SUMMARY

This Summary highlights selected information from this Proxy Statement and may not contain all of the information that is important to you. To better understand the Merger Proposal and the other proposals described in the section of this Proxy Statement entitled “Introduction” upon which you are being asked to vote, you should read this Proxy Statement carefully and in its entirety, as well as the appendices attached to this Proxy Statement and the additional documents to which we refer you. See the section of this Proxy Statement entitled “Where You Can Find More Information” beginning on page 111. Each item in this Summary includes a page reference directing you to a more complete description of that topic. All references to “Mazor,” “the Company,” “we,” “us,” “our” and “our Company”, or words of like import, are references to Mazor Robotics Ltd. and its subsidiaries, references to “you” and “your” refer to our shareholders and all references to “$” or to “US$” are to United States dollars.

The Parties to the Merger (Page 38)

Mazor Robotics Ltd.

Mazor Robotics Ltd. was incorporated under the laws of the State of Israel. The Company develops and markets innovative robotic guidance systems and complementary products. Our expertise is in robotic computerized and imaging-based systems, primarily in the field of spine surgery. See the section of this Proxy Statement entitled “The Parties to the Merger–Our Company” beginning on page 38.

Given Imaging Ltd., Oridion Medical 1987 Ltd., Oridion Systems Ltd. and Covidien Israel Holdings Ltd.

Each of Given Imaging Ltd., Oridion Medical 1987 Ltd., Oridion Systems Ltd. and Covidien Israel Holdings Ltd. (which we refer to collectively and individually as Parent) was incorporated under the laws of the State of Israel and is an indirect subsidiary of Medtronic plc (which we refer to as Medtronic). Medtronic is headquartered in Dublin, Ireland, and is among the world’s largest medical technology, services, and solutions companies - alleviating pain, restoring health, and extending life for millions of people around the world. See the section of this Proxy Statement entitled “The Parties to the Merger–Parent” beginning on page 38.

Belinom Ltd.

Belinom Ltd. (which we refer to as Merger Sub) is an Israeli company wholly owned by Parent, which was formed for the purpose of effecting the Merger and the transactions contemplated by the Merger Agreement. See the section of this Proxy Statement entitled “The Parties to the Merger–Merger Sub” beginning on page 38.

The Merger (Page 47)

On September 20, 2018, Mazor entered into an Agreement and Plan of Merger (which we refer to as the Merger Agreement) with Given Imaging Ltd., Oridion Medical 1987 Ltd., Oridion Systems Ltd., Covidien Israel Holdings Ltd. (which we refer to, collectively and individually, as Parent), each of which is an indirect subsidiary of Medtronic plc (which we refer to as Medtronic), and Belinom Ltd. Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company pursuant to Sections 314-327 of the Israeli Companies Law, 5759-1999, of the State of Israel (which we refer to as the ICL), following which Merger Sub will cease to exist as a separate legal entity and the Company will become collectively wholly owned by Parent and Covidien Group S.a.r.l (which we refer to as CovLux), a Luxembourg company and an indirect wholly-owned subsidiary of Medtronic (which we refer to as the Merger).

As a result of the Merger, each ordinary share of Mazor, par value NIS 0.01 per share (which, including with respect to ordinary shares underlying American Depositary Shares of Mazor (which we refer to as ADSs), we refer to as Ordinary Shares) issued and outstanding immediately prior to the effective time of the Merger (other than Ordinary Shares held in the treasury of the Company, Ordinary Shares owned by any direct or indirect wholly-owned subsidiary of the Company and other than Ordinary Shares underlying ADSs held by CovLux) will automatically be converted into the right to receive US$29.25 in cash, without any interest thereon and subject to the withholding of any applicable taxes (which we refer to as the Merger Consideration).

Effects of the Merger (Page 89)

If the Merger is completed, you will be entitled to receive the Merger Consideration for each Ordinary Share owned by you as of the effective time of the Merger. Each ADS represents two Ordinary Shares and if the Merger is completed, holders of ADSs will be entitled to receive US$58.50 for each ADS held as of the completion of the Merger, without any interest thereon and subject to any applicable withholding taxes and a cancellation fee of US$0.05 per ADS (which we refer to as the Cancellation Fee). As a result of the Merger, we will become a privately-held company that is collectively wholly owned by Parent and CovLux and will cease to be a publicly traded company. You will not receive any shares of the surviving company in connection with the Merger nor will you have any ownership interest in the surviving company following the completion of the Merger.

Share Options and Restricted Stock Units (Page 89)

Effective as of the effective time of the Merger, each outstanding option to acquire Ordinary Shares then outstanding, whether or not vested or exercisable, will become fully vested and exercisable as of the effective time of the Merger and will be canceled and converted into the right to receive a lump sum cash payment equal to the product of (i) the excess, if any, of the Merger Consideration over the applicable per share exercise price of such option and (ii) the number of Ordinary Shares such holder had the right to purchase if such options or right were fully vested and such holder had exercised such option in full immediately prior to the effective time of the Merger, without interest and subject to applicable withholding taxes. Any such option that has an exercise price per Ordinary Share which is greater than the Merger Consideration will be canceled without any payment.

Effective as of the effective time of the Merger, each outstanding restricted stock unit (which we refer to as an RSU), whether or not vested, will become fully vested as of the effective time of the Merger and will be canceled and converted into the right to receive a lump sum cash payment (to the extent such payment does not trigger Taxes under Section 409A of the Internal Revenue Code of 1986, as amended) equal to the product of (i) the Merger Consideration and (ii) the number of Ordinary Shares subject to the RSUs, without interest and subject to applicable withholding taxes.

The Special General Meeting (Page 39)

Time and Place (Page 39)

The Special General Meeting of Shareholders of our Company, which we refer to as the Special Meeting, will be held on November 19, 2018, at 4:00 p.m. (Israel time), at Luchtenstein Levy Wiseman, Law Offices at 5 Azrieli Center, Square Tower, 35^th floor, Tel-Aviv, Israel.

Purpose (Page 39)

At the Special Meeting, you will be asked to consider and vote on the approval of: (i) the Merger; (ii) the Merger Agreement; (iii) the consideration to be received by the shareholders of Mazor (other than CovLux) in the Merger, consisting of US$29.25 per share in cash, without interest and less any applicable withholding taxes, for each Ordinary Share of Mazor owned immediately prior to the effective time of the Merger; (iv) in connection with the renewal of Mazor’s directors’ and officers’ (which we refer to as D&O) liability insurance policy, the amendment of Mazor’s Compensation Policy for Officers and Directors (which we refer to as the Compensation Policy) such that the annual premium limit for D&O liability insurance shall be increased to US$1,500,000; (v) the purchase by Mazor of a run-off directors’ and officers’ liability insurance policy for a period of seven years following the effective time of the Merger, as permitted under the Merger Agreement; (vi) the accelerated vesting of (if unvested) and cancellation of each outstanding option to purchase Ordinary Shares of Mazor (including those granted to Mazor’s officers and directors) in exchange for the right to receive a lump sum cash payment equal to the product of the excess, if any, of the Merger Consideration over the applicable per share exercise price of such option, and the total number of Ordinary Shares underlying such option, without interest and subject to applicable withholding taxes; (vii) the accelerated vesting of (if unvested) and cancellation of each outstanding RSU (including those granted to Mazor’s officers) in exchange for the right to receive a lump sum cash payment (to the extent such payment does not trigger taxes under Section 409A of the Internal Revenue Code of 1986, as amended) equal to the product of the Merger Consideration and the number of Ordinary Shares subject to such RSUs, without interest and subject to applicable withholding taxes; (viii) the payment by Mazor of special transaction bonuses to officers of Mazor in connection with the Merger and subject to the completion of the Merger, as permitted under the Merger Agreement; and (ix) all other transactions and arrangements contemplated by the Merger Agreement (we refer to items (i) through (ix) as the Merger Proposal). Each of the foregoing items is further described in this Proxy Statement.

Record Date (Page 40) and Quorum Requirements (Page 41)

You are entitled to vote at the Special Meeting if you owned Ordinary Shares at the close of business on October 18, 2018, the record date for the Special Meeting (which we refer to as the Record Date). As of the Record Date, there were 53,159,430 Ordinary Shares outstanding and entitled to vote. The presence, in person or by proxy, of at least two Mazor shareholders who collectively hold or represent between them at least 25% of the Ordinary Shares issued and outstanding on the Record Date is necessary to constitute a quorum at the Special Meeting.

Voting Rights and Vote Required (Page 42)

You will have one vote for each Ordinary Share that you owned on the Record Date. Each ADS represents two Ordinary Shares.

Provided that a quorum is present, approval of the Merger Proposal will require the affirmative vote (which we refer to as the Company Shareholder Approval) of holders of at least a majority of the Ordinary Shares voted at the meeting, provided (x) such majority includes more than 50% of the Ordinary Shares voted (not counting any abstentions) by shareholders that are not Merger Sub, Parent or any person or entity holding at least 25% of the means of control of either Merger Sub or Parent, or any person or entity acting on behalf of either Merger Sub or Parent or any family member of, or entity controlled by, any of the foregoing and (y) either (i) such majority includes the affirmative vote of at least a majority of the total votes cast by shareholders who are present and voting (not counting any abstentions) who are not “controlling shareholders” of the Company and do not have a “personal interest” in the matter, or (ii) the total number of Ordinary Shares voted against the Merger Proposal by shareholders who are neither “controlling shareholders” of the Company nor have a “personal interest” in the matter who were present and voted, does not exceed 2% of the total voting rights in the Company.

Under the ICL, in general, a person will be deemed to be a “controlling shareholder” if the person has the power to direct the activities of the Company, other than solely as a result of serving as a director or in another position in the Company. A person is presumed to be a controlling shareholder for these purposes if holding (i) 50% or more of any type of controlling means in the Company, or (ii) 25% or more of the voting rights in the Company, if no other person holds more than 50% of the voting rights in the Company. If two or more shareholders have a “personal interest” in the same proposal, their shareholdings are aggregated for purposes of calculating these percentages with respect to such proposal.

Under the ICL, a person is deemed to have a “personal interest” in the Merger Proposal if this person, or certain members of this person’s family (namely, such person’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings or parents, or the spouse of any such person) or a company that is affiliated with this person or with such members of this person’s family (namely, a company in which this person or any such family member serves as a director or chief executive officer, has the right to appoint a director or the chief executive officer, or owns 5% or more of the outstanding shares or voting rights) has a personal interest in the adoption of such proposal. However, a person is not deemed to have a “personal interest” in the adoption of the Merger Proposal if this person’s interest in the Merger Proposal arises solely from this person’s ownership of the Company’s Ordinary Shares. The term “personal interest” also includes a personal interest of an individual voting via a power of attorney given by a third party (even if the empowering shareholder has no personal interest), and the vote of an attorney-in-fact shall be considered a personal interest vote if the empowering shareholder has a personal interest, in each case regardless of whether the attorney-in-fact has the discretion in the voting.

For purpose of the Merger Proposal, the Ordinary Shares underlying ADSs held by CovLux are excluded for purposes of determining whether the majority referred to in clause (x) of the vote required to approve the Merger Proposal is obtained. In addition, our directors and executive officers and CovLux are deemed to have a “personal interest” in the Merger Proposal and, accordingly, all of the Ordinary Shares held by our directors and executive officers and by CovLux are also excluded for purposes of determining whether the majority referred to in clause (y) of the vote required to approve the Merger Proposal is obtained. As of the Record Date, our directors and executive officers collectively owned 230,971 Ordinary Shares, representing approximately 0.43% of all of the Ordinary Shares outstanding as of the Record Date (see “The Merger–Interests of Our Directors and Executive Officers in the Merger Proposal” beginning on page 83) and CovLux held 2,998,790 ADSs, which represent 5,997,580 Ordinary Shares, representing approximately 11.3% of all of the Ordinary Shares outstanding as of the Record Date, and freely exercisable warrants to purchase 1,210,000 ADSs, which were not exercised on or prior to the Record Date (see “Beneficial Ownership of Ordinary Shares” beginning on page 110).

The Company is not currently aware of any controlling shareholders, as defined under the ICL. However, other shareholders and ADS holders may have a “personal interest” in the Merger Proposal and may be required to be excluded for purposes of determining whether the majority referred to in clause (y) of the vote required to approve the Merger Proposal is obtained.

Each shareholder and ADS holder is required under the ICL to notify us if he, she or it has a personal interest in connection with the Merger Proposal, is a controlling shareholder of Mazor and/or is a shareholder listed in Section 320(c) of the ICL (i.e., whether such shareholder is Merger Sub, Parent or any person or entity holding at least 25% of the means of control of either Merger Sub or Parent, or any person or entity acting on behalf of either Merger Sub or Parent or any family member of, or entity controlled by, any of the foregoing), as a condition for his, her or its vote to be counted with respect to the Merger Proposal. Otherwise, under the ICL, his, her or its vote with respect to the Merger Proposal will not be counted in determining whether the applicable approval requirements have been met.

Voting and Proxies (Page 44)

Any shareholder of record entitled to vote at the Special Meeting may vote in person by attending the Special Meeting or by submitting the enclosed proxy card.

The Israeli Companies Regulations (Deeds of Vote and Position Notices), 5766-2005, states that shareholders who will not attend the Special Meeting in person may vote by completing the second part (part ‘B’) of the Proxy Card (ktav hatzba’a) and returning it promptly (and in any event at least six hours prior to the scheduled time of the Special Meeting) to the Company at its registered address. If your shares are held on the TASE, you can also vote via the electronic voting system of the Israeli Securities Authority, after receiving a personal identifying number, an access code and additional information regarding the Special Meeting from the member of the TASE and after carrying out a secured identification process, up to six hours prior to the scheduled time of the Special Meeting. The Company’s Articles of Association also allow you to appoint a proxy to vote in your stead (whether personally or by means of a Proxy Card) at the Special Meeting, as long as the proxy is delivered to the Company at its registered address at least forty-eight (48) hours prior to the scheduled time of the Special Meeting. If you are a beneficial owner of shares registered in the name of a member of the TASE and you wish to vote, either by appointing a proxy, by Proxy Card or in person by attending the Special Meeting, you must deliver to us a proof of ownership in accordance with the ICL, and the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meetings), 5760-2000. Detailed voting instructions are provided both in this Proxy Statement and on the enclosed Proxy Card.

ADS holders, who held ADSs as of the Record Date, may instruct The Bank of New York Mellon (which we refer to as the Depositary) how to vote the Ordinary Shares underlying their ADSs and the Depositary will endeavor to vote (or will endeavor to cause the vote of) the Ordinary Shares it holds on deposit at the Special Meeting in accordance with the voting instructions, the form of which is attached as Appendix D to this Proxy Statement, timely received from holders of ADSs as of the Record Date. The Depositary must receive such instructions no later than 12:00 p.m. (noon) (New York City Time) on November 15, 2018. The Depositary has advised us that it will not itself exercise any voting discretion in respect of any Ordinary Shares represented by ADSs other than in accordance with signed voting instructions from ADS holders as of the Record Date. Accordingly, Ordinary Shares represented by ADSs for which voting instructions fail to specify the manner in which the Depositary is to vote or for which timely voting instructions are not received by the Depositary will not be voted.

If your Ordinary Shares or ADSs are held in “street name” by your bank, broker, or other nominee you should instruct your bank, broker, or other nominee on how to vote your Ordinary Shares or ADSs using the instructions provided by your bank, broker, or other nominee. If you do not provide your bank, broker, or other nominee with instructions, your Ordinary Shares or ADSs will not be voted.

If you hold Ordinary Shares, you may revoke your proxy up to 24 hours prior to the time set for the Special Meeting and after proving your identity to the satisfaction of our Legal Counsel, by (a) delivering a notice of revocation to us at our head offices located at 5 Shacham St., Caesarea North Industrial Park 3079567, Israel; Attention: Legal Counsel, (b) submitting a later-dated proxy or (c) attending the Special Meeting and voting in person. Attendance without voting at the Special Meeting will not in and of itself constitute revocation of a proxy. If you hold your Ordinary Shares in “street name” through a TASE member, if you voted electronically via the electronic voting system of the ISA, you may change or revoke your vote using the electronic voting system up to the time by which you may submit a vote using such system (i.e., up to six hours prior to the scheduled time of the Special Meeting). ADS holders returning voting instructions to the Depositary may revoke or change such instructions by communicating such revocation or change in writing to the Depositary. The Depositary must receive such revocation or change no later than 12:00 p.m. (noon) (New York City Time) on November 15, 2018.

Ordinary Shares represented by properly executed proxies received by us prior to the Special Meeting will, unless such proxies have been subsequently revoked or superseded, be voted at the Special Meeting in accordance with the directions on the proxies. If you have instructed your bank, broker, or other nominee to vote your Ordinary Shares or ADSs, you must follow the instructions of your bank, broker, or other nominee to change or revoke your instructions.

Our Reasons for Approving the Merger Proposal (Page 54)

Our Board of Directors (which we refer to as the Board) has determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders, and has approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

Our Board recommends that our shareholders vote “FOR” the approval of the Merger Proposal.

For a discussion of the material factors considered by our Board in reaching its conclusions, see “The Merger–Our Reasons for Approving the Merger Proposal” beginning on page 54.

Opinion of Financial Advisor

On September 20, 2018, in connection with the Merger, the Company’s financial advisor, J.P. Morgan Securities LLC (which we refer to as J.P. Morgan), rendered its oral opinion (which was subsequently confirmed in writing) to the Board that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the Merger Consideration to be paid to the holders of Company’s Ordinary Shares (including the Ordinary Shares represented by ADSs) in the Merger, was fair, from a financial point of view, to such holders.

On September 20, 2018, in connection with the Merger, the Company’s financial advisor, Duff & Phelps, LLC (which we refer to as Duff & Phelps), rendered its oral opinion (which was subsequently confirmed in writing) to the Board that, as of such date and based upon and subject to the assumptions, qualifications and limiting conditions stated in its written opinion, the per share consideration to be received by the holders of the Ordinary Shares, including the Ordinary Shares represented by ADSs (other than with respect to Ordinary Shares held in the treasury of the Company or owned by any direct or indirect subsidiary of the Company, and ADSs owned by CovLux, immediately prior to the completion of the Merger) in the Merger is fair, from a financial point of view, to such holders (without giving effect to any impact of the Merger on any particular holder of the Ordinary Shares other than in its capacity as a holder of such Ordinary Shares).

The full text of J.P. Morgan’s and Duff & Phelps’s written opinions, dated as of September 20, 2018, which describe the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by each of J.P. Morgan and Duff & Phelps in connection with their respective opinions, are included as Appendixes C-1 and C-2 to this Proxy Statement and are incorporated herein by reference. Summaries of J.P. Morgan’s and Duff & Phelps’s written opinions set forth in this Proxy Statement under the caption titled “The Merger—Opinions of Our Financial Advisors” beginning on page 58 are qualified in their entirety by reference to the full text of the opinions. J.P. Morgan’s and Duff & Phelps’s opinions were independently provided to the Board in connection with its evaluation of the Merger Consideration from a financial point of view. The opinions of J.P. Morgan and Duff & Phelps do not address any other aspects or implications of the Merger and do not constitute a recommendation to any shareholder of the Company as to how such shareholder should vote with respect to the Merger or any other matter.

No Appraisal Rights (Page 58)

Under Israeli law, holders of Ordinary Shares are not entitled to appraisal rights in connection with the Merger. However, under the ICL, objections to the Merger may be filed by our creditors with the Israeli district court. See “The Merger–No Appraisal Rights; Objections by Creditors” on page 58.

Material Tax Consequences of the Merger (Page 75)

Certain United States Federal Income Tax Consequences

The Merger will be a taxable transaction for United States federal income tax purposes. In general, a United States Holder (as defined below in this Proxy Statement under “The Merger–Material Tax Consequences of the Merger–Certain Material United States Federal Income Tax Consequences”) who receives cash for Ordinary Shares pursuant to the Merger will recognize gain or loss, if any, equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Ordinary Shares exchanged therefor. Payments made to a non-United States Holder (as defined below in this Proxy Statement under “The Merger– Material Tax Consequences of the Merger–Certain Material United States Federal Income Tax Consequences”) with respect to Ordinary Shares exchanged for cash pursuant to the Merger generally will not be subject to United States federal income tax.

Tax matters are very complicated and the tax consequences of the Merger to each holder of Ordinary Shares may depend on such holder’s particular facts and circumstances. Holders of Ordinary Shares are urged to consult their tax advisors to understand fully the tax consequences to them of the Merger. See the section of this document titled “The Merger–Material Tax Consequences of the Merger–Certain Material United States Federal Income Tax Consequences” for a summary discussion of certain material United States federal income tax consequences of the Merger to United States Holders and non-United States Holders.

Israeli Tax Consequences

The receipt of cash in exchange for your Ordinary Shares pursuant to the Merger Agreement will be a taxable transaction for Israeli tax purposes, unless a specific exemption is available under Israeli tax law or unless a double taxation prevention treaty between Israel and your country of residence provides otherwise. If you are a non-Israeli resident, you may be eligible for an exemption from such Israeli tax. You are subject to the Israeli withholding tax (currently 25% for an individual and 23% for a corporation for the 2018 tax year) even if you are not subject to Israeli tax, unless an exemption or relief is provided from such withholding tax based on a valid withholding tax certificate issued by the Israeli Tax Authority evidencing such exemption or relief. You should consult your tax advisor about the particular tax consequences of the Merger to you. See the section of this Proxy Statement entitled “The Merger–Material Tax Consequences of the Merger–Israeli Income Tax Consequences” on page 79.

Regulatory Matters (Page 81)

Parent and its subsidiaries conduct business in a number of countries in which the Company transacts business or its products are sold. Based on our review of the information currently available about the businesses in which the Company and its subsidiaries are engaged, pre-merger notification filings are required to be made under the antitrust and competition laws of the United States and Israel. Consummation of the Merger is subject to the condition that the filings, consents, approvals, actions, rulings or no-action letters required to be obtained pursuant to the antitrust laws of the United States and Israel have been obtained, waived or made, and the respective waiting periods required under such laws have expired or been terminated. There can be no assurance that a challenge to the Merger under antitrust or competition grounds will not be made or, if such a challenge is made, the result thereof. For additional details, see “The Merger–Regulatory Matters” beginning on page 81.

Under the ICL, the Company and Merger Sub may not complete the Merger without first making the following filings and notifications to the Israeli Companies Registrar: (i) the filing of a merger proposal by each of Merger Sub and the Company with the Israeli Companies Registrar (which filing occurred); (ii) notice of the filing of the merger proposal to secured creditors (which is inapplicable to Merger Sub, and occurred with respect to the Company) and substantial creditors (which is inapplicable to Merger Sub or the Company); (iii) notice to creditors through publication in newspapers (which was published by Merger Sub on October 2, 2018 and by the Company on October 2, 2018 and October 3, 2018 (in Israel) and on October 5, 2018 (in New York)); (iv) notice to workers (which was published by the Company); (v) notices to the Israeli Companies Registrar of notices to creditors by each of Merger Sub and the Company (which filing occurred); and (vi) notices to the Israeli Companies Registrar of the approval of the Merger by each merging company’s shareholders, which were filed by Merger Sub and will be filed by us promptly following the receipt of Company Shareholder Approval. Under the ICL, the Merger cannot become effective until the later of the 50th day following the date of the filing of the merger proposal by both merging companies with the Israeli Companies Registrar and the 30th day following the date of receipt of the Company Shareholder Approval (the shareholders of Merger Sub have approved the Merger Agreement).

Other than the filings described above, neither Parent nor the Company is aware of any material regulatory approvals issued by the United States government, the State of Israel, or any foreign, state or local government, required to be obtained, or waiting periods required to expire, to complete the Merger.

Interests of Our Directors and Executive Officers in the Merger Proposal (Page 83)

Accelerated vesting of (if unvested) and cash-out of all options to purchase Ordinary Shares and all RSUs.

Executive officers of the Company are parties to existing employment agreements with the Company that provide for certain rights and benefits (either alone, or in the event of certain qualifying terminations of employment) in connection with or following the Merger.

Certain indemnification and insurance provisions provided in the Merger Agreement.

The executive officers of the Company will be entitled to receive a transaction bonus upon the consummation of the Merger.

In connection with the renewal of our D&O liability insurance policy, the amendment of the Compensation Policy such that the annual premium limit for D&O liability insurance shall be increased to US$1,500,000.

Our Board was aware of these different or additional interests in determining to approve the Merger Proposal. Further, in determining to approve the Merger Proposal, our Board considered the approval of the Compensation Committee of certain of the foregoing arrangements and its recommendation for our Board to approve such arrangements.

For additional details, see “The Merger–Interests of Our Directors and Executive Officers in the Merger Proposal” beginning on page 83.

Voting Commitment (Page 108)

In connection with the execution of the Merger Agreement, Covidien International Finance S.A. (which we refer to as the Guarantor), a wholly-owned subsidiary of Medtronic and an indirect parent company of Parent and Merger Sub, has executed a guaranty (which we refer to as the Guaranty), pursuant to which it has agreed to guarantee all of the obligations of Parent and Merger Sub under the Merger Agreement. The Guaranty also includes a commitment by the Guarantor to vote (or cause to be voted), and to cause all of its subsidiaries and controlled affiliates to vote (or cause to be voted), at the Special Meeting, any and all Ordinary Shares beneficially owned by the Guarantor or such subsidiaries or controlled affiliates (including by timely instructing the Depositary to vote the Ordinary Shares underlying their ADSs), which, as of the Record Date, were 5,997,580 Ordinary Shares, in favor of the Merger Agreement and the transactions contemplated thereby, including the Merger and certain compensation matters.

Conditions to the Completion of the Merger (Page 104)

Each party’s obligation to complete the Merger is conditioned upon the satisfaction or waiver (to the extent permissible), on or prior to the closing date, of all of the following conditions:

the Company Shareholder Approval has been obtained;

no governmental entity has enacted, issued or promulgated any law or any injunction or order which is in effect and which has the effect of making the Merger illegal or otherwise prohibiting or preventing the consummation of the Merger;

the waiting periods under the antitrust laws of the United States and Israel have expired or been terminated, and any approvals or filings required to be obtained or made under the antitrust laws of these countries have been obtained or filed; and

as required by the ICL, (i) at least 50 days have elapsed after the filing of a merger proposal with the Registrar of Companies of the State of Israel and (ii) at least 30 days have elapsed after the Company Shareholder Approval and the approval of the Merger by the shareholder of Merger Sub have been obtained (the shareholders of Merger Sub have approved the Merger Agreement).

The respective obligations of Parent and Merger Sub to complete the Merger are subject to the satisfaction or waiver of the following additional conditions:

the accuracy of the representations and warranties of the Company (subject in certain cases to certain materiality, material adverse effect and other qualifications);

the Company’s performance and compliance with its obligations and covenants under the Merger Agreement in all material respects;

no Company Material Adverse Effect has occurred since the execution of the Merger Agreement; and

the delivery of an officer’s certificate by the Company certifying that the above conditions have been satisfied.

The Company’s obligation to complete the Merger is subject to the satisfaction or waiver of the following additional conditions:

the accuracy of the representations and warranties of Parent and Merger Sub (subject in certain cases to certain materiality and other qualifications);

Parent’s and Merger Sub’s performance and compliance with their obligations and covenants under the Merger Agreement in all material respects; and

the delivery of an officer’s certificate by Parent certifying that the above conditions have been satisfied.

No Solicitation of Acquisition Proposals (Page 97)

The Company has agreed to cease and cause its subsidiaries and their respective representatives to immediately cease any and all existing discussions, communications or negotiations with any persons conducted until the date of the Merger Agreement with respect to any Acquisition Proposal (as defined below). In addition, the Company has agreed that neither it nor its subsidiaries will, and the Company will not authorize or permit any of their respective representatives to:

solicit or initiate the making, submission or announcement of, or knowingly encourage, facilitate or assist the making of, any offer or proposal which constitutes or is reasonably likely to lead to an Acquisition Proposal;

furnish to any person any non-public information relating to our Company, or afford to any person access to non-public information or personnel of our Company, in each case with the intent to induce the making, submission or announcement of, or the intent to knowingly encourage, facilitate or assist, an Acquisition Proposal or any communication that would reasonably be expected to lead to an Acquisition Proposal;

participate or engage in discussions or negotiations with any person with respect to an Acquisition Proposal;

approve, endorse or recommend an Acquisition Proposal; or

enter into any contract contemplating or otherwise relating to an Acquisition Transaction (as defined below).

The term “Acquisition Proposal” means any offer or proposal (other than an offer or proposal by Parent or Merger Sub) to engage in an Acquisition Transaction. The term “Acquisition Transaction” means any transaction or series of transactions involving: (i) any direct or indirect acquisition of securities, tender offer, exchange offer or other similar transaction in which a person or group of persons acquires ownership of securities representing fifteen percent (15%) or more of the outstanding Ordinary Shares of the Company; (ii) any merger, consolidation, business combination, scheme of arrangement or similar transaction involving the Company and/or any of its subsidiaries (except for any transaction among the Company’s subsidiaries); (iii) any sale, lease, exchange, license, transfer, acquisition or disposition of more than fifteen percent (15%) of the total consolidated assets of the Company and its subsidiaries; (iv) any recapitalization, restructuring, liquidation, dissolution or other winding up of the Company; or (v) any issuance by the Company of over fifteen percent (15%) of its equity securities (except pursuant to the exercise of outstanding options or settlement of RSUs).

