UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
SCHEDULE 14A
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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☒ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Under Rule 14a-12
Lifeward Ltd.
(Name of the Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ No fee required.
☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in Exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
200 Donald Lynch Blvd., Marlborough, MA 01752, U.S.A.
Tel: +1 508.251.1154
Dear Shareholder,
You are cordially invited to attend an Extraordinary General Meeting of Shareholders (the “Meeting”) of Lifeward Ltd. (“we,” the “Company” or “Lifeward”) to be held at 10:00 a.m.
(Eastern Standard Time) on Monday, December 30, 2024, at the Company’s offices at 200 Donald Lynch Blvd., Marlborough, MA 01752, U.S.A. We intend to hold the Meeting in person. In the event it is not possible or advisable to hold the Meeting in
person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. As always, we encourage you to vote your shares prior to the Meeting.
The agenda for the Meeting is set forth in the accompanying Notice of Extraordinary Meeting of Shareholders and Proxy Statement.
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For the reasons set forth in the accompanying Proxy Statement, our Board of Directors recommends that you vote “FOR” Proposals 1, 2 and 3 on the agenda for the Meeting.
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We look forward to greeting personally those of you who are able to be present at the Meeting. However, whether or not you plan to attend the
Meeting, it is important that your shares be represented. Accordingly, you are kindly requested to mark, sign, date and promptly mail the enclosed proxy card at your earliest convenience so that it will be received no later than 10:00 a.m. (Eastern
Standard Time) on Friday, December 27, 2024, to be validly included in the tally of ordinary shares voted at the Meeting. Detailed proxy voting instructions are provided both in the Proxy Statement and on the
proxy card.
If your ordinary shares are held in “street name,” that is, in a brokerage account or by a trustee or nominee, you should complete the voting instruction card that will be sent to
you in order to direct your broker, trustee or nominee how to vote your shares. You may also be able to provide such voting instructions via the Internet.
Thank you for your continued cooperation.
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Very truly yours,
Joseph Turk
Chairman of the Board of Directors
November , 2024
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THIS PROXY STATEMENT AND ENCLOSED PROXY CARD ARE
FIRST BEING MAILED TO SHAREHOLDERS ON OR ABOUT NOVEMBER , 2024.
PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION, DATED NOVEMBER 15, 2024
NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
200 Donald Lynch Blvd., Marlborough, MA 01752, U.S.A.
Tel: +1 508.251.1154
To the shareholders of Lifeward Ltd.:
Notice is hereby given that an Extraordinary Meeting of Shareholders (the “Meeting”) of Lifeward Ltd. (“we,” the “Company” or “Lifeward”) will be held at 10:00 a.m. (Eastern
Standard Time) on Monday, December 30, 2024, at the Company’s offices at 200 Donald Lynch Blvd., Marlborough, MA 01752, U.S.A. We intend to hold the Meeting in person. In the event it is not possible or
advisable to hold the Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication.
The agenda of the Meeting will be as follows:
| 1. |
To amend the Company’s Sixth Amended and Restated Articles of Association to eliminate the par value of the Company’s ordinary shares.
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| 2. |
To approve the Company’s 2024 Incentive Compensation Plan.
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| 3. |
To approve a grant to Larry Jasinski, the Company’s Chief Executive Officer, of 14,286 restricted stock units (“RSUs”) and 14,285 performance-based RSUs.
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To act upon any other matters that may properly come before the Meeting or any adjournment or postponement thereof.
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The proposals above are described more fully in the accompanying Proxy Statement, which we urge you to read in its entirety.
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For the reasons set forth in the accompanying Proxy Statement, our Board of Directors recommends that you vote “FOR” Proposals 1, 2 and 3 on the agenda for the Meeting.
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The affirmative vote of a simple majority of the votes cast by shareholders in person or by proxy at the Meeting on the proposal (an “Ordinary Majority”) is necessary for the
approval of each of the Proposals. Under Israeli law, Proposal 3 requires, in addition to the affirmative vote of an Ordinary Majority, that either: (1) a majority of the voting power represented at the
Meeting in person or by proxy and voting thereon, excluding the shares of controlling shareholders and of shareholders who have a personal interest in the approval of the resolution, be voted “FOR” the
proposed resolution, or (2) the total number of shares of non-controlling shareholders and of shareholders who do not have a personal interest in the resolution voted against approval of the proposal does not exceed two percent of the outstanding
voting power in the Company. More detailed information regarding this approval requirement appears below under “Questions and Answers About the Meeting – About the Voting Procedures at the Meeting.”
Only shareholders of record at the close of business on the record date of November 20, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Meeting and any
adjournment or postponement thereof. You are cordially invited to attend the Meeting in person.
If you are unable to attend the Meeting in person you are requested to complete, date and sign the enclosed proxy card and return it promptly in the pre-addressed envelope provided
so that it is received by us no later than 10:00 a.m. (Eastern Standard Time) on the business day before the Meeting or vote by telephone or over the Internet if your voting instruction form describes such voting methods. Your proxy may be revoked at
any time before it is voted if you return a later‑dated proxy card or if you vote your shares in person at the Meeting if you are the record holder of the shares and can provide a copy of a certificate(s) evidencing your shares. If your shares are
held in “street name,” meaning in the name of a bank, broker or other record holder, you must either direct the record holder of your shares on how to vote your shares or obtain a legal proxy from the record holder to vote the shares at the Meeting
on behalf of the record holder as well as a statement from such record holder that it did not vote such shares on your behalf.
Further, if you are a beneficial owner whose shares are held of record by a broker, your broker has discretionary voting authority to vote your shares only on routine matters, which at the Meeting will be only Proposal
1, even if the broker does not receive voting instructions from you. Your broker does not have discretionary authority to vote on non-routine matters without instructions from you, in which case a “broker non-vote” will occur and your shares will not
be voted on these matters. At the Meeting, each of Proposals 2 and 3 is considered a non-routine matter.
Joint holders of shares should note that, pursuant to our Articles of Association, the vote of the senior of joint holders of any share who votes such share, whether in person or
by proxy, will be accepted to the exclusion of the vote(s) of the other registered holder(s) of such share, with seniority determined by the order in which the names of the joint holders appear in our Register of Shareholders. For the appointment of
a proxy to vote shares held by joint holders to be valid, the signature of the senior of the joint holders must appear on the proxy card.
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By Order of the Board of Directors,
Joseph Turk
Chairman of the Board of Directors
November , 2024
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 30, 2024
You are urged to mark, date, sign and promptly return the proxy card in the envelope provided to you so that, if you are unable to attend the Meeting, your
shares can be voted. The Notice and Proxy Statement are available at http://ir.golifeward.com.
TABLE OF CONTENTS
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A-1
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PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION, DATED NOVEMBER 15, 2024
200 Donald Lynch Blvd., Marlborough, MA 01752, U.S.A.
Tel: +1 508.251.1154
PROXY STATEMENT
This Proxy Statement is being furnished to the holders of ordinary shares, par value NIS 1.75 each, of Lifeward Ltd. (“we,” the “Company”, or “Lifeward”) in connection with
the solicitation of proxies by our Board of Directors (the “Board” or the “Board of Directors”) for use at the Extraordinary General Meeting of Shareholders (the “Meeting”) to be held at the Company’s offices at 200
Donald Lynch Blvd., Marlborough, MA 01752, U.S.A., on Monday, December 30, 2024, at 10:00 a.m. (Eastern Standard Time) and at any adjournment or postponement thereof, pursuant to the accompanying Notice of Extraordinary General Meeting of
Shareholders. We are first making available this Proxy Statement and accompanying materials to shareholders on or about November , 2024.
