UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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For the transition period from ______ to ______
Commission File Number:
(Exact name of registrant as specified in charter)
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Registrant’s telephone number, including area code: +
Securities registered pursuant to Section 12(b) of the Act:
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Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐
Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 USC. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
The aggregate market value of the Ordinary Shares held by non-affiliates of the Registrant based upon the closing price of the Ordinary Shares as reported by the Nasdaq Capital Market on June 30, 2021 (the last business day of the Registrant’s most recently completed second fiscal quarter) was $
As of February 24, 2022, the Registrant had outstanding
The registrant’s auditor is
EXPLANATORY NOTE TO AMENDMENT NO. 1
ReWalk Robotics Ltd. (the “Company,” “we,” “us,” “our”) is filing this Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2022 (the “Original Form 10-K” and together with Amendment No. 1, the “2021 Annual Report”) for the sole purpose of including the information required by Part III of Form 10-K. This information was previously omitted from the Original Form 10-K in reliance on General Instruction G(3) to Form 10-K, which permits the information in Part III to be incorporated in the Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after our fiscal year-end. We are filing this Amendment No. 1 to include Part III information in our 2021 Annual Report because we will not file a definitive proxy statement containing this information within 120 days after the end of the fiscal year covered by the Original Form 10-K. This Amendment No. 1 amends and restates in their entirety Items 10, 11, 12, 13 and 14 of Part III of the Original Form 10-K.
In addition, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Item 15 of Part IV of the Original Form 10-K is hereby amended to include as Exhibits 31.3 and 31.4 the certifications required under Section 302 of the Sarbanes-Oxley Act of 2002. Except as described herein, this Amendment No. 1 does not modify or update the disclosures in, or exhibits to, the Original Form 10-K or update the Original Form 10-K to reflect events occurring after the date of such filing. Among other things, forward-looking statements made in the Original Form 10-K have not been revised to reflect events that occurred or facts that became known to us after the filing of the Original Form 10-K, and such forward-looking statements should be read in their historical context. Accordingly, this Amendment No. 1 should be read in conjunction with the Company's other filings made with the SEC subsequent to the filing of the Original Form 10-K. Unless otherwise defined herein, all capitalized terms included in this Amendment No. 1 but not otherwise defined herein shall have the meanings ascribed to such terms in the Original Form 10-K.
REWALK ROBOTICS LTD.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2021
TABLE OF CONTENTS
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PART III
ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
Information About Our Directors
Set forth below are the names and ages of the directors of the Company as of April 22,
2022 and their principal occupations at present and for the past five years. Our Board of Directors currently consists of nine members
and is divided into three classes, with a class of directors elected each year for a three-year term. No family relationships exist between
any directors or executive officers, as such term is defined in Item 401 of Regulation S-K promulgated under the Exchange Act.
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Name |
Age |
Current Position with the Company
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Director Since
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Jeff Dykan*(1) |
63 |
Class I Director, Chairman |
2009 |
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Yasushi Ichiki* |
54 |
Class I Director |
2014 |
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Joseph Turk* |
54 |
Class I Director |
April 2022 |
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Larry Jasinski |
64 |
Class II Director, Chief Executive Officer |
2012 |
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Dr. John William Poduska*(2) (3) |
84 |
Class II Director |
2014 |
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Randel E. Richner* |
66 |
Class II Director |
2020 |
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Wayne B. Weisman*(3) |
66 |
Class III Director |
2009 |
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Aryeh (Arik) Dan*(1)(2) |
63 |
Class III Director |
2013 |
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Yohanan Engelhardt*(3) |
64 |
Class III Director |
2018 |
*Independent
(1) Member of Nominating and Corporate Governance Committee.
(2) Member of Compensation Committee.
(3) Member of Audit Committee.
Class II Directors Continuing in Office until
the 2022 Annual General Meeting of Shareholders
Set forth below is a list of our directors continuing in office
until the 2022 annual general meeting of shareholders, together with certain biographical information, including their ages as of the
date of this Amendment No. 1:
Larry Jasinski, 64, has
served as our Chief Executive Officer (“CEO”) and as a member of our Board since February 2012. From 2005 until 2012, Mr.
Jasinski served as the President and Chief Executive Officer of Soteira, Inc., a company engaged in development and commercialization
of products used to treat individuals with vertebral compression fractures, which was acquired by Globus Medical in 2012. From 2001 to
2005, Mr. Jasinski was President and Chief Executive Officer of Cortek, Inc., a company that developed next-generation treatments for
degenerative disc disease, which was acquired by Alphatec in 2005. From 1985 until 2001, Mr. Jasinski served in multiple sales, research
and development, and general management roles at Boston Scientific Corporation. Mr. Jasinski has served on the board of directors of Massachusetts
Bay Lines since 2015 and of LeMaitre Vascular, Inc. since 2003. Mr. Jasinski holds a B.Sc. in marketing from Providence College and an
MBA from the University of Bridgeport. We believe
that Mr. Jasinski’s successful leadership and executive experience, along with his extensive knowledge of the medical devices industry
and research and development, provide him the qualifications and skills to act as a member of our Board.
Dr. John William Poduska, 84, has
served on our Board since 2014. He also serves as
a director on the boards of a number of privately-held companies. Dr. Poduska also served as a director of EXA Corporation (Nasdaq: EXA),
where he served as chairman of the company and a member of the nominating and corporate governance committee, until 2018, Novell, Inc.
until 2011 and of Anadarko Petroleum Corporation and Safeguard Scientifics, Inc. until 2009. Dr. Poduska was the Chairman of Advanced
Visual Systems Inc., a provider of visualization software, from January 1992 to December 2001. From December 1989 until December 1991,
Dr. Poduska was President and Chief Executive Officer of Stardent Computer Inc., a computer manufacturer. From December 1985 until December
1989, Dr. Poduska served as Chairman and Chief Executive Officer of Stellar Computer Inc., a computer manufacturer he founded which is
the predecessor of Stardent Computer Inc. Prior to founding Stellar Computer, Inc., Dr. Poduska founded Apollo Computer Inc. and Prime
Computer, Inc. Dr. Poduska holds a Sc.D. from MIT and an Honorary Doctorate of Humane Letters from Lowell University. We believe that
Dr. Poduska’s varied director experience, both in private and public companies, his expertise in computer engineering and his familiarity
with developing companies equip him with the qualifications and skills to serve as a member of our Board.
1
Randel E. Richner, 66,
has served on our Board since November 2020. Ms. Richner has over 30 years’ experience in health policy, reimbursement and economics.
From 2013 to 2015, Ms. Richner served as Executive Vice President of Intralign Health, LLC. From 2006 to 2012, she was President
and Founder of Neocure Group, data analytics, health economics and reimbursement strategic services, acquired by Intralign Health, LLC
in 2013. From 1997 to 2006, Ms. Richner was Vice President of Global Government Affairs and Reimbursement, Boston Scientific
Corporation. Ms. Richner has engaged with U.S. Congress and CMS, appointed as first industry representative, Executive Committee
(EC) Medicare Coverage Advisory Committee (MCAC). She has served on the Executive Dean’s Advisory Board, University of Michigan’s
School of Public Health, since 2007, and has served on multiple boards including MassMedic (founding Women in MedTech), Executive
Advisory Board Center for Evaluation Value, Risk Tufts New England Medical Center, International Society of Pharmacoeconomics and Research
(ISPOR), founding the U.S. Medical Device Council. Ms. Richner has been an invited executive lecturer at Dartmouth, Tuck School of Business;
University of Michigan School of Engineering and University of Michigan School of Public Health. She has a Master of Public Health
in Health Policy and Administration and a Bachelor of Science in Nursing from University of Michigan. We
believe that Ms. Richner’s extensive leadership and board membership experience in the healthcare industry, as well as her familiarity
with health economics and reimbursement procedures, provides her with a unique perspective of our market and the qualifications and skills
to serve as a member of our Board.
Class III Directors Continuing in Office until
the 2023 Annual General Meeting of Shareholders
Set forth below is a list of our directors continuing in office
until the 2023 annual general meeting of shareholders, together with certain biographical information, including their ages as of the
date of this Amendment No. 1:
Wayne B. Weisman, 66, has
served on our Board since 2009 and as a member of our audit committee since March 15, 2020. He previously served as a member of our audit
committee from the end of December 2017 until May 2018. He was appointed by our shareholder SCP Vitalife. Since 2007, Mr. Weisman has
been a director of SCP Vitalife GP, the corporate general partner of the common general partner of SCP Vitalife Partners II L.P. and its
affiliate SCP Vitalife Partners (Israel) II L.P. He has also served as a managing member of SCP Vitalife Management Company, LLC, which
by contract provides certain management services to the common general partner of SCP Vitalife. Mr. Weisman is Chairman of Recro Pharma,
Inc. (Nasdaq: REPH), a pharmaceutical contract development and manufacturing company. Mr. Weisman also serves on the board of directors
of Baudax Bio, Inc. (Nasdaq: BXRX), a specialty pharmaceutical company developing multiple non-opioid therapeutics for the treatment of
serious acute pain. He also serves on the boards of a number of private companies, including Garnet Biotherapeutics Inc. and Echo360 Inc.
Mr. Weisman previously served on the board of directors of each of EndoSpan Ltd. from 2009 to 2015, Ivenix, Inc. from 2011 to 2015 and
Pocared Diagnostics Ltd. from 2007 to 2015. He is vice chairman of the board of trustees of Young Scholars Charter School. He is also
an advisory board member of the Philadelphia-Israel Chamber of Commerce and Mid-Atlantic Diamond Ventures, the venture forum of Temple
University. Mr. Weisman holds a B.A. from the University of Pennsylvania and a J.D. from the University of Michigan Law School. We believe
that Mr. Weisman’s leadership as a director of various pharmaceutical and healthcare companies and his extensive experience serving
as a director on other boards provide him the qualifications and skills to serve as a member of our Board.
Aryeh (Arik) Dan, 63, has
served on our Board since 2013. He was appointed by our shareholder Yaskawa Electric Corporation, a manufacturer of motion controllers,
switches, industrial robots and other automation products. He has served as the President and Chief Executive Officer of Yaskawa Europe
Technology since 2005. Mr. Dan holds a B.Sc. in aeronautical engineering from the Technion-Israel Institute of Technology and completed
studies in the M.B.A. research program at Keio University, Japan. We believe that Mr. Dan’s leadership experience and his expertise
in robotics technology and research and development provide him with the qualifications and skills to serve as a member of our Board.
2
Yohanan Engelhardt, 64,
has served on our Board since May 2018 and has been the chairman of our audit committee since May 3, 2018. Mr.
Engelhardt served as CFO and Vice President of Finance of publicly traded and private companies for 25 years, including 18 years at ViryaNet,
a provider of mobile workforce management software solutions. During his tenure at ViryaNet he oversaw all financial operations, M&A
activities, private placements, the company’s initial public offering and the sale of the company to a large private equity firm
in 2014. Since 2015, he has provided CFO services to early-stage companies as well as accounting services to an accounting firm. Mr. Engelhardt
holds a B.A. in accounting and economics from the Hebrew University of Jerusalem and a Certified Public Accountant license in the United
States and in Israel. He is a member of the American Institute of Certified Public Accountants and the Institute of Certified Public Accountants
in Israel. We believe that Mr. Engelhardt’s extensive background as executive in various public companies provides him the qualifications
and skills to serve as a member of our Board.
Class I Directors Continuing in Office until
the 2024 Annual General Meeting of Shareholders
Set forth below is a list of our directors continuing in office
until the 2024 annual general meeting of shareholders, together with certain biographical information, including their ages as of the
date of this Amendment No. 1:
Jeff Dykan, 63, has
served on our Board since 2006 and has been the Chairman of our Board since 2009. He was appointed by our shareholder SCP Vitalife. Since
2002 Mr. Dykan has been a director of Vitalife Partners Management LP, the general partner of Vitalife, and since 2007 has been a director
of its successor fund, SCP Vitalife GP, the corporate general partner of the common general partner of SCP Vitalife Partners II L.P. and
its affiliate SCP Vitalife Partners (Israel) II L.P. He has also served as a managing member of SCP Vitalife Management Company, LLC and
SCP Vitalife Management Israel Ltd., which by contract provides certain management services to the common general partner of SCP Vitalife.
Prior to joining Vitalife, from 2001 to 2002, Mr. Dykan was the Chairman and Chief Executive Officer of BitBand Inc., formerly a provider
of content management and delivery systems, specializing in video on demand for IPTV. Mr. Dykan is a member of the American Institute
of Certified Public Accountants and holds a B.Sc. in accounting and management and an M.B.A. in computer applications, both from New York
University. We believe that Mr. Dykan’s extensive knowledge of corporate finance, securities and investments and his years of acting
in management roles provide him the qualifications and skills to serve as a member of our Board.
Yasushi Ichiki, 54, has
served on our Board since 2014. He was appointed by our shareholder Yaskawa Electric Corporation, a manufacturer of motion controllers,
switches, industrial switches and other automation products. Mr. Ichiki has been the Manager of the Corporate Planning Department, Corporate
Planning Division, of Yaskawa Electric Corporation since May 2014. Previously, from February 2010 to April 2014, he served as the General
Manager of Corporate Planning, Robotics Division of Yaskawa Europe GmbH. Mr. Ichiki holds a B.A. from Yamaguchi University, Japan. We
believe that Mr. Ichiki’s management experience and his expertise in the development and marketing of robotics and power electronics
technology provide him the qualifications and skills to serve as a member of our Board.
