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
Filed
by the Registrant ☒ |
Filed
by a Party other than the Registrant ☐ |
Check
the appropriate box:
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Preliminary
Proxy Statement |
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☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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☒ |
Definitive
Proxy Statement |
|
|
☐ |
Definitive
Additional Materials |
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☐ |
Soliciting
Material Pursuant to §240.14a-12 |
Stereotaxis,
Inc.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box): |
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No
fee required. |
☐ |
Fee
paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b)
per Exchange Act Rules 14a-6(i)(1) and 0-11. |
STEREOTAXIS,
INC.
710
North Tucker Boulevard
Suite
110
St.
Louis, Missouri 63101
(314)
678-6100
April
5, 2023
Dear
Shareholder:
You
are cordially invited to attend our Annual Meeting of Shareholders on Thursday, May 18, 2023, at 10:00 a.m. (Central Daylight Time) at
our Company headquarters at 710 North Tucker Boulevard; Suite 110; 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 2022 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 2022 Annual Report and this proxy statement and to vote your
shares.
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.
|
Sincerely, |
|
|
|
/s/ David
L. Fischel |
|
David
L. Fischel |
|
Chief
Executive Officer and |
|
Chairman
of the Board |
STEREOTAXIS,
INC.
710
North Tucker Boulevard
Suite
110
St.
Louis, Missouri 63101
(314)
678-6100
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
April
5, 2023
The
Annual Meeting of Shareholders of Stereotaxis, Inc. will be held at our principal executive offices located at 710 North Tucker Boulevard,
Suite 110; St. Louis, Missouri 63101, on Thursday, May 18, 2023, at 10:00 a.m. (Central Daylight Time) for the following purposes:
| 1. | To
elect three (3) Class I directors to serve until the 2026 Annual Meeting and until, at the
election of the Company, their respective successors are duly elected and qualified; |
| 2. | To
ratify the appointment of Ernst & Young LLP as our independent registered public accounting
firm for fiscal year 2023; |
| 3. | To
approve, by non-binding vote, executive compensation; |
| 4. | To
recommend, by non-binding vote, the frequency of future advisory votes on executive compensation;
and |
| 5. | To
transact such other business as may properly come before the meeting. |
The
Board of Directors fixed Monday, March 20, 2023, 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 5, 2023. Please note
that our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 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.
|
By
Order of the Board of Directors, |
|
STEREOTAXIS,
INC. |
|
|
|
/s/ Laura
Spencer Garth |
|
Laura
Spencer Garth |
|
Secretary |
|
St.
Louis, Missouri |
|
April
5, 2023 |
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 2023 Annual Meeting of Shareholders to be held on May 18, 2023, 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 Thursday, May 18, 2023, at 10:00 a.m. Central Daylight Time, at our principal
executive offices located at 710 North Tucker Boulevard, Suite 110, St. Louis, MO 63101.
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 2022 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 Monday, March 20, 2023 (the “Record Date”).
On March
20, 2023, there were 75,055,484 shares of our common stock and 22,383 shares of our Series A Convertible Preferred Stock outstanding
and entitled to vote, subject to specified beneficial ownership limitations in the case of the Series A Convertible Preferred Stock.
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 75,055,484, shares of common stock
outstanding. As of the Record Date, each share of our Series A Convertible Preferred Stock is convertible into 2,136 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 22,383 shares of Series A Convertible Preferred Stock outstanding, entitling the holders of
those shares to an aggregate of 21,508,907 votes. Accordingly, on the Record Date, the holders of our common stock and Series A Convertible
Preferred Stock are entitled to an aggregate of 96,564,391 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 three Class I directors to serve until the 2026 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 2023 fiscal year; (3) to approve, by non-binding vote, executive compensation; (4) to recommend,
by non-binding vote, the frequency of future advisory votes on executive compensation; and (5) to 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.
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 17, 2023, 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:
| ● | timely
delivering a properly executed, later-dated proxy; |
| | |
| ● | submitting
a later vote by Internet or telephone any time prior to 11:59 p.m., Eastern Daylight Time,
on May 17, 2023; |
| | |
| ● | delivering
a written revocation of your proxy to our Secretary at our principal executive offices; or |
| | |
| ● | voting
by ballot at the meeting. |
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 2023 fiscal year and “FOR”
the approval, by non-binding vote, executive compensation. The frequency of future advisory votes
on executive compensation – every year, every two years, or every three years – receiving the largest number of votes cast
by holders of the shares entitled to vote and present in person or by proxy will determine the outcome of this proposal.
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 by non-binding vote, executive compensation, and “THREE YEARS” for the recommended frequency of future executive
compensation votes, 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 New York Stock Exchange
(“NYSE”) 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 NYSE 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 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. Under the terms of our restated certificate of incorporation and bylaws, the Board of Directors may fill these vacancies
at any time.