The agenda of the Meeting will be as follows:
| 1. |
To amend the Company’s Sixth Amended and Restated Articles of Association to eliminate the par value of the Company’s ordinary shares.
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| 2. |
To approve the Company’s 2024 Incentive Compensation Plan.
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| 3. |
To approve a grant to Larry Jasinski, the Company’s Chief Executive Officer, of 14,286 restricted stock units (“RSUs”) and 14,285 performance-based RSUs.
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To act upon any other matters that may properly come before the Meeting or any adjournment or postponement thereof.
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Currently, we are not aware of any other matters that will come before the Meeting. If any other matters properly come before the Meeting, the persons designated as proxies will
retain discretion to vote in accordance with their judgment on such matters.
GENERAL
| Q: |
When and where is the Extraordinary General Meeting of Shareholders being held?
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| A: |
The Meeting will be held on Monday, December 30, 2024, at 10:00 a.m. (Eastern Standard Time), at the Company’s offices at 200 Donald Lynch Blvd., Marlborough, MA 01752, U.S.A. As always, we encourage
you to vote your shares prior to the Meeting. We intend to hold the Meeting in person. In the event it is not possible or advisable to hold the Meeting in person, we will announce alternative arrangements for the meeting as promptly as
practicable, which may include holding the meeting solely by means of remote communication.
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| Q: |
Who can attend the Meeting?
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Any shareholder of the Company as of the Record Date (as defined above) may attend. Please note that space limitations make it necessary to limit attendance to shareholders. Admission will be on a first-come, first-served basis. Current
proof of ownership of Lifeward’s shares as of the Record Date, as well as a form of personal photo identification, must be presented in order to be admitted to the Meeting. If your shares are held in the name of a bank, broker or other holder
of record, you must bring a current brokerage statement or other form of proof reflecting ownership as of the Record Date with you to the Meeting. No cameras, recording equipment, electronic devices, use of cell phones or other mobile
devices, large bags or packages will be permitted at the Meeting.
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| Q: |
Who is entitled to vote?
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Only holders of Lifeward’s ordinary shares at the close of business on the Record Date are entitled to notice of, and to vote at, the Meeting and any adjournment or postponement thereof. Each shareholder is entitled to one vote for each
ordinary share owned as of the Record Date. Ordinary shares held in our treasury, which are not considered outstanding, will not be voted. On November 20, 2024, there were ordinary shares outstanding entitled to vote and there
were no outstanding shares of any other class.
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Joint holders of shares should note that, pursuant to our Articles of Association, the vote of the senior of joint holders of any share who votes such share, whether in person
or by proxy, will be accepted to the exclusion of the vote(s) of the other registered holder(s) of such share, with seniority determined by the order in which the names of the joint holders appear in our Register of Shareholders. For the appointment
of a proxy to vote shares held by joint holders to be valid, the signature of the senior of the joint holders must appear on the proxy card.
HOW TO VOTE YOUR SHARES
Q: How do I vote?
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You may vote in person. Ballots will be passed out at the Meeting to anyone who wants to vote at the Meeting. If you choose to do so, please bring the enclosed proxy card or proof of identification.
If you are a shareholder of record, meaning that your shares are held directly in your name, you may vote in person at the Meeting. However, if your shares are held in “street name” (that is, through a bank, broker or other nominee), you must
first obtain a signed proxy from the record holder (that is, your bank, broker or other nominee) before you vote at the Meeting.
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“Street name” holders may also vote by phone or through an Internet website. If you hold your shares in “street name” (e.g., through a broker, bank or other nominee), then you should have received this Proxy Statement from the bank, broker or other nominee, along with its proxy card with voting instructions (including voting by
phone or through an Internet website) and instructions on how to change your vote. Thus, if you are a “street name” holder, your votes will be processed based on your instructions to your bank, broker or other nominee on how to vote the ordinary
shares. Because you are not a shareholder of record, you may not vote those shares directly at the Meeting unless you obtain a “legal proxy” from the bank, broker or other nominee that holds your shares directly, giving you the right to vote the
shares at the Meeting.
You may vote by mail. Both shareholders of record and “street name” holders can do this by
completing the proxy card (for shareholders of record) or voting instruction card (for “street name” holders”) and returning it in the enclosed, prepaid and addressed envelope. If you return a signed card but do not provide voting instructions, your
shares will be voted as recommended by the Board.
| Q: |
What is the difference between holding shares as a shareholder of record and holding shares in “street name”? Will my shares be voted if I do not provide my proxy?
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Many Lifeward shareholders hold their shares in “street name,” meaning through a bank, broker or other nominee rather than directly in their own name. As explained in this Proxy Statement, there are some distinctions between shares held of
record and shares owned in “street name.”
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Shareholders of Record
If your shares are registered directly in your name with our transfer agent Equiniti Trust Company, LLC of New York, New York, you are considered, with respect to those shares,
the shareholder of record. In such case, these proxy materials are being sent directly to you. If you are a shareholder of record, you have the right to grant your voting proxy directly to Lifeward or to vote in person at the Meeting. If you hold
your shares directly in your own name and do not provide a proxy, your shares will not be voted.
“Street Name” Holders (Beneficial Owners)
If your shares are held through a bank, broker or other nominee, they are considered to be held in “street name” and you are the beneficial owner. If your shares are held in
street name, these proxy materials are being forwarded to you by your bank, broker or other nominee which is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to direct the bank, broker
or other nominee on how to vote your shares for the Meeting. You also may attend the Meeting. However, because you are not the shareholder of record, you may not vote these shares in person at the Meeting, unless you first obtain a signed proxy from
the record holder (your bank, broker or other nominee) giving you the right to vote the shares. Your bank, broker or other nominee has enclosed a voting instruction card for you to use in directing the bank, broker or other nominee regarding how to
vote your shares.
If you are a beneficial owner whose shares are held of record by a broker, your broker has discretionary voting authority to vote your shares without your instructions only on
routine matters. Your broker does not have discretionary authority to vote on non-routine matters without instructions from you, in which case a “broker non-vote” will occur and your shares will not be voted on these matters. Thus, while your broker
may vote on Proposal 1 without instructions from you, your broker may not vote on Proposals 2 and 3 unless you provide instructions. In the event of a broker non-vote, the shares held by you will be included in determining the presence of a quorum at
the Meeting but are not considered “present” for purposes of voting on the proposals. It is important for a shareholder that holds ordinary shares through a bank, broker or other nominee to instruct its bank, broker or other nominee regarding how to
vote its shares if the shareholder wants its shares to count towards the vote tally for a given proposal.
| Q: |
Does Lifeward recommend I vote in advance of the Meeting?
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Yes. Even if you plan to attend the Meeting, we recommend that you vote your shares in advance so that your vote will be counted if you later decide not to attend the Meeting.
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| Q: |
If I vote by proxy, can I change my vote or revoke my proxy?