Joseph Turk, 54, has
served on our Board since April 2022. Mr. Turk has served as the Executive Vice President of Fresenius Medical Care North America since
2019, during which he has served as the President of its Renal Therapies group since July 2021 and as the President of its Home and Critical
Care Therapies group from February 2019 until July 2021. Previously he served in a number of roles at NxStageMedical, Inc. from 2000 to
2019, including President, Senior Vice President, and Vice President of Marketing. Mr. Turk holds a B.A. from Wabash College and an M.A
from the Kellogg Graduate School of Management. We believe that Mr. Turk’s management leadership and experience in successfully
achieving favorable Medicare reimbursement, building an organization for implementation of commercialization with a novel breakthrough
medical device, and completing multiple new business development transactions provide him the qualifications and skills to serve as a
member of our Board.
3
Information About Our Executive Officers
The following table sets forth the name, age and position of each
of our executive officers as of April 22, 2022:
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Name |
Age |
Position |
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Executive Officers |
||
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Larry Jasinski |
64 |
Chief Executive Officer and Director |
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Almog Adar |
38 |
Director of Finance |
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Jeannine Lynch |
57 |
Vice President of Market Access and Strategy |
Larry Jasinski. Mr.
Jasinski’s biographical information is set forth above under the section “Information About Our Directors – Class II
Directors Continuing in Office until the 2022 Annual General Meeting of Shareholders.”
Almog Adar, 38, has
served as our Director of Finance since December 2021 and as the Company’s Corporate Financial Controller since January 2020. Before
joining the Company, Mr. Adar served as Controller of Infinya recycling Ltd. (previously Amnir Recycling), from January 2018 until December
2019. From January 2016 until December 2017, Mr. Adar served as Assistant Controller of Delta Galil Industries. Mr. Adar has a Bachelor
of Arts degree in Accounting and Economics from the Open University of Israel and is a Certified Public Accountant licensed by the Israeli
Ministry of Justice.
Jeannine Lynch, 57,
has served as our Vice President of Market Access and Strategy since August 2021. Prior to joining us, Ms. Lynch served as Senior Director
of Patient Access Services at BioMarin Pharmaceuticals from April 2009 to September 2021. In addition to her work with BioMarin, Ms. Lynch
has worked for industry leaders such as Genentech and Pfizer/Agouron. She has held leadership roles in commercial management, product
launches and built customized patient services to address several different rare and ultrarare medical conditions. Ms. Lynch also sits
on the Board of Directors for MVP, a non-profit organization to help young people of color prepare, perform, progress, and prosper in
their education, leadership and early professional careers. Ms. Lynch is a graduate of the University of California Berkeley and holds
a Master of Public Health from the University of Michigan.
Board Leadership Structure
The Board has no policy regarding the need to separate or combine
the offices of Chairman of the Board and CEO and remains free to make this determination from time to time in a manner that the Board
deems most appropriate for our Company. Currently, we have separated the positions of CEO and Chairman of the Board in recognition of
the differences between the two roles. The CEO is responsible for the day-to-day leadership and performance of the Company, while the
Chairman of the Board (in collaboration with other members of the Board) sets the strategic direction of the Company, provides guidance
to the management, sets the agenda for the Board meetings (in collaboration with the other members of the Board) and presides over meetings
of the Board. We believe that separating these positions allows the Chairman of the Board to lead the Board in its fundamental role of
providing direction and guidance to management, while allowing our CEO to focus on our day-to-day operations. In addition, we believe
that the current separation provides a more effective monitoring and objective evaluation of the performance of the CEO. The Board believes
it is important that the Company retain organizational flexibility to determine whether the roles of CEO and Chairman of the Board should
be separated or combined.
Risk Management
The Board is actively involved in the oversight and management
of risks that could affect the Company. This oversight and management is conducted primarily through committees of the Board, as disclosed
in the descriptions of each of the committees above and in the charters of each of the committees, but the full Board has retained responsibility
for general oversight of risks. The Board regularly receives reports from members of senior management on areas of material risk to the
Company, including operational (which itself includes cybersecurity matters), financial, regulatory and legal. The audit committee oversees
management of financial risks (including liquidity and credit), approves all transactions with related persons and is primarily responsible
for oversight of the Company’s financial reporting process and internal control over financial reporting. The compensation committee
is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements. The
nominating and corporate governance committee oversees the Company’s corporate governance programs, including the administration
of the Code of Business Conduct and Ethics. The Board discharges its oversight responsibility through full reports by each committee chair
regarding the relevant committee’s actions, as well as through regular reports directly from officers responsible for oversight
of particular risks within the Company.
4
Opt-Out of Certain Israel Companies Law Requirements
As an Israeli company, we are required to comply with the requirements
of the Israel Companies Law and the regulations promulgated thereunder. Until early 2018, our Board was required to include at least two
“external directors” as defined under the Israel Companies Law. In addition, we were required to comply with certain requirements
under the Israel Companies Law regarding the composition of our audit committee and compensation committee, including requirements relating
to the inclusion and role of the external directors on such committees. Pursuant to regulations promulgated under the Israel Companies
Law, however, we — as a company that does not have a controlling shareholder, and that complies with the U.S. securities laws and
the Nasdaq corporate governance rules — were permitted to “opt out” of the requirement to appoint external directors
as well as the above requirements related to the composition of the audit committee and the compensation committee.
In February 2018, our Board determined that opting out of the requirements
under the Israel Companies Law regarding the appointment of external directors and the composition of our audit committee and compensation
committee would reduce our administrative and financial burden and provide greater flexibility in attracting highly-qualified directors,
while maintaining appropriate corporate governance standards; accordingly, we opted out of such requirements. As a result, our Board is
no longer required to include two external directors, and our audit committee and compensation committee do not need to comply with certain
committee composition requirements under the Israel Companies Law. Following our opting-out of such requirements, Dr. John William Poduska
continued to serve as a member of our Board but not as an external director or a member of any of Class I, Class II or Class III. His
term was initially scheduled to expire in 2020, but because of the Company’s decision to opt out of the requirements as described
above, Dr. Poduska was nominated for reelection as a Class II director in 2019.
Director Independence
Our Board has determined that, other than Larry Jasinski, our CEO,
all of our current directors are independent under Nasdaq listing standards. Furthermore, our Board also determined that all current members
of the audit committee, compensation committee, and nominating and corporate governance committee are independent under the applicable
Nasdaq listing standards and rules and regulations of the SEC. In making its determinations regarding independence, the Board carefully
reviewed the categorical tests enumerated in the Nasdaq independence definition, as well as the individual circumstances of each director
with regard to each director’s business and personal activities as they may relate to the Company and our management.
Nasdaq Listing Standards
The Nasdaq definition of “independent director” includes
a series of objective tests. Specifically, a director is deemed independent under the Nasdaq rules if such director is not an executive
officer or employee of the company or any other individual having a relationship which, in the opinion of the company’s Board, would
interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Generally, the following persons
are not considered independent, among others:
| • |
a director who is, or at any time during the past three years was, employed by the company; |
| • |
a director who accepted or who has a family member who accepted any compensation from the company in excess of $120,000 during any
period of twelve consecutive months within the three years preceding the determination of independence, other than compensation for board
or board committee service, compensation paid to a family member who is an employee (other than an executive officer) of the company,
or benefits under a tax-qualified retirement plan, or non-discretionary compensation; |
| • |
a director who is a family member of an individual who is, or at any time during the past three years was, employed by the company
as an executive officer; |
| • |
a director who is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization
to which the company made, or from which the company received, payments for property or services in the current or any of the past three
fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other
than the following: (i) payments arising solely from investments in the company’s securities; or (ii) payments under non-discretionary
charitable contribution matching programs; |
5
| • |
a director who is, or has a family member who is, employed as an executive officer of another entity where at any time during the
past three years any of the executive officers of the company serve on the compensation committee of such other entity; and |
| • |
a director who is, or has a family member who is, a current partner of the company’s outside auditor, or was a partner or employee
of the company’s outside auditor who worked on the company’s audit at any time during any of the past three years. |
Audit Committee
We have a separately designated standing audit committee. The audit
committee consists of Mr. Yohanan Engelhardt, Dr. John William Poduska and Mr. Wayne B. Weisman. Mr. Yohanan Engelhardt serves as the
chairman of the audit committee. The audit committee holds a minimum of four meetings per year and will meet more frequently as circumstances
require. The audit committee met five times during the fiscal year ended December 31, 2021.
Israel Companies Law Requirements
Under the Israel Companies Law, we are required to appoint an audit
committee. As discussed above under “Opt-Out of Certain Israel Companies Law Requirements”, in February 2018 we opted out
of certain Israel Companies Law requirements, including certain requirements as to the composition of our audit committee.
Nasdaq Listing Standards and SEC Requirements
Under the Nasdaq corporate governance rules, we are required to
maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has
accounting or related financial management expertise. Additionally, we must state whether any members of the audit committee qualifies
as an “audit committee financial expert” under Item 407(d) of Regulation S-K as promulgated by the SEC.
All members of the audit committee meet the requirements for financial
literacy under the applicable rules and regulations of the SEC and the Nasdaq corporate governance rules. Our Board has determined that
Yohanan Engelhardt is an “audit committee financial expert” as defined by the SEC rules and has the requisite financial sophistication
as defined by the Nasdaq corporate governance rules.
Each of the current audit committee members is “independent”
as such term is defined under the Nasdaq corporate governance rules and under Rule 10A-3(b)(1) promulgated under the Exchange Act, which
is different from the general test for independence of board members and members of other committees.
Audit Committee Role
Our Board has adopted an audit committee charter that sets forth
the responsibilities of the audit committee consistent with the rules of the SEC and the Nasdaq corporate governance rules, as well as
the requirements for such committee under the Israel Companies Law, including the following:
| • |
overseeing our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement
of our independent registered public accounting firm to the Board in accordance with Israeli law; |
| • |
reviewing regularly the senior members of the independent auditor’s team, including the lead audit partner and reviewing partner;
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pre-approving the terms of audit, audit-related and permitted non-audit services provided by the independent registered public accounting
firm for pre-approval by our Board; |
| • |
recommending the engagement or termination of the person filling the office of our internal auditor; |
| • |
reviewing periodically with management, the internal audit and the independent registered public accounting firm the adequacy and
effectiveness of the Company’s internal control over financial reporting; and |
| • |
reviewing with management and the independent registered public accounting firm the annual and quarterly financial statements of
the Company prior to filing with the SEC. |
6
The charter of the audit committee is available at http://ir.rewalk.com.
Information contained on, or that can be accessed through, our website does not constitute a part of this Amendment No. 1 and is not incorporated
by reference herein.
The audit committee provides assistance to our Board in fulfilling
its legal and fiduciary obligations in matters involving our accounting, auditing, financial reporting, internal control over financial
reporting and legal compliance. Specifically, the audit committee pre-approves the services performed by our independent registered public
accounting firm and reviews the firm’s reports regarding our accounting practices and systems of internal control over financial
reporting. The audit committee also oversees the audit efforts of our independent registered public accounting firm and takes those actions
that it deems necessary to satisfy itself that such accountants are in fact independent of management.
Under the Israel Companies Law, the audit committee is responsible
for:
| • |
determining whether there are deficiencies in the business management practices of our Company and making recommendations to our
Board to improve such practices; |
| • |
determining whether to approve certain related party transactions, and classifying transactions in which a controlling shareholder
has a personal benefit or other interest as significant or insignificant (which affects the required approvals) (see “Item 13—Certain
Relationships and Related Transactions, and Director Independence—Approval of Related Party Transactions under Israeli Law”
below); |
| • |
examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources
and tools to dispose of its responsibilities, and in certain cases approving the annual work plan of our internal auditor; |
| • |
examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our Board
or shareholders, depending on which of them is considering the appointment of our auditor; and |
| • |
establishing procedures for the handling of employees’ complaints as to the deficiencies in the management of our business
and the protection to be provided to such employees. |
The audit committee may not approve any actions requiring its approval
unless at the time of the approval a majority of the committee’s members are present. See “Item 13—Certain Relationships
and Related Transactions, and Director Independence—Approval of Related Party Transactions under Israeli Law” below.
Compensation Committee
We have a separately designated standing compensation committee.
The compensation committee consists of Mr. Aryeh (Arik) Dan and Dr. John William Poduska. Dr. Poduska serves as the chairman of the compensation
committee. The compensation committee meets as circumstances require and held five meetings during the year ended December 31, 2021. Under
its charter, the compensation committee may ask members of management to attend meetings and provide pertinent information as needed.
However, any person ineligible to serve as a member of the committee under the Israel Companies Law generally may not attend committee
meetings unless to present on a particular topic as determined by the committee. In addition, the CEO may not be present for, and if applicable
is excused from, the meeting during voting or deliberation on his compensation.
Israel Companies Law Requirements
Under the Israel Companies Law, the board of directors of a public
company must appoint a compensation committee. As discussed above under “Opt-Out of Certain Israel Companies Law Requirements”,
in February 2018 we opted out of certain Israel Companies Law requirements, including certain requirements as to the composition of our
compensation committee.
The duties of the compensation committee include the recommendation
to the company’s board of directors of a compensation policy regarding the terms of engagement of directors and of specified members
of senior management. That compensation policy must be adopted by the company’s board of directors, after considering the recommendations
of the compensation committee, and must then be approved by the company’s shareholders, which approval requires a Special Approval
for Compensation (as defined below under “—Approval of Related Party Transactions under Israeli Law—Fiduciary Duties
of Directors and Executive Officers”). Our Board adopted a compensation policy, which our shareholders subsequently approved at
the extraordinary general meeting of our shareholders held on December 15, 2014. Our shareholders approved amendments to our compensation
policy at the annual general meetings of our shareholders held on December 3, 2015, May 24, 2016, June 27, 2017, March 27, 2019, June
18, 2020, and May 19, 2021 (as amended, the “Compensation Policy”).
