amended and restated from time to time, authorizes the issuance of up to 37,000,000 shares of common stock and up to 3,000,000 shares of undesignated preferred stock.

Under the terms of our certificate of incorporation, our board of directors is authorized to issue shares of the preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Currently, we have no shares of preferred stock outstanding.

In May 2006 we approved a 2006 Stock Option and Incentive Plan (as subsequently amended, the 2006 Plan), which became effective upon our initial public offering. In 2010 we amended the 2006 Plan to increase the aggregate pool of available shares to 3,000,000 of common stock, and in 2015 the 2006 Plan was amended to increase the aggregate pool to 5,500,000 shares. The 2006 Plan allows for granting of incentive stock options,~~non-qualified~~ stock options, stock appreciation rights, RSUs, unrestricted stock awards, and deferred stock awards to our officers, employees, directors, and consultants. Incentive stock options are required to be issued at not less than fair market value at the date of the grant and generally vest over four or five years. The term of the options is determined by our Board of Directors but in no event will exceed ten years from date of grant. In connection with the adoption of the 2006 Plan, no further option grants were permitted under any previous stock option plans and any expirations, cancellations, or terminations under the previous plans are available for issuance under the 2006 Plan. We may satisfy awards upon exercise of stock options or RSUs with either newly issued shares or treasury shares. The total number of shares currently authorized for the 2006 Plan is 7,118,003 shares, of which 1,506,797 remain available for grant as of December 31, 2017.

~~We have computed the fair value of employee stock options using the following weighted average assumptions:~~

~~A summary of option activity as of December 31, 2017 and the year then ended is presented below:~~

~~The fair values of the RSUs that vested during 2017, 2016, and 2015 were $1.9 million, $0.8 million, and $0.7 million, respectively.~~

~~We repurchase shares of our common stock in order to cover any minimum tax withholding liability associated with RSU vestings. A summary of our repurchases is as follows:~~

~~The components of stock-based compensation expense included in the consolidated statements of operations are as follows:~~

~~Stock-based compensation is included in our statements of operations as follows:~~

General and administrative stock-based compensation expense for 2017 includes a charge of $0.5 million related to a stock option modification associated with the departure of our President of International Operations.

We expect to record the unamortized portion of share-based compensation expense of $8.3 million for existing stock options and RSUs outstanding at December 31, 2017, over a weighted-average period of 4.0 years.

We offer a 401(k) profit-sharing plan (the Plan) covering eligible U.S. employees to make tax deferred contributions, a portion of which are matched by us. We may make discretionary profit sharing contributions to the Plan in an amount determined by our Board of Directors. Our contributions vest ratably over six years of employment and amounted to approximately $0.2 million, $0.1 million and $50,000 for 2017, 2016 and 2015, respectively.

The FASB establishes standards for reporting information regarding operating segments in financial statements. Operating segments are identified as components of an enterprise that engage in business activities for which separate, discrete financial information is available and is regularly reviewed by the chief operating decision-maker in making decisions on how to allocate resources and assess performance. We view our operations and manage our business as one operating segment. No discrete operating information is prepared by us except for sales by product line and operations by legal entity for local reporting purposes.

Most of our revenues are generated in the United States, Germany, and other European countries, Canada, the United Kingdom and Japan, and substantially all of our assets are located in the United States. Net sales to unaffiliated customers by country were as follows:

~~The fair value accounting guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:~~

~~Level 1 — Quoted prices in active markets for identical assets or liabilities.~~

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

~~Level 1 assets being measured at fair value on a recurring basis as of December 31, 2017 included our short-term investment mutual fund account.~~

~~We had no Level 2 assets being measured at fair value on a recurring basis as of December 31, 2017.~~