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Yes. You may change your proxy instructions at any time prior to the vote at the Meeting. If you are a shareholder of record, you may do this by:
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filing a written notice of revocation with our Chief Financial Officer, delivered to our address above;
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delivering a timely later-dated proxy card or voting instruction form; or
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attending the Meeting and voting (attendance at the Meeting will not cause your previously granted proxy to be revoked unless you specifically so request).
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If you hold shares through a bank, broker or other nominee, you may revoke any prior voting instructions by contacting that firm or by voting via “legal proxy” at the Meeting.
| Q: |
How are my votes cast when I submit a proxy vote?
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When you submit a proxy vote, you appoint Larry Jasinski and Michael Lawless, or either of them, as your representative(s) at the Meeting. Your shares will be voted at the Meeting as you have instructed.
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Upon the receipt of a properly submitted proxy card, which is received by 10:00 a.m. (Eastern Standard Time) on Friday, December 27, 2024, which is the business day
prior to the Meeting, and not revoked prior to the Meeting, or which is presented to the chairperson at the Meeting, the persons named as proxies will vote the ordinary shares represented thereby at the Meeting in accordance with your instructions,
or if no instructions are received, the persons named as proxies will vote in accordance with the Board’s recommendations as indicated in the instructions outlined on the proxy card.
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| Q: |
What does it mean if I receive more than one proxy card from the Company?
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It means that you have multiple accounts at the transfer agent or with brokers. Please sign and return all proxy cards to ensure that all of your shares are voted.
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ABOUT THE VOTING PROCEDURES AT THE MEETING
| Q: |
What constitutes a quorum?
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In order for us to conduct business at the Meeting, two or more shareholders must be present, in person or by proxy, representing at least 33-1/3% of the ordinary shares outstanding as of the Record Date. This is referred to as a quorum.
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Ordinary shares represented in person or by proxy (including broker non-votes and shares that abstain or do not vote with respect to one or more of the matters to be voted upon)
will be counted for purposes of determining whether a quorum exists. As discussed further above, a “broker non-vote” occurs when a bank, broker or other holder of record holding shares for a beneficial owner attends the Meeting but does not vote on a
particular proposal because that holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Abstentions and broker non‑votes will be counted as present in determining if a
quorum is present.
| Q: |
What happens if a quorum is not present?
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If a quorum is not present, the Meeting will be adjourned to the same day at the same time the following week, or to such day and at such time and place as the Chairman of the meeting may determine with the consent of the holders of a
majority of the shares present in person or by proxy and voting on the question of adjournment.
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| Q: |
How will votes be counted?
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Each outstanding ordinary share is entitled to one vote for each proposed resolution to be voted on at the Meeting. Our Articles of Association do not provide for cumulative voting.
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| Q: |
What are the requirements for approval of each of the proposals and how will votes (and discretionary voting) be handled?
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The following chart details the votes required for each of the proposals, the treatment of abstentions and broker non-votes for each of the proposals, and whether the proposals permit discretionary voting.
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Proposal
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Votes Required
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Treatment of Abstentions and Broker Non-Votes
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Broker Discretionary Voting
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Proposal 1: Approval of an amendment to the Company’s Sixth Amended and Restated Articles of Association to eliminate the par value of the
Company’s ordinary shares.
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Affirmative vote of an Ordinary Majority.
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Abstentions and broker non-votes will have no effect on the outcome of the vote.
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Yes.
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Proposal 2: Approval of the Company’s 2024 Incentive Compensation Plan.
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Affirmative vote of an Ordinary Majority.
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Abstentions and broker non-votes will have no effect on the outcome of the vote.
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No.
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Proposal 3: Approval of a grant to Larry Jasinski, our Chief Executive Officer, of 14,286 RSUs and 14,285 performance-based RSUs.
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Affirmative vote of an Ordinary Majority. In addition, a Special Majority, as discussed below, is required under Israeli law for approval of
Proposal 3.
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Abstentions and broker non-votes will have no effect on the outcome of the vote.
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No.
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Special Majority
Under Israeli law, Proposal 3 requires, in addition to the affirmative vote of an Ordinary Majority, that either: (1) a simple majority
of shares voted at the Meeting, excluding the shares of controlling shareholders and of shareholders who have a personal interest in the approval of the resolution, be voted “FOR”
the proposed resolution, or (2) the total number of shares of non-controlling shareholders and of shareholders who do not have a personal interest in the resolution voted against approval of the resolution does not exceed two percent of the
outstanding voting power in the Company. We refer to this threshold in this Proxy Statement as a “Special Majority.”
The term “controlling shareholder” means a shareholder having the ability to direct the activities of a company, other than by virtue of
being an office holder. A shareholder is presumed to be a controlling shareholder if the shareholder holds 50% or more of the voting rights in a company or has the right to appoint the majority of the directors of the company or its general manager.
To the knowledge of the Company, there is no shareholder who is a controlling shareholder.
Under the Israel Companies Law 5759-1999 (the “Israel Companies Law”), a “personal interest” of a shareholder (i) includes a personal
interest of the shareholder and any member of the shareholder’s family, family members of the shareholder’s spouse, or a spouse of any of the foregoing, or a personal interest of a company with respect to which the shareholder (or such family
member) serves as a director or chief executive officer, owns at least 5% of the shares or has the right to appoint a director or chief executive officer, and (ii) excludes an interest arising solely from the ownership of our ordinary shares. Under
the Israel Companies Law, in the case of a person voting by proxy for another person, “personal interest” includes a personal interest of either the proxy holder or the shareholder granting the proxy, whether or not the proxy holder has discretion
how to vote. If you do not have a personal interest in this matter, you may assume that using the form of proxy enclosed herewith will not create a personal interest.
Under the Israel Companies Law, every voting shareholder is required to notify the Company whether such shareholder is a Controlling
Shareholder or has a Personal Interest. To avoid confusion, every shareholder voting by means of the enclosed proxy card or voting instruction form, or via telephone or internet voting, will be deemed to confirm to the Company that such shareholder
is NOT a Controlling Shareholder and does NOT have a Personal Interest. If you are a Controlling Shareholder or have a Personal Interest (in which case your vote will count only for or against the Ordinary Majority, and not for or against the Special
Majority required for approval of Proposal 3), please notify the Company’s Chief Financial Officer by telephone at phone number +508-281-7274 or by email at [email protected]. If your shares are held in “street name” by your broker, bank or
other nominee and you are a Controlling Shareholder or have a Personal Interest, you should notify your broker, bank or other nominee of that status, and they in turn should notify the Company as described in the preceding sentence.
| Q: |
How will my shares be voted if I do not provide instructions on the proxy card?
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If you are the record holder of your shares and return a properly executed proxy card to us no later than 10:00 a.m. (Eastern Standard Time) on the business day before the Meeting, but do not specify on your proxy card how you want to vote
your shares, your shares will be voted as to each of the proposals in accordance with the recommendation of the Board, as follows:
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1. “FOR” the approval of an amendment the Company’s Sixth Amended and Restated Articles of Association to eliminate the par value of the
Company’s ordinary shares.
2. “FOR” the approval of the Company’s 2024 Incentive Compensation Plan.
3. “FOR” the approval of a grant to Larry Jasinski, the Company’s Chief Executive Officer, of 14,286 RSUs and 14,285
performance-based RSUs.
