Item
10. Directors, Executive Officers, and Corporate Governance.
Board
of Directors
We
currently have seven directors serving on our Board of Directors (our “Board”). The Board currently consists of Harel
Gadot, Yoav Waizer, Yoseph Bornstein, Scott Burell, Martin Madden, Prattipati Laxminarain, and Aileen Stockburger.
Messrs.
Gadot, Waizer and Madden are Class I directors whose terms expire at the Company’s 2022 annual meeting of stockholders.
Mr. Burell and Ms. Stockburger are Class II directors whose terms expire at the Company’s 2020 annual meeting of stockholders.
Messrs. Bornstein and Laxminarain are Class III directors whose terms expire at the Company’s 2021 annual meeting of stockholders.
The
following table lists the names, ages and positions of the individuals who serve as directors of the Company, as of April 27,
2020:
|
Name
|
|
Age
|
|
Position
|
|
Harel
Gadot
|
|
47
|
|
President,
Chief Executive Officer and Chairman of the Board of Directors
|
|
Yoav
Waizer(2)(3)
|
|
55
|
|
Director
|
|
Yoseph
Bornstein(1)(3)
|
|
62
|
|
Director
|
|
Scott
Burell(1)(2)
|
|
54
|
|
Director
|
|
Martin
Madden(1)(3)
|
|
58
|
|
Director
|
|
Prattipati
Laxminarain(2)
|
|
62
|
|
Director
|
|
Aileen
Stockburger
|
|
57
|
|
Director
|
|
(1)
|
Member
of Audit Committee.
|
|
(2)
|
Member
of Corporate Governance Committee.
|
|
(3)
|
Member
of Compensation Committee.
|
Harel
Gadot, became President, Chief Executive Officer and Chairman of the Company’s Board following the consummation of the
merger of C&RD Israel Ltd, a wholly owned subsidiary of the Company, with and into Microbot Medical Ltd. (“Microbot
Israel”), with Microbot Israel surviving as a wholly owned subsidiary of the Company (the “Merger”). Mr. Gadot
is a co-founder of Microbot Israel and has served as Microbot Israel’s Chief Executive Officer since Microbot Israel was
founded in November 2010. He has been the Chairman of Microbot Israel’s board of directors since July 2014. He also serves
as the Chairman of XACT Robotics Ltd., an Israel-based private company seeking to develop a novel platform technology for robotic
needle steering in minimally invasive interventional procedures such as biopsies and ablations, since August 2013 and MEDX Xelerator
L.P., a medical device and digital health Israeli incubator, since July 2016. From December 2007 to April 2010 Mr. Gadot was a
Worldwide Group Marketing Director at Ethicon Inc., a Johnson and Johnson Company, where he was responsible for the global strategic
marketing of the Company. Mr. Gadot also held management positions, as well as leading regional strategic position for Europe,
Middle-East and Africa, as well as In Israel, while at Johnson and Johnson. Mr. Gadot served as director for ConTIPI Ltd. from
August 2010 until November 2013 when ConTIPI Ltd. was acquired by Kimberly-Clark Corporation. Mr. Gadot holds a B.Sc.in Business
from Siena College, Loudonville NY, and an M.B.A. from the University of Manchester, UK. The Company believes that Mr. Gadot is
qualified to serve as Chairman of the Board and as President and Chief Executive Officer of the Company due to his extensive experience
in strategic marketing and general management in the medical device industry.
Yoav
Waizer, became a director of the Company following the Merger and has served as a member of the Board of Directors of Microbot
Israel since May 2015. Mr. Waizer provides CFO services on a part-time basis to a number of venture capital funds and companies;
including to Israeli Technology Investments (ITI) Fund, Next Gear Venture Partners L.P. and to Medica Venture Partners. Mr. Waizer
served as CFO & COO at Cedar Fund, a venture capital fund focuses on investing in Israel-related high-tech companies and prior
to that Mr. Waizer was the CFO of Star Ventures Israel, the Israeli fund of Star Ventures, a $1 billion venture capital fund investing
in all stages of development within the Telecom, Enterprise S/W, Wireless and Life Sciences sectors. Mr. Waizer is currently a
director of Yeda Research & Development Co. Ltd., the technology transfer arm of the Weizmann Institute of Science, and XACT
Robotics Ltd., a private Israeli company developing novel platform robotic technology for use in minimally invasive procedures.
Mr. Waizer was the CFO on a part-time basis of MEDX Xelerator L.P., a medical device and digital health Israeli incubator. Mr.
Waizer holds Master of Business Administration in Information Systems and B.Sc. in Accounting and Statistics, both from the Tel-Aviv
University. The Company believes that Mr. Waizer is qualified to serve as a member of the Company’s board due to his extensive
investment experience and extensive knowledge of the life sciences industry.