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 2023 Annual Meeting to serve a three-year term until the 2026 Annual Meeting)
David
W. Benfer
Director
since February 2005
Mr.
Benfer, 76, 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, 68, is Chairman and CEO of Profound Medical Corp. (NASDAQ: PROF), 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. 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.
Myriam
Curet, M.D.
Director
since July 2021
Dr.
Curet, 66, currently serves as Executive Vice President and Chief Medical Officer for Intuitive Surgical, the global leader and pioneer
of robotic surgery. Dr. Curet joined Intuitive Surgical in 2005 and has since led the development of clinical evidence, physician education,
and reimbursement and regulatory activities that have been instrumental to Intuitive Surgical’s growth across multiple clinical
specialties. For more than 20 years, Dr. Curet has also served as a Clinical Professor of Surgery at Stanford University School of Medicine,
with a part-time clinical appointment at the Palo Alto Veteran’s Administration Medical Center. Dr. Curet received her M.D. from
Harvard Medical School and completed her general surgery residency at the University of Chicago. Dr. Curet’s extensive medical
credentials and her executive experience in a medical device company provides the Board with significant insights on the commercial adoption
of our products, as well as product innovation and operational matters.
Class
II Directors (terms expiring at the 2024 Annual Meeting)
David
L. Fischel
Chief
Executive Officer and Chairman of the Board since February 2017
Director
since September 2016
Mr.
Fischel, 36, 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. 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 extensive understanding of our business, operations and strategy, as well as financial
and medical device industry experience, enable him to make valuable contributions to the Board of Directors.
Robert
J. Messey
Director
since May 2005
Mr.
Messey, 77, 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 compensation committee,
and member of the audit committee of a privately held conglomerate. 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
III Directors (terms expiring at the 2025 Annual Meeting)
Nathan
Fischel, M.D.
Director
since February 2017
Dr.
Fischel, 67, 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 23 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, 39, is the Director of Research for Arbiter Partners Capital Management LLC and a principal in the firm. Mr. Levin is a former
board member of Capital Senior Living Corporation, Mood Media Corporation, American Community Properties Trust and Presidential Life
Corporation. Mr. Levin is also chairman of the board of directors of Constructive Partnerships Unlimited, a non-profit organization providing
services and programs for people with developmental disabilities, and former vice chairman of the board of the Cerebral Palsy Associations
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.
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 The New York Stock Exchange American Exchange (“NYSE American”) under the trading symbol “STXS”.
The stock began trading on the NYSE American on September 6, 2019. Prior to that date the stock had traded on the OTCQX®
Best Market since August 4, 2016. Our Board is required to evaluate and affirmatively determine the independence of our directors under
the listing standards of the NYSE American, specifically, NYSE American Company Guide Section 803.
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 2022 under the listing standards
of the NYSE American.
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, experience, 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, sex (including pregnancy, sexual orientation, gender, and/or gender
identity), religion, disability, or age.
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. |
|
|
|
|
● |
If
there is no qualified and available incumbent or if there is a vacancy on the Board, 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., 710 North Tucker Boulevard, Suite 110, St. Louis, Missouri 63101.
|
● |
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., 710 North Tucker Boulevard, Suite 110, St. Louis, Missouri 63101:
|
● |
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:
Matthew
Stepanek, Sr. Director, Regulatory Affairs
Stereotaxis,
Inc.
710
North Tucker Boulevard, Suite 110
St.
Louis, Missouri 63101
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 2022, the Board of Directors held 5 meetings. During fiscal year 2022 all incumbent directors attended 100% 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 encouraged,
but not required, to attend our Annual Meeting of Shareholders. Mr. David Benfer, Mr. David Fischel and Mr. Messey attended our 2022
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 2022 was as follows:
Audit |
|
Compensation |
Ross
B. Levin, Chairman |
|
Arun
Menawat, Chairman |
David
W. Benfer |
|
Myriam
Curet |
Robert
J. Messey |
|
David
W. Benfer |
Nominating
& Corporate Governance |
|
|
David
W. Benfer, Chairman |
|
|
Myriam
Curet |
|
|
Ross
B. Levin |
|
|
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, Board & Management,
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 NYSE American 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 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 2022, the Audit Committee met four times.
Compensation
Committee
Our
Board has determined that each director serving on the Compensation Committee during 2022 was independent under the listing standards
of the NYSE American, 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 NYSE American.
During
fiscal year 2022, the Compensation Committee met one time and acted one time 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 2022 was independent under
the listing standards of the NYSE American. 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 2022, the Nominating and Corporate Governance Committee met one time.