7
The compensation policy of an Israeli company must serve as the
basis for decisions concerning the financial terms of employment or engagement of office holders, including compensation, benefits, exculpation,
insurance and indemnification. The compensation policy must take into account certain factors, including advancement of the company’s
objectives, the company’s business plan and its long-term strategy, and creation of appropriate incentives. It must also consider,
among other things, the company’s risk management, size and the nature of its operations. The compensation policy must include certain
principles, such as a link between variable compensation and long-term performance and measurable criteria, the relationship between variable
and fixed compensation, and the minimum holding or vesting period for variable, equity-based compensation. We believe that the Compensation
Policy satisfies these requirements.
The compensation committee is responsible for (a) recommending
the Compensation Policy to our Board for its approval (and subsequent approval by our shareholders) and (b) carrying out duties related
to the Compensation Policy and to the compensation of our directors and senior management, including:
| • |
reviewing and making recommendations regarding our Compensation Policy at least every three years; |
| • |
recommending to the Board periodic updates to the Compensation Policy; |
| • |
assessing implementation of the Compensation Policy; |
| • |
approving compensation terms of executive officers, directors and employees affiliated with controlling shareholders; and |
| • |
exempting certain compensation arrangements from the requirement to obtain shareholder approval under the Israel Companies Law.
|
Nasdaq Listing Standards and Section 16 of
the Exchange Act
Under the Nasdaq corporate governance rules, we are required to
maintain a compensation committee consisting of at least two independent directors. Each of the members of the compensation committee
is required to be independent under the Nasdaq listing standards relating to compensation committee members, which are different from
the general test for independence of board and members of other committees. In assessing independence, the Board considered all factors
specifically relevant to determining whether a director has a relationship to the Company which is material to that director’s ability
to be independent from management in connection with the duties of a compensation committee member and determined that each of the members
of the compensation committee satisfies those requirements. Additionally, transactions between us and our directors and executive officers
will be considered exempt from short-swing liability under Section 16(b) of the Exchange Act if approved by our Board or a committee composed
solely of two or more “non-employee directors,” as defined in Rule 16b-3 under the Exchange Act (“Rule 16b-3”).
Our Board has determined that each of the members of the compensation committee is a “non-employee director,” as defined in
Rule 16b-3.
Compensation Committee Role
Our Board has adopted a compensation committee charter setting
forth the responsibilities of the committee, which include:
| • |
reviewing and approving the granting of options and other incentive awards under the Company’s equity compensation plans to
the extent such authority is delegated by our Board; |
| • |
recommending the Company’s compensation policy and reviewing that policy from time to time both with respect to the CEO and
other office holders and generally, including to assess the need for periodic updates; |
| • |
reviewing and approving corporate goals relevant to the compensation of the CEO and other officers and evaluating the performance
of the CEO and other officers; and |
| • |
reviewing, evaluating and making recommendations regarding the compensation and benefits for our non-employee directors. |
8
The charter of the compensation committee is available at http://ir.rewalk.com.
Information contained on, or that can be accessed through, our website does not constitute a part of this Amendment No. 1 and is not incorporated
by reference herein.
Subject to applicable law, the compensation committee may delegate
its authority to subcommittees established from time to time by the committee. Such subcommittees shall consist of one or more members
of the committee or the board and shall report to the committee. The compensation committee is authorized to retain and terminate compensation
consultants, legal counsel or other advisors to the committee and to approve the engagement of any such consultant, counsel or advisor,
to the extent it deems necessary or appropriate after specifically analyzing the independence of any such consultant retained by the compensation
committee.
Compensation Consultant
The compensation committee has authority to retain compensation
consulting firms to assist it in the evaluation of executive officer and employee compensation and benefit programs. The compensation
committee has retained Aon Hewitt (“Aon”) as its independent compensation advisor. Aon provides an objective perspective as
to the reasonableness of our executive compensation programs and practices and their effectiveness in supporting our business and compensation
objectives, as well as our equity compensation plans and number of shares available for grants.
Although Aon regularly consults with management in performing work
requested by the compensation committee, it did not perform any separate additional services for management. The compensation committee
has assessed the independence of Aon pursuant to applicable SEC rules and concluded that no conflict of interest exists that would prevent
Aon from independently representing the compensation committee.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee consists of Mr.
Aryeh (Arik) Dan and Mr. Jeff Dykan. Mr. Jeff Dykan serves as the chairman of the nominating and corporate governance committee. The nominating
and corporate governance committee meets as circumstances require, and held one meeting and one informal discussion during the year ended
December 31, 2021. Our Board has adopted a nominating and corporate governance committee charter that sets forth the responsibilities
of the nominating and corporate governance committee, which include:
| • |
overseeing and assisting our board in reviewing and recommending nominees for election as directors; |
| • |
reviewing and evaluating recommendations regarding management succession; |
| • |
assessing the performance of the members of our Board; and |
| • |
establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and
recommending to our Board a code of conduct. |
The nominating and corporate governance committee considers proposals
from a number of sources, including recommendations for nominees from shareholders submitted upon written notice to the chairman of the
nominating and corporate governance committee, c/o ReWalk Robotics Ltd., 3 Hatnufa Street, Floor 6, Yokneam Ilit 2069203, Israel. Other
sources include referrals from other directors, members of management and the Company’s advisors. When considering a person to be
recommended for nomination as a director, the nomination and governance committee evaluates, whether sourced by a shareholder or otherwise,
among other factors, experience, accomplishments, education, skills, personal and professional integrity, diversity of the Board and the
candidate’s ability to devote the necessary time for service as a director (including directorships and other positions held at
other corporations and organizations). The nominating and governance committee does not use different standards to evaluate nominees
depending on whether they are proposed by our directors and management or by our shareholders.
9
The nominating and corporate governance committee has no specific
policy on director diversity. However, the Board reviews diversity of viewpoints, background, experience, accomplishments, education and
skills when evaluating nominees. The Board believes that such diversity is important because it provides varied perspectives and promotes
active and constructive discussion among directors and between the Board and management, resulting in more effective oversight of management’s
formulation and implementation of strategic initiatives. In addition, in the Board’s executive sessions and in annual performance
evaluations conducted by the Board and its committees, the Board from time to time considers whether the Board’s composition promotes
a constructive and collegial environment. In determining whether an incumbent director should stand for reelection, the nominating and
corporate governance committee considers the above factors, as well as that director’s personal and professional integrity, attendance,
preparedness, participation and candor and other relevant factors as determined by the Board. Additionally, under Israeli law, if at the
time of election of a director, all of the members of the Board are of the same gender, the director to be elected must be of the other
gender. Further, the recently adopted listing requirements of Nasdaq require each listed smaller reporting company to have, or explain
why it does not have, at least two diverse directors on the board, including at least one diverse director who self-identifies as female.
Nasdaq permits the second diverse director to include an individual who self-identifies as one or more of the following: female, LGBTQ+
or an underrepresented minority. Our current Board composition is in compliance with these requirements. Each term used above, and in
the matrix below, has the meaning given to it in Nasdaq Listing Rule 5605(f). The Board believes its diversity is demonstrated in the
range of experiences, qualifications and skills of the current members of the Board, as well as gender identities and ethnic backgrounds,
reflected in the membership of Ms. Richner and Mr. Ichiki.
The matrix below provides
certain highlights of the composition of our Board members based on self-identification.
|
Board Diversity Matrix
(As of May 2, 2022) | ||||
|
Total Number of Directors |
9 | |||
|
|
Female
|
Male
|
Non-Binary
|
Did
Not Disclose Gender |
|
Part I: Gender Identity | ||||
|
Directors |
1 |
7 |
— |
1 |
|
Part II: Demographic Background |
|
|
|
|
|
African American or Black |
— |
— |
— |
— |
|
Alaskan Native or Native American |
— |
— |
— |
— |
|
Asian |
— |
1 |
— |
— |
|
Hispanic or Latinx |
— |
— |
— |
— |
|
Native Hawaiian or Pacific Islander |
— |
— |
— |
— |
|
White |
1 |
6 |
— |
1 |
|
Two or More Races or Ethnicities |
— |
— |
— |
— |
|
LGBTQ+ |
— |
— |
— |
— |
|
Did Not Disclose Demographic Background |
— |
— |
— |
1 |
The charter of the nominating
and corporate governance committee is available at http://ir.rewalk.com. Information contained
on, or that can be accessed through, our website does not constitute a part of this Amendment No. 1 and is not incorporated by reference
herein.
Code of Business Conduct and Ethics
We adopted a Code of Business Conduct and Ethics applicable to
all of our directors and employees, including our CEO, Chief Financial Officer (“CFO”), controller or principal accounting
officer, or other persons performing similar functions, which fulfils applicable guidelines issued by the SEC. The full text of the Code
of Business Conduct and Ethics is posted at http://ir.rewalk.com. Information contained on, or
that can be accessed through, our website does not constitute a part of this Amendment No. 1 and is not incorporated by reference herein.
We will also provide a hard copy of our Code of Business Conduct and Ethics free of charge upon written request to ReWalk Robotics, Ltd.,
3 Hatnufa Street, Floor 6, Yokneam Ilit 2069203, Israel. If we make any amendment to the Code of Business Conduct and Ethics or grant
any waivers, including any implicit waiver, from a provision of the code, we will disclose the nature of such amendment or waiver on our
website within four business days to the extent required by the rules and regulations of the SEC. We granted no waivers under our Code
of Business Conduct and Ethics in 2021.
10
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires that the Company’s
directors, executive officers and persons who own more than 10% of our outstanding ordinary shares file with the SEC initial reports
of ownership in our ordinary shares and reports of changes in ownership in our ordinary shares. Based solely on a review of reports filed
during the fiscal year ended December 31, 2021 and certain of our internal records, we believe that all Section 16(a) filing requirements
applicable to our directors, officers and greater than 10% beneficial owners were satisfied on a timely basis, except for (i) one Form
4 filed late by Wayne B. Weisman on November 19, 2021 and (ii) one Form 4 filed late by Jeff Dykan on November 19, 2021, each of which
was filed late due to administrative error.
ITEM 11. EXECUTIVE COMPENSATION
As a smaller reporting company, we have opted to comply with the
executive compensation rules otherwise applicable to “smaller reporting companies,” as such term is defined in Rule 12b-2
under the Exchange Act.
This section provides certain compensation-related information
for (1) all individuals who served as our CEO during any part of the year ended December 31, 2021 and (2) our two most highly compensated
executive officers (other than our CEO) who were serving as executive officers as of December 31, 2021 (together, our “Named Executive
Officers”).
Named Executive Officers
Our Named Executive Officers for the year ended December 31, 2021,
which consists of our principal executive officer and our two other most highly compensated executive officers, are:
| • |
Larry Jasinski, our CEO; |
| • |
Ori Gon, our former CFO; and |
| • |
Jeannine Lynch, our Vice President of Market Access and Strategy. |
11
Summary Compensation Table
The table below provides certain information concerning the compensation
for services rendered to us during the years ended December 31, 2020 and December 31, 2021 by our Named Executive Officers.
|
Name and Principal Position |
|
|
Year |
|
Salary ($) |
|
|
Non-Equity Incentive Plan
($)(1) |
|
|
Stock Awards
($)(2)
|
|
|
Option Awards
($)(2)
|
|
|
All Other Compensation
($)(3) |
|
|
Total ($) |
|
|
Larry Jasinski,
Chief Executive Officer and Director(4)
|
|
|
2021 |
|
400,196 |
|
|
248,327 |
|
|
279,000 |
(5)
|
|
— |
|
|
— |
|
|
927,533 |
|
|
|
|
2020 |
|
391,400 |
|
|
164,388 |
|
|
498,000 |
(6)
|
|
— |
|
|
— |
|
|
1,053,788 |
| |
|
Ori Gon,
Former Chief Financial Officer(7).
(8) |
|
|
2021 |
|
209,609 |
|
|
64,859 |
|
|
126,750 |
(9)
|
|
— |
|
|
79,972 |
(10)
|
|
481,190 |
|
|
|
|
2020 |
|
191,687 |
|
|
40,451 |
|
|
222,400 |
(11)
|
|
__ |
|
|
71,278 |
(12)
|
|
525,816 |
| |
|
Jeannine Lynch, Vice President of Market Access and Strategy (13)
|
|
|
2021 |
|
107,897 |
|
|
98,560 |
|
|
|
|
|
— |
|
|
— |
|
|
381,457 |
|
|
175,000 |
(14)
|
|
(1) |
Represents one-time discretionary cash bonuses to each of the
Named Executive Officers. |
|
(2) |
Amounts represent the aggregate grant date fair value of such awards computed in accordance with Financial
Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). The fair value of restricted
stock units (“RSUs”) granted is determined based on the price of the Company’s ordinary shares on the date of grant.
The fair value of options awards was estimated at the date of grant using a Black-Scholes-Merton option pricing model with assumptions
related to expected volatility, risk free rate, dividend yield, expected term (in years) and ReWalk share price. |
|
(3) |
Amounts reported in this column include benefits and perquisites, including those
mandated by Israeli law. Such benefits and perquisites include payments, contributions and/or allocations for social benefits and
car expenses. |
|
(4) |
Mr. Jasinski does not receive any additional compensation for his services as a director.