As discussed in Notes 1 and 2, several of our acquisition-related assets and liabilities were measured using Level 3 techniques. During 2016, we recorded contingent liabilities associated with our acquisitions of the RestoreFlow allograft and ProCol biologic graft businesses. In the case of the Restore Flow allograft acquisition, the agreement included the potential for us to pay up to $5.1 million of additional consideration, with $1.1 million contingent on the continued employment by LeMaitre of certain retained employees, and another $4.0 million contingent on the achievement of specified levels of revenues in the first 12 and 24 months following the acquisition date. This additional consideration was initially valued in total at $1.0 million and is being~~re-measured~~ each reporting period until the payment requirement ends, with any adjustments reported in income from operations. The amount attributable to the first 12 months of revenue following the acquisition date was not paid as the associated revenue metric was not achieved. In the case of ProCol, additional consideration is payable to the former shareholders for a three-year period following the closing, calculated at 10% of ProCol revenues. This additional consideration was initially valued at $0.3 million and is being~~re-measured~~ each reporting period until the payment requirement ends, with any adjustments reported in income from operations. These arrangements are described more fully in Note 2. The following table provides a rollforward of the fair value of these liabilities, as determined by Level 3 unobservable inputs including management’s forecast of future revenues for these acquired businesses, as well as, in the case of the Restore Flow allograft acquisition, management’s estimate of the likelihood of continued employment of certain retained employees.

   Year ended December 31,
   2017    2016
   (in thousands)
Beginning balance
   $ 1,320    $ —
Additions
   —      1,301
Payments
   (126 )    (68 )
Change in fair value included in earnings
   106    87




Ending balance
   $ 1,300    $ 1,320

~~14. Quarterly Financial Data (unaudited)~~

   Three months ended
2017
   March 31    June 30    September 30    December 31
   (in thousands, except per share data)
Total net sales
   $ 24,139    $ 25,753    $ 24,822    $ 26,153
Gross profit
   17,353    17,516    17,577    18,251
Income (loss) from operations
   4,193    5,536    5,053    6,321
Net income
   3,219    4,632    5,042    4,284
Earnings per share

Basic
   $ 0.17    $ 0.25    $ 0.26    $ 0.22
Diluted
   $ 0.16    $ 0.23    $ 0.25    $ 0.21
   Three months ended
2016
   March 31    June 30    September 30    December 31
   (in thousands, except per share data)
Total net sales
   $ 20,258    $ 22,389    $ 23,216    $ 23,288
Gross profit
   14,356    15,367    17,019    16,194
Income (loss) from operations
   3,300    3,783    5,344    3,909
Net income (loss)
   2,166    2,598    3,229    2,597
Earnings per share

Basic
   $ 0.12    $ 0.14    $ 0.17    $ 0.14
Diluted
   $ 0.11    $ 0.14    $ 0.17    $ 0.13

~~15. Accumulated Other Comprehensive Income (Loss)~~

   Year ended December 31,
   2017    2016    2015
   (in thousands)
Beginning balance
   $ (4,583 )    $ (4,049 )    $ (2,365 )
Other comprehensive income (loss) before reclassifications
   2,294    (534 )    (1,684 )
Amounts reclassified from accumulated other comprehensive loss
   —      —      —






Ending Balance
   $ (2,289 )    $ (4,583 )    $ (4,049 )

~~Changes to our accumulated other comprehensive loss consisted primarily of foreign currency translation for the years ended December 31, 2017, 2016 and 2015.~~

~~F-33~~

Delaware		04-2825458
~~Delaware~~		~~04-2825458~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

63 Second Avenue, Burlington, Massachusetts		01803
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading symbol	Name of ~~each~~ exchange on which registered
Common ~~Stock,~~stock, $0.01 par value per share	LMAT	The Nasdaq ~~Global~~Stock Market LLC


~~PART I~~
~~Item 1.~~	~~Business~~	1
~~Item 1A.~~	~~Risk Factors~~	18
~~Item 1B.~~	~~Unresolved Staff Comments~~	36
~~Item 2.~~	~~Properties~~	36
~~Item 3.~~	~~Legal Proceedings~~	36
~~Item 4.~~	~~Mine Safety Disclosures~~	36
~~PART II~~
~~Item 5.~~	~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~	37
~~Item 6.~~	~~Selected Financial Data~~	40
~~Item 7.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	41
~~Item 7A.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	57
~~Item 8.~~	~~Financial Statements and Supplementary Data~~	58
~~Item 9.~~	~~Changes In and Disagreements With Accountants on Accounting and Financial Disclosure~~	58
~~Item 9A.~~	~~Controls and Procedures~~	58
~~Item 9B.~~	~~Other Information~~	61
~~PART III~~
~~Item 10.~~	~~Directors, Executive Officers and Corporate Governance~~	62
~~Item 11.~~	~~Executive Compensation~~	62
~~Item 12.~~	~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~	62
~~Item 13.~~	~~Certain Relationships and Related Transactions, and Director Independence~~	63
~~Item 14.~~	~~Principal Accounting Fees and Services~~	63
~~PART IV~~
~~Item 15.~~	~~Exhibits and Financial Statements Schedules~~	64
~~Item 16.~~	~~Form10-K~~ ~~Summary~~	67
~~SIGNATURES~~		68