DIRECTOR
COMPENSATION
Director
Compensation Policy
Under
the July 2021 Non-Employee Director compensation program, each director receives an annual award of restricted share units (RSUs) equal
to $200,000 annually, payable in two-equal semi-annual installments valued at $100,000 each with the number of RSUs issued at each semi-annual
installment calculated by dividing a) the total semi-annual grant value of $100,000 by b) the adjusted closing per share on the accounting
grant date for each semi-annual period. 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 $10,000 threshold
in fiscal 2022 and thus are not included in the table below for director compensation.
Compensation
of Directors
The
following table discloses compensation to our non-employee directors for their services during 2022:
Director | |
Fees
Earned or Paid in Cash ($) | | |
Stock
Awards ($)(1) | | |
Option
Awards ($) | | |
All
Other Compensation | | |
Total
($) | |
David W. Benfer | |
| - | | |
| 200,000 | | |
| - | | |
| - | | |
| 200,000 | |
Myriam Curet(2) | |
| - | | |
| 200,000 | | |
| - | | |
| - | | |
| 200,000 | |
David L. Fischel(3) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Nathan Fischel, M.D.(4) | |
| - | | |
| 200,000 | | |
| - | | |
| - | | |
| 200,000 | |
Ross Levin(5) | |
| - | | |
| 200,000 | | |
| - | | |
| - | | |
| 200,000 | |
Dr. Arun S. Menawat(6) | |
| - | | |
| 200,000 | | |
| - | | |
| - | | |
| 200,000 | |
Robert J. Messey(7) | |
| - | | |
| 200,000 | | |
| - | | |
| - | | |
| 200,000 | |
|
(1) |
Amount
represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Includes restricted share units issued
in 2023 for services performed in 2022. |
|
(2) |
24,862
restricted share units were outstanding as of December 31, 2022, none of which were vested as of such date. |
|
(3) |
As
a member of the Company’s management, Mr. David Fischel did not receive compensation for his services as a director in 2022.
205,000 restricted share units were outstanding as of December 31, 2022, none of which were vested as of such date. |
|
(4) |
265,976
restricted share units were outstanding as of December 31, 2022, none of which were vested as of such date. |
|
(5) |
210,949
restricted share units were outstanding as of December 31, 2022, none of which were vested as of such date. |
|
(6) |
265,976
restricted share units were outstanding as of December 31, 2022, none of which were vested as of such date. |
|
(7) |
235,976
restricted share units were outstanding as of December 31, 2022, 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 three (3) Directors, Mr. David Benfer, Dr. Arun Menawat, and Dr. Myriam Curet as Class I directors, to serve
until the 2026 Annual Meeting and until their respective successors are duly elected and qualified.
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
The
following discussion and analysis of the compensation arrangements of our Named Executive Officers for 2022 is intended to provide additional
context about our compensation philosophy and our Board’s compensation-related decisions in 2022. It should be read together with
the compensation tables and related disclosures set forth below.
This
discussion contains forward-looking statements that are based on our current considerations, expectations, and determinations regarding
future compensation programs. The actual amount and form of compensation and the compensation programs that we adopt may differ materially
from current or planned programs as summarized in this discussion.
The
following discussion and analysis relate to the compensation arrangements for 2022 of (i) our principal executive officer, and (ii) our
principal financial officer, who are the two officers included in our Summary Compensation Table (our “Named Executive Officers”).
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. No compensation consultant provided any services to the Compensation Committee during fiscal 2022.
Role
of Executive Officers in Compensation Decisions
For
executive officers other than our CEO, the Compensation Committee has historically sought and considered input from our CEO regarding
such executive officers’ responsibilities, performance, and compensation. Specifically, our CEO recommends base salary increases
and equity award levels that are used throughout our compensation plans and advises the Compensation Committee regarding the compensation
program’s ability to attract, retain and motivate executive talent. These recommendations reflect compensation levels that our
CEO believes are qualitatively commensurate with an executive officer’s individual qualifications, experience, responsibility level,
functional role, knowledge, skills, and individual performance, as well as the Company’s performance. Our Compensation Committee
considers our CEO’s recommendations but may adjust up or down as it determines in its discretion and approves the specific compensation
for all the executive officers. All such compensation determinations by our Compensation Committee are largely discretionary.
Our
CEO abstains from voting in sessions of the Board of Directors where the Board of Directors acts on the Compensation Committee’s
recommendations regarding his compensation.
Executive
Compensation Program
The
elements of the compensation program for officers are base salary, equity-based long-term incentive, and benefits. Officers other than
the CEO are also eligible for an annual cash incentive. 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. 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 to the
CEO are made pursuant to the Company’s 2021 CEO Performance Share Unit Award Plan. Long-term incentive awards to officers other
than the CEO are made pursuant to the Company’s 2022 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.
Historically,
the design of the annual cash incentive plan available for officers other than CEO 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. In recent years, the committee has decided not to establish
a plan based on objective, formulaic performance goals and metrics for the Company and instead determined that annual incentive awards
to management, including the Named Executive Officers other than the CEO, would be discretionary.
