UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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Stereotaxis,
Inc.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement if Other Than the Registrant)
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STEREOTAXIS,
INC.
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4320
Forest Park Avenue
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Suite
100
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St.
Louis, Missouri 63108
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(314)
678-6100
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April
9, 2020
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Dear
Shareholder:
You
are cordially invited to attend our Annual Meeting of Shareholders on Thursday, May 21, 2020 at 10:00 a.m. (Central Daylight Time)
at our Company headquarters at 4320 Forest Park Avenue in St. Louis, Missouri.
Details
about the meeting are described in the Notice of Internet Availability of Proxy Materials you received in the mail and in this
proxy statement. We have also made a copy of our 2019 Annual Report on Form 10-K and this proxy statement available on the Internet.
Whether or not you plan to attend the meeting, we encourage you to read our 2019 Annual Report and this proxy statement and to
vote your shares.
Because
of the current COVID-19 pandemic it is possible that the date, time, or location of the annual meeting will change. In the event
circumstances dictate a change, the Company will comply with Delaware law and also SEC rules and guidance.
Your
vote is very important to us. Most shareholders hold their shares in street name through a broker and may vote by using the Internet,
by telephone or by mail. If your shares are held in the name of a bank, broker or other holder of record, you must present proof
of your ownership, such as a bank or brokerage account statement, to be admitted to the meeting and if you plan to vote your shares
in person at the meeting, you must obtain a proxy, executed in your favor, from your bank or broker. All shareholders must also
present a form of personal identification in order to be admitted to the meeting.
On
behalf of the entire Board, I thank you for your continued support and look forward to seeing you at the meeting.
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Sincerely,
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David
L. Fischel
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Chief
Executive Officer and
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Chairman
of the Board
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STEREOTAXIS,
INC.
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4320
Forest Park Avenue
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Suite
100
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St.
Louis, Missouri 63108
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(314)
678-6100
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NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
April
9, 2020
The
Annual Meeting of Shareholders of Stereotaxis, Inc. will be held at our principal executive offices located at 4320 Forest Park
Avenue, Suite 100, St. Louis, Missouri 63108, on Thursday, May 21, 2020 at 10:00 a.m. (Central Daylight Time) for the following
purposes:
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1.
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To
elect three (3) Directors as follows: a Class II director to serve until the 2021 Annual Meeting and until, at the election
of the Company, his successor is duly elected and qualified, and two Class I directors to serve until the 2023 Annual Meeting
and until, at the election of the Company, their respective successors are duly elected and qualified;
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2.
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To
ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year
2020;
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3.
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To
approve, by non-binding vote, executive compensation; and
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4.
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To
transact such other business as may properly come before the meeting.
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The
Board of Directors fixed Monday, March 30, 2020 as the date of record for the meeting, and only shareholders of record at the
close of business on that date will be entitled to vote at the meeting or any adjournment thereof.
We
began sending to all shareholders of record a Notice of Internet Availability of Proxy Materials on April 9, 2020. Please note
that our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 is available for viewing on the Internet. Please
refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail.
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By
Order of the Board of Directors,
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STEREOTAXIS,
INC.
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/s/
Kevin Barry
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Kevin
Barry
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Secretary
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St.
Louis, Missouri
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April
9, 2020
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IMPORTANT
NOTICE
Please
Vote Your Shares Promptly
TABLE
OF CONTENTS
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING
Q.
Why am I receiving these materials?
The
Board of Directors (the “Board”) of Stereotaxis, Inc. (the “Company”) is soliciting proxies from the Company’s
shareholders in connection with its 2020 Annual Meeting of Shareholders to be held on May 21, 2020 and any and all adjournments
and postponements thereof. You are encouraged to vote on the proposals presented in these proxy materials. You are invited to
attend the Annual Meeting, but you do not have to attend to vote.
Q.
When and where is the Annual Meeting?
We
presently intend to hold the Annual Meeting of Shareholders on May 21, 2020 at 10:00 a.m. Central Daylight Time, at our principal
executive offices located at 4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108.
Because
of the current COVID-19 pandemic it is possible that the date, time, or location of the annual meeting will change. In the event
circumstances dictate a change, the Company will comply with Delaware law and also SEC rules and guidance.
Q.
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
In
accordance with rules adopted by the Securities and Exchange Commission (the “SEC”), we may furnish proxy materials,
including this proxy statement and our 2019 Annual Report on Form 10-K, to our shareholders by providing access to such documents
on the Internet instead of mailing printed copies. Most shareholders will not receive printed copies of the proxy materials unless
they request them. Instead, the Notice, which was mailed to most of our shareholders, will instruct you as to how you may access
and review all of the proxy materials on the Internet. The Notice also instructs you as to how you may submit your proxy on the
Internet. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting
such materials in the Notice.
Q.
How do I get electronic access to the proxy materials?
The
Notice will provide you with instructions regarding how to view our proxy materials for the Annual Meeting on the Internet.
Q.
Who is entitled to vote?
You
are entitled to vote if you were a shareholder of record of shares of our common stock or Series A Convertible Preferred Stock
at the close of business on March 30, 2020 (the “Record Date”). On March 30, 2020, there were 69,036,766 shares of
our common stock outstanding and entitled to vote and 22,918 shares of our Series A Convertible Preferred Stock outstanding. Holders
of our Series B Convertible Preferred Stock are not entitled to vote on any matter being presented for consideration at the Annual
Meeting.
Q.
How many votes do I have?
Each
share of common stock that you own entitles you to one vote. On the Record Date, there were a total of 69,036,766, shares of common
stock outstanding. As of the Record Date, each share of our Series A Convertible Preferred Stock is convertible into 1,862 shares
of our common stock, and is entitled to one vote for each share of common stock into which it is convertible, subject to specified
beneficial ownership limitations. On the Record Date there were 22,918 shares of Series A Convertible Preferred Stock outstanding,
entitling the holders of those shares to an aggregate of 14,740,660 votes. Accordingly, on the Record Date, the holders of our
common stock and Series A Convertible Preferred Stock are entitled to an aggregate of 83,777,426 votes in respect of such shares
of stock.
Q.
What am I being asked to vote on?
We
are asking our shareholders to (1) elect one Class II director to serve until the 2021 Annual Meeting and until, at the election
of the Company, his successor is duly elected and qualified and two Class I directors to serve until the 2023 Annual Meeting and
until, at the election of the Company, their respective successors are duly elected and qualified, (2) ratify the appointment
of Ernst & Young LLP as our independent registered public accounting firm for the 2020 fiscal year, (3) approve, by non-binding
vote, executive compensation, and (4) transact such other business as may properly come before the meeting.
Q.
What do I do if my shares of common stock are held in “street name” at a bank or brokerage firm?
If
your shares are held in an account at a brokerage firm, bank, broker-dealer, trust or other similar organization, like the vast
majority of our shareholders, you are considered the beneficial owner of shares held in “street name”, and the Notice
was forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank, trustee or
nominee how to vote your shares, and you are invited to attend the Annual Meeting.
Q.
How do I vote?
Whether
or not you expect to be present in person at the Annual Meeting, you are requested to vote your shares. Most shareholders will
be able to choose whether they wish to vote using the Internet, by telephone or by mail. The availability of Internet voting or
telephone voting for shareholders whose shares are held in “street name” by a bank or a broker may depend on the voting
processes of that organization. If you vote using the Internet, you may incur costs such as telephone and Internet access charges
for which you will be responsible. Internet and telephone voting facilities will be available 24 hours a day and will close at
11:59 p.m., Eastern Daylight Time, on May 20, 2020, the day before the date of the Annual Meeting. If you hold your shares directly
as a shareholder of record and you attend the meeting, you may vote by ballot. If you hold your shares in street name through
a bank or broker and you wish to vote at the meeting, you must obtain a proxy, executed in your favor, from your bank or broker.
Whether
you hold shares directly as the shareholder of record or beneficially in street name, you may direct how your shares are voted
without attending the Annual Meeting. If you are a shareholder of record, you may vote by proxy. You can vote by proxy over the
Internet by following the instructions provided in the Notice or if you requested to receive printed proxy materials, you can
also vote by mail, telephone or the Internet pursuant to instructions provided on the proxy card. If you hold shares beneficially
in street name, you may vote by proxy over the Internet by following the instructions provided in the Notice, or, if you requested
to receive printed proxy materials, you can also vote by following the voting instruction card provided to you by your broker,
bank, trustee or nominee.
Q.
What if I want to change my vote?
If
you are a shareholder of record, you can revoke your proxy at any time before it is voted at the Annual Meeting by:
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timely
delivering a properly executed, later-dated proxy;
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submitting
a later vote by Internet or telephone any time prior to 11:59 p.m., Eastern Daylight Time, on May 20, 2020;
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delivering
a written revocation of your proxy to our Secretary at our principal executive offices; or
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voting
by ballot at the meeting.
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If
your shares are held in the name of a bank or brokerage firm, you may change your vote by submitting new voting instructions to
your bank or broker following the instructions that they provide.
Q.
What vote of the shareholders is needed?
No
business can be conducted at the Annual Meeting unless a majority of the outstanding shares of common stock entitled to vote is
present in person or represented by proxy at the meeting. Each share of our common stock is entitled to one vote with respect
to each matter on which it is entitled to vote. Each share of Series A Convertible Preferred Stock is entitled to one vote on
an as-converted basis, subject to specified beneficial ownership limitations applicable to the holders of the Series A Convertible
Preferred Stock. As noted above, holders of our Series B Convertible Preferred Stock are not entitled to vote on any matter being
presented for consideration at the Annual Meeting. A plurality of the shares entitled to vote and present in person or by proxy
at the meeting must be voted “FOR” a director nominee. A majority of shares entitled to vote and present in person
or by proxy at the meeting must be voted “FOR” the ratification of Ernst & Young LLP as our independent registered
public accounting firm for the 2020 fiscal year and “FOR” the non-binding approval of executive compensation.
Q.
