Feed to the latest filings at the SEC
Date Filed : Aug 09, 2019
SECURITIESAND EXCHANGE COMMISSION
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of the Securities Exchange Act of 1934
Filedby the Registrant [X]
Filedby a Party other than the Registrant [ ]
Checkthe appropriate box:
MICROBOT MEDICAL INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Paymentof filing fee (Check the appropriate box):
25Recreation Park Drive, Unit 108
NOTICEOF ANNUAL MEETING OF SHAREHOLDERS
TOBE HELD ON SEPTEMBER 10, 2019
NOTICEIS HEREBY GIVEN, that the 2019 Annual Meeting of Shareholders (the “Annual Meeting”) of Microbot Medical Inc. (the“Company”) will be held at 4:00 P.M., Eastern Time on September 10, 2019 at the offices of Mintz, Levin, Cohn, Ferris,Glovsky and Popeo, P.C. located at 666 Third Avenue, Room 24C, New York, NY 10017. At the Annual Meeting, you will be asked tovote on:
TheBoard of Directors has fixed the close of business on July 22, 2019 as the record date for determining shareholders who are entitledto receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.
Yourvote is important to us. Whether or not you intend to be present at the meeting, please sign and date the enclosed proxy cardand return it in the enclosed envelope. Returning a proxy will not deprive you of your right to attend the Annual Meeting andvote your shares in person.
Theforegoing items of business are more fully described in the accompanying proxy statement.
ByOrder of the Board of Directors,
Chairman,President and Chief Executive Officer
Dated:August 9, 2019
2019ANNUAL MEETING OF SHAREHOLDERS
Thisproxy statement and the accompanying proxy card is furnished in connection with the solicitation by the Board of Directors (the“Board”) of Microbot Medical Inc., a Delaware corporation (the “Company”), of proxies for use at the 2019Annual Meeting of Shareholders (the “Annual Meeting”) to be held at the offices of Mintz, Levin, Cohn, Ferris, Glovskyand Popeo, P.C. located at 666 Third Avenue, Room 24C, New York, NY 10017 at 4:00 P.M., Eastern Time, on September 10, 2019, orat any adjournment or postponement thereof, for the purposes set forth in this proxy statement and the accompanying Notice ofAnnual Meeting of Shareholders. This proxy statement and the accompanying proxy card is first being mailed on or about August12, 2019 to all Shareholders of the Company entitled to vote at the Annual Meeting (the “Shareholders”).
TheCompany will bear the cost of solicitation of proxies. Directors, officers and employees of the Company may solicit proxies bytelephone, email, facsimile, in person or otherwise for no additional compensation. The Company has retained Morrow Sodali LLCto act as a proxy solicitor in conjunction with the annual stockholders meeting at an estimated cost of $7,000 plus expenses.The Company will pay the entire costs of such solicitation as well as the costs of printing and filing this proxy statement andproxy card. The Company will reimburse banks, brokerage firms, proxy solicitors, and other custodians, nominees and fiduciariesfor reasonable expenses incurred by them in sending proxy materials to the beneficial owners of shares.
TheBoard of Directors has fixed the close of business on July 22, 2019, as the record date for determining stockholders entitledto notice of, and to vote at, the Annual Meeting or at any postponement or adjournment thereof. There were 4,307,666 shares ofour common stock, $.01 par value, outstanding on July 22, 2019, each of which is entitled to one vote for each share on the mattersto be voted upon.
Stockholdersare being asked to vote on three proposals at the Company’s 2019 Annual Meeting. The proposals to be voted on and relatedrecommendations from the Board of Directors are as follows:
Inthe election of directors, which is Proposal Number 1, you may vote “FOR” all of the nominees or your vote may be“WITHHELD” with respect to any of the nominees. For Proposal Number 2 and Proposal Number 3, you may vote “FOR,”vote “AGAINST” or “ABSTAIN.” If you “ABSTAIN” as to Proposal Number 2, the abstention willhave no effect. An abstention, a “broker non-vote,” or a failure to submit a proxy card or vote at the Annual Meetingwith respect to Proposal Number 3 will have the same effect as voting “AGAINST” such proposal.
Sharesof our common stock represented by proxies in the form enclosed that are properly executed and returned to us and not revokedwill be voted as specified in the proxy by the stockholder. In the absence of contrary instructions, or in instances where nospecifications are made, the shares will be voted:
Anystockholder signing and delivering a proxy may revoke it at any time before it is voted by delivering to the company’s corporatesecretary a written revocation or a duly executed proxy bearing a date later than the date of the proxy being revoked. Any stockholderattending the Annual Meeting in person may revoke his, her or its proxy and vote his, her or its shares at the Annual Meeting.
Howto vote shares at our 2019 Annual Meeting.
Votingat the Annual Meeting. All Company stockholders are invited to attend the Annual Meeting in person. Any stockholder that attendsthe meeting in person may deliver a completed proxy card in person or vote by completing a ballot, which will be available atthe meeting. However, each stockholder intending to vote in person at the Annual Meeting should note that if his, her or its sharesare held in the name of a bank, broker or other nominee, such stockholder must obtain a legal proxy, executed in his, her or itsfavor, from the holder of record to be able to vote at the Annual Meeting. Stockholders should allow enough time prior to theAnnual Meeting to obtain this proxy from the holder of record, if needed.
Thisyear, registered stockholders of the Company, meaning stockholders who hold the Company’s stock directly (not through abank, broker, or other nominee) may cast their vote in any of the following ways:
Voteby Internet. Registered stockholders can vote over the Internet at www.envisionreports.com/MBOT by following the instructionson the proxy card. Internet voting facilities for registered stockholders of record will be available 24 hours a day and willclose at 3:00 p.m. (EDT) on September 10, 2019.
Voteby Mail. Registered stockholders can vote by mail by signing, dating and mailing the enclosed proxy card in the postage-paidenvelope provided. If the envelope is missing, such a stockholder can mail the completed proxy card or voting instruction cardto Computershare, C/O Shareholder Services, P.O. Box 505000, Louisville, KY 40233-5000. The completed card must be received nolater than September 9, 2019.
Voteby Telephone. Registered stockholders can vote by telephone by calling the phone number located on the top of your proxy cardand following the voice prompts. You will need information from your proxy card to submit your proxy by telephone. Telephone votingfacilities for registered stockholders of record will be available 24 hours a day and will close at 3:00 p.m. (EDT) onSeptember 10, 2019.
Thisyear, beneficial stockholders of the Company, meaning stockholders who hold the Company’s stock in the name of a bank, broker,or other nominee (commonly referred to as holding shares in “street name”) may cast their vote in any of the followingways:
Voteby Internet. Beneficial stockholders can vote over the Internet at www.proxyvote.com by following the online instructions.Internet voting facilities for beneficial stockholders of record will be available 24 hours a day and will close at 3:00 p.m.(EDT) on September 10, 2019.
Voteby Mail. Beneficial stockholders can vote by mail by signing, dating and mailing the enclosed voting instruction form (“VIF”)in the postage-paid envelope provided. The completed card must be received no later than September 9, 2019.
Voteby Telephone. Beneficial stockholders can vote by telephone by calling the phone number located on the top of your VIF andfollowing the voice prompts. Telephone voting facilities for beneficial stockholders of record will be available 24 hours a dayand will close at 3:00 p.m. (EDT) on September 10, 2019.