Notwithstanding the restrictions above, our Board is permitted to engage in discussions of, or provide non-public information with respect to, any bona fide, unsolicited written Acquisition Proposal received without any material violation of the “no solicitation” restrictions described above if our Board has determined, after consultation with its financial advisor and outside legal counsel, that (i) the Acquisition Proposal constitutes or would reasonably be expected to lead to a Superior Proposal (as defined below) and (ii) failure to take the actions would reasonably be expected to be inconsistent with the fiduciary duties of directors of a Delaware corporation under Delaware law; provided, that before providing any non-public information to the person making the Acquisition Proposal, the recipient must enter into a confidentiality agreement that is no less favorable to the Company than the confidentiality agreement between the Company and Parent.

Company Board Recommendation Change; Fiduciary Termination (Page 98)

The Merger Agreement prohibits our Board from (i) withholding, withdrawing, amending or modifying in a manner adverse to Parent in any material respect, or publicly proposing to withhold, withdraw, amend or modify in a manner adverse to Parent in any material respect, our Board’s recommendation of the Merger Agreement and the transactions contemplated by the Merger Agreement, or (ii) approving or recommending or proposing to approve or recommend, any Acquisition Proposal.

Notwithstanding the restrictions described above, if, prior to obtaining the Company Shareholder Approval, the Company receives a bona fide, written Acquisition Proposal from a third party that did not result from the third party’s breach of any standstill obligations or the Company’s breach of its no solicitation obligations, and our Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that (i) the Acquisition Proposal constitutes a Superior Proposal and (ii) the failure to change its recommendation or terminate the Merger Agreement would reasonably be expected to be inconsistent with the fiduciary duties of directors of a Delaware corporation under Delaware law, then, our board may, subject to compliance with certain obligations set forth in the Merger Agreement, including providing Parent with prior notice and allowing Parent the right to negotiate with the Company to match the terms of any Superior Proposal, withdraw (or qualify or modify in a manner adverse to Parent) its recommendation of the Merger Agreement (which we refer to as a Company Board Recommendation Change) or terminate the Merger Agreement to enter into an acquisition agreement with respect to such Superior Proposal, subject to payment of the Termination Fee (as defined below).

The term “Superior Proposal” means any bona fide written Acquisition Proposal to acquire more than 50% of the equity securities or consolidated total assets of the Company and its Subsidiaries, pursuant to a tender or exchange offer, a merger, scheme of arrangement, a consolidation, a business combination, or a sale of assets (i) on terms that our Board (or any Board committee) has determined in good faith (after consultation with its financial advisor and outside legal counsel), taking into account all relevant legal, financial and regulatory aspects and the terms of this Acquisition Proposal, would be more favorable to our shareholders than the Merger and (ii) which our Board has determined in good faith (after consultation with its outside legal counsel and financial advisors) to be reasonably capable of being completed on the terms proposed, taking into account all financial, regulatory, legal and other aspects of such proposal.

In addition, at any time prior to obtaining the Company Shareholder Approval, if an Intervening Event (as defined below) will have occurred and our Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to change its recommendation would reasonably be expected to be inconsistent with the fiduciary duties of directors of a Delaware corporation under Delaware law, our Board may, subject to compliance with certain obligations set forth in the merger agreement, including providing Parent with prior notice and allowing Parent the right to negotiate with the Company to make adjustments to the terms and conditions of the Merger Agreement, withdraw (or qualify or modify in a manner adverse to Parent) its recommendation of the Merger Agreement solely in respect of such Intervening Event. An “Intervening Event” means a material event, development or change in circumstances (other than the receipt of an Acquisition Proposal) with respect to the Company or any of its subsidiaries occurring, arising or coming to the attention of the Board after the date of the Merger Agreement and prior to obtaining the Company Shareholder Approval, and which was not known or reasonably foreseeable to the Board as of or prior to the date of the Merger Agreement.

The parties to the Merger Agreement have contractually and without intending to modify any fiduciary duties of our Board (or any of its committees) under applicable law agreed that, in the absence of compelling legal authority to the contrary, the Company, our Board and the Company’s outside legal counsel are entitled to rely on and deem applicable to the Company and our Board the law applicable to corporations incorporated in the State of Delaware for purposes of making the conclusions described above (and providing advice with respect thereto).

Termination (Page 105)

The Merger Agreement may be terminated at any time before the effective time of the Merger by the mutual written consent of Parent and the Company.

The Merger Agreement may also be terminated prior to the effective time of the Merger by either Parent or the Company if:

the Merger is not consummated by March 20, 2019 (which we refer to as the Outside Date). This right to terminate is not available to a party whose breach of the Merger Agreement has been a principal cause of, or primarily resulted in, the failure to close the Merger by the Outside Date or is in material breach of the Merger Agreement;

a governmental entity has issued a final and non-appealable order or taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger (this right to terminate is not available to a party if the issuance of the order was primarily due to this party’s failure to perform its obligations under the Merger Agreement); or

the Company Shareholder Approval is not obtained after the final adjournment of the shareholders’ meeting at which a vote is taken on the Merger.

The Merger Agreement may also be terminated by Parent under any of the following circumstances:

(i) at any time prior to the receipt of Company Shareholder Approval (x) our Board has withdrawn (or qualified or modified in a manner adverse to Parent) its recommendation of the Merger Agreement, (y) our Board has failed to formally recommend against a competing tender or exchange offer that constitutes an Acquisition Proposal within 10 business days after the commencement of the offer, has recommended our shareholders to approve such Acquisition Proposal, or has publicly announced its intention to enter into any agreement in respect of such Acquisition Proposal, or (ii) at any time prior to the effective time of the Merger, (A) our Board has failed to publicly reaffirm its recommendation of the Merger within three Business Days after Parent’s written request, or (B) the Company or any of its Subsidiaries or senior representatives has willfully and materially breached their obligations under the Merger Agreement with respect to no solicitation of Acquisition Proposals and/or no change of Board recommendation; or

the Company has breached any of its representations, warranties or covenants under the Merger Agreement which would result in the failure to satisfy a closing condition, and the Company has failed to cure or cannot cure the breach within 20 business days following notice of the breach (provided that Parent has not breached the Merger Agreement in any material respect).

The Merger Agreement may also be terminated by the Company under any of the following circumstances:

at any time prior the receipt of the Company Shareholder Approval in order to enter into an agreement with respect to a Superior Proposal, provided that the Company pays the Termination Fee to Parent concurrently with the termination of the Merger Agreement; or

Parent or Merger Sub has breached any of their representations, warranties or covenants under the Merger Agreement which would result in the failure to satisfy a closing condition, and the breaching party has failed to cure or cannot cure the breach within 20 business days following notice of the breach (provided that the Company has not breached the Merger Agreement in any material respect).

Termination Fee (Page 105)

The Company is required to pay Parent a US$60.8 million fee (which we refer to as the Termination Fee) in connection with the termination of the Merger Agreement under the following circumstances:

The Company terminates the Merger Agreement in order to enter into an agreement with respect to a Superior Proposal;

Parent terminates the Merger Agreement as a result of a Company Board Recommendation Change, our Board’s recommendation of (or failure to recommend against) a competing tender or exchange offer that constitutes an Acquisition Proposal, our Board’s failure to reaffirm its recommendation of the Merger, or a willful and material breach by the Company or any of its senior representatives of their obligations under the Merger Agreement with respect to no solicitation of Acquisition Proposals and/or no change of Board recommendation;

the Merger Agreement is terminated by either party as a result of the failure to obtain the Company Shareholder Approval, an Acquisition Proposal was publicly announced and not withdrawn before the Company Shareholders Meeting, and within 12 months after the termination, the Company enters into a definitive agreement with the party who made that Acquisition Proposal and the Acquisition Proposal was subsequently completed; or

the Merger Agreement is terminated as a result of the failure to close the Merger before the Outside Date or as a result of a breach by the Company of any of its representations, warranties or covenants such that the closing conditions would not be satisfied (see above), an Acquisition Proposal was publicly disclosed and not withdrawn prior to the termination, and within 12 months after the termination, the Company either consummates an Acquisition Proposal involving 50% or more of the Company’s shares or substantially all of the Company’s assets, or enters into a definitive agreement with respect to such an Acquisition Proposal.

Unless Parent has waived its right to receive the Termination Fee and refunded any Termination Fee that has been paid by the Company, (i) Parent’s right to receive the Termination Fee is its sole and exclusive remedy against the Company under the Merger Agreement under circumstances when the Termination Fee is payable and (ii) upon payment of the Termination Fee, the Company will have no further liabilities to Parent relating to the Merger Agreement.

Specific Performance (Page 107)

The parties to the Merger Agreement have agreed that they will be entitled, in addition to any other remedy at law or in equity, to an injunction or injunctions to prevent or restrain breaches or threatened breaches by the other party, and to specifically enforce the terms and provisions of the Merger Agreement.

Guaranty (Page 108)

In connection with the execution of the Merger Agreement, the Guarantor has executed the Guaranty pursuant to which it has agreed to guarantee all of the obligations of Parent and Merger Sub under the Merger Agreement.

Market Price Information (Page 109)

On September 20, 2018, the last full trading day on the NASDAQ and the TASE prior to the announcement of the Merger Agreement, the closing price per ADS on NASDAQ was US$52.75 and the closing price per Ordinary Share on the TASE was NIS 93.77 (approximately US$26.17 based on the exchange rate reported by the Bank of Israel as of such date). On October 18, 2018, the most recent practicable date, the closing price per ADS on NASDAQ was US$58.08 and the closing price per Ordinary Share on the TASE was NIS 106.10 (approximately US$29.05, based on the exchange rate reported by the Bank of Israel as of such date). For further information regarding our historical share prices, please see the section of this Proxy Statement entitled “Market Price Information” beginning on page 109.

RISK FACTORS

In addition to the other information included in this Proxy Statement, including the matters addressed under the caption titled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 36, you should carefully consider the following risk factors in determining how to vote at the Special Meeting. The following is not intended to be an exhaustive list of the risks related to the merger and you should read and consider the risk factors described under Part 1, Item 3, “Key Information — Risk Factors” of the Company’s Annual Report on Form 20-F for the year ended December 31, 2017, which is on file with the SEC, and is incorporated by reference into this Proxy Statement.

Failure to complete the Merger could negatively impact our share price, business, financial condition, results of operations or prospects.

The Merger is subject to the satisfaction or waiver of certain closing conditions described in the section entitled “The Merger Agreement—Conditions to the Merger” beginning on page 104, including that:

the expiration or termination of the waiting period under the antitrust laws of the United States and Israel, and the receipt of any required approval or the making of any required filing under the antitrust laws of these countries; and

no Company Material Adverse Effect has occurred since signing.

No assurance can be given that each of the conditions will be satisfied. If the conditions are not satisfied or waived in a timely manner and the Merger is delayed, payment of the Merger Consideration will also be delayed. In addition, the Merger Agreement may be terminated under the circumstances described in the section entitled “The Merger Agreement–Termination Provisions” beginning on page 105. If the Merger is not completed (including in the case the Merger Agreement is terminated), the price of our Ordinary Shares and/or ADSs and our ongoing business, financial condition, results of operations and prospects may be adversely affected and, without realizing any of the benefits of having completed the Merger, we will be subject to a number of risks, including the following:

we may be required to pay Parent a Termination Fee if the Merger is terminated under various circumstances described in the section entitled “The Merger Agreement–Remedies–Termination Fee” beginning on page 106, which might have the effect of discouraging other parties potentially interested in acquiring the Company from pursuing an acquisition of the Company;

we will be required to pay our expenses related to the Merger, which are substantial, including expenses incurred in connection with any litigation that may result from the announcement or pendency of the Merger;

the market’s perception of the Company’s continuing business could potentially result in a loss of customers, suppliers, business partners and employees;

our commercial relationship with Medtronic may be impacted;

any employee attrition could adversely impact the Company’s business; and

the trading price of Ordinary Shares and ADS may decline to the extent that the current market price reflects a market assumption that the Merger will be completed.

Some of our directors and officers have interests that may differ from the interests of our shareholders, and these persons may have conflicts of interest in recommending to our shareholders to approve the Merger Proposal.

Some of the members of management and our Board may have interests that differ from, or are in addition to, their interests as shareholders, which are described in the section entitled “The Merger–Interests of Our Directors and Executive Officers in the Merger Proposal” beginning on page 83. These interests could cause management or members of our Board to have a conflict of interest in recommending approval of the Merger Proposal.

The fact that there is a Merger pending could harm our business, revenue and results of operations.

While the Merger is pending, it creates uncertainty about our future. As a result of this uncertainty, customers may decide to delay, defer or cancel purchases of our products pending completion of the Merger or termination of the Merger Agreement. If these decisions represent a significant portion of our anticipated revenue, our results of operations and quarterly revenues could be substantially below the expectations of investors. If as a result there is a Company Material Adverse Effect (as defined in the section entitled “The Merger Agreement” beginning on page 88), Parent may have a right to terminate the Merger Agreement without paying any termination fee.

In addition, while the Merger is pending, we are subject to a number of risks that may harm our business, revenue and results of operations, including:

the diversion of management and employee attention, which could otherwise have been devoted to other opportunities that may have been beneficial to us as an independent company, and the unavoidable disruption to our relationships with customers and suppliers may detract from our ability to grow revenues and minimize costs;

the potential negative effect of the pendency of the Merger on the Company’s business, including uncertainty about the effect of the Merger on the Company’s employees, customers, suppliers and other parties, which may impair the Company’s ability to attract, retain and motivate key personnel, and could cause customers, suppliers and others to seek to change existing business relationships with the Company;

our current and prospective employees may be uncertain about their future roles and relationships with the Company following completion of the Merger. This uncertainty may adversely affect our ability to attract and retain key personnel;

the restrictions on the conduct of the Company’s business prior to the completion of the Merger, requiring us to conduct the Company’s business only in the ordinary course, subject to specific limitations, which may delay or prevent us from undertaking business opportunities that may arise pending completion of the Merger;

we have and will continue to incur significant expenses related to the Merger prior to its closing; and

we may be unable to respond effectively to competitive pressures, industry developments and future opportunities.

Our obligation to pay a Termination Fee under certain circumstances and the restrictions on our ability to solicit or engage in negotiations with respect to other Acquisition Proposals may discourage other transactions that may be favorable to our shareholders.

Until the Merger is completed or the Merger Agreement is terminated, with limited exceptions, the Merger Agreement prohibits us from entering into, soliciting or engaging in negotiations with respect to Acquisition Proposals or other business combinations. Under specified circumstances, including in connection with our termination of the Merger Agreement in order to accept a Superior Proposal, we will be obligated to pay Parent a Termination Fee of US$60.8 million. These provisions could discourage other companies from proposing alternative transactions that may be more favorable to our shareholders than the Merger.

If the Merger is not consummated by March 20, 2019 (which we refer to as the Outside Date), either we or Parent may, under certain circumstances which may be beyond our control, choose not to proceed with the Merger.

The Merger is subject to the satisfaction or waiver of certain closing conditions described in the section entitled “The Merger Agreement–Conditions to the Completion of the Merger” beginning on page 104. Certain of these conditions are beyond our control, such as the expiration or termination of the applicable waiting period under antitrust laws. In addition, the Merger cannot be consummated until after (i) the completion of a 50-day waiting period commencing on the date of the filing of the merger proposal by both merging companies with the Companies Registrar and (ii) 30 days after the Company Shareholder Approval has been obtained. If the Merger has not been completed by the Outside Date either the Company or Parent may terminate the Merger Agreement, except that this termination right is not available to a party whose breach of the Merger Agreement has been a principal cause of, or primarily resulted in, the failure to close the Merger by the Outside Date or is material breach of the Merger Agreement.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Proxy Statement, including information set forth or incorporated by reference in this document, contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the expected completion of the proposed transaction and the timing thereof, the satisfaction or waiver of any conditions to the proposed transaction, anticipated benefits, growth opportunities and other events relating to the proposed transaction, projections about the Company’s business and its future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as “may,” “anticipates,” “estimates,” “expects,” “intends,” “plans,” “believes,” and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual events, results, performance, circumstances or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors that could cause actual events, results, performance, circumstances or achievements to differ from such forward-looking statements include, but are not limited to, the following:

we may be unable to obtain the Company Shareholder Approval;

we may be unable to obtain required regulatory approvals or satisfy other conditions to the closing of the Merger;

the Merger may involve unexpected costs, liabilities or delays;

our business may suffer as a result of uncertainty surrounding the proposed Merger, diversion of management attention on Merger-related matters, disruption of current plans and operations, the potential difficulties in employee retention, and impact of the Merger on relationships with customers, distributors and suppliers;

the outcome of any legal proceedings related to the Merger;

our Company may be adversely affected by other economic, business, and/or competitive factors;

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

the ability to recognize benefits of the proposed Merger;

disruptions to current plans and operations and potential difficulties in employee retention as a result of the Merger;

the Merger may impact the Company’s relationships with its customers, distributors and suppliers;

other risks to consummation of the proposed transaction, including the risk that the proposed transaction will not be consummated within the expected time period or at all; and

other risks and factors disclosed in the Company’s filings with the Securities and Exchange Commission (which we refer to as the SEC), including, but not limited to, risks and factors identified under such headings as “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “Operating and Financial Review and Prospects” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2017, filed with the SEC on April 30, 2018.

These forward-looking statements speak only as of the date on which the statements were made and we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statement included in this Proxy Statement or elsewhere. In addition to other factors and matters contained or incorporated in this document, these statements are subject to risks, uncertainties, and other factors.

In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements. We cannot guarantee any future results, including with respect to the Merger. The statements made in this Proxy Statement represent our views as of the date of this Proxy Statement, and it should not be assumed that the statements made herein remain accurate as of any future date. Moreover, we assume no obligation to update forward-looking statements or update the reasons that actual results could differ materially from those anticipated in forward-looking statements, except as required by law.

THE PARTIES TO THE MERGER

Our Company

Mazor Robotics Ltd. (which we refer to as Mazor, the Company or our Company) was incorporated under the laws of the State of Israel. Mazor Robotics, an Israeli company, is a leading innovator that has pioneered robotic guidance systems and complementary products in the spine and brain surgical markets which we believe may provide a safer surgical environment for patients, surgeons and operating room staff. We engage in the development, production and marketing of innovative medical devices for supporting surgical procedures in the fields of orthopedics and neurosurgery. We operate in the fields of image guided surgery and computer-assisted surgery enabling the use of surgical instruments with high precision and minimal invasiveness, aiming to simplify complex and minimally-invasive surgical procedures. We believe that our Mazor Core technology – the collaboration of four key technologies in Mazor's systems - provides predictable, efficient and precise surgical procedures. We believe that our portfolio of products, based on our proprietary Mazor Core technology and including the Mazor X^TM Robotic Guidance System, or Mazor X, and the Renaissance® Surgical-Guidance System, or Renaissance, are transforming spine surgery from freehand procedures to highly accurate, state-of-the-art, guided procedures that raise the standard of care with better clinical results. We believe in evidence-based medicine, with more than fifty-five peer-reviewed studies validating the clinical value proposition of our products. The Mazor X, Renaissance and SpineAssist (our predecessor to the Renaissance) systems have been used to perform a wide variety of spine procedures on over 36,000 patients worldwide (with over 250,000 implants placed).

Our Company’s principal offices are located at 5 Shacham St., Caesarea North Industrial Park 3079567, Israel.

This Proxy Statement incorporates important business and financial information about Mazor from other documents that are not included in or delivered with this information statement. For a list of the documents incorporated by reference in this information statement, see “Where You Can Find More Information” beginning on page 111.

Parent

Each of Given Imaging Ltd., Oridion Medical 1987 Ltd., Oridion Systems Ltd. and Covidien Israel Holdings Ltd. (which we refer to collectively and individually as Parent) was incorporated under the laws of the State of Israel and is an indirect subsidiary of Medtronic plc (which we refer to as Medtronic). Medtronic is headquartered in Dublin, Ireland, and is among the world’s largest medical technology, services, and solutions companies - alleviating pain, restoring health, and extending life for millions of people around the world. With revenue in its fiscal year ended in April 2018 of US$30 billion, Medtronic has approximately 86,000 full-time employees serving hospitals, physicians, clinicians, and patients in more than 150 countries worldwide. The principal executive offices of Medtronic are located 20 Lower Hatch Street, Dublin 2, Ireland, and its telephone number is +353 1 438 1700.

Merger Sub

Belinom Ltd., which we refer to as Merger Sub, is an Israeli company wholly owned by Parent, which was formed for the purpose of effecting the Merger and the transactions contemplated by the Merger Agreement. Merger Sub has not engaged in any business except activities incidental to its formation and in connection with the transactions contemplated by the Merger Agreement. The principal executive offices of Merger Sub are located at 16 Abba Hillel Rd., Ramat Gan 5250608, Israel (c/o Meitar Liquornik Geva Leshem Tal, Law Offices).

THE SPECIAL GENERAL MEETING

Time and Place of the Special Meeting

This Proxy Statement is being furnished to holders of our ordinary shares, par value NIS 0.01 per share (which, including with respect to ordinary shares underlying American Depositary Shares of Mazor (which we refer to as ADSs), we refer to as Ordinary Shares) in connection with the solicitation of proxies by and on behalf of our Board of Directors (which we refer to as the Board) for use at the Special General Meeting of Shareholders of our Company (which we refer to as the Special Meeting) to be held on November 19, 2018, at 4:00 p.m. (Israel time), at Luchtenstein Levy Wiseman, Law Offices at 5 Azrieli Center, Square Tower, 35^th floor, Tel-Aviv, Israel, and at any adjournment or postponement thereof. We are first making available this Proxy Statement, the accompanying notice, letter to shareholders and proxy card on or about October 19, 2018 to all holders of Ordinary Shares entitled to participate in and to vote at the Special Meeting.

Purposes of the Special Meeting; Proposed Resolutions

On September 20, 2018, Mazor entered into an Agreement and Plan of Merger (which we refer to as the Merger Agreement) with Given Imaging Ltd., Oridion Medical 1987 Ltd., Oridion Systems Ltd., Covidien Israel Holdings Ltd. (which we refer to, collectively and individually, as Parent), each of which is an indirect subsidiary of Medtronic plc (which we refer to as Medtronic), and Merger Sub, Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, following which Merger Sub will cease to exist as a separate legal entity and the Company will become collectively wholly owned by Parent and Covidien Group S.a.r.l (which we refer to as CovLux), a Luxembourg company and an indirect wholly-owned subsidiary of Medtronic (which we refer to as the Merger).

Merger Proposal. At the Special Meeting, our shareholders will consider and vote on the Merger Proposal, which is a proposal to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. To approve the Merger Proposal, it is proposed that at the Special Meeting, the following resolution be adopted:

“RESOLVED, that pursuant to Section 320 of the Israeli Companies Law, 5759-1999 (the “Companies Law”): (i) the merger of Belinom Ltd. (“Merger Sub”), a company formed under the laws of the State of Israel and directly wholly owned by Given Imaging Ltd., a company organized under the laws of the State of Israel, Oridion Medical 1987 Ltd., a company organized under the laws of the State of Israel, Oridion Systems Ltd., a company organized under the laws of the State of Israel, Covidien Israel Holdings Ltd., a company organized under the laws of the State of Israel (collectively and individually, “Parent”) each of which is an indirect subsidiary of Medtronic plc, a public company formed under the laws of Ireland (“Medtronic”), with and into Mazor, pursuant to Sections 314 through 327 of the Companies Law, following which Merger Sub will cease to exist as a separate legal entity and the Company will become collectively wholly owned by Parent and Covidien Group S.a.r.l, a Luxembourg company and an indirect wholly-owned subsidiary of Medtronic (“CovLux”) (the “Merger”); (ii) the Agreement and Plan of Merger, dated as of September 20, 2018, as it may be amended from time to time (the “Merger Agreement”), by and among Mazor, Merger Sub and Parent; (iii) the consideration to be received by the shareholders of Mazor (other than CovLux) in the Merger (the “Merger Consideration”), consisting of US$29.25 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share of Mazor, par value NIS 0.01 per share (including with respect to ordinary shares underlying American Depositary Shares of the Company (“ADSs”), the “Ordinary Shares”) owned immediately prior to the effective time of the Merger; (iv) in connection with the renewal of our directors’ and officers’ (“D&O”) liability insurance policy, the amendment of the Company’s Compensation Policy for Officers and Directors such that the annual premium limit for D&O liability insurance shall be increased to US$1,500,000; (v) the purchase by Mazor of a run-off directors’ and officers’ liability insurance policy for a period of seven years following the effective time of the Merger, as permitted under the Merger Agreement; (vi) the accelerated vesting of (if unvested) and cancellation of each outstanding option to purchase Ordinary Shares of Mazor (including those granted to Mazor’s officers and directors) in exchange for the right to receive a lump sum cash payment equal to the product of the excess, if any, of the Merger Consideration over the applicable per share exercise price of such option, and the total number of Ordinary Shares underlying such option, without interest and subject to applicable withholding taxes; (vii) the accelerated vesting of (if unvested) and cancellation of each outstanding restricted stock unit (“RSU”) (including those granted to Mazor’s officers) in exchange for the right to receive a lump sum cash payment (to the extent such payment does not trigger taxes under Section 409A of the Internal Revenue Code of 1986, as amended) equal to the product of the Merger Consideration and the number of Ordinary Shares subject to such RSUs, without interest and subject to applicable withholding taxes; (viii) the payment by Mazor of special transaction bonuses to officers of Mazor in connection with the Merger and subject to the completion of the Merger, as permitted under the Merger Agreement; and (ix) all other transactions and arrangements contemplated by the Merger Agreement, as described in the proxy statement, dated October 19, 2018, sent by Mazor to its shareholders in respect of this meeting, be, and each of the foregoing hereby is, approved in all respects by Mazor’s shareholders.”

Our shareholders must approve the Merger Proposal in order for the Merger to occur. If the shareholders fail to approve and adopt the Merger Proposal, the Merger will not occur. For more information about the Merger and the Merger Agreement, see the sections of this Proxy Statement entitled “The Merger” and “The Merger Agreement” beginning on pages 47 and 88, respectively.

Recommendation of the Board of Mazor

OUR BOARD BELIEVES THAT THE MERGER PROPOSAL IS FAIR TO AND IN THE BEST INTERESTS OF MAZOR AND ITS SHAREHOLDERS AND RECOMMENDS THAT YOU AND THE OTHER MAZOR SHAREHOLDERS VOTE “FOR” THE MERGER PROPOSAL. See “The Merger–Our Reasons for Approving the Merger Proposal” beginning on page 54.

Record Date; Shareholders Entitled to Vote

In accordance with the ICL and our Articles of Association, October 18, 2018 was fixed as the Record Date for determining the shareholders entitled to participate in and to vote at the Special Meeting. Accordingly, you are entitled to participate in and to vote at the Special Meeting only if you were a record holder of Ordinary Shares at the close of business on that date, irrespective of the amount of Ordinary Shares in your possession on such date. Shareholders who hold shares through members of TASE may participate and vote at the Special Meeting if they confirm their ownership as required by the ICL and its regulations.

As of October 18, 2018, the Record Date for the Special Meeting, there were 53,159,430 Ordinary Shares outstanding and entitled to vote. Your shares may be voted at the Special Meeting only if you are present or your shares are represented by a valid proxy.

If, as of the Record Date, you held Ordinary Shares through a bank, broker or other nominee which is a shareholder of record of the Company or which appears in the participant list of a securities depositary, you are considered to be beneficial owners of shares held in “street name”. This Proxy Statement and other proxy materials are being forwarded to beneficial owners by your bank, broker or other nominee that is considered the holder of record. Beneficial owners have the right to direct how their shares should be voted and are also invited to attend the meeting, but may not actually vote their shares in person at the meeting. The bank, broker or other nominee that is a shareholder of record has enclosed a voting instruction card for you to use in directing the holder of record how to vote the shares. Such holders should follow the instructions provided by their bank, broker or other nominee.

Holders of ADSs, who held ADSs as of the Record Date, may instruct The Bank of New York Mellon (which we refer to as the Depositary) how to vote the Ordinary Shares underlying their ADSs and the Depositary will endeavor to vote (or will endeavor to cause the vote of) the Ordinary Shares it holds on deposit at the Special Meeting in accordance with the voting instructions, the form of which is attached as Appendix D to this Proxy Statement, timely received from holders of ADSs as of the Record Date. The Depositary must receive such instructions no later than 12:00 p.m. (noon) (New York City Time) on November 15, 2018. The Depositary has advised us that it will not itself exercise any voting discretion in respect of any Ordinary Shares represented by ADSs other than in accordance with signed voting instructions from ADS holders as of the Record Date. Accordingly, Ordinary Shares represented by ADSs for which voting instructions fail to specify the manner in which the Depositary is to vote or for which timely voting instructions are not received by the Depositary will not be voted.