What happens if I request a paper copy of proxy material and return my signed proxy card but forget to indicate how I want my
shares of common stock voted?
If
you sign, date and return your proxy and do not mark how you want to vote, your proxy will be counted as a vote “FOR”
all of the nominees for directors, “FOR” the ratification of our independent registered public accounting firm, “FOR”
the approval of executive compensation, and in the discretion of the proxy holders for such other business as may properly come
before the meeting.
Q.
What happens if I do not instruct my broker how to vote or if I indicate I wish to “abstain” on the proxy?
If
you hold shares in street name through a broker or other nominee and do not vote your shares or provide voting instructions, your
broker may vote for you on “routine” proposals but not on “non-routine” proposals. Rules of the NYSE
American Exchange (“NYSEAmerican”) determine whether proposals are routine or non-routine. Therefore, if you do
not vote on the non-routine proposals or provide voting instructions, your broker will not be allowed to vote your shares on these
matters. This will result in a “broker non-vote”. Broker non-votes are not counted as shares present and entitled
to vote so they will not affect the outcome of the vote.
We
expect that the following proposal will be considered “routine” under applicable NYSEAmerican rules: Proposal
2 (the ratification of Ernst & Young LLP as the Company’s independent registered public accountants. Accordingly, if
you do not provide voting instructions to your broker, we expect that your broker will be permitted to vote your shares
on this proposal, but all of our other proposals are “non-routine”. Therefore, if you do not vote on the non-routine
proposals or provide voting instructions, your broker will not be allowed to vote your shares. This will result in a broker
non-vote. Broker non-votes are not counted as shares present and entitled to vote so they will not affect the outcome of the vote.
If
you indicate that you wish to “abstain,” your vote will have the same effect as a vote against the proposal or the
election of the applicable director.
Q.
What if other matters are voted on at the Annual Meeting?
If
any other matters are properly presented for consideration at the Annual Meeting and you have voted your shares by Internet, telephone
or mail, the persons named as proxies in your proxy will have the discretion to vote on those matters for you. As of the date
we filed this proxy statement with the Securities and Exchange Commission, the Board of Directors did not know of any other matter
to be presented at the Annual Meeting.
Q.
What do I need to do if I plan to attend the meeting in person?
All
shareholders must present a form of personal identification in order to be admitted to the meeting. If your shares are held in
the name of a bank, broker or other holder of record, you also must present proof of your ownership, such as a bank or brokerage
account statement, to be admitted to the meeting.
INFORMATION
ABOUT THE BOARD OF DIRECTORS
The
number of directors set by the Board is nine. Currently, there are two vacancies on the Board, one vacancy in Class II and one
vacancy in Class III. Robert J. Messey, a Class I director, has discussed with the Nominating and Corporate Governance Committee
of the Board his intent to retire from the Board. On the recommendation of the Committee, the Board nominated Mr. Messey for election
to the Board to fill the vacancy in Class II and serve a one-year term. If Mr. Messey is elected, there will be one vacancy in
both Class I and Class III.
Set
forth below is the name, age, and business experience of each of the continuing directors and nominees of the Company, including
the specific experience, qualifications, attributes or skills that led to the conclusion that such person should serve as a director.
Dr. Nathan Fischel is the father of David L. Fischel, our Chief Executive Officer and Chairman of the Board.
Class
I Directors (Nominees for election to the Board at the 2020 Annual Meeting to serve a three-year term until the 2023 Annual Meeting)
David
W. Benfer
Director
since February 2005
Mr.
Benfer, 73, has served as the chairman of The Benfer Group LLC, which provides advisory services to healthcare providers and suppliers,
since 2010. From 1999 to 2009, Mr. Benfer served as president and chief executive officer of Saint Raphael Healthcare System and
the Hospital of Saint Raphael, New Haven, Connecticut. Prior to that, he was the president and chief executive officer of the
Provena-Saint Joseph/Morris Health Network in Joliet, Illinois from 1992 to 1999. Mr. Benfer served as senior vice president for
Hospital and Urban Affairs for the Henry Ford Health System in Detroit and chief executive officer of the Henry Ford Hospital
from 1985 to 1992. He served as the chairman of the American College of Healthcare Executives (ACHE) from 1998 to 1999 and on
its board of governors from 1992 to 2000. Mr. Benfer was named a Fellow of ACHE in 1981 and served on the board of the Catholic
Health Association from 2003 until 2008. He earned his M.B.A. from Xavier University and his B.S.B.A. from Wittenburg University.
Mr. Benfer’s extensive experience in the healthcare industry and in hospital management provides the Company with useful
industry information related to technology acquisition, governance, and risk and liability issues.
Arun
S. Menawat, Ph.D.
Director
since September 2016
Dr.
Menawat, 65, is Chairman and CEO of Profound Medical Corp. (NASDAQ:PROF) (TXSV:PRN), a medical device company that is driving
commercialization of real-time MRI-guided ablation for prostate diseases including cancer. Dr. Menawat has an accomplished history
of executive leadership success in the healthcare industry. He was previously the Chairman, President and CEO of Novadaq Technologies
Inc. (NASDAQ:NVDQ) (TXS:NDQ). Under his 13-year tenure at Novadaq, he transformed the company from a small private pre-commercial
company into the leader in intraoperative imaging and was instrumental in signing strategic partnerships with companies including
Intuitive Surgical, LifeCell, and KCI. He obtained a Ph.D. in Chemical (Bio) Engineering from the University of Maryland, while
concurrently completing a fellowship in biomedical engineering at the U.S. National Institute of Health, and holds an Executive
MBA from the J.L. Kellogg School of Management, Northwestern University. In 2014, Dr. Menawat was named the EY Ontario Entrepreneur
of the Year in the health sciences category. Dr. Menawat’s strong executive experience with medical device companies provides
the Board valuable guidance for product innovation, customer initiatives and operational matters.
Class
I Director (Nominee for election to the Board at the 2020 Annual Meeting to serve a one-year term as a Class II director until
the 2021 Annual Meeting)
Robert
J. Messey
Director
since May 2005
Mr.
Messey, 74, served as the senior vice president and chief financial officer of Arch Coal, Inc. from December 2000 until his retirement
in April 2008. Prior to joining Arch Coal, he served as the vice president of financial services of Jacobs Engineering Group,
Inc. from 1999 to 2000 following that company’s acquisition of Sverdrup Corporation, where he served as senior vice president
and chief financial officer from 1992 to 1999. Mr. Messey was an audit partner at Ernst & Young LLP from 1981 to 1992. He
previously served as a director and member of the audit and compensation committees of Oxford Resource Partners, LP, a publicly
traded coal mining company, from May 2010 to December 2014, and as a director and chairman of the audit committee of Baldor Electric
Company, a publicly traded manufacturer of industrial electrical motors, from May 1993 to January 2011. He serves as an advisory
director, chairman of the audit committee, and member of the compensation committee of a privately held mining company. Mr. Messey
earned his B.S.B.A. from Washington University. Mr. Messey’s experience in finance and accounting provides the Board with
a great deal of expertise on financing, accounting and compliance matters.
Class
II Directors (terms expiring at the 2021 Annual Meeting)
David
L. Fischel
Chief
Executive Officer and Chairman of the Board since February 2017
Director
since September 2016
Mr.
Fischel, 33, was named chief executive officer and chairman of the board effective as of February 3, 2017. He has served as a
director of Stereotaxis since leading the equity investment and positive strategic initiatives announced in September 2016. He
has served for over ten years as Principal and portfolio manager for medical device investments at DAFNA Capital Management, LLC.
In addition to his research responsibilities, Mr. Fischel has been deeply involved in all aspects of DAFNA Capital’s operations
including legal, accounting, IT, compliance, human resources and marketing. Prior to joining DAFNA Capital, he was a research
analyst at SCP Vitalife, a healthcare venture capital fund. Mr. Fischel completed his B.S. magna cum laude in Applied Mathematics
with a minor in Accounting at the University of California at Los Angeles and received his MBA from Bar-Ilan University in Tel
Aviv. He is a Certified Public Accountant, Chartered Financial Analyst and Chartered Alternative Investment Analyst. Mr. Fischel’s
financial experience and understanding of the medical device industry enables him to make valuable contributions to our strategic
initiatives and general management matters.
Joe
Kiani
Director
since September 2016
Mr.
Kiani, 55, is the founder, Chairman of the board of directors, and CEO of Masimo, a global medical technology innovator. He has
been a beacon for patient safety and innovation in healthcare for more than 26 years. He founded Masimo in 1989 to improve patient
outcomes and reduce the cost of care by taking noninvasive monitoring to new sites and applications. Under his leadership, Masimo
has grown from a “garage start up” into a successful publicly traded company (NASDAQ: MASI) employing more than 5,500
people. Masimo has helped to solve the “unsolvable” problems plaguing patient monitoring through significant inventions
with more than 600 issued and pending patents worldwide. Committed to patient safety, Mr. Kiani founded the Patient Safety Movement
Foundation in 2012 and the World Patient Safety, Science & Technology Summit. The Patient Safety Movement Foundation (PSMF)
has the goal of eliminating preventable deaths by 2020 in the US, and to significantly reduce preventable deaths in hospitals
worldwide. Today, PSMF has over 1700 hospitals from around the world that have committed to patient safety. In January 2016, the
hospitals that had joined Patient Safety Movement reported 24,643 lives saved annually. Mr. Kiani’s understanding of the
healthcare industry as well as his experience in strategic planning, strategic innovations, engineering and product innovation
are valuable in supporting and guiding our product development, growth, technology innovation and operational excellence.
Class
III Directors (terms expiring at the 2022 Annual Meeting)
Nathan
Fischel, M.D.
Director
since February 2017
Dr.
Fischel, 64, is the Founder and CEO of DAFNA Capital Management, LLC. DAFNA Capital is an SEC registered investment advisor with
a highly successful investment track record of over 20 years focused on innovations in biotechnology and medical devices. Dr.
