DEF 14A of Microbot Medical Inc.
Filed Nov 6, 2024 · FY20230001493152-24-043762
BOARD OF DIRECTORS
BOARD OF DIRECTORS
Director Oversight and Qualifications
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. We believe each of our directors, and director nominee, brings valuable skills, experience, judgment, and perspectives to our company. The Board took the following qualifications into consideration, among other things, when nominating or appointing our current directors and director nominee: Harel Gadot, became President, Chief Executive Officer and Chairman of the Company’s Board following the consummation of 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 served as a director until January 2024 of XACT Robotics Ltd., an Israel-based private company that recently ceased operations and is in insolvency proceedings in Israel, and was its Chairman from August 2013 until September 2023. Mr. Gadot serves as Chairman of 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. Scott R. Burell, became a director of the Company in November 2016. Since August 2018, Mr. Burell has been the Chief Financial Officer and Secretary of AIVITA Biomedical, Inc., an Irvine California-based immuno-oncology company focused on the advancement of commercial and clinical-stage programs utilizing curative and regenerative medicines. From November 2006 until its sale to Invitae Corp. (NASDAQ: NVTA) 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. (NASDAQ: SPNW), a publicly traded technology and information infrastructure company located in Seattle. Prior to this, Mr. Burell spent nine 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 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. During his thirty-year tenure with Johnson & Johnson’s Medical Device organization, he was an innovator and research leader for nearly every medical device business including Cardiology, Electrophysiology, Peripheral Vascular Surgery, General and Colorectal Surgery, Aesthetics, Orthopaedics, Sports Medicine, Spine, and Trauma. As an executive of Johnson & Johnson, Mr. Madden served on the management boards of Johnson & Johnson’s Global Surgery Group, Ethicon, Ethicon Endo-Surgery, DePuy-Synthes, and Cordis, with responsibility for research and development - inclusive of organic and licensed/acquired technology. He was also Chairman of J&J’s Medical Device Research Council, with responsibility for talent strategy and technology acceleration. Mr. Madden serves on the Board of Directors of Novocure (NASDAQ: NVCR), a global oncology company, and is an advisor to numerous medical device start-ups. 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.
Director Oversight and Qualifications
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, Worldwide 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 the Chair 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. She also serve on the Audit Committee and the People, Culture and Remuneration Committee of the Board of Directors of Next Science Limited. 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. Tal Wenderow was appointed by the Board on July 29, 2020 to fill a vacancy on the Board and to serve as a Class I director of the Company, with a term commencing on August 1, 2020. Since June 2024, Mr. Wenderow serves as the CEO of Sensory Cloud Inc., a health technology company pioneering treatments for respiratory human illnesses of the airway lining. Since September 2021, Mr. Wenderow serves as the Venture Partner at Genesis MedTech, a global medical device company. Previously, from February 2019, Mr. Wenderow served as the President and CEO of Vocalis Health Inc., an AI healthtech company pioneering the development of vocal biomarkers. Previously, Mr. Wenderow co-founded Corindus Vascular Robotics in 2002, which was a New York Stock Exchange-listed company upon its acquisition by Siemens Healthineers in 2019. Mr. Wenderow held various positions at Corindus from founder, Chief Executive Officer and director at inception, Executive Vice President Product & Business Development to his most recent role as Executive Vice President of International & Business Development. Mr. Wenderow received a B.Sc. in Mechanical Engineering at the Technion - Israel Institute of Technology, Haifa, Israel. The Company believes that Mr. Wenderow is qualified as a Board member of the Company because of his extensive knowledge of the medical robotics space with specific focus on interventional procedures, as well as his medical devices start up experience. David J. Wilson, is a nominee for the Class III director position opening up at the Annual Meeting upon the expiration of Mr. Bornstein’s term. Since March 2022, Mr. Wilson has been the Chief Executive Officer and a director of InnovHeart Corporation, a private company developing transcatheter mitral valve replacement systems to treat patients suffering from mitral valve disease. From September 2017 to October 2021, he was the President of Global Plasma at Haemonetics Corporation where he led the global commercialization of a next generation plasma collection system. He dedicated two decades in roles of increasing responsibility with various Johnson and Johnson (J&J) companies, including as the Worldwide President of Cordis. In this role, he led the global integration of Cordis into Cardinal Health and rejuvenated the product portfolio through business development deals. Mr. Wilson held other leadership roles at J&J companies, namely President of Mentor, Vice President of Ethicon R&D and Vice President of Ethicon Biosurgicals. Earlier in his tenure with J&J, he attained senior leadership roles at Cordis Endovascular as Vice President of R&D and Regional Director of Sales. He is the holder of 10 medical device patents and has served as a Board member of several educational and healthcare institutions in the US. His education includes a Bachelor of Mechanical Engineering from Auburn University, a Master of Science in Biomedical Engineering from the University of Alabama at Birmingham and a Master of Business Administration from Columbia University. We believe that Mr. Wilson is qualified to serve as a member of the Board due to his experience as a healthcare and medical device executive, including extensive experience in general management, research and development, marketing, sales and supply chain management.