Theshares voted electronically or represented by the proxy cards received, properly marked, dated, signed and not revoked, will bevoted at the Annual Meeting.
Quorum,Required Votes and Method of Tabulation
Consistentwith Delaware law and the Company’s amended and restated by-laws, a majority of the votes entitled to be cast on a particularmatter, present in person or represented by proxy, constitutes a quorum as to such matter. The Company will appoint one or moreelection inspectors for the meeting to count votes cast by proxy or in person at the Annual Meeting.
Ifyou hold shares beneficially in street name and do not provide your broker or nominee with voting instructions, your shares mayconstitute “broker non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to voteon that matter without instructions from the beneficial owner and instructions have not been given. This year if you hold sharesbeneficially in street name and do not vote your shares, your broker or nominee can vote your shares at its discretion on ProposalNumber 2. In tabulating the voting result for any proposal for which the required vote is based on the number of shares present,shares that constitute broker non-votes are not considered entitled to vote on that proposal. However, for proposals for whichthe required vote is based on the number of shares of common stock issued and outstanding, broker non-votes have the same effectas a vote “AGAINST” the proposal. Thus, if stockholders do not give their broker or nominee specific instructions,their shares may not be voted for the election of directors or the Share Reduction. Abstentions and broker non-votes will be countedas present for purposes of establishing a quorum.
WhatVote is Required to Approve Each Item?
Electionof directors by stockholders, which is Proposal Number 1, will be determined by a plurality of the votes cast by the stockholdersentitled to vote at the election that are either present in person or represented by proxy. Consequently, any shares not votedat the annual meeting, whether due to abstentions, broker non-votes or otherwise, will have no impact on the election of directors.
ForProposal Number 2, the affirmative “FOR” vote is required by the holders of a majority of the shares present at theAnnual Meeting in person or by proxy and voting. Abstentions will have no effect on the outcome of this proposal.
ForProposal Number 3, the affirmative “FOR” vote is required by the holders of a majority of the shares outstanding andentitled to vote on the matter. An abstention, a “broker non-vote,” or a failure to submit a proxy card or vote atthe Annual Meeting will have the same effect as voting “AGAINST” this proposal.
Managementdoes not know of any matters to be presented at this year’s Annual Meeting other than those set forth in this proxy statementand in the notice accompanying this proxy statement. Stockholders will have no appraisal rights under Delaware law with respectto any of the matters expected to be voted on at the Annual Meeting. If other matters should properly come before the meeting,the proxy holders will vote such matters in their discretion. Any stockholder has the right to revoke his, her or its proxy atany time until it is voted.
SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Thefollowing table shows the number of shares of our common stock beneficially owned, as of August 8, 2019, by (i) each ofour directors, (ii) each of our named executive officers, (iii) all of our current directors and executive officers as a group,and (iv) all those known by us to be to a beneficial owner of more than 5% of the Company’s common stock. In general, “beneficialownership” refers to shares that an individual or entity has the power to vote or dispose of, and any rights to acquirecommon stock that are currently exercisable or will become exercisable within 60 days of August 8, 2019. We calculatedpercentage ownership in accordance with the rules of the SEC. The percentage of common stock beneficially owned is based on 4,307,666shares outstanding as of August 8, 2019. In addition, shares issuable pursuant to options or other convertible securitiesthat may be acquired within 60 days of August 8, 2019 are deemed to be issued and outstanding and have been treated asoutstanding in calculating and determining the beneficial ownership and percentage ownership of those persons possessing thosesecurities, but not for any other persons.
Thistable is based on information supplied by each director, officer and principal stockholder of the Company. Exceptas indicated in footnotes to this table, the Company believes that the stockholders named in this table have sole voting and investmentpower with respect to all shares of Common Stock shown to be beneficially owned by them, based on information provided by suchstockholders. Unless otherwise indicated, the address for each director, executive officer and 5% or greater stockholders of theCompany listed is: c/o Microbot Medical Inc., 25 Recreation Park Drive, Unit 108, Hingham, MA 02043.
Number of Shares
Wecurrently have six directors serving on our Board and one vacancy. The following table lists the names, ages andpositions of the individuals who serve as directors of the Company, as of August 8, 2019:
Becausewe have a classified Board, with each of our directors serving a staggered three-year term, only our Class I Directors are standingfor election at our 2019 Annual Meeting. The following table shows the current composition of the three classes of our Board:
ClassI Directors (terms scheduled to expire in 2019):
ClassII Directors (term scheduled to expire in 2020):
ClassIII Directors (term scheduled to expire in 2021):
Theindependent members of our Board, as determined by the Board in accordance with the existing Nasdaq Listing rules, are Messrs.Waizer, Bornstein, Burell, Madden and Laxminarain. The Board held approximately 13 regular and special meetings during the fiscalyear ended December 31, 2018 and acted by unanimous written consent 1 times. Each of our directors attended at least approximately90% of such meetings of the Board. While we encourage our directors to attend the Company’s annual Shareholder meeting,we do not have a policy requiring that they do so. All of our directors attended the Company’s 2018 annual stockholder meeting.
Committeesof the Board of Directors
Presently,the Board has three standing committees — the Audit Committee, the Compensation and Stock Option Committee (the “CompensationCommittee”), and the Corporate Governance and Nominating Committee (the “Corporate Governance Committee”). Allmembers of the Audit Committee, the Compensation Committee, and the Corporate Governance Committee are, and are required by thecharters of the respective committees to be, independent as determined under Nasdaq Listing rules.
TheAudit Committee is composed of Messrs. Burell, Madden and Bornstein. Each of the members of the Audit Committee is independent,and the Board has determined that Mr. Burell is an “audit committee financial expert,” as defined in SEC rules. TheAudit Committee acts pursuant to a written charter which is available through our website at www.microbotmedical.com. The AuditCommittee held 4 meetings during the fiscal year ended December 31, 2018.
Theprimary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities. TheAudit Committee does this primarily by reviewing the Company’s financial reports and other financial information as wellas the Company’s systems of internal controls regarding finance, accounting, legal compliance, and ethics that managementand the Board of Directors have established. The Audit Committee also assesses the Company’s auditing, accounting and financialprocesses more generally. The Audit Committee recommends to the Board of Directors the appointment of a firm of independent auditorsto audit the financial statements of the Company and meets with such personnel of the Company to review the scope and the resultsof the annual audit, the amount of audit fees, the company’s internal accounting controls, the Company’s financialstatements contained in this proxy statement, and other related matters.
TheCompensation Committee is composed of Messrs. Waizer, Madden and Bornstein. Each of the members of the Compensation Committeeis independent. The Compensation Committee acts pursuant to a written charter which is available through our website at www.microbotmedical.com.The Compensation Committee held 3 meetings during the fiscal year ended December 31, 2018.
TheCompensation Committee acts pursuant to a written charter. The Compensation Committee makes recommendations to the Board of Directorsand management concerning salaries in general, determines executive compensation and approves incentive compensation for employeesand consultants.
TheCorporate Governance Committee is composed of Messrs. Waizer, Laxminarain and Burell. Each of the members of the Corporate GovernanceCommittee is independent. The Corporate Governance Committee acts pursuant to a written charter which is available through ourwebsite at www.microbotmedical.com. The Corporate Governance Committee acted by unanimous written consent one time during thefiscal year ended December 31, 2018.