See “Director Compensation” above. |
|
(5) |
Consists of 150,000 RSUs that were granted under the Amended and Restated 2014 Equity
Incentive Plan (the “2014 Plan”) to Mr. Jasinski on May 21, 2021, which vest ratably in four equal annual installments starting
on the first anniversary of the grant date. |
|
(6) |
Consists of 300,000 RSUs that were granted under the 2014 Plan to Mr. Jasinski on
June 18, 2020, which vest ratably in four equal annual installments starting on the first anniversary of the grant date. |
|
(7) |
Mr. Gon resigned as CFO, effective as of March 12, 2022. |
|
(8) |
The amounts set forth for Mr. Gon in the columns “Salary,” “Non-Equity
Incentive Plan,” and “All Other Compensation” represent payments, contributions and/or allocations that were made in
NIS, and have been translated to U.S. dollars according to the average exchange rate on the applicable period. |
|
(9) |
Consists of 75,000 RSUs that were granted under the 2014 Plan to Mr. Gon on June 30,
2021, which vest ratably in four equal annual installments starting on the first anniversary of the grant date. |
|
(10) |
Consists of $59,105 for payments, contributions and/or allocations for social benefits
and the aggregate incremental cost to the Company of $20,867 with respect to Mr. Gon’s personal use of a Company-leased car.
|
|
(11) |
Consists of 150,000 RSUs that were granted under the 2014 Plan to Mr. Gon on July
2, 2020, which vest ratably in four equal annual installments starting on the first anniversary of the grant date, and 10,000 RSUs that
were granted under the 2014 Plan to Mr. Gon on July 2, 2020, which vested immediately on the date of grant. |
|
(12) |
Consists of $54,350 for payments, contributions and/or allocations for social benefits
and the aggregate incremental cost to the Company of $16,928 with respect to Mr. Gon’s personal use of a Company-leased car.
|
|
(13) |
Ms. Lynch joined the Company effective August 31, 2021. |
|
(14) |
Consists of 125,000 RSUs that were granted under the 2014 Plan to Ms. Lynch on August
31, 2021, which vest ratably in four equal annual installments starting on the first anniversary of the grant date. |
12
Pursuant to regulations promulgated under the Israel Companies
Law, we are required to disclose the total compensation earned during 2021 by our five most highly-compensated office holders (as defined
in the Israel Companies Law). Three of such individuals are our Named Executive Officers, as defined above, and their respective total
compensation for 2021 is set forth in the Summary Compensation Table. The other two individuals, and their respective total compensation
for 2021, is as follows:
|
Name and Principal Position |
|
|
Salary ($) |
|
|
Non-Equity Incentive Plan
($)(1) |
|
|
Stock Awards
($)(2)
|
|
|
Option Awards
($)(2)
|
|
|
All Other Compensation
($)(3) |
|
|
Total ($) |
|
Miri Pariente,
Vice President of Operations, Regulatory and Quality(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187,807 |
|
|
41,950 |
|
|
72,085 |
(5)
|
|
— |
|
|
91,989 |
(6)
|
|
393,831 | |
|
David Hexner,
Vice President of Research and Development(4).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,124 |
|
|
32,626 |
|
|
12,675 |
(5)
|
|
— |
|
|
67,299)
|
(6)
|
|
256,724 |
|
(1) |
Represents one-time discretionary cash bonuses to each of the officers listed herein.
|
|
(2) |
Amounts represent the aggregate grant date fair value of such awards computed in accordance with FASB ASC
Topic 718. The fair value of RSUs granted is determined based on the price of the Company’s ordinary shares on the date of grant.
The fair value of options awards was estimated at the date of grant using a Black-Scholes-Merton option pricing model with assumptions
related to expected volatility, risk free rate, dividend yield, expected term (in years) and ReWalk share price. |
|
(3) |
Amounts reported in this column include benefits and perquisites, including those
mandated by Israeli law. Such benefits and perquisites include payments, contributions and/or allocations for social benefits and
car expenses. |
|
(4) |
The amounts set forth for each of Ms. Pariente and Mr. Hexner in the columns “Salary,” “Non-Equity
Incentive Plan,” and “All Other Compensation” represent payments, contributions and/or allocations that were made in
NIS, and have been translated to U.S. dollars according to the average exchange rate on the applicable period. |
|
(5) |
Consists of 10,000 RSUs that were granted under the 2014 Plan to Ms. Pariente on January
1, 2021, which vest ratably in four equal annual installments starting on the first anniversary of the grant date, and 32,500 RSUs that
were granted under the 2014 Plan to Ms. Pariente on June 30, 2021, which vest ratably in four equal annual installments starting
on the first anniversary of the grant date., and |
|
(6) |
Consists of $55,217 for payments, contributions and/or allocations for social benefits
and the aggregate incremental cost to the Company of $36,772 with respect to Ms. Pariente’s personal use of a Company-leased car.
|
|
(7) |
Consists of 7,500 RSUs that were granted under the 2014 Plan to Mr. Hexner on June
30, 2021, which vest ratably in four equal annual installments starting on the first anniversary of the grant date. |
|
(8) |
Consists of $44,508 for payments, contributions and/or allocations for social benefits
and the aggregate incremental cost to the Company of $22,791 with respect to Mr. Hexner’s personal use of a Company-leased car.
|
Employment Agreements of Named Executive Officers
Each of Larry Jasinski, our CEO, and Jeannine Lynch, our Vice President
of Market Access and Strategy, previously entered into an employment agreement with our Subsidiary, and Ori Gon, our former CFO, previously
entered into an employment agreement with us. These employment agreements set forth their respective terms of employment, which terms
are generally applicable to all of our executives, covering matters such as vacation, health and other benefits. The following are descriptions
of the material terms of our Named Executive Officers’ employment agreements.
13
Larry Jasinski
On January 17, 2011, we entered into an employment agreement with
Mr. Jasinski, pursuant to which he has served as the CEO of the Company since February 12, 2012. The employment agreement provides for
an annual base salary, subject to annual increases in the discretion of, the Company, and an annual performance bonus. In accordance with
previous shareholder approvals, the annual base salary is currently $403,142. The annual performance bonus was originally set at up to
35% of annual base salary. In 2016, this was increased to an annual performance bonus of up to 60% of annual base salary for achieving
100% of targets (with adjustment upward or downward for performance exceeding or failing to meet such objectives, respectively). In
2020, this was increased to an annual performance bonus of up to 70% of annual base salary for achieving 100% of targets (with adjustment
upward or downward for performance exceeding or failing to meet such objectives, respectively). In the event that Mr. Jasinski’s
employment is terminated by the Company without cause (as defined in the employment agreement), or if Mr. Jasinski terminates his employment
for “Good Reason” (as defined in the employment agreement), he will be entitled to certain severance payments and benefits,
including: (i) a lump sum payment equal to 90 days of his base salary, (ii) an annual performance bonus (calculated based on the assumption
that to the extent performance objectives were achieved in the six-month period preceding his termination, they will also be achieved
in the six months following termination), (iii) reimbursement for any COBRA or other medical, dental and vision premiums for twelve months
following his termination and (iv) continued participation for a period of twelve months in any employee and executive benefit programs
in effect as of his termination and reimbursement for the premium or other fees associated with continuation in any insurance program
available to the Company’s employees as a non-employee or in a comparable program if participation as a non-employee would be barred.
The employment agreement further provides that if Mr. Jasinski’s employment is terminated without cause or by Mr. Jasinski for Good
Reason, any unvested portion of the options which would have vested during the six months following such termination had Mr. Jasinski
remained employed by the Company, will automatically vest. If Mr. Jasinski terminates his employment without Good Reason, he will be entitled
to receive a pro-rated amount of his annual performance bonus as determined in good faith by the Board. Mr. Jasinski is not entitled
to any severance if he is terminated by the Company for cause.
The employment agreement was amended in 2020 to provide that if a
change of control occurs, and within one year following such change of control Mr. Jasinski is terminated without cause or he resigns
for Good Reason, Mr. Jasinski will be entitled to severance of 18 months’ salary as well as an annual bonus (assuming achievement
of 100% of milestones and targets set by the board of directors).
The employment agreement is governed by the laws of the State of
Delaware and contains non-solicitation and non-competition covenants (each of which remains in effect during the term of employment and
for 12 months following termination of employment) and trade secrets and inventions clauses.
Ori Gon
On January 4, 2018, the Board appointed Mr. Ori Gon as CFO of the
Company, effective February 22, 2018. On March 1, 2018, the Company entered into an amendment, effective as of the date of Mr.
Gon’s appointment, to the employment agreement entered into on May 25, 2015, in connection with his previous employment by the Company.
Pursuant to the terms of the amended employment agreement, Mr. Gon was entitled to (i) an annual base salary of NIS 642,720 (following
annual increases) (approximately $194,763 based on the exchange rates as of March 16, 2021), subject to increases as may have been determined
from time to time by the compensation committee of the Board, (ii) an annual performance bonus up to 25% of annual base salary, subject
to the achievement of objectives as determined by the compensation committee of the Board, and (iii) use of a Company-provided car and
related maintenance expenses (returnable to the Company upon termination of employment). Pursuant to the Amendment, effective February
22, 2018, Mr. Gon also received, under the Company’s 2014 Incentive Compensation Plan, (i) options to purchase 96,525 ordinary
shares of the Company, at an exercise price of $1.15, one-fourth of which become vested and exercisable on the first anniversary of the
date of the grant, with the remaining options vesting in twelve equal quarterly instalments thereafter, and (ii) RSUs for 17,857 ordinary
shares, which vested in four equal annual installments starting on the first anniversary of the date of grant. Additionally, in 2020,
(i) Mr. Gon’s annual performance bonus was amended to allow a bonus of up to 35% of his base salary and (ii) Mr. Gon was granted
10,000 additional RSUs. The terms of the options and the RSUs are materially consistent with the Company’s forms of option and RSU
award agreements for employees and executive officers as previously filed with the SEC. The employment agreement was not for any specific
term and could be terminated by either party at will upon three months’ prior written notice. Mr. Gon’s employment agreement
is governed by the laws of the State of Israel and contains non-solicitation and non-competition covenants (each of which remains in effect
during the term of employment and for a period of 12 months and 24 months, respectively, following termination of employment) and trade
secrets and inventions clauses.
Mr. Gon resigned from his position with the Company, effective
as of March 12, 2022. In connection with his resignation, the compensation committee and Board approved a departure bonus to Mr. Ori Gon
of a number of ordinary shares of the Company having a value equal to $50,000, payable in a single payment on June 30, 2022 and based
on the average closing price of the Company’s ordinary shares on Nasdaq over the ninety-day period ending on such date, contingent
on Mr. Gon’s providing satisfactory consulting services to the Company in connection with the transition to a new CFO or other finance
department employee designated by the CEO. Mr. Gon may also be entitled to receive severance pay in such amounts as determined in accordance
with the Israel Companies Law.
14
Jeannine Lynch
On July 22, 2021, the Board appointed Ms. Jeannine Lynch as Vice
President of Market Access and Strategy of the Company, effective August 31, 2021. Pursuant to the terms of the employment agreement,
Ms. Lynch is entitled to (i) an annual base salary of $320,000, subject to increases as may be determined from time to time by the compensation
committee of the Board and (ii) an annual performance bonus up to 35% of annual base salary, subject to the achievement of objectives
as determined by the compensation committee of the Board. Ms. Lynch also received, under the Company’s 2014 Incentive Compensation
Plan, RSUs for 125,000 ordinary shares, which vested in four equal annual installments starting on the first anniversary of the date of
grant. The employment agreement may be terminated by the Company upon prior written notice. In the event that Ms. Lynch’s employment
is terminated for any reason other than for “cause” (as defined therein), the Company shall pay as severance pay or liquidated
damages or both, monthly payments at the rate per annum of her salary and bonus (and the replacement cost of her benefits) at the time
of such termination for a period from the date of such termination to the date which is six months after such termination. Ms. Lynch’s
employment agreement is governed by the laws of the Commonwealth of Massachusetts and contains non-solicitation and non-competition covenants
(each of which remains in effect during the term of employment and for a period of 12 months following termination of employment) and
trade secrets and inventions clauses.
2021 Non-Equity Incentive Plan
All employees who have bonus features in their employment agreements,
including our Named Executive Officers, were eligible to participate in a non-equity incentive plan for fiscal year 2021, pursuant to
which employees were eligible to receive a bonus with respect to their performance in such year. Each employee’s target was equal
to a specified percentage of his or her base salary, and the actual bonus is paid based on the achievement of certain business and personal
performance objectives for the 2021 fiscal year. Not all goals needed to be met for an employee participant to receive a portion of the
bonus. The principal business performance objective under the non-equity incentive plan for 2021 was based on achieving specified financial
goals or milestones as set forth in the Compensation Policy as approved by the Company’s shareholders. These objectives were allocated
as 35% for revenue targets, 15% for product development and regulatory approval targets, 5% for market development targets, 10% for strategic
targets and 15% for cash management targets. A personal performance objective, which is subjective in nature, made up the remaining 20%.
If the target was met in all categories of the business performance
objective, 100% of the employee’s bonus was to be paid. If certain lower targets were met with respect to each of the different
targets, 50% of the employee’s bonus was to be paid. If targets are exceeded in all categories of the business performance objective,
150% of the bonus was to be paid.
