Exhibit 99.1
November 12, 2024
Dear Shareholder,
You are cordially invited to attend the 2024 Annual Meeting of Shareholders (the “Annual Meeting”) of Allot Ltd. (“Allot” or the “Company”), to be held at Allot’s offices at 22 Hanagar Street, Neve Ne’eman Industrial Zone B, Hod Hasharon, Israel on December 11, 2024, at 2:30 p.m. Israel
time.
At the Annual Meeting, the Company’s shareholders will be asked to consider and vote on the matters listed in the enclosed Notice of Annual Meeting of Shareholders (the “Notice”). Allot’s board of directors unanimously recommends that you vote “FOR” each proposal listed in the Notice. Management will also report on the affairs of the Company, and a discussion period will be
provided for questions and comments of general interest to shareholders.
Whether or not you plan to attend the Annual Meeting, it is important that your ordinary shares be represented and voted at the Annual Meeting. Accordingly,
after reading the enclosed Notice and proxy statement, please sign, date and mail the enclosed proxy card in the envelope provided or vote by telephone or, if you hold your shares in street name and the proxy card allows this, over the Internet in
accordance with the instructions on your proxy card, or vote through the Israel Securities Authority’s electronic voting system.
We urge all of our shareholders to review our annual report on Form 20-F and our quarterly results of operations furnished to the U.S. Securities and Exchange Commission (the “SEC”) on Form 6-K, all of which are available on our website at www.allot.com or on the SEC’s website at www.sec.gov.
We look forward to greeting as many of you as can attend the Annual Meeting.
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Sincerely, |
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/s/ David Reis |
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David Reis |
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Chairman of the Board of Directors |
ALLOT LTD.
____________________________________
Notice of Annual Meeting of Shareholders
22 Hanagar Street, Neve Ne’eman Industrial Zone B, Hod Hasharon, Israel
Tel: +972-9-761-9200
____________________________________
NOTICE IS HEREBY GIVEN that the 2024 Annual Meeting (the “Annual Meeting”) of shareholders of Allot Ltd. (“Allot” or the “Company”) will be held on December 11, 2024, at 2:30 p.m. Israel time, at our offices at 22 Hanagar Street, Neve Ne’eman Industrial Zone B, Hod Hasharon, Israel.
The Annual Meeting is being called for the following purposes:
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1. |
To approve an amendment to the Company’s Articles of Association, effective immediately upon the approval of this Proposal 1, to provide for the elimination of the different classes of members of the Board of Directors of the Company
(the “Board”), so that after completion of their current term, the term of each director who is elected or reelected at or after the Annual Meeting (other than Outside Directors (as defined in the
Israel Companies Law, 5759-1999, as amended (the “Israel Companies Law”)), shall be one year.
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2. |
To reelect Efrat Makov as an Outside Director of the Company, to serve for a term of three years commencing as of the Annual Meeting, or until her office is vacated in accordance with the Company’s Articles of Association or the Israel
Companies Law.
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3. |
To approve an amendment to the compensation policy for officers and directors of the Company.
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4. |
To approve the compensation payable to the Company’s directors.
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5. |
To approve a grant of 12,000 restricted stock units to each of the following Company directors: David Reis, Cynthia L. Paul, Raffi Kesten and Efrat Makov.
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6. |
To approve the reappointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as Allot’s independent registered public accounting firm for the fiscal year ending December 31, 2024 and until the next annual
meeting of shareholders, and to authorize the Board, upon recommendation of the audit committee, to fix the remuneration of said independent registered public accounting firm.
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7. |
To report on the business of the Company for the fiscal year ended December 31, 2023, including a review of the fiscal 2023 financial statements; and
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8. |
To act upon any other matters that may properly come before the Annual Meeting or any adjournment or postponement thereof.
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The foregoing proposals are described in detail in the enclosed proxy statement, which we urge you to read in its entirety.
Our Board unanimously recommends that you vote “FOR” each of the above proposals.
Only shareholders of record at the close of business on October 30, 2024 (the “Record Date”) will be entitled to notice of, and to vote
at, the Annual Meeting, or any adjournment or postponement thereof.
A proxy statement describing the various matters to be voted upon at the Annual Meeting, along with a proxy card enabling shareholders to indicate their vote on each matter
presented at the Annual Meeting, is included with this Notice of Annual meeting of Shareholders (the “Notice”), and is being mailed on or about November 13, 2024 to all shareholders entitled to vote at the
Annual Meeting. Such proxy statement shall also be furnished to the U.S. Securities and Exchange Commission (the “SEC”) under cover of a Form 6-K and will be available on the Company’s website at www.allot.com
and on the SEC’s website at www.sec.gov. Signed proxy cards must be received by our transfer agent, Equiniti Trust Company LLC, or at our registered office no later than 24 hours before the time fixed for the Annual Meeting or presented to
the chairperson of the Annual Meeting at the time of the Annual Meeting in order for the proxy to be qualified to participate in the Annual Meeting. Voting via the Israel Securities Authority’s electronic voting system must be completed no later
than six hours before the time fixed for the Annual Meeting (see Q&A under “About the Annual Meeting” for further information). Detailed proxy voting instructions are provided in the proxy statement as well as on the enclosed proxy card.
Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting.
Accordingly, after reading the Notice and proxy statement, please sign, date and mail the enclosed proxy card in the envelope provided, vote by telephone or, if you hold your shares in street name and the proxy card allows this, over the Internet
in accordance with the instructions on your proxy card, or vote through the Israel Securities Authority’s electronic voting system.
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By Order of the Board of Directors, |
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/s/ David Reis
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David Reis |
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Chairman of the Board of Directors |
Hod Hasharon, Israel
November 12, 2024
ALLOT LTD.
22 Hanagar Street, Neve Ne’eman Industrial Zone B, Hod Hasharon, Israel
Tel: +972-9-761-9200
PROXY STATEMENT
2024 ANNUAL GENERAL MEETING OF SHAREHOLDERS
ABOUT THE ANNUAL MEETING
Q: When and where is the 2024 Annual Meeting of Shareholders being held?
| A: |
The Annual Meeting will be held on December 11, 2024, at 2:30 p.m. Israel time, at our offices at 22 Hanagar Street, Neve Ne’eman Industrial Zone B, Hod Hasharon, Israel.
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Q: Who can attend the Annual Meeting?
| A: |
Any shareholder may attend. Current proof of ownership of the Company’s shares, as well as a form of personal photo identification, must be presented in order to be admitted to the Annual Meeting. If your shares are held in the name of a
bank, broker or other holder of record, you must bring a current brokerage statement or other proof of ownership with you to the Annual Meeting.
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Q: Who is entitled to vote?
| A: |
Only holders of record of ordinary shares at the close of business on October 30, 2024, the Record Date for the Annual Meeting, are entitled to vote at the Annual Meeting.
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Joint holders of ordinary shares should note that, pursuant to Article 32.4 of the Company’s Articles of Association, the right to vote at the Annual Meeting will be conferred
exclusively upon the “senior” among the joint owners attending the Annual Meeting, in person or by proxy, and for this purpose, seniority will be determined by the order in which the names appear in the Company’s register of shareholders.
HOW TO VOTE YOUR SHARES
Q: How do I vote?
| A: |
You may vote by mail. You can do this by completing your proxy card (if you are a shareholder of record) or your voting instruction card (if you are a “street name” beneficial owner) and returning
it in the enclosed, prepaid and addressed envelope. If you return a signed card but do not provide voting instructions, your shares will be voted as recommended by the Board.
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If you hold shares through a member of the Tel-Aviv Stock Exchange, you may vote through the Israel Securities Authority’s electronic voting
system. The Israel Securities Authority has set up an electronic voting system for shareholder meetings of publicly-listed Israeli companies via its MAGNA online platform. Following a registration process, you will be able to vote your
shares through such system no later than 24 hours before the time fixed for the Annual Meeting. Please note that the Israel Securities Authority has advised that shareholders voting from abroad via the Israel Securities Authority’s MAGNA online
platform may experience temporary technical difficulties and that such shareholders are welcome to contact the Israel Securities Authority’s MAGNA support line at +972-077-223-8333 for further assistance or vote via the alternative voting methods
described herein.