Holders of ADSs who held ADSs as of the Record Date through a bank, broker or other nominee, which is a holder of ADSs of record, are considered to be beneficial owners of ADSs. These proxy materials are being forwarded to beneficial owners by their bank, broker or other nominee that is considered the holder of record. Beneficial owners have the right to direct how their ADSs should be voted. The bank, broker or other nominee that is a holder of ADSs of record will provide voting instructions for beneficial owners to use in directing the holder of record how to vote the ADSs. Such holders should follow the instructions provided by their bank, broker or other nominee. Holders of ADSs will not be able to attend or vote directly at the Special Meeting.

You may receive more than one set of voting materials, including multiple copies of this document and multiple proxy cards or voting instruction cards. For example, shareholders who hold shares in more than one brokerage account will receive a separate voting instruction card for each brokerage account in which shares are held.

Shareholders of record whose shares are registered in more than one name will receive more than one proxy card. You should complete, sign, date and return each proxy card and voting instruction card you receive.

Quorum

Pursuant to the Company’s Articles of Association, the quorum required for the Special Meeting consists of at least two shareholders present, in person or by proxy, who hold or represent between them at least 25% of the Company’s issued share capital. Ordinary Shares held through a TASE member or ADSs for which no instructions were received will not be counted as present at the meeting for the purpose of determining whether a quorum is present and will not be treated as voting shares and will not have any effect on whether the requisite vote is obtained for all matters placed before shareholders for their vote. Abstentions will be counted as present at the meeting for the purpose of determining whether a quorum is present, but will not be treated as voting shares and will not have any effect on whether the requisite vote is obtained for all matters placed before shareholders for their vote.

If within half an hour from the time scheduled for the holding of the Special Meeting a quorum is not present, the Special Meeting will stand adjourned until one week thereafter at the same time and place. If within half an hour from the time scheduled for holding of the adjourned meeting the aforesaid percentage of Ordinary Shares required for a quorum is not present, two or more shareholders (regardless of the percentage of our Ordinary Shares held by them) who are present will constitute a quorum for the business for which the original Special Meeting was called.

Voting Rights and Vote Required

Each Ordinary Share outstanding on the Record Date will entitle its holder to one vote on the Merger Proposal and any other matter to be presented at the Special Meeting. Each ADS represents two Ordinary Shares.

Provided that a quorum is present, approval of the Merger Proposal will require the affirmative vote (which we refer to as the Company Shareholder Approval) of holders of at least a majority of Ordinary Shares voted at the meeting, provided (x) such majority includes more than 50% of the Ordinary Shares voted (not counting any abstentions) by shareholders that are not Merger Sub, Parent or any person or entity holding at least 25% of the means of control of either Merger Sub or Parent, or any person or entity acting on behalf of either Merger Sub or Parent or any family member of, or entity controlled by, any of the foregoing and (y) either (i) such majority includes the affirmative vote of at least a majority of the total votes cast by shareholders who are present and voting (not counting any abstentions) who are not “controlling shareholders” of the Company and do not have a “personal interest” in the matter, or (ii) the total number of Ordinary Shares voted against the Merger Proposal by shareholders who are neither “controlling shareholders” of the Company nor have a “personal interest” in the matter who were present and voted, does not exceed 2% of the total voting rights in the Company.

Only Ordinary Shares that are voted on the Merger Proposal will be counted towards determining whether the Merger Proposal is approved by shareholders. Ordinary Shares present at the Special Meeting that are not voted on the Merger Proposal or Ordinary Shares present by proxy where the shareholder properly withheld authority to vote on such proposal will not have any effect in determining whether the Merger Proposal is approved by shareholders, but will be counted for purposes of determining whether a quorum exists.

The shares subject to a proxy card of a record shareholder that is duly signed in accordance with this notice and returned that does not indicate a vote “FOR”, “AGAINST” or “ABSTAIN” with respect to the Merger Proposal: (i) if the proxy card nevertheless indicates that the relevant shareholder (x) is not Parent, Merger Sub or any person or entity holding at least 25% of the means of control of either Parent or Merger Sub, or any person or entity acting on behalf of either Parent or Merger Sub or any family member of, or entity controlled by, any of the foregoing, by indicating “NO” in Item 1A on the proxy card, and (y) is not a “controlling shareholder” of the Company and does not have a “personal interest” in the approval of the Merger Proposal, by indicating “NO” in Item 1B on the proxy card, then such shares will be voted at the Special Meeting “FOR” the Merger Proposal, in accordance with the recommendation of our Board; and (ii) if the proxy card does not provide the foregoing indications, then such shares will not vote and will not be counted for the vote on the Merger Proposal.

A bank, broker or nominee who holds shares for customers who are the beneficial owners of those shares has the authority to vote on “routine” proposals when it has not received instructions from the beneficial owners. However, such bank, broker or nominee is prohibited from giving a proxy to vote those customers’ shares with respect to approving non-routine matters, such as the Merger Proposal to be voted on at the Special Meeting, without instructions from the customer. Shares held by a bank, broker or nominee that are not voted at the Special Meeting because the customer has not provided instructions to the bank, broker or nominee will not be considered to be votes “FOR” or “AGAINST” the Merger Proposal and will have no effect on the result on the vote.

The Depositary has advised us that it will not itself exercise any voting discretion in respect of any Ordinary Shares represented by ADSs other than in accordance with signed voting instructions from ADS holders as of the Record Date. Accordingly, Ordinary Shares represented by ADSs, for which voting instructions fail to specify the manner in which the Depositary is to vote or for which timely voting instructions are not received by the Depositary, will not be voted.

Adjournment and Postponement

Voting Procedures; Revoking Proxies or Voting Instructions

Shareholders of Record

If you are a shareholder of record, meaning that your Ordinary Shares and your share certificate(s) were registered in your name with us and our transfer agent as of the Record Date, you may vote (a) in person by attending the Special Meeting or (b) by marking, signing, dating and returning the second part (part ‘B’) of the enclosed proxy card.

If you sign, date and return your proxy card without indicating how you want to vote, your Ordinary Shares will not be voted at the Special Meeting but will be counted for purposes of determining whether a quorum exists.

ADS Holders of record

ADS holders as of the Record Date, may instruct the Depositary how to vote the Ordinary Shares underlying their ADSs and the Depositary will endeavor to vote (or will endeavor to cause the vote of) the Ordinary Shares it holds on deposit at the Special Meeting in accordance with the voting instructions, the form of which is attached as Appendix D to this Proxy Statement, timely received from holders of ADSs as of the Record Date. The Depositary must receive such instructions no later than 12:00 p.m. (noon) (New York City Time) on November 15, 2018. The Depositary has advised us that it will not itself exercise any voting discretion in respect of any Ordinary Shares represented by ADSs other than in accordance with signed voting instructions from ADS holders as of the Record Date. Accordingly, Ordinary Shares represented by ADSs for which voting instructions fail to specify the manner in which the Depositary is to vote or for which timely voting instructions are not received by the Depositary will not be voted.

Shares or ADS Held in “Street Name”

If you hold your Ordinary Shares or ADSs in “street name” through a bank, broker or other nominee you should follow the instructions on the form you receive from your bank, broker or other nominee. If your Ordinary Shares are held in “street name” and you wish to vote such shares by attending the Special Meeting in person, you will need to obtain a proxy from your bank, broker or other nominee.

Shares Traded on TASE

Voting of Proxies

All shares represented at the Special Meeting by valid proxies that we receive in time for the Special Meeting as a result of this solicitation (other than proxies that are revoked or superseded before they are voted) will be voted in the manner specified on such proxy. If you submit an executed proxy but do not specify how to vote your proxy, your Ordinary Shares will not be voted at the Special Meeting.

Proxies submitted with instructions to abstain from voting, proxies for which no instruction was given and Ordinary Shares held through a TASE member or ADSs for which no instructions were received will not be considered to be votes “FOR” or “AGAINST” the Merger Proposal and will have no effect on the result of the vote.

Revocation of Proxies

Shareholder may revoke their proxy at any time up to 24 hours before the time set for the Special Meeting and provided that you prove your identity to the satisfaction of our Legal Counsel by (a) delivering to us at our head offices located at 5 Shacham St., Caesarea North Industrial Park 3079567, Israel; Attention: Legal Counsel, a written notice of revocation, bearing a later date than the proxy, stating that the proxy is revoked, (b) by properly submitting a later-dated proxy relating to the same shares or (c) by attending the Special Meeting and voting in person (although attendance at the Special Meeting will not, by itself, revoke a proxy). Ordinary Shares represented by properly executed proxies received by us no later than twenty-four (24) hours prior to the Special Meeting will, unless such proxies have been previously revoked or superseded, be voted at the Special Meeting in accordance with the directions on the proxies. Written notices of revocation and other communications concerning the revocation of a previously executed proxy should be addressed to us at our head offices located at 5 Shacham St., Caesarea North Industrial Park 3079567, Israel; Attention: Legal Counsel.

If you hold your Ordinary Shares in “street name” through a TASE member, if you voted electronically via the electronic voting system of the ISA, you may change or revoke your vote using the electronic voting system up to the time by which you may submit a vote using such system (i.e., up to six hours prior to the scheduled time of the Special Meeting).

ADS holders returning voting instructions to the Depositary may revoke or change such instructions by communicating such revocation or change in writing to the Depositary. The Depositary must receive such revocation or change no later than 12:00 p.m. (noon) (New York City Time) on November 15, 2018.

If you have instructed your bank, broker, or other nominee to vote your Ordinary Shares or ADSs, you must follow the instructions of your bank, broker, or other nominee to change or revoke your instructions.

You may also be represented by another person present at the Special Meeting by executing a proxy designating such person to act on your behalf.

Solicitation of Proxies

The Company will bear the costs of solicitation of proxies for the Special Meeting. We have engaged The Proxy Advisory Group, LLC, which we refer to as PAG, to assist in the solicitation of proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed US$30,000 in total. The Company has also engaged Broadridge Investor Communication Solutions, Inc., which we refer to as Broadridge, to assist in the solicitation of proxies and provide related services, for a services fee of US$6,495 and the reimbursement of customary disbursements and expenses. In addition, the Depositary will assist in the solicitation of proxy for the special meeting from holders of ADSs. PAG’s, Broadridge’s and the Depositary’s employees and the Company’s directors, officers and employees may solicit proxies from shareholders by mail, telephone, telegram, personal interview or otherwise. The Company’s directors, officers and employees will not receive additional compensation, but may be reimbursed for 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 for their reasonable expenses. The Company may reimburse the reasonable charges and expenses of brokerage houses or other nominees or fiduciaries for forwarding proxy materials to, and obtaining authority to execute proxies from, beneficial owners for whose accounts they hold Ordinary Shares.

SHAREHOLDERS AND ADS HOLDERS SHOULD NOT SEND ANY CERTIFICATES REPRESENTING ORDINARY SHARES OR ADS WITH THEIR PROXY CARDS. IF THE MERGER PROPOSAL IS APPROVED AND THE MERGER IS SUBSEQUENTLY COMPLETED, YOU WILL RECEIVE INSTRUCTIONS FOR SURRENDERING YOUR CERTIFICATES IN EXCHANGE FOR THE MERGER CONSIDERATION.

SHAREHOLDERS AND ADS HOLDERS ARE URGED TO PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE APPLICABLE ENCLOSED PROXY CARD OR VOTING INSTRUCTION FORM AND SUBMIT IT, AS SOON AS POSSIBLE, PURSUANT TO THE INSTRUCTIONS PROVIDED THEREIN. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN RETURNING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.

Questions and Additional Information

If you have questions about the Merger or how to submit your proxy, or if you need any copies of this Proxy Statement or the enclosed proxy card or voting instructions, please contact:

For shareholders of Ordinary Shares:

Mazor Robotics Ltd.
5 Shacham Street, North Industrial Park
Caesarea 3079567 Israel
Attention: Legal Counsel
+972 (4) 618-7100

For American Depository Share (ADS) holders:

The Proxy Advisory Group, LLC
18 East 41^st Street, Suite 2000
New York, New York 10017
+1 (212) 616-2180

THE MERGER

The description in this Proxy Statement of the Merger is subject to, and is qualified in its entirety by reference to, the Merger Agreement, which is the legal document governing the Merger. We have attached a copy of the Merger Agreement to this Proxy Statement as Appendix A and we urge that you read it carefully and in its entirety.

Background of the Merger

The Board and senior management of the Company regularly review the Company’s operations, financial performance and industry conditions as they may affect the Company’s long-term strategic goals and plans. The Board and senior management of the Company consider and evaluate options for enhancing shareholder value as an independent company and alternatives for business combination transactions to enhance shareholder value. As part of that review, the Board and senior management from time to time discussed the possibility that the Company may be acquired, including with Medtronic and some of the other parties referenced below.

In late summer 2015, Strategic Party A reached out to the Company and expressed interest in exploring a potential business combination with the Company.

In connection with these discussions, the Company engaged a financial advisor and engaged Kirkland & Ellis LLP (which we refer to as K&E) as U.S. legal counsel. Through its financial advisor, the Company contacted various parties to solicit interest in a business combination with the Company, including from Medtronic, and received two proposals, from Strategic Party A and another strategic party. Medtronic did not submit a proposal. The Board considered the two proposals and decided to only pursue the proposal from Strategic Party A for various reasons, including the likelihood of consummation of a transaction.

From August to October 2015, Strategic Party A conducted due diligence on the Company and the parties engaged in discussions about the terms of a possible business combination. However, on October 23, 2015, representatives of Strategic Party A informed Mr. Ori Hadomi, the Company’s Chief Executive Officer, that it was no longer interested in pursuing a business combination with the Company but instead was interested in pursuing a commercial arrangement with the Company.

In December 2015, Mr. Hadomi contacted Medtronic to initiate conversations about potential business relationships between the parties, and thereafter, Medtronic visited the Company’s offices in Israel.

Starting in December 2015 and continuing through March 2016, the Company had discussions with Medtronic regarding a possible commercial relationship, and continued to have discussions with Strategic Party A regarding a possible commercial arrangement with the Company.

On March 10, 2016, the Board reviewed and approved the execution of a non-binding term sheet with Medtronic regarding an exclusive lead sharing and distribution agreement accompanied by an equity investment in the Company by Medtronic.

During March, April and May 2016, management of the Company negotiated the terms of the commercial arrangement with Medtronic. On May 10, 2016, the Board approved the execution of the Exclusive Lead Sharing and Distribution Agreement and the Share Purchase Agreement with CovLux.

On May 18, 2016, the Company entered into the Exclusive Lead Sharing and Distribution Agreement with a subsidiary of Medtronic. The Company also executed the Share Purchase Agreement with CovLux on the same date. Pursuant to the Share Purchase Agreement, CovLux invested US$31.9 million in the Company’s ADSs in two tranches in May 2016 and August 2016, respectively. Copies of the Exclusive Lead Sharing and Distribution Agreement and amendments thereto and the Share Purchase Agreement with certain subsidiaries of Medtronic were included as exhibits to the Company’s Annual Report on Form 20-F for the year ended December 31, 2016, filed with the SEC on May 1, 2017.

On June 7, 2017, during a conference call with Mr. Hadomi, Ms. Sharon Levita, the Company’s Chief Financial Officer, Mr. Christopher Cleary, Medtronic’s Vice President of Corporate Development and Mr. Daniel Wolf, Medtronic's Senior Director of Corporate Development, Medtronic orally proposed an additional investment in the Company for consideration comprising additional Company Shares, convertible debt and warrants to acquire Company Shares. On June 15, 2017, the Board discussed Medtronic’s proposal and decided not to proceed with it as proposed.

On July 13, 2017, representatives of Strategic Party B met Mr. Hadomi and other members of management at the Company’s offices to further discuss, among other things, the possibility of a commercial relationship with respect to markets other than Spine.

During July and August 2017, the Company and Medtronic continued discussions on potential terms for an amendment to the Exclusive Lead Sharing and Distribution Agreement and an amendment to the Share Purchase Agreement, including an additional equity investment in the Company by Medtronic, that would be mutually acceptable to the parties.

On August 20, 2017, the Board approved the Amended and Restated Exclusive Lead Sharing and Distribution Agreement and the First Amendment to Purchase Agreement.

On August 29, 2017, the Company entered into the Amended and Restated Exclusive Lead Sharing and Distribution Agreement with a subsidiary of Medtronic and the First Amendment to Purchase Agreement with CovLux. Pursuant to the First Amendment to Purchase Agreement, CovLux acquired warrants to purchase 1,210,000 ADSs at an exercise price of US$44.23 and invested US$40 million in the Company’s ADSs in September 2017. Copies of the Amended and Restated Exclusive Lead Sharing and Distribution Agreement and the First Amendment to Purchase Agreement with certain subsidiaries of Medtronic were included as exhibits to the Company’s Annual Report on Form 20-F for the year ended December 31, 2017, filed with the SEC on April 30, 2018.

On January 7, 2018, Mr. Hadomi met with Mr. Geoff Martha, Executive Vice President and Group President for Medtronic’s Restorative Therapies Group. During the meeting, Messrs. Hadomi and Martha discussed the long-term prospects of the current commercial relationship between the Company and Medtronic, including a possible acquisition of the Company’s Spine and Brain businesses by Medtronic.

On January 8, 2018, during the J.P. Morgan Annual Healthcare Conference in San Francisco, California, the Company and Medtronic engaged in exploratory discussions regarding a potential transaction, with Mr. Hadomi, Ms. Levita, Mr. Ron Tavlin, the Company’s Vice President Business Development, Mr. Cleary and additional members of the Medtronic business development team in attendance. The parties discussed the possibility of an acquisition by Medtronic of the Company’s Spine business with a possible spinoff of the remaining businesses of the Company to the Company’s shareholders. That same day, Mr. Hadomi met again with representatives of Strategic Party B in order to further explore their interest in potential business development opportunities in areas other than Spine. Later that same day, Mr. Hadomi also met with Strategic Party C in order to discuss the possibility of a business combination with the Company.

On January 9, 2018, representatives of the Company and Medtronic engaged in further discussions regarding a possible spinoff, as discussed at the meeting the previous day.

On January 18, 2018, Mr. Hadomi updated the Board on the discussions with Medtronic regarding the potential strategic transaction and his discussions with Strategic Party B and another strategic party, as well as his introductory meetings with two financial advisory firms, including J.P. Morgan Securities LLC (which we refer to as J.P. Morgan), as potential financial advisors to the Company.

On January 25, 2018, Mr. Hadomi, Ms. Levita, Mr. Tavlin and Mr. Cleary held a meeting in Tel Aviv, Israel to continue discussions about a possible acquisition by Medtronic of the Company’s Spine business, with a possible spinoff of the remaining businesses of the Company to the Company’s shareholders.

On February 2, 2018, J.P. Morgan delivered to the Company a written disclosure regarding the amount of fees received by J.P. Morgan from the Company, Medtronic, Strategic Party B and Strategic Party C in the two years prior to the date of the disclosure.

On February 6, 2018, the Board approved the engagement of J.P. Morgan as financial advisor to the Company. The Board decided to engage J.P. Morgan because of its familiarity with the Company and because of J.P. Morgan’s qualifications, reputation and general experience in the valuation of businesses and securities in connection with mergers and acquisitions, as well as substantial experience in transactions comparable to the Merger. An engagement letter between J.P. Morgan and the Company was subsequently executed on February 8, 2018.

On February 9, 2018, at the direction of the Board, representatives of J.P. Morgan requested from Mr. Cleary that Medtronic submit a written offer detailing Medtronic’s proposal regarding a potential strategic transaction involving the Company.

On February 26, 2018, at the request of the Board, representatives of J.P. Morgan contacted representatives of Strategic Party B and Strategic Party C to discuss their potential interest in a strategic transaction involving the Company.

On February 27, 2018, representatives of Strategic Party B met with Mr. Hadomi and other members of management at the Company’s offices to continue discussing, among other things, the possibility of a commercial relationship with respect to markets other than Spine.

On March 1, 2018, Mr. Hadomi met with a representative of Strategic Party B to discuss its spine strategy, business models and market dynamics. Such representative indicated that a discussion with more senior members of management of Strategic Party B regarding a potential transaction with the Company was expected to occur in mid-March.

On March 7, 2018, Messrs. Hadomi and Martha engaged in further discussions with respect to the current commercial relationship between the Company and Medtronic, their respective strategies and potential business opportunities. They also discussed the possible structure of a potential acquisition by Medtronic of part of the Company, including the business areas that might be spun off to the Company’s shareholders.

On March 18, 2018, representatives of J.P. Morgan received and relayed to the Board an indication from Strategic Party C that it continued to have interest in a transaction with the Company. On March 27, 2018, Strategic Party B informed representatives of J.P. Morgan that Strategic Party B’s internal deliberation regarding a potential transaction with the Company was ongoing and that it expected to provide an update in the following week.

On March 18, 2018, Messrs. Hadomi and Martha discussed Medtronic’s continuing interest in the Company and the go-forward strategy with respect to the Company’s Spine business. Mr. Martha relayed to Mr. Hadomi the preliminary support by the Medtronic board for the continuing discussions of the potential acquisition of the Company’s Spine business, and indicated that Medtronic would potentially be interested in acquiring a stake in any businesses that may be spun off to the Company’s shareholders.

On March 21, 2018, the Board held a meeting during which, at the Board’s request, representatives of J.P. Morgan presented materials relating to a potential transaction with Medtronic.

In April 2018, the Company, with the assistance of its advisors, continued conversations with Strategic Party C regarding its interest in a potential transaction with the Company.

On April 4, 2018, a representative from Strategic Party B informed Mr. Hadomi that there was a lack of support from its management for a potential transaction with the Company.

On April 16, 2018, Mr. Hadomi and representatives of J.P. Morgan met with Strategic Party C at the offices of J.P. Morgan in New York, New York to further discuss a potential transaction opportunity.

On May 8, 2018, Mr. Hadomi updated the Board regarding the status of discussions with Medtronic and other potential interested parties.

On June 19, 2018, Mr. Martha reiterated to Mr. Hadomi Medtronic’s continuing interest in pursuing a possible transaction with the Company and they discussed potential structuring for such a transaction and that the Medtronic board was scheduled to discuss a potential transaction with the Company by the end of August.

On June 24, 2018, the Board received a further update from Mr. Hadomi on the discussions with Medtronic, including Medtronic’s indication that it may be in a position to make a preliminary proposal for a business combination by late summer 2018. Mr. Hadomi further advised the Board that, based on discussions with their respective representatives, it was unlikely that the other potential bidders that had been identified, including Strategic Party B and Strategic Party C, would make an offer to acquire the Company.

On July 11, 2018, Mr. Hadomi met with representatives of Medtronic in Minneapolis for strategic discussions. During this meeting, Mr. Hadomi was informed that the Medtronic board was scheduled to review a potential transaction with the Company in August 2018. The parties also discussed the structuring of a potential transaction, including the challenges of structuring a transaction with a spinoff.

On July 14, 2018, Medtronic indicated to representatives of J.P. Morgan, who relayed such information to the Company’s management, that Medtronic was continuing to discuss internally whether to make an offer to acquire the Company, and whether any offer that might be made would be to acquire the whole company or just the Spine business.

On July 29, 2018, Mr. Hadomi updated the Board on the status of discussions with Medtronic and that a proposal with respect to a transaction with the Company was expected to be presented to the Medtronic board in August 2018.

On August 24, 2018, Mr. Hadomi received an update from Mr. Cleary that the Medtronic board had authorized Medtronic management to proceed with a preliminary indication of potential interest in acquiring the whole Company, subject to, among other conditions, satisfactory completion of due diligence by Medtronic and negotiation of definitive agreements. Mr. Cleary also communicated Medtronic’s view that any transaction would need to be negotiated on an expedited timeline to minimize the risk of leaks which would adversely impact the Company and Medtronic’s interest in a potential transaction.

On August 27, 2018, the Board held a meeting during which Mr. Hadomi informed the Board that, on August 24, 2018, the Medtronic board had approved the making of a preliminary proposal to acquire the Company, subject to, among other conditions, satisfactory completion of due diligence by Medtronic and negotiation of definitive agreements. At the direction of the Company, representatives of J.P. Morgan followed up with Strategic Party B and Strategic Party C to determine their levels of interest and ability to provide an indication of interest in the near-term. Later that same day, at the direction of the Board, Mr. Hadomi and Ms. Levita met Mr. Cleary in Paris, France, during which meeting Mr. Cleary presented Medtronic’s indication of interest to acquire 100% of the capital stock of the Company (without any proposed spinoff) at a price of US$51.00 per ADS in cash, subject to, among other conditions, satisfactory completion of due diligence by Medtronic and negotiation of definitive agreements.

On August 29, 2018, the Board reviewed and discussed the terms of Medtronic’s indication of interest, subject to, among other conditions, satisfactory completion of due diligence by Medtronic and negotiation of definitive agreements. Representatives of J.P. Morgan updated the Board on their discussions with other potential counterparties to a strategic transaction, including Strategic Party B and Strategic Party C. The Board agreed to reconvene on September 2, 2018 to further discuss and consider Medtronic’s preliminary non-binding proposal and instructed management of the Company to update their long-range financial projections for the Company. The Board also requested that J.P. Morgan prepare a preliminary valuation of the Company based on management’s updated projections. At the conclusion of this meeting, the independent directors of the Company held an executive session to discuss the matters reviewed during the Board meeting; similar executive sessions were held at the conclusion of most of the subsequent Board meetings through September 20, 2018.

On August 30, 2018, Mr. Hadomi provided an update to Mr. Cleary by email, to the effect that the Board was continuing to review Medtronic’s indication of interest and would revert with a response in the near future.

On September 1, 2018, Strategic Party B conveyed to representatives of J.P. Morgan, who relayed such information to the Company’s management, its determination that it would not pursue a transaction with the Company.

Early on September 2, 2018, the Board met to review and discuss the updated financial projections prepared by the Company’s management (which we refer to as the Financial Projections). See the subsection of this Proxy Statement captioned “—Financial Projections.” The Board engaged in an extended discussion with Mr. Hadomi and Ms. Levita regarding the assumptions underlying the updated financial projections and management’s assessments as to the relative likelihood of achieving the results indicated by the updated projected financial information. During the discussion, Mr. Hadomi and Ms. Levita discussed with the Board long-term risks concerning the performance of the business, including, among other things, the competitive environment and the potential impact of a dissolution of the Company’s commercial relationship with Medtronic (which could occur if a business combination with Medtronic was not completed). After discussion, the Board approved the Financial Projections.

Later in the day on September 2, 2018, the Board met again, and representatives of J.P. Morgan presented their preliminary financial analysis of the Company and strategic alternatives available to the Company, and representatives of K&E and representatives of Luchtenstein Levy Wiseman (which we refer to as LLW), the Company’s Israeli counsel, discussed with the Board various legal matters, including the Board’s fiduciary duties in connection with a potential business combination. During the course of this meeting, representatives of J.P. Morgan were separately informed, and conveyed to the Board, that Strategic Party C would not be extending an offer to acquire the Company. Representatives of J.P. Morgan provided an updated disclosure to the Board regarding their relationships with each of the Company and Medtronic. The Board discussed additional parties that may be interested in a transaction with the Company and were of the view that the Company had already had discussions with those parties most likely to be interested in a transaction with the Company and the financial resources to engage in such a transaction. The Board also discussed the substantial risk of leaks and potential risk to the Company and its business, as well as Medtronic’s interest in continuing to pursue a transaction with the Company, in the event of a broad outreach to solicit interest in a transaction with the Company. In this regard, the Board noted that any merger agreement with Medtronic should include the ability to evaluate any unsolicited competing proposals following the signing and to terminate the agreement with Medtronic in the event the Board determined that the competing proposal was a superior proposal (subject to the payment of a customary termination fee). The Board authorized the Company’s management and J.P. Morgan to engage in further negotiations with Medtronic to increase their proposed price and, in light of customary and market practices in Israel under these circumstances, to engage a second financial advisor to provide a fairness opinion in respect of any potential transaction with Medtronic.

Following the Board meetings on September 2, 2018, at the request of the Board, representatives of J.P. Morgan communicated to Mr. Cleary that Medtronic’s indication of interest of US$51.00 per ADS was unacceptable to the Board. Later in the day on September 2, 2018, at the request of the Board, Mr. Hadomi conveyed in a call to Mr. Cleary that the Board was expecting a proposal that is no less than US$60.00 per ADS, and Mr. Hadomi agreed to meet with Mr. Cleary to discuss further.

On September 3, 2018, at the request of the Board, Mr. Hadomi met with Mr. Cleary in Minneapolis to further negotiate the price. During this meeting, Mr. Cleary indicated that, subject to the approval by the Medtronic board, Medtronic would be willing to increase its indication of interest to US$58.50 per ADS, but that speed was of critical importance to Medtronic due to the risk of leaks that could be disruptive to the process and Medtronic’s need to prioritize its business development activities.

On September 4, 2018, the Board met to discuss Medtronic’s revised proposal. The Board authorized the Company’s management to proceed with the negotiation of a potential transaction based on Medtronic’s revised indication of interest at US$58.50 per ADS.