Yoseph
Bornstein, became a director of the Company following the Merger. Mr. Bornstein is a
co-founder of Microbot Israel and has been a member of the Board of Directors since Microbot Israel was founded in November 2010.
Mr. Bornstein founded Shizim Ltd., a life science holding group in October 2000 and has served as its president since then. Mr.
Bornstein is the Chairman of GCP Clinical Studies Ltd., a provider of clinical research services and educational programs in Israel
since January 2002. He is the Chairman of Biotis Ltd., a service company for the bio-pharmaceutical industry, since June 2000.
In addition, he is the Chairman of Dolphin Medical Ltd., a service company for the medical device industry, since April 2012,
and the Chairman of ASIS Enterprises B.B.G. Ltd., a business development company focusing on creating business ties between Israeli
and Japanese entities, since August 2007. Mr. Bornstein is a co-founder and director of XACT Robotics Ltd., an Israeli-
based private company seeking to develop a novel platform technology for robotic needle steering in minimally invasive interventional
procedures, and is the founder of ShizimXL Innovation Center. In October 1992, Mr. Bornstein founded Pharmateam Ltd., an Israeli
company that specialized in representing international pharmaceutical companies which was sold in 2000. Mr. Bornstein is also
a founder of a number of other privately held life-science companies. Mr. Bornstein served as the Biotechnology Committee Chairman
of the Unites States-Israel Science & Technology Commission (the “USISTF”) from September 2002 to February 2005
as well as a consultant for USISTF from September 2002 to February 2005. He is also the founder of ILSI-Israel Life Science Industry
Organization (who was integrated into IATI) and ITTN-Israel Tech Transfer Organization. The Company believes that Mr. Bornstein
is qualified to serve as a member of the Board due to his extensive experience in, and knowledge of, the life sciences industry
and international business.
Scott
R. Burell, became a director of the Company following the Merger. Since August 1, 2018, Mr. Burell has been the Chief Financial
Officer of AIVITA Biomedical, Inc., a private biopharmaceutical company. From November 2006 until its sale to Invitae Corp. in
November 2017, he was the Chief Financial Officer, Secretary and Treasurer of CombiMatrix Corporation (NASDAQ: CBMX), a family
health-focused clinical molecular diagnostic laboratory specializing in pre-implantation genetic screening, prenatal diagnosis,
miscarriage analysis, and pediatric developmental disorders. He successfully led the split-off of CombiMatrix in 2007 from its
former parent, has led several successful public and private debt and equity financing transactions as well as CombiMatrix’s
reorganization in 2010. Prior to this, Mr. Burell had served as CombiMatrix’s Vice President of Finance since November 2001
and as its Controller from February 2001 to November 2001. From May 1999 to first joining CombiMatrix in February 2001, Mr. Burell
was the Controller for Network Commerce, Inc., a publicly traded technology and information infrastructure company located in
Seattle. Prior to this, Mr. Burell spent 9 years with Arthur Andersen’s Audit and Business Advisory practice in Seattle.
During his tenure in public accounting, Mr. Burell worked with many clients, both public and private, in the high-tech and healthcare
markets, and was involved in numerous public offerings, spin-offs, mergers and acquisitions. Mr. Burell is a Board member of Mer Telemanagement Solutions Ltd. (Nasdaq: MTSL), an Israeli-based publicly traded telecommunications
services company. Mr. Burell obtained his Washington state CPA license in 1992 and is a certified public accountant (currently
inactive). He holds Bachelor of Science degrees in Accounting and Business Finance from Central Washington University. The Company
believes Mr. Burell’s qualifications to serve on the Board include his experience as an executive of a public life sciences
company and knowledge of financial accounting in the medical technology field.
Martin
Madden, has been a director of the Company since February 6, 2017. Mr. Madden has held various positions at Johnson &
Johnson and its affiliates from 1986 to January 2017, most recently as Vice President, Research & Development of DePuy Synthes,
a Johnson & Johnson Company, from February 2016 to January 2017. Prior to that, from July 2015 to February 2016, Mr. Madden
was the Vice President, New Product Development of Johnson & Johnson Medical Devices. From January 2012 to July 2015, Mr.
Madden was the Vice President, Research & Development of Johnson & Johnson’s Global Surgery Group. Mr. Madden holds
a MBA from Columbia University, a M.S. from Carnegie Mellon University in Mechanical Engineering, and a B.S. from the University
of Dayton in Mechanical Engineering. The Company believes that Mr. Madden is qualified to serve as a member of the Board due to
his extensive experience in research and development, portfolio planning, technology assessment and assimilation, and project
management and budgeting.