TheCorporate Governance Committee oversees nominations to the Board and considers the experience, ability and character of potentialnominees to serve as directors, as well as particular skills or knowledge that may be desirable in light of the Company’sposition at any time. From time to time, the Corporate Governance Committee may engage the services of a paid search firm to helpthe Corporate Governance Committee identify potential nominees to the Board. The Corporate Governance Committee and Board seekto nominate and appoint candidates to the Board who have significant business experience, technical expertise or personal attributes,or a combination of these, sufficient to suggest, in the Board’s judgment, that the candidate would have the ability tohelp direct the affairs of the Company and enhance the Board as a whole. The Corporate Governance Committee may identify potentialcandidates through any reliable means available, including recommendations of past or current members of the Board from theirknowledge of the industry and of the Company. The Corporate Governance Committee also considers past service on the Board or onthe board of directors of other publicly traded or technology focused companies. The Corporate Governance Committee has not adopteda formulaic approach to evaluating potential nominees to the Board; it does not have a formal policy concerning diversity, forexample. Rather, the Corporate Governance Committee weighs and considers the experience, expertise, intellect, and judgment ofpotential nominees irrespective of their race, gender, age, religion, or other personal characteristics. The Corporate GovernanceCommittee may look for nominees that can bring new skill sets or diverse business perspectives. Potential candidates recommendedby security holders will be considered as provided in the company’s “Policy Regarding Shareholder Candidates for Nominationas a Director,” which sets forth the procedures and conditions for such recommendations. This policy is available throughour website at www.microbotmedical.com.
Themembers of the Corporate Governance Committee have approved the nominations of the Class I directors standing for election orreelection, as the case may be, at our 2019 Annual Meeting.
DirectorOversight and Qualifications
Whilemanagement is responsible for the day-to-day management of the risks the company faces, the Board, as a whole and through itscommittees, has responsibility for the oversight of risk management. An important part of risk management is not only understandingthe risks facing the company and what steps management is taking to manage those risks, but also understanding what level of riskis appropriate for the company. In support of this oversight function, the Board receives regular reports from our Chief ExecutiveOfficer and members of senior management on operational, financial, legal, and regulatory issues and risks. The Audit Committeeadditionally is charged under its charter with oversight of financial risk, including the company’s internal controls, andit receives regular reports from management, the company’s internal auditors and the company’s independent auditors.The chairman of the Board and independent members of the Board work together to provide strong, independent oversight of the company’smanagement and affairs through its standing committees and, when necessary, special meetings of directors.
Webelieve each of our directors brings valuable skills, experience, judgment, and perspectives to our company. The Board took thefollowing qualifications into consideration, among other things, when nominating or appointing our current directors:
HarelGadot, became President, Chief Executive Officer and Chairman of the Company’sBoard following the consummation of the merger of C&RD Israel Ltd, a wholly owned subsidiary of the Company, with and intoMicrobot Medical Ltd. (“Microbot Israel”), with Microbot Israel surviving as a wholly owned subsidiary of the Company(the “Merger”). Mr. Gadot is a co-founder of Microbot Israel and has served as Microbot Israel’s Chief ExecutiveOfficer since Microbot Israel was founded in November 2010. He has been the Chairman of Microbot Israel’s board of directorssince July 2014. He also serves as the Chairman of XACT Robotics Ltd., an Israel-based private company seeking to develop a novelplatform technology for robotic needle steering in minimally invasive interventional procedures such as biopsies and ablations,since August 2013 and MEDX Xelerator L.P., a medical device and digital health Israeli incubator, since July 2016. From December2007 to April 2010 Mr. Gadot was a Worldwide Group Marketing Director at Ethicon Inc., a Johnson and Johnson Company, where hewas responsible for the global strategic marketing of the Company. Mr. Gadot also held management positions, as well as leadingregional strategic position for Europe, Middle-East and Africa, as well as In Israel, while at Johnson and Johnson. Mr. Gadotserved as director for ConTIPI Ltd. from August 2010 until November 2013 when ConTIPI Ltd. was acquired by Kimberly-Clark Corporation.Mr. Gadot holds a B.Sc.in Business from Siena College, Loudonville NY, and an M.B.A. from the University of Manchester, UK. TheCompany believes that Mr. Gadot is qualified to serve as Chairman of the Board and as President and Chief Executive Officer ofthe Company due to his extensive experience in strategic marketing and general management in the medical device industry.
YoavWaizer, became a director of the Company following the Merger and has served as a member of the Board of Directors of MicrobotIsrael since May 2015. Mr. Waizer provides CFO services on a part-time basis to a number of venture capital funds and companies;including to Israeli Technology Investments (ITI) Fund, Next Gear Venture Partners L.P. and to Medica Venture Partners. Mr. Waizerserved as CFO & COO at Cedar Fund, a venture capital fund focuses on investing in Israel-related high-tech companies and priorto that Mr. Waizer was the CFO of Star Ventures Israel, the Israeli fund of Star Ventures. Mr. Waizer is currently a directorof Yeda Research & Development Co. Ltd., the technology transfer arm of the Weizmann Institute of Science, and XACT RoboticsLtd., a private Israeli company developing novel platform robotic technology for use in minimally invasive procedures. Mr. Waizerwas the CFO on a part-time basis of MEDX Xelerator L.P., a medical device and digital health Israeli incubator. Mr. Waizer holdsMaster of Business Administration in Information Systems and B.Sc. in Accounting and Statistics, both from the Tel-Aviv University.The Company believes that Mr. Waizer is qualified to serve as a member of the Company’s board due to his extensive investmentexperience and extensive knowledge of the life sciences industry.
YosephBornstein, became a director of the Company following the Merger. Mr. Bornstein is a co-founder of Microbot Israel and hasbeen a member of the Board of Directors since Microbot Israel was founded in November 2010. Mr. Bornstein founded Shizim Ltd.,a life science holding group in October 2000 and has served as its president since then. Mr. Bornstein is the Chairman of GCPClinical Studies Ltd., a provider of clinical research services and educational programs in Israel since January 2002. He is theChairman of Biotis Ltd., a service company for the bio-pharmaceutical industry, since June 2000. In addition, he is the Chairmanof Dolphin Medical Ltd., a service company for the medical device industry, since April 2012, and the Chairman of ASIS EnterprisesB.B.G. Ltd., a business development company focusing on creating business ties between Israeli and Japanese entities, since August2007. Mr. Bornstein is a director of XAct Robotics Ltd., an Israeli- based private company seeking to develop a novel platformtechnology for robotic needle steering in minimally invasive interventional procedures, and is the founder of ShizimXL InnovationCenter. In October 1992, Mr. Bornstein founded Pharmateam Ltd., an Israeli company that specialized in representing internationalpharmaceutical companies which was sold in 2000. Mr. Bornstein is also a founder of a number of other privately held life-sciencecompanies. Mr. Bornstein served as the Biotechnology Committee Chairman of the Unites States-Israel Science & Technology Commission(the “USISTF”) from September 2002 to February 2005 as well as a consultant for USISTF from September 2002 to February2005. He is also the founder of ILSI-Israel Life Science Industry Organization (who was integrated into IATI) and ITTN-IsraelTech Transfer Organization. The Company believes that Mr. Bornstein is qualified to serve as a member of the Board due to hisextensive experience in, and knowledge of, the life sciences industry and international business.