~~Year~~	~~Acquisition~~	~~Key Product(s) and Services~~
~~1998~~	~~Whittaker Screen Printing~~	~~Radiopaque tape manufacturing operations~~
~~1999~~	~~Vermed~~	~~Balloon catheters~~
~~2001~~	~~Ideas for Medicine~~	~~Carotid shunts, balloon catheters, and laparoscopic cholecystectomy devices~~
~~2003~~	~~Credent~~	~~Polycarbonate grafts~~
~~2004~~	~~VCS Clip~~	~~Vessel closure system~~
~~2005~~	~~Endomed~~	~~Stent grafts~~
~~2007~~	~~Vascular Innovations~~	~~Contrast injector~~
~~2007~~	~~Vascular Architects~~	~~Remote endarterectomy devices~~
~~2007~~	~~UnBalloon Technology~~	~~Stent graft modeling catheters~~
~~2007~~	~~Biomateriali~~	~~Polyester grafts and patches~~
~~2010~~	~~LifeSpan~~	~~ePTFE grafts~~
~~2012~~	~~XenoSure~~	~~Biologic patches~~
~~2013~~	~~Clinical Instruments~~	~~Carotid Shunts and Embolectomy Catheters~~
~~2013~~	~~TRIVEX~~	~~Powered phlebectomy system~~
~~2014~~	~~Xenotis Pty Ltd~~	~~Biosynthetic grafts~~
~~2014~~	~~Angioscope~~	~~Fiberoptic catheters~~
~~2015~~	~~Tru-Incise~~ ~~(for sale outside of the US)~~	~~Valvulotomes~~
~~2016~~	~~ProCol~~	~~Biologic graft~~
~~2016~~	~~RestoreFlow Allografts~~	~~Human tissue cryopreservation services~~


	High		Low
Year ended December 31, 2017:
First quarter ended March 31, 2017	$	27.04	$	19.82
Second quarter ended June 30, 2017	$	33.22	$	23.87
Third quarter ended September 30, 2017	$	39.29	$	26.37
Fourth quarter ended December 31, 2017	$	39.88	$	28.23

Year ended December 31, 2016:
First quarter ended March 31, 2016	$	17.20	$	12.03
Second quarter ended June 30, 2016	$	16.87	$	13.75
Third quarter ended September 30, 2016	$	22.50	$	13.52
Fourth quarter ended December 31, 2016	$	25.87	$	18.55


Record Date	Payment Date	Per Share Amount	Dividend Payment
			(in thousands)
Fiscal Year 2017
March 22, 2017	April 6, 2017	$0.055	$1,029
May 24, 2017	June 8, 2017	$0.055	$1,036
August 23, 2017	September 6, 2017	$0.055	$1,055
November 22, 2017	December 7, 2017	$0.055	$1,060

Fiscal Year 2016
March 21, 2016	April 4, 2016	$0.045	$825
May 25, 2016	June 8, 2016	$0.045	$829
August 22,2016	September 2, 2016	$0.045	$833
November 21, 2016	December 5, 2016	$0.045	$836


	12/12		12/13		12/14		12/15		12/16		12/17
LeMaitre Vascular, Inc		100.00		142.05		138.19		316.16		469.47		594.25
NASDAQ Composite		100.00		141.63		162.09		173.33		187.19		242.29
NASDAQ Medical Equipment		100.00		118.21		139.19		155.48		164.37		232.47
2016 Peer Group		100.00		159.05		149.48		92.43		103.63		121.75
2017 Peer Group		100.00		159.05		149.48		94.61		113.94		136.54