15
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information concerning outstanding equity awards as
of December 31, 2021, for each Named Executive Officer:
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
| ||||||||
|
Name |
|
Grant Date(1)
|
|
|
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 or Units of Stock that Have Not Vested(2)($) |
|
|
Larry Jasinski |
|
5/1/2012 |
(3) |
|
6,619 |
|
— |
|
32.93 |
|
5/1/2022 |
|
|
|
|
|
|
|
|
5/10/2012 |
(4) |
|
3,308 |
|
— |
|
32.93 |
|
5/10/2022 |
|
|
|
|
|
|
|
|
12/24/2013 |
(5) |
|
5,641 |
|
— |
|
37.14 |
|
12/24/2023 |
|
|
|
|
|
|
|
|
6/27/2017 |
(6) |
|
5,000 |
|
|
52.50 |
|
6/27/2027 |
|
|
|
|
| |
|
|
|
5/3/2018 |
(7) |
|
7,655 |
|
1,094 |
|
26.88 |
|
5/3/2028 |
|
|
|
|
|
|
|
|
3/27/2019 |
(8) |
|
8,542 |
|
3,883 |
|
5.37 |
|
3/27/2029 |
|
|
|
|
|
|
|
|
5/3/2018 |
(9) |
|
|
|
|
|
|
|
|
|
438 |
|
539 |
|
|
|
|
3/27/2019 |
(10) |
|
|
|
|
|
|
|
|
|
1,243 |
|
1,529 |
|
|
|
|
6/18/2020 |
(11) |
|
|
|
|
|
|
|
|
|
225,000 |
|
276,250 |
|
|
|
|
5/21/2021 |
(12) |
|
|
|
|
|
|
|
|
|
150,000 |
|
184,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ori Gon |
|
2/22/2018 |
(13) |
|
3,619 |
|
242 |
|
28.75 |
|
2/22/2028 |
|
|
|
|
|
|
|
|
5/3/2018 |
(7) |
|
2,296 |
|
329 |
|
27.11 |
|
5/3/2028 |
|
|
|
|
|
|
|
|
2/22/2018 |
(15) |
|
|
|
|
|
|
|
|
|
179 |
|
220 |
|
|
|
|
5/03/2018 |
(9) |
|
|
|
|
|
|
|
|
|
132 |
|
162 |
|
|
|
|
6/1/2019 |
(15) |
|
|
|
|
|
|
|
|
|
1,500 |
|
1,845 |
|
|
|
|
7/2/2020 |
(16) |
|
|
|
|
|
|
|
|
|
112,500 |
|
138,375 |
|
|
|
|
6/30/2021 |
(17) |
|
|
|
|
|
|
|
|
|
75,000 |
|
92,250 |
|
|
Jeannine Lynch |
|
8/31/2021 |
(18) |
|
|
|
|
|
125,000 |
|
153,750 |
| ||||
|
(1) |
Represents grant dates of the stock option and RSU awards. |
|
(2) |
The amount listed in this column represents the product of the closing market price of the Company’s
ordinary shares as of December 31, 2021 ($1.23) multiplied by the number of shares subject to the award. |
|
(3) |
Option awards became vested and exercisable a rate of 1/12th the original number of ordinary shares subject
thereto on a quarterly basis commencing on May 1, 2012. |
|
(4) |
Option awards vested at a rate of 1/12th the original number of ordinary shares subject thereto on a quarterly
basis commencing on May 10, 2012. |
|
(5) |
Option awards vested at a rate of 1/48th the original number of ordinary shares subject thereto on a quarterly
basis commencing on January 23, 2014. |
|
(6) |
Option awards vested with respect to 1/4th of the original number of ordinary shares subject thereto on
June 27, 2018 and vested thereafter at a rate of 1/16th of the original number of shares on a quarterly basis commencing on September
27, 2018. |
|
(7) |
Option awards vested with respect to 1/4th of the original number of ordinary shares subject thereto on
May 3, 2019 and thereafter at a rate of 1/16th of the original number of shares on a quarterly basis commencing on August 3, 2019 and
ending on May 3, 2022. |
|
(8) |
Option awards vested with respect to 1/4th of the original number of ordinary shares subject thereto on
March 27, 2020 and thereafter at a rate of 1/16th of the original number of shares on a quarterly basis commencing on June 27, 2020 and
ending on March 27, 2023. |
|
(9) |
RSUs vested with respect to 1/4th of the original number of shares on an annual basis commencing on May
3, 2019 and ending on May 3, 2022. |
|
(10) |
RSUs vested with respect to 1/4th of the original number of shares on an annual basis commencing on March
27, 2020 and ending on March 27, 2023. |
|
(11) |
RSUs vested with respect to 1/4th of the original number of shares on an annual basis commencing on June
18, 2021 and ending on June 18, 2024. |
|
(12) |
RSUs vested with respect to 1/4th of the original number of shares on an annual basis commencing on May
21, 2022 and ending on May 21, 2025. |
|
(13) |
Option awards vested with respect to 1/4th of the original number of ordinary shares subject thereto on
February 22, 2019 and thereafter at a rate of 1/16th of the original number of shares on a quarterly basis commencing on May 22, 2019
and ending on May 22, 2022. |
|
(14) |
RSUs vested with respect to 1/4th of the original number of ordinary shares subject thereto on February
22, 2019 and vest thereafter at a rate of 1/16th of the original number of shares on a quarterly basis commencing on May 22, 2019 and
ending on May 22, 2022. |
|
(15) |
RSUs vest with respect to 1/3rd of the original number of shares on an annual basis commencing on June
1, 2020 and ending on June 1, 2023. |
|
(16) |
RSUs vested with respect to 1/4th of the original number of shares on an annual basis commencing on July
2, 2021 and ending on July 2, 2024. |
|
(17) |
RSUs vested with respect to 1/4th of the original number of shares on an annual basis commencing on June
30, 2022 and ending on July 2, 2025. |
|
(18) |
RSUs vested with respect to 1/4th of the original number of shares on an annual basis commencing on August
31, 2022 and ending on August 31, 2025. |
16
Equity Compensation Plans
2014 Equity Incentive Plan
On August 19, 2014, we adopted the 2014 Plan, which was amended
and restated on June 18, 2020, and May 19, 2021. The 2014 Plan provides for the grant of stock options, stock appreciation rights, restricted
stock awards, RSUs, cash-based awards, other stock-based awards and dividend equivalents to our company’s and our affiliates’
respective employees, non-employee directors and consultants. The reserved pool of shares under the 2014 Plan includes, in addition to
shares added to the pool, the number of shares available for issuance under our 2012 Equity Incentive Plan, our 2012 Israeli Sub Plan
and our 2006 Stock Option Plan (collectively, the “Prior Plans”) as of the effective date of the 2014 Plan (in an amount not
to exceed 5,124 shares). Generally, shares that are forfeited, cancelled, terminated or expire unexercised shall be available for issuance
under new awards. Generally, any shares tendered or withheld under the 2014 Plan to pay the exercise price, purchase price of an award,
or any withholding taxes shall not be available for issuance under new awards. Shares delivered pursuant to “substitute awards”
(awards granted in assumption or substitution of awards granted by a company acquired by us) shall not reduce the shares available for
issuance under the 2014 Plan. As of December 31, 2021, there were 1,652,073 ordinary shares subject to outstanding awards under the 2014
Plan, including options to purchase 61,832 ordinary shares and 1,356,284 ordinary shares underlying unvested RSUs, and 233,957 shares
available for future grants.
The 2014 Plan is administered by the compensation committee which
has authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the plan. Awards
under the 2014 Plan may be granted until ten years after the date on which the 2014 Plan was approved by our shareholders.
The terms of options granted under the 2014 Plan, including the
exercise price, vesting provisions and the duration of an option, shall be determined by the compensation committee and set forth in an
award agreement, provided, however, that no option shall vest within the one year anniversary of the date of the grant of such award,
except that awards representing 5% of the Available Shares shall be permitted to vest within the one year anniversary of the date of the
grant of such award. Except as provided in the applicable award agreement, or in the discretion of the compensation committee, an option
may be exercised only to the extent that it is then exercisable and shall terminate immediately upon a termination of service of the grantee.
Stock appreciation rights (“SARs”) are awards entitling
a grantee to receive a payment representing the difference between the base price per share of the right and the fair market value of
a share on the date of exercise. SARs may be granted in tandem with an option or independent and unrelated to an option. The terms of
SARs granted under the 2014 Plan, including the base price per share, vesting provisions and the duration of an SAR, shall be determined
by the compensation committee and set forth in an award agreement. Except as provided in the applicable award agreement, or in the discretion
of the compensation committee, a SAR may be exercised only to the extent that it is then exercisable and shall terminate immediately upon
a termination of service of the grantee. At the discretion of the compensation committee, SARs will be payable in cash, ordinary shares
or equivalent value or some combination thereof.
Restricted stock awards are ordinary shares that are awarded to
a grantee subject to the satisfaction of the terms and conditions established by the compensation committee in the award agreement. Until
such time as the applicable restrictions lapse, restricted shares are subject to forfeiture and may not be sold, assigned, pledged or
otherwise disposed of by the grantee who holds those shares.
RSUs are awards covering a number of hypothetical units with respect
to shares that are granted subject to such vesting and transfer restrictions and conditions of payment as the compensation committee may
determine in an award agreement. RSUs are payable in cash, ordinary shares of equivalent value or a combination thereof.
The 2014 Plan provides for the grant of cash-based award and other
stock-based awards (which are equity-based or equity related award not otherwise described in the 2014 Plan). The terms of such cash-based
awards or other stock-based awards shall be determined by the compensation committee and set forth in an award agreement.
17
The compensation committee may grant dividend equivalents based
on the dividends declared on shares that are subject to any award. Dividend equivalents may be subject to any limitations and/or restrictions
determined by the compensation committee and shall be converted to cash or additional shares by such formula and at such time, and shall
be paid at such times, as may be determined by the compensation committee.
In the event of any dividend (excluding any ordinary dividend)
or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off,
combination, repurchase or exchange of shares or similar event (including a change in control) that affects the ordinary shares, the compensation
committee shall make any such adjustments in such manner as it may deem equitable, including, but not limited to, any or all of the following:
(i) adjusting the number of shares available for grant under the 2014 Plan, (ii) adjusting the terms of outstanding awards, (iii) providing
for a substitution or assumption of awards and (iv) cancelling awards in exchange for a payment in cash. In the event of a change of control
(except as otherwise provided by in the applicable award agreement), each outstanding award shall be either (i) honored or assumed, or
equivalent rights substituted therefor, by the new employer or (ii) all awards will terminate upon the change in control. In the event
of such termination, options and stock appreciation rights with time-based vesting shall become fully exercisable as of the change of
control and all other awards with time-based vesting, conditions or restrictions shall become fully vested and nonforfeitable as of the
change of control and all awards with conditions and restrictions relating to the attainment of performance goals shall be deemed to vest
and become nonforfeitable as of the change of control assuming the higher of (a) achievement of all relevant performance goals at
the “target” level (prorated based upon the length of time within the performance period that elapsed prior to the change
of control) or (b) actual achievement as of the date of such change of control.
2014 U.S. Sub Plan
The 2014 U.S. Sub Plan applies to grantees that are subject to
U.S. federal income tax. The 2014 U.S. Sub Plan provides that options granted to the U.S. grantees will either be incentive stock options
pursuant to Section 422 of the Internal Revenue Code or nonstatutory stock options. Options, other than certain incentive stock options
described below, must have an exercise price not less than 100% of the fair market value of an underlying share on the date of grant.
Incentive stock options that are not exercised within ten years from the grant date expire, provided that incentive stock options granted
to a person holding more than 10% of our voting power will expire within five years from the date of the grant and must have an exercise
price at least equal to 110% of the fair market value of an underlying share on the date of grant. The number of shares available under
the 2014 Plan for grants of incentive stock options shall be the total number of shares available under the 2014 Plan subject to any limitations
under the Internal Revenue Code and provided that shares delivered pursuant to “substitute awards” shall reduce the shares
available for issuance of incentive stock options under the 2014 Plan. It is the intention that no award shall be deferred compensation
subject to Section 409A of the Internal Revenue Code unless and to the extent that the compensation committee specifically determines
otherwise. If the compensation committee determines an award will be subject to Section 409A of the Internal Revenue Code such awards
shall be intended to comply in all respects with Section 409A of the Internal Revenue Code, and the 2014 Plan and the terms and conditions
of such awards shall be interpreted and administered accordingly.
2012 Equity Incentive Plan
On March 30, 2012, we adopted our 2012 Equity Incentive Plan (the
“2012 Plan”), which was approved by our shareholders on the same date. The 2012 Plan provides for the grant of options, restricted
shares, RSUs, share appreciation rights, performance units, performance shares and other shares or cash awards to our company’s
and our affiliates’ respective employees, directors and consultants. As of December 31, 2021, options to purchase 20,672 ordinary
shares were outstanding under the 2012 Plan. The 2012 Plan was terminated on August 19, 2014, although option awards outstanding as of
that date will continue in full force in accordance with the terms under which they were granted. In the event that any award shall for
any reason expire or terminate without having been exercised or paid in full, the shares not acquired shall revert to the 2014 Plan and
again become available for issuance. Following the termination of the 2012 Plan, awards may no longer be granted under the plan.
The 2012 Plan is administered by our Board, unless and until the
Board delegates administration to a committee, which shall determine the grantees of awards and the terms of the grant, including, exercise
prices, vesting schedules, acceleration of vesting and the other matters necessary in the administration of the 2012 Plan. Awards under
the 2012 Plan may be granted until ten years after the date on which the 2012 Plan was approved by our shareholders.
18
Options granted under the 2012 Plan are either incentive share
options pursuant to Section 422 of the Internal Revenue Code or nonstatutory share options. Options generally vest as determined by the
board or committee. Options, other than certain incentive share options described below, must have an exercise price not less than 100%
of the fair market value of an underlying share on the date of grant. Options, other than certain incentive share options described below,
that are not exercised within ten years from the grant date expire, unless otherwise determined by our Board or its designated committee,
as applicable. Incentive share options granted to a person holding more than 10% of our voting power will expire within five years from
the date of the grant and must have an exercise price at least equal to 110% of the fair market value of an underlying share on the date
of grant. Unless otherwise provided in an option agreement, in the event of termination of employment or services for reasons of disability
or death, the grantee, or in the case of death, his or her legal successor, may generally exercise options that have vested prior to termination
within a period of one year from the date of disability or death (or the expiration of the term of the option, if earlier). If a grantee’s
employment or service is terminated for any other reason, the grantee may generally exercise his or her vested options within 90 days
of the date of termination (or the expiration of the term of the option, if earlier).
Share appreciation rights are awards entitling a grantee to receive
a payment representing the difference between the base price per share of the right and the fair market value of a share on the date of
exercise subject to any terms or conditions as the board or committee may determine in the award agreement. Share appreciation rights
are payable in cash, shares of equivalent value or a combination thereof.
Restricted share awards are ordinary shares that are awarded to
a grantee subject to the satisfaction of the terms and conditions established by the board or committee in the award agreement. Until
such time as the applicable restrictions lapse, restricted shares are subject to forfeiture and may not be sold, assigned, pledged or
otherwise disposed of by the participant who holds those shares.