The named proxies will act in accordance with the best judgment of the named proxies on any other matters properly brought before the Extraordinary General Meeting and any
postponement(s) or adjournment(s) thereof to the extent permitted under Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”).
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HOW TO FIND VOTING RESULTS
| Q: |
Where do I find the voting results of the Meeting?
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We plan to announce preliminary voting results at the Meeting. The final voting results will be reported following the Meeting on the “Investors” portion on our website at www.golifeward.com and in
a Current Report on Form 8-K that we expect to file with the Securities and Exchange Commission (the “SEC”) within four business days after the Meeting. If final voting results are not available to us in time to file a Form 8-K within four
business days after the Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
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SOLICITATION OF PROXIES
| Q: |
Who will bear the costs of solicitation of proxies for the Meeting?
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| A: |
Lifeward will bear the costs of solicitation of proxies for the Meeting. In addition to solicitation by mail, directors, officers and employees of Lifeward may solicit proxies from shareholders by telephone, in person or otherwise. Such
directors, officers and employees will not receive additional compensation, but may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation. Brokers, nominees, fiduciaries and other custodians have been
requested to forward soliciting material to the beneficial owners of ordinary shares held of record by them, and such custodians will be reimbursed by Lifeward for their reasonable out-of-pocket expenses.
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HOW TO FIND MORE INFORMATION
| Q: |
Who can I contact for more information or questions about the Meeting or the Proposals on the agenda for the Meeting?
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For more information or questions about the Meeting or any of the Proposals on the agenda for the Meeting, please contact the Company’s Chief Financial Officer by telephone at phone number
+508-281-7274 or by email at [email protected].
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POSITION STATEMENTS
| Q: |
Can a shareholder express an opinion on a proposal prior to the Meeting?
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In accordance with the Israel Companies Law and regulations promulgated thereunder, any Lifeward shareholder may submit a position statement on its behalf, expressing its position on an agenda item for the Meeting, to Lifeward Ltd., 200
Donald Lynch Blvd., Marlborough, Massachusetts 01752, U.S.A, Attention: Chief Financial Officer, or by email to [email protected], no later than December 20, 2024. Position statements must be in English and otherwise must comply
with applicable law. We will make publicly available any valid position statement that we receive.
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We are first mailing this Proxy Statement and accompanying materials to shareholders on or about November , 2024. This Proxy Statement is also available at http://ir.golifeward.com. Information contained on, or that can be accessed through, our website does not constitute a part of this Proxy Statement and is not incorporated by reference herein.
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As of November 13, 2024, there were 8,808,143 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 November 13, 2024, 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; and
(4) all of our directors and executive officers as a group.
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 November 13, 2024, and shares subject to RSUs that were vested as of or will vest within 60 days of November 13, 2024, 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 Lifeward Ltd., 200 Donald Lynch Blvd., Marlborough, Massachusetts 01752, U.S.A.
7
|
Ordinary Shares Beneficially Owned
|
||||||||
|
Name
|
Number of Shares
|
Percentage
|
||||||
|
5%-or-More Beneficial Owners:
|
||||||||
|
Lind Global Funds(1)
|
1,431,106
|
16.2
|
%
|
|||||
|
Named Executive Officers and Directors:
|
||||||||
|
Larry Jasinski(2)
|
61,705
|
*
|
||||||
|
Randel Richner(3)
|
25,852
|
*
|
||||||
|
Dr. John William Poduska(4)
|
20,102
|
*
|
||||||
|
Joseph Turk(5)
|
27,134
|
*
|
||||||
|
Hadar Levy(6)
|
15,656
|
*
|
||||||
|
Michael Swinford(7)
|
5,020
|
*
|
||||||
|
Robert J. Marshall(8)
|
—
|
—
|
||||||
|
Almog Adar(9)
|
16,516
|
*
|
||||||
|
Jeannine Lynch(10)
|
18,641
|
*
|
||||||
|
Michael A. Lawless (11)
|
26,112
|
*
|
||||||
|
Charles Remsberg(12)
|
7,142
|
*
|
||||||
|
All directors and executive officers as a group (eleven) persons) (13)
|
223,880
|
2.5
|
%
|
|||||
___________
* Ownership of less than 1%.
|
(1)
|
Based on a Schedule 13D/A filed on September 28, 2023, and subsequent Form 4 filings, by Lind Global Fund II LP (“Global Fund II”), 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”). The foregoing excludes warrants to purchase 247,334 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 444 Madison Avenue, Floor 41, New York, N.Y. 10022.
|
|
(2)
|
Consists of 57,969 ordinary shares, including exercisable options to purchase 3,736 ordinary shares.
|
|
(3)
|
Consists of 25,852 ordinary shares.
|
|
(4)
|
Consists of 20,033 ordinary shares, including exercisable options to purchase 69 ordinary shares.
|
|
(5)
|
Consists of 27,134 ordinary shares.
|
|
(6)
|
Consists of 15,656 ordinary shares.
|
|
(7)
|
Consists of 5,020 ordinary shares.
|
|
(8)
|
Mr. Marshall joined our Board of Directors on November 2, 2024.
|
|
(9)
|
Consists of 16,516 ordinary shares.
|
|
(10)
|
Consists of 18,641 ordinary shares.
|
|
(11)
|
Consists of 26,112 ordinary shares.
|
|
(12)
|
Consists of 7,142 ordinary shares.
|
|
(13)
|
Consists of (i) 220,075 ordinary shares directly or beneficially owned by our executive officers and our six directors other than Mr. Jasinski; (ii) 3,805 ordinary shares constituting the
cumulative aggregate number of options granted to the executive officers and directors.
|
8
APPROVAL OF AN AMENDMENT TO THE COMPANY’S SIXTH AMENDED
AND RESTATED ARTICLES OF ASSOCIATION TO ELIMINATE THE PAR
VALUE OF THE COMPANY’S ORDINARY SHARES
The Company’s authorized share capital is currently NIS 43,750,000, consisting of 25,000,000 ordinary shares, par value NIS 1.75 per share. Historically, the concept of par
value served to protect creditors and shareholders by ensuring that a company received at least the par value (or minimum price) as consideration for the issuance of shares of common stock. However, over time the concept of par value has lost its
significance for a variety of reasons, including recognition that creditors and shareholders are protected, or can be protected, through other means. Currently, many companies that incorporate today have no par value or use a nominal par value. In
addition, the Israel Companies Law does not require shares to have a par value. Elimination of the par value will simplify various technical aspects of the Company’s share capital, such as avoiding the need for the par value of the ordinary shares
to be paid or allocated upon the vesting of restricted stock units. Moreover, elimination of the par value will facilitate any future stock split or reverse stock split that the Company may decide to effect, by avoiding the necessity to denominate
the split as a multiple of the existing par value.
The elimination of the par value of the ordinary shares is not intended to modify the rights of existing shareholders in any material respect. It will not increase the registered share capital of the
Company nor will it allow the Company to make any change to the registered share capital without the prior approval of shareholders. We expect the proposed elimination of the par value of our ordinary shares will have no effect on the market value of
our outstanding ordinary shares.