You may vote in person. Ballots will be passed out at the Annual Meeting to anyone who wants to vote at the Annual
Meeting. If you choose to do so, please bring the enclosed proxy card or proof of identification. If you are a shareholder of record and your shares are held directly in your name, you may vote in person at the Annual Meeting. However, if your
shares are held in “street name,” you must first obtain a “legal proxy” from the record holder (that is, your bank, broker or other nominee) giving you the right to vote at the Annual Meeting.
“Street name” holders may be able to vote by phone or through an Internet website in accordance with instructions included on
their proxy cards.
| Q: |
What is the difference between holding shares as a shareholder of record and holding shares in “street name”?
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| A: |
Many Allot shareholders hold their shares through a bank, broker or other nominee rather than directly in their own name. As explained in this proxy statement, there are some distinctions between shares held of record and shares owned in
“street name.”
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Shareholders of Record
If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company of New York, New York, you are considered, with respect
to those shares, the shareholder of record. In such case, these proxy materials are being sent directly to you. As the shareholder of record, you have the right to grant your voting proxy directly or to vote in person at the Annual Meeting.
“Street Name” Beneficial Owners
If your shares are held through a bank, broker or other nominee, they are considered to be held in “street name” and you are the beneficial owner. If your shares are held in
street name, these proxy materials are being forwarded to you by your bank, broker or other nominee, which is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have the right to direct the bank,
broker or nominee how to vote your shares for the Annual Meeting. You also may attend the Annual Meeting. However, because you are not the shareholder of record, you may not vote these shares in person at the Annual Meeting, unless you first obtain
a “legal proxy” from the record holder (that is, your bank, broker or other nominee) giving you the right to vote the shares. Your bank, broker or nominee has enclosed a voting instruction card for you to use in directing the bank, broker or
nominee regarding how to vote your shares.
Brokers that hold shares in “street name” for clients typically have authority to vote on “routine” proposals even when they have not received instructions from beneficial
owners. The only item on the Annual Meeting agenda that may be considered routine is Proposal 6 relating to the reappointment of Allot’s independent registered public accounting firm for the fiscal year ending December 31, 2024; however, we cannot
be certain whether this will be treated as a routine matter since our proxy statement is prepared in compliance with the Israel Companies Law rather than the rules applicable to domestic U.S. reporting companies. Therefore, it is important for a
shareholder that holds ordinary shares through a bank, broker or other nominee to instruct such bank, broker or other nominee how to vote its shares, if the shareholder wants its shares to count for the proposals.
Q: Does Allot recommend I vote in advance of the Annual Meeting?
| A: |
Yes. Even if you plan to attend the Annual Meeting, Allot recommends that you vote your shares in advance so that your vote will be counted if you later decide not to attend the Annual Meeting.
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Q: If I vote by proxy, can I change my vote or revoke my proxy?
| A: |
Yes. You may change your proxy instructions at any time prior to the vote at the Annual Meeting. If you are a shareholder of record, you may do this by:
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• |
filing a written notice of revocation with the Secretary of the Company, delivered to the Company’s address above;
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• |
granting a new proxy card bearing a later date; or
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• |
attending the Annual Meeting and voting in person (attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you submit another vote at the Annual Meeting).
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If you hold shares through a bank, broker or other nominee, you must contact that firm to revoke any prior voting instructions.
Q: How are my votes cast when I submit a proxy vote?
| A: |
When you submit a proxy vote, you appoint Liat Nahum and Rael Kolevsohn, or either of them, as your representative(s) at the Annual Meeting. Your shares will be voted at the Annual Meeting as you have instructed.
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Upon the receipt of a properly submitted proxy card, which is received in time (by 2:30 p.m., Israel Time, on December 10, 2024, 24 hours prior to the Annual Meeting) and not
revoked prior to the Annual Meeting, or which is presented to the chairperson at the Annual Meeting, the persons named as proxies will vote the ordinary shares represented thereby at the Annual Meeting in accordance with the Board’s recommendations
as indicated in the instructions outlined on the proxy card.
Q: What does it mean if I receive more than one proxy card?
| A: |
It means that you have multiple accounts at the transfer agent or with brokers. Please sign and return all proxy cards to ensure that all of your shares are voted.
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ABOUT THE VOTING PROCEDURE AT THE ANNUAL MEETING
Q: What constitutes a quorum?
| A: |
To conduct business at the Annual Meeting, two or more shareholders must be present, in person or by proxy, representing not less than 25% of the ordinary shares outstanding as of the Record Date, that is, a quorum must be present.
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Ordinary shares represented in person or by proxy will be counted for purposes of determining whether a quorum exists. A “broker non-vote” occurs when a bank, broker or other
holder of record holding shares for a beneficial owner submits a proxy card but does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and
has not received instructions from the beneficial owner. Abstentions and broker non‑votes will be counted as present in determining if a quorum is present.
Q: What happens if a quorum is not present?
| A: |
If a quorum is not present, the Annual Meeting will be adjourned to the same day at the same time the following week, or to such day and at such time and place as the Chairman of the Annual Meeting may determine with the consent of the
holders of a majority of the shares present in person or by proxy and voting on the question of adjournment.
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Q: How will votes be counted?
| A: |
Each outstanding ordinary share is entitled to one vote. The Company’s Articles of Association do not provide for cumulative voting.
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On all matters considered at the Annual Meeting, abstentions and broker non-votes will not be treated as either a vote “FOR” or “AGAINST” the matter.
| Q: |
What vote is required to approve each proposal presented at the Annual Meeting?
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| A: |
Proposal 1 (approval of an amendment to our Articles of Association) requires that securities representing at least two-thirds of the voting securities of the Company then outstanding be voted “FOR” the adoption of the proposal.
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Each of Proposals 2 (reelection of Efrat Makov as an Outside Director) and 3 (approval of an amendment to the compensation policy for officers and directors of the Company (the “Compensation Policy”)), requires, in addition to the affirmative vote of a simple majority of the ordinary shares of the Company voted in person or by proxy at the Annual Meeting on the proposal, that either: (1) a simple majority of shares voted at the Annual Meeting, excluding the shares of controlling shareholders and of shareholders who have a personal interest in the
approval of the resolution, be voted “FOR” the proposed resolution or (2) the total number of shares of non-controlling shareholders and of shareholders who do not have a personal interest in the resolution voted against approval of the resolution
does not exceed two percent of the outstanding voting power in the Company.
The term “controlling shareholder” means a shareholder having the ability to direct the activities of a company, other than by virtue of
being an office holder. A shareholder is presumed to be a controlling shareholder if the shareholder holds 50% or more of the voting rights in a company or has the right to appoint the majority of the directors of the company or its general
manager.
Under the Israel Companies Law, a “personal interest” of a shareholder (i) includes a personal interest of the shareholder and any member
of the shareholder’s family, family members of the shareholder’s spouse, or a spouse of any of such family members, or a personal interest of a company with respect to which the shareholder (or such family member) serves as a director or chief
executive officer, owns at least 5% of the shares or has the right to appoint a director or chief executive officer, and (ii) excludes an interest arising solely from the ownership of our ordinary shares. Under the Israel Companies Law, in the case
of a person voting by proxy for another person, “personal interest” includes a personal interest of either the proxy holder or the shareholder granting the proxy, whether or not the proxy holder has discretion how to vote.
The Israel Companies Law requires that each shareholder voting on the proposal indicate whether or not the shareholder is a controlling shareholder or has a personal interest in
the proposed resolution. To avoid confusion, every shareholder voting by means of the enclosed proxy card or via a voting instruction form, internet voting or telephone, will be deemed to confirm to the Company that such shareholder is NOT a
controlling shareholder and does NOT have a personal interest in Proposals 2 and 3.
If you are a controlling shareholder or have a personal interest, please contact the Company’s General Counsel for guidance at +972-9-761-9200; if you hold
your shares in “street name,” you may also contact the representative managing your account, who should contact us on your behalf.