RSUs are awards covering a number of hypothetical units with respect
to shares that are granted subject to such vesting and transfer restrictions and conditions of payment as the board or committee may determine.
RSUs are payable in cash, shares of equivalent value or a combination thereof.
Performance share awards are awards denominated in shares which
may be earned in whole or part upon attainment of performance goals or other vesting criteria as the board or committee may determine.
Performance units are awards covering a number of hypothetical
units with respect to shares that may be earned in whole or in part upon attainment of performance goals or other vesting criteria as
the board or committee may determine. Performance units are payable in cash, shares of equivalent value or a combination thereof.
Awards under the 2012 Plan may be made subject to performance goals
relating to one or more business criteria and may provide for a targeted level or levels of achievement.
In the event that any change is made to the shares without consideration
to the Company (through merger, consolidation, reorganization, recapitalization, share dividend or similar event), the class and number
of shares available for issuance, maximum award limits and any outstanding awards under the 2012 Plan will be appropriately adjusted.
In the event of a change in control, either (i) the surviving entity may assume and continue outstanding awards (or substitute similar
awards) in all or in part or (ii) if the surviving entity does not assume and continue awards (or substitute similar awards), unvested
awards will be forfeited and vested awards shall terminate if not exercised at or prior to the change in control. Notwithstanding the
foregoing, in the event of a change in control, the board, in its discretion, may accelerate the vesting of any or all awards, in whole
or in part.
19
2012 Israeli Sub Plan
The 2012 Israeli Sub Plan provides for the grant by us of awards
pursuant to Sections 102 and 3(i) of the Israeli Income Tax Ordinance (the “Ordinance”) and the rules and regulations promulgated
thereunder. The 2012 Israeli Sub Plan provides for options and share awards to be granted to our or our affiliates’ employees, directors
and officers who are not “Controlling Shareholders,” as defined in the Ordinance, and who are considered Israeli residents,
to the extent that such options or awards either are (i) intended to qualify for special tax treatment under the “capital gains
track” provisions of Section 102(b)(2) of the Ordinance or (ii) not intended to qualify for such special tax treatment. The 2012
Israeli Sub Plan also provides for the grant of options under Section 3(i) of the Ordinance to our Israeli non-employee service providers
and controlling shareholders, who are not eligible for such special tax treatment.
2012 U.S. Sub Plan
The 2012 U.S. Sub Plan applies to grants to participants who are
citizens or residents of the United States on the date of grant of an award. Under the 2012 U.S. Sub Plan, the Board may require a participant
to represent that he or she is acquiring securities for investment purposes and without a view to distribution thereof. Shares will not
be issued under the U.S. Sub Plan unless the issuance complies with the requirements of any stock exchange on which the shares are then
listed or quoted, any securities or tax laws and all other applicable laws. All shares delivered under the U.S. Sub Plan will be subject
to such transfer orders and other restrictions as our Board may deem advisable under the rules, regulations, and other requirements of
any stock exchange upon which the shares are then listed and any applicable laws. Our obligations under the U.S. Sub Plan will be conditioned
on the payment by the participant of all applicable withholding taxes.
The U.S. Sub Plan contains provisions relating solely to participants
located in California, which generally provide that in the event of termination of employment or services for reasons of disability or
death, the participant, or in the case of death, his or her legal successor, may generally exercise options that have vested prior to
termination within a period of six months from the date of disability or death (or the expiration of the term of the option, if earlier).
If a participant’s employment or service is terminated for any other reason, the grantee may generally exercise his or her vested
options within 30 days of the date of termination (or the expiration of the term of the option, if earlier).
Potential Payments Upon Termination or Change in Control
See “Executive Compensation — Employment Agreements.”
We have adopted, pursuant to shareholder approval, our Compensation
Policy, which provides for certain benefits to our executive officers upon retirement or termination, whether or not in the event of a
change in control. We may memorialize any of these benefits in arrangements we enter into with individual executive officers. Under the
Compensation Policy, executive officers may be entitled to advance notice of termination of up to 12 months and to obtain up to 12 months
of post-termination health insurance. In addition to receiving severance pay as required or facilitated under the local laws of the relevant
jurisdiction, executive officers may have the right to receive up to 12 months of base salary (18 months in the case of the CEO), bonus
and benefits, taking into account the period of the officer’s service or employment, his or her performance during employment and
contribution to the Company’s targets and profits and the circumstances surrounding termination of his or her employment. These
benefits are designed to attract and motivate highly skilled professionals to join our Company and to enable us in to retain key management.
Compensation Committee Interlocks and Insider Participation
None of the members of the compensation committee is, or has ever
been, an officer or employee of the Company or any of its subsidiaries. In addition, during the last fiscal year, no executive officer
of the Company served as a member of the board of directors or the compensation committee of another entity that has one or more executive
officers serving on the Company’s compensation committee or the Board.
20
Director Compensation
The following table provides certain information concerning the
compensation for services rendered in all capacities by each non-employee director serving on our Board during the year ended December
31, 2021, other than Mr. Larry Jasinski, our CEO, who did not receive additional compensation for his services as director and whose compensation
is set forth in the Summary Compensation Table found elsewhere in this Amendment No. 1.
|
Name |
|
Fees Earned in Cash ($) |
|
RSU Awards ($) |
|
Total ($) |
| |||
|
Jeff Dykan |
|
63,872 |
(2) |
|
25,832 |
(1) |
|
89,704 |
| |
|
Aryeh (Arik) Dan |
|
|
65,081 |
(3) |
|
25,832 |
(1) |
|
90,913 |
|
|
Yohanan Engelhardt |
|
|
68,677 |
(4) |
|
25,832 |
(1) |
|
94,509 |
|
|
Yasushi Ichiki |
|
|
51,749 |
(5) |
|
25,832 |
(1) |
|
77,581 |
|
|
Dr. John William Poduska |
|
|
69,069 |
(6) |
|
25,832 |
(1) |
|
94,901 |
|
|
Randel Richner |
|
|
58,775 |
(7) |
|
25,832 |
(1) |
|
84,607 |
|
|
Wayne B. Weisman |
|
|
67,071 |
(8) |
|
25,832 |
(1) |
|
92,903 |
|
|
(1) |
Amounts represent the aggregate grant date fair value of an award of 13,888 RSUs issued under the 2014
Plan as an annual award to the applicable directors, computed in accordance with FASB ASC Topic 718. The fair value of RSUs granted is
determined based on the price of the Company’s ordinary shares on the date of grant. All RSUs become vested and exercisable in four
equal quarterly installments starting three months following the grant date. The valuation assumptions used in determining such amounts
are described in Notes 2k and 8c to our consolidated financial statements included in our 2021 Annual Report. |
|
(2) |
Represents $25,836 earned by Mr. Dykan as an annual retainer for serving as our Chairman
on the Board of Directors, a cash payment of $18,750 received in lieu of equity compensation (as discussed below), $7,978 for attending
meetings of the Board of Directors, $9,834 for serving as a member of the mergers and acquisitions committee and $1,474 for serving as
a member of the Company’s nomination and governance committee. |
|
(3) |
Represents $25,836 earned by Mr. Dan as an annual retainer for serving as a non-executive
director on the Board of Directors, a cash payment of $18,750 received in lieu of equity compensation, $8,795 for attending meetings of
the Board of Directors, $5,396 for serving as a member of the compensation committee, $4,830 for serving as a member of the mergers and
acquisitions committee and $1,474 for serving as a member of the Company’s nomination and governance committee. |
|
(4) |
Represents $25,836 earned by Mr. Engelhardt as an annual retainer for serving as a
non-executive director on the Board of Directors, a cash payment of $18,750 received in lieu of equity compensation, $9,360 for attending
meetings of the Board of Directors, $4,107 for serving as the chairman of the audit committee, $9,834 for serving as a member of the mergers
and acquisitions committee and $790 for serving as a member of the Company’s finance committee established for its securities offerings.
|
|
(5) |
Represents $25,836 earned by Mr. Ichiki as an annual retainer for serving as a non-executive
director on the Board of Directors, a cash payment of $18,750 received in lieu of equity compensation and $7,163 for attending meetings
of the Board of Directors. |
|
(6) |
Represents $25,836 earned by Dr. Poduska as an annual retainer for serving as a non-executive
director on the Board of Directors, a cash payment of $18,750 received in lieu of equity compensation, $9,360 for attending meetings of
the Board of Directors, $4,107 for serving as a member of the audit committee, $5,396 for serving as the chairman of the compensation
committee, $4,830 for serving as a member of the mergers and acquisitions committee and $790 for serving as a member of the Company’s
finance committee established for its securities offerings. |
|
(7) |
Represents $25,836 earned by Ms. Richner as an annual retainer for serving as a non-executive
director on the Board of Directors, a cash payment of $18,750 received in lieu of equity compensation, $9,360 for attending meetings of
the Board of Directors and $4,829 for serving as a member of the mergers and acquisitions committee. |
|
(8) |
Represents $25,836 earned by Mr. Weisman as an annual retainer for serving as a non-executive
director on the Board of Directors, a cash payment of $18,750 received in lieu of equity compensation, $8,544 for attending meetings of
the Board of Directors, $4,107 for serving as a member of our audit committee and $9,834 for serving as a member of the mergers and acquisitions
committee. |
21
The aggregate number of ordinary shares subject to outstanding
options and RSU awards for each of our non-employee directors as of December 31, 2021, is shown below. Information regarding Mr.
Jasinski’s outstanding equity awards as of December 31, 2021, is set forth in the Outstanding Equity Awards Table found elsewhere
in this Amendment No. 1.
|
Name |
|
Number of Shares |
| |
|
Jeff Dykan |
|
|
7,445 |
(1) |
|
Aryeh (Arik) Dan |
|
|
7,445 |
|
|
Yohanan Engelhardt |
|
|
6,944 |
|
|
Yasushi Ichiki |
|
|
7,445 |
|
|
Dr. John William Poduska |
|
|
7,946 |
|
|
Randel Richner |
|
|
6,944 |
|
|
Wayne B. Weisman |
|
|
7,445 |
(2) |
|
(1) |
See “Security Ownership of Certain Beneficial Owners and Management” above
for further information on Mr. Dykan’s holdings in our ordinary shares. |
|
(2) |
See “Security Ownership of Certain Beneficial Owners and Management” above
for further information on Mr. Weisman’s holdings in our ordinary shares. |
Cash compensation for our independent, non-employee directors’
services is governed by previous decisions of our compensation committee, Board and shareholders. Additionally, each independent, non-employee
director currently receives upon his or her appointment RSUs to purchase ordinary shares, with such RSUs having a value based on the Black-Scholes
model equal to $50,000 on the date of grant and an annual grant of RSUs to purchase ordinary shares, with such RSUs having a value based
on the Black-Scholes model equal to $50,000 on the date of grant, all of which vest ratably in four equal quarterly installments starting
three months from the date of grant with the vesting of such RSUs to be accelerated upon certain change of control events in accordance
with the Company’s standard policy. At our 2020 annual general meeting, our shareholders approved an amendment to our Compensation
Policy whereby all or a portion of our directors cash compensation may be paid in equity, at the discretion of our compensation committee
in order to preserve the Company’s cash, and to provide that equity compensation of directors will be payable in the first instance
in RSUs but such compensation may also be payable, at the discretion of our compensation committee, in cash, based on a formula to be
determined and with such payment provisions as shall result in the equivalent effect of vesting of RSUs, in order to preserve the equity
available for incentives.
In addition, each director is reimbursed for out-of-pocket expenses
in connection with attending meetings of the Board or committees. Directors are also indemnified and insured by us for actions associated
with being a director to the extent permitted under Israeli law. For further discussion, see “Item 13—Certain Relationships
and Related Transactions and Director Independence—Agreements with Directors and Officers.” Further, none of our non-employee
directors receive any benefits upon termination of their directorship positions. Our non-employee directors are eligible to receive awards
under certain of our equity compensation plans described above under “Equity Compensation Plans.” The compensation committee
reviews director compensation annually and makes recommendations to the Board with respect to compensation and benefits provided to the
members of the Board.
ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of April 22, 2022, there were
62,508,517 ordinary shares outstanding, excluding ordinary shares issuable in connection with the exercise of outstanding warrants or
outstanding options or upon the vesting of restricted stock units (“RSUs”). The voting rights of all shareholders are the
same.
The following table sets forth certain information as of April
22, 2022 concerning the number of ordinary shares beneficially owned, directly or indirectly, by:
| (1) |
each person, or group of affiliated persons, known to us to beneficially own more than 5% of our outstanding ordinary shares;
|
| (2) |
each of our directors and director nominees; |
| (3) |
each of our Named Executive Officers (as defined under “Summary Compensation Table” below); and |
| (4) |
all of our directors and executive officers as a group. |
22
Beneficial ownership is determined in accordance with the rules
of the SEC based on voting and investment power with respect to such shares. Shares subject to options or warrants that are currently
exercisable or exercisable within 60 days of April 22, 2022 and shares subject to RSUs that were vested as of or will vest within 60 days
of April 22, 2022 are deemed to be outstanding and to be beneficially owned by the person holding such options, RSUs or warrants for the
purpose of computing the percentage ownership of such person. However, such shares are not deemed to be outstanding and to be beneficially
owned for the purpose of computing the percentage ownership of any other person.
Under the terms of the terms of certain outstanding warrants, a
holder may not exercise the warrants to the extent that such shareholder, together with its affiliates, would beneficially own, after
such exercise, more than 4.99% or 9.99% of the ordinary shares then outstanding, as applicable (subject to the right of the shareholder
with a 4.99% ownership limitation to increase or decrease such beneficial ownership limitation upon notice to us, provided that such limitation
cannot exceed 9.99%), and provided that any increase in the beneficial ownership limitation shall not be effective until 61 days after
such notice is delivered. Consistent with beneficial ownership reporting principles under Section 13(d) of the Exchange Act, the below
table only shows ordinary shares underlying warrants that are deemed to be beneficially owned, assuming compliance with these ownership
limitations.