Fischel was Professor of Pediatrics at UCLA School of Medicine, and attending physician in Pediatric Hematology and Oncology at
Cedars-Sinai Medical Center in Los Angeles. He has published over 120 peer-reviewed scientific and medical manuscripts and book
chapters, has been the principal investigator of multiple National Institutes of Health (“NIH”) funded research grants,
has served repeatedly on internal and external review panels at the NIH, and was appointed by the U.S. Secretary of Health and
Human Services to serve for four years on the Advisory Council of one of the NIH’s institutes. Dr. Fischel received his
M.D. from the Technion Israel Institute of Technology and served his internship year at Hadassah Hospital in Jerusalem. He completed
his residency and fellowship in Pediatrics and Pediatric Hematology and Oncology at the Children’s Hospital and the Dana-Farber
Cancer Institute, Harvard Medical School in Boston, and his postgraduate research training in Molecular Genetics at Oxford University
in England. Dr. Fischel’s experience as a physician enables him to provide critical perspectives regarding our technologies
and commercial adoption of our products and his extensive knowledge of medical device companies allows him to provide insight
to the Board on strategic decisions.
Ross
B. Levin
Director
since July 2018
Mr.
Levin, 36, is the Director of Research for Arbiter Partners Capital Management LLC and a principal in the firm. Mr. Levin serves
on the board of directors for Capital Senior Living Corporation and is a former board member of Mood Media Corporation, American
Community Properties Trust and Presidential Life Corporation. Mr. Levin is also Vice Chairman of the Board of Directors of the
Cerebral Palsy Association of New York State. Mr. Levin is a member of the New York Society of Securities Analysts and a CFA charter
holder. Mr. Levin holds a Bachelor of Science degree in Management with a concentration in Finance from the A.B. Freeman School
of Business at Tulane University and has completed the Investment Decisions and Behavioral Finance program at the John F. Kennedy
School of Government at Harvard University. Mr. Levin’s securities industry experience and experience with other publicly
traded companies permits him to offer valuable insight into corporate governance, audit, and risk and liability issues.
CORPORATE
GOVERNANCE INFORMATION
Board
Leadership Structure and Board Role in Risk Oversight
David
L. Fischel became chief executive officer and chairman of the board effective February 3, 2017. Since February 2015, David W.
Benfer has served as the lead independent director. The Board believes that it should have flexibility to make the determination
of whether the same person should serve as both the chief executive officer and chairman of the board or if the roles should be
separate. The Board believes that its current leadership structure, with the positions of chief executive officer and chairman
of the Board held by the same individual and Mr. Benfer serving as lead independent director, provides appropriate leadership
for the Company and best serves the shareholders. Mr. Benfer provides independent leadership on the Board and interacts with the
chief executive officer and the independent directors to facilitate communications. Our independent directors regularly have executive
sessions as part of our regular meeting schedule, during which only the independent directors are present. Mr. Benfer leads these
sessions and provides feedback to the chief executive officer.
Our
Board provides risk oversight to the Company through the Audit Committee. The Audit Committee monitors financial, healthcare compliance,
and regulatory risks. This oversight process takes place through discussions at committee meetings with the members of senior
management who are responsible for the Company’s risk management policies and procedures. In addition, the Audit Committee
regularly meets in a private session with the Company’s independent auditors.
Director
Independence
Our
common stock is listed on NYSEAmerican under the symbol STXS. The stock began trading on the NYSEAmerican on September 6, 2019.
Prior to that date the stock had traded on the OTCQX® Best Market since August 4, 2016. Historically, our Board
has considered the independence of our directors under the listing standards of The NASDAQ Capital Market (“NASDAQ”).
With the uplisting to the NYSEAmerican our Board now considers the independence of our directors under the listing standards
of the NYSEAmerican, specifically, NYSE Company Guide Section 803 Tests as amended February 5, 2015. Currently, all of our directors
are independent except David L. Fischel and Dr. Nathan Fischel.
With
the exception of David L. Fischel and Dr. Nathan Fischel, our Board determined that each member of the Board and the respective
Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee were independent in 2019 under the
listing standards of both, as applicable, NASDAQ and the NYSEAmerican,
Director
Nomination Process
The
Nominating and Corporate Governance Committee is responsible for identifying and recommending to the Board candidates to serve
as members of the Board. In carrying out this responsibility, the committee has adopted a written policy setting forth the minimum
qualifications to serve as a director of the Company. These minimum qualifications emphasize integrity, independence, experiences,
strength of character, mature judgment and technical skills applicable to the Company. The committee will also consider whether
the candidate is able to represent all shareholders of the Company fairly and equally, without favoring or advancing any particular
shareholder or other constituency of the Company.
The
committee also seeks Board members from diverse professional backgrounds who combine a broad spectrum of experience and expertise
with a reputation for integrity. Directors should have experience in positions with a high degree of responsibility, be leaders
in the companies or institutions with which they are affiliated, and/or be selected based upon contributions they can make to
the Company and Board. We do not have a formal policy regarding diversity, but the Board is committed to a diverse membership.
In selecting nominees, the Board does not discriminate on the basis of race, color, national origin, gender, religion, disability,
or sexual orientation.
The
committee may approve, in its discretion, the candidacy of a nominee who does not satisfy all of these requirements if it believes
the service of the nominee is in the best interests of the Company and its shareholders.
The
committee has written procedures for identifying and evaluating candidates for election to the Board. The material elements of
that process are as follows:
|
●
|
The
committee gives due consideration to the re-nomination of incumbent directors who desire to continue their service and who
continue to satisfy the committee’s criteria for membership on the Board.
|
|
●
|
In
the event that the Board elects to fill a director vacancy, the committee will identify and evaluate new candidates and will solicit or entertain recommendations for nominees
from other Board members and the Company’s management. The committee also may engage a professional search firm to assist
it in identifying qualified candidates.
|
Nomination
of Directors by Shareholders
The
Nominating and Corporate Governance Committee will evaluate candidates proposed by shareholders for nomination as directors under
criteria similar to the evaluation of other candidates. Our bylaws provide that shareholders seeking to nominate candidates for
election as directors at an annual meeting of shareholders must provide timely notice in writing. To be timely, a shareholder’s
notice must be delivered to or mailed and received at our principal executive offices not more than 120 days or less than 90 days
prior to the anniversary date of the immediately preceding annual meeting of shareholders. However, in the event that the annual
meeting is called for a date that is not within 30 days before or after such anniversary date, notice must be received not later
than the close of business on the 10th day following the date on which notice of the date of the annual meeting was mailed to
shareholders or made public, whichever occurs first. Our bylaws specify requirements as to the form and content of a shareholder’s
notice. These provisions may preclude shareholders from making nominations for directors at an annual meeting of shareholders.
The
Nominating and Corporate Governance Committee has established a written policy that it will consider recommendations for the nomination
of a candidate submitted by holders of the Company’s shares entitled to vote generally in the election of directors. The
material elements of that policy include the following:
|
●
|
The
committee will give consideration to these recommendations for positions on the Board where the committee has determined not
to re-nominate a qualified incumbent director;
|
|
●
|
For
each annual meeting of shareholders, it is anticipated that the committee will accept for consideration only one recommendation
from any shareholder or affiliated group of shareholders (within the meaning of SEC Regulation 13D); and
|
|
●
|
While
the committee has not established a minimum number of shares that a shareholder must own in order to present a nominating
recommendation for consideration, or a minimum length of time during which the shareholder must own its shares, the committee
may, in its discretion, take into account the size and duration of a recommending shareholder’s ownership interest in
the Company.
|
The
committee may, in its discretion, also consider the extent to which the shareholder making the nominating recommendation intends
to maintain its ownership interest in the Company; to the extent such information is available to the committee. The committee
may elect not to consider recommendations of nominees who do not satisfy the criteria described above, including that a director
must represent the interests of all shareholders and not serve for the purpose of favoring or advancing the interests of any particular
shareholder group or other constituency. Absent special or unusual circumstances, only those recommendations whose submission
complies with the procedural requirements adopted by the committee will be considered by the committee.
Any
shareholder wishing to submit a candidate for consideration should send the following information to the corporate secretary,
Stereotaxis, Inc., 4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108:
|
●
|
Shareholder’s
name, number of shares owned, length of period held and proof of ownership;
|
|
●
|
Name,
age, business and residential address of candidate;
|
|
●
|
A
detailed résumé describing, among other things, the candidate’s educational background, occupation, employment
history and material outside commitments (e.g., memberships on other boards and committees, charitable foundations);
|
|
●
|
A
supporting statement which describes the candidate’s reasons for seeking election to the Board and documents his/her
ability to satisfy the director qualifications described herein;
|
|
●
|
Any
information relating to the candidate that is required to be disclosed in the solicitation of proxies for election of director;
|
|
●
|
The
class and number of shares of our capital stock that are beneficially owned by the candidate;
|
|
●
|
A
description of any arrangements or understandings between the shareholder and the candidate; and
|
|
●
|
A
signed statement from the candidate, confirming his/her willingness to serve on the Board.
|
Our
corporate secretary will promptly forward such materials to the chair of our Nominating and Corporate Governance Committee and
our chairman of the Board. Our corporate secretary will also maintain copies of such materials for future reference by the committee
when filling Board positions. Shareholders may submit potential director candidates at any time pursuant to these procedures.
Shareholder
Communications Policy
Any
shareholder wishing to send communications to our Board should send the written communication and the following information to
our Corporate Secretary, Stereotaxis, Inc., 4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108:
|
●
|
Shareholder’s
name, number of shares owned, length of period held and proof of ownership;
|
|
●
|
Name,
age, business and residential address of shareholder; and
|
|
●
|
Any
individual director or committee to whom the shareholder would like to have the written statement and other information sent.
|
The
corporate secretary will forward the information to the chairman of the Board, if addressed to the full Board, or to the specific
director to which the communication is addressed.
Code
of Conduct
Our
Board has adopted a Code of Conduct that applies to all of our directors, officers and employees. Shareholders may download a
free copy of our Code of Conduct from our website (www.stereotaxis.com) or by written request to our Chief Compliance Officer
as follows:
Kevin
Barry, CLO, CCO & Secretary
Stereotaxis,
Inc.