Director Oversight and Qualifications
Yoseph Bornstein, became a director of the Company following the Merger, and whose terms as a director is expiring at the Annual Meeting. 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 CEO and director since then. Mr. Bornstein is the Chairman of, and through Shizim owns a stake in: GCP Clinical Studies Ltd., a provider of clinical research services and educational programs in Israel since January 2002; Biotis Ltd., a service company for the bio-pharmaceutical industry, since June 2000; Dolphin Medical Ltd., which supplies the medical device industry, since April 2012, and LSA - Life Science Accelerator Ltd., since 2000. 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 United States-Israel Science & Technology Commission (the “USISTC”) from September 2002 to February 2005 as well as a consultant for USISTC 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. He founded in July 2014 ShizimXL Ltd., an international medical device innovation center, and founded in January 2020 ShizimVS Ltd., a digital health innovation center. He co-founded Identifai Genetics, a non invasive prenatal genetic testing in April 2021. Mr. Bornstein is an external director in Can-fite BioPharma Ltd. (Nasdaq:CANF), and also a Strategic Advisory Board Chairman in Cube Labs, an Italy-based venture builder enabling innovation in the healthcare technology space. At the time of his last nomination and election in 2022, the Company believed that Mr. Bornstein was 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.
Summary Compensation Table
Summary Compensation Table 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.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Harel Gadot | 2023 | 372,521 | 386,000(2) | - | 470,302 | - | 55,300(3) | 1,284,123 | | CEO, President & Chairman | 2022 | 514,049 | 300,000(4) | - | 971,217 | - | 52,900(3) | 1,838,166 | | Simon Sharon | 2023 | 195,901 | 87,022(2) | - | 88,418 | - | 98,589(5) | 469,930 | | CTO and General Manager | 2022 | 255,621 | 89,721(4) | - | 65,114 | - | 115,874(5) | 526,330 | | Eyal Morag | 2023 | 146,403 | 82,878(2) | - | 101,356 | - | 181,235(7) | 511,872 | | CMO(6) | 2022 | 284,024 | 89,164(4) | - | 90,836 | - | 137,245(7) | 601,269 | | Rachel Vaknin | 2023 | 139,601 | 27,626(2) | - | 76,533 | - | 45,743(8) | 289,503 | | CFO | 2022 | 142,012 | - | - | 45,263 | - | 47,372(8) | 234,647 |
Summary Compensation Table
| (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 10 to the Consolidated Financial Statements of the Company for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. | | (2) Represents bonus for the 2022 fiscal year, which amount was actually paid in 2023. | | (3) All Other Compensation includes contributions to the named executive officer’s 401(k) Plan, and a yearly automobile allowance. | | (4) Represents bonus for the 2021 fiscal year, which amount was actually paid in 2022. | | (5) All Other Compensation includes the executive’s yearly automobile allowance. | | (6) On August 29, 2023, Dr. Morag resigned from his position with the Company, effective November 29, 2023. | | (7) All Other Compensation includes contributions or payments to the named executive officer’s convalescence pay, pension fund, work disability insurance, severance fund, education fund, and social security. It also includes a yearly automobile allowance and, for the 2023 fiscal year, payments for accrued vacation days upon termination of employment. | | (8) All Other Compensation includes contributions or payments to the named executive officer’s convalescence pay, pension fund, work disability insurance, severance fund, education fund, and social security. |