Specifically, we propose to amend the definition of “Ordinary Shares” in Article 1 of our Sixth Amended and Restated Articles of Association, and to amend Article 4 of our Sixth Amended and Restated
Articles of Association, as follows (additions are underlined, deletions are struck through):
“Ordinary Shares” shall mean the ordinary shares of the Company, without par value
NIS 1.75 per share.
4. Authorized Share Capital
The authorized share capital of the Company is Forty Three Million Seven Hundred and Fifty Thousand New Israeli Shekels (NIS 43,750,000) divided into
Twenty Five Million Ordinary Shares, without par value NIS 1.75 per share.”
Proposed Resolution
You are requested to adopt the following resolution:
“1. RESOLVED, to approve the amendments to the Company’s Sixth Amended and Restated Articles of Association to eliminate the par value of the Company’s Ordinary Shares, as detailed
in the Proxy Statement.”
Vote Required
The affirmative vote of an Ordinary Majority is required to adopt the resolution.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTION.
9
APPROVAL OF 2024 INCENTIVE COMPENSATION PLAN
Background
On August 19, 2014, we adopted our 2014 Incentive Compensation Plan, which was amended and restated on each of March 29, 2019, June 18, 2020, and July 27, 2022 (as amended and
restated, the “2014 Plan”). From the time of the adoption of the 2014 Plan, we granted various equity awards to our officers, directors, employees and consultants under the 2014 Plan. Pursuant to Section 1.3 of the 2014 Plan, no awards can be granted
under the plan on or after ten years from the date of adoption of the 2014 Plan. As a result, since August 19, 2024, we cannot grant any additional equity awards under the 2014 Plan.
Equity awards are an important component of our compensation program aimed at incentivizing our officers, directors and employees, and we wish to be able to continue to make grants
of equity under compensation plans approved by our shareholders. Accordingly, since we cannot grant any additional awards under the 2014 Plan, we are proposing to adopt a new incentive compensation plan called the Lifeward Ltd. 2024 Incentive
Compensation Plan (the “2024 Plan”) and are submitting it for the approval of our shareholders at the Meeting. Each of our compensation committee and our Board of Directors approved the 2024 Plan on November 7, 2024, subject to the approval of our
shareholders. The 2024 Plan is designed to enhance the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and ensure that we can continue to grant equity awards to eligible recipients at levels
determined to be appropriate by our compensation committee and/or our Board of Directors. The 2024 Plan will become effective if and when it is approved by our shareholders.
As of November 12, 2024, there were stock options to acquire 4,723 ordinary shares outstanding under the 2014 Plan, with a weighted average exercise price of $259.70 and a weighted
average remaining term of 3.5 years. In addition, as of November 12, 2024, there were 329,209 unvested full-value awards with time-based vesting under the 2014 Plan. Other than the foregoing, no awards were outstanding under the 2014 Plan as of
November 12, 2024.
At our 2024 Annual General Meeting of Shareholders which was held on September 4, 2024 (the “2024 AGM”), we submitted a version of the 2024 Plan (the “Prior 2024 Plan”) for the
review and approval of our shareholders. The Prior 2024 plan was not approved at the 2024 AGM. The revised 2024 Plan we are submitting for approval of the shareholders at the Meeting is identical to the Prior 2024 Plan except that the maximum number
of ordinary shares to be issued under the revised 2024 Plan being submitted at the Meeting is 800,000 ordinary shares as opposed to 1,206,342 ordinary shares under the Prior 2024 Plan. We believe that the lower number of ordinary shares underlying
the revised 2024 Plan will result in reduced dilution of our shareholders than would have occurred under the Prior 2024 Plan and will still accomplish our goals of incentivizing our officers, directors and employees through equity compensation.
In addition, at the 2024 AGM our shareholders approved the issuance of equity compensation to Randel E. Richner, a member of the Board, in connection with the additional consulting
services provided by Ms. Richner under the consulting agreement with Richner Consultants, LLC, a Delaware company owned by Ms. Richner, as described in the Definitive Proxy Statement for the 2024 AGM we filed with the SEC on July 29, 2024, as
supplemented on August 9, 2024, and August 26, 2024. The approval of the issuance of equity compensation to Ms. Richner is subject to the approval of the 2024 Plan. In the event the revised 2024 Plan is approved at the Meeting, this will constitute
approval of the 2024 Plan for purposes of the issuance of the equity compensation to Ms. Richner.
Summary of Material Features of the 2024 Plan
The material features of the 2024 Plan are as follows (this summary is qualified in its entirety by reference to the 2024 Plan, a copy of which is attached to this Proxy
Statement as Appendix A):
• The maximum number of ordinary shares to be issued under the 2024 Plan is 800,000 ordinary shares;
• The 2024 Plan does not contain an annual “evergreen” provision, but rather authorizes a fixed number of shares, meaning that shareholder approval is
required to issue any additional shares, allowing our shareholders to have direct input on our equity compensation programs;
10
• The 2024 Plan permits the award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted shares, RSUs and
other share-based awards, dividend equivalent rights, and cash-based awards;
• Shares underlying any awards that are forfeited, canceled or otherwise terminated, other than by exercise, under the 2024 Plan and our 2014 Plan will
be added back to the ordinary shares available for issuance under the 2024 Plan. Shares tendered or held back upon exercise of a stock option or settlement of an award under the 2024 Plan to cover the exercise price or tax withholding will not be
added back to the reserved pool under the 2024 Plan. Upon the exercise of a stock appreciation right that is settled in ordinary shares, the full number of shares underlying the award will be charged to the reserved pool. Additionally, shares we
reacquire on the open market will not be added to the reserved pool;
• Stock options and stock appreciation rights will not be repriced without stockholder approval;
• Any dividends and dividend equivalent rights payable with respect to any equity award are subject to the same vesting provisions as the underlying
award;
• To the extent required under the rules of Nasdaq, any material amendment to the 2024 Plan is subject to approval by our shareholders;
• Our 2024 Plan does not contain any “liberal” change in control provisions, meaning that the 2024 Plan does not provide for single-trigger acceleration
in the event of a change in control transaction (defined as a “sale event” in the 2024 Plan); and
• Awards under the 2024 Plan may be granted until ten years from the effective date of the 2024 Plan, provided,
however, that no grants of incentive stock options may be made after November 7, 2034, which is the tenth anniversary of the date the 2024 Plan was approved by our Board of Directors.
Based solely on the closing price of our ordinary shares as reported by Nasdaq on November 14, 2024, and the maximum number of shares that would have been available for awards as
of such date under the 2024 Plan, the maximum aggregate market value of the ordinary shares that could potentially be issued under the 2024 Plan is $1,552,000.
Rationale for Size of Reserved Pool Under the 2024 Plan
The 2024 Plan is critical to our ongoing effort to build shareholder value. Equity incentive awards are an important component of our executive and non-executive employees’
compensation. Our compensation committee and our Board of Directors believe that we must continue to offer a competitive equity compensation program in order to attract, retain and motivate the talented and qualified employees necessary for our
continued growth and success.
Summary of the Material Terms of the 2024 Plan
The terms and conditions of the 2024 Plan are substantially similar to those of the 2014 Plan. The material terms of the 2024 Plan are as follows (this summary is qualified in its
entirety by reference to the 2024 Plan):
Administration. The 2024 Plan will be administered by our compensation committee. The compensation committee has full power to select,
from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2024
Plan. The compensation committee may delegate to any person or persons selected by it the authority to grant awards to employees who are not subject to the reporting and other provisions of Section 16 of the Exchange Act, subject to certain
limitations and guidelines.