4320
Forest Park Avenue, Suite 100
St.
Louis, Missouri 63108
We
intend to promptly disclose any amendments to, or waivers from, any provision of the Code of Conduct by posting the relevant material
on our website (www.stereotaxis.com) in accordance with SEC rules.
BOARD
MEETINGS AND COMMITTEES
Board
Meetings
During
fiscal year 2019, the Board of Directors held five meetings. During fiscal year 2019, all incumbent directors attended 75% or
more of the aggregate meetings of the Board and the Board committees on which they served during the period they held office.
Directors are not required to attend our Annual Meeting of Shareholders; however, Robert Messey did attend our 2019 Annual Meeting
of Shareholders.
Board
Committee Membership
The
Board has established three standing committees. Presently, the standing committees are: Audit, Compensation, and Nominating and
Corporate Governance. Committee membership as of the end of fiscal year 2019 was as follows:
Audit
|
|
Compensation
|
Robert
J. Messey, Chairman
|
|
Arun
Menawat, Chairman
|
David
W. Benfer
|
|
Robert
J. Messey
|
Ross
B. Levin
|
|
|
|
|
|
Nominating
& Corporate Governance
|
|
|
David
W. Benfer, Chairman
|
|
|
Ross
B. Levin
|
|
|
Joe
Kiani
|
|
|
The
Board has adopted a written charter for each of the committees. The charters of our Audit, Compensation, and Nominating and Corporate
Governance Committees, and our Code of Conduct are published on our website at www.stereotaxis.com, Investors, Governance. These
materials are available in print to any shareholder upon request. From time to time, the Board and the committees review and update
these documents, as they deem necessary and appropriate.
Audit
Committee
The
Board has determined that each member of the Audit Committee is independent under the listing standards of the NYSEAmerican and
the enhanced independence standards for audit committee members set forth in SEC rules under the Securities Exchange Act of 1934.
Further, our Board has determined that each member of the Audit Committee is financially sophisticated and that Mr. Messey, who
currently serves as the chair of the Audit Committee, qualifies as an Audit Committee Financial Expert under SEC rules and regulations.
The Audit Committee assists our Board in its oversight of:
|
●
|
the
integrity of our financial statements;
|
|
●
|
our
accounting and financial reporting process, including our internal controls;
|
|
●
|
our
compliance with legal and regulatory requirements;
|
|
●
|
the
independent registered public accountants’ qualifications and independence; and
|
|
●
|
the
performance of our independent registered public accountants.
|
The
Audit Committee has direct responsibility for the appointment, compensation, retention and oversight of our independent registered
public accountants. In addition, the Audit Committee must approve in advance:
|
●
|
any
related-party transaction that creates a conflict of interest situation;
|
|
●
|
all
audit services; and
|
|
●
|
all
non-audit services, except for de minimis non-audit services, provided the Audit Committee has approved such de
minimis services prior to the completion of the audit.
|
During
fiscal year 2019, the Audit Committee met seven times.
Compensation
Committee
Our
Board has determined that each director serving on the Compensation Committee during 2019 was independent under the listing standards
of the NYSEAmerican, except Dr. Nathan Fischel, and that each qualified as an “outside director” under Section 162(m)
of the Internal Revenue Code of 1986 and as a “non-employee director” under Rule 16b-3 under the Securities Exchange
Act of 1934. The functions of the Compensation Committee include:
|
●
|
assisting
management and the Board in defining an executive compensation policy;
|
|
●
|
determining
the total compensation package for our chief executive officer and other executive officers;
|
|
●
|
performing
or, to the extent deemed appropriate delegating to our officers, reviewing and monitoring the administration of our equity-based
compensation plans and qualified and non-qualified benefit plans;
|
|
●
|
approving
new incentive plans and major benefit programs; and
|
|
●
|
approving
changes to the outside directors’ compensation program.
|
The
Compensation Committee has authority to retain compensation consultants to furnish advice or assistance to the committee within
the scope of its duties. The committee has direct responsibility for the appointment, retention, and compensation of the compensation
consultants as well as the oversight of the work of the consultants. In selecting any compensation consultant, the committee considers
the factors relevant to the consultant’s independence from management in accordance with the listing standards of the NYSEAmerican.
During
fiscal year 2019, the Compensation Committee met one time and acted four times by unanimous written consent.
Nominating
and Corporate Governance Committee
Our
Board has determined that each director serving on the Nominating and Corporate Governance Committee during 2019 was independent
under the listing standards of the NYSEAmerican. The Nominating and Corporate Governance Committee assists the Board in:
|
●
|
identifying
and evaluating individuals qualified to become Board members;
|
|
●
|
reviewing
director nominees received from shareholders;
|
|
●
|
selecting
director nominees for submission to the shareholders at our annual meeting;
|
|
●
|
selecting
director candidates to fill any vacancies on the Board; and
|
|
●
|
overseeing
the structure and operations of the Board, including recommending Board committee structure, appointments and responsibilities.
|
The
Nominating and Corporate Governance Committee is also responsible for developing and recommending to the Board a set of corporate
governance guidelines and principles. During fiscal year 2019, the Nominating and Corporate Governance Committee acted one time
by unanimous written consent.
DIRECTOR
COMPENSATION
Director
Compensation Policy
In
February 2017, the Compensation Committee adopted a new compensation program for our non-employee directors effective for the
2017 fiscal year. Each director now receives an annual award of 60,000 restricted share units. The annual equity awards are made
in two equal installments on the first business day of January and the first business day of July in each calendar year, paid
in arrears (the first installment is compensation for the six months ending December 31st, and the second installment is compensation
for the six months ending June 30th) and pro-rated if applicable (in the event a new director is nominated and elected).
Each
director has the option to choose one of two vesting schedules prior to the commencement of the year. Each director
may elect either for: (1) the restricted share units to vest immediately with the first option as of the date of the award; or
(2) the restricted share units to vest on the earliest to occur of (i) the fifth anniversary of the date of the award, (ii) the
date on which the service of the director on the Board of Directors terminates, or (iii) a “change of control” of
the Company, as defined in the award agreement.
We
reimburse our directors for reasonable out-of-pocket expenses incurred in connection with attendance and participation in Board
and committee meetings (including costs of travel, food and lodging). Reimbursements for any non-employee director did not exceed
the $10,000 threshold in fiscal 2019 and thus are not included in the table below for director compensation.
Compensation
of Directors
The
following table discloses compensation to our non-employee directors for their services during 2019:
Director
|
|
Fees Earned or Paid in Cash ($)
|
|
|
Stock Awards ($)(1)
|
|
|
Option Awards ($)
|
|
|
All Other Compensation
|
|
|
Total ($)
|
|
David W. Benfer(2)
|
|
|
-
|
|
|
|
240,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
240,300
|
|
David L. Fischel(3)
|
|
|
-
|
|
|
|
240,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
240,300
|
|
Nathan Fischel, M.D.(4)
|
|
|
-
|
|
|
|
240,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
240,300
|
|
Joe Kiani(5)
|
|
|
-
|
|
|
|
240,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
240,300
|
|
Ross Levin(6)
|
|
|
-
|
|
|
|
240,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
240,300
|
|
Dr. Arun S. Menawat(7)
|
|
|
-
|
|
|
|
240,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
240,300
|
|
Robert J. Messey(8)
|
|
|
-
|
|
|
|
240,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
240,300
|
|
|
(1)
|
Amount
represents aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Includes restricted share units
granted in 2020 for services performed in 2019.
|
|
|
|
|
(2)
|
3,400
options were outstanding as of December 31, 2019, all of which were exercisable as of such date.
|
|
(3)
|
150,000
restricted share units were outstanding as of December 31, 2019, none of which were vested as of such date.
|
|
|
|
|
(4)
|
144,500
restricted share units were outstanding as of December 31, 2019, none of which were vested as of such date.
|
|
|
|
|
(5)
|
150,000
restricted share units were outstanding as of December 31, 2019, none of which were vested as of such date.
|
|
|
|
|
(6)
|
64,973
restricted share units were outstanding as of December 31, 2019, none of which were vested as of such date.
|
|
|
|
|
(7)
|
150,000
restricted share units were outstanding as of December 31, 2019, none of which were vested as of such date.
|
|
|
|
|
(8)
|
4,425
options were outstanding as of December 31, 2019, all of which were exercisable as of such date, and 90,000 restricted share
units were outstanding as of December 31, 2019, none of which were vested as of such date.
|
PROPOSAL
1: ELECTION OF DIRECTORS
Under
the Company’s bylaws, the number of directors of the Company may be fixed or changed from time to time by resolution of
a majority of the Board of Directors, provided the number shall be no less than three and no more than fifteen. Currently, the
Board has set the number of directors of the Company at nine. The directors are divided into three classes: Class I, Class II
and Class III, each class to be as nearly equal in number as possible. The directors in each class are elected for a term of three
years. Currently, there is one vacancy in Class II and one vacancy in Class III.
Shareholders
are being asked to elect one director, Robert J. Messey, as a Class II director for a term of one year until the 2021 Annual Meeting
of Shareholders, which is the remaining term of the Class II directors. Shareholders are also being asked to elect two directors,
David W. Benfer and Dr. Arun S. Menawat, as Class I directors to serve until the 2023 Annual Meeting of Shareholders. The Board
nominated Messrs. Messey, Benfer, and Dr. Menawat for election at the 2020 Annual Meeting of Shareholders upon the recommendation
of the Nominating and Corporate Governance Committee. Each nominee currently is a director of our Company. Following the annual
meeting if all nominated directors are elected, there will be a vacancy in one position of the Class I directors and a vacancy
in one position of the Class III directors. Certain information with respect to the nominees for election is set forth above under
the headings “Information about the Board of Directors” and “Board Meetings and Committees.” Proxies cannot
be voted for a greater number of persons than the number of nominees named.