Each of Proposals 4 (approval of the compensation payable to directors), 5 (approval of the grant of 12,000 RSUs to David Reis, Cynthia L. Paul, Raffi Kesten and Efrat Makov),
and 6 (reappointment of independent registered public accounting firm) requires that a simple majority of the ordinary shares of the Company voted in person or by proxy at the Annual Meeting on the matter presented for passage be voted “FOR” the
adoption of the proposal.
Q: How will my shares be voted if I do not provide instructions on the proxy card?
| A: |
If you are the record holder of your shares and do not specify on your proxy card how you want to vote your shares, your shares will be voted in favor of the proposals in accordance with the recommendation of the Board:
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1. |
“FOR” the approval of an amendment to the Company’s Articles of Association, effective immediately upon the approval of Proposal 1, to provide for the elimination of the different classes of
members of the Board and to set the term of each director who is elected or reelected at or after the Annual Meeting (other than Outside Directors, who shall continue to serve in accordance with the Israel Companies Law) to one year.
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2. |
“FOR” the reelection of Efrat Makov as an Outside Director of the Company, to serve for a term of three years commencing as of the end of her current term, or until her office is vacated in
accordance with the Company’s Articles of Association or the Israel Companies Law.
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3. |
“FOR” the amendment to the Compensation Policy.
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4. |
“FOR” the approval of the compensation payable to the Company’s directors.
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5. |
“FOR” the approval of the approval of the grant of 12,000 RSUs to David Reis, Cynthia L. Paul, Raffi Kesten and Efrat Makov.
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6. |
“FOR” the approval of the reappointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as Allot’s independent registered public accounting firm for the fiscal year
ending December 31, 2024 and until the next annual meeting of shareholders, and to authorize the Board, upon recommendation of the audit committee, to fix the remuneration of said independent registered public accounting firm.
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7. |
In accordance with the best judgment of the named proxies on any other matters properly brought before the annual meeting and any postponement(s) or adjournment(s) thereof.
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If you are a beneficial owner of shares and do not specify how you want to vote, your shares will be included in determining the presence of a quorum at the Annual Meeting, but will not be
considered as present and entitled to vote on any matter to be considered at the Annual Meeting. If your shares are held of record by a bank, broker, or other nominee, we urge you to give instructions to your bank, broker, or other nominee as to
how you wish your shares to be voted so you may participate in the shareholder voting on these important matters.
HOW TO FIND VOTING RESULTS
Q: Where do I find the voting results of the Annual Meeting?
| A: |
We plan to announce preliminary voting results at the Annual Meeting and to report the final voting results following the Annual Meeting in a Report of Foreign Private Issuer on Form 6-K that we will furnish to the SEC.
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SOLICITATION OF PROXIES
Q: Who will bear the costs of solicitation of proxies for the Annual Meeting?
| A: |
The Company will bear the costs of solicitation of proxies for the Annual Meeting. In addition to solicitation by mail, directors, officers and employees of the Company may solicit proxies from shareholders by telephone, personal
interview or otherwise. Such directors, officers and employees will not receive additional compensation, but may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation. Brokers, nominees, fiduciaries and
other custodians have been requested to forward soliciting material to the beneficial owners of ordinary shares held of record by them, and such custodians will be reimbursed by the Company for their reasonable out-of-pocket expenses. The
Company may also retain an independent advisor to assist in the solicitation of proxies. If retained for such services, the costs will be paid by the Company.
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AVAILABILITY OF PROXY MATERIALS
Copies of the proxy card, the notice of the Annual Meeting and this proxy statement are available at the “Investor Relations” portion of our Company’s website, www.allot.com.
The contents of that website are not a part of this proxy statement.
SHARES OUTSTANDING
As of the Record Date, the Company had 39,289,327 ordinary shares outstanding. American Stock Transfer & Trust Company is the transfer agent and registrar for our ordinary
shares.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Major Shareholders
The following table sets forth certain information regarding the beneficial ownership of our outstanding ordinary shares as of the Record Date, by each person whom we know
beneficially owns more than 5.0% of the outstanding ordinary shares of the Company. Each of our shareholders has identical voting rights with respect to its shares.
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Ordinary Shares
Beneficially
Owned (1)
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Percentage of
Ordinary Shares
Beneficially
Owned
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Lynrock Lake Partners LLC (2)
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8,768,666
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22.3
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%
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QVT Financial LP (3)
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2,857,225
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7.3
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%
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Clal Insurance Enterprises Holdings Ltd. (4)
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2,739,043
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7.0
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%
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(1) |
As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. For purposes of this table, a person is deemed to be the beneficial owner
of ordinary shares that can be acquired within 60 days from the Record Date through the exercise of any option or warrant. Ordinary shares subject to options or warrants that are currently exercisable or exercisable within 60 days are
deemed outstanding for computing the ownership percentage of the person holding such options or warrants, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based upon
39,289,327 ordinary shares outstanding as of the Record Date.
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(2) |
Based on a Schedule 13D/A filed on November 21, 2023, Lynrock Lake LP and Lynrock Lake Partners LLC reported that each had sole voting and dispositive power over 8,768,666 ordinary shares and Cynthia L. Paul reported that she had sole
voting and dispositive power over 8,775,332 ordinary shares. This amount does not include any ordinary shares issuable upon conversion of a senior unsecured convertible promissory note, issued to Lynrock Lake Master Fund LP (“Lynrock Lake Master”) in February 2022 in an aggregate principal amount of $40 million, which is subject to a beneficial ownership limitation of 19.99% of the ordinary shares outstanding immediately after
any such conversion (which percentage may be decreased upon notice by Lynrock Lake Master or increased to 24.99% upon 61 days’ notice by Lynrock Lake Master). Lynrock Lake LP (the “Investment Manager”)
is the investment manager of Lynrock Lake Master, and pursuant to an investment management agreement, the Investment Manager has been delegated full voting and investment power over our securities held by Lynrock Lake Master. Cynthia L.
Paul, the Chief Investment Officer of the Investment Manager and Sole Member of Lynrock Lake Partners LLC, the general partner of the Investment Manager, may be deemed to exercise voting and investment power over our securities held by
Lynrock Lake Master. The address of the reporting persons is 2 International Drive, Suite 130, Rye Brook, NY 10573.
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(3) |
Based on a Schedule 13D/A filed on August 29, 2024, QVT Financial LP, a Delaware limited partnership (“QVT Financial”), QVT Financial GP LLC, a Delaware limited liability company, QVT Family Office Fund LP (the “Fund”), a Cayman limited
partnership and QVT Associates GP LLC, a Delaware limited liability company (“Fund GP”) (collectively, the “Reporting Persons”) that they had shared voting and dispositive power over 2,857,225 ordinary shares. The principal executive
offices of QVT Financial, QVT Financial GP LLC and Fund GP are located at 888 Seventh Avenue, 43rd Floor, New York, New York 10106. The registered office of the Fund is 1 Nexus Way, Camana Bay, George Town, Grand Cayman KY1-9005, Cayman
Islands.
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(4) |
Based on a Schedule 13G/A filed on February 14, 2024, Clal Insurance Enterprises Holdings Ltd. (“Clal”) had shared voting and dispositive power over 2,739,043 of our shares. All of these shares are
held for members of the public through, among others, provident funds, mutual funds, pension funds and insurance policies, which are managed by subsidiaries of Clal. The address of Clal is 36 Raoul Wallenberg Street, Tel Aviv 37070, Israel.
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Beneficial Ownership of Executive Officers and Directors
The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of the Record Date, by (i) each of our directors and nominees,
(ii) each of our executive officers and (iii) all of our executive officers and directors serving as of the Record Date, as a group. Unless otherwise stated, the address of each named executive officer and director is c/o Allot Ltd., 22 Hanagar
Street, Neve Ne’eman Industrial Zone B, Hod-Hasharon 4501317, Israel.