11
Eligibility; Plan Limits. All employees, non-employee directors and consultants are eligible to participate in the 2024 Plan, subject to
the discretion of the compensation committee. As of November 12, 2024, approximately 102 individuals would have been eligible to participate in the 2024 Plan had it been effective on such date, which includes 10 executive officers, 86 employees who
are not executive officers, and 6 non-employee directors. The 2024 Plan contains certain limits on the number of awards that may be granted under the plan.
Stock Options. The 2024 Plan permits the granting of (1) options to purchase ordinary shares intended to qualify as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) (solely under the U.S. Sub Plan, which is attached and incorporated into the 2024 Plan (the “U.S. Sub Plan”)), and (2) options that do not so qualify. Options
granted under the 2024 Plan will be non-qualified options if they fail to qualify as incentive options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its
subsidiaries. Non-qualified options may be granted to any persons eligible to receive incentive options and to non-employee directors and consultants. The terms of options granted under the 2024 Plan, including the exercise price, vesting provisions
and the duration of an option, will be determined by the compensation committee and set forth in an award agreement. Except in the case of options (i) granted pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of
the Code or (ii) that are compliant with Section 409A of the Code, the exercise price of an option may not be less than 100% of the fair market value of our ordinary shares on the date of grant. Fair market value for this purpose will be determined
by reference to the closing price of the ordinary shares on Nasdaq. The exercise price of an option may not be reduced after the date of the option grant without shareholder approval, other than to appropriately reflect changes in our capital
structure.
The term of each option will be fixed by the compensation committee, provided, however, that term of each option may not exceed ten years from the date of grant. The compensation
committee will determine at what time or times each option may be exercised. Options may be made exercisable in installments and the exercisability of options may be accelerated by the compensation committee in circumstances involving the optionee’s
death or disability. In general, unless otherwise permitted by the compensation committee, no option granted under the 2024 Plan is transferable by the optionee other than by will or by the laws of descent and distribution, and options may be
exercised during the optionee’s lifetime only by the optionee, or by the optionee’s legal representative or guardian in the case of the optionee’s incapacity.
Upon exercise of options, the option exercise price must be paid in full either by certified or bank check or other instrument acceptable to the compensation committee or by
delivery (or attestation to the ownership) of ordinary shares that are beneficially owned by the optionee and that are not subject to risk of forfeiture. Subject to applicable law, the exercise price may also be delivered to the Company by a broker
pursuant to irrevocable instructions to the broker from the optionee. In addition, non-qualified options may be exercised using a net exercise feature which reduces the number of shares issued to the optionee by the number of ordinary shares with a
fair market value equal to the exercise price.
As permitted under the U.S. Sub Plan, to qualify as incentive options, options must meet additional federal tax requirements, including a $100,000 limit on the value of shares
subject to incentive options that first become exercisable by a participant in any one calendar year.
Stock Appreciation Rights. 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 an ordinary 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 2024 Plan, including the base price per share, vesting provisions and the duration of an SAR, will 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 will 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. Under the U.S. Sub Plan, the exercise price of a SAR may not be less than the fair market value of our ordinary shares on the date of grant, and the term may not exceed
ten years. Except in the case of SARs (i) granted pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code or (ii) that are compliant with Section 409A of the Code, the exercise price of a SAR may not be
less than 100% of the fair market value of our ordinary shares on the date of grant. Fair market value for this purpose will be determined by reference to the closing price of the ordinary shares on Nasdaq. The exercise price of a SAR may not be
reduced after the date of the SAR grant without shareholder approval, other than to appropriately reflect changes in our capital structure.
12
Restricted Shares. Restricted share 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. During the vesting period, holders of restricted shares may receive dividends, although dividends payable with respect to restricted share awards with vesting shall be subject to the same vesting terms and conditions
as relate to the restricted share awards.
Restricted Share Units. 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.
Cash-Based Awards. The 2024 Plan provides for the grant of cash-based awards and other share-based awards (that are equity-based or
equity-related awards not otherwise described in the 2024 Plan). The terms of such cash-based awards or other share-based awards will be determined by the compensation committee and set forth in an award agreement.
Dividend Equivalent Rights. 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 will be converted to cash or additional shares by such formula and at such time, and will be paid at such
times, as may be determined by the compensation committee. Dividend equivalent rights granted as a component of another award (other than a stock option or stock appreciation right) may be paid only if the related award becomes vested.
Maximum Awards to Non-Employee Directors. Notwithstanding anything to the contrary in the 2024 Plan, the value of all awards awarded under
the 2024 Plan and all other cash compensation paid by the Company to any non-employee director in any calendar year shall not exceed $500,000.
Adjustments for Share Dividends, Stock Splits, Etc. In the event of any dividend (excluding any ordinary dividend) or other distribution,
recapitalization, share split, reverse share 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 will 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 2024 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.
Change of Control Provisions. In the event of a change of control (except as otherwise provided by in the applicable award agreement), each
outstanding award will be either (i) honored or assumed, or equivalent rights substituted therefor, by the successor entity or parent thereof or (ii) the 2024 Plan and all awards will terminate upon the change in control. In the event of such
termination (except as otherwise provided in the applicable award agreement), options and share appreciation rights with time-based vesting will become fully exercisable as of the change of control and all other awards with time-based vesting,
conditions or restrictions will 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 will 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. In addition, (i) the compensation committee will have the option to make or provide for a payment, in cash or in kind, to participants holding stock options and stock appreciation rights equal to
the difference between the per-share consideration and the exercise price of the stock options and stock appreciation rights or (ii) each grantee will be permitted, within a specified period of time prior to the change of control transaction, to
exercise all outstanding stock options and stock appreciation rights, to the extent then exercisable. The compensation committee will also have the option to make or provide for a payment, in cash or in kind, to holders of other awards in an amount
equal to the consideration paid in the change of control transaction multiplied by the number of vested shares subject to the award.
Tax Withholding. Participants in the 2024 Plan are responsible for the payment of any taxes that the Company is required by any applicable
law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. The compensation committee may require that tax withholding obligations satisfied by withholding ordinary shares to be issued pursuant to exercise
or vesting, or by tendering to the Company ordinary shares owned by the participant.
Amendments and Termination. The Board of Directors may at any time amend or discontinue the 2024 Plan and the compensation committee may at
any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. To the
extent required under the rules of Nasdaq, any amendments that materially change the terms of the 2024 Plan will be subject to approval by our shareholders.
Effective Date of Plan. The 2024 Plan was approved by our compensation committee and our Board of Directors on November 7, 2024. Awards of
incentive options may be granted under the 2024 Plan until November 7, 2034. No other awards may be granted under the 2024 Plan after the date that is ten years from the date of shareholder approval, which will be the effective date of the 2024 Plan.