The
Board does not contemplate that any of the nominees will be unable to stand for election, but should any nominee become unable
to serve or for good cause will not serve; all proxies (except proxies marked to the contrary) will be voted for the election
of a substitute nominee recommended by our Board.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NAMED NOMINEES AS DIRECTORS.
EXECUTIVE
COMPENSATION
Executive
Compensation Summary and Analysis
The
Compensation Committee is tasked with discharging the Board of Directors’ responsibilities related to oversight of the compensation
of our directors and officers and ensuring that our executive compensation program meets our corporate objectives. The following
is a summary and analysis of the executive compensation policies, programs and practices developed by the Compensation Committee,
and a description of the compensation of our Named Executive Officers.
Compensation
Philosophy
The
objective of our compensation program is to attract, retain and motivate highly qualified executive officers while aligning the
interests of these executives with those of shareholders. When designing compensation packages to achieve this objective, the
committee is guided by the following principles:
|
●
|
Align
pay and performance: Provide total compensation that is commensurate with stock price performance, the operational and
financial success of our business, and the individual performance contributions of executives.
|
|
|
|
|
●
|
Manage
program cost and dilution: Balance other considerations for executive pay programs with their impact on earnings, cash
flow and stock dilution.
|
|
|
|
|
●
|
Provide
market competitive pay: Targeted compensation opportunities should generally reflect levels, both in terms of size of
pay opportunity and mix of pay elements, observed in the competitive marketplace, as defined by the market median pay levels
among companies with which we compete for talent.
|
We
believe that adhering to these principles will create a total compensation program that supports our aim to deliver long-term
shareholder value through business performance. In addition to the above principles, the Compensation Committee exercises its
judgment in setting pay levels with respect to individual competencies and experience and the internal compensation equity among
Named Executive Officers.
Role
and Independence of the Consultant
From
time-to-time, when deemed necessary, the Compensation Committee engages the services of an independent compensation consultant
to provide the committee with market data and analysis, advice on incentive design practices, and an external perspective on pay
trends and legal and regulatory developments. Most recently in 2016, the committee retained Radford, an Aon Hewitt Company, as
its independent compensation consultant (the “Consultant”). Radford has not provided any services to the Company since.
The committee considers the Consultant to be fully independent and that the Consultant’s work has not raised any conflict
of interest.
Executive
Compensation Program
The
elements of the compensation program are base salary, annual incentive, equity-based long-term incentive, and benefits. The committee
has historically set targeted total compensation at the median of the competitive market. The committee may adjust targeted total
compensation or the mix of total compensation based on other considerations such as business performance, company size and stock
dilution. In addition, incentive programs are intended to be designed such that total compensation realized by executives is consistent
with performance achievement.
Historically,
the design of the annual incentive plan was intended to be primarily objective and formulaic. Each year, the committee established
annual performance metrics relating to financial performance and strategic initiatives and annual incentive opportunities for
management employees, including the Named Executive Officers. The annual incentive opportunities were determined as a percentage
of the individual’s base salary. In addition, the committee retained discretion to adjust annual incentive awards, taking
into account non-formulaic considerations such as the context in which certain performance achievement occurred, the unique experience
an individual brings to a role, and other factors the committee deemed relevant.
The
objective of the Company’s long-term incentive program is to directly align compensation outcomes with returns received
by shareholders, build equity ownership within the management team, and motivate the sustainable financial performance that supports
stock price growth. Long-term incentive awards are made pursuant to the Company’s 2012 Stock Incentive Plan, which permits
grants of cash awards, stock options, stock appreciation rights and stock awards. Throughout the year, the committee may also
approve awards in connection with employee promotions, employee retention, an individual newly hired to the Company, or for purposes
otherwise deemed to be in the best interest of the Company. The timing of these equity award grants is not based on the timing
of the release of material, non-public information, nor is such information released for the purpose of affecting the value of
executive compensation.
The
typical pay review process occurs at the beginning of the fiscal year at which time the Compensation Committee reviews and approves
executive compensation, including adjustments in base salaries, annual incentive awards and equity awards, and establishes performance
goals and target incentive opportunities for the annual incentive plan for the following fiscal year. During the review process,
the committee considers a number of factors, including competitive market data, input received from the Company’s management,
an assessment of individual performance and the operating performance of the Company.
2019
Executive Compensation
Annual
Base Salary. The Compensation Committee decided to make no changes to the annual base salaries during 2019 for Mr. Stammer
($290,000) and Mr. Barry ($187,000). Mr. Stammer resigned as Chief Financial Officer effective September 30, 2019. Ms. Kimberly
R. Peery was appointed Chief Financial Officer effective October 1, 2019, with a base salary of $220,000. Mr. David Fischel does
not receive a base salary.
Annual
Incentive Plan. The committee decided not to establish a 2019 annual incentive plan based on objective, formulaic performance
goals and metrics for the Company or the Named Executive Officers, and instead determined that annual incentive awards to management,
including the Named Executive Officers, for the 2019 fiscal year would be discretionary.
Long-Term
Incentive Compensation. In March 2019, a grant of service-vested Incentive Stock Options, vesting 25% on the first anniversary
and 2.083% per month thereafter through the fourth anniversary, was made with the intention of emphasizing retention and the criticality
of shareholder alignment during this key phase in the Company’s life-cycle.
Recoupment
Policy
The
Compensation Committee has a recoupment policy applicable to incentive compensation based on financial results, including the
annual bonus and equity-based compensation, to our Named Executive Officers and other executives. If we are required to file a
restatement of financial results due to fraud, gross negligence or willful misconduct, then our independent directors may take
action to recoup any portion of the incentive compensation awarded to the executives that exceeded the amount that would have
been awarded based on the restated financial results during the three fiscal years prior to the filing of the restated financial
results.
Other
Benefits
|
●
|
Healthcare
and Other Insurance Programs: All of our employees, including the Named Executive Officers, are eligible to participate
in medical, dental, short and long-term disability and life insurance plans. The terms of such benefits for our Named Executive
Officers are the same as those for all of our employees.
|
|
●
|
401(k): We
offer all eligible employees the opportunity to participate in a 401(k) plan. Employer matching contributions are discretionary
under the 401(k) plan. During 2019, the Company matched employee contributions up to 3% of the employee’s salary, subject
to limitations. However, the employer match was not made until 2020.
|
|
●
|
Employee
Stock Purchase Plan: The Company offers an employee stock purchase plan, under which all of our employees, including our
Named Executive Officers, who do not own 5% or more of our outstanding common stock, have the opportunity to buy an aggregate
for all employees of up to 250,000 shares of Company common stock at 95% of market price with up to 15% of their salaries
and incentives (subject to certain limits), with the objective of allowing employees to profit when the value of our stock
increases over time.
|
Compensation
Risk Assessment
The
Compensation Committee has considered potential risks arising out of our compensation programs and does not believe our compensation
programs encourage excessive or inappropriate risk taking by our employees. The Compensation Committee believes that our compensation
packages, which are structured to balance fixed and variable compensation and include both annual and long-term incentives, mitigates
against unnecessary or excessive risk taking.
Summary
Compensation Table
The
following table summarizes the total compensation paid to the following executive officers (our “Named Executive Officers”)
for fiscal years 2018 and 2019. For more information about the components of the total compensation, refer to the “Executive
Compensation Summary and Analysis” section of this proxy statement.
Name and Principal Position
|
|
Year
|
|
|
Salary ($)
|
|
|
Option
Awards ($)(1)
|
|
|
Non-Equity Incentive Plan Compensation ($)(2)
|
|
|
All Other Compensation ($)(3)
|
|
|
Totals
($)
|
|
David L. Fischel
|
|
|
2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Chief Executive Officer(4)
|
|
|
2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Kimberly R. Peery
|
|
|
2019
|
|
|
|
55,000
|
|
|
|
-
|
|
|
|
7,500
|
|
|
|
1,857
|
|
|
|
64,357
|
|
Chief Financial Officer(5)
|
|
|
2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Martin C. Stammer
|
|
|
2019
|
|
|
|
217,500
|
|
|
|
110,305
|
|
|
|
-
|
|
|
|
6,789
|
|
|
|
334,594
|
|
Former Chief Financial Officer(6)
|
|
|
2018
|
|
|
|
290,000
|
|
|
|
41,400
|
|
|
|
-
|
|
|
|
10,349
|
|
|
|
341,749
|
|
Kevin M. Barry
|
|
|
2019
|
|
|
|
187,000
|
|
|
|
16,970
|
|
|
|
-
|
|
|
|
31,841
|
|
|
|
235,811
|
|
Chief Legal Officer & Secretary(7)
|
|
|
2018
|
|
|
|
29,848
|
|
|
|
27,000
|
|
|
|
-
|
|
|
|
131
|
|
|
|
56,979
|
|
(1)
|
Amounts
reported reflect the aggregate grant date fair value of awards granted during the year computed in accordance with ASC 718,
Compensation-Stock Compensation. These awards consist of grants of incentive stock options. See Note 10 of the notes
to our consolidated financial statements contained in our 2019 Annual Report on Form 10-K for a discussion of all assumptions
made by us in determining the ASC 718, Compensation-Stock Compensation values of our equity awards. These amounts reflect
the aggregate grant date fair value for these awards and do not correspond to the actual value that will be recognized by
the Named Executive Officers.
|
(2)
|
These
amounts represent cash awards earned during the respective fiscal year under the applicable annual incentive programs, irrespective
of the year in which they were actually paid.
|
(3)
|
All Other Compensation
includes the payment of group term life insurance premiums, employer match contributions to the executive’s 401(k) plan
earned in the respective fiscal year, and in the case of Mr. Stammer in 2019, payment for accrued paid time off benefits,
and in the case of Mr. Barry in 2019, payment of certain relocation expenses some of which were paid in 2019, and some of
which were paid in 2020.
|
(4)
|
David
L. Fischel receives compensation only as a director.
|
(5)
|
Kimberly
Peery was appointed as Chief Financial Officer effective October 1, 2019.
|
(6)
|
Martin
C. Stammer resigned as Chief Financial Officer effective September 30, 2019.
|
(7)
|
Kevin
M. Barry was hired as Chief Legal Officer & Secretary effective November 5, 2018.
|
Outstanding
Equity Awards at Fiscal Year-End
The
following table discloses information regarding outstanding awards under the Company’s 2002 Stock Incentive Plan, as amended
and 2012 Stock Incentive Plan, as amended, as of December 31, 2019.