Outstanding Equity Awards at Fiscal Year-End
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, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | 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 | 1/01/2025 | - | - | - | - | | | 120,847 | - | 15.75 | 9/14/2027 | - | - | - | - | | | 166,666 | - | 9.64 | 2/25/2030 | - | - | - | - | | | 190,000 | - | 8.48 | 02/01/2031 | - | - | - | - | | | 62,500 | 37,500 | 6.48 | 01/26/2032 | - | - | - | - | | | 64,000 | 96,000 | 3.73 | 12/21/2032 | - | - | - | - | | | | 80,000 | 2.43 | 08/01/2033 | | | | | | Simon Sharon | 10,000 | - | 9.00 | 08/13/2028 | - | - | - | - | | | 14,170 | - | 5.95 | 08/12/2029 | - | - | - | - | | | 15,625 | 9,375 | 6.48 | 01/26/2032 | - | - | - | - | | | 11,375 | 23,625 | 3.48 | 12/21/2032 | | | | | | | | 17,500 | 2.43 | 08/01/2033 | - | - | - | - | | Eyal Morag | 25,000 | - | 6.16 | 02/29/2024 | - | - | - | - | | | 15,625 | - | 6.48 | 02/29/2024 | - | - | - | - | | Rachel Vaknin | 12,500 | 7,500 | 6.48 | 01/26/2032 | - | - | - | - | | | 4,750 | 5,250 | 4.80 | 07/18/2032 | - | - | - | - | | | 5,200 | 7,800 | 3.73 | 12/21/2032 | - | - | - | - | | | | 17,500 | 2.43 | 08/01/2033 | - | - | - | - |
Director Compensation
Director Compensation The Company has an amended compensation package for the non-management members of its Board, pursuant to which each such Board member would receive for his or her services $35,000 per annum. Furthermore, each member of the Audit Committee of the Board receives an additional $10,000 per annum ($20,000 if Chairman), each member of the Compensation Committee of the Board receives an additional $7,500 per annum ($15,000 if Chairman) and each member of the Corporate Governance and Nominating Committee of the Board receives an additional $5,000 per annum ($10,000 if Chairman). Board members are also entitled to receive equity awards. Upon joining the Board, a member would receive an initial grant of stock options with an additional grant of stock options each year thereafter. The Company had recently amended the directors compensation package to remove the requirement that the option grants be based on a specific dollar value of $95,000 (or $190,000 for new directors) as a result of the decrease in value of the Company’s stock price and the corresponding increase in the number of options the directors would have each received. Additionally, as a result of the Company’s May 2023 cost reduction plan, the independent members of the Board agreed to a suspension of their quarterly director fees, with reinstatement of such fees effective as of January 1, 2024. The following table summarizes cash and equity-based compensation information for our outside directors, for the year ended December 31, 2023:
Director Compensation
| 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 | | Yoseph Bornstein | $13,125 | - | $60,998 | - | - | - | $74,123 | | Scott Burell | $15,000 | - | $60,998 | - | - | - | $75,998 | | Martin Madden | $15,000 | - | $60,998 | - | - | - | $75,998 | | Prattipati Laxminarain | $11,250 | - | $60,998 | - | - | - | $72,248 | | Aileen Stockburger | $10,625 | - | $64,386 | - | - | - | $75,011 | | Tal Wenderow | $10,000 | - | $63,701 | - | - | - | $73,701 |
Director Compensation
| (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 U.S. GAAP. The assumptions used to calculate the fair value of stock option awards are described in 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, 2023. |
Director Compensation
Mr. Gadot received compensation for his services to the Company as set forth under the summary compensation table above.