Later in the day on September 4, 2018, representatives of K&E and LLW discussed with Meitar Liquornik Geva Leshem Tal (which we refer to as Meitar), legal counsel to Medtronic, the process to negotiate definitive agreements. In addition, K&E, LLW and Meitar discussed various due diligence requirements and the need to enter into a non-disclosure agreement with respect to the transaction. At the direction of the Board, Mr. Hadomi and representatives of J.P. Morgan separately met with Mr. Cleary and other representatives of Medtronic to discuss diligence requests, timing and logistics given the anticipated timeline. Representatives from Medtronic’s financial advisors, Goldman Sachs & Co. LLC and Perella Weinberg Partners, joined this meeting telephonically.

On September 5, 2018, Medtronic delivered to the Company its updated indication of interest to acquire 100% of the issued and outstanding shares of the Company at a price of US$58.50 per ADS, subject to, among other conditions, satisfactory completion of due diligence by Medtronic and negotiation of definitive agreements. In addition, Medtronic sent to the Company an exclusivity letter pursuant to which the Company would be obligated to negotiate exclusively with Medtronic through September 30, 2018. Medtronic indicated that a short period of exclusivity was a condition to its willingness to commit the necessary resources in order to complete its due diligence activities and negotiate the details of any formal offer on an expedited basis. The parties subsequently negotiated the exclusivity letter and it was executed on September 8, 2018.

Also on September 5, 2018, the Compensation Committee of the Board met to discuss certain compensation-related matters in connection with a possible transaction with Medtronic. At the meeting, the Compensation Committee determined that it should take steps to ensure that the Company’s employees remain employed with the Company and motivated through the closing of the transaction, and to reward employees should the closing of the transaction occur. As a result, the Compensation Committee approved, conditioned on the completion of a transaction with Medtronic, the accelerated vesting of all Company Options and RSUs and the payment of transaction bonuses to the Company’s employees.

On September 6, 2018, Medtronic signed a non-disclosure agreement with the Company. Thereafter and until the signing of the Merger Agreement, the Company made available to Medtronic various documents in an online data room and various in-person and telephonic meetings were conducted to further Medtronic’s ongoing due diligence review of the Company.

On September 7, 2018, at the request of the Board in light of customary and market practices in Israel under the circumstances, the Company entered into a non-disclosure agreement with Duff & Phelps, LLC (which we refer to as Duff & Phelps) to facilitate discussions with Duff & Phelps about potentially serving as an additional financial advisor to the Company for the purpose of rendering an additional fairness opinion to the Board in connection with a potential transaction. Duff & Phelps indicated to the Board that it had not had a material relationship with Medtronic or the Company during the prior two-year period. Soon thereafter, Duff & Phelps commenced working on its financial analysis and on September 14, 2018 the Company formally engaged Duff & Phelps.

On September 10, 2018, representatives of Meitar delivered to representatives of K&E an initial draft of the merger agreement.

On September 12, 2018, the Board, pursuant to the recommendation of the Compensation Committee, approved, conditioned on the completion of a transaction with Medtronic, the accelerated vesting of all Company Options and RSUs and the payment of transaction bonuses to the Company’s employees.

Also on September 12, 2018, representatives of K&E delivered to representatives of Meitar a revised draft of the Merger Agreement.

On September 13, 2018, representative of K&E, LLW and Meitar discussed the revised draft of the merger agreement and, later that day, representatives of Meitar delivered a revised draft merger agreement.

Between September 13, 2018 and September 20, 2018, K&E, LLW and Meitar continued to negotiate the draft Merger Agreement, disclosure schedules and a guaranty by a subsidiary of Medtronic of the obligations of the Medtronic entities that would be entering into the Merger Agreement, as well as other ancillary documents.

On September 15, 2018, representatives of K&E delivered to representatives of Meitar an initial draft of the disclosure schedules.

On September 16, 2018, the Board reviewed with K&E and LLW a summary of the Merger Agreement, together with an update on the open issues remaining in the draft Merger Agreement and general status of the transaction, including with respect to Medtronic’s ongoing due diligence review. Also on September 16, 2018, representatives of K&E delivered to representatives of Meitar an updated draft of the Merger Agreement.

On September 18, 2018, representatives of J.P. Morgan and Duff & Phelps independently presented to the Board their respective valuation analyses with respect to the potential transaction. K&E and LLW reviewed with the Board their fiduciary duties in connection with a potential business combination. At the same meeting, the Board also received an update on the open issues in the Merger Agreement.

On September 20, 2018, Medtronic informed J.P. Morgan, K&E and representatives of the Company that it had completed its due diligence review and was prepared to move ahead with an acquisition of the Company on the terms set forth in the draft Merger Agreement that representatives of Medtronic and the Company had been negotiating. Also on September 20, 2018, the Board reviewed a final summary of the Merger Agreement, together with an update on how the issues that were previously open were resolved. Representatives of J.P. Morgan and Duff & Phelps each orally rendered their independent opinions (which were subsequently confirmed in writing) to the Board that, as of such date and based upon and subject to the factors, assumptions, qualifications and limiting conditions set forth in their respective opinions and discussed with the Board, the US$29.25 per Ordinary Share to be paid to the holders of Company’s Ordinary Shares (including the Ordinary Shares represented by ADSs, but excluding, in the case of the Duff & Phelps opinion, the Ordinary Shares held in the treasury of the Company or owned by any direct or indirect subsidiary of the Company, as well as any ADSs owned by CovLux, immediately prior to the completion of the Merger) in the Merger, was fair, from a financial point of view, to such holders. See “–Opinions of Our Financial Advisors” beginning on page 58. Following further discussions, the Board determined that the terms of the Merger and the other transactions contemplated by the Merger Agreement were advisable, fair to and in the best interests of the Company and its shareholders, approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, recommended that the Company’s shareholders vote “FOR” the Merger Proposal and authorized the Company’s management to execute the Merger Agreement. See “–Our Reasons for Approving the Merger Proposal” beginning on page 54 for more information on the factors considered by the Board. Following the Board meeting, the Company and certain subsidiaries of Medtronic executed the Merger Agreement.

Our Reasons for Approving the Merger Proposal; Recommendation and Determination of Certain Committees and Our Board

Our Board has (i) determined that the Merger Proposal is fair to, and in the best interests of, our Company and its shareholders and that, considering the financial position of the merging companies, no reasonable concern exists that the surviving corporation will be unable to fulfill the obligations of our Company to its creditors; (ii) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement; (iii) adopted further resolutions supporting the transactions contemplated by the Merger Agreement; and (iv) determined to recommend that our shareholders approve the Merger Proposal.

In reaching these determinations, our Board considered a number of factors, including the following: (i) the advice of our senior management, (ii) a variety of business, financial, regulatory and market factors and (iii) the opinions provided by our financial advisors.

In the course of reaching their determinations, our Board also considered the following factors and potential benefits of the Merger Proposal, each of which the members of our Board believed supported their respective decisions:

current and historical market prices for the Ordinary Shares and the fact that the Merger Consideration payable represents a premium to current market prices;

our Board’s familiarity with, and information provided by our management as to, the business, financial condition, results of operations, current business strategy and future prospects of our Company, as well as the risks involved in achieving those prospects and objectives under current industry, regulatory and market conditions, the nature of the markets in which our Company operates and our position in such markets;

the financial analyses presented to our Board and the oral opinions of J.P. Morgan and Duff & Phelps independently rendered to the Board on September 20, 2018, and subsequently confirmed in writing, to the effect that as of the date of the opinion and based upon and subject to the factors, qualifications, limitations and assumptions set forth in their respective opinions, the US$29.25 per share Merger Consideration to be offered to the holders of Ordinary Shares and ADSs (in the case of Duff & Phelps, other than with respect to Ordinary Shares held in the treasury of the Company or owned by any direct or indirect subsidiary of the Company, as well as ADSs owned by CovLux, immediately prior to the completion of the Merger) was fair to such holders from a financial point of view, as more fully described in the section of this Proxy Statement entitled “The Merger —Opinions of Our Financial Advisors” beginning on page 58;

that the Board believed that the Merger Consideration of US$29.25 per share was more favorable to our shareholders than the potential value that might result from other alternatives reasonably available to our Company, including, but not limited to, acquisitions, dividends, and the continued operation of our Company on a stand-alone basis in light of a number of factors, including the risks and uncertainties associated with those alternatives;

the fact that representatives of the Company contacted several potential interested parties, and none of such contacts resulted in an offer for a transaction with the Company;

the fact that the proposed Merger Consideration is all cash, so that the transaction provides our shareholders certainty of value and liquidity for their shares, especially when viewed against the risks and uncertainties inherent in our Company’s business, including the following:

our ability to develop new products, to successfully complete any necessary or required clinical studies with our products, to receive regulatory clearance or approval to market our products, and to successfully implement our sales, marketing and manufacturing plans;

our ability to obtain reimbursement for our product from government and commercial payors;

changes and reforms in applicable healthcare laws and regulations; and

the introduction of new products by other companies that could make our products obsolete.

the fact that it is a condition to the closing of the Merger that the Merger Proposal has been approved by our shareholders (including the special voting requirements under Israeli law), which allows for an informed vote by the shareholders on the merits of the Merger Proposal;

the financial and other terms and conditions of the Merger Proposal, including those listed below, and the fact that they were the product of arm’s-length negotiations between the parties:

subject to compliance with the Merger Agreement, our Board is permitted to participate in discussions or negotiations with, or provide non-public information to, any person in response to an unsolicited Acquisition Proposal for us, if our Board determines, after consultation with outside legal counsel and financial advisors, that such Acquisition Proposal constitutes or would reasonably be expected to lead to a superior proposal;

the provision of the Merger Agreement allowing our Board to terminate the Merger Agreement, in specified circumstances relating to a superior proposal, subject, in specified cases, to payment of a termination fee of US$60.8 million, which amount the members of the Board believed was reasonable in light of, among other matters, the benefits of the Merger to the Company’s shareholders, the typical size of such termination fees in similar transactions and the likelihood that a fee of such size would not be a meaningful deterrent to alternative Acquisition Proposals, as more fully described under “The Merger Agreement—Remedies—Termination Fee”;

subject to compliance with the Merger Agreement, our Board is permitted to take, and disclose to our shareholders, a position with respect to any tender or exchange offer by a third party;

the provision of the Merger Agreement allowing our Board to withdraw its recommendation of the Merger upon the occurrence of certain intervening events that were not known to our Board at or prior to the execution of the Merger Agreement;

the limited number and nature of the conditions to Parent’s obligation to consummate the Merger, and the fact that the Merger is not subject to any financing condition;

the fact that Parent has undertaken to cause the Surviving Company to, for a period of twelve months after the effective time of the Merger, provide each continuing employee of our Company or our subsidiaries with (i) a base salary or base wage that is no less than that in effect before the Merger and the same aggregate base salary or base wage and cash incentive compensation opportunity in effect with respect to such employee immediately before the Merger, (ii) severance benefits that are no less favorable than those in effect with respect to such employee before the Merger, and (iii) other employee benefits (excluding equity based benefits, but including allocations to provident funds and education funds) that are substantially comparable in the aggregate to the other employee benefits provided to such employee before the Merger; and

the fact that the Company may seek specific performance of the Merger Agreement by Parent and Merger Sub.

the Guaranty provided by Guarantor, pursuant to which Guarantor has agreed to unconditionally and irrevocably guarantee all of the obligations of Parent and Merger Sub under the Merger Agreement and to cause Guarantor and its subsidiaries to vote in favor of the Merger;

the identity of Medtronic plc, which is a reputable strategic buyer, and our Board’s assessment that Parent would have adequate capital resources to pay the Merger Consideration; and

the fact that our Board had engaged financial and legal advisors with significant experience in public company transactions to advise it in connection with the Merger, and that those financial and legal advisors were involved throughout the negotiations with Medtronic and updated the Board directly and regularly, which provided the Board with additional perspectives on the negotiations in addition to those of the Company’s management.

Our Board also considered a variety of risks and other potentially negative factors concerning the Merger Agreement and the Merger, including the following:

the fact that the Company’s shareholders generally will have no continuing equity participation in the Surviving Company following the Merger, and that such shareholders will cease to participate in the Surviving Company’s future earnings or growth, if any, or to benefit from increases, if any, in the value of the Ordinary Shares and ADSs, and will not participate in any potential future sale of the Surviving Company to a third party;

the risk that there can be no assurance that all conditions to the parties’ obligations to complete the Merger will be satisfied, and as a result, it is possible that the Merger may not be completed even if the Merger Agreement is approved by our shareholders;

the risk that, if the merger is not completed:

our Company will be required to pay its expenses related to the Merger, which are substantial, including expenses incurred in connection with any litigation that may result from the announcement or pendency of the Merger;

the market’s perception of the Company’s continuing business could potentially result in a loss of customers, suppliers, business partners and employees;

the diversion of management and employee attention and any employee attrition could adversely impact the Company’s business;

our commercial relationship with Medtronic may be impacted; and

the trading price of the Company’s Ordinary Shares and/or ADSs could be adversely affected.

the fact that the Merger Agreement prohibits the Company and its representatives from soliciting alternative Acquisition Proposals;

the restrictions on the conduct of our business prior to the completion of the Merger, requiring us to conduct our business only in the ordinary course, subject to specific limitations, which may delay or prevent us from undertaking business opportunities that may arise pending completion of the Merger;

the requirement that, under certain circumstances described in the section of this Proxy Statement entitled “The Merger Agreement—Remedies—Termination Fee” beginning on page 106, we are required to pay Parent a Termination Fee of US$60.8 million, which might have the effect of discouraging other parties potentially interested in acquiring our Company from pursuing an acquisition of our Company;

the fact that the Company’s directors and executive officers have interests in the Merger Proposal that are different from, or in addition to, the interests of our shareholders in general; our Board were fully informed of these interests, which are described in more detail in the section entitled “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger Proposal,” and have considered certain additional factors and aspects (including those required under the ICL) as described under “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger Proposal—Arrangements in connection with the Merger.”

the fact that J.P. Morgan has performed various investment banking and financial services for Medtronic and certain of its affiliates in the past, and expects to perform such services in the future, and has received, and expects to receive, customary fees for such services; the Board took into account these matters in considering the advice and fairness opinion from J.P. Morgan;

the fact that the receipt of cash by our shareholders in exchange for their Ordinary Shares or ADSs pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes and Israeli income tax purposes; and

the impact that the consummation of the Merger might have on our employees.

We do not intend for the foregoing discussion of the information and factors considered by our Board to be exhaustive. We do believe, however, that the foregoing discussion summarizes the material factors considered by our Board in their consideration of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. After considering these factors, our Board concluded that the positive factors relating to the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement outweighed any potential negative factors. In view of the number of factors considered by our Board, and the complexity of these matters, our Board did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition, individual members of our Board may have assigned different weights to various factors. Our Board approved and recommended the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement based upon the totality of the information presented to and considered by them.

Our Board recommends that you vote “FOR” the Merger Proposal.

No Appraisal Rights; Objections by Creditors

Under Israeli law, holders of Ordinary Shares are not entitled to appraisal rights in connection with the Merger. Under the ICL, objections to the Merger may be filed by our creditors with the Israeli district court. The court, in its discretion, may provide a remedy to any creditor who so objects if there is a reasonable concern that, as a result of the Merger, we will not be able to satisfy our obligations to our creditors following completion of the Merger.

Opinions of Our Financial Advisors

Opinion of J.P. Morgan

Pursuant to an engagement letter dated February 8, 2018, the Company retained J.P. Morgan as its financial advisor in connection with the Merger.

At the meeting of the Board on September 20, 2018, J.P. Morgan rendered its oral opinion to the Board, confirmed by delivery of a written opinion, dated September 20, 2018, that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the Merger Consideration to be paid to the holders of Company’s Ordinary Shares (including the Ordinary Shares represented by ADSs) in the Merger, was fair, from a financial point of view, to such holders.

The full text of the written opinion of J.P. Morgan dated September 20, 2018, which sets forth the assumptions made, matters considered and limits on the review undertaken, is attached as Appendix C-1 to this Proxy Statement and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this Proxy Statement is qualified in its entirety by reference to the full text of such opinion. The Company’s shareholders are urged to read the opinion in its entirety.

J.P. Morgan’s written opinion was addressed to the Board (in its capacity as such) in connection with and for the purposes of its evaluation of the Merger, was directed only to the consideration to be paid in the Merger and did not address any other aspect of the Merger. J.P. Morgan expressed no opinion as to the fairness of the consideration to the holders of any class of securities, creditors or other constituencies of the Company or as to the underlying decision by the Company to engage in the Merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The summary of the opinion of J.P. Morgan set forth in this Proxy Statement is qualified in its entirety by reference to the full text of such opinion. The opinion does not constitute a recommendation to any shareholder of the Company as to how such shareholder should vote with respect to the Merger or any other matter.

In arriving at its opinions, J.P. Morgan, among other things:

reviewed a draft dated September 20, 2018 of the Merger Agreement;

reviewed certain publicly available business and financial information concerning the Company and the industries in which it operates;

compared the proposed financial terms of the Merger with the publicly available financial terms of certain transactions involving companies J.P. Morgan deemed relevant and the consideration paid for such companies;

compared the financial and operating performance of the Company with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of the Company’s Ordinary Shares and ADSs and certain publicly traded securities of such other companies;

reviewed certain internal financial analyses and forecasts prepared by the management of the Company relating to its business; and

performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.

In addition, J.P. Morgan held discussions with certain members of the management of the Company and management of Medtronic with respect to certain aspects of the Merger, the past and current business operations of the Company, the financial condition and future prospects and operations of the Company, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by the Company, Medtronic and Parent or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (and did not assume responsibility or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan did not conduct or was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of the Company, Medtronic or Parent under any applicable laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management of the Company as to the expected future results of operations and financial condition of the Company to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan also assumed that the Merger and the other transactions contemplated by the Merger Agreement will be consummated as described in the Merger Agreement, and that the definitive Merger Agreement would not differ in any material respect from the draft thereof provided to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by the Company, Medtronic and Parent in the Merger Agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to the Company with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on the Company or on the contemplated benefits of the Merger.

The projections furnished to J.P. Morgan for the Company were prepared by management of the Company. The Board directed J.P. Morgan to focus its analyses on both Scenario A and Scenario B (as described in the section of this Proxy Statement captioned “—Financial Projections” beginning on page 73) as the basis of its opinion. For more information regarding the use of projections, please refer to “—Financial Projections” beginning on page 73.

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion, and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the consideration to be paid to the holders of Ordinary Shares and ADSs in the Merger, and J.P. Morgan has expressed no opinion as to the fairness of any consideration to the holders of any other class of securities, creditors or other constituencies of the Company or the underlying decision by the Company to engage in the Merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the Merger, or any class of such persons relative to the consideration to be paid to the Company’s shareholders in the Merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which the Company’s Ordinary Shares or ADSs will trade at any future time.

The terms of the Merger Agreement, were determined through arm’s length negotiations between the Company and Parent, and the decision to enter into the Merger Agreement was solely that of the Board. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the Board in its evaluation of the Merger and should not be viewed as determinative of the views of the Board or management of the Company with respect to the Merger or the Merger Consideration.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodology in rendering its opinion to the Board on September 20, 2018 and contained in the presentation delivered to the Board on such date in connection with the rendering of such opinion. The following is a summary of the material financial analyses utilized by J.P. Morgan in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.

Public Trading Multiples. Using publicly available information, J.P. Morgan compared selected financial data of the Company with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be analogous to the business of the Company. These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analyses, may be considered sufficiently similar to those of the Company based on business sector participation, operational characteristics and financial metrics. However, none of the companies selected is identical to the Company, and certain of these companies may have characteristics that are materially different from those of the Company. The companies selected by J.P. Morgan were:

ABIOMED, Inc.

Align Technology, Inc.

DexCom, Inc.

Glaukos Corporation

Inogen, Inc.

Insulet Corporation

Intersect ENT, Inc.

iRhythm Technologies, Inc.

Nevro Corp.

Penumbra, Inc.

Tactile Systems Technology, Inc.

Tandem Diabetes Care, Inc.

TransEnterix, Inc.

For each of the selected companies, J.P. Morgan calculated the multiple of firm value to estimated revenue for the 2018 calendar year (which is referred to as FV/2018E Revenue) and firm value to estimated revenue for the 2019 calendar year (which is referred to as FV/2019E Revenue). The multiples were based on the selected companies’ closing stock prices on September 19, 2018 and publicly available Wall Street analysts’ consensus estimates.

The multiples for the selected companies for low, high, and median FV/2018E Revenue were 4.5x, 57.6x and 13.6x, respectively, and the multiples for the selected companies for low, high, and median FV/2019E Revenue were 4.0x, 33.4x and 11.3x, respectively. Based on the results of this analysis and other factors J.P. Morgan considered appropriate, J.P. Morgan selected a multiple range of 7.8x to 23.6x for FV/2018E Revenue and a multiple range of 6.4x to 18.3x for FV/2019E Revenue, and applied these reference ranges to corresponding metrics for the Company, as provided by the management of the Company in its Financial Projections. This resulted in implied equity value ranges for FV/2018E Revenue of US$11.25 to US$29.25 per Ordinary Share under Scenario A and US$10.50 to US$26.75 per Ordinary Share under Scenario B (in each case, rounded to the nearest US$0.25). The implied equity value ranges for FV/2019E Revenue were US$12.50 to US$31.00 per Ordinary Share under Scenario A and US$7.00 to US$15.75 per Ordinary Share under Scenario B (in each case, rounded to the nearest US$0.25). These ranges were compared to (i) the closing stock price of US$26.17 of the Company’s Ordinary Shares on the TASE converted into USD assuming the Bank of Israel quoted exchange rate of 0.2791 USD per ILS on September 20, 2018 (which is referred to as the “Unaffected Price”) prior to the public announcement of the Merger and (ii) the Merger Consideration of US$29.25.

Selected Transaction Analysis. Using publicly available information, J.P. Morgan examined selected transactions involving companies that engaged in businesses which J.P. Morgan judged to be reasonably analogous to the business of the Company or aspects thereof. For each of the selected transactions, J.P. Morgan calculated the ratio of the target company’s firm value to the public estimates of revenue for the last 12-month period prior to the announcement of the transaction (which is referred to as “FV/LTM Revenue”) and the target company’s firm value to the public estimates of revenue for the 12-month period following the announcement of the transaction (which is referred to as “FV/NTM Revenue”). Specifically, J.P. Morgan reviewed the following transactions:

Announcement Date	Target	Acquiror
August 27, 2018	Cartiva Inc.	Wright Medical Group N.V.
December 7, 2017	Entellus Medical	Stryker Corporation
September 5, 2017	NeoTract, Inc.	Teleflex Incorporated
June 28, 2017	Spectranetics Corporation	Royal Philips
June 19, 2017	NOVADAQ Technologies Inc.	Stryker Corporation
February 13, 2017	ZELTIQ Aesthetics, Inc.	Allergan plc
December 2, 2016	Vascular Solutions, Inc.	Teleflex Incorporated
June 7, 2016	LDR Holding Corporation	Zimmer Biomet Holdings, Inc.
January 5, 2016	Ellipse Technologies, Inc.	NuVasive, Inc.
October 29, 2015	Blue Belt Technologies	Smith & Nephew
September 25, 2013	MAKO Surgical Corp.	Stryker Corporation
April 29, 2013	Conceptus, Inc.	Bayer HealthCare LLC
March 12, 2012	ZOLL Medical Corporation	Asahi Kasei Corporation
December 15, 2011	SonoSite Inc.	FUJIFILM Holdings Corporation
October 18, 2010	AGA Medical Holdings, Inc.	St. Jude Medical, Inc.
June 1, 2010	ev3 Inc.	Covidien PLC

The multiples for the selected transactions for low, high, mean and median FV/LTM Revenue were 2.9x, 14.9x, 8.2x and 7.7x, respectively, and the multiples for the selected transactions for low, high, mean and median FV/NTM Revenue were 2.5x, 10.7x, 6.0x and 5.6x, respectively. Based on the results of this analysis and other factors J.P. Morgan considered appropriate, J.P. Morgan selected a multiple range of 5.5x to 14.9x for FV/LTM Revenue and a multiple range of 4.7x to 10.7x for FV/NTM Revenue (which, in the case of the Company, was NTM as of June 30, 2018) and applied these reference ranges to corresponding metrics for the Company, as provided by the management of the Company in its Financial Projections. This resulted in an implied equity value range of for FV/LTM Revenue of US$8.75 to US$20.00 per Ordinary Share under both Scenario A and Scenario B (in each case, rounded to the nearest US$0.25). The implied equity value ranges for FV/NTM Revenue were US$9.00 to US$17.25 per Ordinary Share under Scenario A and US$6.25 to US$11.50 per Ordinary Share under Scenario B (in each case, rounded to the nearest US$0.25). These ranges were compared to (i) the Unaffected Price and (ii) the Merger Consideration of US$29.25.

Discounted Cash Flow Analysis. J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining an implied fully diluted equity value per Ordinary Share for the Company’s Ordinary Shares. In performing this analysis, J.P. Morgan used the forecasted unlevered free cash flows for fiscal years 2018 through 2028 for Scenario A and 2018 through 2033 for Scenario B that were calculated using the Financial Projections. J.P. Morgan treated stock-based compensation as a cash expense in the unlevered free cash flow calculation for purposes of its discounted cash flow analysis, as stock-based compensation was viewed by J.P. Morgan as a true economic expense of the business. “Unlevered free cash flows” refers to a calculation of the future cash flows generated by an asset without including in such calculation any debt servicing costs. Specifically, unlevered free cash flow represents unlevered net operating profit after tax (including stock-based compensation expenses), adjusted for, as applicable, depreciation and amortization, capital expenditures and changes in net working capital. J.P. Morgan also calculated a range of terminal values of the Company by applying perpetuity growth rates ranging from 2.5% to 3.5% to the unlevered free cash flow of the Company during the terminal year. The unlevered free cash flows and the range of terminal values were then discounted to present values using a range of discount rates from 8.0% to 10.0%, which were chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of the Company. The present value of the unlevered free cash flows and the range of terminal values were then adjusted for the Company’s cash, net of debt. Based on the results of this analysis, J.P. Morgan arrived at a range of implied equity values for the Company’s Ordinary Shares of between US$12.50 and US$20.00 per Ordinary Share under Scenario A and US$8.00 to US$15.00 per Ordinary Share under Scenario B (in each case, rounded to the nearest US$0.25). These ranges were compared to (i) the Unaffected Price and (ii) the Merger Consideration of US$29.25.

Miscellaneous. The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of the Company. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary is identical to the Company, and none of the selected transactions reviewed was identical to the Merger. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of the Company. The transactions selected were similarly chosen because their participants, size and other factors, for purposes of J.P. Morgan’s analysis, may be considered similar to the Merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to the Company and the transactions compared to the Merger.

As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise the Company with respect to the Merger and deliver an opinion to the Board with respect to the Merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with the Company and the industries in which it operates.

For services rendered in connection with the Merger and the delivery of its opinion, the Company has agreed to pay J.P. Morgan a transaction fee of approximately US$20.7 million, US$1.5 million of which was payable upon delivery of its opinion and the remainder of which is payable upon the consummation of the Merger. In addition, the Company has agreed to reimburse J.P. Morgan for certain expenses incurred in connection with its services, including the fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement. During the two years preceding the date of J.P. Morgan’s opinion, neither J.P. Morgan nor its affiliates had material financial advisory or other material commercial or investment banking relationships with the Company. During the two years preceding the date of J.P. Morgan’s opinion, J.P. Morgan and its affiliates had commercial or investment banking relationships with Medtronic for which J.P. Morgan and such affiliates received customary compensation. Such services during such period included acting as financial advisor to Medtronic on the sale of its patient care, deep vein thrombosis and nutritional insufficiency businesses in July 2017. In addition, J.P. Morgan and its affiliates held, on a proprietary basis, less than 1% of the outstanding equity of each of the Company and Medtronic. During the two year period preceding delivery of its opinion ending on July 31, 2018, the aggregate fees received by J.P. Morgan from Medtronic was approximately US$22.9 million. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of the Company or Medtronic for its own account or for the accounts of customers and, accordingly, J.P. Morgan or its affiliates may at any time hold long or short positions in such securities or other financial instruments.

Opinion of Duff & Phelps

On September 14, 2018, the Company engaged Duff & Phelps to serve as an independent financial advisor to the Board to provide an opinion as to the fairness, from a financial point of view, to the holders of the Company’s Ordinary Shares (including the Ordinary Shares represented by ADSs), other than (i) Ordinary Shares, if any, held in the treasury of the Company or owned by any direct or indirect subsidiary of the Company immediately prior to the effective time of the Merger (which is referred to, collectively, as Treasury Shares), and (ii) the ADSs held by CovLux prior to the Merger (which is referred to as Excluded Shares), of the Merger Consideration to be received by such holders in the Merger.