13
New Plan Benefits
Because the grant of awards under the 2024 Plan is within the discretion of the compensation committee, we cannot determine the dollar value or number of ordinary shares that will
in the future be received by or allocated to any participant in the 2024 Plan. Accordingly, in lieu of providing information regarding benefits that will be received under the 2024 Plan, the following table provides information concerning the
benefits that were received by the following persons and groups during 2023: (1) each (x) individual who served as our CEO during any part of the year ended December 31, 2023, and (y) our two most highly compensated executive officers (other than our
CEO) who were serving as executive officers as of December 31, 2023; (2) all current executive officers, as a group; (3) all current directors who are not executive officers, as a group; and (4) all current employees who are not executive officers,
as a group.
|
Options
|
Stock Awards
|
|||||||||||||||
|
Name and Position
|
Average
Exercise
Price
($)
|
Number of
Awards
(#)
|
Dollar Value
($)(1)
|
Number of
Awards
(#)
|
||||||||||||
|
Larry Jasinski, Chief Executive Officer
|
—
|
—
|
$
|
5.87
|
28,571
|
|||||||||||
|
Michael Lawless, Chief Financial Officer
|
—
|
—
|
$
|
4.20
|
23,571
|
|||||||||||
|
Jeannine Lynch, Vice President of Market Access and Strategy
|
—
|
—
|
$
|
4.20
|
19,642
|
|||||||||||
|
All current executive officers, as a group
|
—
|
—
|
$
|
4.44
|
(2)
|
126,784
|
||||||||||
|
All current directors who are not executive officers, as a group
|
—
|
—
|
$
|
5.87
|
(2)
|
42,658
|
||||||||||
|
All current employees and consultants who are not executive officers, as a group
|
—
|
—
|
$
|
4.28
|
(2)
|
81,472
|
||||||||||
| (1) |
The valuation of share awards is based on the grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions used in calculating these values, see Notes 2m and 9b to our consolidated financial
statements in our Annual Report on Form 10-K for the year ended December 31, 2023.
|
| (2) |
Represents the aggregate grant date fair value for the group.
|
U.S. Tax Aspects Under the Code
The following is a summary of the principal United States federal income tax consequences of certain transactions under the 2024 Plan. It does not describe all federal tax
consequences under the 2024 Plan, nor does it describe state or local tax consequences.
Incentive Options. No taxable income is generally realized by the optionee upon the grant or exercise of an incentive option. If
ordinary shares issued to an optionee pursuant to the exercise of an incentive option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized
in excess of the option exercise price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) the Company will not be entitled to any deduction for
federal income tax purposes. The exercise of an incentive option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.
If ordinary shares acquired upon the exercise of an incentive option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a
“disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares of common stock at exercise (or, if less, the amount
realized on a sale of such shares of common stock) over the option price thereof, and (ii) we will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive option is paid by tendering
shares of common stock.
If an incentive option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a non-qualified option. Generally, an
incentive option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of
termination of employment by reason of death, the three-month rule does not apply.
Non-Qualified Options. No income is realized by the optionee at the time a non-qualified option is granted. Generally (i) at exercise,
ordinary income is realized by the optionee in an amount equal to the difference between the option exercise price and the fair market value of the ordinary shares on the date of exercise, and we receive a tax deduction for the same amount, and
(ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the ordinary shares have been held. Special rules will apply where all or a portion
of the exercise price of the non-qualified option is paid by tendering ordinary shares. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.
Other Awards. The Company generally will be entitled to a tax deduction in connection with other awards under the 2024 Plan in an amount
equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomes
non-forfeitable, unless the award provides for a further deferral.
Parachute Payments. The vesting of any portion of an award that is accelerated due to the occurrence of a change in control (such as a sale
event) may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be non-deductible to the Company, in whole or in part, and may subject
the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
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Material Israeli Tax Consequences
The following summarizes the tax implications for Israeli participants receiving equity awards under the 2024 Plan. It does not cover all tax matters and is intended as a general
overview.
Classification of equity awards under Israeli Tax Laws. Generally, pursuant to the provisions
of the Israeli Income Tax Ordinance [New Version], 1961 and the regulations enacted thereunder (together the “Ordinance”), equity awards to participants may be designated as either 102 awards or 3(9) awards, as follows:
(a) Section 102 of the Ordinance provides that grants of equity awards to participants who are Israeli employees, directors and office holders of a company, or its affiliates,
other than to a Controlling Shareholder (as defined in Section 32(9) of the Ordinance, and, generally, a holder of 10% or more of the company’s share capital) are subject to the provisions of Section 102 of the Ordinance and the Income Tax Rules (Tax
Relief in Issuance of Shares to Employees), 2003 (“102 Rules”) (“Section 102” and “102 Awards”, respectively); and
(b) Grants of equity awards exercisable into shares to participants who are Israeli consultants, contractors or Controlling Shareholders of the company are
subject to the provisions of Section 3(9) of the Ordinance (“3(9) Awards”).
Trustee Awards under Section 102(b) of the Ordinance (“Trustee 102 Awards”). Section 102 provides for grants of Trustee 102 Awards and
non-trustee 102 awards. Trustee 102 Awards may be granted under the capital gain tax route of Section 102(b)(2) and 102(b)(3) of the Ordinance (the “Capital Gain Route”, and equity awards under such tax route
“Capital Gain Awards”), or under the ordinary income tax route of Section 102(b)(1) of the Ordinance (the “Ordinary Income Route”, and equity awards under such tax route “Ordinary Income Awards”). The Company elected the Capital Gain Tax Route to
apply to equity awards granted to eligible Israeli participants.
Trust. Trustee 102 Awards, any shares issued upon vesting or exercise of such Trustee 102 Awards and/or other shares received subsequently
following any realization of rights (e.g., bonus shares), must be deposited with a trustee appointed by the company and approved by the Israel Tax Authority, in accordance with the provisions of Section 102(a)
of the Ordinance (“Trustee”). Trustee 102 Awards are afforded reduced tax rates if held by the Trustee in trust for the benefit of such eligible Israeli participants (the “Trust”) for the requisite period of time required under Section 102 (the
“Minimum Trust Period”), as further described below. A sale or release from the Trust of awards or any underlying shares before the lapse of the Minimum Trust Period is possible but would result in less favorable tax treatment. The applicable Minimum
Trust Period for Capital Gain Awards is two (2) years from the date of grant of such Awards.
The Trustee may not release any Trustee 102 Awards and any shares issued upon vesting or exercise of the Trustee 102 Awards prior to the full payment of the participant’s tax
liabilities arising from the transfer/sale of such awards or underlying shares. Applicable taxes are withheld at the source by the “employing company” (as such term is defined by the Ordinance) of the Participant and/or by the Trustee.
Tax Consequences.
The Tax Event
(a) 3(9) Awards (except for shares or restricted shares (which are taxed on the applicable date of grant)) are taxed on the date of exercise or vesting of the applicable award
into shares. The taxable benefit of the participant on such date is calculated based on the difference between the fair market value/the closing price of the share and the exercise price/purchase price, if any, as the case may be.
(b) Trustee 102 Awards are taxed on the date of sale of the underlying shares and/or the date of the transfer of the awards or such underlying shares from Trust. The taxable
benefit of the participant on such date is calculated based on the difference between the fair market value/the closing price of the share/the actual consideration received upon the sale of the underlying share, as the case may be, and the exercise
price/purchase price, if any, as the case may be.
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The Tax Rates
(a) For 3(9) Awards, the benefit received on the date of the tax event as provided above is deemed as ordinary work income and taxed at the participant’s applicable marginal tax
rates. The relevant company may be required to withhold applicable income tax, social security and national health insurance charges at source and in certain circumstances may be required to pay social security and national health insurance charges
(a certain portion payable by the employer).