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Name
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Ordinary Shares Beneficially Owned(1)
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Percentage of Ordinary Shares Beneficially Owned
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Directors
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David Reis
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|
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*
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*
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Raffi Kesten
|
|
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*
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|
|
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*
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Nadav Zohar
|
|
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*
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*
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Cynthia L. Paul(2)
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8,781,999
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22.4
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%
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Efrat Makov
|
|
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*
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|
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*
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Steven D. Levy
|
|
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*
|
|
|
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*
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|
|
Executive Officers
|
|
|
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|
Eyal Harari
|
|
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*
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|
|
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*
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Liat Nahum
|
|
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*
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*
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Rael Kolevsohn
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*
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*
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Assaf Eyal
|
|
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*
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*
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|
Vered Zur
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|
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*
|
|
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*
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|
Mark Shteiman
|
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*
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|
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*
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Gili Groner
|
|
|
*
|
|
|
|
*
|
|
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Boaz Grossman
|
|
|
*
|
|
|
|
*
|
|
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Noam Lila
|
|
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*
|
|
|
|
*
|
|
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All directors, director nominees and executive officers as a group
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|
|
9,532,631
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|
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24.3
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%
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* Represents less than one percent of the outstanding ordinary shares.
(1) As used in this table, “beneficial ownership” is determined in accordance with the rules of the SEC and consists of either or both voting or investment power with respect to securities. For
purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from the Record Date through the exercise of any option or vesting of any restricted stock unit (“RSU”). Ordinary shares subject to options that are currently exercisable or exercisable within 60 days, or RSUs that will become vested within 60 days, are deemed outstanding for computing the ownership percentage of the person
holding such options or RSUs, but are not deemed outstanding for the purpose of computing the ownership percentage of any other person. Except as otherwise indicated, the persons named in the table have reported that they have sole voting and sole
investment power with respect to all shares of common stock shown as beneficially owned by them. The amounts and percentages are based upon 39,289,327 ordinary shares outstanding as of the Record Date pursuant to Rule 13d-3(d)(1)(i) under the
Exchange Act.
As of the Record Date, there were, in the aggregate 3,148,343 ordinary shares subject to outstanding equity awards, which amount includes (i) options exercisable for 62,750 ordinary shares, of
which none are held by our directors and executive officers, and (ii) 3,085,593 unvested RSUs, of which our directors and executive officers held 1,076,141 unvested RSUs. Furthermore, 89,149 ordinary shares remained reserved for future grants under
the Plan (as defined below). Taking into account the grants proposed pursuant to Proposals 5, the number of ordinary shares remaining reserved for future grants under the Plan, as of the Record Date, is equal to 41,149 ordinary shares.
(2) See “Security Ownership of Certain Beneficial Owners and Management” above and note 2 to the table contained therein.
COMPENSATION OF EXECUTIVE OFFICERS
For information concerning the total compensation earned during 2023 by our five most highly-compensated office holders (as defined in the Israel Companies Law), including base
salary, share-based compensation, directors’ fees (where applicable) and all other compensation, please see “Item 6.B. Compensation of Officers and Directors—Compensation of our Five Most Highly Compensated Office Holders—Summary Compensation
Table” of our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on April 10, 2024, a copy of which is available on our website at www.allot.com or on the SEC’s website at www.sec.gov.
CORPORATE GOVERNANCE
Following the Annual Meeting, assuming the reelection of Efrat Makov as an Outside Director under Proposal 2, our Board will consist of six directors. Our Articles of Association
provide that our Board may consist of up to nine directors. During the year ended December 31, 2023, each director (with the exception of Mr. Reis, who was appointed as an interim director in September 2023) attended in excess of 75% of all Board
meetings and in excess of 75% of the meetings of each committee of the Board on which he or she serves. Since his appointment in September 2023, Mr. Reis attended in excess of 75% of all Board meetings and in excess of 75% of the meetings of the
committee of the Board on which he serves.
Under our Articles of Association, our directors (other than our Outside Directors) are divided into three classes. Each class of directors consists, as nearly as possible, of
one-third of the total number of directors constituting the entire Board (other than our Outside Directors). At each annual meeting of our shareholders, the election or reelection of directors following the expiration of the term of office of the
directors of that class of directors is for a term of office that expires on the third annual meeting following such election or reelection, such that each year the term of office of one class of directors expires. See Proposal 1 for a proposed
change to our Articles of Association in this respect.
Our current Class I directors, Nadav Zohar and Cynthia Paul, will hold office until the 2025 annual meeting of shareholders. Our current Class II directors, David Reis and Raffi
Kesten, will hold office until the 2026 annual meeting of shareholders. We currently do not have any Class III directors. In addition, assuming the reelection of Efrat Makov as an Outside Director under Proposal 2, we will have two Outside
Directors serving for fixed three-year periods in accordance with the Israel Companies Law. These two Outside Directors have each been determined by our Board to meet the independence requirements of the listing standards of The Nasdaq Stock Market
and satisfy the requirements for an Outside Director under the Israel Companies Law.
Biographical information concerning our director nominee, Efrat Makov, and of each of the other current directors (who are not nominated for reelection at the Annual Meeting), is
provided below.
Nominee for Reelection to the Board as an Outside Director to Serve for a Three-Year Term Commencing at the End of Her Current Term
Efrat Makov, age 56, has served as the lead independent director on our Board since November 2021. She has served as a director of
Ceragon Networks Ltd since October 2022 and B Communications Ltd. (TASE: BCOM) since November 2019. Ms. Makov previously served as a director of BioLight Life Sciences Ltd. (TASE: BOLT), an emerging global ophthalmic company, from April 2011 to
July 2020. Ms. Makov served as a director of Kamada Ltd. (NASDAQ: KMDA), a plasma-derived biopharmaceutical company, from December 2018 to December 2019, of Anchiano Therapeutics Ltd. (NASDAQ: ANCN) (now known as Chemomab Therapeutics Ltd.
(NASDAQ: CMMB)), a clinical-stage biopharmaceutical company, from September 2018 to February 2020 and of iSPAC 1 Ltd. (TASE: ISPC) from July 2021 to July 2023. Ms. Makov served as the Chief Financial Officer of Alvarion Ltd. (formerly NASDAQ;
TASE: ALVR), a global provider of autonomous Wi-Fi networks, from April 2007 to December 2010. Ms. Makov served as the Chief Financial Officer of Aladdin Knowledge Systems Ltd. (formerly NASDAQ; TASE: ALDN), an information security leader
specializing in authentication, software DRM and content security, from September 2005 to January 2007, where she was responsible for the finance, operations, information systems and human resources functions. Prior to that, Ms. Makov served in
management positions at two Israeli-based public companies, including as Vice President of Finance at Check Point Software Technologies Ltd. (NASDAQ: CHKP), a worldwide leader in IT security, from September 2002 to August 2005. Ms. Makov served
as Director of Finance for NUR Macroprinters Ltd. (formerly NASDAQ: NURM) (now known as Ellomay Capital Ltd. (NYSE; TASE: ELLO)), from August 2000 to August 2002. Prior to that, Ms. Makov spent seven years in public accounting with Arthur
Andersen LLP in its New York, London and Tel Aviv offices. Ms. Makov holds a B.A. degree in Accounting and Economics from Tel Aviv University and is a certified public accountant in Israel and the United States.
Class I Directors Whose Terms Continue Until the 2025 Annual General Meeting of Shareholders
Nadav Zohar, age 58, has served as an interim director since February 2017 and as a director since April 2017. Mr. Zohar has held the
position of Chairman of the LRC Group since 2018. Mr. Zohar served as the head of Business Development of Gett, an “on demand” transportation service provider from March 2015 and October 2018. Prior to joining Gett, Mr. Zohar served as Chief
Operating Officer of Delek Global Real Estate PLC, company description to be added, between 2006 and 2009 and held several executive positions with Morgan Stanley, a multinational investment bank and financial services company, between 2001 and
2006, the last of which was Executive Director, Financial Sponsors Group. Prior to joining Morgan Stanley, Mr. Zohar served in executive roles at Lehman Brothers, a global financial services firm, between 1997 and 2001. Mr. Zohar serves as a board
member of Matomy Media Group Ltd. (London Stock Exchange: MTMY), a digital performance-based advertising company. Mr. Zohar holds a Masters in Finance (graduated with Merit) from the London Business School and a LLB in Law (graduated with honors)
from the University of Reading.