Prattipati
Laxminarain, has been a director of the Company since December 6, 2017. From April 2006 through October 2017, Mr. Laxminarain
served as Worldwide President at Codman Neuro, a global neurosurgery and neurovascular company that offers a portfolio of devices
for hydrocephalus management, neuro intensive care and cranial surgery and other technologies, and which was part of DePuy Synthes
Companies of Johnson & Johnson. Mr.Laxminarain is currently the CEO of Deinde Medical Corporation, and is a Board Member
of Oculogica Inc., Millar Inc., and GT Medical Inc. He has a degree in Mechanical Engineering from Osmania University, Hyderabad,
India and an MBA from Indian Institute of Management. The Company believes that Mr. Laxminarain is qualified as a Board member
of the Company because of his extensive experience working with medical device companies and knowledge of the industries in which
the Company intends to compete.
Aileen
Stockburger was appointed by the Board on March 26, 2020 to fill a vacancy on the Board and to serve as a Class II director
of the Company, with a term commencing on April 1, 2020. Since February 2018, Ms. Stockburger has provided M&A consulting
and advisory services through Aileen Stockburger LLC. Prior to that, from 1989 through January 2018, Ms. Stockburger held various
positions in Johnson & Johnson, most recently as Vice President, Wordwide Business Development & Strategic Planning for
the DePuy Synthes Group of Johnson & Johnson, and as a member of its Worldwide Board and Group Operating Committee, from 2010-2018.
In that role, she oversaw the group’s merger and acquisition activities, including deal structuring, negotiations, contract
design and review, and deal terms. Before joining Johnson & Johnson, Ms. Stockburger spent several years at PriceWaterhouseCoopers,
and earned her CPA certification. She is also a Non-Executive Director of Next Science Limited (ASX: NXS), a medical technology
company headquartered in Sydney, Australia, with a primary focus in the development and continued commercialization of its proprietary
technology to reduce the impact of biofilm based infections in human health. Ms. Stockburger received her MBA and BS from The
Wharton School, University of Pennsylvania. The Company believes that Ms. Stockburger is qualified as a Board member of the Company
because of her extensive experience in strategizing, managing and closing sizable, complex worldwide mergers and acquisitions,
licensing agreements and divestitures, as well as her expertise in business development, strategic planning and finance.
Executive
Officers
Following
are the name, age and other information for our named executive officers, as of April 27, 2020. All Company officers have been
appointed to serve until their successors are elected and qualified or until their earlier resignation or removal. Information
regarding Harel Gadot, our Chairman, President and Chief Executive Officer, is set forth above under “–Board of Directors.”
|
Name
|
|
Age
|
|
Position
|
|
Harel
Gadot
|
|
47
|
|
President,
Chief Executive Officer and Chairman of the Board of Directors
|
|
David
Ben Naim
Dr.
Eyal Morag(1)
|
|
50
55
|
|
Chief
Financial Officer
Chief
Medical Officer
|
|
(1)
|
Dr.
Morag is scheduled to commence employment on June 15, 2020, or earlier as agreed to by Microbot and Dr. Morag. Dr. Morag entered
into an Employment Agreement with the Company as of February 18, 2020.
|
David
Ben Naim, became the Company’s part-time Chief Financial Officer following the consummation of the Merger. Mr. Ben Naim
is the general manager of DBN Finance Services Ltd., a company which provides outsourcing financial services to public and private
companies, since 2014, including the Company. Through DBN Finance Services, Mr. Ben Naim has acted as the outsourced CFO for Emerald
Medical Applications Corp. (OTC:MRLA), a digital health startup company engaged in the development, sale and service of imaging
solutions, Tempramed Inc., a private medical device company, Vonetize PLC (TASE:VNTZ), an Israeli company that offers video on
demand and over-the-top content services, Unet Credit Finance Services Ltd. (TASE:UNCR-M), and Todos Medical Ltd. (OTC:TOMDF),
an Israeli cancer in-vitro-diagnostic company engaging in the development of a series of blood tests for the early detection of
a variety of cancers. Prior to that, Mr. Ben Naim served as Chief Financial Officer for several companies in the biomedical and
technology industries. From July 2012 to September 2014, Mr. Ben Naim served as Chief Financial Officer for Insuline Medical Ltd.
(TASE: INSL), an Israel-based company focused on improving performance of insulin treatment methods. From 2008 until 2011, Mr.