All information with respect to the beneficial ownership of any
principal shareholder has been furnished by such shareholder or is based on our filings with the SEC and, unless otherwise indicated below,
we believe that persons named in the table have sole voting and sole investment power with respect to all the ordinary shares shown as
beneficially owned, subject to community property laws, where applicable. The ordinary shares beneficially owned by our directors and
officers may include shares owned by their respective family members, as to which such directors and officers disclaim beneficial ownership.
Unless otherwise noted below, each shareholder’s address is c/o ReWalk Robotics Ltd., 3 Hatnufa Street, Floor 6, Yokneam Ilit 2069203,
Israel.
|
|
|
Ordinary Shares Beneficially Owned |
| |||||
|
Name |
|
Number of Shares |
|
|
Percentage |
| ||
|
5%-or-More Beneficial Owners:
|
|
|
|
|
|
| ||
|
Lind Global Funds(1) |
|
|
8,038,134 |
|
|
|
12.9 |
% |
|
Named Executive Officers and Directors:
|
|
|
|
|
|
|
|
|
|
Larry Jasinski(2) |
|
|
174,583 |
|
|
|
* |
|
|
Jeff Dykan(3)(4) |
|
|
75,732 |
|
|
|
* |
|
|
Yohanan Engelhardt(5) |
|
|
30,585 |
|
|
|
* |
|
|
Wayne B. Weisman(3)(6) |
|
|
87,020 |
|
|
|
* |
|
|
Aryeh (Arik) Dan(7) |
|
|
31,145 |
|
|
|
* |
|
|
Yasushi Ichiki(7) |
|
|
31,146 |
|
|
|
* |
|
|
Randel Richner(8) |
|
|
41,385 |
|
|
|
* |
|
|
Dr. John William Poduska(8) |
|
|
31,647 |
|
|
|
* |
|
|
Ori Gon(10) |
|
|
58,471 |
|
|
|
* |
|
|
Jeannine Lynch |
|
|
- |
|
|
|
- |
|
|
Joseph Turk |
|
|
- |
|
|
|
- |
|
|
All directors and executive officers as a group (11 persons)(11) |
|
|
447,369 |
|
|
|
* |
|
|
* |
Ownership of less than 1%. |
|
(1) |
Based on a Form 4 filed on April 15, 2002, and a Schedule 13G/A filed on February
11, 2022, by Lind Global Fund II LP, Lind Global Partners II LLC, Lind Global Macro Fund LP, Lind Global Partners LLC (together, the “Lind
Global Funds”) and Jeff Easton (together with the Lind Global Funds, the “Reporting Persons”), and includes, as of April
13, 2022, 8,018,134 ordinary shares, which consisted of (i) 7,319,134 ordinary shares and (ii) options to purchase 719,000 ordinary shares.
The foregoing excludes warrants to purchase 1,731,351 ordinary shares, because each of the warrants includes a provision limiting the
holder’s ability to exercise the warrants if such exercise would cause the holder to beneficially own greater than 9.99% of the
ordinary shares then outstanding. Without such provisions, the Reporting Persons may have been deemed to have beneficial ownership of
the ordinary shares underlying such warrants. Jeff Easton, the managing member of Lind Global Partners II LLC and Lind Global Partners
LLC, may be deemed to have sole voting and dispositive power with respect to the shares held by Lind Global Macro Fund, LP and Lind Global
Fund II LP. The principal business address of the Reporting Persons is 44 Madison Avenue, Floor 41, New York, N.Y. 10022. |
23
|
(2) |
Consists of 135,949 ordinary shares, including 77,127 shares underlying RSUs vesting
within 60 days, and exercisable options to purchase 38,634 ordinary shares. |
|
(3) |
Based on Section 13(d) and 16 filings made with the SEC, consists of 40,707 ordinary
shares beneficially owned by SCP Vitalife Partners II, L.P., or SCP Vitalife Partners II, a limited partnership organized in the Cayman
Islands, 13,596 ordinary shares beneficially owned by SCP Vitalife Partners (Israel) II, L.P., or SCP Vitalife Partners Israel II, a limited
partnership organized in Israel, and 1,571 ordinary shares currently held by the Israel Innovation Authority (formerly known as the Office
of the Chief Scientist of the State of Israel), or the IIA, that Vitalife Partners Overseas, Vitalife Partners Israel and Vitalife Partners
DCM have the right to acquire from IIA. SCP Vitalife II Associates, L.P., or SCP Vitalife Associates, a limited partnership organized
in the Cayman Islands, is the general partner of the SCP Vitalife Partners II and SCP Vitalife Partners Israel II, and SCP Vitalife II
GP, Ltd., or SCP Vitalife GP, organized in the Cayman Islands, is the general partner of SCP Vitalife Associates. As such, SCP Vitalife
GP may be deemed to beneficially own the 54,303 ordinary shares beneficially owned by SCP Vitalife Partners II and SCP Vitalife Israel
Partners II. Jeff Dykan and Wayne B. Weisman are the directors of SCP Vitalife GP and, as such, share voting and dispositive power over
the shares held by the foregoing entities. As such, they may be deemed to beneficially own 55,874 ordinary shares, consisting of the 54,303
ordinary shares beneficially owned by SCP Vitalife GP, as well as the ordinary shares beneficially owned by each of Vitalife Partners
Overseas, Vitalife Partners Israel and Vitalife Partners DCM and held by IIA. The principal business address of SCP Vitalife Partners
II, SCP Vitalife Associates, SCP Vitalife GP, and Messrs. Churchill and Weisman is c/o SCP Vitalife Partners II, L.P., 1200 Liberty Ridge
Drive, Suite 300, Wayne, Pennsylvania 19087. The principal business address of SCP Vitalife Partners Israel II, Vitalife Partners Israel,
Vitalife Partners Overseas, Vitalife Partners DCM, Mr. Dykan and Dr. Ludomirski is c/o SCP Vitalife Partners (Israel) II, L.P., 32B Habarzel
Street, Ramat Hachayal, Tel Aviv 69710, Israel. |
|
(4) |
Consists of 19,357 ordinary shares, including 2,430 shares underlying RSUs vesting
within 60 days, and exercisable options to purchase 501 ordinary shares. |
|
(5) |
Consists of 30,585 ordinary shares, including 3,472 shares underlying RSUs vesting
within 60 days. |
|
(6) |
Consists of 30,645 ordinary shares, including 3,472 shares underlying RSUs vesting
within 60 days, and exercisable options to purchase 501 ordinary shares. |
|
(7) |
Consists of 30,644 ordinary shares, including 3,472 shares underlying RSUs vesting
within 60 days, and exercisable options to purchase 501 ordinary shares. |
|
(8) |
Consists of 41,385 ordinary shares, including 3,472 shares underlying RSUs vesting
within 60 days. |
|
(9) |
Consists of 30,645 ordinary shares, including 3,472 shares underlying RSUs vesting
within 60 days, and exercisable options to purchase 1,002 ordinary shares. |
|
(10) |
Consists of 52,150 ordinary shares and exercisable options to purchase 6,321 ordinary
shares. Mr. Gon resigned as CFO, effective March 12, 2022. |
|
(11) |
Consists of (i) 305,340 ordinary shares directly or beneficially owned by our executive
officers and our eight directors other than Mr. Jasinski; (ii) 41,640 ordinary shares constituting the cumulative aggregate number of
options granted to the executive officers and directors; and (iii) 100,389 shares underlying RSUs vesting within 60 days. |
24
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides
certain aggregate information with respect to our ordinary shares that may be issued under our equity compensation plans in effect as
of December 31, 2021.
|
Plan Category |
Number of
securities to be issued upon exercise of outstanding options, warrants and rights(1)(2) |
Weighted- average exercise price of outstanding options, warrants and rights |
Number of
securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)(3) |
|||||||||
|
Equity compensation plans approved by security holders |
1,418,116 |
$ |
1.67 |
233,957 |
||||||||
|
Equity compensation plans not approved by security holders
|
— |
— |
— |
|||||||||
|
Total |
1,418,116 |
$ |
1.67 |
233,957 |
||||||||
| (1) |
Represents shares issuable under our (i) 2014 Plan upon exercise of options outstanding to purchase 41,160 shares and upon the settlement
of outstanding RSUs with respect to 1,356,284 shares, (ii) 2012 Equity Incentive Plan upon exercise of options outstanding to purchase
20,672 shares. |
| (2) |
The weighted average remaining term for the expiration of stock options is 4.55 years. |
| (3) |
Represents shares available for future issuance under our 2014 Plan. |
ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Director Independence
The information required by Item 407(a) of Regulation S-K is incorporated by reference
herein from Item 10 above as set forth under the caption “Director Independence.”
Certain Relationships and Related Transactions
See “Item 11. Executive Compensation —Employment Agreements
of Named Executive Officers” for a description of employment agreements between us and the Named Executive Officers.
See “Corporate Governance — Approval of Related Party
Transactions Under Israeli Law” for a discussion of our policies and procedures related to related party transactions and conflicts
of interest.
We describe below transactions and series of similar transactions
which are currently proposed or to which we have been or were a party since January 1, 2020, in which (a) the amount involved exceeds
or exceeded the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed
fiscal years and (b) any of our directors, executive officers, beneficial owners of more than 5% of our ordinary shares, or any affiliates
or members of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest. Although
we do not have a formal written policy as to the approval of related party transactions, all related party transactions for which disclosure
would be required under Item 404 of Regulation S-K are approved based on procedures under Israeli law, as is duly memorialized in the
minutes of the meetings of the Board and audit committee, as applicable.
Agreements with Affiliates of SCP Vitalife
Partners and/or Yaskawa
Amended and Restated Shareholders’ Rights Agreement
On July 14, 2014, we entered into an Amended and Restated
Shareholders’ Rights Agreement (the “Shareholders’ Rights Agreement”), with entities affiliated with SCP Vitalife
Partners II, which are controlled by our directors Messrs. Dykan and Weisman, Yaskawa Electric Corporation (“Yaskawa”), where
our directors Messrs. Ichiki and Dan are employed, and other entities and shareholders that are no longer related parties. The Shareholders’
Rights Agreement provided the shareholders party to it holding our ordinary shares with certain registration rights. All registration
rights terminated in 2019 on the fifth anniversary of the closing of our IPO.
25
Agreements with Yaskawa
On September 24, 2013, we entered into a Strategic Alliance
Agreement with Yaskawa. Pursuant to the Strategic Alliance Agreement, we and Yaskawa will collaborate in the following areas, among others:
| • |
marketing, distribution and commercialization of our products by Yaskawa, subject to a separate distribution agreement; |
| • |
marketing and distribution of future Yaskawa healthcare equipment products by us in the scope of our sales network; and |
| • |
improvement and quality control of our products by applying Yaskawa’s know-how and expertise in motion control and robotics.
|
The Strategic Alliance Agreement also provides for the creation
of a joint steering committee to meet quarterly to review, among other things, sales targets for our products by Yaskawa, opportunities
for us to sell Yaskawa products, possibilities for quality improvements to our products by applying Yaskawa’s expertise and future
research and development for our products. In the future, subject to any necessary regulatory clearance, we are entitled to market and
sell certain of Yaskawa’s products currently under development, which consist of complementary products to ReWalk, in the United
States and Europe. While the terms of any such arrangement, including with respect to any compensation we may receive, have not yet been
agreed, we expect that any such compensation would take the form of a percentage discount off of each product’s list price or another
customary arrangement. The term of the agreement is ten years, but it may be terminated by either party after seven years or upon 60 days’
notice in the event of an uncured default under the agreement.
On September 24, 2013, we and Yaskawa also entered into an
Exclusive Distribution Agreement which provides that Yaskawa will be our exclusive distributor in Japan, China (including Hong Kong and
Macau), Taiwan, South Korea, Singapore and Thailand. In addition, (i) if we desire to sell any exoskeleton products into any regional
market in the Asian and Pacific regions (other than Australia, New Zealand or India), Yaskawa will have a right of first refusal to serve
as distributor in those markets, subject to an agreement on minimum purchase requirements, and (ii) if we offer pricing to any other distributor
better than what we offer Yaskawa, Yaskawa will be entitled to that pricing. The initial term of the Exclusive Distribution Agreement
is ten years. Either party may terminate the agreement upon 90 days’ written notice after seven years or upon an event of default
under the agreement or a bankruptcy event of the other party. Through December 30, 2018, Yaskawa had paid us an aggregate of approximately
$1,077,000 pursuant to the exclusive distribution agreement, $303,000 of which was paid since January 1, 2017. In connection with
the closing of the first tranche of the private placement of the Investment Agreement with Timwell Corporation Limited (“Timwell”),
we entered into an amendment to this Exclusive Distribution Agreement to terminate the distribution rights granted to Yaskawa in China
(including Hong Kong and Macau), and in return we agreed to pay Yaskawa an amount equal to 3% of the net revenues we receive between April 1,
2018 and December 31, 2023 from the sale in China of our spinal cord injury line, but not less than an aggregate amount of $75,000.
On June 25, 2020 we delivered a written notice that we would terminate this agreement at the end of the seven year term, and such termination
occurred on September 24, 2020.
Investment Agreement with Timwell
Mr. Chunlin Han was a member of our Board until April 7, 2020,
serving as a designee of Timwell. Mr. Han’s father controls Timwell and Mr. Han’s parents indirectly control Timwell
affiliate Realcan Ambrum.