	Year ended December 31,
	2017			2016			2015			2014			2013
	(in thousands, except per share data)
Consolidated Statements of Operations Data:
Net sales	$	100,867		$	89,151		$	78,352		$	71,097		$	64,549
Cost of sales		30,170			26,215			24,186			22,666			19,434

Gross profit		70,697			62,936			54,166			48,431			45,115
Operating expenses:
Sales and marketing		25,948			26,105			22,780			22,087			22,143
General and administrative		17,010			14,354			14,010			13,889			12,576
Research and development		6,636			6,141			5,479			4,671			5,243
Medical device excise tax		—			—			744			689			635
Restructuring charges		—			—			—			526			—
Gain on divestitures		—			—			(360	)		—			—
Impairment charges		—			—			—			229			—

Total operating expenses		49,594			46,600			42,653			42,091			40,597

Income from operations		21,103			16,336			11,513			6,340			4,518
Other income (expense):
Interest income		179			81			13			1			4
Interest expense		(21	)		(14	)		—			(5	)		(12	)
Foreign currency gain (loss)		(155	)		(161	)		(102	)		(16	)		(182	)

Total other income (loss)		3			(94	)		(89	)		(20	)		(190	)

Income before income tax		21,106			16,242			11,424			6,320			4,328
Provision for income taxes		3,929			5,652			3,666			2,405			1,126

Net income	$	17,177		$	10,590		$	7,758		$	3,915		$	3,202

Earnings per share of common stock:
Basic	$	0.91		$	0.57		$	0.44		$	0.24		$	0.21

Diluted	$	0.86		$	0.55		$	0.42		$	0.23		$	0.20

Weighted-average shares outstanding:
Basic		18,961			18,485			17,764			16,614			15,317

Diluted		20,033			19,241			18,316			17,008			15,764

Cash dividends declared per common share	$	0.22		$	0.18		$	0.16		$	0.14		$	0.12


							Percent
	2017		2016		$ Change		change
	($ in thousands)
Net sales	$	100,867	$	89,151	$	11,716		13	%
Net sales by geography:
Americas	$	62,696	$	53,710	$	8,986		17	%
International		38,171		35,441		2,730		8	%

Total	$	100,867	$	89,151	$	11,716		13	%


								Percent			2017 as a %			2016 as a %
	2017		2016		$ change			change			of Net Sales			of Net Sales
	($ in thousands)
Sales and marketing	$	25,948	$	26,105	$	(157	)		(1	%)		26	%		29	%
General and administrative		17,010		14,354		2,656			19	%		17	%		16	%
Research and development		6,636		6,141		495			8	%		7	%		7	%

	$	49,594	$	46,600	$	2,994			6	%		49	%		52	%


									Percent			2016 as a %			2015 as a %
	2016		2015			$ change			change			of Net Sales			of Net Sales
	($ in thousands)
Sales and marketing	$	26,105	$	22,780		$	3,325			15	%		29	%		29	%
General and administrative		14,354		14,010			344			2	%		16	%		18	%
Research and development		6,141		5,479			662			12	%		7	%		7	%
Medical device excise tax		—		744			(744	)		(100	%)		0	%		1	%
Gain on divestitures		—		(360	)		360			*			*			*

	$	46,600	$	42,653		$	3,947			9	%		52	%		54	%


			Less						More
			than		1-3		3-5		than
Contractual obligations	Total		1 year		years		years		5 years
	(in thousands)
Operating leases	$	9,408	$	2,220	$	3,423	$	2,563	$	1,202

Name	Age	Position
George W. LeMaitre(1)	55	Chairman of the Board and Chief Executive Officer
David B. Roberts(1)	56	President and Director
Joseph P. Pellegrino, Jr.(1)	55	Chief Financial Officer and Director
Trent G. Kamke(1)	49	Senior Vice President, Operations
Laurie A. Churchill	49	Senior Vice President and General Counsel
Kimberly L. Cieslak	47	Vice President, Marketing
Ryan H. Connelly	42	Vice President, Research and Development
Giovannella Deiure	51	Vice President, Sales – Southern Europe
Helen Goulding	59	Director – Northern Europe
Andrew Hodgkinson	44	Senior Vice President, Clinical, Regulatory and Quality Affairs
Chance Kriesel	47	Vice President, Sales, The Americas
Roli Kumar-Choudhury	41	Vice President, Quality Affairs
Stéphane Maier	44	Vice President, EMEA Operations
Jonathan W. Ngau	46	Vice President, Information Technology
Jacob Petersen	43	Vice President, Asia-Pac
James Russell	44	Director, Operations
Xiang Zhang	47	Vice President, Regulatory Affairs
Lawrence J. Jasinski	62	Director
John J. O’Connor	72	Director
Bridget A. Ross	55	Director
John A. Roush	55	Director