Ben Naim served as Chief Financial Officer of Crow Technologies 1977 Ltd. (OTC:CRWTF), a company that designs, develops, manufactures
and sells a broad range of security and alarm systems. From 2007 to 2008, Mr. Ben Naim served as Chief Financial Officer of Ilex
Medical Ltd. (TASE:ILX), a leading company in the medical diagnostics field. From 2003 to 2007, Mr. Ben Naim was the Corporate
Controller of Tadiran Telecom Ltd. He started his career in 1998 at Deloitte & Touche where he left in 2003 as an Audit Senior
Manager. Mr. Ben Naim holds a B.A. in social sciences from Open University, Israel, a CPA license from Ramat Gan College, Israel,
and an M.B.A. from Ono Academic College, Israel.
Dr.
Eyal Morag, entered into an employment agreement with the Company as of February 18, 2020 to
serve as the Company’s Chief Medical Officer (“CMO”), commencing June 15, 2020 (as such date may be changed
upon agreement between the Company and Dr. Morag). As CMO, Dr. Morag will lead the development
and execution of the clinical strategy of the Company, including its current development of the SCS and LIBERTY products as well
as its future pipeline. Dr. Morag is a member of the Company’s Scientific Advisory Board since November 1, 2017. Dr. Morag
is certified by the American Board of Radiology, and since March 2017 has been the Chairman of Radiology at Assuta Ashdod Medical
Center, Ashdod, Israel. Previously, from July 2014 through March 2017, he was the senior Radiologist at URG Teleradiology LLC,
the largest provider of subspecialty radiology and teleradiology services in New Jersey. He is a graduate of Boston University
School of Medicine and completed both his Radiology residency and Fellowship in Cardiovascular & Interventional Radiology
at the Beth Israel Deaconess Medical Center & Harvard Medical School. Following his clinical training, Dr. Morag then joined
a private practice in western Massachusetts, where he served as Chief of Radiology at Holyoke Medical Center for several years.
He has also served as the Regional Radiology Director at Mercy Health Partners Hospitals in Toledo, Ohio, and was a member of
the University Radiology Group where he headed the International Investment efforts for the Ventures division. Dr. Morag’s
international experience developing and establishing radiology-related businesses includes teleradiology, interventional Radiology
services, and free-standing imaging centers. During his fellowship, Dr. Morag co-founded InTek Technology, a medical device startup
company. Later he founded Global Versa Radiology (“GVR”), an Israeli and U.S. based teleradiology company. GVR has
established imaging centers in Russia and Ukraine and provided teleradiology services in countries outside the U.S. and Israel.
Dr. Morag served as GVR’s Chief Medical Officer and Vice-President. He continues to be involved in several startup companies
ranging from AI to medical devices. Dr. Morag is also a member of the Advisory Board of MEDX Xelerator, a medical device and digital
health incubator.
Committees
of the Board of Directors
Presently,
the Board has three standing committees — the Audit Committee, the Compensation and Stock Option Committee (the “Compensation
Committee”), and the Corporate Governance and Nominating Committee (the “Corporate Governance Committee”). All
members of the Audit Committee, the Compensation Committee, and the Corporate Governance Committee are, and are required by the
charters of the respective committees to be, independent as determined under Nasdaq Listing rules.
Audit
Committee
The
Audit Committee is composed of Messrs. Burell, Madden and Bornstein. Each of the members of the Audit Committee is independent,
and the Board has determined that Mr. Burell is an “audit committee financial expert,” as defined in SEC rules. The
Audit Committee acts pursuant to a written charter which is available through our website at www.microbotmedical.com.
The
primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities. The
Audit Committee does this primarily by reviewing the Company’s financial reports and other financial information as well
as the Company’s systems of internal controls regarding finance, accounting, legal compliance, and ethics that management
and the Board of Directors have established. The Audit Committee also assesses the Company’s auditing, accounting and financial
processes more generally. The Audit Committee recommends to the Board of Directors the appointment of a firm of independent auditors
to audit the financial statements of the Company and meets with such personnel of the Company to review the scope and the results
of the annual audit, the amount of audit fees, the company’s internal accounting controls, the Company’s financial
statements contained in this proxy statement, and other related matters.
Compensation
Committee
The
Compensation Committee is composed of Messrs. Waizer, Madden and Bornstein. Each of the members of the Compensation Committee
is independent. The Compensation Committee acts pursuant to a written charter which is available through our website at www.microbotmedical.com.
The
Compensation Committee acts pursuant to a written charter. The Compensation Committee makes recommendations to the Board of Directors
and management concerning salaries in general, determines executive compensation and approves incentive compensation for employees
and consultants.
Corporate
Governance Committee
The
Corporate Governance Committee is composed of Messrs. Waizer, Laxminarain and Burell. Each of the members of the Corporate Governance
Committee is independent. The Corporate Governance Committee acts pursuant to a written charter which is available through our
website at www.microbotmedical.com.