Cynthia L. Paul, age 52, has served as a director since December 2022. She is Chief Investment
Officer and Chief Executive Officer of Lynrock Lake LP, an investment management firm she founded in 2018. Ms. Paul invests across the full capital structure of public and private companies, employing a long-term, fundamentally-driven,
value-oriented investment strategy, with a focus on the technology industry. She is a board member of ON24, Inc. (NYSE: ONTF), a SaaS company providing a cloud-based sales and marketing platform for digital engagement. From 2018 until the time of
its acquisition in 2021, Ms. Paul served as a board member of DSP Group, a NASDAQ-listed semiconductor company. She served as chairperson of the Nomination and Corporate Governance Committee, a member of the Audit Committee, and a member of the
Compensation Committee. Ms. Paul served as Chairperson of the Board of Directors of Conexant Systems, LLC, a privately-held semiconductor company, from 2013 until its acquisition in 2017. Ms. Paul is an advisory board member and former board member
of AlphaSense Inc., a privately-held SaaS company providing intelligent search to enterprise customers. From 2002 to 2017, Ms. Paul was a portfolio manager at Soros Fund Management LLC (“SFM”), where she managed a portfolio across corporate credit,
convertible and equity securities. Ms. Paul joined SFM in 2000 and served as a SFM representative for the Council on Foreign Relations and on SFM’s Investment Committee. Prior to joining SFM, she worked at The Palladin Group in 1999 and at JP
Morgan from 1994 to 1999, most recently as Head of Convertible Research. Ms. Paul graduated from Princeton University in 1994 with an Independent Major in Statistics and Operations Research, a Certificate from the Princeton School of Public and
International Affairs, and a Certificate in Engineering Management Systems.
As noted above under “Security Ownership of Certain Beneficial Owners and Management,” based on a Schedule 13D/A filed on November 21, 2023, Ms. Paul reported that she had sole
voting and dispositive power over 8,775,332 ordinary shares (as did each of the Investment Manager and Lynrock Lake Partners LLC). This amount does not include any ordinary shares issuable upon conversion of a senior unsecured convertible
promissory note, issued to Lynrock Lake Master in February 2022 in an aggregate principal amount of $40 million, which is subject to a beneficial ownership limitation of 19.99% of the ordinary shares outstanding immediately after any such
conversion (which percentage may be decreased upon notice by Lynrock Lake Master or increased to 24.99% upon 61 days’ notice by Lynrock Lake Master). The Investment Manager is the investment manager of Lynrock Lake Master, and pursuant to an
investment management agreement, the Investment Manager has been delegated full voting and investment power over our securities held by Lynrock Lake Master. Cynthia L. Paul is the Chief Investment Officer of the Investment Manager and Sole Member
of Lynrock Lake Partners LLC, the general partner of the Investment Manager, and may be deemed to exercise voting and investment power over our securities held by Lynrock Lake Master.
Class II Directors Whose Terms Continue Until the 2026 Annual General Meeting of Shareholders
David Reis, age 63, has served as Chairman of our Board since September 2023. Mr. Reis has served as a director of Stratasys Ltd.
(NASDAQ: SSYS) (“Stratasys”) since June 2013. During his tenure with Stratasys, he also served as vice chairman of the board of directors of Stratasys and as an executive director. Since 2017, Mr. Reis has served as Chairman at Enercon Technologies
Ltd., Tuttnauer Ltd and Seed X Inc. (since 2020) and a director at Scodix Ltd (since 2021). He also served as a director of Objet Ltd. from 2003 until the closing of the Stratasys-Objet merger and as the Chief Executive Officer of Stratasys from
March 2009 until July 2016 (and, prior to the Stratasys-Objet merger, as Chief Executive Officer of Objet). Previously, he served as Chief Executive Officer and President of NUR Macroprinters Ltd. (NURMF.PK), a wide format printer manufacturer that
was acquired by HP, from February 2006 to March 2008. Prior to joining NUR, Mr. Reis served as the Chief Executive Officer and President of ImageID, an automatic identification and data capture solution provider, and of Scitex Vision, a developer
and manufacturer of wide-format printers. Mr. Reis holds a B.A. in Economics and Management from the Technion-Israel Institute of Technology and an M.B.A. from the University of Denver. Mr. Reis is also a graduate of the Harvard Business School
Advanced Management Program.
Raffi Kesten, age 71, has served as an interim director since May 2022 and as a director since December 2022. Mr. Kesten served as Chief
Business Officer of Radware Ltd. (NASDAQ: RDWR) since June 2019 until February 2022, leading all customer-facing functions worldwide as well as international sales, professional services, sales engineering and business development, and
international sales. Mr. Kesten has over 30 years of experience in leadership roles at various technology companies, including Intel ,Vice President of HP Indigo Division, a division of HP Inc., between 1991 and 1995, as a Chief Operating Officer
and General Manager of Cisco Videoscape (formerly NDS Group - Prior acquisition) from 1996 to 2015, as Vice President Video and General Manager Israel of Cisco Videoscape from 2012 to 2015, as Silicon Process Engineer of Intel Corporation from 1982
to 1991, and as a managing partner at Jerusalem Venture Partners from 2014 to 2018. Mr. Kesten holds a B.S. in chemical engineering from Ben Gurion University and an Executive M.B.A. from The Hebrew University, Israel.
Outside Director Whose Term Continues Until the 2025 Annual General Meeting of Shareholders
Steven Levy, age 68, has served as an outside director since 2007. Mr. Levy served as a Managing Director and Global Head of
Communications Technology Research at Lehman Brothers, a global financial services firm, from 1998 to 2005. Before joining Lehman Brothers, Mr. Levy was a Director of Telecommunications Research at Salomon Brothers, an American investment bank,
from 1997 to 1998, Managing Director and Head of the Communications Research Team at Oppenheimer & Co., a global full-service brokerage and investment bank from 1994 to 1997 and a senior communications analyst at Hambrecht & Quist, a
California-based investment bank, from 1986 to 1994. Mr. Levy has served as a director of PCTEL, a broadband wireless technology company since 2006 and currently serves as their Chairman and served as a director of Edison Properties, a privately
held U.S. real estate company, since 2015. Mr. Levy previously served as a director of privately held GENBAND Inc., a U.S. provider of telecommunications equipment. Mr. Levy holds a B.Sc. in Materials Engineering and an M.B.A., both from the
Rensselaer Polytechnic Institute.
Director Independence
Under the listing standards of The Nasdaq Stock Market, a majority of our directors must meet the independence requirements specified in those rules. Following the Annual
Meeting, assuming the reelection of Ms. Makov, our Board will consist of six members, all of whom, other than Cynthia L. Paul, will be independent under the listing standards of The Nasdaq Stock Market, as determined by our Board. In reaching that
conclusion, our Board has determined that none of these directors or nominees (other than Ms. Paul) has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our Board
determined that Ms. Paul is not independent under the listing standards of The Nasdaq Stock Market because of the senior unsecured convertible promissory note issued to Lynrock Lake Master Fund in February 2022 in an aggregate principal amount of
$40 million and the potential that different interests may arise as a result of that relationship. None of our directors is a member of our executive team.
MATTERS SUBMITTED TO SHAREHOLDERS
PROPOSAL 1
APPROVAL OF AN AMENDMENT TO OUR ARTICLES OF ASSOCIATION TO
DECLASSIFY OUR BOARD
Background
We are proposing to amend our Articles of Association to eliminate the staggered nature of our Board. At the time of our initial public offering in 2006, the Company established
a classified board structure because such structure offered certain advantages to the Company, such as providing continuity and stability, encouraging directors to employ a long-term perspective and ensuring that a majority of the Board will always
have prior experience with the Company. While there are valid arguments in favor of a classified board structure, the Board believes that corporate governance standards have evolved and that annual elections of directors will enhance directors’
accountability to shareholders and will provide the Company’s shareholders with the opportunity to express their views on the performance of the entire Board on an annual basis. After careful consideration, the Board determined that it is
appropriate and in the best interest of the Company and its shareholders to propose amendments to our Articles of Association to eliminate the classified structure of the Board.