On September 18, 2018, representatives of Duff & Phelps’ reviewed with the Board its fairness analyses of the Merger, responded to questions from the Board and delivered its oral opinion, subsequently confirmed orally and in writing on September 20, 2018, to the Board that, as of such date and based upon and subject to the assumptions, qualifications and limiting conditions contained in the opinion and discussed with the Board, the Merger Consideration to be received by the holders of Ordinary Shares and ADSs, other than the Treasury Shares and Excluded Shares, in the Merger was fair from a financial point of view to such holders.

The full text of Duff & Phelps’ opinion is attached as Appendix C-2 to this Proxy Statement and is incorporated herein by reference. The full text of the opinion sets forth a description of the assumptions made, procedures followed, matters considered and qualifications and limitations in rendering the opinion. We urge you to read Duff & Phelps’ opinion carefully and in its entirety.

Duff & Phelps provided its opinion for the use and benefit of the Board in connection with its consideration of the Merger. The opinion was furnished solely for the use and benefit of the Board in connection with its consideration of the Merger and was not intended to, and did not, confer any rights or remedies upon any other person, and was not intended to be used, and may not be used, by any other person or for any other purpose, without Duff & Phelps’ prior written consent, except as permitted in the engagement letter between Duff & Phelps and the Company dated September 14, 2018. The opinion (i) did not address the merits of the underlying business decision to enter into the Merger versus any alternative strategy or Merger; (ii) did not address any transaction related to the Merger; (iii) was not a recommendation as to how the Board or any shareholder should vote or act with respect to any matters relating to the Merger, or whether to proceed with the Merger or any related transaction; and (iv) did not indicate that the consideration received is the best possibly attainable under any circumstances. Instead, the opinion merely stated whether the consideration to be received in the Merger is within a range suggested by certain financial analyses. The decision as to whether to proceed with the Merger or any related transaction may depend on an assessment of factors unrelated to the financial analyses on which the opinion is based. The opinion should not be construed as creating any fiduciary duty on the part of Duff & Phelps to any party. Duff & Phelps did not review or advise the Board with respect to any alternative transaction.

In connection with its opinion, Duff & Phelps made such reviews, analyses and inquiries as it deemed necessary and appropriate under the circumstances. Duff & Phelps also took into account its assessment of general economic, market and financial conditions, as well as its experience in securities and business valuation, in general, and with respect to similar transactions, in particular. Duff & Phelps’ procedures, investigations, and financial analyses with respect to the preparation of the opinion included, but were not limited to, the items summarized below:

Reviewed the following documents:

The Company’s annual reports and audited financial statements on Form 20-F filed with the SEC for the years ended December 31, 2013, December 31, 2014, December 31, 2015, December 31, 2016, and December 31, 2017;

The Company’s unaudited interim financial statements for June 30, 2018 included in the Company’s Form 6-K filed with the SEC;

Unaudited segment financial information for the Company for the year ended December 31, 2017 and the six months ended June 30, 2018, which management of the Company identified as being the most current financial statements available;

Other internal documents relating to the history, current operations, and probable future outlook of the Company, including the Financial Projections, provided to Duff & Phelps by management of the Company; and

Documents related to the Merger, including the Merger Agreement, dated September 20, 2018;

Discussed the information referred to above and the background and other elements of the Merger with management of the Company;

Reviewed the historical trading price and trading volume of the Company’s Ordinary Shares and ADSs and the publicly traded securities of certain other companies that Duff & Phelps deemed relevant;

Performed certain valuation and comparative analyses using generally accepted valuation and analytical techniques including a discounted cash flow analysis, an analysis of selected public companies that Duff & Phelps deemed relevant, and an analysis of selected transactions that Duff & Phelps deemed relevant; and

Conducted such other analyses and considered such other factors as Duff & Phelps deemed appropriate.

In performing its analyses and rendering its opinion with respect to the Merger, Duff & Phelps, with the Company’s consent:

Relied upon the accuracy, completeness, and fair presentation of all information, data, advice, opinions and representations obtained from public sources or provided to it from private sources, including management of the Company, and did not independently verify such information;

Relied upon the fact that the Board and the Company have been advised by counsel as to all legal matters with respect to the Merger, including whether all procedures required by law to be taken in connection with the Merger have been duly, validly and timely taken;

Assumed that any estimates, evaluations, forecasts and projections furnished to Duff & Phelps were reasonably prepared and based upon the best currently available information and good faith judgment of the person furnishing the same, and Duff & Phelps expressed no opinion with respect to such projections or the underlying assumptions;

Assumed that the information supplied and representations made by the management of the Company are substantially accurate regarding the Company and the Merger;

Assumed that the representations and warranties made by all parties in the Merger Agreement are substantially accurate and that each party to the Merger Agreement will perform all covenants, undertakings and obligations required to be performed by such party;

Assumed that the final versions of all documents reviewed by Duff & Phelps in draft form, including the Merger Agreement, conform in all material respects to the drafts reviewed;

Assumed that there has been no material change in the assets, liabilities, financial condition, results of operations, business, or prospects of the Company since the date of the most recent financial statements and other information made available to Duff & Phelps, and that there is no information or facts that would make the information reviewed by Duff & Phelps incomplete or misleading;

Assumed that all of the conditions required to implement the Merger will be satisfied and that the Merger will be completed in accordance with the Merger Agreement without any amendments thereto or any waivers of any terms or conditions thereof, in either case that would be material to the opinion; and

Assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any undue delay, limitation, restriction or other adverse condition that would have a material effect on the Company.

To the extent that any of the foregoing assumptions or any of the facts on which Duff & Phelps’ opinion is based prove to be untrue in any material respect, the opinion cannot and should not be relied upon. Furthermore, in Duff & Phelps’ analyses and in connection with the preparation of its opinion, Duff & Phelps has made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in the Merger.

Duff & Phelps delivered its written opinion on September 20, 2018. The opinion is necessarily based upon the information made available to Duff & Phelps as of the date of the opinion and market, economic, financial and other conditions as they exist and can be evaluated as of such date, and Duff & Phelps disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting the opinion which may come or be brought to the attention of Duff & Phelps after the date of the opinion, or to update, revise or reaffirm the opinion after the date of the opinion.

Duff & Phelps did not evaluate the Company’s solvency or conduct an independent appraisal or physical inspection of any specific assets or liabilities (contingent or otherwise). Duff & Phelps was not requested to, and did not, (i) initiate any discussions with, or solicit any indications of interest from, third parties with respect to the Merger, the assets, businesses or operations of the Company, or any alternatives to the Merger, (ii) negotiate the terms of the Merger, and therefore, Duff & Phelps has assumed that such terms are the most beneficial terms, from the Company’s perspective, that could, under the circumstances, be reasonably negotiated among the parties to the Merger Agreement and the Merger, or (iii) advise the Board or any other party with respect to alternatives to the Merger.

Duff & Phelps did not express any opinion as to the market price or value of the Ordinary Shares or ADSs (or anything else) after the announcement or the consummation of the Merger. Duff & Phelps’ opinion should not be construed as a valuation opinion, credit rating, solvency opinion, analysis of the Company’s credit worthiness, tax advice or accounting advice. Duff & Phelps has not made, and assumes no responsibility to make, any representation, or render any opinion, as to any legal matter.

In rendering its opinion, Duff & Phelps did not express any opinion with respect to the amount or nature or any other aspect of any compensation to any of the Company’s officers, directors, or employees, or any class of such persons, relative to the consideration to be received by the public shareholders of the Company in the Merger, or with respect to the fairness of any such compensation. In addition, the opinion did not address the fairness to, or any other consideration of, the holders of any class of securities, creditors or other constituencies of the Company, other than the holders of the Ordinary Shares and the ADSs (other than the Excluded Shares and the Treasury Shares, if any).

Summary of Financial Analyses by Duff & Phelps

Set forth below is a summary of the material analyses performed by Duff & Phelps in connection with providing its opinion to the Board. This summary is qualified in its entirety by reference to the full text of the opinion, attached hereto as Appendix C-2. While this summary describes the analyses and factors that Duff & Phelps deemed material in its presentation to the Board, it is not a comprehensive description of all analyses and factors considered by Duff & Phelps. The preparation of a fairness opinion is a complex process that involves various determinations as to appropriate and relevant methods of financial analyses and the application of these methods to the particular circumstances. Therefore, neither the opinion nor Duff & Phelps’ underlying analysis is susceptible to partial analyses or summary description. In arriving at its opinion, Duff & Phelps did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Duff & Phelps’ analyses must be considered as a whole and selecting portions of its analyses and of the factors considered by it in rendering the opinion, without considering all analyses and factors, could create a misleading or incomplete view of the evaluation process underlying the opinion. The conclusion reached by Duff & Phelps was based on all analyses and factors taken as a whole, and also on the application of Duff & Phelps’ own experience and judgment.

Duff & Phelps’ analyses were prepared using the Financial Projections provided by management of the Company. Based on Duff & Phelps’ professional judgement and with the agreement of the Board, these analyses focused on Scenario A (as described in the subsection of this Proxy Statement captioned “—Financial Projections” beginning on page 73) as the basis of its opinion. For more information regarding the use of projections, please refer to “—Financial Projections” beginning on page 73.

The financial analyses summarized below include information presented in tabular format. In order for Duff & Phelps’ financial analyses to be fully understood, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses undertaken by Duff and Phelps. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Duff & Phelps’ financial analyses.

As part of its analyses, Duff & Phelps performed an enterprise valuation analysis of the Company using generally accepted valuation methodologies as described below.

Discounted Cash Flow Analysis

Duff & Phelps performed a discounted cash flow analysis based on the Financial Projections using the projected unlevered free cash flows of the Company for the fiscal years (“FY”) ending December 31, 2018 through December 31, 2028 to derive an estimated enterprise value for the Company. Duff & Phelps defines “free cash flow” as cash that is available to distribute to all security holders of the Company. The discounted cash flow analysis was used to determine the net present value of projected unlevered free cash flows utilizing an appropriate cost of capital for the discount rate, which reflects the relative risk associated with these cash flows as well as the rates of return that investors could expect to realize on alternative investment opportunities with similar risk profiles to the Company.

Duff & Phelps calculated the Company’s projected unlevered free cash flows by taking its projected earnings before interest and taxes (which is referred to as EBIT), subtracting taxes, adding back depreciation, and subtracting capital expenditures and the investment in net working capital. Duff & Phelps estimated the terminal value using a FY 2028 adjusted earnings before interest, taxes, depreciation and amortization (which is referred to as EBITDA) of US$100.7 million and a terminal exit multiple range of 19.0x to 21.0x. The resulting cash flows and estimated terminal value were discounted at a weighted average cost of capital range of 9.25% to 11.25%. The estimated enterprise value for the Company resulting from Duff & Phelps’ discounted cash flow analysis ranged from approximately US$775.0 million to US$1,010.0 million.

Based on Duff & Phelps’ estimated enterprise value range, the implied range of multiples of enterprise value to latest 12 months’ (which is referred to as LTM) total revenue, FY 2018 estimated total revenue, FY 2019 projected (which is referred to as P) total revenue and FY 2020P total revenue were as follows:

	Implied Enterprise Value Multiples
LTM⁽¹⁾ Total Revenue	11.65x - 15.18x
2018E Total Revenue	11.92x - 15.54x
2019P Total Revenue	8.66x – 11.29x
2020P Total Revenue	6.08x – 7.92x

⁽¹⁾	LTM ended June 30, 2018.

Selected Public Companies Reviewed

Duff & Phelps compared certain financial performance metrics of the Company to corresponding data and ratios from 12 publicly traded companies in the healthcare equipment, electronic equipment and instruments, and medical technology and device industries that Duff & Phelps deemed relevant to its analysis. The companies reviewed were:

CONMED Corporation;

Corindus Vascular Robotics, Inc.;

Globus Medical, Inc.;

Integra LifeSciences Holdings Corporation;

Intuitive Surgical, Inc.;

Medtronic plc;

NuVasive, Inc.;

Renishaw plc

Stryker Corporation;

TransEnterix, Inc.;

Wright Medical Group N.V.; and

Zimmer Biomet Holdings, Inc.

Although none of these selected public companies are directly comparable to the Company, Duff & Phelps reviewed these companies based on their relative similarity to the Company, primarily in terms of business model and primary customer end markets. For purposes of its analysis, Duff & Phelps used certain publicly available historical financial data and equity analyst estimates for the selected public companies. As the Company, at the time Duff & Phelps’ opinion was delivered, was still experiencing significant growth and negative EBITDA, such review was primarily used to assess the reasonableness of the Company’s implied multiples using the discounted cash flow analysis and to select the terminal value multiples used in the discounted cash flow analysis.

The table below summarizes certain observed trading multiples and historical and projected financial performance of the selected public companies as of September 19, 2018. The revenue and EBITDA estimates for 2018 and projected 2019 and 2020 in the tables below for the selected public companies were derived based on information for LTM ending closest to the Company’s FY 2019 and 2020 for which information was available. Duff Phelps determined, in its professional judgment, that certain metrics could not be calculated (which is referred to as NA) or were not meaningful (which is referred to as NM).

	Selected Public Companies Reviewed
	Company	Company⁽¹⁾	Mean	Median
Revenue Growth
3-YR CAGR	45.2%	6.2%	28.3%	12.2%
LTM	36.2%	3.9%	35.7%	10.5%
2018E	0.1%	NA	30.7%	10.1%
2019P	37.6%	NA	18.6%	7.6%
2020P	42.5%	NA	18.4%	6.7%
EBITDA Growth
3-YR CAGR	-2.5%	10.5%	12.2%	14.8%
LTM	NM	8.0%	23.7%	9.4%
2018E	NM	NA	18.4%	14.2%
2019P	NM	NA	11.7%	9.8%
2020P	NM	NA	11.4%	11.2%
EBITDA Margin
3-YR CAGR	-42.7%	32.2%	25.3%	26.7%
LTM	-13.3%	33.5%	27.2%	28.2%
2018E	-15.7%	NA	28.3%	28.9%
2019P	-8.9%	NA	29.1%	29.1%
2020P	9.2%	NA	30.2%	30.3%

Enterprise Value as a Multiple of
LTM EBITDA			22.7x	19.9x
2018E EBITDA			21.3x	18.7x
2019P EBITDA			18.8x	17.2x
2020P EBITDA⁽³⁾			16.7x	15.5x
LTM Revenue			15.33x	5.50x
2018E Revenue			11.55x	5.31x
2019P Revenue			8.24x	4.90x
2020P Revenue			6.53x	4.51x

(1)	FY 2028 as LTM.

Source: S&P Capital IQ, SEC filings and company filings.

Selected M&A Transactions Reviewed

Duff & Phelps reviewed the target companies involved in 13 selected merger and acquisition transactions listed in the below table. The selection of these transactions was based, among other things, on the target company’s industry, the relative size of the transaction compared to the Merger, and the availability of public information related to the selected transaction. The selected transactions indicated (i) enterprise value to EBITDA multiples ranging from 11.1x to 106.2x, with a median of 17.1x and a mean of 30.6x, and (ii) enterprise value to revenue multiples ranging from 2.06x to 14.94x, with a median of 6.07x and a mean of 6.44x.

As the Company, at the time Duff & Phelps’ opinion was delivered, was still experiencing significant growth and negative EBITDA, such review was primarily used to assess the reasonableness of the Company’s implied multiples using the discounted cash flow analysis and to select the terminal value multiples used in the discounted cash flow analysis.

Date of Announcement	Target	Acquiror
August 29, 2018	K2M Group Holdings, Inc.	Stryker Corporation
August 24, 2018	Cartiva, Inc.	Wright Medical Group, Inc.
December 7, 2017	Entellus Medical, Inc.	Stryker Corporation
October 24, 2017	Vexim SA	Stryker Corporation
April 10, 2017	China Resources Wandong Medical Equipment Co., Ltd.	Jiangsu Yuyue Technology Development Co., Ltd.
February 14, 2017	Cynosure, Inc.	Hologic, Inc.
December 1, 2016	Vascular Solutions, Inc.	Teleflex Incorporated
May 30, 2016	Atos Medical AB	PAI Partners; PAI Europe VI, L.P.
October 23, 2015	Biosensors International Group, Ltd.	CITIC Private Equity Funds Management Co. Ltd.
June 17, 2015	Lumenis Ltd.	XIO Group
April 1, 2015	Olympus Corporation	JPMorgan Securities Japan Co. Ltd.
August 15, 2013	MAKO Surgical Corp.	Stryker Corporation
November 23, 2011	Straumann Holding AG	GIC Private Limited

Source: S&P Capital IQ and company filings.

Summary of Analyses

The range of indicated enterprise values for the Company that Duff & Phelps derived from its discounted cash flow analysis was US$775.0 million to US$1,010.0 million. On the basis of this valuation and Duff & Phelps’ analysis of the selected public companies and transactions, as described above, Duff & Phelps observed that the multiple range implied by this value range above was above or within the multiple range observed for the selected public companies and transactions, as indicated in the following table.

	Public Company Multiple Range	Median Transaction Multiple	DCF Enterprise Value Multiple Range
2020P EBITDA	10.5x – 29.5x	NA	65.9x – 85.9x
LTM Total Revenue⁽¹⁾	3.29x – 93.52x	6.07x	11.65x – 15.18x
2018E Total Revenue	3.23x – 56.26x	NA	11.92x – 15.54x
2019P Total Revenue	3.07x – 29.90x	NA	8.66x – 11.29x
2020P Total Revenue	2.93x – 20.34x	NA	6.08x – 7.92x

⁽¹⁾	LTM ended June 30, 2018.

Based on the concluded enterprise value, Duff & Phelps estimated the range of aggregate equity value of the Company to be approximately US$906.6 million to approximately US$1,141.6 million by adjusting the enterprise value as follows:

Adding cash and equivalents of approximately US$41.0 million as of June 30, 2018 including cash from option exercises since June 30, 2018;

Adding marketable securities of approximately US$70.6 million as of June 30, 2018; and

Adding the present value of net operating losses tax benefits of approximately US$20.0 million.

Summary Conclusion

Based on the foregoing analysis, and subject to the assumptions, qualifications and limiting conditions, Duff & Phelps estimated the value of each Company Ordinary Share (including each Ordinary Share represented by the ADSs) to range from US$16.14 to US$20.33 per share, as compared to the Merger Consideration for each share of US$29.25. Duff & Phelps noted that the Merger Consideration to be received by the holders of Ordinary Shares and ADSs (other than the Excluded Shares and Treasury Shares, if any) pursuant to the Merger Agreement was above the range of the per share value indicated by its analyses.

Duff & Phelps’ opinion and financial analyses were only one of the many factors considered by the Board in their evaluation of the Merger and should not be viewed as determinative of the views of the Board.

Miscellaneous

The issuance of Duff & Phelps’ opinion was approved by its Opinion Review Committee.

Duff & Phelps is a premier global valuation and corporate finance advisor that is regularly engaged to provide financial advisory services, including fairness opinions, in connection with mergers and acquisitions, leveraged buyouts, going-private transactions and recapitalization transactions. Since 2005, Duff & Phelps has rendered over 780 fairness opinions in transactions aggregating more than US$250 billion and is regularly engaged in the valuation of businesses and securities in the preparation of fairness opinions in connection with mergers, acquisitions and other strategic transactions.

As compensation for Duff & Phelps’ services in connection with the rendering of its opinion, the Company agreed to pay Duff & Phelps a fee of US$500,000, consisting of a nonrefundable retainer of US$250,000 payable upon its engagement by the Company and US$250,000 payable upon the Board’s request for Duff & Phelps to deliver its opinion and Duff & Phelps informing the Board in writing, prior to the termination of its engagement, that it was prepared to deliver the opinion. No portion of Duff & Phelps’ fee was refundable or contingent upon either the conclusion expressed in the opinion or whether or not the Merger is successfully consummated. The Company has also agreed to pay Duff & Phelps’ reasonable out-of-pocket expenses and to provide customary indemnification. The terms of the fee arrangements with Duff & Phelps, which the Company believes are customary in transactions of this nature, were negotiated at arm’s length, and the Board is aware of these fee arrangements.

According to information supplied to the Company by Duff & Phelps, other than its engagement in connection with the Merger, during the two years preceding the date of its opinion, Duff & Phelps has not had any material relationship with any party to the Merger for which compensation has been received or is intended to be received, nor is any such material relationship or related compensation mutually understood to be contemplated. According to information supplied to the Company by Duff & Phelps, during the two years preceding the date of its opinion, Duff & Phelps has received customary compensation by Medtronic or its affiliates for certain dispute consulting engagements by certain law firms who were representing Medtronic or its affiliates, and the aggregate fees Duff & Phelps received for these dispute consulting engagements are immaterial to the revenue of Duff & Phelps.

Financial Projections

The Company’s management does not as a matter of course make public projections as to future performance or earnings and is especially wary of making projections for extended periods due to the significant unpredictability of the underlying assumptions and estimates. However, the Company provided, among other information, certain financial projections prepared by the Company’s management to the Board in connection with its consideration of the Merger, to J.P. Morgan and Duff & Phelps and to Medtronic. We refer to these financial projections as the Financial Projections.

The Financial Projections reflect numerous estimates and assumptions with respect to industry performance, general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to the Company’s business, all of which are difficult to predict and many of which are beyond the Company’s control. These Financial Projections are subjective in many respects and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. As such, these Financial Projections constitute forward-looking information and are subject to risks and uncertainties, including the various risks set forth in this Proxy Statement, in the Company’s Form 20-F for the year ended December 31, 2017 and the other reports furnished by the Company to the SEC. The Company’s filings with the SEC are available at www.sec.gov. The Financial Projections cover multiple years and such information by its nature becomes less reliable with each successive year.

The Financial Projections were prepared solely for internal use and not with a view toward public disclosure or toward complying with International Financial Reporting Standards or “IFRS,” or the published guidelines of the SEC regarding projections. The Financial Projections included below were prepared by the Company’s management. None of the Company’s independent advisors has compiled, examined or performed any procedures with respect to the Financial Projections included below, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and they assume no responsibility for, and disclaim any association with, the Financial Projections. Furthermore, the Financial Projections do not take into account any circumstances or events occurring after the date they were prepared. Certain of the measures included in the Financial Projections may be considered non-IFRS financial measures. Non-IFRS financial measures should not be considered in isolation from, or as a substitute for or superior to, financial information presented in compliance with IFRS, and non-IFRS financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies.

Readers of this Proxy Statement are strongly cautioned not to place undue reliance on the Financial Projections set forth below. The inclusion of the Financial Projections in this Proxy Statement should not be regarded as an indication that any of the Company, Merger Sub, Parent or their respective affiliates, advisors or representatives considered or consider the Financial Projections to be predictive of actual future events, and the Financial Projections should not be relied upon as such. None of the Company, Merger Sub, Parent or their respective affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from the projections, and none of them undertakes any obligation to update or otherwise revise or reconcile the Financial Projections to reflect circumstances existing after the date such projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Financial Projections are shown to be in error. None of the Company, Merger Sub or Parent intends to make publicly available any update or other revisions to the Financial Projections, except as required by law. None of the Company, Merger Sub, Parent or their respective affiliates, advisors, officers, directors or representatives has made or makes any representation to any shareholder or other person regarding the Financial Projections or the ultimate performance of the Company compared to the information contained in the Financial Projections or that forecasted results will be achieved. The projections are not being included in this Proxy Statement to influence a shareholders’ or holder of ADS’s decision whether to vote his or her shares in the Special Meeting in favor of the Merger Proposal, but are being included in this Proxy Statement because the projections were provided to the Board, J.P. Morgan, Duff & Phelps and Medtronic.

In connection with Medtronic’s offer to acquire the Company, as requested by the Board, in September 2018 the Company’s management prepared long-term financial projections (which we refer to as the Financial Projections) to allow J.P. Morgan and Duff & Phelps to evaluate the fairness from a financial point of view of Medtronic’s offer and for the Board to evaluate Medtronic’s offer and potentially other strategic alternatives. The Financial Projections were prepared using a “bottoms-up” revenue build approach across the Company’s three core product lines (Mazor X, Renaissance and a new technology) as well as near-term pipeline opportunities and across three primary geographies (US, EU and Asia) under two scenarios: Scenario A, which includes projections for the years 2018 to 2028 and assumes the continued existing commercial arrangement with Medtronic; and Scenario B, which includes projections for the years 2018 to 2033 and assumes immediate dissolution of the existing commercial arrangement with Medtronic and subsequent re-establishment of a standalone commercial organization. In Scenario A, growth for Mazor X is assumed to be driven by capital sales with the assumed introduction of the Mazor X Stealth platform in 2019E (and subsequent platform upgrades) as well as increasing utilization per unit across a growing installed base. Also in Scenario A, sales from Renaissance products are expected to grow through 2021E before beginning to decelerate as sales are expected to be replaced by Mazor X and next generation technologies. In Scenario B, the long-range projections assume the dissolution of the existing commercial arrangement with Medtronic and therefore a delay in the introduction of a new platform of Mazor X would be expected. Also due to the dissolution of the existing commercial arrangement with Medtronic, investments in the establishment of new sales channels for the distribution of Mazor X, and in operations required for a standalone commercial organization, as well as additional R&D investment and increases in sales, marketing, general and administration (which we refer to as SG&A) expense are assumed. Only Scenario A (for years through 2021) was shared with Medtronic.

Company Management Scenario A Summary
(U.S. dollars in millions)

	2018			2019			2020			2021			2022			2023			2024			2025			2026			2027			2028
Revenues		65			89			127			160			170			199			224			251			274			290			301
SG&A^(a)		(34	)		(38	)		(41	)		(43	)		(46	)		(54	)		(61	)		(68	)		(75	)		(79	)		(83	)
EBITDA^(b)		(10	)		(8	)		12			39			44			54			64			75			85			93			101
EBIT^(c)		(11	)		(9	)		11			39			43			53			62			73			83			91			98
Unlevered FCF^(d)		(22	)		(11	)		(6	)		20			37			40			52			49			59			67			74

(a) SG&A represents sales, marketing, general and administration expense.

(b) EBITDA represents earnings before interest, taxes, depreciation and amortization, which was calculated by adding back to EBIT (including stock-based compensation expenses) projected depreciation and amortization.

(c) EBIT represents earnings before interest and taxes, which was calculated by deducting from revenues projected cost of goods sold, research and development expense and SG&A

(d) Unlevered FCF represents unlevered free cash flow, which was calculated subtracting from EBIT projected taxes, projected capital expenditures and investment in net working capital adding projected depreciation and amortization.

Company Management Scenario B Summary
(U.S. dollars in millions)

	2018			2019			2020			2021			2022			2023			2024			2025			2026			2027			2028			2029			2030			2031			2032			2033
Revenues		59			41			70			95			108			124			141			169			192			225			266			308			348			384			413			433
SG&A^(a)		(36	)		(52	)		(60	)		(63	)		(65	)		(68	)		(73	)		(83	)		(88	)		(97	)		(107	)		(117	)		(125	)		(130	)		(132	)		(130	)
EBITD ^(b)		(15	)		(48	)		(44	)		(13	)		(4	)		5			12			19			20			31			45			59			75			92			108			123
EBIT^(c)		(15	)		(48	)		(44	)		(14	)		(5	)		4			11			17			18			29			43			57			72			88			104			119
Unlevered FCF^(d)		(20	)		(53	)		(48	)		(27	)		(11	)		(3	)		5			9			13			23			38			50			66			82			99			90

(a) SG&A represents sales, marketing, general and administration expense.

(c) EBIT represents earnings before interest and taxes, which was calculated by deducting from revenues projected cost of goods sold, research and development expense and SG&A

Material Tax Consequences of the Merger

Certain Material United States Federal Income Tax Consequences

The following is a summary of certain material United States federal income tax consequences of the Merger to United States Holders and non-United States Holders (each as defined below). This summary is general in nature and does not discuss all aspects of United States federal income taxation that may be relevant to a United States Holder or non-United States Holder in light of its particular circumstances. In addition, this summary does not describe any tax consequences arising under the laws of any local, state or foreign jurisdiction and does not consider any aspects of United States federal tax law other than income taxation (e.g., estate or gift tax). This summary deals only with Ordinary Shares held as capital assets within the meaning of Section 1221 of the United States Internal Revenue Code of 1986, as amended, which we refer to as the Code (generally, property held for investment) and does not address tax considerations applicable to any holder of Ordinary Shares that may be subject to special treatment under the United States federal income tax laws, including:

a bank or other financial institution;

a tax-exempt organization;

a retirement plan or other tax-deferred account;

a partnership (including any entity or arrangement treated as a partnership for United States federal income tax purposes), an S corporation or other pass-through entity (or an investor in any of the foregoing);

an insurance company;

a mutual fund;

a real estate investment trust;

a dealer or broker in stocks and securities, or currencies;

a trader in securities that elects mark-to-market treatment;

a holder of Ordinary Shares subject to the alternative minimum tax provisions of the Code;

a holder of Ordinary Shares that received the Ordinary Shares through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;

a person that has a functional currency other than the United States dollar;

a person that holds the Ordinary Shares as part of a hedge, straddle, constructive sale, conversion or other integrated transaction;

a United States expatriate or entity covered by the anti-inversion rules under the Code;

a person subject to special tax accounting rules (including rules requiring recognition of gross income based on a taxpayer’s applicable financial statement);

a person subject to the base erosion and anti-abuse tax;

any holder of Ordinary Shares that entered into a voting agreement as part of the transactions described in this Proxy Statement; or

any holder of Ordinary Shares that beneficially owns, actually or constructively, or at some time during the 5-year period ending on the date of the exchange has beneficially owned, actually or constructively, more than 5% of the total fair market value of the Company’s voting stock.