The
Corporate Governance Committee oversees nominations to the Board and considers the experience, ability and character of potential
nominees to serve as directors, as well as particular skills or knowledge that may be desirable in light of the Company’s
position at any time. From time to time, the Corporate Governance Committee may engage the services of a paid search firm to help
the Corporate Governance Committee identify potential nominees to the Board. The Corporate Governance Committee and Board seek
to nominate and appoint candidates to the Board who have significant business experience, technical expertise or personal attributes,
or a combination of these, sufficient to suggest, in the Board’s judgment, that the candidate would have the ability to
help direct the affairs of the Company and enhance the Board as a whole. The Corporate Governance Committee may identify potential
candidates through any reliable means available, including recommendations of past or current members of the Board from their
knowledge of the industry and of the Company. The Corporate Governance Committee also considers past service on the Board or on
the board of directors of other publicly traded or technology focused companies. The Corporate Governance Committee has not adopted
a formulaic approach to evaluating potential nominees to the Board; it does not have a formal policy concerning diversity, for
example. Rather, the Corporate Governance Committee weighs and considers the experience, expertise, intellect, and judgment of
potential nominees irrespective of their race, gender, age, religion, or other personal characteristics. The Corporate Governance
Committee may look for nominees that can bring new skill sets or diverse business perspectives. Potential candidates recommended
by security holders will be considered as provided in the company’s “Policy Regarding Shareholder Candidates for Nomination
as a Director,” which sets forth the procedures and conditions for such recommendations. This policy is available through
our website at www.microbotmedical.com.
There
were no material changes to the procedures by which securityholders may recommend nominees to the Board, since the Company last
provided the disclosure in this section.
Director
Oversight and Qualifications
While
management is responsible for the day-to-day management of the risks the company faces, the Board, as a whole and through its
committees, has responsibility for the oversight of risk management. An important part of risk management is not only understanding
the risks facing the company and what steps management is taking to manage those risks, but also understanding what level of risk
is appropriate for the company. In support of this oversight function, the Board receives regular reports from our Chief Executive
Officer and members of senior management on operational, financial, legal, and regulatory issues and risks. The Audit Committee
additionally is charged under its charter with oversight of financial risk, including the company’s internal controls, and
it receives regular reports from management, the company’s internal auditors and the company’s independent auditors.
The chairman of the Board and independent members of the Board work together to provide strong, independent oversight of the company’s
management and affairs through its standing committees and, when necessary, special meetings of directors.
Code
of Business Conduct and Ethics
We
have adopted a Code of Ethics and Conduct that applies to all of our directors, officers, employees, and consultants. A copy of
our code of ethics is posted on our website at www.microbotmedical.com. We intend to disclose any substantive amendment or waivers
to this code on our website. There were no substantive amendments or waivers to this code in 2019.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers, directors,
and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of ownership of
our securities and changes in reported ownership. Executive officers, directors and greater than 10% beneficial owners are required
by SEC rules to furnish us with copies of all Section 16(a) reports they file. Based solely on a review of the copies of such
forms furnished to us, or written representations from the reporting persons that no Form 5 was required, we believe that, during
the fiscal year ended December 31, 2019, all Section 16(a) filing requirements applicable to our officers, directors and greater
than 10% beneficial owners have been met.
Item
11. Executive Compensation.
The
following table sets forth information regarding each element of compensation that was paid or awarded to the named executive
officers of the Company for the periods indicated.
|
Name
and Principal Position
|
|
Year
|
|
|
Salary ($)
|
|
|
Bonus ($)
|
|
|
Stock Awards ($)
|
|
|
Option
Awards
($) (1)
|
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
|
All Other Compensation ($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harel Gadot
|
|
|
2019
|
|
|
|
360,000
|
|
|
|
144,000
|
|
|
|
—
|
|
|
|
482,493
|
|
|
|
—
|
|
|
|
13,800
|
(2)
|
|
|
1,000,293
|
|
|
Chief Executive
|
|
|
2018
|
|
|
|
360,000
|
|
|
|
55,000
|
(3)
|
|
|
—
|
|
|
|
580,667
|
|
|
|
—
|
|
|
|
13,800
|
(2)
|
|
|
1,009,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hezi Himelfarb(4)
|
|
|
2019
|
|
|
|
201,868
|
|
|
|
—
|
|
|
|
—
|
|
|
|
322,119
|
|
|
|
—
|
|
|
|
8,082
|
(5)
|
|
|
532,069
|
|
|
Former Chief Operating Officer & General Manager
|
|
|
2018
|
|
|
|
280,067
|
|
|
|
12,931
|
(6)
|
|
|
—
|
|
|
|
425,101
|
|
|
|
—
|
|
|
|
13,000
|
(5)
|
|
|
718,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Ben Naim
|
|
|
2019
|
|
|
|
74,268
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,308
|
|
|
|
—
|
|
|
|
—
|
|
|
|
94,076
|
|
|
Chief Financial Officer
|
|
|
2018
|
|
|
|
70,026
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26,890
|
|
|
|
—
|
|
|
|
—
|
|
|
|
96,916
|
|
|
(1)
|
Amounts
shown do not reflect cash compensation actually received by the named executive officer. Instead, the amounts shown are the
non-cash aggregate grant date fair values of stock option awards made during the periods presented as determined pursuant
to ASC Topic 718 and excludes the effect of forfeiture assumptions. The assumptions used to calculate the fair value of stock
option awards are set forth under Note 9 to the Consolidated Financial Statements of the Company included in this Annual Report
on Form 10-K for the fiscal year ended December 31, 2019.