PROPOSAL 1: NOMINEES FOR ELECTION OF CLASS III DIRECTORS
PROPOSAL 1: NOMINEES FOR ELECTION OF CLASS III DIRECTORS The number of directors is currently fixed at seven. Both our restated certificate of incorporation, as amended to date, and our amended and restated by-laws provide for the classification of the Board into three classes (Class I, Class II and Class III), as nearly equal in number as possible, with the term of office of one class expiring each year. Unless otherwise instructed, the enclosed proxy will be voted to elect the nominees named below as Class III directors for a term of three years expiring at the 2027 Annual Meeting of Shareholders and until their successors are duly elected and qualified. Mr. Laxminarain, one of the two Class III director nominees, has been recommended by the Corporate Governance Committee because of his past experience serving on the Company’s Board, his business expertise, sound judgment, and demonstrated leadership, among other things. Mr. Wilson, the other of the two Class III director nominees and seeking his first term as a director of the Company, has been recommended by the Corporate Governance Committee because of his experience as a healthcare and medical device executive, among other things. Proxies cannot be voted for a greater number of persons than the number of nominees named below. It is expected that the nominees will be able to serve, but if any are unable to serve, the proxy will be voted for a substitute nominee or nominees designated by the Board. The Corporate Governance Committee has recommended and the Board has nominated Prattipati Laxminarain and David J. Wilson for election as the Company’s Class III directors to serve as Class III Directors until the 2027 Annual Meeting of Shareholders. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL 1 TO ELECT AS DIRECTORS THE TWO NOMINEES DESCRIBED ABOVE. PROPOSAL 2: AN AMENDMENT TO THE MICROBOT MEDICAL INC. 2020 OMNIBUS PERFORMANCE AWARD PLAN TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK RESERVED FOR ISSUANCE BY 600,000 SHARES We are asking you to approve an amendment to the Company’s 2020 Omnibus Performance Award Plan, as amended to date, a copy of which is attached as Exhibit A hereto (the “Plan Amendment”), to increase the number of shares of common stock authorized for issuance by an additional 600,000 shares. On or about October 25, 2024, the Board approved the Plan Amendment to the Company’s 2020 Omnibus Performance Award Plan to authorize an increase of up to 1,200,000 additional shares of common stock for issuance, and management determined that the incentive for the Plan Amendment shall be set at 600,000, all subject to stockholder approval. In this proxy statement, we refer to the Company’s current 2020 Omnibus Performance Award Plan (including a sub-plan for Israeli residents), as the “Current Plan,” and we refer to the Current Plan, as modified by the Plan Amendment, as the “Amended Plan.” We directed that the Amended Plan be submitted to our stockholders for their approval at the Annual Meeting. The Amended Plan does not contain any modifications, alterations or revisions of any other term or provision of our Current Plan except with respect to the increase in the share reserve. The purposes of the Amended Plan are to enable the Company to continue to recruit and retain highly qualified employees, directors and consultants; continue to provide them with an incentive for productivity; and continue to provide them with an opportunity to share in the growth and value of the Company. The Board believes that the Amended Plan and the increase in the number of shares available for grant thereunder are important to allow us to continue to attract, motivate, reward and retain the talent critical to achieving our business goals. As of September 30, 2024, we had approximately 37,779 shares of common stock that remained available for issuance under the Current Plan. If Proposal No. 2 is approved, the Plan Amendment will become effective with respect to the increase in the number of authorized shares reserved for issuance upon stockholder approval at the Annual Meeting. Without approval by stockholders of the Plan Amendment, the Company will be unable to continue to grant equity awards once the share pool is depleted, potentially resulting in the loss of employees and difficulties in recruiting new employees. If the Plan Amendment is not approved, the Company will become increasingly reliant on cash-based compensation, which will deplete the company’s finite cash resources. Accordingly, our Board recommends the approval of the Plan Amendment. The closing stock price of a share of the Company’s common stock as reported on the Nasdaq Stock Market on October 25, 2024, the Record Date, was $0.9768.