	Respectfully Submitted by the Compensation
	Committee:

	Lawrence J. Jasinski (Chairman)
	John A. Roush

Core Objectives of the Executive Compensation Philosophy
Core Objective	Primary Purpose
Market Driven	Provide competitive compensation to attract, motivate, and retain superior talent
Pay for Performance	Reward individual and team successes linked to the achievement of company objectives aimed at increasing stockholder value
Equitable	Seek to ensure rewards are internally and externally equitable

Key Components of Executive Compensation
Compensation Component	Form	Primary Purpose
Base Salary	Cash	Provide competitive pay to attract and retain experienced and successful executives; intended to reflect the market value of the role, with differentiation for individual capability
Short-Term Incentive	Cash – Performance Based Bonuses	Encourage and reward contributions with respect to meeting short-term financial and operational goals, tied directly to company performance and company goals
Long-Term Incentive	Periodic Equity Grants	Encourage and reward long-term stockholder value creation, create and sustain a retention incentive and facilitate long-term stock ownership among our executive team

Name	% of 2019 Target Bonus Opportunity Tied to Above Targets
George W. LeMaitre	75%
Joseph P. Pellegrino, Jr.	53%
David B. Roberts	53%

Named Executive Officer	Target 2019 Non-Equity Incentive Plan Compensation under the Management Incentive Compensation Plan ($)		Actual 2019 Non-Equity Incentive Plan Compensation under the Management Incentive Compensation Plan ($)
George W. LeMaitre	$	257,500	$	234,203

Joseph P. Pellegrino, Jr.		121,722		128,028

David B. Roberts		133,875		148,321

Trent G. Kamke		95,240		109,000

Name	Annual Equity Value(1)
George W. LeMaitre	$725,000
Joseph P. Pellegrino, Jr.	250,000
David B. Roberts	250,000
Trent G. Kamke	115,000

Name and Principal Position	Year	Salary ($)			Bonus ($)			Stock Awards(1) ($)		Option Awards(2) ($)		Non-Equity Incentive Plan Compensation(3) ($)		All Other Compensation(4) ($)			Total ($)
George W. LeMaitre(5)	2019	$	437,750		$	—		$	181,267	$	538,223	$	234,203	$	6,300		$	1,397,744
Chairman and Chief	2018		437,750			—			181,247		525,427		254,144		5,638			1,404,207
Executive Officer	2017		162,392			—			181,258		543,575		—		1,758			888,982

Joseph P. Pellegrino, Jr.	2019		309,989			—			62,516		185,443		128,028		—			685,976
Chief Financial Officer	2018		296,640			—			62,505		181,206		130,671		—			671,022
	2017		283,041			—			62,506		187,565		114,452		—			647,564

David B. Roberts	2019		344,251			—			62,516		185,443		148,321		6,300			746,831
President	2018		326,304			—			62,505		181,206		122,357		11,188	(6)		703,559
	2017		339,102	(7)		—			62,506		187,565		122,732		4,250			716,155

Trent G. Kamke	2019		242,548			10,500	(8)		28,739		85,307		98,500		6,300			471,894
Senior Vice President,	2018		234,346			—			28,743		83,357		96,840		11,188	(6)		454,474
Operations	2017		214,141			—			28,765		86,276		85,000		4,093			418,276

		Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares of Stock or		All Other Option Awards: Number of Securities Underlying		Exercise or Base Price of Option			Grant Date Fair Value of Stock and Option
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)		Threshold ($)		Target ($)		Maximum ($)		Units(1) (#)		Options(1) (#)		Awards ($/Sh)			Awards(2) ($)