|
|
(2)
|
All
Other Compensation includes Mr. Gadot’s monthly automobile allowance and tax gross-up.
|
|
(3)
|
Represents
the remaining portion of Mr. Gadot’s 2017 bonus, which was paid in 2018. Mr. Gadot’s bonus for the 2018 fiscal
year was paid in 2019.
|
|
(4)
|
Effective
as of February 1, 2019, Mr. Himelfarb, a member of the Board of Directors of the Company, and the Company’s Chief Operating
Officer, resigned from all positions with the Company and from his position as General Manager of Microbot Medical Ltd., a
wholly-owned subsidiary of the Company.
|
|
(5)
|
All
Other Compensation includes Mr. Himelfarb’s yearly automobile allowance.
|
|
(6)
|
Represents
the remaining portion of Mr. Himelfarb’s 2017 bonus, which was paid in 2018.
|
Outstanding
Equity Awards at Fiscal Year-End
The
following table presents the outstanding equity awards held by each of the named executive officers as of the end of the fiscal
year ended December 31, 2019.
|
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
|
Option
Exercise Price
|
|
|
Option
Expiration
Date
|
|
|
Number
of Shares or Units of Stock That Have Not Vested
|
|
|
Market
value of Shares of Units of Stock That Have Not Vested
|
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harel Gadot
|
|
|
77,846
|
|
|
|
–
|
|
|
$
|
4.20
|
|
|
|
9/01/2024
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
81,752
|
|
|
|
39,095
|
|
|
|
15.75
|
|
|
|
9/14/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hezi Himelfarb
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
David Ben Naim
|
|
|
3,500
|
|
|
|
1,500
|
|
|
|
15.30
|
|
|
|
12/28/2027
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Harel
Gadot Employment Agreement
The
Company entered into an employment agreement (the “Gadot Agreement”) with Harel Gadot on November 28, 2016, to serve
as the Company’s Chairman of the Board of Directors and Chief Executive Officer, on an indefinite basis subject to the termination
provisions described in the Agreement. Pursuant to the terms of the Gadot Agreement, Mr. Gadot shall receive an annual base salary
of $360,000. The salary will be reviewed on an annual basis by the Compensation Committee of the Company to determine potential
increases taking into account such performance metrics and criteria as established by the Executive and the Company. On February
25, 2020, Mr. Gadot’s annual base salary was increased from $360,000 to $450,000, retroactive to January 1, 2020
Mr.
Gadot shall also be entitled to receive a target annual cash bonus of up to a maximum amount of 40% of base salary, which maximum
amount was paid for the 2019 fiscal year. Effective as of January 1, 2020, Mr. Gadot’s annual bonus pursuant to the Gadot
Agreement was increased from 40% of his annual salary to 60% of his annual salary.
Mr.
Gadot shall be further entitled to a monthly automobile allowance and tax gross up on such allowance of $1,150, and shall be granted
options to purchase shares of common stock of the Company representing 5% of the issued and outstanding shares of the Company,
based on vesting and other terms to be determined by the Compensation Committee of the Board of Directors.
In
the event Mr. Gadot’s employment is terminated as a result of death, Mr. Gadot’s estate would be entitled to receive
any earned annual salary, bonus, reimbursement of business expenses and accrued vacation, if any, that is unpaid up to the date
of Mr. Gadot’s death.
In
the event Mr. Gadot’s employment is terminated as a result of disability, Mr. Gadot would be entitled to receive any earned
annual salary, bonus, reimbursement of business expenses and accrued vacation, if any, incurred up to the date of termination.
In
the event Mr. Gadot’s employment is terminated by the Company for cause, Mr. Gadot would be entitled to receive any compensation
then due and payable incurred up to the date of termination.