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, if appropriate, 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.
2022
Executive Compensation
Annual
Base Salary. The Compensation Committee approved a base salary increase of approximately $3,000 for Ms. Peery, effective
March 1, 2022. The Compensation Committee decided to make no changes to the annual base salary during 2022 for Mr. Fischel, which remained
at $60,000 per year.
Annual
Incentive Plan. The committee decided not to establish a 2022 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 2022 fiscal year would be discretionary.
Long-Term
Incentive Compensation. In February 2022, 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 to Ms. Peery with the intention of emphasizing retention and
the criticality of shareholder alignment during this key phase in the Company’s life-cycle. In February 2021, the Board, upon recommendation
of the Compensation Committee and subject to shareholder approval, approved a grant of performance based restricted stock units to Mr.
Fischel, with vesting contingent on achievement of minimum service requirements and market-based milestones. Shareholders subsequently
approved the award in May 2021. As of December 31, 2022, none of the performance milestones established
by the 2021 CEO Incentive Program have been achieved and no awards have been earned. The full award document can be found in Exhibit
10.7 to our 2021 10K filed with the SEC on March 10, 2022.
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 2022, the Company
matched employee contributions up to 3% of the employee’s salary, subject to limitations.
However, the employer match payment was not made until 2023. |
| | |
| ● | 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 Named Executive Officers for fiscal years 2021 and 2022. 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
($) | | |
Stock
Awards ($)(1) | | |
Option
Awards ($)(2) | | |
Non-Equity
Incentive Plan Compensation ($)(3) | | |
All
Other Compensation ($)(4) | | |
Totals
($) | |
David L. Fischel | |
| 2022 | | |
| 60,000 | | |
| - | | |
| - | | |
| - | | |
| 2,195 | | |
| 62,195 | |
Chief Executive Officer | |
| 2021 | | |
| 60,000 | | |
| 57,397,673 | | |
| - | | |
| - | | |
| 2,195 | | |
| 57,459,868 | |
Kimbery R. Peery | |
| 2022 | | |
| 222,500 | | |
| - | | |
| 134,920 | | |
| 20,000 | | |
| 9,340 | | |
| 386,760 | |
Chief Financial Officer | |
| 2021 | | |
| 220,000 | | |
| - | | |
| 177,720 | | |
| 40,722 | | |
| 9,098 | | |
| 447,540 | |
(1) |
Amount
reported reflects the aggregate grant date fair value of the shares awarded under the 2021 CEO Performance Share Unit Award Plan,
computed in accordance with FASB ASC Topic 718. See Note 9 of the notes to our consolidated financial statements contained in our
2021 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. This amount reflects the aggregate grant date fair value for this award and does not correspond to the
actual value that will be recognized by Mr. David Fischel. The amount reported is also the amount that would be reported assuming
the highest level of performance conditions are achieved. The 2021 CEO Performance Share Unit Award Plan is intended to compensate
Mr. Fischel over its 10-year term and will become vested as to all shares subject to it only if our market capitalization increases
to $5.5 billion. Each tranche of shares out of a total of 10 tranches will become vested and exercisable each time: (i) our market
capitalization increases initially to $1.0 billion for the first tranche, and (ii) by an additional $0.5 billion for each tranche
thereafter, subject to Mr. Fischel’s continued service to us as the Chief Company Executive (as defined in the award agreement),
at each such vesting event. This award was designed to be entirely an incentive for future performance that would take many years,
if at all, to be achieved. If any shares have not vested by the end of the term of the award term, they will be forfeited, and Mr.