ScottR. Burell, became a director of the Company following the Merger. Since August 1, 2018, Mr. Burell has been the Chief FinancialOfficer of AIVITA Biomedical, Inc., a private biopharmaceutical company. From November 2006 until its sale to Invitae Corp. inNovember 2017, he was the Chief Financial Officer, Secretary and Treasurer of CombiMatrix Corporation (NASDAQ: CBMX), a familyhealth-focused clinical molecular diagnostic laboratory specializing in pre-implantation genetic screening, prenatal diagnosis,miscarriage analysis, and pediatric developmental disorders. He successfully led the split-off of CombiMatrix in 2007 from itsformer parent, has led several successful public and private debt and equity financing transactions as well as CombiMatrix’sreorganization in 2010. Prior to this, Mr. Burell had served as CombiMatrix’s Vice President of Finance since November 2001and as its Controller from February 2001 to November 2001. From May 1999 to first joining CombiMatrix in February 2001, Mr. Burellwas the Controller for Network Commerce, Inc., a publicly traded technology and information infrastructure company located inSeattle. Prior to this, Mr. Burell spent 9 years with Arthur Andersen’s Audit and Business Advisory practice in Seattle.During his tenure in public accounting, Mr. Burell worked with many clients, both public and private, in the high-tech and healthcaremarkets, and was involved in numerous public offerings, spin-offs, mergers and acquisitions. Mr. Burell is a Board member of CollplantBiotechnologies. (Nasdaq: CLGN), an Israeli -based publicly traded biotechnology company focused on regenerative medicine.Mr. Burell is also a Board member of Mer Telemanagement Solutions Ltd. (Nasdaq: MTSL), an Israeli-based publicly traded telecommunicationsservices company. Mr. Burell obtained his Washington state CPA license in 1992 and is a certified public accountant (currentlyinactive). He holds Bachelor of Science degrees in Accounting and Business Finance from Central Washington University. The Companybelieves Mr. Burell’s qualifications to serve on the Board include his experience as an executive of a public life sciencescompany and knowledge of financial accounting in the medical technology field.
MartinMadden, has been a director of the Company since February 6, 2017. Mr. Madden has held various positions at Johnson &Johnson and its affiliates from 1986 to January 2017, most recently as Vice President, Research & Development of DePuy Synthes,a Johnson & Johnson Company, from February 2016 to January 2017. Prior to that, from July 2015 to February 2016, Mr. Maddenwas the Vice President, New Product Development of Johnson & Johnson Medical Devices. From January 2012 to July 2015, Mr.Madden was the Vice President, Research & Development of Johnson & Johnson’s Global Surgery Group. Mr. Madden holdsa MBA from Columbia University, a M.S. from Carnegie Mellon University in Mechanical Engineering, and a B.S. from the Universityof Dayton in Mechanical Engineering. The Company believes that Mr. Madden is qualified to serve as a member of the Board due tohis extensive experience in research and development, portfolio planning, technology assessment and assimilation, and projectmanagement and budgeting.
PrattipatiLaxminarain, has been a director of the Company since December 6, 2017. From April 2006through October 2017, Mr. Laxminarain served as Worldwide President at Codman Neuro, a global neurosurgery and neurovascular companythat offers a portfolio of devices for hydrocephalus management, neuro intensive care and cranial surgery and other technologies,and which was part of DePuy Synthes Companies of Johnson & Johnson. Mr. Laxminarain holds an MBA from Indian Institute ofManagement, Calcutta, India and a Bachelor of Engineering from Osmania University, Hyderabad, India. The Company believes thatMr. Laxminarain is qualified as a Board member of the Company because of his extensive experience working with medical devicecompanies and knowledge of the industries in which the Company intends to compete.
Followingare the name, age and other information for our named executive officers, as of August 8, 2019. All company officers havebeen appointed to serve until their successors are elected and qualified or until their earlier resignation or removal. Informationregarding Harel Gadot, our Chairman, President and Chief Executive Officer, is set forth above under “–Board of Directors.”
DavidBen Naim, became the Company’s part-time Chief Financial Officer following theconsummation of the Merger. Mr. Ben Naim is the general manager of DBN Finance Services Ltd., a company which provides outsourcingfinancial services to public and private companies, since 2014, including the Company. Through DBN Finance Services, Mr. Ben Naimhas acted as the outsourced CFO for Emerald Medical Applications Corp. (OTC:MRLA), a digital health startup company engaged inthe development, sale and service of imaging solutions, Tempramed Inc., a private medical device company, Vonetize PLC (TASE:VNTZ),an Israeli company that offers video on demand and over-the-top content services, Unet Credit Finance Services Ltd. (TASE:UNCR-M),and Todos Medical Ltd. (OTC:TOMDF), an Israeli cancer in-vitro-diagnostic company engaging in the development of a series of bloodtests for the early detection of a variety of cancers. Prior to that, Mr. Ben Naim served as Chief Financial Officer for severalcompanies in the biomedical and technology industries. From July 2012 to September 2014, Mr. Ben Naim served as Chief FinancialOfficer for Insuline Medical Ltd. (TASE: INSL), an Israel-based company focused on improving performance of insulin treatmentmethods. From 2008 until 2011, Mr. Ben Naim served as Chief Financial Officer of Crow Technologies 1977 Ltd. (OTC:CRWTF), a companythat designs, develops, manufactures and sells a broad range of security and alarm systems. From 2007 to 2008, Mr. Ben Naim servedas Chief Financial Officer of Ilex Medical Ltd. (TASE:ILX), a leading company in the medical diagnostics field. From 2003 to 2007,Mr. Ben Naim was the Corporate Controller of Tadiran Telecom Ltd. He started his career in 1998 at Deloitte & Touche wherehe left in 2003 as an Audit Senior Manager. Mr. Ben Naim holds a B.A. in social sciences from Open University, Israel, a CPA licensefrom Ramat Gan College, Israel, and an M.B.A. from Ono Academic College, Israel.
Section16(a) Beneficial Ownership Reporting Compliance
Section16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers, directors,and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of ownership ofour securities and changes in reported ownership. Executive officers, directors and greater than 10% beneficial owners are requiredby SEC rules to furnish us with copies of all Section 16(a) reports they file. Based solely on a review of the copies of suchforms furnished to us, or written representations from the reporting persons that no Form 5 was required, we believe that, duringthe fiscal year ended December 31, 2018, all Section 16(a) filing requirements applicable to our officers, directors and greaterthan 10% beneficial owners have been met, with the exception of Mr. Ben Naim who failed to timely file a 4 report showing 1 transaction.
Codeof Business Conduct and Ethics
Wehave adopted a Code of Ethics and Conduct that applies to all of our directors, officers, employees, and consultants. A copy ofour code of ethics is posted on our website at www.microbotmedical.com. We intend to disclose any substantive amendment or waiversto this code on our website. There were no substantive amendments or waivers to this code in 2018.
Thefollowing table sets forth information regarding each element of compensation that was paid or awarded to the named executiveofficers of the Company for the periods indicated.