(b) For Capital Gain Awards, if the awards (or the underlying shares) are held by a Trustee for the duration of the Minimum Trust Period, generally the benefit derived from such
awards will be classified as capital gain and taxed at a rate of only 25%, with generally no social security or national health insurance charges payable. Notwithstanding the foregoing, if the exercise price/purchase price paid for each share
underlying an award is lower than the fair market value of the Company's share at the time of grant of such award (calculated as the average of the closing market prices of the share on the 30 trading days preceding the date of grant of the award),
then such difference shall be deemed as ordinary income, and be taxed (on the date of the tax event) at the participant’s marginal tax rates plus applicable social security and national health insurance payments. The Company or the Trustee will
withhold applicable tax at the source as required by applicable law on the date of the tax event.
However, if the shares underlying an award are sold or if the underlying shares are released from the Trust prior to the lapse of the Minimum Trust Period, gains derived from such
sale or transfer shall be deemed ordinary income, taxed at the participant’s marginal tax rates, plus applicable social security and national health insurance payments.
For income above a certain amount, as provided by the Ordinance, the participant may be required to pay surtax in addition to the above.
Proposed Resolution
You are requested to adopt the following resolution:
“2. RESOLVED, to approve the Lifeward Ltd. 2024 Incentive Compensation Plan.”
Vote Required
The affirmative vote of an Ordinary Majority is required to adopt the resolution.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTION.
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APPROVAL OF A GRANT OF EQUITY AWARDS TO LARRY JASINSKI,
OUR CEO
Background
At the Meeting you will be asked to approve a one-time grant under the 2024 Plan to Larry Jasinski, the Company’s Chief Executive Officer,
of 28,516 RSUs, which will vest in four equal annual installments commencing as of the date of the Meeting, subject to Mr. Jasinski’s continued employment with the Company through each such vesting date, and 28,515 performance-based RSUs (“PRSUs”),
which will vest in four equal annual installments commencing as of the date of the Meeting subject to the achievement by Mr. Jasinski of certain performance-based objectives. The PRSUs will vest, subject (in addition to the passage of time and to Mr.
Jasinski’s continued employment with the Company on a vesting date) to achievement of the Specified Performance Criteria by December 31, 2024. The “Specified Performance Criteria” means completion of the shutdown of the Company’s production facility
in Fremont, California. Achievement of the Specified Performance Criteria shall be measured on a binary basis: if the shutdown of the Company’s production facility in Fremont, California is fully completed by December 31, 2024, 100% of the PRSUs
shall vest on the basis of time in four equal annual installments commencing on the date the Specified Performance Criteria is achieved, subject to Mr. Jasinski’s continued service with the Company through each such vesting date; if the shutdown of
the Company’s production facility in Fremont, California is not fully completed by December 31, 2024, none of the PRSUs shall vest.
The Board and compensation committee believe that in order to align the interests of our CEO with the interests of our shareholders it is important that our CEO maintain a sizable
level of share ownership in the Company, through the time-based vesting of RSUs and PRSUs and, in the case of the PRSUs, through the achievement of the Specified Performance Criteria. Therefore, in determining or recommending the amount and form of
executive compensation, the Board and the compensation committee believe that a substantial portion of our CEO’s compensation should be in the form of long-term equity incentive awards. These awards link a significant portion of our CEO’s
compensation to delivering value to our shareholders, both in the form of share price performance, operating results and other performance-based objectives, and encourage his retention through long-term vesting periods. Additionally, as recommended
by our compensation committee and by our Board, the proposed grant of equity awards is designed to bring Mr. Jasinski’s compensation in line with market practice. These equity grants will directly link Mr. Jasinski’s performance to delivering value
to our shareholders.
Under the Israel Companies Law, the compensation of our CEO requires the approval of the compensation committee, the Board and shareholders, in that order. The compensation
committee recommended, and the Board approved, the proposed grant of equity awards, and determined that such compensation is consistent with the Compensation Policy.
Proposed Resolution
You are requested to adopt the following resolution:
“3. RESOLVED, to approve a one-time grant to Larry Jasinski, the Company’s Chief Executive Officer, of 14,286 RSUs and 14,285 performance-based RSUs, as
described in the Proxy Statement.”
Vote Required
The affirmative vote of both an Ordinary Majority and a Special Majority is required to adopt the resolution. For the definitions of “Ordinary Majority” and “Special Majority,” see
“Questions and Answers About the Meeting – About the Voting Procedure at the Meeting” above.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTION.
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The Board knows of no other matter to come before the Meeting. However, if any matters requiring a vote of the shareholders arise, it is the intention of the persons named in the
attached form of proxy to vote such proxy in accordance with their best judgment, including any matters or motions dealing with the conduct of the Meeting to the extent permitted under Rule 14a-4(c) of the Exchange Act.
Your prompt action is required to vote. Therefore, whether or not you expect to attend the Meeting, please complete and sign a form of proxy and
return it to us, so that it is received at our offices no later than 10:00 a.m. (Eastern Standard Time) on December 27, 2024.
ADDITIONAL INFORMATION
Householding of Proxies
As permitted under the federal securities laws, we or brokers holding shares on behalf of our shareholders will send a single set of our proxy materials, including this Proxy
Statement, to multiple shareholders sharing an address who have requested that we mail them such materials. Each such shareholder will continue to receive a separate proxy card or voting instruction card and will retain a separate right to vote on
all matters presented at the Meeting. This practice, known as “householding,” reduces duplicate mailings, thus saving printing and postage costs as well as natural resources. Once a shareholder receives notice from the shareholder’s broker or from us
that communications to the shareholder’s address will be “householded,” householding will continue until the shareholder is notified or until the shareholder provides contrary instructions. Shareholders whose households have received a single set of
our proxy materials but who would like to receive additional copies of the materials may contact our transfer agent, Equiniti Trust Company, LLC, by telephone at 1-800-937-5449 or by mail at 6201 15th Avenue, Brooklyn, N.Y. 11219, and we
will promptly deliver additional copies. Shareholders who do not wish to participate in “householding” and would like to receive their own sets of our proxy statement in future years, or who share an address with another shareholder of the Company
and who would like to receive only a single set of our proxy statements should follow the instructions below.
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Shareholders whose shares are registered in their own name should contact Equiniti Trust Company, LLC by telephone at 1-800-937-5449 or by mail at 6201 15th Avenue, Brooklyn, N.Y. 11219, and inform it of their request; and
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Shareholders whose shares are held by a broker or other nominee should contact the broker or other nominee directly and inform them of their request.
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Cost and Method of Solicitation
We will pay the cost of soliciting proxies and may make arrangements with brokerage houses, custodians, nominees and other fiduciaries to send proxy materials to beneficial owners
of our ordinary shares. We will reimburse these third parties for reasonable out-of-pocket expenses. In addition to solicitation by mail, our directors, executive officers and other employees may solicit proxies by telephone, electronic transmission
and personally. Our directors, executive officers and other employees will not receive compensation for such services other than regular non-employee director or employee compensation.
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By Order of the Board of Directors,
Joseph Turk
Chairman of the Board of Directors
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