Fischel will not realize the value of such award. As of the date of this filing, no market capitalization milestones have been achieved
and consequently, no shares have vested under the 2021 CEO Performance Share Unit Award Plan. As of December 31, 2022, Mr. Fischel
has not achieved any of the performance milestones established by the 2021 CEO Performance Share Unit Award and has not received
any shares under this plan. |
(2) |
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 2022 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. |
(3) |
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. |
(4) |
All
Other Compensation includes the payment of group term life insurance premiums and employer match contributions to the executive’s
401(k) plan earned in the respective fiscal year. |
Outstanding
Equity Awards at Fiscal Year-End
| |
| | |
Option
Awards | | |
Stock
Awards | |
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 (#) | | |
Market
Value of Shares or Units of Stock That Have Not Vested ($)(2) | |
David L. Fischel(3) | |
| 01/02/2018 | | |
| | | |
| | | |
| | | |
| | | |
| 30,000 | | |
| 62,100 | |
| |
| 07/02/2018 | | |
| | | |
| | | |
| | | |
| | | |
| 30,000 | | |
| 62,100 | |
| |
| 01/02/2019 | | |
| | | |
| | | |
| | | |
| | | |
| 30,000 | | |
| 62,100 | |
| |
| 07/01/2019 | | |
| | | |
| | | |
| | | |
| | | |
| 30,000 | | |
| 62,100 | |
| |
| 01/02/2020 | | |
| | | |
| | | |
| | | |
| | | |
| 30,000 | | |
| 62,100 | |
| |
| 07/01/2020 | | |
| | | |
| | | |
| | | |
| | | |
| 30,000 | | |
| 62,100 | |
| |
| 01/04/2021 | | |
| | | |
| | | |
| | | |
| | | |
| 25,000 | | |
| 51,750 | |
| |
| 02/27/2021 | (4) | |
| | | |
| | | |
| | | |
| | | |
| 13,000,000 | | |
| 26,910,000 | |
Kimberly R. Peery | |
| 03/27/2014 | | |
| 4,000 | | |
| | | |
| 4.04 | | |
| 03/27/2024 | | |
| | | |
| | |
| |
| 02/26/2018 | | |
| 15,750 | | |
| | | |
| 0.74 | | |
| 02/26/2028 | | |
| | | |
| | |
| |
| 03/03/2019 | | |
| 32,840 | | |
| 2,160 | | |
| 2.03 | | |
| 03/03/2029 | | |
| | | |
| | |
| |
| 03/09/2020 | | |
| 27,514 | | |
| 12,486 | | |
| 4.52 | | |
| 03/09/2030 | | |
| | | |
| | |
| |
| 03/08/2021 | | |
| 17,506 | | |
| 22,494 | | |
| 6.96 | | |
| 03/08/2031 | | |
| | | |
| | |
| |
| 02/25/2022 | | |
| - | | |
| 40,000 | | |
| 4.80 | | |
| 02/25/2032 | | |
| | | |
| | |
(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, 2022. 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) |
Based
on the closing price of $2.07 for the shares of our common stock on December 30, 2022. |
(3) |
Prior
to December 1, 2020, Mr. Fischel received compensation as a “non-employee director” under our compensation program for
non-employee directors described under “Director Compensation” above. |
(4) |
As
of 12/31/2022, Mr. Fischel has not achieved any of the performance milestones established by the 2021 CEO Incentive Program and has
not received any awards under that program. |
PAY
VERSUS PERFORMANCE
As
required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are
providing the following information about the relationship between executive compensation actually paid and certain financial performance
of our company. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for
any of the fiscal years shown.
Year | |
Summary
Compensation Table Total for Principal Executive Officer (“PEO”) | | |
Compensation
Actually Paid to PEO(1) | | |
Average
Summary Compensation Table Total for Non-PEO Named Executive Officers (“NEOs”) | | |
Average
Compensation Actually Paid to Non-PEO NEOs(1) | | |
Value
of Initial Fixed $100 Investment Based On Total Shareholder Return (“TSR”)(2) | | |
Net
Income (Loss)(3) (millions) | |
| |
| | |
| | |
| | |
| | |
| | |
| |
2022 | |
| 62,195 | | |
| (49,087,719 | ) | |
| 386,760 | | |
| 94,383 | | |
| 40.67 | | |
| (18.30 | ) |
2021 | |
| 57,459,868 | | |
| 64,557,430 | | |
| 447,540 | | |
| 476,648 | | |
| 121.81 | | |
| (10.70 | ) |
(1) | Amounts
represent compensation actually paid to our CEO, Mr. David Fischel, who was our Principal
Executive Officer or “PEO” for each of the years shown, and the average compensation
actually paid to our CFO, Ms. Peery, as our remaining NEO or “Non-PEO NEO” for
the relevant fiscal year.
Amounts were computed in accordance with Item
402(v) of Regulation S-K and do not reflect the actual amount of compensation earned by or
paid to Mr. Fischel or Ms. Peery during the applicable year. |
Amounts
represent the Summary Compensation Table Total Compensation for the applicable fiscal year adjusted as follows:
| |
2021 | | |
2022 | |
| |
PEO | | |
Average
non-PEO NEOs | | |
PEO | | |
Average
non-PEO NEOs | |
Deduction for
ASC 718 Fair Value as of Grant Date Reported under the Stock Awards and Option Awards Columns in the Summary Compensation Table | |
| (57,397,673 | ) | |
| (177,720 | ) | |
| - | | |
| (134,920 | ) |
| |
| | | |
| | | |
| | | |
| | |
Year End Fair Value of Outstanding
and Unvested Equity Awards Granted in the Year | |
| 64,495,235 | | |
| 150,200 | | |
| - | | |
| 46,680 | |
| |
| | | |
| | | |
| | | |
| | |
Fair Value as of Vesting Date
of Equity Awards Granted and Vested in the Year | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Year over Year Change in Fair
Value of Outstanding and Unvested Equity Awards Granted in Prior Years | |
| - | | |
| 17,744 | | |
| (49,149,914 | ) | |
| (109,265 | ) |
| |
| | | |
| | | |
| | | |
| | |
Year over Year Change in Fair
Value of Equity Awards Granted in Prior Years that Vested in the Year | |
| - | | |
| 38,884 | | |
| - | | |
| (94,872 | ) |
| |
| | | |
| | | |
| | | |
| | |
Fair Value at the End of the
Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Value of Dividends or other
Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Total Adjustments | |
| 7,097,562 | | |
| 29,108 | | |
| (49,149,914 | ) | |
| (292,377 | ) |
The
equity awards granted to our PEO include performance-based stock units (PSU). The change in fair values of those PSUs included in the
compensation actually paid to our PEO are calculated at the required measurement dates using a Black-Scholes model to approximate the
change in fair value. Changes to the PSU fair value from the grant date are based on our updated stock price at the respective measurement
dates, in addition to remaining life of the grant, implied volatility of our stock over the remaining grant life, and risk-free rate
assumptions. For all years presented, the meaningful increases or decreases in the year-end stock option fair value from the fair value
on the grant date were primarily driven by changes in the stock price.