George W. LeMaitre			—	$	257,500	$	410,688		—		—		—		—		—		—			—
	12/20/2019		—		—		—		—		—		—		—		43,050	$	39.03	(3)	$	538,223
	12/20/2019		—		—		—		—		—		—		5,109		—		—		$	181,267

Joseph P. Pellegrino, Jr			—		121,722		193,656		—		—		—		—		—		—			—
	12/20/2019		—		—		—		—		—		—		—		14,706	$	35.48		$	185,443
	12/20/2019		—		—		—		—		—		—		1,762		—		—		$	62,516

David B. Roberts			—		133,875		213,427		—		—		—		—		—		—			—
	12/20/2019		—		—		—		—		—		—		—		14,706	$	35.48		$	185,443
	12/20/2019		—		—		—		—		—		—		1,762		—		—		$	62,516

Trent G. Kamke			—		95,240		152,500		—		—		—		—		—		—			—
	12/20/2019		—		—		—		—		—		—		—		6,765	$	35.48		$	85,307
	12/20/2019		—		—		—		—		—		—		810		—		—		$	28,739

	Option Awards										Stock Awards
Name	Number of Securities underlying Unexercised Options - # Exercisable			Number of Securities underlying Unexercised Options - # Unexcercisable			Option Exercise Price		Option Expiration Date		Number of shares or units of stock that have not vested - #			Market value of shares or units of stock that have not vested - $

George W. LeMaitre		-			23,621	(1)	$	12.57	7/23/2020			-			-
		-			7,078	(2)	$	15.54	7/25/2021			-			-
		-			56,387	(2)	$	14.13	7/25/2023			-			-
		-			3,195	(3)	$	34.43	12/22/2022			-			-
		23,304	(3)		31,762		$	31.30	12/22/2024			-			-
		-			4,244	(4)	$	25.92	12/19/2023			-			-
		12,747	(4)		46,743		$	23.56	12/19/2025			-			-
		-			2,562	(5)	$	39.03	12/20/2024			-			-
		-			40,488	(5)	$	35.48	12/20/2026			-			-
		-			-			-		-		5,131	(2)	$	184,459
		-			-			-		-		3,475	(3)	$	124,926
		-			-			-		-		6,154	(4)	$	221,236
		-			-			-		-		5,109	(5)	$	183,669
Joseph P. Pellegrino, Jr		-			9,752	(1)	$	11.43	7/23/2022			-			-
		-			17,190	(2)	$	14.13	7/25/2023			-			-
		6,921	(3)		10,382		$	31.30	12/22/2024			-			-
		4,366	(4)		17,466		$	23.56	12/19/2025			-			-
		-			14,706	(5)	$	35.48	12/20/2026			-			-
		-			-			-		-		1,769	(2)	$	63,596
		-			-			-		-		1,198	(3)	$	43,068
		-			-			-		-		2,122	(4)	$	76,286
		-			-			-		-		1,762	(5)	$	63,344
David B. Roberts		-			9,752	(1)	$	11.43	7/23/2022			-			-
		8,597	(2)		17,190		$	14.13	7/25/2023			-			-
		6,921	(3)		10,382		$	31.30	12/22/2024			-			-
		4,366	(4)		17,466		$	23.56	12/19/2025			-			-
		-			14,706	(5)	$	35.48	12/20/2026			-			-
		-			-			-		-		1,769	(2)	$	63,596
		-			-			-		-		1,198	(3)	$	43,068
		-			-			-		-		2,122	(4)	$	76,286
		-			-			-		-		1,762	(5)	$	63,344
Trent G. Kamke		3,145	(6)		-		$	7.87	7/24/2021			-			-
		13,002	(1)		3,251		$	11.43	7/23/2022			-			-
		11,861	(2)		7,908		$	14.13	7/25/2023			-			-
		3,184	(3)		4,775		$	31.30	12/22/2024			-			-
		2,009			8,034	(4)	$	23.56	12/19/2025			-			-
		-			6,765	(5)	$	35.48	12/20/2026			-			-
		-			-			-		-		814	(2)	$	29,263
		-			-			-		-		551	(3)	$	19,808
		-			-			-		-		976	(4)	$	35,087
		-			-			-		-		810	(5)	$	29,120

(1)	Value realized is calculated on the basis of the difference between the exercise price and the closing price of our common stock as reported on Nasdaq on the date of the exercise, multiplied by the number of shares of common stock underlying the options.
(2)	Value realized is calculated on the basis of the closing price of our common stock as reported on Nasdaq on the date of grant, multiplied by the number of shares.