OutstandingEquity Awards at Fiscal Year-End
Thefollowing table presents the outstanding equity awards held by each of the named executive officers as of the end of the fiscalyear ended December 31, 2018.
HarelGadot Employment Agreement
TheCompany entered into an employment agreement (the “Gadot Agreement”) with Harel Gadot on November 28, 2016, to serveas the Company’s Chairman of the Board of Directors and Chief Executive Officer, on an indefinite basis subject to the terminationprovisions described in the Agreement. Pursuant to the terms of the Gadot Agreement, Mr. Gadot shall receive an annual base salaryof $360,000. The salary will be reviewed on an annual basis by the Compensation Committee of the Company to determine potentialincreases taking into account such performance metrics and criteria as established by the Executive and the Company.
Mr.Gadot shall also be entitled to receive a target annual cash bonus of up to a maximum amount of 40% of base salary, which maximumamount was paid for the 2018 fiscal year.
Mr.Gadot shall be further entitled to a monthly automobile allowance and tax gross up on such allowance of $1,150, and shall be grantedoptions to purchase shares of common stock of the Company representing 5% of the issued and outstanding shares of the Company,based on vesting and other terms to be determined by the Compensation Committee of the Board of Directors.
Inthe event Mr. Gadot’s employment is terminated as a result of death, Mr. Gadot’s estate would be entitled to receiveany earned annual salary, bonus, reimbursement of business expenses and accrued vacation, if any, that is unpaid up to the dateof Mr. Gadot’s death.
Inthe event Mr. Gadot’s employment is terminated as a result of disability, Mr. Gadot would be entitled to receive any earnedannual salary, bonus, reimbursement of business expenses and accrued vacation, if any, incurred up to the date of termination.
Inthe event Mr. Gadot’s employment is terminated by the Company for cause, Mr. Gadot would be entitled to receive any compensationthen due and payable incurred up to the date of termination.
Inthe event Mr. Gadot’s employment is terminated by the Company without cause, he would be entitled to receive (i) any earnedannual salary; (ii) 12 months’ pay and full benefits, (iii) a pro rata bonus equal to the maximum target bonus for thatcalendar year; (iv) the dollar value of unused and accrued vacation days; and (v) applicable premiums (inclusive of premiums forMr. Gadot’s dependents) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, for twelve (12)months from the date of termination for any benefits plan sponsored by the Company. In addition, 100% of any unvested portionof his stock options shall immediately vest and become exercisable.
Theagreement contains customary non-competition and non-solicitation provisions pursuant to which Mr. Gadot agrees not to competeand solicit with the Company. Mr. Gadot also agreed to customary terms regarding confidentiality and ownership of intellectualproperty.
HeziHimelfarb Employment Agreement
Weentered into an employment agreement (the “Himelfarb Agreement”) with Mr. Himelfarb on December 5, 2016, to serveas our Chief Operating Office and General Manager, on an indefinite basis subject to the termination provisions described in theHimelfarb Agreement. Pursuant to the terms of the Himelfarb Agreement, Mr. Himelfarb shall receive a base salary of 64,000 NewIsraeli Shekel (NIS) per month or NIS 768,000 per year, or the equivalent of approximately $203,714 per annum based on an exchangerate of $.265 for NIS 1.0.
Mr.Himelfarb shall be entitled to grants or payments subject to the adoption by the Company at its discretion of a bonus plan orpolicy.
Underthe Himelfarb Agreement, Mr. Himelfarb was entitled to participate in the Company’s motor vehicle program and receive amotor vehicle from the Company’s vehicle pool. The Company shall pay an amount equal to 8.33% of Mr. Himelfarb’s salary,which shall be allocated to a fund for severance pay to Mr. Himelfarb, and an additional amount equal to 6.25% of Mr. Himelfarb’ssalary (6.5% as of January 1, 2017), which shall be allocated to a pension plan, in addition to disability insurance contributionsand as otherwise may be required by applicable Israeli law from time to time. The Company shall also contribute to an educationalfund an amount equal to 7.5% of each monthly payment of Mr. Himelfarb’s full salary. Mr. Himelfarb is also entitled to optionsto purchase 1,087,627 shares of the Company’s common stock, which represents 3% of the Company’s issued and outstandingshares of common stock as of the closing of the Company’s merger transaction with the Subsidiary on November 28, 2016.
TheHimelfarb Agreement contains customary non-competition provisions pursuant to which Mr. Himelfarb agrees not to compete with theCompany. Mr. Himelfarb also agreed to customary terms regarding confidentiality and ownership of intellectual property.
Effectiveas of February 1, 2019, Mr. Himelfarb, a member of the Board of Directors of the Company, and the Company’s Chief OperatingOfficer, resigned from all positions with the Company. Effective as of February 1, 2019, Mr. Himelfarb also resigned from hisposition as General Manager of Microbot Medical Ltd., a wholly-owned subsidiary of the Company. Notwithstanding the foregoing,Mr. Himelfarb remained to assist with the transition of his duties through August 1, 2019. As a result of certain terminationprovisions of the Himelfarb Agreement, Mr. Himelfarb is entitled to six months of compensation as a result of such resignation.
DavidBen Naim Services Agreement
Weentered into a services agreement (the “Services Agreement”) with DBN Finance Services effective October 31, 2016,to provide outsourced CFO services. Pursuant to the terms of the Services Agreement, DBN Finance Services will provide its servicesexclusively through Mr. David Ben Naim, who will serve as the principal financial and accounting officer of Microbot Israel andthe Company. Mr. Ben Naim’s engagement will continue on an indefinite basis subject to the termination provisions describedin the Agreement.
Pursuantto the Agreement, the Company shall pay the Service Provider a fixed fee of NIS 22,000, or the equivalent of approximately $5,835per month based on an exchange rate of $.265 for NIS1.0, plus VAT per month, and the Company shall reimburse DBN Finance Servicesfor reasonable and customary out of pocket expenses incurred by it or Mr. Ben Naim connection with the performance of the dutiesunder the Services Agreement. In addition, the Company shall maintain for the benefit of Mr. Ben Naim, a Directors and Officersinsurance policy, according to the Company’s policy for other directors and officers of the Company.
Boththe Company and DBN Finance Services shall have the right to terminate the Agreement for any reason or without reason at any timeby furnishing the other party with a 30-day notice of termination. The Company shall further be entitled to terminate the ServicesAgreement for “cause” without notice, in which case neither DBN Finance Services nor Mr. Ben Naim shall be entitledto any compensation due to such early termination.
DBNFinance Services and Mr. Ben Naim agreed to customary provisions regarding confidentiality and intellectual property ownership.The Services Agreement also contains customary non-competition and non-solicitation provisions pursuant to which DBN Finance Servicesand Mr. Ben Naim agree not to compete and solicit with the Company during the term of the Agreement and for a period of twelvemonths following the termination of the Agreement.
TheCompany generally enters into indemnification agreements with each of its directors and executive officers. Pursuant to the indemnificationagreements, the Company has agreed to indemnify and hold harmless these current and former directors and officers to the fullestextent permitted by the Delaware General Corporation Law. The agreements generally cover expenses that a director or officer incursor amounts that a director or officer becomes obligated to pay because of any proceeding to which he is made or threatened tobe made a party or participant by reason of his service as a current or former director, officer, employee or agent of the Company,provided that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of theCompany. The agreements also provide for the advancement of expenses to the directors and officers subject to specified conditions.There are certain exceptions to the Company’s obligation to indemnify the directors and officers, and, with certain exceptions,with respect to proceedings that he initiates.