Under our current Articles of Association, our directors (other than Outside Directors, whose appointments are required under the Israel Companies Law) are divided into three
classes. Each class of directors consists, as nearly as possible, of one-third of the total number of directors constituting the entire Board (other than the Outside Directors). At each annual general meeting of our shareholders, the election or
reelection of directors following the expiration of the term of office of that class of directors is for a term of office that expires as of the third annual general meeting following such election or reelection, such that each year the term of
office of only one class of directors will expire.
We are proposing to amend and restate our Articles of Association to eliminate the different classes of members of our Board and to set the term of each director who is elected
or reelected at or after the Annual Meeting (other than Outside Directors, who shall continue to serve in accordance with the Israel Companies Law) to be one year each, effective immediately. The then-current terms of all directors serving prior to
the Annual Meeting shall continue until their completion.
Specifically, we propose to amend Article 39.3 of our Articles of Association in its entirety as follows (additions are underlined, deletions are struck through):
“39.3 Subject to the provisions of Articles 40 and 41, the members of the Board of Directors of the Company shall be
elected by an Ordinary Resolution in a General Meeting, according to the following conditions:
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39.23.1 |
Commencing with the Company’s 2024 Annual General Meeting, the members of the Board of Directors of the Company, other than Outside Directors, shall be elected by an Ordinary Resolution in a General Meeting, and each such Director
shall hold office until the next Annual General Meeting and until his or her successor shall be elected and qualified. The Directors of the Company (other than the Outside Directors) shall be divided into three classes,
designated Class I, Class II and Class III. Each class of Directors shall consist, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors. The above-described term of office of the
Class I Directors shall expire at the first Annual General Meeting ensuing next after the division into Classes; the above-described term of office of the Class II Directors shall expire at the second Annual General Meeting ensuing after
the division into Classes; and the above-described term of office of the Class III Directors shall expire at the third Annual General Meeting ensuing after the division into Classes.
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39.23.2 |
Notwithstanding the foregoing Article 39.2.1, any Director, other than Outside Directors, elected prior to the Company’s 2024 Annual General Meeting shall hold office until the completion of his or her then-current term of office.
At each Annual General Meeting, election or re-election of Directors following the expiration of the term of office of the Directors of a certain Class, will be for a term of office that expires on the third Annual General Meeting
following such election or re-election, such that from 2007 and forward (inclusive), each year the term of office of only one Class of Directors will expire. A Director shall hold office until the Annual General Meeting for the year in
which his or her term expires and until his or her successor shall be elected and qualified, subject to Article 41 below.
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39.3.3 |
Upon a change in the number of Directors, in accordance with the provisions of these Articles, any increase or decrease shall be apportioned among the Classes so as to maintain the number of Directors in each Class as nearly
equal as possible. The removal of any Director, other than in accordance with Article 41 below, shall only be carried out by a Special Resolution.
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39.3.4 |
Any change to this Article 39.3 shall only be carried out by a resolution of the shareholders of the Company, adopted by the holders of securities representing at least 2/3 (two thirds) of the voting securities of the Company
then outstanding.”
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Proposed Resolution
You are requested to adopt the following resolution:
“1. RESOLVED, that the Company’s Articles of Association be amended and restated, as set forth in the Proxy
Statement.”
Vote Required
The affirmative vote of the holders of securities representing at least two-thirds of the voting securities of the Company is required to adopt the foregoing resolution.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTION.
PROPOSAL 2
REELECTION OF EFRAT MAKOV AS AN OUTSIDE DIRECTOR
Background
As an Israeli company (unless we affirmatively opt out of such requirement (as permitted under the Israel Companies Law)), we are required to have a minimum of two directors who
meet certain independence and other criteria established by the Israel Companies Law. These directors are referred to as “Outside Directors.” All of our Outside Directors are required to serve on our audit committee and our compensation and
nomination committee, each of which was formed in accordance with the Israel Companies Law and the listing standards of The Nasdaq Stock Market, and at least one Outside Director is required to serve on each other committee of our Board. Currently,
our two Outside Directors are Steven Levy and Efrat Makov. Mr. Levy was initially elected as an Outside Director in 2007 and Ms. Makov was initially elected as an Outside Director in 2021. Mr. Levy was most recently reelected to serve as an Outside
Director until August 14, 2025, or until his office is vacated in accordance with our Articles of Association or the Israel Companies Law. Ms. Makov was elected to serve as an Outside Director until November 30, 2024, or until her office is vacated
in accordance with our Articles of Association or the Israel Companies Law.
According to the Israel Companies Law, subject to relief under certain circumstances for companies whose shares are traded on a securities exchange outside of Israel, at least
one of the Outside Directors must have “accounting and financial expertise” and the other Outside Director must have either “accounting and financial expertise” or “professional qualifications,” as such terms are defined by regulations promulgated
under the Israel Companies Law. Each of Mr. Levy and Ms. Makov qualify as having relevant accounting and financial expertise.
Outside Directors must be elected by the shareholders by a special majority, as described above. The term of service of an Outside Director is three years and may be extended for
up to two additional three-year terms; thereafter, an Outside Director may be reelected by our shareholders for additional periods of up to three years each only if our audit committee and our Board confirm that, in light of the Outside Director’s
expertise and special contribution to the work of the Board and its committees, the reelection for such additional period is beneficial to the Company.
At the Annual Meeting, shareholders will be asked to reelect Ms. Makov as an Outside Director until December 11, 2027, or until her office is vacated in accordance with our
Articles of Association or the Israel Companies Law. Ms. Makov has advised the Company that she is willing to continue serving as a director if reelected, that she has the qualifications and time required for the performance of her duties as a
director, and that there are no legal restrictions preventing her from assuming such office.
Biographical information concerning Efrat Makov is set forth above.
Our Board has determined that Efrat Makov satisfies the requirements for an Outside Director under the Israel Companies Law and the independence requirements under the listing
standards of The Nasdaq Stock Market and as having financial and accounting expertise under the Israel Companies Law.
Proposed Resolution
You are requested to adopt the following resolution:
“2. RESOLVED, that Efrat Makov be elected as an Outside Director, to serve for a term of three years
commencing as of the end of her current term and until December 11, 2027, or until her office is vacated in accordance with the Company’s Articles of Association or the Israel Companies Law.”
Vote Required
The affirmative vote of the holders of a majority of the voting power represented at the Annual Meeting in person or by proxy and voting thereon is required to adopt the
foregoing resolution, provided that either:
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1. |
a simple majority of shares voted at the Annual Meeting, excluding the shares of controlling shareholders and of shareholders who have a personal interest in the approval of the resolution, other
than a personal interest in the appointment that is not as a result of relationship with the controlling shareholder, be voted “FOR” the resolution; or
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2. |
the total number of shares of non-controlling shareholders and of shareholders who do not have a personal interest in the approval of the resolution voted against approval of the resolution does not exceed two percent of the outstanding
voting power in the Company.
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For certain definitions, see “About the Voting Procedure at the Annual Meeting – What vote is required to approve each proposal presented at the Annual Meeting?” above.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTION.
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO THE COMPANY’S COMPENSATION POLICY
FOR OFFICERS AND DIRECTORS
Background
Under the Israel Companies Law, every office holder’s terms of compensation, including fixed remuneration, bonuses, equity compensation, retirement or termination payments,
indemnification, liability insurance and the grant of an exemption from liability, must comply with the Compensation Policy, and must be approved by the compensation committee and the board of directors, in that order. In addition, the terms of
compensation of directors, the chief executive officer, and any employee or service provider who is considered a controlling shareholder must also be approved separately by the shareholders of the Company, after the approval by the compensation
committee and the board of directors.