Named
Executive Officer
|
|
Date
of Award
|
|
Number
of Securities Underlying Unexercised Options (#) Exercisable
|
|
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable(1)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration Date
|
|
Number
of
Shares or Units
of Stock That
Have Not
Vested (#)(2)
|
|
|
Market
Value of Shares or Units
of Stock That
Have Not
Vested ($)(3)
|
|
David
L. Fischel(4)
|
|
7/3/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
158,700
|
|
|
|
1/2/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
158,700
|
|
|
|
7/2/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
158,700
|
|
|
|
1/2/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
158,700
|
|
|
|
7/1/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
158,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kimberly
R. Peery(5)
|
|
3/27/2014
|
|
|
4,000
|
|
|
|
|
|
|
|
4.04
|
|
|
3/27/2024
|
|
|
|
|
|
|
|
|
|
|
2/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
|
|
|
19,838
|
|
|
|
2/26/2018
|
|
|
2,208
|
|
|
|
13,542
|
|
|
|
0.74
|
|
|
2/26/2028
|
|
|
|
|
|
|
|
|
|
|
3/3/2019
|
|
|
|
|
|
|
35,000
|
|
|
|
2.03
|
|
|
3/3/2029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin
C. Stammer(6)
|
|
3/27/2014
|
|
|
33,000
|
|
|
|
|
|
|
|
4.04
|
|
|
3/27/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin
M. Barry
|
|
11/5/2018
|
|
|
8,125
|
|
|
|
21,875
|
|
|
|
1.07
|
|
|
11/5/2028
|
|
|
|
|
|
|
|
|
|
|
3/3/2019
|
|
|
|
|
|
|
10,000
|
|
|
|
2.03
|
|
|
3/3/2029
|
|
|
|
|
|
|
|
|
|
(1)
|
The
amounts appearing in this column represent the total number of options and stock appreciation rights (SARs) that have not
vested as of December 31, 2019. Options and SARs granted to the Named Executive Officers, vest at the rate of 25% one year
from the date of grant, and monthly thereafter, over 36 additional months.
|
|
(2)
|
The
amounts appearing in this column represent the total number of service-vested restricted share units granted under our 2012
Stock Incentive Plan. The restricted share units vest at the rate of 25% annually beginning with the one-year anniversary
of the date of grant. The restricted share units granted to Mr. Fischel will vest on the earliest to occur of (i) the fifth
anniversary of the date of the award, (ii) the date on which his service as a director on the Board of Directors terminates,
or (iii) a Change of Control of the Company.
|
|
(3)
|
Based
on the closing price of $5.29 for the shares of our common stock on December 31, 2019.
|
|
(4)
|
David
L. Fischel was appointed Chief Executive Officer effective February 3, 2017. All awards in this table were granted to him
as a director.
|
|
(5)
|
Kimberly
R. Peery was appointed as Chief Financial Officer effective October 1, 2019.
|
|
(6)
|
Martin
C. Stammer resigned as Chief Financial Officer effective September 30, 2019.
|
Securities
Authorized for Issuance under Equity Compensation Plans
The
following table discloses information as of December 31, 2019, regarding securities to be issued upon the exercise of outstanding
options, warrants and rights under equity compensation plans.
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(1)
|
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(2)
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Equity compensation plans approved by shareholders
|
|
|
2,698,311
|
|
|
$
|
2.22
|
|
|
|
4,056,740
|
|
Equity compensation plans not approved by shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,698,311
|
|
|
$
|
2.22
|
|
|
|
4,056,740
|
|
|
(1)
|
Shares issuable upon vesting
of restricted share units are not included in the weighted average computation.
|
|
(2)
|
Includes 840,712 restricted share units covered
by outstanding awards that have not yet vested and are subject to forfeiture. In the event of forfeiture, such shares will
be available for issuance under the 2012 Stock Incentive Plan.
|
Potential
Payments Upon Termination or Change of Control
The
award agreements under our 2002 Stock Incentive Plan and 2012 Stock Incentive Plan provide for the acceleration of certain equity
awards in the event of termination of the employee’s employment due to a change of control of the Company. The provisions
under the award agreements are generally applicable to awards granted to all participants in the Plan, including the Named Executive
Officers. We have described those provisions generally below. Additionally, under the stock incentive plans, in the event of a
change of control of the Company, the Compensation Committee has discretion to provide for termination of awards in exchange for
cash payments or the issuance of substitute awards. Benefits or payments under other plans and arrangements that are generally
available to the Company’s employees on similar terms are not described.
Provisions
of awards under the Stock Incentive Plans
The
awards do not generally accelerate in connection with the retirement, resignation or other termination of employment (i.e., voluntary
termination, termination for cause or involuntary termination) of any of the participants. In addition, none of the equity awards
under the 2002 Stock Incentive Plan or 2012 Stock Incentive Plan accelerate in the event of termination by death or disability.
SARs and options could be exercised for specified periods following retirement, death or disability.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of
March 30, 2020 by:
|
●
|
each
person known by us to own beneficially more than 5% of our outstanding common stock;
|
|
●
|
each
of our directors;
|
|
●
|
each
of our Named Executive Officers; and
|
|
●
|
all
of our directors and executive officers as a group.
|
There
were 69,036,766 shares of common stock, 22,918 shares of Series A Convertible Preferred Stock, and 5,610,121 shares of Series
B Convertible Preferred Stock outstanding as of March 30, 2020. Unless otherwise indicated, the table below includes the number
of shares underlying options, stock appreciation rights and warrants that are currently exercisable or exercisable within 60 days
after March 30, 2020, the number of shares that may be issuable upon vesting of restricted share units within 60 days after March
30, 2020, and the number of shares of common stock into which the shares of Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock are convertible within 60 days after March 30, 2020, in each case subject to the beneficial ownership
limitations described in the footnotes below. Such shares are considered outstanding and beneficially owned by the person holding
the options, stock appreciation rights, warrants, restricted share units, or shares of Series A Convertible Preferred Stock, for
the purposes of computing beneficial ownership of that person, but are not treated as outstanding for the purpose of computing
the percentage ownership of any other person. To our knowledge, except as set forth in the footnotes to this table and subject
to applicable community property laws, where applicable, each person named in the table has sole voting and investment power with
respect to the shares set forth opposite such person’s name. Except as otherwise indicated, the address of each of the persons
in this table is as follows: c/o Stereotaxis, Inc., 4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108.
Name
and Address of Beneficial
Owner of Common Stock
|
|
Number of
shares of
Common Stock
beneficially owned
|
|
|
Percentage of
shares of
Common Stock
beneficially Owned
|
|
Five percent shareholders
|
|
|
|
|
|
|
|
|
2012 Revocable Trust of Andrew Redleaf (1)
3033 Excelsior Boulevard
Minneapolis, MN 55416
|
|
|
6,830,600
|
|
|
|
9.38
|
%
|
Joseph Kiani Dynasty Trust(2)
52 Discovery
Irvine, CA 92618
|
|
|
6,153,846
|
|
|
|
8.91
|
%
|
Arbiter Partners QP, L.P.(3)
530 Fifth Avenue, 20th Fl.
New York, NY 10036
|
|
|
4,618,385
|
|
|
|
6.69
|
%
|
DAFNA Capital Management, LLC (4)
10990 Wilshire Boulevard, Suite 1400
Los Angeles, CA 90024
|
|
|
13,680,554
|
|
|
|
19.82
|
%
|
Opaleye Management Inc. (5)
One Boston Place
26th Floor
Boston, MA 02108
|
|
|
4,112,500
|
|
|
|
5.96
|
%
|
Redmile Group, LLC(6)
One Letterman Drive
Building D, Suite D3-300
The Presidio of San Francisco
San Francisco, California 94129
|
|
|
7,053,462
|
|
|
|
9.80
|
%
|
Directors and Named Executive Officers
|
|
|
|
|
|
|
|
|
David W. Benfer (7)
|
|
|
254,054
|
|
|
|
*
|
|
David L. Fischel
|
|
|
20,000
|
|
|
|
*
|
|
Nathan Fischel (8)
|
|
|
13,700,554
|
|
|
|
19.85
|
%
|
Joe Kiani (9)
|
|
|
6,173,846
|
|
|
|
8.94
|
%
|
Arun S. Menawat
|
|
|
329,285
|
|
|
|
*
|
|
Robert J. Messey (10)
|
|
|
120,243
|
|
|
|
*
|
|
Ross Levin
|
|
|
-
|
|
|
|
*
|
|
Martin C. Stammer (11)
|
|
|
145,819
|
|
|
|
*
|
|
Kimberly R. Peery (12)
|
|
|
22,338
|
|
|
|
|
|
Kevin. Barry (13)
|
|
|
14,167
|
|
|
|
*
|
|
All directors and executive officers as a group (10 persons)
|
|
|
20,780,306
|
|
|
|
30.05
|
%
|
*
|
Indicates
ownership of less than 1%
|
(1)
|
Based on the Company’s
records. Includes 3,753,677 shares of common stock issuable upon conversion of Series A Convertible Preferred Stock.