The
equity awards to our Non-PEO NEOs include incentive stock options. The change in fair values of
those options include in the compensation actually paid to our Non-PEO NEOs are calculated at the required measurement dates, consistent
with the approach used to value the awards at the grant date as described in our Annual Report on Form 10-K for the year ended December
31, 2022. Changes to the stock option fair values are based on the updated stock price at the respective measurement dates, in
addition to updated expected option term, implied volatility of our stock over the updated expected option term, and risk-free rate assumptions.
For all years presented, the meaningful increases or decreases in the year-end stock option fair value from the fair value on the grant
date were primarily driven by changes in the stock price.
(2)
Cumulative TSR is calculated by dividing the sum of
the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our company’s
share price at the end and the beginning of the measurement period by our company’s share price at the beginning of the measurement
period. No dividends were paid on stock or option awards in 2021 or 2022.
(3)
The dollar amounts reported represent the amount of net income (loss) reflected in our consolidated audited financial statements for
the applicable year.
Analysis
of the Information Presented in the Pay Versus Performance Table
We
generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation
actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v)
of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance
table.
Compensation
Actually Paid and Net Income (Loss)
Between
2021 and 2022, our net loss increased and the compensation
actually paid for both our PEO and non-PEO NEOs decreased reflecting company performance and the impact of the
declining stock price.
Compensation
Actually Paid and Cumulative TSR
As
shown in the following graph, the compensation actually paid to Mr. Fischel and the average amount of compensation actually paid to our
named executive officers as a group (excluding Mr. Fischel) during the periods presented are positively correlated. While have not historically
aligned executive compensation with TSR, our stock incentive programs, which are an integral part of our executive compensation program,
are tied to company performance because they provide value only if the market price of our common stock increases and if the executive
officer continues in our employment over the vesting period. These stock awards strongly align our executive officers’ interests
with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by
encouraging our executive officers to continue in our employment for the long-term. Additionally, part of the compensation of
our named executive officers other than our PEO consists of annual performance-based cash bonuses which are designed to provide appropriate
incentives to our executives to achieve defined annual corporate goals and to reward our executives for individual achievement towards
these goals. See the Executive Compensation section for a complete discussion of our compensation programs.
Securities
Authorized for Issuance under Equity Compensation Plans
The
following table discloses information as of December 31, 2022, 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 (1) | | |
Weighted-Average
Exercise Price of Outstanding Options, Warrants and Rights(2) | | |
Number
of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(3) | |
| |
(a) | | |
(b) | | |
(c) | |
Equity compensation
plans approved by shareholders | |
| 4,416,804 | | |
$ | 4.21 | | |
| 16,930,952 | |
Equity compensation plans
not approved by shareholders | |
| - | | |
| - | | |
| - | |
Total | |
| 4,416,804 | | |
$ | 4.21 | | |
| 16,930,952 | |
(1) |
Includes
1,208,739 shares issuable pursuant to RSUs under our compensation program for non-employee
directors, for which the service period has been completed but which will vest and become
issuable in the future on the earliest to occur of (i) the fifth anniversary of the date
of the award, (ii) the date on which the Board service of the director terminates, or (iii)
a “change of control” of the Company, as defined in the award agreement. See
“Director Compensation—Director Compensation Policy” above.