Payments and Benefits	Voluntary Termination Without Good Reason		Involuntary Termination Without Cause		Voluntary Termination for Good Reason		Termination for Cause		Termination upon Death		Termination upon Disability		Retirement		Termination w/o Cause after Change-in-Control
Cash Severance		—	$	437,750	$	437,750		—		—		—		—	$	437,750
Health Care Benefits		—		4,811		4,811		—		—		—		—		4,811
Total		—	$	442,561	$	442,561		—		—		—		—	$	442,561

Name	Fees Earned or Paid in Cash(1) ($)		Option Awards(2) ($)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)
Lawrence J. Jasinski	$	33,000	$	90,000		—		—	$	123,000
John J. O’Connor		38,000		90,000		—		—		128,000
John A. Roush		25,550		90,000		—		—		115,550
Michael H. Thomas(3)		18,000		0		—		—		18,000

Name of Beneficial Owner	Shares Beneficially Owned(1)		Percentage of Shares Beneficially Owned
5% Stockholders(2)
BlackRock, Inc.(3)		2,618,648		13.0	%
55 East 52nd Street
New York, NY 10055

Conestoga Capital Advisors, LLC(4)		1,887,846		9.4	%
550 E. Swedesford Road, Ste 120
Wayne, PA 19807

The Vanguard Group		1,368,353		6.8	%
100 Vanguard Blvd.
Malvern, PA 19355


Named Executive Officers
George W. LeMaitre(5)		3,105,908		15.4	%
David B. Roberts(6)		49,754		*
Joseph P. Pellegrino, Jr.(7)		11,516		*
Trent G. Kamke(8)		47,407		*

Directors
Lawrence J. Jasinski(9)		15,833		*
John J. O’Connor(10)		84,210		*
Bridget A. Ross		0		*
John A. Roush(11)		42,500		*
All executive officers and directors as a group (8 persons)(12)		3,357,128		16.5	%


Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category							Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans, excluding securities reflected in column (a)
	(a)		(b)		(c)		(a)		(b)		(c)
Equity compensation plans approved by security holders		1,753,032	$	14.38		1,506,797		1,235,775	$	23.64		1,089,749
Equity compensation plans not approved by security holders		—		—		—		-		-		-

Total		1,753,032	$	14.38		1,506,797		1,235,775	$	23.64		1,089,749

	2019		2018
Audit Fees	$	653,000	$	589,000
Audit-Related Fees		62,000		59,000
Tax Fees		-		-
All Other Fees		-		-
Total	$	715,000	$	648,000


~~LEMAITRE VASCULAR, INC.~~

~~By:~~		/S~~/ GEORGE~~ ~~W. LEMAITRE~~
		~~George W. LeMaitre,~~ ~~Chief Executive Officer and Chairman of the Board~~


~~Signature~~LEMAITRE VASCULAR, INC.		~~Title~~		~~Date~~

~~/s/ GEORGE W. LEMAITRE~~		~~Chief Executive Officer and Chairman of the Board~~~~(Principal Executive Officer)~~		~~March 9, 2018~~
~~George W. LeMaitre~~				~~March 9, 2018~~
By:
/s/ JOSEPH P. PELLEGRINO, JR.
	Joseph P. Pellegrino, Jr.,
	Chief Financial Officer~~(Principal~~~~Financial and Accounting~~~~Officer)~~ and Director		~~March 9, 2018~~
~~Joseph P. Pellegrino, Jr.~~			~~March 9, 2018~~

~~/s/ LAWRENCE J. JASINSKI~~		~~Director~~		~~March 9, 2018~~
~~Lawrence J. Jasinski~~		~~Director~~		~~March 9, 2018~~

~~/s/ JOHN J. O’CONNOR~~		~~Director~~		~~March 9, 2018~~
~~John J. O’Connor~~		~~Director~~		~~March 9, 2018~~