In
the event Mr. Gadot’s employment is terminated by the Company without cause, he would be entitled to receive (i) any earned
annual salary; (ii) 12 months’ pay and full benefits, (iii) a pro rata bonus equal to the maximum target bonus for that
calendar year; (iv) the dollar value of unused and accrued vacation days; and (v) applicable premiums (inclusive of premiums for
Mr. Gadot’s dependents) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, for twelve (12)
months from the date of termination for any benefits plan sponsored by the Company. In addition, 100% of any unvested portion
of his stock options shall immediately vest and become exercisable.
The
agreement contains customary non-competition and non-solicitation provisions pursuant to which Mr. Gadot agrees not to compete
and solicit with the Company. Mr. Gadot also agreed to customary terms regarding confidentiality and ownership of intellectual
property.
Hezi
Himelfarb Employment Agreement
We
entered into an employment agreement (the “Himelfarb Agreement”) with Mr. Himelfarb on December 5, 2016, to serve
as our Chief Operating Office and General Manager, on an indefinite basis subject to the termination provisions described in the
Himelfarb Agreement.
Effective
as of February 1, 2019, Mr. Himelfarb resigned from all positions with the Company. Effective as of February 1, 2019, Mr. Himelfarb
also resigned from his position as General Manager of Microbot Medical Ltd., a wholly-owned subsidiary of the Company. Notwithstanding
the foregoing, as a result of certain termination provisions of the Himelfarb Agreement, Mr. Himelfarb was entitled to six months
of compensation as a result of such resignation. As of December 2019, all the options granted to Mr. Himelfarb were forfeited.
David
Ben Naim Services Agreement
We
entered into a services agreement (the “Services Agreement”) with DBN Finance Services effective October 31, 2016,
to provide outsourced CFO services. Pursuant to the terms of the Services Agreement, DBN Finance Services will provide its services
exclusively through Mr. David Ben Naim, who will serve as the principal financial and accounting officer of Microbot Israel and
the Company. Mr. Ben Naim’s engagement will continue on an indefinite basis subject to the termination provisions described
in the Agreement.
Pursuant
to the Agreement, the Company shall pay the Service Provider a fixed fee of NIS 22,000, or the equivalent of approximately $6,285
per month based on an exchange rate of $.286 for NIS1.0, plus VAT per month, and the Company shall reimburse DBN Finance Services
for reasonable and customary out of pocket expenses incurred by it or Mr. Ben Naim connection with the performance of the duties
under the Services Agreement. In addition, the Company shall maintain for the benefit of Mr. Ben Naim, a Directors and Officers
insurance policy, according to the Company’s policy for other directors and officers of the Company.
Both
the Company and DBN Finance Services shall have the right to terminate the Agreement for any reason or without reason at any time
by furnishing the other party with a 30-day notice of termination. The Company shall further be entitled to terminate the Services
Agreement for “cause” without notice, in which case neither DBN Finance Services nor Mr. Ben Naim shall be entitled
to any compensation due to such early termination.
DBN
Finance Services and Mr. Ben Naim agreed to customary provisions regarding confidentiality and intellectual property ownership.
The Services Agreement also contains customary non-competition and non-solicitation provisions pursuant to which DBN Finance Services
and Mr. Ben Naim agree not to compete and solicit with the Company during the term of the Agreement and for a period of twelve
months following the termination of the Agreement.
Dr.
Eyal Morag Employment Agreement
We
entered into an employment agreement (the “Morag Agreement”), as of February 18, 2020, with Dr. Morag, to serve as
the Company’s Chief Medical Officer, commencing June 15, 2020 (as such date may be changed upon agreement between the Company
and Dr. Morag; the “Commencement Date”) on an indefinite basis subject to the termination provisions described in
the Morag Agreement. Pursuant to the terms of the Morag Agreement, Dr. Morag shall receive a base salary of NIS 64,000 per month
plus Global Overtime (as defined in the Morag Agreement) of NIS 16,000 per month.
Dr.
Morag shall also be entitled to receive a target annual cash bonus, based on certain milestones, of up to a maximum amount of
30% of his annual salary.
Dr.
Morag shall be further entitled to a monthly automobile allowance not to exceed NIS 4,800 per month plus expenses and applicable
taxes, and shall be granted options to purchase 25,000 shares of common stock of the Company based on vesting and other terms
set forth in the Morag Agreement.
Pursuant
to the Morag Agreement, the Company shall pay an amount equal to 8.33% of Dr. Morag’s salary to be allocated for severance
pay, 6.5% of Dr. Morag’s salary to be allocated for pension savings and 7.5% to be allocated to an educational fund. The
Company may have additional payment obligations for disability insurance as specified in the Morag Agreement.