|
(2) |
Shares
issuable upon vesting of restricted share units are not included in the weighted average computation. |
(3) |
Includes
13,000,000 shares issuable pursuant to performance based RSUs under the 2021 CEO Performance Share Unit Award Plan which was approved
by our shareholders at our May 20, 2021 annual meeting. As of December 31, 2022, no milestones have been achieved under the 2021
CEO Performance Share Unit Award Plan and accordingly no shares have been issued. |
Potential
Payments Upon Termination or Change of Control
The
award agreements under our 2002 Stock Incentive Plan, 2012 Stock Incentive Plan, 2022 Stock Incentive Plan, and the 2021 CEO Performance
Share Unit Award Plan (collectively, the “Plans”) 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 certain stock incentive plans, in the event of a change of control of the Company, the Compensation
Committee has the 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, 2012 Stock Incentive Plan, or 2022 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 20,
2023, 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 75,055,484 shares of common stock, 22,383 shares of Series A Convertible Preferred Stock, and 5,610,121 shares of Series B Convertible
Preferred Stock outstanding as of March 20, 2023. Each share of our Series A Convertible Preferred Stock is convertible into 2,136 shares
of our common stock (or an aggregate 21,508,907 of shares) and each share of our Series B Convertible Preferred Stock is convertible
into one (1) share of our common stock, in each case subject to specified beneficial ownership limitations. Unless otherwise indicated,
the table below includes the number of shares underlying options and stock appreciation rights that are currently exercisable or exercisable
within 60 days after March 20, 2023, the number of shares that may be issuable upon vesting of restricted share units within 60 days
after March 20, 2023, 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 20, 2023, 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, restricted share units, shares of Series A Convertible Preferred Stock, or shares of Series B Convertible 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., 710 North Tucker Boulevard, Suite 110, St. Louis, MO 63101.
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 | |
| 7,379,389 | | |
| 9.30 | % |
| |
| | | |
| | |
Joseph Kiani Dynasty Trust
(2) 52 Discovery Irvine, CA 92618 | |
| 7,647,232 | | |
| 9.99 | % |
| |
| | | |
| | |
Arbiter Partners QP, L.P.(3)
530 Fifth Avenue, 20th Fl. New York, NY 10036 | |
| 3,806,831 | | |
| 4.99 | % |
| |
| | | |
| | |
DAFNA Capital Management,
LLC (4) 10990 Wilshire Boulevard, Suite 1400 Los Angeles, CA 90024 | |
| 13,680,554 | | |
| 18.23 | % |
| |
| | | |
| | |
Redmile Group, LLC(5)
One Letterman Drive Building D Suite D3-300 The Presidio of San Francisco San Francisco, California 94129 | |
| 7,097,616 | | |
| 8.80 | % |
| |
| | | |
| | |
Directors
and Named Executive Officer | |
| | | |
| | |
David W. Benfer (6) | |
| 415,685 | | |
| * | |
| |
| | | |
| | |
David L. Fischel | |
| 80,000 | | |
| * | |
| |
| | | |
| | |
Nathan Fischel, M.D. (7) | |
| 13,755,054 | | |
| 18.33 | % |
| |
| | | |
| | |
Myriam Curet, M.D. | |
| - | | |
| * | |
| |
| | | |
| | |
Arun S. Menawat | |
| 389,285 | | |
| * | |
| |
| | | |
| | |
Robert J. Messey | |
| 115,818 | | |
| * | |
| |
| | | |
| | |
Ross Levin | |
| - | | |
| * | |
| |
| | | |
| | |
Kimberly R. Peery (8) | |
| 123,067 | | |
| * | |
| |
| | | |
| | |
All directors and executive
officers as a group (8 persons) | |
| 14,878,909 | | |
| 19.41 | % |
* Indicates
ownership of less than 1%
(1) |
Based on the Company’s
records. Includes 4,302,466 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 13G
filed by Joe Kiani on June 9, 2021, and the Company’s records. Excludes 7,111,545 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 9.99% of our common stock then outstanding. |
(3) |
Based on the Company’s
records and Schedule 13F filed by Arbiter Partners Capital Management LLC on February 14, 2023. Excludes 5,219,982 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 17,209,863 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 with the SEC on February 14, 2023 by Redmile Group, LLC (“Redmile”), the shares of the Company’s common stock
that may be deemed to be beneficially owned by Redmile is comprised of 1,487,495 shares of Common Stock held by certain private investment
vehicles and/or separately managed accounts managed by Redmile Group, LLC (collectively, the “Redmile Funds”), which
shares of Common Stock may be deemed beneficially owned by Redmile Group, LLC as investment manager of the Redmile Funds. 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. Redmile Group, LLC may also be deemed to beneficially own shares of Common Stock issuable upon conversion
of 5,610,121 shares of the Company’s non-voting Series B Convertible Preferred Stock (“Series B Preferred Stock”)
held by certain Redmile Funds. The Series B Preferred Stock is initially convertible into shares of Common Stock on a one-for-one
basis. 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. |
(6) |
Includes, 2,700 shares
of common stock held by Mr. Benfer’s spouse, and 210,255 shares of common stock held by the Benfer Family Trust TTEE. |
(7) |
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 17,209,863 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. |
(8) |
Includes options to purchase
119,750 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 NYSE American 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, 2022 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 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, 2022 for filing with the SEC.