On March 6, 2018, we entered into an investment agreement
(the “Investment Agreement”) for a private placement of 640,000 ordinary shares to Timwell, a Hong Kong entity, in exchange
for total aggregate proceeds of $20.0 million at a price of $31.25 per share, and a joint venture framework agreement (the “JV
Framework Agreement”) for a related joint venture in China. For more information, see “Part II. Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Timwell Private Placement”
in our 2021 Annual Report and “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources—Timwell Private Placement” in our Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2020, filed with the SEC on November 10, 2020. Timwell agreed to make the investment in three
separate tranches, consisting of $5.0 million for 160,000 shares in the first tranche, $10.0 million for 320,000 shares
in the second tranche and $5.0 million for 160,000 shares in the third tranche. As a result of Timwell’s notification
that it would not invest the second and third tranches under the Investment Agreement, on April 7, 2020, our Board removed Mr. Chunlin
Han, Timwell’s designee, from the Board.
26
Transactions with Other Current and/or Former
5% Beneficial Owners
Since January 1, 2020, we entered into the following transactions
with other shareholders who are currently 5% beneficial owners or who we believe beneficially owned at the time of such transactions or
became as a result of such transactions more than 5% of our ordinary shares, based on a review of Schedule 13G filings made and Company
records during such period.
Former 5% Beneficial Owners
On April 5, 2019, we sold to Intracoastal Capital, LLC and/or its
affiliates (“Intracoastal”) 272,304 ordinary shares in a registered direct offering and warrants to purchase 136,152 ordinary
shares with an exercise price of $5.14 per share in a concurrent private placement, at a sale price of $5.2025 per ordinary share and
associated warrant. On June 10, 2019, we sold to Intracoastal 333,334 ordinary shares in a registered direct offering and warrants
to purchase 166,667 ordinary shares with an exercise price of $6.00 per share in a concurrent private placement, at a sale price of $6
per share and associated warrant. On February 10, 2020, in a follow-on public offering, we sold to Intracoastal 600,000 ordinary shares
and common warrants to purchase 600,000 ordinary shares with an exercise price of $1.25 per common warrant, at a sale price of $1.25 per
common unit. On July 1, 2020, we sold to Intracoastal 823,046 ordinary shares in a registered direct offering and warrants to purchase
411,523 ordinary shares with an exercise price of $1.76 per share in a concurrent private placement, at a sale price of $1.8225 per share
and associated warrant.
On December 3, 2020, in a private placement, we sold to Intracoastal
871,840 ordinary shares and warrants to purchase 653,880 ordinary shares with an exercise price of $1.34 per share, at a sale price of
$1.43375 per share and associated warrant. In connection with the December 3, 2020 private placement, we also entered into a registration
rights agreements, dated December 3, 2020, with Intracoastal and other investors party thereto, pursuant to which we are required to prepare,
file and maintain effectiveness with the SEC one or more registration statements to register for resale the ordinary shares issued outright
and ordinary shares underlying the warrants, in each case, sold in such private placement, by December 18, 2020. The registration statement
became effective on December 28, 2020.
On February 19, 2021, in a private placement, we sold to Intracoastal
819,112 ordinary shares and warrants to purchase 409,556 ordinary shares with an exercise price of $3.60 per share, at a sale price of
$3.6625 per share and associated warrant. On September 27, 2021, in a registered direct offering, we sold to Intracoastal 2,457,004 ordinary
shares and warrants to purchase 1,228,5802 ordinary shares with an exercise price of $2.00 per share, at a sale price of $2.035 per share
and associated warrant.
We engaged in certain warrant exercise agreements and private placements,
best efforts offerings and registered direct offerings of ordinary shares and/or warrants with a number of investors who we believe were
5% beneficial owners at the time of such transactions. These include Intracoastal, Anson Funds Management LP and/or its affiliates, Armistice
Capital Master Fund Ltd. and its affiliates, CVI Investments, Inc. and its affiliates, and Sabby Volatility Warrant Master Fund, Ltd and
its affiliates. For information regarding these transactions, see our Registration Statement on Form S-1 (File No. 333-254147), filed
with the SEC on March 11, 2021, and our Registration Statement on Form S-3 (File No. 333-260382), filed with the SEC on October 20, 2021.
Agreements with Directors, Officers and Others
Employment Agreements
We have entered into written employment agreements with each of
our executive officers. These agreements provide for notice periods of varying duration for termination of the agreement by us or by the
relevant executive officer, during which time the executive officer will continue to receive base salary and benefits. We have also entered
into customary non-competition, confidentiality of information and ownership of inventions arrangements with our executive officers. However,
the enforceability of the noncompetition provisions may be limited under applicable law.
Options
Since our inception we have granted options to purchase our ordinary
shares to our officers and certain of our directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition,
or change of control transactions. We describe our option plans above under “Equity Compensation Plan Information.”
Exculpation, Indemnification and Insurance
Our Articles of Association permit us to exculpate, indemnify and
insure certain of our office holders to the fullest extent permitted by the Israel Companies Law. We have entered into indemnification
agreements with our office holders, exculpating them from a breach of their duty of care to us to the fullest extent permitted by law
and undertaking to indemnify them to the fullest extent permitted by law, subject to certain exceptions, including with respect to liabilities
resulting from our IPO to the extent that these liabilities are not covered by insurance.
27
Approval of Related Party Transactions Under Israeli Law
Disclosure of Personal Benefits or Other Interests
of an Office Holder and Approval of Certain Transactions
The Israel Companies Law requires that an office holder promptly
disclose to the board of directors any personal benefit or other interest that he or she may have, and all related material information
or documents, concerning any existing or proposed transaction with the company. A personal benefit or other interest includes the individual’s
own benefit or other interest and, in some cases, a personal benefit or other interest of such person’s relative or an entity in
which such individual, or his or her relative, is a 5% or greater shareholder, director or general manager, or in which he or she has
the right to appoint at least one director or the general manager, but does not include a personal benefit or other interest stemming
only from ownership of our shares.
If an office holder has a personal benefit or other interest in
a transaction, approval by the board of directors is required for the transaction. Once an office holder has disclosed his or her personal
benefit or other interest in a transaction, the board of directors may approve an action by the office holder that would otherwise be
deemed a breach of duty of loyalty. A company may not, however, approve a transaction or action unless it is in the best interests of
the company, or if the office holder is not acting in good faith.
Special approval is required for an extraordinary transaction,
which under the Israel Companies Law is defined as any of the following:
| • |
a transaction other than in the ordinary course of business; |
| • |
a transaction that is not on market terms; or |
| • |
a transaction that may have a material impact on a company’s profitability, assets or liabilities. |
An extraordinary transaction in which an office holder has a personal
benefit or other interest requires approval first by the company’s audit committee and subsequently by the board of directors. The
compensation of, or an undertaking to indemnify or insure, an office holder who is not a director requires approval first by the company’s
compensation committee, then by the company’s board of directors and, if such compensation arrangement or an undertaking to indemnify
or insure is inconsistent with the Company’s compensation policy or if the office holder is the Chief Executive Officer (apart from
a number of specific exceptions), then such arrangement is subject to shareholder approval by a simple majority, which must also include
at least a majority of the shares voted by all shareholders who are neither controlling shareholders nor have a personal benefit or other
interest in such compensation arrangement (alternatively, in addition to a simple majority, the total number of shares voted against the
compensation arrangement by non-controlling shareholders and shareholders who do not have a personal benefit or other interest in the
arrangement may not exceed 2% of our outstanding shares). We refer to this as the “Special Approval for Compensation”. Arrangements
regarding the compensation, indemnification or insurance of a director require the approval of the compensation committee, board of directors
and shareholders by a simple majority, in that order, and under certain circumstances, a Special Approval for Compensation.
Generally, a person who has a personal benefit or other interest
in a matter that is considered at a meeting of the board of directors or the audit committee may not be present at such a meeting or vote
on that matter unless the chairman of the board of directors or the audit committee (as applicable) determines that he or she should be
present in order to present the transaction that is subject to approval. If a majority of the members of the board of directors or the
audit committee (as applicable) have a personal benefit or other interest in the approval of a transaction, then all directors may participate
in discussions of the board of directors or the audit committee (as applicable) on such transaction and in the voting, but shareholder
approval is also required for such transaction.
28
Disclosure of Personal Benefits or Other Interests
of Controlling Shareholders and Approval of Certain Transactions
Pursuant to the Israel Companies Law, the disclosure requirements
regarding personal benefits or other interests that apply to directors and executive officers also apply to a controlling shareholder
of a public company. In this context, a controlling shareholder includes a shareholder who holds 25% or more of our outstanding shares
if no other shareholder holds more than 50% of our outstanding shares. For this purpose, the holdings of all shareholders who have a personal
benefit or other interest in the same transaction will be aggregated. The approval of the audit committee, the board of directors and
the shareholders of the company, in that order, is required for (a) extraordinary transactions with a controlling shareholder or in which
a controlling shareholder has a personal benefit or other interest, (b) our engagement with a controlling shareholder or his or her relative,
directly or indirectly, for the provision of services to us, (c) the terms of engagement and compensation of a controlling shareholder
or his or her relative who is not an office holder or (d) our employment of a controlling shareholder or his or her relative, other than
as an office holder. In addition to shareholder approval by a simple majority, the transaction must be approved by a Special Majority.
To the extent that any such transaction with a controlling shareholder
is for a period extending beyond three years, approval is required once every three years, unless, with respect to certain transactions,
the audit committee determines that the duration of the transaction is reasonable under the circumstances.
Arrangements regarding the compensation, indemnification or insurance
of a controlling shareholder in his or her capacity as an office holder require the approval of the compensation committee, board of directors
and shareholders, in that order, by a Special Majority, and the terms must be consistent with our Compensation Policy.
Pursuant to regulations promulgated under the Israel Companies
Law, certain transactions with a controlling shareholder or his or her relative, or with directors, that would otherwise require approval
of our shareholders may be exempt from shareholder approval upon certain determinations of the audit committee and board of directors.
Under these regulations, we must publish these determinations, and a shareholder holding at least 1% of our outstanding shares may, within
14 days of after publication, demand shareholder approval despite such determinations.
ITEM 14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES
Principal Accounting Fees and Services
The following table sets forth, for each of the years indicated,
the fees expensed by Kost Forer Gabbay & Kasierer, our independent registered public accounting firm, in each such year.
|
|
2020 |
2021 |
||||||
|
|
($ in thousands) |
|||||||
|
Audit Fees(1)
|
$ |
295 |
$ |
275 |
||||
|
Audit-Related Fees(2)
|
$ |
10 |
$ |
- |
||||
|
Tax Fees(3)
|
$ |
17 |
$ |
17 |
||||
|
All Other Fees(4)
|
$ |
3 |
$ |
3 |
||||
|
Total: |
$ |
325 |
$ |
295 |
||||
| (1) |
“Audit fees” include fees for services performed by our independent public accounting firm in connection with our annual
audit for 2020 and 2021, fees related to the review of quarterly financial statements, fees related to our at-the-market equity offering
program, follow-on offering of ordinary shares and follow-on offering of ordinary shares and warrants and fees for consultation concerning
financial accounting and reporting standards. |
| (2) |
“Audit-related fees” relate to assurance and associated services that are traditionally performed by an independent auditor,
including accounting consultation and consultation concerning financial accounting, reporting standards and due diligence. |
| (3) |
“Tax fees” include fees for professional services rendered by our independent registered public accounting firm for tax
compliance, transfer pricing and tax advice on actual or contemplated transactions. |
| (4) |
“All other fees” include fees for services rendered by our independent registered public accounting firm with respect
to government incentives and other matters. |
Audit Committee’s Pre-Approval Policies and Procedures
The audit committee has adopted a pre-approval policy for the engagement
of our independent accountant to perform certain audit and non-audit services. Pursuant to this policy, which is designed to ensure that
such engagements do not impair the independence of our auditors, the audit committee pre-approves annually a catalog of specific audit
and non-audit services in the categories of audit service, audit-related service and tax services that may be performed by our independent
accountants.
All engagements by us of the auditors for 2020 and 2021 were pre-approved
by the audit committee.
29
PART IV
ITEM 15. EXHIBITS, FINANCIAL
STATEMENT SCHEDULES
(a)(3) Exhibits.
The exhibits listed in the Exhibit Index
are filed, furnished, or incorporated by reference in this Amendment No. 1.
EXHIBIT INDEX
30
|
104 |
Cover Page Interactive Data File (the cover page XBRL tags are embedded
within the iXBRL document). |
|
* |
Certain identified information in the exhibit has
been omitted because it is the type of information that (i) the Company customarily and actually treats as private and confidential, and
(ii) is not material. |
|
** |
Management contract or compensatory plan, contract
or arrangement. |
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
ReWalk Robotics Ltd. |
||
|
|
|
||
|
|
By: |
/s/ Larry Jasinski |
|
|
|
|
Name: Larry Jasinski |
|
|
|
|
Title: Chief Executive Officer |
|
Date: May 2, 2022
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities set forth below on
May 2, 2022.
|
Signature
|
Title |
|
|
|
|
/s/ Larry Jasinski |
|
|
Larry Jasinski |
Director and Chief Executive Officer
(Principal Executive Officer) |
|
|
|
|
/s/ Almog Adar |
|
|
Almog Adar |
Director of Finance and Corporate Financial Controller (Principal Financial Officer and Principal Accounting Officer) |
|
|
|
|
* |
|
|
Jeff Dykan |
Chairman of the Board |
|
|
|
|
* |
|
|
Dr. John William Poduska |
Director |
|
|
|
|
* |
|
|
Yohanan Engelhardt |
Director |
|
|
|
|
* |
|
|
Wayne B. Weisman |
Director |
|
|
|
|
* |
|
|
Yasushi Ichiki |
Director |
|
|
|
|
* |
|
|
Aryeh Dan |
Director |
|
|
|
|
* |
|
|
Randel Richner |
Director |
|
* |
|
|
Joseph Turk |
Director |
*By /s/ Larry Jasinski
Larry Jasinski, Attorney-in-fact
32