Limitson Liability and Indemnification
Weprovide directors and officers insurance for our current directors and officers.
Ourcertificate of incorporation eliminate the personal liability of our directors to the fullest extent permitted by law. The certificateof incorporation further provide that the Company will indemnify its officers and directors to the fullest extent permitted bylaw. We believe that this indemnification covers at least negligence on the part of the indemnified parties. Insofar as indemnificationfor liabilities under the Securities Act may be permitted to our directors, officers, and controlling persons under the foregoingprovisions or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnificationis against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.
TheCompany adopted a compensation package for the non-management members of its Board, pursuant to which each such Board member wouldreceive for his services $12,000 per annum, $750 per duly called Board meeting and $250 per unanimous written consent. Furthermore,each member of the Audit Committee of the Board receives an additional $10,000 per annum, and other committee members receivean additional $5,000 per annum. Board members are also entitled to receive equity awards. Upon joining the Board, a member wouldreceive an initial grant of $40,000 of stock options (calculated as the product of the exercise price on the date of grant multipliedby the number of shares underlying the stock option award required to equal $40,000), with an additional grant of stock optionseach year thereafter, to purchase such number of shares of the Company’s common stock equal to $20,000, subject to the memberof the Board having served on the Board for at least twelve continuous months, and having attended at least 80% of the Board meetingsover the prior year.
Thefollowing table summarizes cash-based and equity compensation information for our outside directors, including annual Board andcommittee retainer fees and meeting attendance fees, for the year ended December 31, 2018:
Messrs.Gadot and Himelfarb received compensation for their services to the Company as set forth under the summary compensation tableabove.
CertainRelationships and Related Transactions
Relatedparties can include any of our directors or executive officers, certain of our stockholders and their immediate family members.Each year, we prepare and require our directors and executive officers to complete Director and Officer Questionnaires identifyingany transactions with us in which the officer or director or their family members have an interest. This helps us identify potentialconflicts of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere,in any way with the interests of the company as a whole. Our code of ethics requires all directors, officers and employees whomay have a potential or apparent conflict of interest to immediately notify our general counsel, who serves as our complianceofficer. In addition, the Corporate Governance Committee is responsible for considering and reporting to the Board any questionsof possible conflicts of interest of Board members. Our code of ethics further requires pre-clearance before any employee, officeror director engages in any personal or business activity that may raise concerns about conflict, potential conflict or apparentconflict of interest. Copies of our code of ethics and the Corporate Governance Committee charter are posted on the corporategovernance section of our website at www.microbotmedical.com.
Ourwholly-owned subsidiary, Microbot Medical Ltd., entered into a license agreement with Technion Research and Development FoundationLtd., or TRDF, in 2012 pursuant to which it obtained an exclusive, worldwide, royalty-bearing, sub-licensable license to certainpatents and inventions relating to the SCS and TipCAT technology platforms. TRDF is a founder of Microbot. See “Descriptionof Business – Intellectual Property” for a description of this agreement.
Otherthan the above transaction, there have been no related party transactions or any other transactions or relationships requiredto be disclosed pursuant to Item 404 of Regulation S-K.
PrincipalAccountant Fees and Services.
Auditand Tax Fees
TheBoard, upon the recommendation of the Audit Committee, has selected the independent accounting firm of Brightman AlmagorZohar & Co., a Member of Deloitte Touche Tohmatsu Limited, to audit the accounts of the Company for the year endingDecember 31, 2018.
TheAudit Committee considered the tax compliance services provided by Brightman Almagor Zohar & Co., concluded that provisionof such services is compatible with maintaining the independence of the independent accountants, and approved the provision byBrightman Almagor Zohar & Co. of tax compliance services with respect to the year ending December 31, 2018.
TheAudit Committee received the following information concerning the fees of the independent accountants for the years ended December31, 2018 and 2017, has considered whether the provision of these services is compatible with independence of the independent accountants,and concluded that it is:
Auditand tax fees include administrative overhead charges and reimbursement for out-of-pocket expenses.
Pre-ApprovalPolicies and Procedures
TheAudit Committee has adopted policies and procedures for pre-approving all services (audit and non-audit) performed by our independentauditors. In accordance with such policies and procedures, the Audit Committee is required to pre-approve all audit and non-auditservices to be performed by the independent auditors in order to assure that the provision of such services is in accordance withthe rules and regulations of the SEC and does not impair the auditors’ independence. Under the policy, pre-approval is generallyprovided up to one year and any pre-approval is detailed as to the particular service or category of services and is subject toa specific budget. In addition, the Audit Committee may pre-approve additional services on a case-by-case basis. During 2015 andthrough November 28, 2016, Microbot Israel did not have a standing audit committee.
REPORT OF THE AUDIT COMMITTEE
TheAudit Committee oversees our accounting and financial reporting processes and the audits of our financial statements on behalfof the Board and selects an independent public accounting firm to perform these audits. Management has the primary responsibilityfor establishing and maintaining adequate internal control over financial reporting, preparing the financial statements, and establishingand maintaining adequate controls over public reporting. Our independent registered public accounting firm for fiscal 2018, Deloitte,had responsibility for conducting an audit of our annual financial statements in accordance with the standards of the Public CompanyAccounting Oversight Board (United States) and expressing an opinion on the conformity of those audited financial statements withgenerally accepted accounting principles.
TheAudit Committee oversaw the independent public accounting firm’s qualifications and independence, as well as its performance.The Audit Committee assisted the Board in overseeing the preparation of the Company’s financial statements, the Company’scompliance with legal and regulatory requirements, and the performance of the Company’s internal audit function. The AuditCommittee met with personnel of the Company and Deloitte to review the scope and the results of the annual audit, the amount ofaudit fees, the Company’s internal accounting controls, the Company’s financial statements contained in the Company’sAnnual Report to Shareholders and other related matters.
TheAudit Committee has reviewed and discussed with management the financial statements for fiscal year 2018 audited by Deloitte,as well as management’s report on internal control over financial reporting, using the criteria set forth by the Committeeof Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. The Audit Committeehas discussed with Deloitte various matters related to the financial statements, including those matters required to be discussedby SAS 114 (The Auditor’s Communication with Those Charged with Governance). The Audit Committee has also discussed withDeloitte its report on internal control over financial reporting, has received the written disclosures and the letter from Deloitterequired by Public Company Accounting Oversight Board (PCAOB) Ethics and Independence Rule 3526, Communication with Audit CommitteesConcerning Independence (Rule 3526), and has discussed with Deloitte its independence.
Basedupon such review and discussions, the Audit Committee recommended to the Board of Directors, and the Board approved the recommendation,that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year endingDecember 31, 2018 for filing with the SEC.
Theforegoing Audit Committee Report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933or the Securities Exchange Act of 1934, and shall not otherwise be deemed filed under these acts, except to the extent we specificallyincorporate by reference into such filings.
PROPOSAL1: NOMINEES FOR ELECTION OF CLASS I DIRECTORS
Thenumber of directors is currently fixed at seven, with one vacancy. Both our restated certificate of incorporation, as amendedto date, and our amended and restated by-laws provide for the classification of the Board into three classes (Class I, Class IIand Class III), as nearly equal in number as possible, with the term of office of one class expiring each year.