The Israel Companies Law requires the Board to reevaluate the compensation policy from time to time, and upon any material change in the circumstances that existed at the time
the policy was formulated. The compensation policy must also be reviewed and reapproved at least once every three years. The compensation policy must be recommended by the compensation committee, approved by the board of directors and approved by
the shareholders, in that order. The Compensation Policy was last approved by our shareholders in December 2022.
The Compensation Policy currently provides that the vesting period of equity awards granted to non-executive directors shall not be less than three years. Recently, following
their review of our Compensation Policy, the compensation and nomination committee and Board approved, subject to shareholder approval, an amendment to the Compensation Policy to allow for the grant of equity awards to non-executive directors with
a vesting period shorter than three years, to be determined by the Board upon each grant. The Compensation Policy, as amended, would allow the grant of equity awards to non-executive directors with a vesting period of not less than one year; equity
awards may also be granted with immediate vesting, but in such event the awards would be treated as cash awards rather than equity awards for purposes of the limitations imposed by the Compensation Policy. The proposed amendment to the Compensation
Policy results from the ongoing review by the compensation and nomination committee and Board of factors aimed to allow the Company to attract and retain highly-qualified directors while aligning the form of payment of their compensation with the
resources and needs of the Company specifically with regards to the Company’s strategy planning for the short and long term.
Below are the specific changes we propose to make to the Compensation Policy, marked to show the proposed changes (the language proposed to be added is underlined, and the
language proposed to be deleted is crossed out):
“11.1 Compensation of the members of Allot’s Board which are non-executive directors
• The non-executive members of Allot’s Board of Directors may (and, in the case of externaloutside directors, shall) be entitled
to remuneration and refund of expenses according to the provisions of the Companies Regulations (Rules on Remuneration and Expenses of Outside Directors), 5760-2000, as amended by the Companies Regulations (Relief for Public Companies
Traded on a Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time.
• In addition, the non-executive members of Allot’s Board of Directors may be eligible to participate in Allot’s equity plans. Such equity grants will
vest over a period of not less than one year, to be determined by Allot’s Board of Directors with respect to reach grant, and will not exceed in value (based on accepted valuation methods), on the date of grant, $200,000, per vesting annum. Equity
awards will vest over a period of not less than 3 years. The non-executive members of Allot’s Board of Directors may also receive equity grants with immediate vesting, but such grants will be treated as cash compensation for purposes
of this Compensation Policy.
Proposed Resolution
You are requested to adopt the following resolution:
“3. RESOLVED, to approve the amendment to the Company’s Compensation Policy for Officers and Directors as described in the Proxy Statement.”
Vote Required
The affirmative vote of the holders of a majority of the voting power represented at the Annual Meeting in person or by proxy and voting thereon is required to adopt the
foregoing resolution, provided that either:
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1. |
a simple majority of shares voted at the Annual Meeting, excluding the shares of controlling shareholders and of shareholders who have a personal interest in the approval of the resolution, be
voted “FOR” the resolution; or
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2. |
the total number of shares of non-controlling shareholders and of shareholders who do not have a personal interest in the approval of the resolution voted against approval of the resolution does not exceed two percent of the outstanding
voting power in the Company.
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For certain definitions, see “About the Voting Procedure at the Annual Meeting – What vote is required to approve each proposal presented at the Annual Meeting?” above.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTION.
PROPOSAL 4
APPROVAL OF THE COMPENSATION PAYABLE TO DIRECTORS
Background
We pay each of our directors, other than the Chairman of the Board, the same compensation in the form of cash and equity. We currently pay each of our directors, other than the
Chairman of the Board, the following cash compensation: (i) a quarterly retainer fee of NIS 13,110 (approximately $3,496) (the “Quarterly Retainer”) and (ii) a per-meeting attendance fee of NIS 3,750
(approximately $1,000), a fee of NIS 2,250 (approximately $600) for each meeting the director attends telephonically or through similar means, and a fee of NIS 1,875 (approximately $500) for each written resolution of the Board executed by the
director (each of the fees in the foregoing sub-section (ii), a “Participation Fee”).
Upon his or initial election to our Board, each of our directors is entitled to receive a uniform grant of 30,000 RSUs, which vest over a period of three years in equal quarterly
installments subject to such director continuing to serve as a director over such period, and with the vesting subject to acceleration upon certain mergers and acquisitions involving the Company. Additionally, each director, other than the Chairman
of the Board, is entitled to 10,000 RSUs as of every third annual general meeting following his or her initial election, provided that he or she is reelected at such annual general meeting. The foregoing equity compensation is in addition to any
cash compensation which such director is entitled to receive for serving as a member of our Board.
The Company’s compensation and nomination committee recommended, and the Board approved subject to the approval of our shareholders, to increase the Quarterly Retainer to NIS
20,000 (approximately $5,333) and each Participation Fee by 25%.
Additionally, the Company’s compensation and nomination committee recommended, and the Board approved subject to the approval of our shareholders, an amendment to the equity
compensation payable to our directors such that the number of RSUs to be granted to directors shall be determined based on a monetary value, as opposed to a fixed number, and such number of RSUs shall be granted annually. Specifically, under the
amended arrangement, (i) a director who is elected or reelected at the Annual Meeting, and (ii) commencing with the 2025 annual meeting of shareholders, a director who is elected or reelected at an annual meeting of shareholders, or a director who
is not nominated for reelection at an annual meeting of shareholders but continues to serve by virtue of having been elected or appointed to a term that extends beyond such annual meeting, shall be entitled to a number of RSUs valued at $50,000 less the value of any unvested RSUs held by the director as of the date of such annual meeting (with the value of such unvested RSUs being calculated for such purpose based on the average closing price of an
ordinary share over the 30-trading day period ending on the last trading day prior to the annual meeting of shareholders at which such unvested RSUs were granted).The number of RSUs will be determined based on a price per share that is the higher
of (i) $3.00 and (ii) the average closing price of an ordinary share over the 30-trading day period ending on the last trading day prior to the annual meeting of shareholders at which such RSUs are granted. If Proposal 3 is approved, the RSUs will
vest over a period to be determined by Allot’s Board of Directors, or if Proposal 3 is not approved, a period of three years, subject to such director continuing to serve as a director over such period, in either case, in equal quarterly
installments and the vesting will be subject to acceleration upon certain mergers and acquisitions involving the Company.
The proposed compensation is intended to ensure that the Company’s compensation for directors is competitive relative to market practices and designed to attract highly-qualified
directors in the future. The Israel Companies Law requires that this compensation be approved by the compensation and nomination committee, the Board and the shareholders of the Company, in that order. The Company’s compensation and nomination
committee and the Board have approved the compensation described above as being consistent with the Compensation Policy, and have recommended that the proposed compensation be approved by the Company’s shareholders.
If the foregoing cash compensation is not approved by our shareholders at the Annual Meeting, the Company’s directors will continue to receive the cash compensation currently in
place as described above. If the foregoing equity compensation is not approved by our shareholders at the Annual Meeting, the Company’s directors will continue to receive the equity compensation currently in place as described above.
Proposed Resolution
You are requested to adopt the following resolutions:
“4a. RESOLVED, to approve the cash compensation payable to the Company’s directors, as described in the Proxy
Statement.”
“4b. RESOLVED, to approve the equity compensation payable to the Company’s directors, as described in the
Proxy Statement.”
Vote Required
The affirmative vote of the holders of a majority of the voting power represented at the Annual Meeting in person or by proxy and voting thereon is required to adopt this
resolution.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTIONS.
PROPOSAL 5
APPROVAL OF A GRANT OF 12,000 RSUS TO EACH OF DAVID REIS, CYNTHIA L. PAUL,
RAFFI KESTEN AND EFRAT MAKOV
Background
The Company’s compensation and nomination committee recommended, and the Board approved a one-time grant of 12,000 RSUs to each of David Reis, Cynthia L. Paul, Raffi Kesten and
Efrat Makov for their significant effort involved in orchestrating and overseeing a transition of both the CEO and CFO roles during the last 12 months as well as participating in an increased number of formal board meetings and informal working
sessions associated with the transition.