During
the initial 24 months following the Commencement Date (“Initial Period”), either the Company or Dr. Morag may terminate
the Morag Agreement at its discretion at any time by providing the other party with a three months (or, following the Initial
Period, six months) prior written notice of termination (the “Advance Notice Period”).
The
Company may terminate the Morag Agreement “For Cause” (as defined in the Morag Agreement) at any time by written notice
without the Advance Notice Period.
In
the event that the Company terminates Dr. Morag’s employment during the Initial Period other than For Cause, Dr. Morag shall
be entitled to a one-time payment in an amount equal to his annual salary as of the date of termination of employment multiplied
by the balance time between the end of the Advance Notice Period and until the end of the Initial Period.
The
Morag Agreement contains customary non-competition and non-solicit provisions pursuant to which Dr. Morag agrees not to compete
and solicit with the Company. Dr. Morag also agreed to customary terms regarding confidentiality and ownership of intellectual
property.
Indemnification
Agreements
The
Company generally enters into indemnification agreements with each of its directors and executive officers. Pursuant to the indemnification
agreements, the Company has agreed to indemnify and hold harmless these current and former directors and officers to the fullest
extent permitted by the Delaware General Corporation Law. The agreements generally cover expenses that a director or officer incurs
or amounts that a director or officer becomes obligated to pay because of any proceeding to which he is made or threatened to
be made a party or participant by reason of his service as a current or former director, officer, employee or agent of the Company,
provided that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
Company. The agreements also provide for the advancement of expenses to the directors and officers subject to specified conditions.
There are certain exceptions to the Company’s obligation to indemnify the directors and officers, and, with certain exceptions,
with respect to proceedings that he initiates.
Limits
on Liability and Indemnification
We
provide directors and officers insurance for our current directors and officers.
Our
certificate of incorporation eliminate the personal liability of our directors to the fullest extent permitted by law. The certificate
of incorporation further provide that the Company will indemnify its officers and directors to the fullest extent permitted by
law. We believe that this indemnification covers at least negligence on the part of the indemnified parties. Insofar as indemnification
for liabilities under the Securities Act may be permitted to our directors, officers, and controlling persons under the foregoing
provisions or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.
Director
Compensation
The
Company adopted a compensation package for the non-management members of its Board, pursuant to which each such Board member would
receive for his services $12,000 per annum, $750 per duly called Board meeting and $250 per unanimous written consent. Furthermore,
each member of the Audit Committee of the Board receives an additional $10,000 per annum, and other committee members receive
an additional $5,000 per annum. Board members are also entitled to receive equity awards. Upon joining the Board, a member would
receive an initial grant of $40,000 of stock options (calculated as the product of the exercise price on the date of grant multiplied
by the number of shares underlying the stock option award required to equal $40,000), with an additional grant of stock options
each year thereafter, to purchase such number of shares of the Company’s common stock equal to $20,000, subject to the member
of the Board having served on the Board for at least twelve continuous months, and having attended at least 80% of the Board meetings
over the prior year.
The
following table summarizes cash-based and equity compensation information for our outside directors, including annual Board and
committee retainer fees and meeting attendance fees, for the year ended December 31, 2019:
|
Name
|
|
Fees
earned or paid in cash
|
|
|
Stock
Awards
|
|
|
Option
Awards (1)
|
|
|
Non-Equity
Incentive
Plan Compensation
|
|
|
Nonqualified
Deferred Compensation Earnings
|
|
|
All
Other Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yoav Waizer
|
|
$
|
41,250
|
|
|
$
|
-
|
|
|
$
|
20,469
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
61,719
|
|
|
Yoseph Bornstein
|
|
|
44,500
|
|
|
|
-
|
|
|
|
20,469
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64,969
|
|
|
Scott Burell
|
|
|
44,350
|
|
|
|
-
|
|
|
|
20,469
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64,819
|
|
|
Martin Madden
|
|
|
43,000
|
|
|
|
-
|
|
|
|
20,469
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
63,469
|
|
|
Prattipati Laxminarain
|
|
|
30,500
|
|
|
|
-
|
|
|
|
20,469
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
50,969
|
|
|
(1)
|
Amounts
shown do not reflect cash compensation actually received by the director. Instead, the amounts shown are the non-cash aggregate
grant date fair values of stock option awards made during the period presented as determined pursuant to ASC Topic 718 and
excludes the effect of forfeiture assumptions. The assumptions used to calculate the fair value of stock option awards are
set forth under Note 9 to the Consolidated Financial Statements of the Company included in this Annual Report on Form 10-K
for the fiscal year ended December 31, 2019.
|
Mr.
Gadot received compensation for his services to the Company as set forth under the summary compensation table above. The above
table does not include Ms. Stockburger, who was appointed as a director subsequent to December 31, 2019.