Unlessotherwise instructed, the enclosed proxy will be voted to elect the nominees named below, each of whom is now a Class I director,as Class I directors for a term of three years expiring at the 2022 Annual Meeting of Shareholders and until their successorsare duly elected and qualified. All three Class I director nominees have been recommended by the Corporate Governance Committeebecause of their past experience serving on the Company’s Board, the breadth of their business expertise, sound judgment,and demonstrated leadership, among other things. Proxies cannot be voted for a greater number of persons than the number of nomineesnamed below. It is expected that the nominees will be able to serve, but if any are unable to serve, the proxy will be voted fora substitute nominee or nominees designated by the Board.
TheCorporate Governance Committee has recommended and the Board has nominated Harel Gadot, Yoav Waizer, and Martin Maddenfor election as the Company’s Class I directors to serve as Class I Directors until the 2022 Annual Meeting of Shareholders.
THEBOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL 1 TO ELECT AS DIRECTORS THE THREE NOMINEES DESCRIBEDABOVE.
PROPOSAL2: RATIFICATION OF INDEPENDENT REGISTERED ACCOUNTING FIRM
TheCompany is asking the stockholders to ratify the selection of Deloitte, or its U.S. affiliate, as the Company’s independentpublic accountants for the fiscal year ending December 31, 2019. The affirmative vote of the holders of a majority of the sharesrepresented and voting at the Annual Meeting will be required to ratify the selection of Deloitte or its U.S. affiliate.
Inthe event the stockholders fail to ratify the appointment, the Audit Committee of the Board of Directors will consider it as arecommendation to select other auditors for the subsequent year, which the Audit Committee would then take under advisement. Evenif the selection is ratified, the Audit Committee of the Board at its discretion could decide to terminate the engagement of Deloitteor its U.S. affiliate and engage another firm at any time if the Audit Committee determines that such a change would be necessaryor desirable in the best interests of the Company and its stockholders.
Arepresentative of Deloitte is expected to attend the Annual Meeting telephonically and is not expected to make a statement, butwill be available to respond to appropriate questions and may make a statement if such representative desires to do so.
THEBOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL 2 TO RATIFY THE SELECTION OF DELOITTE OR ITS U.S. AFFILIATEAS THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 2019.
PROPOSAL3: APPROVAL OF AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REDUCTION IN TH AUTHORIZED NUMBEROF SHARES OF CAPITAL STOCK
OurBoard has adopted a resolution declaring advisable and recommending to the stockholders for their approval a proposal to amendthe Company’s restated certificate of incorporation, as amended to date, to effect to effect a reduction in the authorizednumber of shares of capital stock the Company is authorized to issues from 221,000,000 to 61,000,000, including a reduction inthe number of authorized shares of common stock of the Company from 220,000,000 to 60,000,000 (the “Share Reduction”).If the Share Reduction is approved, the Company will file an appropriate Certificate of Amendment to its Restated Certificateof Incorporation to affect such Share Reduction. Our primary reason for seeking to effect the Share Reduction is that the ShareReduction will reduce the Company Delaware franchise tax obligations.
Asample form of the Certificate of Amendment relating to this Proposal Number 3, which we would complete and file with the Secretaryof State of the State of Delaware to carry out the Share Reduction, is attached to this proxy statement as Schedule A (the “Amendment”).Stockholders are encouraged to review this carefully as it would modify the capitalization of the Company upon its effectiveness.
Asfurther detailed below, the Company is presently authorized to issue 221,000,000 shares of capital stock, which consists of 220,000,000shares of common stock, par value $0.01 per share and 1,000,000 shares of undesignated preferred stock, $0.01 per share. As ofAugust 8, 2019, the Company had 4,307,666 shares of common stock issued and outstanding and no shares of preferred stockissued and outstanding. As proposed, the Share Reduction would reduce the authorized capital of the Company from 221,000,000 to61,000,000, including in a reduction in the authorized number of shares of common stock from 220,000,000 to 60,000,000. The ShareReduction would not affect the authorized number of shares of preferred stock, which would remain at 1,000,000. The proposed ShareReduction will not affect any stockholder’s proportionate equity interest in the Company. Neither the par value of the commonstock nor any rights presently accruing to holders of Common Stock would be affected by this Amendment.
Thefollowing table illustrates the effect of the Amendment on the Company’s common stock based on shares authorized, issued,outstanding and available for future issuance as of August 8, 2019.
Reasonsfor Proposed Share Reduction
TheBoard believe the Share Reduction, if affected, will reduce the Company’s annual Delaware franchise tax liability by approximately$130,000 commencing for the year ending December 31, 2019. Assuming no changes in future Delaware franchise tax law and the Company’scurrent financial position, the Board anticipates that there will be ongoing savings however, there can be no assurance that suchresult will occur.
TheBoard is not aware of any present efforts by any persons to accumulate common stock or to obtain control of the Company. The Amendmentis being sought for the sole purpose of reducing the number of shares authorized capital stock for future issuance to reduce theCompany’s current Delaware franchise tax liability. The Board believes that the remaining shares of authorized capital stockunder the Restated Certificate of Incorporation after giving effect to the Share Reduction will be sufficient to satisfy the Company’scapital requirements in the future.
PotentialDisadvantages of the Proposal
Althoughthe Board believes that 60,000,000 authorized shares of common stock will be sufficient for our expected purposes for the foreseeablefuture, these expectations could turn out to be wrong and we may require additional authorized shares sooner than we expect. Inthat case, we would be required to obtain the approval of our stockholders to effect an increase to our authorized shares. Anysuch increase to our authorized shares may require us to solicit consents or proxies and hold a vote at an annual or special meetingof our stockholders. The stockholder meeting process can be costly and time-consuming and is subject to a variety of SEC rulesthat implement waiting periods throughout the process, which could prevent us from obtaining any increase to our authorized sharesin a timely manner. Moreover, our stockholders may not approve any proposal to increase our authorized shares. Either of theseoutcomes could cause us to forego opportunities that we believe to be valuable or prevent us from using equity for compensationor other corporate purposes, which could limit our flexibility and prospects.
Marketfor the Company’s Common Stock
Thecommon stock of the Company trades on the NASDAQ Capital Market under the symbol “MBOT”.
Asof July 22, 2019, there were approximately 11,500 beneficial owners of the Company’s common stock. The closing price ofthe common stock of the Company was $5.89 on August 8, 2019.
VoteRequired and Board of Directors Reservation of Rights
UnderDelaware law, approval of the Share Reduction requires the affirmative vote of at least a majority of the outstanding shares ofthe Company’s common stock. Such approval will authorize the Board to effectuate a reduction in the number of authorizedshares of common stock by filing the Amendment with the Secretary of State of the State of Delaware.
UnderDelaware law, stockholders are not entitled to dissenter’s rights of appraisal with respect to the proposed Share Reduction.
THEBOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL 3 TO APPROVE THE AMENDMENT TO THE COMPANY’S RESTATEDCERTIFICATE OF INCORPORATION TO EFFECT THE SHARE REDUCTION.