The conversion of the Series A Convertible Preferred Stock is restricted to the extent that, upon such conversion, the number
of shares of common stock then beneficially owned by the holder of such securities and its affiliates would exceed 9.99% of
our common stock then outstanding.
|
|
|
(2)
|
Based
on a Schedule 13D filed by Joe Kiani on March 16, 2018, and the Company’s records. Excludes 7,507,355 shares of common
stock issuable upon conversion of Series A Convertible Preferred Stock held by the Joseph Kiani Dynasty Trust. The conversion
of the Series A Convertible Preferred Stock is restricted to the extent that, upon such conversion, the number of shares of
common stock then beneficially owned by the holder of such securities and its affiliates would exceed 4.99% of our common
stock then outstanding.
|
(3)
|
Based on a Schedule
13G filed by Arbiter Partners Capital Management LLC on February 14, 2019, and the Company’s records. Excludes 5,630,517
shares of common stock issuable upon conversion of Series A Convertible Preferred Stock held by Arbiter. The conversion
of the Series A Convertible Preferred Stock is restricted to the extent that, upon such conversion or exercise, the number
of shares of common stock then beneficially owned by the holder of such securities and its affiliates would exceed 4.99% of
our common stock then outstanding.
|
|
|
(4)
|
Based
on the Company’s records and a Schedule 13D filed on March 8, 2018 by DAFNA Capital Management, LLC, in its capacity
as investment adviser to DAFNA LifeScience Ltd., DAFNA LifeScience Market Neutral Ltd., and DAFNA LifeScience Select Ltd.
(collectively, the “Funds”), each of which entities is a Cayman Islands exempted company. In such capacity, DAFNA
Capital Management, LLC may be deemed to be the beneficial owner of the shares of our common stock owned by the Funds, as
in its capacity as investment adviser it has the power to dispose, direct the disposition of, and vote our shares owned by
the Funds. Nathan Fischel and Fariba Ghodsian are part-owners of DAFNA Capital Management and managing members. As controlling
persons of DAFNA Capital Management, they may be deemed to beneficially own the shares of our common stock owned by the Funds.
Pursuant to Rule 13d-4, Drs. Fischel and Ghodsian disclaim beneficial ownership of the securities owned by the Funds. This
amount excludes an aggregate of 15,014,710 shares of common stock issuable upon conversion of Series A Convertible Preferred
Stock. The conversion of the Series A Convertible Preferred Stock is restricted to the extent that, upon such conversion,
the number of shares of common stock then beneficially owned by the holder of such securities and its affiliates would exceed
4.99% of our common stock then outstanding.
|
|
|
(5)
|
Based
on a Schedule 13G filed b Opaleye Management, Inc., on February 14, 2020.
|
|
|
(6)
|
Based
on a Schedule 13G filed with the SEC on February 14, 2020 by Redmile Group, LLC (“Redmile”), Jeremy C. Green,
Redmile Strategic Master Fund, LP (“Strategic Fund”), Redmile Capital Offshore II Master Fund, Ltd. (“Master
Fund” and together with Strategic Fund, the “Redmile Affiliates”), the shares of the Company’s common
stock that may be deemed to be beneficially owned by entities affiliated with Redmile is comprised of: (i) 1,778,193 shares
of Common Stock held by Redmile Strategic Master Fund, LP, and (ii) 1,391,115 shares of Common Stock held by Redmile Capital
Offshore II Master Fund, Ltd. Redmile Group, LLC is the investment manager/adviser to each of the private investment vehicles
listed in items (i) and (ii) (collectively, the “Redmile Affiliates”) and, in such capacity, exercises sole voting
and investment power over all of the shares held by the Redmile Affiliates and may be deemed to be the beneficial owner of
these shares. Jeremy C. Green serves as the principal of Redmile Group, LLC and also may be deemed to be the beneficial owner
of these shares. Redmile Group, LLC and Mr. Green each disclaim beneficial ownership of these shares, except to the extent
of its or his pecuniary interest in such shares, if any. Subject to the Beneficial Ownership Blocker (as defined below), Redmile
Group, LLC may also be deemed to beneficially own shares of Common Stock issuable upon conversion of the following: (i) 2,905,600
shares of the Issuer’s non-voting Series B Convertible Preferred Stock (“Series B Preferred Stock”) held
by Redmile Strategic Master Fund, LP, and (ii) 2,704,521 shares of Series B Preferred Stock held by Redmile Capital Offshore
II Master Fund, Ltd. The conversion of the Series B Convertible Preferred Stock is restricted to the extent that, upon such
conversion, the number of shares of common stock then beneficially owned by the holder of such securities and its affiliates
would exceed 9.99% of our common stock then outstanding.
|
|
|
(7)
|
Includes
options to purchase 3,400 shares of common stock, 2,700 shares of common stock held by Mr. Benfer’s spouse, and 160,000
shares of common stock held by the Benfer Family Trust TTEE.
|
|
|
(8)
|
Includes
13,680,554 shares of common stock held by DAFNA Capital Management, LLC, in its capacity as investment advisor to DAFNA LifeScience
Ltd., DAFNA LifeScience Market Neutral Ltd., and DAFNA LifeScience Select Ltd. (collectively, the “Funds”). This
number of shares excludes an aggregate of 15,014,710 shares of common stock issuable upon conversion of Series A Convertible
Preferred Stock held by the Funds. Dr. Fischel disclaims beneficial ownership of the shares and warrants owned by the Funds.
The conversion of the Series A Convertible Preferred Stock is restricted to the extent that, upon such conversion, the number
of shares of common stock then beneficially owned by the holder of such securities and its affiliates would exceed 4.99% of
our common stock then outstanding
|
|
|
(9)
|
Includes
6,153,846 shares of common stock held by the Joseph Kiani Dynasty Trust. Excludes 7,507,355 shares of common stock issuable
upon conversion of Series A Convertible Preferred Stock held by the Joseph Kiani Dynasty Trust. The conversion of the Series
A Convertible Preferred Stock is restricted to the extent that, upon such conversion or exercise, the number of shares of
common stock then beneficially owned by the holder of such securities and its affiliates would exceed 4.99% of our common
stock then outstanding.
|
|
|
(10)
|
Include
options to purchase 4,425 shares of common stock.
|
|
|
(11)
|
Includes
options to purchase 66,000 shares of common stock. Mr. Stammer resigned as Chief Financial Officer effective September 30,
2019.
|
|
|
(12)
|
Includes
options to purchase 19,021 shares of common stock.
|
|
|
(13)
|
Includes
options to purchase 14,167 shares of common stock.
|
REPORT
OF AUDIT COMMITTEE
Currently,
three non-employee directors serve on the Audit Committee. Each is independent as defined by Section 803 of the NYSEAmerican Company
Guide and Rule 10-A-3(b)(1) of the Securities Exchange Act of 1934. The Board has adopted a written charter for the Audit Committee,
which is posted on our website at www.stereotaxis.com, Investors, Governance.
The
Audit Committee assists the Board in providing oversight of our accounting and financial reporting process. Management has the
primary responsibility for the financial statements and the reporting process, including our systems of internal control. Our
independent registered public accountants are responsible for performing an independent audit of our financial statements in accordance
with auditing standards generally accepted in the United States and expressing an opinion on the conformity of those financial
statements with U.S. generally accepted accounting principles. The audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances. In addition, the Company engages
another accounting firm for assistance with internal audit services and their analysis is provided to the Committee.
The
Audit Committee reviews with management the Company’s major financial risk exposures and the steps management has taken
to monitor mitigate and control such exposures. Management has the responsibility for the implementation of these activities.
In fulfilling its oversight responsibilities, the committee reviewed and discussed the audited financial statements to be included
in the Annual Report on Form 10-K for the year ended December 31, 2019 with management, including a discussion of the quality
and the acceptability of our financial reporting practices and the internal controls over financial reporting.
The
Audit Committee reviewed with the independent registered public accounting firm its judgments as to the quality and the acceptability
of our financial reporting and such other matters as are required to be discussed with the committee under auditing standards
of the Public Company Accounting Oversight Board (PCAOB). In addition, the committee discussed with the independent registered
public accountants, the firm’s independence from management and the Company, including the matters in the accountants’
written disclosures regarding the auditors’ independence required by PCAOB Ethics and Independence Rule 3526, Communication
with Audit Committees Concerning Independence. Finally, the Audit Committee discussed its opinion on the Company’s internal
controls over financial reporting as required by Section 404b of the Sarbanes-Oxley Act.
Our
independent registered public accountants did not provide any non-audit services to us during 2019.
The
Audit Committee also discussed with the Company’s internal audit service provider and the independent registered public
accounting firm in advance the overall scope and plans for their respective audits. The committee meets regularly with the internal
audit service provider and the independent registered public accounting firm, with and without management present, to discuss
the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the
Company’s financial reporting.
In
reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for filing
with the SEC. Submitted by the Audit Committee of the Board of Directors,
Robert
J. Messey, Chair
David
W. Benfer
Ross
B. Levin
The
report of the Audit Committee will not be deemed incorporated by reference by any general statement incorporating by reference
this proxy statement or portions thereof into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that we specifically incorporate by reference the Audit Committee report, and will not otherwise be deemed
filed under such Acts.
PROPOSAL
2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Our
Audit Committee, pursuant to its charter, has appointed Ernst & Young LLP as the Company’s independent registered public
accountants to examine the financial statements of the Company for our 2020 fiscal year.
While
the Audit Committee is responsible for the appointment, compensation, retention, termination and oversight of the independent
registered public accounting firm, the Audit Committee and our Board are requesting, as a matter of policy, that the shareholders
ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accountants for 2020. The
Audit Committee is not required to take any action as a result of the outcome of the vote on this proposal. However, if the shareholders
do not ratify the appointment, the Audit Committee may investigate the reasons for shareholder rejection and may consider whether
to retain Ernst & Young LLP or to appoint another firm. Furthermore, even if the appointment is ratified, the Audit Committee
in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the
year if the Audit Committee determines that such a change would be in the best interests of the Company and its shareholders.
A
formal statement by representatives of Ernst & Young LLP is not planned for the Annual Meeting. However, Ernst & Young
LLP representatives are expected to be present at the meeting and available to respond to appropriate questions.
The
affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting
will be required to ratify the selection of Ernst & Young LLP.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP
AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2020.
PROPOSAL
3: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Pursuant
to Section 14A of the Exchange Act, our Board of Directors is submitting a non-binding shareholder vote on our executive compensation
as described in this proxy statement (commonly referred to as “say-on-pay”). As approved by the shareholders in 2017,
this vote is conducted every three years, and the next vote will be in 2023.