Submitted by the Audit Committee of the Board of Directors,
|
Ross
Levin, Chair |
|
David
W. Benfer |
|
Robert
J. Messey |
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 2023 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 2023. 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.
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 2023.
PROPOSAL
3: TO APPROVE, BY NON-BINDNG VOTE, EXECUTIVE COMPENSATION
Our
Board of Directors believes that long-term incentive compensation programs align the interests of management, employees, and the shareholders
to create long-term shareholder value. The Board believes that these programs increase our ability to achieve this objective by allowing
for several different forms of long-term incentive awards, which the Board believes will help us recruit, reward, motivate and retain
talented personnel.
Pursuant
to Section 14A of the Exchange Act, our Board of Directors is again submitting a non-binding shareholder vote on our executive compensation
as described in this proxy statement (commonly referred to as “say-on-pay”). This vote is currently conducted every three
years, and if approved by shareholders, the next vote will be in 2026.
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
affirmative vote of the holders of a majority of the shares of 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 approve, on an advisory basis, the compensation
of our Named Executive Officers, as described in this proxy statement. 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.
PROPOSAL
4: TO RECOMMEND, BY NON-BINDING VOTE, the FREQUENY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
Section
14A of the Securities Exchange Act requires that every six years we include in this proxy statement a separate non-binding shareholder
vote to advise on whether the “say-on-pay” vote should occur every one, two or three years. You have the option to vote for
any one of the three options, or to abstain on the matter.
The
Board believes that following this year’s advisory vote on executive compensation, an advisory vote on executive compensation every
three years is the best approach for the Company based on a number of considerations, including the following:
|
● |
Our
compensation program is designed and weighted to reward sustained financial and stock price performance over such a multi-year period. |
|
|
|
|
● |
The
largest value creation opportunity for our Named Executive Officers rewards multi-year stock price appreciation through the provision
of stock-settled stock appreciation rights and restricted share units with multi-year vesting. |
|
|
|
|
● |
A
success of the Company’s long-term incentive strategy is best measured on a three-year frequency by providing sufficient time
for shareholders to meaningfully weigh the full impact and success of the program compared to the sustained financial performance
of the Company. |
The
proxy card provides the Company’s shareholders with the opportunity to choose among four options (holding the vote every one, two,
or three years, or abstaining) and, therefore, shareholders will not be voting to approve or disapprove our Board’s recommendation.
The frequency of holding an advisory vote on the compensation of our named executive officers receiving the largest number of votes cast
– every year, two years, or every three years – will be the frequency approved, on an advisory basis, by the Company’s
shareholders. However, because the vote on the frequency of holding future advisory votes on the compensation of our named executive
officers is not binding, if none of the frequency options receives a majority vote, the option receiving the greatest number of votes
will be considered the frequency preferred by our shareholders.
Although
the vote is non-binding, our Board intends to consider the outcome of the vote when making future decisions about the Company’s
executive compensation policies and procedures. The Company’s shareholders also may provide additional feedback on important matters
involving executive compensation even in years when Say-on-Pay votes do not occur. For example, the Company from time to time seeks shareholder
approval for new employee equity compensation plans and material revisions thereto.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE TO CONDUCT AN ADVISORY VOTE ON EXECUTIVE COMPENSATION EVERY THREE YEARS.
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 2021 and an estimate of the fees we expect to be billed by Ernst & Young LLP for professional services for fiscal
year 2022:
| |
Amount
Billed for Fiscal Year | |
Description
of Professional Service | |
2021 | | |
2022 | |
Audit
Fees – professional services rendered by Ernst & Young LLP for the audit of our annual financial statements, 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. | |
$ | 410,000 | | |
$ | 375,000 | |
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. | |
| - | | |
| 83,930 | |
All Other
Fees | |
| - | | |
| - | |
Total
Ernst & Young LLP Fees | |
$ | 410,000 | | |
$ | 458,930 | |
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 2022 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 2023 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 6, 2022, which is 120 calendar days prior to the anniversary of April 5, 2023,
the release date of this proxy statement relating to the 2023 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 any shareholder 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 19, 2023, and not
later than February 18, 2023, for the 2023 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., 710 North Tucker Boulevard, Suite 110, St. Louis, Missouri 63101:
|
● |
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 710 North Tucker Boulevard, Suite 110, St. Louis, Missouri 63101, 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, 2022, 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 will not exceed our reasonable
expenses in connection therewith. Requests for such materials should be directed to Stereotaxis, Inc., 710 North Tucker Boulevard, Suite
110, St. Louis, Missouri 63101, Attention: Corporate Secretary. Such information may also be obtained free of charge by accessing the
Commission’s web site at www.sec.gov.
April
5, 2023
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