Shareholderswho wish to present proposals for inclusion in the Company’s proxy materials for the 2020 Annual Meeting of Shareholdersmay do so by following the procedures prescribed in Rule 14a-8 under the Exchange Act. To be eligible, the Shareholder proposalsmust be received by our corporate secretary on or before April 11, 2020.
Shareholderswho wish to make a proposal at the 2020 Annual Meeting of Shareholders, other than one that will be included in our proxy materials,must notify us no later than June 25, 2020 (see Rule 14a-4 under the Exchange Act). If a Shareholder who wishes to presenta proposal at the 2020 Annual Meeting of Shareholders fails to notify us by June 25, 2020, the proxies that managementsolicits for the meeting will confer discretionary authority to vote on the Shareholder’s proposal if it is properly broughtbefore the meeting.
ShareholderNominations of Directors
Ashareholder entitled to vote for the election of directors at a meeting may nominate persons for election as directors by givingtimely notice thereof in proper written form to the secretary accompanied by a petition signed by at least 100 record holdersof capital stock of the Company which shows the class and number of shares held by each person and which represent in the aggregate1% or more of the outstanding shares entitled to vote in the election of directors. The submission must be in writing and deliveredto Microbot Medical Inc., Attn: Secretary, Board of Directors, 25 Recreation Park Drive, Unit 108, Hingham, MA 02043, in accordancewith the advance notice procedures and other requirements set forth in Section 3.2 of our bylaws for nominees to be consideredfor nomination at the 2020 annual meeting. These requirements are separate from, and in addition to, the requirements discussedabove to have the shareholder nomination or other proposals included in our proxy statement and form of proxy/voting instructioncard pursuant to the SEC’s rules. Submissions must include the name, address and number of shares of common stock beneficiallyowned by each participant in the Nominating Shareholder group, a representation that the Nominating Shareholder meets the requirementsdescribed in the Board policy and will continue to meet them through the date of the annual meeting, a description of all arrangementsor understandings between or among the Nominating Shareholder group (or any participant in the Nominating Shareholder group) andthe candidate or any other person or entity regarding the candidate, all information regarding the candidate that the Companywould be required to disclose in a proxy statement under SEC rules, including whether the candidate is independent or, if not,a description of the reasons why not, the consent of the candidate to serve as a director, and representations by the candidateregarding his or her performance of the duties of a director. Full details may be obtained from the secretary of the Board atthe address above or on our website at www.microbotmedical.com. The Corporate Governance Committee will consider and evaluateup to two candidates recommended in accordance with this policy in connection with any annual meeting. The Corporate GovernanceCommittee will consider and evaluate candidates recommended by Shareholders on the same basis as candidates recommended by othersources.
Inaddition, the Company’s by-laws provide that a Shareholder entitled to vote for the election of directors at a meeting maynominate persons for election as directors by giving timely notice thereof in proper written form to the Secretary accompaniedby a petition signed by at least 100 record holders of capital stock of the Company representing in the aggregate 1% or more ofthe outstanding shares entitled to vote in the election of directors, which petition must show the class and number of sharesheld by each person. To be timely, such notice and petition must be received at the principal executive offices of the Companynot less than 60 days nor more than 90 days prior to the meeting, except if less than 70 days notice of the date of the meetingis given to Shareholders, in which case the notice and petition must be received not later than the close of business on the tenthday following the day on which notice of the date of the meeting was mailed or public disclosure of such date was made. The requestingShareholder is required to provide information with respect to the nominee(s) for director similar to that described above, asmore fully set forth in the Company’s by-laws.
TheCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC, is available withoutcharge upon request by writing to Microbot Medical Inc. at 25 Recreation Park Drive, Unit 108, Hingham, MA 02043, Attention: InvestorRelations. A copy of this report is also available through our website at www.microbotmedical.com or, alternatively, at www.sec.gov.
“Householding”of Proxy Materials
Somebanks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statementsand annual reports. This means that only one copy of our proxy statement and annual report to shareholders may have been sentto multiple shareholders in your household. The Company will promptly deliver a separate copy of either document to you if youcontact the Secretary at the following address or telephone number: Microbot Medical Inc., 25 Recreation Park Drive, Unit 108,Hingham, MA 02043; telephone: (781) 875-3605. In addition, copies of both documents may be obtained from our website (www.microbotmedical.com,click on the button “Investors” and then “Presentation + Resources”). You may also request informationfrom Morrow Sodali LLC, our proxy solicitor, at the following address and telephone number: Morrow Sodali LLC, 470 West Avenue,Stamford, CT 06902; Stockholders Call Toll Free: 800-662-5200; Microbotemail@example.com. If you want to receive separatecopies of the proxy statement or the annual report to shareholders in the future, or if you are receiving multiple copies andwould like to receive only one copy per household, you should contact your bank, broker or other nominee record holder, or youmay contact the Company at the above address or telephone number.
TheBoard knows of no business that will come before the meeting for action except as described in the accompanying Notice of Meeting.However, as to any such business, the persons designated as proxies will have authority to act in their discretion.
CERTIFICATEOF AMENDMENT TO THE
RESTATEDCERTIFICATE OF INCORPORATION OF
MicrobotMedical Inc. (the “Corporation”), a corporation duly organized and existing under the General Corporation Law of theState of Delaware (the “DGCL”), hereby certifies that:
1.The name of the Corporation is Microbot Medical Inc. and the Corporation was originally incorporated pursuant to the DGCL underthe name Cellular Transplants, Inc. and the original certificate of incorporation of the Corporation was filed with the Secretaryof State of the State of Delaware on August 2, 1988. The original certificate of incorporation was then restated on December 5,1991 to change the name of the corporation to Cytotheraputics, Inc. The certificate of incorporation as restated was further amendedon May 24, 2000 to change the name of the corporation to StemCells, Inc. The certificate of incorporation was restated on August25, 2006. The certificate of incorporation as restated was further amended on November 28, 2016 to change the name of the corporationto Microbot Medical Inc. The certificate of incorporation as restated was further amended on September 4, 2018 to effect a reversestock split of the Corporation’s common stock (as amended and restated, the “Certificate of Incorporation”).
2.Upon filing of this Certificate of Amendment to the Certificate of Incorporation, the first paragraph of Paragraph THREE of theCertificate of Incorporation shall be amended to read in its entirety as set forth below:
Thetotal number of shares of stock that this Corporation shall have authority to issue is 61,000,000, consisting of 60,000,000 shareof Common Stock, with a par value of $0.01 per share (the “Common Stock”), and 1,000,000 shares of Undesignated PreferredStock with a par value of $0.01 per share (the “Undesignated Preferred Stock”).
3.This Amendment was duly adopted in accordance with Section 242 of the DGCL. The Board of Directors duly adopted resolutions settingforth and declaring advisable this Amendment and directed that the proposed Amendment be considered by the stockholders of theCorporation. A meeting of stockholders was duly called upon notice in accordance with Section 222 of the DGCL and held on September10, 2019, at which meeting the necessary number of shares were voted in favor of the proposed Amendment. The stockholders of theCorporation duly adopted this Amendment.
4.The remaining provisions of the Certificate of Incorporation are not affected by the aforementioned amendment and remain in fullforce and are not affected by this Amendment.
5.The foregoing Amendment shall be effective as of September [__], 2019.
INWITNESS WHEREOF, said Corporation has caused this certificate to be signed this [__] day of September, 2019.