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Related Parties Transactions

12 Months Ended

Dec. 31, 2018

NOTE 7 - RELATED PARTIES TRANSACTIONS

	a.	Chief Executive Officer (“CEO”)

		On September 5, 2017 the Company and the Company’s CEO entered into a fifth amendment (the “Fifth Amendment”) to the CEO’s employment agreement, in order to, among other things (i) modify the term of the CEO’s employment to (a) continue until July 31, 2018, and (b) provide that in the event that the term is not extended beyond July 31, 2018, by mutual agreement of the parties and the Company does not offer the CEO a position as CEO on the same or more favorable terms with an annual base salary of at least $400,000, the CEO’s termination will be deemed a termination without cause; and (ii) amend the terms and conditions of the CEO’s compensation, as described below.

		Pursuant to the Fifth Amendment, the CEO was to be paid a base salary of no less than $30,416.67 per month ($365,000 on an annualized basis) while he was employed by the Company during the term; such amount may be reduced only as part of an overall cost reduction program that affects all of the senior executives of the Company and does not disproportionately affect the CEO, so long as such reductions do not reduce the base salary to a rate that is less than 90% of the amount set forth above (or 90% of the amount to which it has been increased). Notwithstanding the foregoing, in the event of the closing of a transaction or series of related transactions with investors where Company raises an aggregate of $7 million from such investors, the CEO’s annual base salary would increase to $400,000. The CEO’s annual base salary was increased to $400,000, as the March 2018 and the April 2018 offerings raised more than $7 million, effective as of April 1, 2018 with payment beginning as of the first November 2018 pay period. During the year ended 2018, including after the expiration of the term on July 31, 2018, the CEO’s compensation was paid pursuant to the prior employment agreement, as amended by the fifth amendment, until, on February 4, 2019, the Company entered into an amended and restated employment agreement (the “A&R Employment Agreement”) with the CEO, which amended, restated and superseded the CEO’s prior employment agreement.

		Pursuant to the prior employment agreement, as amended by the Fifth Amendment, the CEO was eligible to receive, subject to the CEO’s continued employment through the applicable grant date, (i) a nonqualified stock option relating to the number of shares of the Company’s common stock equal to 2% of the Company’s outstanding common stock on the date of the closing of the Financing (the “Financing Option”) and (ii) an award of a number of restricted shares of the Company’s common stock equal to 2% of our outstanding common stock on the date of the closing of the Financing (the “Financing Restricted Stock Award” and together with the Financing Option, the “Financing Equity Grant”), in each case, subject to the availability of shares for grant under the InspireMD, Inc. 2013 Long-Term Incentive Plan (the “2013 Plan”).

		The CEO has an option to deliver a number of shares with an aggregate fair market value that equals or exceeds (to avoid issuance of fractional shares) the required tax withholding payment resulted from the vesting of the restricted stock or from the exercise of the options. As of December 31, 2018 and 2017, 0 and 657 shares were withheld by the Company to satisfy tax withholding obligations, respectively. The payment, amounting to $0 and $10,000, respectively, was deducted from equity.

b. On June 2, 2017 the Company’s then chairman of the board resigned from his position. In connection with his resignation, the Company amended certain stock option agreement the Company entered with him, to accelerate the vesting of unvested options in a negligible amount as of resignation date. In connection with the Company’s former chairman’s resignation, the Company announced the appointment of a new chairman of the board, who has been a director of the Company since August 2011.

c. On June 29, 2017, one of the Company’s directors was not nominated for re-election at the Company’s 2017 annual meeting of stockholders.

d. During the years ended December 31, 2018 and 2017, the Company did not grant any stock options to directors and executive officers.

Balances with related parties:

	December 31,
	2018		2017
	($ in thousands)
Current liabilities:
Other accounts payable	$	44	$	47

Transactions with related parties:

	Year ended December 31,
	2018		2017
	($ in thousands)

Compensation expenses (including share-based compensation)	$	830	$	1,208