While
this vote is advisory and not binding on our Company, it will provide information to our Compensation Committee regarding shareholders’
sentiment about our executive compensation philosophy and practices, which the committee will be able to consider when determining
executive compensation in the future.
As
you consider how to cast your vote, we encourage you to review the “Executive Compensation Summary and Analysis” section
of this proxy statement as well as the executive compensation tables and related narratives. As described in those sections, the
primary goals of our executive compensation program are to attract, retain and motivate highly qualified executives and to align
their interests with those of our shareholders. Our program, consisting of a mix of base salary, annual cash bonus, and equity
awards, is designed to reflect a balance between short-term and long-term goals to create value for our shareholders.
The
Board strongly endorses the Company’s executive compensation program and recommends that the shareholders vote in favor
of the following resolution:
RESOLVED,
that the shareholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers as described
in this proxy statement under “Executive Compensation”, including the “Executive Compensation Summary and Analysis”
and the tabular and narrative disclosure contained in this proxy statement.
OUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
The
table below shows the fees charged by Ernst & Young LLP, our independent registered public accountants, for professional services
for fiscal year 2018 and an estimate of the fees we expect to be billed by Ernst & Young LLP for professional services for
fiscal year 2019:
|
|
Amount Billed for Fiscal Year
|
|
Description of Professional Service
|
|
2018
|
|
|
2019
|
|
Audit Fees – professional services rendered by Ernst & Young LLP for the audit of our annual financial statements and reports on internal control over financial reporting (2019), the review procedures on the financial statements included in our Forms 10-Q, as well as services that are normally provided by the accountant in connection with Securities and Exchange Commission filings for those fiscal years.
|
|
|
358,853
|
|
|
|
495,000
|
|
Audit-Related Fees – assurance and related services by Ernst & Young LLP that are reasonably related to the performance of the audit or review of financial statements and are not reported as “Audit Fees.”
|
|
|
-
|
|
|
|
-
|
|
Tax Fees– professional services rendered by Ernst & Young LLP for tax compliance, tax advice and tax planning.
|
|
|
-
|
|
|
|
-
|
|
All Other Fees
|
|
|
-
|
|
|
|
-
|
|
Total Ernst & Young LLP Fees
|
|
|
358,853
|
|
|
|
495,000
|
|
Pre-Approval
Policy
As
described in the Audit Committee charter, it is the Audit Committee’s policy and procedure to review and consider and ultimately
pre-approve, where appropriate, all audit and non-audit engagement services to be performed by our independent registered public
accountants. All of the audit services provided by Ernst & Young LLP during fiscal year 2019 were pre-approved in accordance
with the Audit Committee’s policy.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
We
review all relationships and transactions in which the Company and our directors, executive officers or their immediate family
members participate to determine whether such persons have a direct or indirect material interest in such transactions or relationships.
In addition, our Code of Conduct prohibits our officers, directors and employees from engaging in activities that involve, or
even appear to involve, a conflict between their personal interest and the interests of the Company. Our Code of Conduct encourages
our employees to report to us an actual or apparent conflict of interest.
Our
Board of Directors or the Audit Committee, in either case, with any directors involved in the relevant transaction recusing themselves
from the discussion and decision, reviews all related party transactions involving the Company and any of the Company’s
principal shareholders or members of our board of directors or senior management or any immediate family member of any of the
foregoing. A general statement of this policy is set forth in our Audit Committee charter, which is published on our website at
www.stereotaxis.com, Investors, Governance. However, the Board does not have detailed written policies and procedures for reviewing
related party transactions. Rather, all facts and circumstances surrounding each related party transaction may be considered.
DELINQUENT
SECTION 16(a) REPORTS
Section
16(a) of the Securities Exchange Act of 1934 requires all Company executive officers, directors and persons owning more than 10%
of any registered class of our capital stock to file reports of ownership and changes in ownership with the SEC. Based solely
on the reports received by us and on written representations from our directors and executive officers, we believe that all such
persons timely filed such reports during the last fiscal year.
GENERAL
INFORMATION
SHAREHOLDER
PROPOSALS
Proposals
Included In Proxy Statement
Proposals
of shareholders of the Company that are intended to be presented by such shareholders at the Company’s 2021 Annual Meeting
and that shareholders desire to have included in the Company’s proxy materials relating to such meeting must be received
by the Company at its principal executive offices no later than December 10, 2020, which is 120 calendar days prior to the anniversary
of April 9, 2020, the release date of this proxy statement relating to the 2020 Annual Meeting. Upon timely receipt of any such
proposal, the Company will determine whether or not to include such proposal in the proxy statement and proxy in accordance with
applicable regulations governing the solicitation of proxies.
Proposals
Not Included in the Proxy Statement
Our
bylaws provide that shareholders seeking to bring business before an annual meeting of shareholders, or to nominate candidates
for election as directors at an annual meeting of shareholders, must provide timely notice in writing. To be timely, a shareholder’s
notice must be delivered to or mailed and received at our principal executive offices not more than 120 days or less than 90 days
prior to the anniversary date of the immediately preceding annual meeting of shareholders, i.e., not earlier than January 21,
2021, and not later than February 19, 2021, for the 2021 Annual Meeting. However, in the event that the annual meeting is called
for a date that is not within 30 days before or after such anniversary date, notice by the shareholder in order to be timely must
be received not later than the close of business on the 10th day following the date on which notice of the date of the annual
meeting was mailed to shareholders or made public, whichever first occurs. Our restated bylaws specify requirements as to the
form and content of a shareholder’s notice. These provisions may preclude shareholders from bringing matters before an annual
meeting of shareholders or from making nominations for directors at an annual meeting of shareholders.
Any
shareholder wishing to submit a candidate for election to our Board of Directors should follow the procedures outlined in “Director
Nominations.” For all other proposals, as to each matter of business proposed, the shareholder should send the following
information to the Corporate Secretary, Stereotaxis, Inc., 4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108:
|
●
|
A
brief description of the business desired to be brought before the meeting and the reasons for conducting such business;
|
|
●
|
The
text of the business (including the text of any resolutions proposed and the language of any proposed amendment to our charter
documents);
|
|
●
|
The
name and address, as they appear in our shareholder records, of the shareholder(s) proposing such business;
|
|
●
|
The
class and number of shares of the stock which are beneficially owned by the proposing shareholder(s);
|
|
●
|
Any
material interest of the proposing shareholder(s) in such business; and
|
|
●
|
A
statement as to whether either the proposing shareholder(s) intend(s) to deliver a proxy statement and form of proxy to holders
of, in the case of the proposal, at least the percentage of the Company’s voting shares required under applicable law
to carry the proposal.
|
A
more complete description of this process is set forth in our bylaws.
HOUSEHOLDING
OF PROXIES
The
SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for annual reports,
proxy statements and Notices of Internet Availability of Proxy Materials, with respect to two or more shareholders sharing the
same address by delivering a single annual report and/or proxy statement and/or Notices of Internet Availability of Proxy Materials
addressed to those shareholders. This process is commonly referred to as “householding”. The Company and some brokers
household annual reports, proxy materials, and Notices of Internet Availability of Proxy Materials, delivering a single annual
report and/or proxy statement and/or Notice of Internet Availability of Proxy Materials to multiple shareholders sharing an address
unless contrary instructions have been received from the affected shareholders.
Once
you have received notice from your broker or the Company that your broker or we will be householding materials to your address,
householding will continue until you are notified otherwise or until you request otherwise. If, at any time, you no longer wish
to participate in householding and would prefer to receive a separate annual report and/or proxy statement and/or Notice of Internet
Availability of Proxy Materials, in the future, please notify your broker if your shares are held in a brokerage account or us
if you hold registered shares. If, at any time, you and another shareholder sharing the same address wish to participate in householding
and prefer to receive a single copy of our annual report and/or proxy statement and/or Notice of Internet Availability of Proxy
Materials, please notify your broker if your shares are held in a brokerage account or us if you hold registered shares.
You
may request to receive at any time a separate copy of our proxy materials, our Annual Report, or Notice of Internet Availability
of Proxy Materials, or notify us that you do or do not wish to participate in householding by sending a written request to our
Corporate Secretary at 4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108, or by telephoning 314-678-6100. We will
deliver such materials to you promptly upon such request.
OTHER
INFORMATION
The
Board knows of no matter, other than those referred to in this proxy statement, which will be presented at the meeting. However,
if any other matters, including a shareholder proposal excluded from this proxy statement pursuant to the rules of the SEC, properly
come before the meeting or any of its adjournments, the person or persons voting the proxies will vote in accordance with their
best judgment on such matters. Should any nominee for director be unable to serve or for good cause will not serve at the time
of the meeting or any adjournments thereof, the persons named in the proxy will vote for the election of such other person for
such directorship as the Board may recommend, unless, prior to the meeting, the Board has eliminated that directorship by reducing
the size of the Board. The Board is not aware that any nominee herein will be unable to serve or for good cause will not serve
as a director.
The
Company will bear the expense of preparing, printing and mailing this proxy material, as well as the cost of any required solicitation.
Directors, officers or employees of the Company may solicit proxies on behalf of the Company. In addition, the Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred in forwarding proxy materials
to beneficial owners of the Company’s stock and obtaining their proxies.
You
are urged to vote promptly. You may revoke your proxy at any time before it is voted; and if you attend the meeting, as we hope
you will, you may vote your shares in person, if you held your shares directly as a registered holder. In addition, we will furnish,
without charge, copies of exhibits to our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Commission,
upon the written request of any person who is a shareholder as of the Record Date, upon payment of a reasonable fee which shall
not exceed our reasonable expenses in connection therewith. Requests for such materials should be directed to Stereotaxis, Inc.,
4320 Forest Park Avenue, Suite 100, St. Louis, Missouri 63108, Attention: Corporate Secretary. Such information may also be obtained
free of charge by accessing the Commission’s web site at www.sec.gov.
April
9, 2020
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