If a partnership (including any entity or arrangement treated as a partnership for United States federal income tax purposes) holds Ordinary Shares, the tax treatment of a holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Such holders should consult their tax advisors regarding the tax consequences to them of the Merger.

A non-U.S. corporation generally will be classified as a “passive foreign investment company,” or a PFIC, for United States federal income tax purposes in any taxable year in which, after applying applicable look-through rules, either (i) at least 75% of its gross income is “passive income,” or (ii) on average at least 50% of the value of its gross assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose includes items such as dividends, interest, royalties, rents and gains from commodities and securities transactions. The determination as to whether a non-U.S. corporation is a PFIC is based on the application of complex U.S. federal income tax rules, which are subject to different interpretations. In addition, the PFIC determination is made annually and generally is based on the value of a non-U.S. corporation’s assets (including goodwill) and composition of its income. In determining whether the Company is a PFIC, a pro rata portion of the income and assets of each subsidiary in which the Company owns, directly or indirectly, at least a 25% interest by value is taken into account.

The Company does not believe that it is or ever has been a PFIC for United States federal income tax purposes. Notwithstanding this belief, should the Company prove to have been a PFIC so that a United States Holder would be disposing of Ordinary Shares of a PFIC, the United States federal income tax consequences of the disposition of shares in the Merger could be different than those described herein. If the Company were characterized as a PFIC for any taxable year, a United States Holder would be subject to special rules (and may be subject to increased tax liability and filing requirements) with respect to any gain recognized by a United States Holder who sells our Ordinary Shares, including the exchange of Ordinary Shares for cash pursuant to the Merger. Under those rules, (a) the gain would be allocated ratably over the United States Holder’s holding period for the Ordinary Shares, (b) the amount allocated to the taxable year in which the gain or excess distribution is realized and to taxable years before the first day on which the Company became a PFIC would be taxable as ordinary income, (c) the amount allocated to each prior year in which the Company was a PFIC would be subject to U.S. federal income tax at the highest tax rate in effect for that year and (d) the interest charge generally applicable to underpayments of U.S. federal income tax would be imposed in respect of the tax attributable to each prior year in which the Company was treated as a PFIC. Each United States Holder should consult its own tax advisor as to the consequences to it of owning shares of a PFIC.

This summary is based on the Code, the regulations promulgated under the Code by the United States Department of the Treasury, and rulings and judicial decisions, all as in effect as of the date of this Proxy Statement, and all of which are subject to change or differing interpretations at any time, with possible retroactive effect. We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.

The discussion set out herein is intended only as a summary of certain material United States federal income tax consequences relevant to a United States Holder or non-United States Holder. We urge each holder to consult its tax advisor with respect to the specific tax consequences of the Merger to it in light of its own particular circumstances, including federal estate, gift and other non-income tax consequences, and tax consequences under state, local or foreign tax laws.

United States Holders

For purposes of this discussion, the term “United States Holder” means a beneficial owner of Ordinary Shares that is, for United States federal income tax purposes:

a citizen or individual resident of the United States;

a corporation (or any other entity or arrangement treated as a corporation for United States federal income tax purposes) organized in or under the laws of the United States or any state thereof or the District of Columbia;

an estate, the income of which is subject to United States federal income taxation regardless of its source; or

a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) the trust has validly elected to be treated as a “United States person” under applicable Treasury regulations.

Payments with Respect to Ordinary Shares

The exchange of Ordinary Shares for cash pursuant to the Merger will be a taxable transaction for United States federal income tax purposes and a United States Holder who receives cash for Ordinary Shares pursuant to the Merger will recognize gain or loss, if any, equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Ordinary Shares exchanged therefor. Gain or loss will be determined separately for each block of Ordinary Shares (i.e., Ordinary Shares acquired at the same cost in a single transaction). Subject to the discussion above regarding potential treatment of the Company as a PFIC for United States federal income tax purposes under “—Certain United States Federal Income Tax Consequences” above, such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if such United States Holder’s holding period for the Ordinary Shares that were cancelled in exchange for Merger Consideration in the Merger is more than one year at the time of the exchange. Long-term capital gain recognized by an individual holder generally is subject to tax at a lower rate than short-term capital gain or ordinary income. There are limitations on the deductibility of capital losses.

Backup Withholding

Proceeds from the exchange of Ordinary Shares pursuant to the Merger generally will be subject to backup withholding at the applicable rate (currently 24%) unless the applicable United States Holder or other payee provides a valid taxpayer identification number and complies with certain certification procedures (generally by providing a properly completed IRS Form W-9) or otherwise establishes an exemption from backup withholding. Any amounts withheld under the backup withholding rules from a payment to a United States Holder are not an additional tax and will generally be allowed as a credit against the United States Holder’s United States federal income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS.

Non-United States Holders

For purposes of this discussion, the term “non-United States Holder” means a beneficial owner (other than any entity or arrangement treated as a partnership for United States federal income tax purposes) of Ordinary Shares that is not a United States Holder.

The following discussion applies only to non-United States Holders and assumes that no item of income, gain, deduction or loss derived by the non-United States Holder in respect of Ordinary Shares at any time is effectively connected with the conduct of a United States trade or business. Special rules, not discussed herein, may apply to certain non-United States Holders, such as:

certain former citizens or residents of the United States;

controlled foreign corporations;

passive foreign investment companies;

corporations that accumulate earnings to avoid United States federal income tax;

investors in pass-through entities that are subject to special treatment under the Code; and

non-United States Holders that are engaged in the conduct of a United States trade or business.

Payments with Respect to Ordinary Shares

Payments made to a non-United States Holder with respect to Ordinary Shares exchanged for cash pursuant to the Merger generally will be exempt from United States federal income and withholding tax. However, if the non-United States Holder is an individual who was present in the United States for 183 days or more in the taxable year of the exchange and certain other conditions are met, such holder will be subject to tax at a flat rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) on any gain from the exchange of the Ordinary Shares, net of applicable United States-source losses from sales or exchanges of other capital assets recognized by the holder during the year, provided that the non-United States Holder has timely filed U.S. federal income tax returns with respect to such losses.

Backup Withholding

A non-United States Holder may be subject to backup withholding with respect to the proceeds from the disposition of Ordinary Shares pursuant to the Merger, unless, generally, the non-United States Holder or other payee certifies under penalties of perjury on an appropriate IRS Form W-8 that such non-United States Holder or other payee is not a United States person or otherwise establishes an exemption from backup withholding.

Any amounts withheld under the backup withholding rules are not an additional tax and will generally be allowed as a refund or a credit against the non-United States Holder’s United States federal income tax liability, provided that certain required information is furnished to the IRS.

The foregoing summary does not discuss all aspects of United States federal income taxation that may be relevant to particular holders of Ordinary Shares. Each holder of Ordinary Shares should consult its own tax advisor as to the particular tax consequences to it of exchanging its Ordinary Shares for cash in the Merger under any federal, state, foreign, local or other tax laws.

Israeli Income Tax Consequences

The following is a summary discussion of certain Israeli income tax considerations in connection with the Merger. The following summary is included for general information purposes only, is based upon current Israeli tax law and should not be conceived as tax advice to any particular holder of Ordinary Shares. No assurance can be given that the analysis made and the views contained in this summary as well as the classification of the transaction for Israeli tax purposes as set forth below will be upheld by the tax authorities, nor that new or future legislation, regulations or interpretations will not significantly change the tax considerations described below, and any such change may apply retroactively. This summary does not discuss all material aspects of Israeli tax consequences that may apply to particular holders of Ordinary Shares in light of their particular circumstances, such as investors subject to special tax rules or other investors referred to below.

HOLDERS OF ORDINARY SHARES SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR ISRAELI TAX CONSEQUENCES OF THE MERGER APPLICABLE TO THEM.

Sale of Ordinary Shares

In general, under the Israeli Income Tax Ordinance New Version, 1961 and the rules and regulations promulgated thereunder, which we also refer to as the Tax Ordinance, the disposition of shares of an Israeli resident company is deemed to be a sale of capital assets, unless such shares are held for the purpose of trading. The Tax Ordinance generally imposes a capital gains tax on the sale of capital assets located in Israel, including shares in an Israeli resident company, by both residents and non-residents of Israel, unless a specific exemption is available or unless a double taxation prevention treaty between Israel and the seller’s country of residence provides otherwise.

Under the Tax Ordinance, the tax rate applicable to capital gains derived from the disposition of Ordinary Shares in the Merger is generally 25% for individuals, unless such an individual shareholder claims a deduction for financing expenses in connection with such shares, in which case the gain will generally be taxed at a rate of 30%. Additionally, if such shareholder is considered a “Significant Shareholder” at any time during the 12-month period preceding such disposition, i.e., such shareholder holds directly or indirectly, including with others, at least 10% of any means of control in our Company, the tax rate will be 30%. An additional tax at a rate of 3% on the capital gain may be imposed upon individual shareholders whose annual income from all sources that is taxable in Israel exceeds a certain amount. However, dealers in securities may be subject to marginal tax rates. Companies are subject to the corporate tax rate (23% for the 2018 tax year) on capital gains derived from the disposition of Ordinary Shares.

Notwithstanding the foregoing, according to the Tax Ordinance and the regulations promulgated thereunder, non-Israeli residents are generally exempt from Israeli capital gains tax on any gains derived from the disposition of Ordinary Shares, provided that such gains are not derived from a permanent establishment of such shareholders in Israel, that such shareholders did not acquire their shares prior to our initial public offering and (solely with respect to the disposition of shares traded on the NASDAQ) that such capital gains are not subject to the Israeli Income Tax Law (Inflationary Adjustments), 5745-1985 or the rules promulgated under section 130A of the Tax Ordinance. However, a non-Israeli corporate shareholder will not be entitled to such exemption if Israeli residents (a) have, directly or indirectly, a controlling interest of more than 25% in such non-Israeli corporation or (b) are the beneficiaries of or are entitled to 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly.

In addition, under the Convention Between the Government of the United States of America and the Government of the State of Israel with Respect to Taxes on Income, or the U.S.-Israel Tax Treaty, Israeli capital gains tax generally will not apply to the disposition of shares by a U.S. resident to which the U.S.-Israel Tax Treaty applies, or a U.S. Treaty Resident, who holds the shares as capital assets. However, such exemption will not apply if (a) the U.S. Treaty Resident holds, directly or indirectly, shares representing 10% or more of our voting power during any part of the 12-month period preceding the disposition, subject to specified conditions, or (b) the capital gains from such disposition can be allocated to a permanent establishment of such U.S. Treaty Resident in Israel. Under the U.S.-Israel Tax Treaty, such U.S. Treaty Resident would be permitted to claim a credit for Israeli income tax against the U.S. federal income tax imposed on the disposition, subject to the limitations in U.S. tax laws applicable to foreign tax credits.

Generally, the payment for the Ordinary Shares is subject to Israeli withholding tax at a rate of 25% (23% for corporations) or 30%. A reduced rate of, or an exemption from, Israeli withholding tax is available to shareholders that provide a valid withholding certificate issued by the Israeli Tax Authority evidencing such reduced withholding rate or withholding exemption, which we also refer to as the Valid Certificate.

Our shareholders who do not provide a Valid Certificate may be subject to withholding of Israeli capital gains tax on the disposition of their Ordinary Shares in the Merger. SUCH SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE MERGER TO THEM.

Shares Issued as Compensation for Employment or Service

Shareholders who received or acquired their Ordinary Shares under one or more of our incentive plans, or otherwise as compensation for employment or services provided to our Company or any of its affiliates, may be subject to different tax rates. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, ANY SUCH HOLDERS OF ORDINARY SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE ISRAELI TAX CONSEQUENCES APPLICABLE TO THEM.

Company Options Tax Ruling

We have agreed, as soon as practicable after the execution of the Merger Agreement, to instruct our Israeli counsel, advisors and/or accountants to prepare and file, with the Israeli Tax Authority an application for a ruling providing, among other things, that: (i) Parent and the paying agent and anyone on their behalf will be exempt from withholding tax in respect to any consideration paid directly to IBI Investment House Ltd., in its capacity as trustee (which we refer to as the Section 102 Trustee) for the purpose of Section 102 of the Tax Ordinance, or the Company, and (ii) the payments made in respect to the Company’s options and RSUs issued under Section 102 of the Tax Ordinance and Ordinary Shares issued upon exercise or vesting of such options and restricted stock units will not be treated as a breach of the provisions of Section 102 of the Tax Ordinance, subject to deposit with the Section 102 Trustee and compliance with the minimum holding period required under Section 102 of the Tax Ordinance. Obtaining such tax ruling is not a condition to consummation of the Merger. If such tax ruling is not granted prior to the Closing, the Company will seek to obtain an interim ruling confirming that the Parent and any person acting on its behalf shall be exempt from Israeli withholding tax in relation to any payments made to the Paying Agent and the Section 102 Trustee with respect to any of the payments made in respect to the Company’s options and RSUs issued under Section 102 of the Tax Ordinance and Ordinary Shares issued upon exercise or vesting of such options and RSUs.

Regulatory Matters

Antitrust Filings

United States

Under the United States Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (which we refer to as the HSR Act), and the rules and regulations promulgated thereunder, certain transactions, including the Merger, may not be consummated unless certain waiting period requirements have expired or been terminated. Pursuant to the requirements of the HSR Act, the required Notification and Report Forms with respect to the Merger have been filed with the United States Department of Justice, Antitrust Division (which we refer to as the Antitrust Division), and the Federal Trade Commission (which we refer to as the FTC). Pursuant to the requirements of the HSR Act, the Merger may be closed following the expiration of a 30-calendar day waiting period (if the thirtieth day falls on a weekend or holiday, the waiting period will expire on the next business day) following such filings with the FTC and the Antitrust Division, unless the federal government terminates the waiting period early or issues a request for additional information and documentary material. The 30-calendar day waiting period commenced on October 11, 2018.

Israel

Under the Restrictive Trade Practices Law, 5748-1988 (which we refer to as the Israeli Antitrust Law), the Israeli Antitrust Authority (which we refer to as the IAA) is responsible for maintaining and promoting the competition in Israel. According to the Israeli Antitrust Law, a companies’ merger, which may be subject to pre-merger notifications, is broadly defined to include, among others, the Merger. A pre-merger notification is required for any merger in which the sales turnover of each of the merging companies (together with its respective affiliates) and the combined sales turnover of the merging companies exceed certain minimum thresholds, or if one of the merging companies holds a market share that exceeds 50% of a relevant market in Israel, or if following consummation of a merger the combined market share of the parties to the merger in any relevant market in Israel will exceed 50%. Such pre-merger notification has to be filed with the IAA before the consummation of the transaction. The General Director of the IAA may object to the requested merger, stipulate conditions for it or approve it. Although our sales turnover in Israel does not reach the threshold required for filing a pre-merger notification, and although the consummation of the Merger will not generate a combined market share of more than 50% in Israel with respect to the Company’s products, and although we do not currently perceive ourselves as a monopoly in Israel, under a very narrow and conservative market definition, comprising only the provision of robots for brain and spine surgery, we hold more than 50% market share in Israel. Furthermore, under conservative market definitions, Medtronic cannot rule out the possibility that it holds market shares in Israel in excess of 50% in some of its activities. Therefore, for the sake of caution, on October 11, 2018, the Company and Medtronic filed pre-merger notifications with the IAA. Under the Israeli Antitrust Law, the IAA has to advise on its ruling within 30 days of the receipt of the notifications (it may however request an extension).

Israeli Companies Registrar

Under the ICL, we and Merger Sub may not complete the Merger without first making the following filings and notifications to the Israeli Companies Registrar:

Merger Proposal. We and Merger Sub are required each to file with the Israeli Companies Registrar a “merger proposal” setting forth specified details with respect to the Merger, within three days of calling the respective shareholders’ meeting called to approve the Merger. Accordingly, both Merger Sub and we filed the required merger proposals with the Israeli Companies Registrar. Under the ICL, at least 50 days must pass from the date of the filing of the merger proposal by both merging companies with the Israeli Companies Registrar before the Merger can become effective.

Notice to Creditors. In addition, each of the Company and Merger Sub is required to notify its respective creditors of the proposed Merger. Pursuant to the ICL, a copy of the merger proposal must be sent to the secured creditors of each company within three days after the merger proposal is filed with the Israeli Companies Registrar, and, within four business days of such filing, known substantial creditors must be informed individually by registered mail of such filing and where the merger proposal can be reviewed. Non-secured creditors must be informed of the merger proposal by publication in two daily Hebrew newspapers circulated in Israel on the day that the merger proposal is filed with the Israeli Companies Registrar and, where necessary, elsewhere, and by making the merger proposal available for review. Each of the Company and Merger Sub has notified its respective creditors of the Merger in accordance with these requirements, to the extent applicable and, because our shares are traded on the NASDAQ, we have also published an announcement of the Merger in the U.S. within three business days following the day on which the merger proposal was submitted to the Israeli Companies Registrar. In addition, pursuant to the ICL, because we employ more than 50 employees, we must provide to the workers’ union a copy of the publication placed in the newspapers or post a copy of the publication placed in the newspapers in a prominent location in the workplace within three business days after the merger proposal was filed with the Israeli Companies Registrar. We have satisfied such requirement by posting a copy of the publication in a prominent location in our office. Each of the Company and Merger Sub has notified the Israeli Companies Registrar of the notices to its respective creditors.

Shareholder Approval Notice. After the Special Meeting, and assuming the approval of the Merger thereat by the shareholders of each of the merging companies, each of the merging companies must file a notice with the Israeli Companies Registrar regarding the vote of the shareholders. Such notice has been filed by Merger Sub and will be filed by us promptly following the receipt of Company Shareholder Approval. At least 30 days must pass from the date of receipt of the Company Shareholder Approval before the Merger can become effective (the shareholders of Merger Sub have approved the Merger Agreement).

No later than the closing date of the Merger (assuming that the shareholders of the Company approved the Merger Agreement and the Merger and that all of the other conditions set forth in the Merger Agreement have been satisfied or waived (if permissible under applicable law)), each of the Company and Merger Sub will notify the Israeli Companies Registrar that all of the conditions to the closing have been met and request that the Israeli Companies Registrar issue a certificate evidencing the completion of the Merger in accordance with Section 323(5) of the ICL. Assuming all statutory procedures and requirements have been complied with, the Merger will then become effective and the Israeli Companies Registrar will be required to register the Merger in the Surviving Company’s register and to issue the Surviving Company a certificate regarding the Merger.

Israeli National Authority for Technological Innovation

The change in the composition of the Company’s shareholders in connection with the Merger and the transfer of control therein to Israeli entities require the submission of notice to the Israeli National Authority for Technological Innovation, previously known as the Research Committee of the Office of the Chief Scientist of the Israeli Ministry of Economy and Industry.

Israeli Tax Authority

Other Approvals

Other than the filings described above and other than filings and other approvals as may be required under the U.S. Securities Exchange Act of 1934, as amended or the Israeli Securities Law, 5728-1968, neither Parent nor the Company is aware of any material regulatory filings or approvals issued by the United States government, the State of Israel, or any foreign, state or local government, required to be obtained, or waiting periods required to expire, to complete the Merger. If Parent and the Company discover that other such material approvals or waiting periods are necessary, Parent and the Company will seek to obtain or comply with them in accordance with the Merger Agreement.

Interests of Our Directors and Executive Officers in the Merger Proposal

In considering the recommendation of our Board with respect to the Merger Proposal, you should be aware that our directors and executive officers have interests in the Merger Proposal that may be different from, or in addition to, the interests of our shareholders in general. Our Board was aware of these different or additional interests in determining to approve the Merger Proposal, and to recommend to our shareholders that they vote in favor of the Merger Proposal. Further, in determining to approve the Merger Proposal, our Board considered the approval of the Compensation Committee of certain arrangements with the Company’s directors and executive officers and its recommendation for our Board to approve such arrangements, as further detailed below.

Under the ICL, an extraordinary transaction in which an officer or director has a personal interest requires the approval of the audit committee or the compensation committee, as applicable, and the Board, in that order. Generally, the directors having a personal interest are not permitted to participate in the discussion or vote on the matters. However, the ICL provides that if a majority of the directors have a personal interest in a transaction, then all the directors may participate and vote on the transaction and the transaction requires shareholder approval. Furthermore, under the ICL, certain compensation matters, such as compensation items related to a company’s chief executive officer, or compensation items related to a company’s directors and/or executive officers which are not consistent with a company’s compensation policy, are required to be submitted for the approval by the compensation committee, the board of directors as well as such company’s shareholders, provided that at least a majority of the total votes of shareholders who are neither “controlling shareholders” nor have a “personal interest” in these compensation matters voted in favor of these matters (or alternatively the votes cast by such shareholders against these matters do not exceed two percent (2%) of the total voting rights in such company).

Because of one or more of the considerations described above and for the sake of caution, the Merger Proposal is subject to the approval by our shareholders under the standards described as the Company Shareholder Approval (which includes the majority described above), as further described in “The Special General Meeting—Voting Rights and Vote Required.”

Ordinary Shares

As of the Record Date, the executive officers and directors of the Company beneficially owned an aggregate of 230,971 Ordinary Shares, or 0.43% of the outstanding Ordinary Shares as of the Record Date. For ownership of the Ordinary Shares by our directors and executive officers, see “Beneficial Ownership of Ordinary Shares” beginning on page 110. Outstanding Ordinary Shares held by executive officers and directors of the Company will be treated in the Merger in the same manner as Ordinary Shares held by all other shareholders of the Company (other than CovLux) (i.e., they will entitle the holders thereof to receive the Merger Consideration).

Company Stock Options and RSUs

Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding option to acquire Ordinary Shares and each outstanding restricted stock unit (which we refer to as an RSU), whether or not then exercisable, will become fully vested as of, and contingent upon, the effective time of the Merger. At the effective time of the Merger, each outstanding option will be cancelled and converted into the right to receive a lump sum cash payment equal to the product of (i) the excess, if any, of the Merger Consideration over the applicable exercise price per Ordinary Share of such share option (which excess cash amount we refer to as the Option Consideration) and (ii) the number of Ordinary Shares that such holder would have the right to purchase if such share option were fully vested and such holder had exercised such share option in full immediately prior to the effective time, without interest and subject to applicable withholding taxes. At the effective time of the Merger, each outstanding RSU will be canceled in exchange for the right to receive a lump sum cash payment (to the extent such payment does not trigger Taxes under Section 409A of the Internal Revenue Code of 1986, as amended) equal to the product of (i) the Merger Consideration and (ii) the number of Ordinary Shares subject to such RSUs, without interest and subject to applicable withholding taxes.

As of October 18, 2018, the total number of Ordinary Shares issuable upon the exercise of options (excluding options with an exercise price equal to or above US$29.25 per Ordinary Share) or subject to outstanding RSUs held by our directors and executive officers as a group (15 persons) was 1,052,026. The options (excluding options with an exercise price equal to or above US$29.25 per Ordinary Share) held by our directors and executive officers have exercise prices ranging from NIS 22.23 (or approximately US$6.09) to NIS 45.17 (or approximately US$12.37) per share and a weighted average exercise price of NIS 28.31 (or approximately US$7.75) per share.

Arrangements in connection with the Merger

The Merger Agreement provides for the accelerated vesting of all (if unvested) options to purchase Ordinary Shares and RSUs and for the cash-out of all options to purchase Ordinary Shares and all RSUs, as well as a number of indemnification, insurance and compensation arrangements concerning our directors and executive officers.

Indemnification Arrangements; D&O Insurance Arrangements

Pursuant to the Merger Agreement and subject to the Company’s Articles of Association, Parent has agreed to cause the Surviving Company in the Merger (which we refer to as the Surviving Company) to honor all existing indemnification agreements with our directors and officers.

In addition, Parent has agreed to cause the Surviving Company and its subsidiaries to, for seven years after the closing of the Merger, maintain in their respective organizational documents director and officer indemnification, insurance, exculpation and expense advancement provisions that are at least as favorable as those existing at the time of the signing of the Merger Agreement.

Parent has also agreed that for seven years after the closing of the Merger, to the fullest extent permitted by the laws applicable to Parent and subject to specified limitations set forth in the ICL (to the extent applicable) and the terms of the Merger Agreement, indemnify our directors and officers against liabilities arising out of any action or omission prior to or at the closing of any transaction contemplated by the Merger Agreement, including the Merger, and advance litigation expenses in connection with any related legal proceeding.

In addition, in connection with the execution of the Merger Agreement, Covidien International Finance S.A. (which we refer to as the Guarantor), a wholly-owned subsidiary of Medtronic and an indirect parent company of Parent and Merger Sub has executed a guaranty (which we refer to as the Guaranty), pursuant to which it has agreed to guarantee all of the obligations of Parent and Merger Sub under the Merger Agreement.

The foregoing arrangements regarding indemnification are collectively referred to as Indemnification Arrangements.

The Surviving Company will and Parent has agreed to cause the Surviving Company, for seven years after the closing of the Merger, to (i) maintain in effect or obtain directors’ and officers’ insurance policies covering acts or omissions prior to or at the closing on terms with respect to coverage and amounts and terms that are equivalent to those of the Company’s current directors’ and officers’ insurance policies, in each case provided that Parent and the Surviving Company are not required to spend more than US$2.2 million, or (ii) purchase a seven-year “tail” endorsement or run-off “tail” policy with respect to the current directors’ and officers’ insurance policies (or Parent may purchase a substitute policy with the same coverage as the “tail” endorsement or run-off “tail” policy). Alternatively, in lieu of the foregoing obligations of the Surviving Company, subject to the Company Shareholder Approval, the Company has the option, in consultation with Parent, to purchase a seven-year “tail” endorsement or run-off “tail” policy with respect to the current directors’ and officers’ insurance policies prior to the closing of the Merger. The foregoing arrangements regarding directors’ and officers’ insurance policies are collectively referred to as D&O Insurance Arrangements. None of the D&O Insurance Arrangements detracts from any existing (or prior) insurance policy of the Company, including, without limitation, the Company’s existing (or prior) directors’ and officers’ insurance policies.

Under our existing Compensation Policy for Officers and Directors, the annual premium for the directors’ and officers’ (which we refer to as D&O) liability insurance may not exceed the following limits: (a) the premium for each 12 months’ policy shall not exceed US$550,000 (we refer to this limit as the Annual Cap Amount) and (b) the maximum aggregate limit of liability pursuant to the policy shall not exceed 10% of the highest Company’s market value based on the closing price of the Company ADSs, as quoted on the NASDAQ over the 365 days ending immediately prior to the Compensation Committee’s resolution date, without an additional shareholders’ approval to the extent permitted under the ICL. Notwithstanding the above, the Compensation Committee is authorized to increase the coverage purchased and/or the premium paid for such policies in the middle of the insurance term by up to 20% when necessary to match the limit of liability to the growth in the Company’s market value in the same proportion (10%) as described above. In connection with the renewal of our D&O insurance policy, our Compensation Committee approved, and recommended that the Board approve, and our Board has approved, the increase of the Annual Cap Amount to US$1,500,000. The foregoing arrangement is referred to as the D&O Tail Policy Arrangement. The D&O Tail Policy Arrangement is also included as one of the items in the Merger Proposal.

For more details on the indemnification and insurance arrangements for our directors and officers, see “The Merger Agreement–Indemnification and Insurance” beginning on page 101.

Other Compensation Matters

Our Compensation Committee approved, and recommended that the Board approve, and our Board had approved, among other things, that the following individuals will be paid a transaction bonus promptly after the closing (subject to the consummation of the Merger and their continued employment through the closing):

Chief Executive Officer - US$1,200,000;

Chief Financial Officer and Vice President Business Operations - US$700,000;

Executive Vice President of Advanced Technologies - US$300,000;

Chief Technology Officer- US$200,000;

Chief Medical Officer - US$100,000;

Vice President, Regulatory Affairs and Quality Assurance - US$100,000;

Vice President, Operations and Service - US$100,000; and

Vice President, Product Development - US$100,000.

The foregoing compensation arrangements are collectively referred to as the Other Compensation Matters.