~~/s/ DAVID B. ROBERTS~~		~~President and Director~~		~~March 9, 2018~~
~~David B. Roberts~~		~~President and Director~~		~~March 9, 2018~~

~~/s/ JOHN A. ROUSH~~		~~Director~~		~~March 9, 2018~~
~~John A. Roush~~		~~Director~~		~~March 9, 2018~~

~~/S/ MICHAEL H. THOMAS~~		~~Director~~		~~March 9, 2018~~
~~Michael H. Thomas~~


	~~Page~~
~~LeMaitre Vascular, Inc.~~

*~~Consolidated Financial Statements~~*

~~Report of Independent Registered Public Accounting Firm~~		~~F-2~~

~~Consolidated Balance Sheets as of December 31, 2017 and 2016~~		~~F-3~~

~~Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015~~		~~F-4~~

~~Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2017, 2016 and 2015~~		~~F-5~~

~~Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2017, 2016 and 2015~~		~~F-6~~

~~Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015~~		~~F-9~~

~~Notes to Consolidated Financial Statements~~		~~F-10~~


	December 31, 2017			December 31, 2016
	(in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	19,096		$	24,288
Short-term marketable securities		22,564			—
Accounts receivable, net of allowances of $349 at December 31, 2017, and $258 at December 31, 2016		15,000			13,191
Inventory and other deferred costs		21,046			19,578
Prepaid expenses and other current assets		2,605			1,970

Total current assets		80,311			59,027
Property and equipment, net		12,378			8,012
Goodwill		23,844			23,426
Other intangibles, net		8,234			9,897
Deferred tax assets		1,378			1,399
Other assets		178			163

Total assets	$	126,323		$	101,924

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,543		$	1,217
Accrued expenses		9,770			8,804
Acquisition-related obligations		1,876			461

Total current liabilities		13,189			10,482
Deferred tax liabilities		2,176			1,941
Other long-term liabilities		1,188			2,001

Total liabilities		16,553			14,424

Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 3,000,000 shares; none outstanding		—			—
Common stock, $0.01 par value; authorized 37,000,000 shares; issued 20,745,041 shares at December 31, 2017, and 20,040,348 shares at December 31, 2016		207			200
Additionalpaid-in capital		93,127			85,378
Retained earnings		28,333			15,335
Accumulated other comprehensive loss		(2,289	)		(4,583	)
Treasury stock, at cost; 1,480,101 shares at December 31, 2017 and 1,452,810 shares at December 31, 2016		(9,608	)		(8,830	)

Total stockholders’ equity		109,770			87,500

Total liabilities and stockholders’ equity	$	126,323		$	101,924


										Accumulated Other Comprehensive Income (Loss)
					Additional Paid-in Capital													Total Stockholders’ Equity
	Common Stock						Retained Earnings						Treasury Stock
	Shares		Amount				Retained Earnings						Shares		Amount
Balance at December 31, 2014		18,778,436	$	188	$	75,389	$	3,248		$	(2,365	)		1,407,211	$	(8,253	)	$	68,207
Net income								7,758											7,758
Other comprehensive income											(1,684	)							(1,684	)
Issuance of common stock for stock options exercised		906,936		9		4,827													4,836
Vested restricted stock units		62,949																	—
Excess tax benefits from stock-based compensation awards						454													454
Stock based compensation expense						1,424													1,424
Repurchase of common stock at cost														23,928		(266	)		(266	)
Common stock cash dividend paid								(2,845	)										(2,845	)

Balance at December 31, 2015		19,748,321	$	197	$	82,094	$	8,161		$	(4,049	)		1,431,139	$	(8,519	)	$	77,884


	Balance at Beginning of Period		Additions (recoveries) charged to Income		Deductions from Reserves		Balance at End of Period
	(in thousands)
Allowance for doubtful accounts and sales returns:
Year ended December 31, 2017	$	258	$	230	$	139		349
Year ended December 31, 2016		243		105		90		258
Year ended December 31, 2015		242		182		181		243


~~Description~~		~~Useful Life~~
~~Computers and equipment~~		~~3–5 years~~
~~Machinery and equipment~~		~~3–10 years~~
~~Leasehold improvements~~		~~The shorter of its useful life or lease term~~