In approving the Indemnification Arrangements, D&O Insurance Arrangements, the D&O Tail Policy Arrangement and the Other Compensation Matters, our Board considered numerous factors and aspects (including those required under the ICL), including, among other things: (i) the fact that certain of these indemnification, insurance and compensation arrangements represent departures from the Company’s Compensation Policy for officers and directors, which departures are warranted under the circumstances under which these arrangements were made, including the Merger, and are in our shareholders’ best interests; (ii) the fact that provision of these indemnification, insurance and compensation arrangements is essential to the retention of these directors and officers at least until the completion of the Merger; (iii) the fact that these directors and officers have the qualifications, expertise and experience necessary to serve the Company and promote the Company’s objectives, taking into consideration the significant burdens and potential risks and exposure faced by directors and officers of public companies, especially those with securities publicly listed in the United States and in Israel; (iv) the fact that these indemnification, insurance and compensation arrangements were made in recognition of the contributions of these directors and officers to the Company’s long-term goals (subject to the Merger), to the strategic process undertaken by the Company and to the Company’s growth and profitability and set in a manner designed to enhance the Company’s directors’, officers’ and employees’ sense of identification with the Company and its activities, increase their satisfaction and motivation and ensure that the Company can retain these persons who have been contributing to the Company over time and at least until the effective time of the Merger; (v) the fact that these indemnification, insurance and compensation arrangements are subject or related to the Merger, and are intended to align the interests of the Company’s directors, officers and employees with those of the Company’s shareholders, including in connection with the successful completion of the Merger (with all such arrangements being conditioned on the completion of the Merger); (vi) that certain indemnification and insurance arrangements are generally in a uniform form for all indemnified persons and it is not appropriate to adjust them separately to the circumstances of each person or to other compensation he or she receives from the Company; and (vii) the fact that the scope and amounts of these indemnification, insurance and compensation arrangements are reasonable under the circumstances under which these arrangements were given.

Employee Compensation and Benefits

Under the Merger Agreement, Parent has undertaken that for one year following the consummation of the proposed Merger, it will cause the Surviving Company to provide each continuing employee of the Company with (i) a base salary or base wage that is no less than that in effect before closing and the same aggregate base salary or base wage and cash incentive compensation opportunity in effect with respect to such employee immediately before closing, (ii) severance benefits that are no less favorable than those in effect with respect to such employee before closing, and (iii) other employee benefits (excluding equity based benefits, but including allocations to provident funds and education funds) that are substantially comparable in the aggregate to the other employee benefits provided to such employee before closing. For more details, see “The Merger Agreement—Employee Matters” beginning on page 102.

Payments in connection with a Change in Control

Under the employment agreement between Mazor and Ori Hadomi, dated as of April 9, 2013, as amended from time to time, including as amended on January 21, 2014, in the event Mr. Hadomi resigns following the consummation of the Merger, Mr. Hadomi will be entitled to receive a re-adjustment payment in an amount equal to 6 monthly payments, and in the event Mr. Hadomi is terminated other than for cause following the Merger, Mr. Hadomi will be entitled to receive a re-adjustment payment in an amount equal to 9 monthly payments.

Under the employment agreement between Mazor and Sharon Levita, dated as of December 12, 2007, as amended from time to time, including as amended on October 3, 2013, in the event Ms. Levita resigns following the consummation of the Merger, Ms. Levita will be entitled to receive a re-adjustment payment in an amount equal to 4 monthly payments, and in the event Ms. Levita is terminated other than for cause following the Merger, Ms. Levita will be entitled to receive a re-adjustment payment in an amount equal to 6 monthly payments.

Under the employment agreement between Mazor and Eliyahu Zehavi, dated as of November 28, 2000, as amended from time to time, including as amended on October 3, 2013, in the event Mr. Zehavi resigns following the consummation of the Merger, Mr. Zehavi will be entitled to receive a re-adjustment payment in an amount equal to 4 monthly payments, and in the event Mr. Zehavi is terminated other than for cause following the Merger, Mr. Zehavi will be entitled to receive a re-adjustment payment in an amount equal to 6 monthly payments.

Under the employment agreement between Mazor or one of its subsidiaries and Christopher Prentice, dated as of November 9, 2010, as amended from time to time, including as amended on September 17, 2014 and August 24, 2017 the consummation of the Merger will entitle Mr. Prentice to a pro rata portion of his retention payment of US$500,000 would have otherwise been due in September 2019.

THE MERGER AGREEMENT

This section of the Proxy Statement describes the material provisions of the Merger Agreement, but does not purport to describe all of the terms of the Merger Agreement and may not contain all of the information that is important to you. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, which is attached as Appendix A to this Proxy Statement and incorporated into this Proxy Statement by reference. You are urged to read the Merger Agreement carefully and in its entirety because it is the legal document that governs the Merger.

The Merger Agreement contains representations and warranties by the Company, Parent and Merger Sub which were made only for purposes of that agreement and as of specified dates. The representations, warranties and covenants in the Merger Agreement were made solely for the benefit of the parties to the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the merger agreement instead of establishing these matters as facts, and may apply contractual standards of materiality or material adverse effect that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. Neither the Merger Agreement nor the description below is intended to provide you with any other factual information about us. Such information can be found elsewhere in this Proxy Statement and in the public filings we make with the SEC, as described in the section entitled “Where You Can Find More Information” beginning on page 111.

The Merger Agreement

Structure of the Merger; Company Shareholder Approval

Subject to the terms and conditions of the Merger Agreement and in accordance with Israeli law, Merger Sub, a wholly-owned subsidiary of Parent, will be merged with and into the Company pursuant to Sections 314-327 of the ICL, with the Company surviving the Merger and becoming collectively wholly owned by Parent and CovLux. As a result, after the effective time of the Merger, the Ordinary Shares will no longer be publicly traded.

The approval of the Merger Proposal requires the affirmative vote of holders of at least a majority of Ordinary Shares voted at the meeting, provided (x) such majority includes more than 50% of the Ordinary Shares voted (not counting any abstentions) by shareholders that are not Merger Sub, Parent or any person or entity holding at least 25% of the means of control of either Merger Sub or Parent, or any person or entity acting on behalf of either Merger Sub or Parent or any family member of, or entity controlled by, any of the foregoing and (y) either (i) such majority includes the affirmative vote of at least a majority of the total votes cast by shareholders who are present and voting (not counting any abstentions) who are not “controlling shareholders” of the Company and do not have a “personal interest” in the matter, or (ii) the total number of Ordinary Shares voted against the Merger Proposal by shareholders who are neither “controlling shareholders” of the Company nor have a “personal interest” in the matter who were present and voted, does not exceed 2% of the total voting rights in the Company.

Merger Consideration

As a result of the Merger, each Ordinary Share issued and outstanding immediately prior to the effective time of the Merger (other than Ordinary Shares held in the treasury of the Company or owned by any direct or indirect wholly-owned subsidiary of the Company and other than Ordinary Shares underlying ADSs held by CovLux) will automatically be converted into the right to receive US$29.25 in cash (which we refer to as the Merger Consideration) without any interest thereon, subject to the withholding of any applicable taxes.

Effective as of the effective time of the Merger, each outstanding option to acquire Ordinary Shares then outstanding, whether or not vested or exercisable, will become fully vested and exercisable as of the effective time of the Merger and will be canceled and converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of the Merger Consideration over the applicable exercise price per Ordinary Share of such option (which excess we refer to as the Option Consideration) and (ii) the number of Ordinary Shares such holder would have the right to purchase if such option or right were fully vested and such holder had exercised such option or right in full immediately prior to the effective time of the Merger, without interest and subject to applicable withholding taxes. Any such option that has an exercise price per Ordinary Share which is greater than the Merger Consideration will be canceled without further payment.

Effective as of the effective time of the Merger, each outstanding RSU, whether or not vested, will become fully vested as of the effective time of the Merger and will be canceled and converted into the right to receive a lump sum cash payment (to the extent such payment does not trigger Taxes under Section 409A of the Internal Revenue Code of 1986, as amended) equal to the product of the Merger Consideration and the number of Company Shares subject to Company RSUs, without interest and subject to applicable withholding taxes.

Representations and Warranties

The Merger Agreement contains a number of representations made by and to Parent and Merger Sub, on the one hand, and the Company, on the other hand. Representations made by the Company to Parent and Merger Sub in the Merger Agreement relate to, among other things:

due incorporation or organization, good standing and qualification;

corporate authority to enter into the Merger Agreement and consummate the transactions contemplated by the Merger Agreement;

Board approval and recommendation of the Merger Agreement and the transactions contemplated by the Merger Agreement;

absence of conflict with organizational documents, applicable law or material contracts as a result of the Merger;

required filings with and approvals by governmental entities;

capitalization;

ownership of subsidiaries;

accuracy and compliance of documents filed with the SEC, the TASE and the Israeli Securities Authority;

conformity of the Company’s financial statements with applicable accounting requirements and that the financial statements fairly present, in all material respects, the consolidated financial positions of the Company;

the status of the Company as a “foreign private issuer;”

absence of material undisclosed liabilities;

the absence of any Company Material Adverse Effect (as defined below) since June 30, 2018;

the operation of the Company in the ordinary course of business during the period from June 30, 2018 to September 20, 2018;

material contracts;

real property;

personal property;

intellectual property matters;

taxes and tax matters;

employee benefit plans and employment matters;

labor matters;

ownership and compliance with permits;

compliance with laws and regulatory matters;

global trade matters;

environmental matters;

absence of material pending or threatened legal proceedings or investigations;

insurance matters;

related party transactions;

absence of any obligation to pay brokers’ or other similar fees;

receipt of an opinion from our financial advisors;

inapplicability of anti-takeover statutes;

the Company’s proxy statement; and

privacy and data protection matters.

Representations made by the Parent and Merger Sub to the Company in the Merger Agreement relate to, among other things:

due incorporation or organization, good standing and qualification;

corporate authority to enter into the Merger Agreement and consummate the transactions contemplated thereby;

absence of conflict with organizational documents, applicable law or material contracts as a result of the Merger;

required filings with and approvals by governmental entities;

absence of material pending or threatened legal proceedings or investigations;

ownership and operations of Merger Sub;

absence of any obligation to pay brokers’ or other similar fees;

information provided by Parent for inclusion in the Company’s proxy statement;

no ownership of Ordinary Shares;

no arrangements with the Company’s shareholders or management;

sufficiency of funds for payments pursuant to the Merger Agreement;

non-reliance on the Company’s estimates, projections and forecasts; and

approval of the Merger Agreement by the boards of directors of Parent and Merger Sub.

Significant portions of the representations and warranties of the Company are qualified by “materiality” or “Company Material Adverse Effect.” A Company Material Adverse Effect means any change, effect, event or development that, individually or in the aggregate, has had or is reasonably likely to have, a materially adverse effect on (a) the financial condition, properties, assets (including intangible assets), liabilities, business, capitalization, operations or results of operations of the Company and its Subsidiaries, taken as a whole or (b) the ability of the Company to consummate the Merger and to perform its obligations under this Agreement. However, no change, effect, development, condition or occurrence arising out of the following will be considered when determining if a Company Material Adverse Effect has occurred or would or could occur (with respect to the matters described in clauses (i) through (vi) below, except to the extent the effects resulting from or arising out of these matters disproportionately affect the Company and its subsidiaries, taken as a whole, as compared to other companies operating in the industry and geographic markets in which the Company or its Subsidiaries conduct business):

(i)

general economic conditions or political conditions (or changes in such conditions) in Israel, the United States or any other country or region in the world in which the Company or any of its Subsidiaries operates, or conditions in the global economy generally;

(ii)

conditions (or changes in such conditions) in the securities markets, capital markets, credit markets, currency markets or other financial markets in Israel, the United States or any other country or region in the world in which the Company or any of its Subsidiaries operates;

(iii)

conditions (or changes in such conditions) in the industries in which the Company and its Subsidiaries conduct business;

(iv)

acts of war, armed hostilities, sabotage or terrorism in Israel, the United States or any other country or region in the world where the Company or any of its Subsidiaries has operations;

(v)

changes in Law or other legal or regulatory conditions (or the authoritative interpretation thereof) or changes in IFRS or other accounting standards applicable to the Company or its Subsidiaries (or the authoritative interpretation thereof);

(vi)

natural disasters, weather conditions and other force majeure events in Israel, the United States or any other country or region in the world where the Company or any of its Subsidiaries has operations;

(vii)

the announcement of this Merger Agreement or the pendency or consummation of the transactions contemplated by the Merger Agreement, including impact thereof on the relationships with officers, employees, customers, suppliers, distributors or other business partners;

(viii)

any action or omission required by law or terms of the Merger Agreement, or at the request or with the consent of Parent or any of its affiliates;

(ix)

changes in the Company’s share price or the trading volume of the Company’s shares, in and of itself (but not the underlying cause of such changes);

(x)

any failure of the Company to meet any securities analysts’ projections, internal projections, or forecasts or estimates of earnings or revenues (but not the underlying cause of such failure); or

(xi)

any legal proceedings brought or threatened by any of the current or former shareholders of the Company (on their own behalf or on behalf of the Company) relating to the Merger Agreement or any of the transactions contemplated by the Merger Agreement, including the Merger.

Some of the representations and warranties of Parent and Merger Sub are qualified as to “materiality” or are qualified with respect to any event, change, effect, development, condition or occurrence that would prevent or materially delay Parent from consummating the transactions contemplated by the Merger Agreement or prevent or materially delay that party from performing its obligations under the Merger Agreement.

The representations and warranties in the Merger Agreement do not survive the completion of the Merger.

Conduct of Business by the Company

The Company has agreed that until the effective date of the Merger, the Company and its subsidiaries will conduct their businesses in the ordinary course of business consistent with past practice and use commercially reasonable efforts to preserve substantially intact their business organization, keep available the services of the current officers and key employees, and preserve the current relationships with customers, suppliers, distributors and other persons with whom the Company or its subsidiaries have significant business relations, subject to certain exceptions. The Company has also agreed that to the extent reasonably practicable to notify and consult with the Parent (a) after the receipt of any material communication from any governmental authority or inspections of any manufacturing or clinical trial site and before making any material submission to any governmental authority, and (b) prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, or making a material change to the development timeline for any of its product candidates or programs.

The Company has further agreed generally to not take, and to not permit its subsidiaries to take, the following actions (subject in each case to the exceptions provided in the Merger Agreement) prior to the effective time of the Merger without the prior written consent of Parent (which consent may not be unreasonably withheld, delayed or conditioned):

amend the articles of association of the Company or amend any organizational document of any subsidiary of the Company;

issue, sell, deliver any equity securities of the Company or its subsidiaries, except for issuances of Ordinary Shares upon exercise of options or RSUs outstanding on the date of the Merger Agreement in accordance with their present terms;

purchase, redeem or otherwise acquire any equity securities of the Company or any of its subsidiaries, except in connection with tax withholdings and exercise price settlements upon the exercise of options or vesting of RSUs outstanding on the date of the Merger Agreement and in accordance with their present terms;

split, combine, subdivide or reclassify the share capital of the Company or any of its subsidiaries or issue or authorize the issuance of any other securities in respect of such shares;

declare, set aside or pay any dividends or other distributions in respect of the share capital of the Company;

propose to adopt a plan of liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries, or elect or appoint any new directors or executive officers of the Company, except for the transactions contemplated by the Merger Agreement;

incur, assume or guarantee any indebtedness for borrowed money, or issue any debt securities or other rights to acquire any debt securities of the Company or any of its subsidiaries, except for (i) debt incurred in the ordinary course of business consistent with past practice under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date of the Merger Agreement or issuances or repayment of commercial paper in the ordinary course of business consistent with past practice, and (ii) loans or advances between the Company and its subsidiaries, or between any subsidiaries;

make any loans, advances or capital contributions to or investments in any other person (other than the Company or any of its subsidiaries), except for business expense advances in the ordinary course of business consistent with past practice to employees of the Company or its subsidiaries;

mortgage or pledge any material assets or create a lien on any material assets (other than permitted liens or liens granted in connection with the incurrence of any indebtedness for borrowed money permitted under the Merger Agreement);

except as may be required by applicable law or the terms of any employee plan as in effect on the date of the Merger Agreement, (i) enter into, adopt, amend in any material respect or terminate any material employee benefit agreement, arrangement or plan, or (ii) increase the compensation or pay any special remuneration to any director, officer or employee, or pay any material benefit not required by any existing plan or arrangement, make any loans to or change existing lending arrangements with any directors, officers or employees, agents or consultants (other than advancement of business expenses in the ordinary course of business), except for (w) payment of the 2018 annual bonus up to the full target amounts payable thereunder and in accordance with the terms thereof, in each case in the Company’s ordinary course of business consistent with past practice (both with respect to the timing and amount), (x) the adoption of a 2019 incentive bonus plan in the Company’s ordinary course of business consistent with past practice (both with respect to the timing and composition) and in any event on terms consistent with those disclosed to Parent, (y) hiring of new employees, terminating employees and/or entering into, amending or modifying compensation arrangements in the ordinary course of business consistent with past practice for employees (or individuals who would become employees) who are not officers or directors and whose annual compensation is less than US$200,000, and (z) as otherwise permitted under the Merger Agreement;

except as may be required as a result of a change in applicable law or in IFRS, make any material change in accounting principles or practices or make any material change in internal accounting controls or disclosure controls and procedures;

make or agree to make any new capital expenditure or expenditures in excess of US$200,000 individually or US$400,000 in the aggregate, except for capital expenditures that are contemplated by the Company’s 2018 or 2019 budget;

acquire or agree to acquire (i) any business or company or any material equity interest for consideration in excess of US$500,000 in the aggregate or (ii) any assets that are material to the Company and its subsidiaries, taken as a whole, except for purchases of inventory, services or supplies in the ordinary course of business consistent with past practice or other purchases contemplated by the Company’s 2018 budget;

enter into any contract (other than inter-company contracts) with respect to any joint venture, strategic alliance or partnership that is material to the Company and its subsidiaries, taken as a whole;

other than in the ordinary course consistent with past practice, sell, lease (as lessor), license or otherwise dispose of or incur any lien on any properties or assets of the Company or its subsidiaries, which are material to the Company and its subsidiaries, taken as a whole;

prepare or file any income tax return or other material tax return in a manner inconsistent with past practice or, on any such tax return, take any material position inconsistent with past practice, make or change any tax election, settle or otherwise compromise any material claim relating to taxes, settle any material dispute relating to taxes, adopt or change any accounting method in respect of taxes, enter into any tax indemnity, sharing, allocation agreement or closing agreement, or consent to any extension or waiver of the statute of limitations period applicable to any material tax claim or assessment, request any ruling or similar guidance with respect to taxes, other than the tax rulings contemplated by the Merger Agreement;

other than in the ordinary course of business consistent with past practice, (i) discharge, settle or satisfy any claims, liabilities or litigation for an amount in excess of US$100,000 individually or US$200,000 in the aggregate, other than those reflected or reserved against in the most recent consolidated financial statements of the Company included in its public filings or incurred in the ordinary course of business consistent with past practice after the date of the most recent balance sheet included in these financial statements, (ii) cancel any material indebtedness for borrowed money or waive any claims or rights with a value in excess of US$200,000, or (iii) give any material discount, accommodation or other concession inconsistent with past business practices in order to accelerate or induce the collection of any receivable;

apply for or accept (i) any grant from the Israeli National Authority for Technological Innovation or any other Israeli governmental authority, which grant is extended to support the Company’s research and development operations, or (ii) any material grants from any other governmental authority;

enter into, engage in or amend any transaction or contract with any related party or any interested parties (Ba’alay Inyan);

enter into any non-compete or non-solicitation agreement that would or would be reasonably expected to restrict or limit, in any material respect, the operations of the Company or any of its Affiliates;

enter into any contract that involves consideration payable by the Company or its Subsidiaries in fiscal year 2018 in excess of US$250,000 or that is reasonably likely to involve consideration payable by the Company or its Subsidiaries in fiscal year 2019 in excess of US$250,000;

cancel or fail to in good faith seek to renew any material insurance policies; or

enter into a Contract, or otherwise resolve or agree in any legally binding manner, to take any of the actions prohibited by the Merger Agreement.

Company Shareholder Meeting; Merger Proposal

The Company has agreed to establish a Record Date for, duly call, give notice of and convene the Special Meeting for the purpose of obtaining the Company Shareholder Approval, and publish the notice of the Company Shareholder Meeting. The notice of this Special Meeting was published on September 24, 2018 (subsequently revised to reflect the updated Record Date).

The Company has also agreed, as soon as practicable following the execution of the Merger Agreement to prepare and file with the Israeli Securities Authority and furnish to the SEC on a Form 6-K a proxy statement for the Company Shareholders Meeting, and cause the proxy statement to be available to shareholders of the Company. Unless our Board has effected a Company Board Recommendation Change, the Company will include in the proxy statement our Board’s recommendation of the Merger Agreement and the transactions contemplated by the Merger Agreement (which we refer to as the Company Board Recommendation).

The Company and Merger Sub have agreed that they will, as promptly as reasonably practicable after the execution of the Merger Agreement, cause a merger proposal (in the Hebrew language) to be executed in accordance with Section 316 of the ICL and delivered and filed with the Israeli Companies Registrar. The Company and Merger Sub have further agreed to timely provide and/or publish notices to their creditors in accordance with Section 318 of the ICL and to timely inform the Israeli Companies Registrar, in accordance with Section 317(b) of the ICL, that notice was given to their respective creditors under Section 318 of the ICL. The executed merger proposals of Merger Sub and the Company were filed with the Israeli Companies Registrar. The notice to creditors was published by Merger Sub on October 2, 2018 and by the Company on October 2, 2018 and October 3, 2018 (in Israel) and on October 5, 2018 (in New York), and the related notification to the Israeli Companies Registrar that such notices were provided by Merger Sub and by the Company. Notice of the filing of the merger proposal was also given to the Company’s secured creditors. Notices to the Israeli Companies Registrar of the approval of the Merger by a merging company’s shareholders was filed by Merger Sub and will be filed by us promptly following the receipt of the Company Shareholder Approval.

No Solicitation of Acquisition Proposals

The Company has agreed that it will and will cause its subsidiaries and their respective representatives to immediately cease any and all existing discussions, communications or negotiations with respect to any Acquisition Proposal with any persons conducted prior to the execution of the Merger Agreement. In addition, the Company has agreed that neither it nor its subsidiaries will, and the Company will not authorize or permit any of their respective representatives to:

participate or engage in discussions or negotiations with any person with respect to an Acquisition Proposal;

approve, endorse or recommend an Acquisition Proposal; or

enter into any contract contemplating or otherwise relating to an Acquisition Transaction (as defined below).

Any material violation of the foregoing restrictions by the Company or any of its subsidiaries or any of their respective senior representatives will be deemed a material breach by the Company. The term “senior representative” means any representative of the Company who is (i) a director or officer of the Company or any of its subsidiaries, (ii) a senior-level employee (i.e., managing director (or similar title) or above) of any financial advisor retained by the Company or any of its subsidiaries or (iii) a partner of any law firm retained by the Company or any of its Subsidiaries or any other person acting with the actual authority of the Company.

Notwithstanding the restrictions above, our Board is permitted to engage in discussions of, or provide non-public information with respect to, any bona fide, unsolicited written Acquisition Proposal received without any material violation of the “no solicitation” restrictions described above if our Board has determined, after consultation with its financial advisor and outside legal counsel, that (i) the Acquisition Proposal constitutes or would reasonably be expected to lead to a Superior Proposal and (ii) failure to take the actions would reasonably be expected to be inconsistent with the fiduciary duties of directors of a Delaware corporation under Delaware law; provided, that before providing any non-public information to the person making the Acquisition Proposal, the recipient must enter into a confidentiality agreement that is no less favorable to the Company than the confidentiality agreement between the Company and Parent. The Board may not take any of the actions referred to above unless the Company has delivered to Parent a prior written notice advising Parent that it intends to take such action, which notice must include the material terms of the Acquisition Proposal and the identity of the person making the Acquisition Proposal.

The Company is required to notify Parent promptly (but in no event later than 24 hours) after receipt by the Company of an Acquisition Proposal or any request for information that would reasonably be expected to lead to an Acquisition Proposal, or any inquiry with respect to, or would reasonably be expected to lead to an Acquisition Proposal. The Company is required to provide such notice and identify the third party making, and the material terms and conditions of, any such Acquisition Proposal, as well as to provide a copy of the Acquisition Proposal (if in writing), and to keep Parent informed on a prompt basis with respect to any change to the material terms of such Acquisition Proposal (but in no event later than 24 hours following any such change), including providing Parent with copies of any draft documentation.

The Company has also agreed that except to the extent inconsistent with the fiduciary duties of directors of a Delaware corporation under applicable Delaware law, it will not, and will cause its subsidiaries not to, terminate, waive, amend or modify, or grant permission under, any standstill provision in any confidentiality agreement to which it or any of its subsidiaries is or becomes a party (other than as occurs in accordance with the terms of any such standstill provision in effect as of the date hereof). In addition, it will, and will cause its subsidiaries to, use reasonable best efforts to enforce such standstill provisions if it becomes aware of any material breach of any such standstill provision by the party subject thereto.

Company Board Recommendation Change; Fiduciary Termination

The Merger Agreement prohibits our Board from (i) withholding, withdrawing, amending or modifying in a manner adverse to Parent in any material respect, or publicly proposing to withhold, withdraw, amend or modify in a manner adverse to Parent in any material respect, the Company Board Recommendation, or (ii) approving or recommending or proposing to approve or recommend, any Acquisition Proposal (the actions in clauses (i) and (ii) are referred to as a Company Board Recommendation Change).

prior to making a Company Board Recommendation Change or terminating the Merger Agreement in order to accept the superior proposal, the Company has given Parent a three-business-day period during which, if requested by Parent, the Company would make its representatives available to discuss proposed changes to the Merger Agreement (with any material revision to the superior proposal restarting the three-business-day period);

after considering any written, binding and irrevocable offer delivered by Parent during the matching period, the Company Board nonetheless determines, after consultation with its financial advisors and outside legal counsel, that failure to make a Company Board Recommendation Change or terminate the Merger Agreement would reasonably be expected to be inconsistent with the fiduciary duties of directors of a Delaware corporation under Delaware law; and

the Company has paid the Termination Fee in advance of or substantially concurrently with the termination of the Merger Agreement and immediately following such termination enters into a binding definitive agreement for the superior proposal.

In addition, at any time prior to obtaining the Company Shareholder Approval, if an Intervening Event will have occurred and our Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to effect a Company Board Recommendation Change would reasonably be expected to be inconsistent with the fiduciary duties of directors of a Delaware corporation under Delaware law, our Board may effect a Company Board Recommendation Change if:

prior to taking such action, the Company has given Parent a three-business-day period during which, if requested by Parent, the Company would make its representatives available to discuss proposed changes to the Merger Agreement (with any material change to the Intervening Event restarting the three-business-day period); and

after considering any written, binding and irrevocable offer delivered by Parent during the matching period, the Company Board nonetheless determines, after consultation with its financial advisors and outside legal counsel, that failure to change its recommendation would reasonably be expected to be inconsistent with the fiduciary duties of directors of a Delaware corporation under Delaware law.

An “Intervening Event” means a material event, development or change in circumstances (other than the receipt of an Acquisition Proposal) with respect to the Company or any of its subsidiaries occurring, arising or coming to the attention of the Board after the date of the Merger Agreement and prior to obtaining the Company Shareholder Approval, and which was not known or reasonably foreseeable to the Board as of or prior to the date of the Merger Agreement.

The parties to the Merger Agreement have contractually agreed, without intending to modify any fiduciary duties of our Board (or any of its committees) under applicable law, that, in the absence of compelling legal authority to the contrary, the Company, our Board and the Company’s outside legal counsel are entitled to rely on and deem applicable to the Company and our Board the law applicable to corporations incorporated in the State of Delaware for purposes of making the conclusions described above (and providing advice with respect thereto).

Efforts to Consummate the Merger; Regulatory Filings

Subject to the terms and conditions of the Merger Agreement, each of the Parent, Merger Sub and the Company has agreed to use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, and to assist and cooperate with the other party to the Merger Agreement in doing, all things reasonably necessary, proper or advisable under applicable law or otherwise to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including (i) causing the conditions to closing to be satisfied; (ii) obtaining all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from governmental authorities and making all necessary registrations, declarations and filings with governmental authorities, that are necessary to consummate the Merger and the other transactions contemplated the Merger Agreement; (iii) obtaining all necessary or appropriate consents, waivers and approvals under any material contracts to which the Company or any of its subsidiaries is a party in connection with the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement so as to maintain and preserve the benefits under these material contracts following the closing; and (iv) executing and delivering any additional instruments necessary to consummate the transactions contemplated hereby and to fully carry out the purposes of the Merger Agreement. Notwithstanding the foregoing, the Company is not required prior to the effective time of the Merger to pay any consent or other similar fee, “profit sharing” or other similar payment or other consideration, or to provide additional security to obtain the consent, waiver or approval of any person under any contract.

Each of Parent and the Company has agreed to, and cause their respective affiliates (if applicable) to, promptly (i) file with the applicable governmental entity in each of the United States and Israel the notifications required by their respective antitrust laws, and (ii) file comparable pre-merger or post-merger notification filings, forms and submissions with any other governmental authority that is required by any other antitrust laws as soon as practicable and in any event before the expiration of any applicable legal deadline.

Parent has agreed that it and/or its affiliates will execute and deliver an undertaking in customary form in favor of the Israeli National Authority for Technological Innovation to comply with applicable law (if and when required to do so).

Each of Parent and the Company has agreed to, and to cause each of its respective affiliates to, take any and all reasonable actions necessary to obtain any consents, clearances or approvals required under or in connection with any applicable law (including antitrust law), and to enable all waiting periods under any applicable law (including antitrust law) to expire, and to avoid or eliminate each and every impediment under any applicable law (including antitrust law) asserted by any governmental authority, in each case, to cause the Merger and the other transactions contemplated by the Merger Agreement to occur as soon as practicable and in any event prior to the Outside Date, including but not limited to (i) promptly complying with or modifying any requests for additional information (including any second request) by any governmental authority, (ii) contesting, defending and appealing any threatened or pending injunction or other order that would adversely affect the ability of any party hereto to consummate the transactions contemplated by the Merger Agreement and (iii) taking any and all other actions to prevent the entry, enactment or promulgation thereof.

100

Each of Parent and the Company further agreed that until all required governmental approvals have been obtained, each of them will not, and will cause its affiliates not to, operate their respective businesses in such manner or take any action that would reasonably be expected to increase in any material respect the risk of not obtaining any required governmental approval. In addition, Parent and Merger Sub have agreed that, prior to the effective time of the Merger, they will not, and will not permit their affiliates to, make any acquisition or enter into any definitive agreement for any acquisition if doing so would reasonably be expected to (i) delay or increase the risk of not obtaining any required governmental approval or the expiration or termination of any applicable waiting period, (ii) increase the risk of any governmental authority entering an order prohibiting the consummation of the transactions contemplated by the Merger Agreement or the risk of not being able to remove any such order on appeal or (iii) delay or prevent the consummation of the Merger or the other transactions contemplated by the Merger Agreement.

Nothing in the Merger Agreement requires Parent, the Surviving Company or any other subsidiary of Parent to sell, hold separate, license or otherwise dispose of any assets or conduct their business in a specified manner, or agree or propose to sell, hold separate, license or otherwise dispose of any assets or conduct their business in a specified manner, or permit or agree to the sale, holding separate, licensing or other disposition of, any assets of Parent, the Surviving Company or any other subsidiary of Parent or the Company, whether as a condition to obtaining any approval from, or to avoid potential litigation or administrative action by, a governmental authority or any other person or for any other reason.

Indemnification and Insurance

Pursuant to the Merger Agreement, Parent has agreed to cause the Surviving Company in the Merger (which we refer to as the Surviving Company) to honor all existing indemnification agreements with our directors and officers.

Parent has also agreed that for seven years after the closing of the Merger, to the fullest extent permitted by the laws applicable to Parent (for purpose of this provision, as if Parent is a Delaware corporation and the relevant directors and officers are directors and officers of a Delaware subsidiary of Parent) and subject to specified limitations set forth in the ICL (to the extent applicable):

(i)

indemnify our directors and officers against liabilities arising out of or pertaining to (x) any action or omission or alleged action or omission in such person’s capacity as a director, officer, employee or agent of the Company or any of its Subsidiaries or other affiliates prior to or at the effective time of the Merger or (y) any of the transactions contemplated by the Merger Agreement; and

(ii)

advance, prior to the final disposition of any claim, proceeding, investigation or inquiry for which indemnification may be sought under the Merger Agreement, all costs, fees and expenses (including reasonable attorneys’ fees and investigation expenses) incurred by an indemnified person in connection with any such claim, proceeding, investigation or inquiry upon receipt of an undertaking by such indemnified person to repay such advances if it is ultimately decided in a final, non appealable judgment by a court of competent jurisdiction that such indemnified person is not entitled to indemnification.

101

Finally, Parent has agreed to cause the Surviving Company, for seven years after the closing of the Merger, to (i) maintain in effect or obtain, directors’ and officers’ insurance policies covering acts or omissions prior to or at the closing on terms with respect to coverage and amounts that are equivalent to those of the Company’s current directors’ and officers’ insurance policies, in each case provided that Parent and the Surviving Company are not required to spend more than US$2.2 million, or (ii) purchase a seven-year “tail” endorsement or run-off “tail” policy with respect to the current directors’ and officers’ insurance policies (or Parent may purchase a substitute policy with the same coverage as the “tail” endorsement or run-off “tail” policy). Alternatively, in lieu of the foregoing obligations of the Surviving Company, subject to the Company Shareholder Approval, the Company has the option, in consultation with Parent, to purchase a seven-year “tail” endorsement or run-off “tail” policy with respect to the current directors’ and officers’ insurance policies prior to the closing of the Merger.

Subject to applicable law, the rights of any beneficiaries under these provisions of the Merger Agreement are in addition to any other rights these beneficiaries may have under any law or contract or constituent documents of any person. In the event Parent or the Surviving Company or any of its successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving company or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then and in each such case, proper provision will be made so that the successors and assigns of Parent and the Surviving Company will assume all of the foregoing obligations.

In addition, in connection with the execution of the Merger Agreement, the Guarantor has executed the Guaranty pursuant to which it has agreed to guarantee all of the obligations of Parent and Merger Sub under the Merger Agreement

The obligations and liabilities of Parent, the Surviving Company and their respective subsidiaries under these provisions of the Merger Agreement will be joint and several.

Employee Matters

Parent has acknowledged that the consummation of the transactions set forth in the Merger Agreement will constitute a “change of control” (or similar phrase) for purposes of all of the Company’s employee plans.

From the effective time the Surviving Company will honor all employee plans and compensation arrangements in accordance with their terms as in effect immediately before the effective time of the Merger, provided that the foregoing does not prohibit the Surviving Company from amending or terminating any employee plan or compensation arrangements in accordance with their terms or as required by applicable laws.

The Merger Agreement contains covenants relating to certain employee matters. Under these covenants, Parent has undertaken, among other things, to:

for a period of one year following the effective time of the Merger, cause the Surviving Company to provide each continuing employee of the Company with (i) a base salary or base wage that is no less than that in effect before closing and the same aggregate base salary or base wage and cash incentive compensation opportunity in effect with respect to the employee immediately before closing, (ii) severance benefits that are no less favorable than those in effect with respect to the employee before closing, and (iii) other employee benefits (excluding equity based benefits, but including allocations to provident funds and education funds) that are substantially comparable in the aggregate to the other employee benefits provided to the employee before closing;

102

cause the Surviving Company to provide continuing employees with service credit for all services with the Company and its subsidiaries prior to the effective time of the Merger for the purposes of any vesting, eligibility, and benefits entitled under benefit plans, programs or arrangements made available to Company employees following the closing date, provided that the crediting of service will not operate to duplicate any benefits; and

for purposes of each Parent plan providing health benefits to any continuing employee after the effective time of the Merger, cause the Surviving Company to (i) allow such employee to be immediately eligible to participate in Parent’s plans to the extent coverage in the plan replaces coverage under a comparable plan of the Company in which such employee participates immediately prior to the effective time of the Merger, (ii) waive all limitations as to pre-existing conditions, exclusions and waiting periods and (iii) give credit to eligible expenses incurred by such employee during the portion of the plan year prior to the employee’s participation in Parent’s plan for purposes of satisfying deductible, co-payments and out-of-pocket maximums as though suc

Q:	What am I being asked to vote on?
A:	You are being asked to approve: (i) the Merger; (ii) the Merger Agreement; (iii) the consideration to be received by the shareholders of Mazor (other than CovLux) in the Merger (which we refer to as the Merger Consideration), consisting of US$29.25 per share in cash, without interest and less any applicable withholding taxes, for each Ordinary Share of Mazor owned immediately prior to the effective time of the Merger; (iv) in connection with the renewal of Mazor’s directors’ and officers’ (which we refer to as D&O) liability insurance policy, the amendment of Mazor’s Compensation Policy for Officers and Directors (which we refer to as the Compensation Policy) such that the annual premium limit for D&O liability insurance shall be increased to US$1,500,000; (v) the purchase by Mazor of a run-off directors’ and officers’ liability insurance policy for a period of seven years following the effective time of the Merger, as permitted under the Merger Agreement; (vi) the accelerated vesting of (if unvested) and cancellation of each outstanding option to purchase Ordinary Shares of Mazor (including those granted to Mazor’s officers and directors) in exchange for the right to receive a lump sum cash payment equal to the product of the excess, if any, of the Merger Consideration over the applicable per share exercise price of such option, and the total number of Ordinary Shares underlying such option, without interest and subject to applicable withholding taxes; (vii) the accelerated vesting of (if unvested) and cancellation of each outstanding restricted stock unit (which we refer to as an RSU) (including those granted to Mazor’s officers) in exchange for the right to receive a lump sum cash payment (to the extent such payment does not trigger taxes under Section 409A of the Internal Revenue Code of 1986, as amended) equal to the product of the Merger Consideration and the number of Ordinary Shares subject to such RSUs, without interest and subject to applicable withholding taxes; (viii) the payment by Mazor of special transaction bonuses to officers of Mazor in connection with the Merger and subject to the completion of the Merger, as permitted under the Merger Agreement; and (ix) all other transactions and arrangements contemplated by the Merger Agreement (we refer to items (i) through (ix) as the Merger Proposal). Each of the foregoing items is further described in this Proxy Statement.
Q:	What will I receive in the Merger?
A:	Upon completion of the Merger, each shareholder (other than CovLux) will have the right to receive US$29.25 in cash per Ordinary Share held by such shareholder immediately prior to the effective time of the Merger, which we refer to as the Merger Consideration, without any interest thereon, subject to applicable withholding taxes, and each ADS holder (other than CovLux) will have the right to receive US$58.50 in cash per ADS held by such ADS holder immediately prior to the effective time of the Merger without any interest thereon, subject to applicable withholding taxes and a cancellation fee of US$0.05 per ADS, which we refer to as the Cancellation Fee.
	You will not have any ownership interest in the surviving company following the completion of the Merger.
Q:	When will the Merger be completed?
A:	We are working to complete the Merger as soon as practicable and expect to complete the Merger by December 31, 2018, but because the Merger is subject to governmental and regulatory approvals and certain other conditions, some of which are beyond the control of the Company and Parent, the exact timing cannot be predicted nor can it be guaranteed that the Merger will ever be completed. Under the Companies Law, 5759-1999, of the State of Israel (which we refer to as the ICL), the Merger cannot become effective until the later of the 50th day following the date of the filing of the merger proposal by both merging companies with the Israeli Companies Registrar and the 30th day following the date on which the Merger Proposal is approved by our shareholders (the shareholders of Merger Sub have approved the Merger Agreement). See the section of this Proxy Statement entitled “The Merger Agreement–Conditions to the Completion of the Merger” beginning on page 104 for a summary description of these conditions. The Merger Agreement may be terminated by either party if the Merger is not completed by March 20, 2019 (unless this date has been extended by mutual agreement of Parent and us), so long as the terminating party’s breach of the Merger Agreement has not been a principal cause of, or primarily resulted in, the failure to close the Merger by this date and the terminating party is not then in material breach of the Merger Agreement.

Q:	Are there risks I should consider in deciding how to vote on the Merger?
A:	Yes. You should carefully read this Proxy Statement in its entirety, including the factors discussed in the section “Risk Factors” beginning on page 33.
Q:	When and where is the Special Meeting, and who may attend?
A:	The Special Meeting will be held on November 19, 2018, at 4:00 p.m. (Israel time) at Luchtenstein Levy Wiseman, Law Offices at 5 Azrieli Center, Square Tower, 35^th floor, Tel-Aviv, Israel. Shareholders who are entitled to vote at the Special Meeting may attend the meeting. All shareholders and proxyholders will need proof of identification along with their proxy card or proof of stock ownership to enter the Special Meeting. Beneficial owners of shares held in “street name”, that are traded on the TASE, who wish to attend the meeting must present proof of ownership of Mazor Ordinary Shares as of the Record Date (in accordance with the ICL and the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meetings), 5760-2000), and will only be able to vote at the Special Meeting if they have a proxy, executed in their favor, from the shareholder of record (bank, brokerage firm or other nominee) giving them the right to vote the shares at the Special Meeting. ADS holders may not attend the Special Meeting.
Q:	What vote is required for Mazor shareholders to approve the Merger Proposal?
A:	Provided that a quorum is present, approval of the Merger Proposal will require the affirmative vote of holders of at least a majority of the Ordinary Shares voted at the meeting, provided (x) such majority includes more than 50% of the Ordinary Shares voted (not counting any abstentions) by shareholders that are not Merger Sub, Parent or any person or entity holding at least 25% of the means of control of either Merger Sub or Parent, or any person or entity acting on behalf of either Merger Sub or Parent or any family member of, or entity controlled by, any of the foregoing and (y) either (i) such majority includes the affirmative vote of at least a majority of the total votes cast by shareholders who are present and voting (not counting any abstentions) who are not “controlling shareholders” of the Company and do not have a “personal interest” in the matter, or (ii) the total number of Ordinary Shares voted against the Merger Proposal by shareholders who are neither “controlling shareholders” of the Company nor have a “personal interest” in the matter who were present and voted, does not exceed 2% of the total voting rights in the Company. We refer to the foregoing approval as the Company Shareholder Approval. Under the ICL, in general, a person will be deemed to be a “controlling shareholder” if the person has the power to direct the activities of the Company, other than solely as a result of serving as a director or in another position in the Company. A person is presumed to be a controlling shareholder for these purposes if holding (i) 50% or more of any type of controlling means in the Company, or (ii) 25% or more of the voting rights in the Company, if no other person holds more than 50% of the voting rights in the Company. If two or more shareholders have a “personal interest” in the same proposal, their shareholdings are aggregated for purposes of calculating these percentages with respect to such proposal.

	Under the ICL, a person is deemed to have a “personal interest” in the Merger Proposal if this person, or certain members of this person’s family (namely, such person’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants, siblings or parents, or the spouse of any such person) or a company that is affiliated with this person or with such members of this person’s family (namely, a company in which this person or any such family member serves as a director or chief executive officer, has the right to appoint a director or the chief executive officer, or owns 5% or more of the outstanding shares or voting rights) has a personal interest in the adoption of such proposal. However, a person is not deemed to have a “personal interest” in the adoption of the Merger Proposal if this person’s interest in the Merger Proposal arises solely from this person’s ownership of the Company’s Ordinary Shares. The term “personal interest” also includes a personal interest of an individual voting via a power of attorney given by a third party (even if the empowering shareholder has no personal interest), and the vote of an attorney-in-fact shall be considered a personal interest vote if the empowering shareholder has a personal interest, in each case regardless of whether the attorney-in-fact has the discretion in the voting. For purpose of the Merger Proposal, the Ordinary Shares underlying ADSs held by CovLux are excluded for purposes of determining whether the majority referred to in clause (x) of the vote required to approve the Merger Proposal is obtained. In addition, our directors and executive officers and CovLux are deemed to have a “personal interest” in the Merger Proposal and, accordingly, all of the Ordinary Shares held by our directors and executive officers and by CovLux are also excluded for purposes of determining whether the majority referred to in clause (y) of the vote required to approve the Merger Proposal is obtained. As of the Record Date, our directors and executive officers collectively owned 230,971 Ordinary Shares, representing approximately 0.43% of all of the Ordinary Shares outstanding as of the Record Date (see “The Merger–Interests of Our Directors and Executive Officers in the Merger Proposal” beginning on page 83) and CovLux held 2,998,790 ADSs, which represent 5,997,580 Ordinary Shares, representing approximately 11.3% of all of the Ordinary Shares outstanding as of the Record Date, and freely exercisable warrants to purchase 1,210,000 ADSs, which were not exercised on or prior to the Record Date (see “Beneficial Ownership of Ordinary Shares” beginning on page 110). The Company is not currently aware of any controlling shareholders, as defined under the ICL. However, other shareholders and ADS holders may have a “personal interest” in the Merger Proposal and may be required to be excluded for purposes of determining whether the majority referred to in clause (y) of the vote required to approve the Merger Proposal is obtained. Each shareholder and ADS holder is required under the ICL to notify us if he, she or it has a personal interest in connection with the Merger Proposal, is a controlling shareholder of Mazor and/or is a shareholder listed in Section 320(c) of the ICL (i.e., whether such shareholder is Merger Sub, Parent or any person or entity holding at least 25% of the means of control of either Merger Sub or Parent, or any person or entity acting on behalf of either Merger Sub or Parent or any family member of, or entity controlled by, any of the foregoing), as a condition for his, her or its vote to be counted with respect to the Merger Proposal. Otherwise, under the ICL, his, her or its vote with respect to the Merger Proposal will not be counted in determining whether the applicable approval requirements have been met.
Q:	Are there any voting commitments or agreements with existing shareholders?
A:	Yes. In connection with the execution of the Merger Agreement, Covidien International Finance S.A. (which we refer to as the Guarantor), a wholly-owned subsidiary of Medtronic and an indirect parent company of Parent and Merger Sub, has executed a guaranty (which we refer to as the Guaranty) pursuant to which it has agreed to guarantee all of the obligations of Parent and Merger Sub under the Merger Agreement. The Guaranty also includes a commitment by the Guarantor to vote (or cause to be voted), and to cause all of its subsidiaries and controlled affiliates to vote (or cause to be voted), at the Special Meeting, any and all Ordinary Shares beneficially owned by the Guarantor or such subsidiaries or controlled affiliates (including by timely instructing the Depositary to vote the Ordinary Shares underlying their ADSs), which, as of the Record Date, were 5,997,580 Ordinary Shares, in favor of the Merger Agreement and the transactions contemplated thereby, including the Merger and certain compensation matters. For more information about the Guarantee, see the section of this Proxy Statement entitled “The Merger Agreement—Guaranty” beginning on page 108.

Q:	How does Mazor’s Board of Directors recommend that I vote?
A:	Our Board of Directors (which we refer to as the Board) has determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders, and has approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Our Board recommends that our shareholders vote “FOR” the approval of the Merger Proposal.
Q:	Why is our Board recommending that I vote “FOR” the approval of the Merger Proposal?
A:	Our Board has determined that the terms and provisions of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of our Company and our shareholders. For additional information see the sections of this Proxy Statement entitled “The Merger—Background of the Merger” beginning on page 47 and “The Merger—Our Reasons for Approving the Merger Proposal” beginning on page 54.
Q:	Should I send my share certificates or ADS certificates now?
A:	No. Once all conditions to closing of the Merger are satisfied, including, but not limited to, receipt of all governmental and regulatory approvals, we will be able to effect the closing of the Merger. If your shares or ADSs are held in “street name” by your bank, broker or other nominee, you will receive instructions from your bank, broker or other nominee as to how to effect the surrender or transfer of your “street name” shares or ADSs in exchange for the Merger Consideration. You will be required to deliver an IRS Form W-9 or appropriate Form W-8 (as applicable) prior to receiving the Merger Consideration.
	If you do not deliver an IRS Form W-9 or Form W-8 (as applicable), you may be subject to United States backup withholding as described in the section of this Proxy Statement entitled “The Merger–Material Tax Consequences of the Merger–Certain Material United States Federal Income Tax Consequences” beginning on page 75.
	If your shares are traded through the Tel Aviv Stock Exchange Ltd. (which we refer to as the TASE), you will receive the Merger Consideration through the bank or financial institution through which you hold your shares, which will also be responsible for administering Israeli tax withholding. For additional information with respect to tax withholding, see the section of this Proxy Statement entitled “The Merger–Material Tax Consequences of the Merger–Israeli Income Tax Consequences” beginning on page 79.

Q:	What effects will the proposed Merger have on our Company?
A:	As a result of the proposed Merger, we will cease to be a publicly-traded company and will become a privately-held company that is collectively wholly owned by Parent and CovLux. Following the completion of the proposed Merger, the registration of the ADSs and the Ordinary Shares and our reporting obligations under the U.S. Securities Exchange Act of 1934, as amended (which we refer to as the Exchange Act) and the Israeli Securities Law, 5728-1968 will be terminated upon notification to the U.S. Securities and Exchange Commission (which we refer to as the SEC) and to the Israeli Securities Authority. In addition, upon completion of the proposed Merger, the ADSs and Ordinary Shares will no longer be listed on any stock exchange, including the NASDAQ Global Select Market (which we refer to as NASDAQ) and TASE, respectively.
Q:	What happens if the Merger is not completed?
A:	If the Merger is not completed for any reason, our shareholders and ADS holders will not receive any Merger Consideration for their Ordinary Shares or ADSs. Instead, we will remain a public company and our ADSs and Ordinary Shares will continue to be listed on the NASDAQ and TASE, respectively. Under certain circumstances related to a termination, as specified in the Merger Agreement, we may be required to pay Parent a termination fee as described in the section of this Proxy Statement entitled “The Merger Agreement–Remedies–Termination Fee” beginning on page 106.
Q:	What interests do the directors and executive officers of our Company have in the Merger Proposal?
A:	In considering the recommendation of our Board with respect to the Merger Proposal, you should be aware that our directors and executive officers have interests in the Merger Proposal that may be different from, or in addition to, the interests of our shareholders in general, including, among other things: · Accelerated vesting of (if unvested) and cash-out of all options to purchase Ordinary Shares and all RSUs. · Executive officers of the Company are parties to existing employment agreements with the Company that provide for certain rights and benefits (either alone, or in the event of certain qualifying terminations of employment) in connection with or following the Merger. · Certain indemnification and insurance provisions provided in the Merger Agreement. · The executive officers of the Company will be entitled to receive a transaction bonus upon the consummation of the Merger. · In connection with the renewal of our D&O liability insurance policy, the amendment of the Compensation Policy such that the annual premium limit for D&O liability insurance shall be increased to US$1,500,000.

INTRODUCTION	1
QUESTIONS AND ANSWERS ABOUT THE TRANSACTION	10
SUMMARY	19
RISK FACTORS	33
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS	36
THE PARTIES TO THE MERGER	38
Our Company	38
Parent	38
Merger Sub	38
THE SPECIAL GENERAL MEETING	39
Time and Place of the Special Meeting	39
Purposes of the Special Meeting; Proposed Resolutions	39
Recommendation of the Board of Mazor	40
Record Date; Shareholders Entitled to Vote	40
Quorum	41
Voting Rights and Vote Required	42
Adjournment and Postponement	43
Voting Procedures; Revoking Proxies or Voting Instructions	44
Solicitation of Proxies	45
Questions and Additional Information	46
THE MERGER	47
Background of the Merger	47
Our Reasons for Approving the Merger Proposal; Recommendation and Determination of Certain Committees and Our Board	54
No Appraisal Rights; Objections by Creditors	58
Opinions of Our Financial Advisors	58
Financial Projections	73
Material Tax Consequences of the Merger	75
Regulatory Matters	81
Interests of Our Directors and Executive Officers in the Merger Proposal	83
THE MERGER AGREEMENT	88
The Merger Agreement	88
Guaranty	108
MARKET PRICE INFORMATION	109
BENEFICIAL OWNERSHIP OF ORDINARY SHARES	110
WHERE YOU CAN FIND MORE INFORMATION	111
OTHER MATTERS	111

	Our Board was aware of these different or additional interests in determining to approve the Merger Proposal. Further, in determining to approve the Merger Proposal, our Board considered the approval of the Compensation Committee of certain of the foregoing arrangements and its recommendation for our Board to approve such arrangements.
	For additional details, see “The Merger–Interests of Our Directors and Executive Officers in the Merger Proposal” beginning on page 83.
Q.	What do I need to do now?
A.	This Proxy Statement contains important information regarding the Merger as well as information about us. It also contains important information regarding the factors considered by our Board in evaluating the Merger. You are urged to read this Proxy Statement carefully and in its entirety. You should follow the instructions on how to vote your shares or ADSs provided in the next Q&A. You should also review the documents referenced under the section of this Proxy Statement entitled “Where You Can Find More Information” beginning on page 111.
Q.	How do I vote?
A.	Beneficial owners on TASE. The Israeli Companies Regulations (Deeds of Vote and Position Notices), 5766-2005, states that shareholders who will not attend the Special Meeting in person may vote by completing the second part (part ‘B’) of the Proxy Card (ktav hatzba’a) and returning it promptly (and in any event at least six hours prior to the scheduled time of the Special Meeting) to the Company at its registered address. If your shares are held on the TASE, you can also vote via the electronic voting system of the Israeli Securities Authority, after receiving a personal identifying number, an access code and additional information regarding the Special Meeting from the member of the TASE and after carrying out a secured identification process, up to six hours prior to the scheduled time of the Special Meeting. The Company’s Articles of Association also allow you to appoint a proxy to vote in your stead (whether personally or by means of a Proxy Card) at the Special Meeting, as long as the proxy is delivered to the Company at its registered address at least forty-eight (48) hours prior to the scheduled time of the Special Meeting. If you are a beneficial owner of shares registered in the name of a member of the TASE and you wish to vote, either by appointing a proxy, by Proxy Card or in person by attending the Special Meeting, you must deliver to us a proof of ownership in accordance with the ICL, and the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meetings), 5760-2000. Detailed voting instructions are provided both in this Proxy Statement and on the enclosed Proxy Card. ADS Holders. If you own ADSs, you should indicate on the enclosed ADS voting instruction form (attached as Appendix D to this Proxy Statement) how you want to vote, and date, sign and submit it, as soon as possible, pursuant to the instructions provided on the voting instruction form. Holders of ADSs will not be able to attend or vote directly at the Special Meeting. Holders through a Bank, Broker or other Nominee. If you hold your Ordinary Shares or ADSs in “street name” through a bank, broker or other nominee you should follow the instructions on the form you receive from your bank, broker or other nominee. If your Ordinary Shares are held in “street name” and you wish to vote such shares by attending the Special Meeting in person, you will need to obtain a proxy from your bank, broker or other nominee.

Q:	What do I do if I want to change my vote?
A:	You may send a written notice of revocation, or send a later-dated, completed and signed proxy card relating to the same shares, to us at our head offices located at 5 Shacham St., Caesarea North Industrial Park 3079567, Israel; Attention: Legal Counsel, so it is received up to 24 hours prior to the time set for the Special Meeting and after proving your identity to the satisfaction of our Legal Counsel. Ordinary Shares represented by properly executed proxies received by us prior to the Special Meeting will be voted at the Special Meeting in accordance with the directions on the proxies, unless such proxies have been previously revoked or superseded. Alternatively, you may attend the Special Meeting and vote in person. Attendance without voting at the Special Meeting will not in and of itself constitute revocation of a proxy. If you hold your Ordinary Shares in “street name” through a TASE member, if you voted electronically via the electronic voting system of the ISA, you may change or revoke your vote using the electronic voting system up to the time by which you may submit a vote using such system (i.e., up to six hours prior to the scheduled time of the Special Meeting). ADS holders returning voting instructions to the Depositary may revoke or change such instructions by communicating such revocation or change in writing to the Depositary. The Depositary must receive such revocation or change no later than 12:00 p.m. (noon) (New York City Time) on November 15, 2018.
Q:	If my shares or ADSs are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee vote my shares for me if I do not provide instructions?
A:	No. Your bank, broker or other nominee will vote your shares or ADSs only if you provide instructions to your bank, broker or other nominee on how to vote. If you do not provide instructions to your bank, broker or other nominee, your shares or ADSs will not be voted at the Special Meeting. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your shares or ADSs and be sure to provide your bank, broker or other nominee with instructions on how to vote your shares or ADSs. If your shares or ADSs are held in “street name”, you must contact your bank, broker or other nominee to change or revoke your voting instructions.
	If you hold shares through members of the TASE, you may vote in person or vote through the enclosed form of proxy by completing, signing, dating and mailing the proxy with a copy of your identity card, passport or certificate of incorporation, as the case may be, to the Company’s offices. Shareholders who hold shares through members of the TASE and intend to vote their shares either in person or by proxy must deliver to the Company an ownership certificate confirming their ownership of the Company’s shares on the Record Date, which must be certified by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) of 2000, as amended.

Q:	Who can vote at the Special Meeting?
A:	Only those holders of record of outstanding Ordinary Shares at the close of business on October 18, 2018, the Record Date for the Special Meeting, are entitled to participate in and to vote at the Special Meeting. As of the Record Date, there were 53,159,430 Ordinary Shares outstanding and entitled to vote.
Q:	What happens if I sell my shares or ADSs before the Special Meeting?
A:	The Record Date for the Special Meeting is earlier than the Special Meeting and the date that the Merger is expected to be completed. If you transfer your Ordinary Shares or ADSs after the Record Date but before the Special Meeting, you will retain your right to vote at the Special Meeting (or, for ADS holders, to instruct the Depositary on how to vote the shares underlying your ADSs at the Special Meeting), but will have transferred the right to receive the Merger Consideration with respect to such Ordinary Shares or ADSs. In order to receive the Merger Consideration, you must hold your Ordinary Shares or ADSs through the completion of the Merger.
Q:	Am I entitled to appraisal rights in connection with the Merger?
A:	No. Under Israeli law, holders of Ordinary Shares are not entitled to appraisal rights in connection with the Merger. However, under the ICL, objections to the Merger may be filed by our creditors with the Israeli district court. See “The Merger—No Appraisal Rights; Objections by Creditors” on page 58.
Q:	Who can help answer my questions?
A:	If you have additional questions about the Merger Agreement or the Merger Proposal, or would like copies of this Proxy Statement or the enclosed proxy card, you should contact: For holders of Ordinary Shares: Mazor Robotics Ltd. 5 Shacham Street, North Industrial Park Caesarea 3079567 Israel Attention: Legal Counsel +972 (4) 618-7100 For American Depository Share (ADS) holders: The Proxy Advisory Group, LLC 18 East 41^st Street, Suite 2000 New York, New York 10017 +1 (212) 616-2180