If this Proposal 5 is approved by our shareholders, the foregoing RSUs will be vested immediately upon grant.
The Israel Companies Law requires that this compensation be approved by the compensation and nomination committee, the Board and the shareholders of the Company, in that order.
The Company’s compensation and nomination committee and the Board have approved the compensation described above as being consistent with the Compensation Policy, and have recommended that the proposed compensation be approved by the Company’s
shareholders.
Proposed Resolution
You are requested to adopt the following resolutions:
“5. RESOLVED, to approve a grant of 12,000
Restricted Stock Units to each of the following Company Directors: David Reis, Cynthia L. Paul, Raffi Kesten and Efrat Makov.”
Vote Required
The affirmative vote of the holders of a majority of the voting power represented at the Annual Meeting in person or by proxy and voting thereon is required to adopt this
resolution.
Board Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTIONS.
PROPOSAL 6
REAPPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Background
Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, served as our independent registered public accounting firm for the fiscal year ended December 31, 2023.
At the Annual Meeting, shareholders will be asked to approve the reappointment of Kost Forer Gabbay & Kasierer as our independent registered public accounting firm for the year ending December 31, 2024 and until the next annual meeting of
shareholders and to authorize the Board, upon the recommendation of the audit committee, to fix the remuneration of the independent registered public accounting firm in accordance with the volume and nature of its services.
Audit Committee Pre-Approval Policies and Procedures
Our audit committee pre-approves audit and non-audit services rendered by Kost Forer Gabbay & Kasierer and its affiliates. This pre-approval is designed to ensure that such
engagements do not impair the independence of our independent registered public accounting firm.
The following table sets forth, for each of the years indicated, the fees billed by our independent registered public accounting firm.
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Year ended December 31,
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2022
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2023
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(in thousands of U.S. dollars)
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Audit Fees (1)
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445
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489
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Audit-Related Fees (2)
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10
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5
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Tax Fees (3)
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60
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|
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70
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|
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Other
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30
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|
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-
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Total
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|
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____________________
| (1) |
“Audit fees” include fees for services performed by the Company’s independent public accounting firm in connection with our annual audit for 2022 and 2023, certain procedures regarding the Company’s quarterly financial results submitted
on Form 6-K and consultation concerning financial accounting and reporting standards.
|
| (2) |
“Audit-Related fees” relate to assurance and associated services that are traditionally performed by the independent auditor, including: accounting consultation and consultation concerning financial accounting, reporting standards and
due diligence investigations.
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| (3) |
“Tax fees” include fees for professional services rendered by our independent registered public accounting firm for tax compliance, transfer pricing and tax advice on actual or contemplated transactions.
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Proposed Resolution
You are requested to adopt the following resolution:
“6. RESOLVED, that the reappointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as the Company’s independent
registered public accounting firm for the fiscal year ending December 31, 2024 and until the next annual meeting of shareholders be approved, and that the Board, upon recommendation of the audit committee, be authorized to fix the remuneration of
said independent registered public accounting firm in accordance with the volume and nature of their services.”
Vote Required
The affirmative vote of the holders of a majority of the voting power represented at the Annual Meeting in person or by proxy and voting thereon is required to adopt the
foregoing resolution.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE FOREGOING RESOLUTION.
REVIEW OF THE COMPANY’S FINANCIAL STATEMENTS FOR FISCAL YEAR 2023
At the Annual Meeting, the Board will provide a management report which will include a discussion of the Company’s consolidated financial statements for the fiscal year ended
December 31, 2023. This item does not require a vote of the Company’s shareholders.
PROPOSALS OF SHAREHOLDERS
Shareholder Proposals for the Annual Meeting
Any shareholder of the Company who intends to present a proposal at the Annual Meeting must satisfy the requirements of the Israel Companies Law. Under the Israel Companies Law,
only shareholders who severally or jointly hold at least 1% of the Company’s outstanding voting rights are entitled to request that the Board include a proposal in a future shareholders’ meeting, provided that such proposal is appropriate for
consideration by shareholders at such meeting and provided further that the foregoing holdings threshold for submission of a proposal for the nomination of a candidate to serve on the board of directors is 5%. Such shareholders may present
proposals for consideration at the Annual Meeting by submitting their proposals in writing to our General Counsel at the following address: 22 Hanagar Street, Neve Ne’eman Industrial Zone B, Hod Hasharon, Israel, Attention: General Counsel. For a
shareholder proposal to be considered for inclusion in the Annual Meeting, our General Counsel must receive the written proposal no later than November 19, 2024. If our Board determines that a shareholder proposal is duly and timely received and is
appropriate under applicable Israeli law for inclusion in the agenda of the Annual Meeting, we will publish a revised agenda for the Annual Meeting no later than November 26, 2024 in a press release or a Current Report on Form 6-K furnished to the
SEC.
Shareholder Proposals for Annual General Meeting in 2024
We currently expect that the agenda for our annual general meeting to be held in 2025 (the “2025 Annual Meeting”) will include (1) the
reelection of our Class I directors; (2) the approval of the appointment (or reappointment) of the Company’s auditors; and (3) presentation and discussion of the financial statements of the Company for the year ended December 31, 2024 and the
auditors’ report for this period.
Pursuant to Section 66(b) of the Israel Companies Law, shareholders who hold at least 1% of our outstanding ordinary shares are generally allowed to submit a proper proposal for
inclusion on the agenda of a general meeting of the Company’s shareholders, provided that the foregoing holdings threshold for submission of a proposal for the nomination of a candidate to serve on the board of directors is 5%. Such eligible
shareholders may present proper proposals for inclusion in, and for consideration at, the 2025 Annual Meeting by submitting their proposals in writing to Allot Ltd., 22 Hanagar Street, Neve Ne’eman Industrial Zone B, Hod Hasharon, Attention:
General Counsel. For a shareholder proposal to be considered for inclusion in the agenda for the 2025 Annual Meeting, our General Counsel must receive the written proposal not less than 90 calendar days prior to the anniversary of the Annual
Meeting, i.e., no later than September 12, 2025; provided that if the date of the 2025 Annual Meeting is advanced by more than 30 calendar days prior to, or delayed
(other than as a result of adjournment) by more than 30 calendar days after, the anniversary of the Annual Meeting, for a proposal by a shareholder to be timely it must be so delivered not later than the earlier of (i) the 7th calendar
day following the day on which we call and provide notice of the 2025 Annual Meeting and (ii) the 14th calendar day following the day on which public disclosure of the date of the 2025 Annual Meeting is first made.
In general, a shareholder proposal must be in English and must set forth (i) the name, business address, telephone number, fax number and email address of the proposing
shareholder (and each member of the group constituting the proposing shareholder, if applicable) and, if not a natural person, the same information with respect to the person(s) that controls or manages such person, (ii) the number of ordinary
shares held by the proposing shareholder, directly or indirectly, including if beneficially owned by the proposing shareholder (within the meaning of Rule 13d-3 promulgated under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”)); if any of such Ordinary Shares are held indirectly, an explanation of how they are held and by whom, and, if such proposing shareholder is not the holder of record of any such ordinary shares, a
written statement from an authorized bank, broker, depository or other nominee, as the case may be, indicating the number of ordinary shares the proposing shareholder is entitled to vote as of a date that is no more than 10 days prior to the date
of delivery of the shareholder proposal, (iii) any agreements, arrangements, understandings or relationships between the proposing shareholder and any other person with respect to any securities of the Company or the subject matter of the
shareholder proposal, including any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such proposing shareholder, the purpose or effect of which is to give such proposing shareholder economic
risk similar to ownership of shares of any class or series of the Company, (iv) the proposing shareholder’s purpose in making the proposal, (v) the complete text of the resolution that the proposing shareholder proposes to be voted upon at the 2025
Annual Meeting, (vi) a statement of whether the proposing shareholder has a personal interest in the proposal and, if so, a description in reasonable detail of such personal interest, (vii) a declaration that all the information that is required
under the Israel Companies Law and any other applicable law to be provided to the Company in connection with such subject, if any, has been provided, (viii) if the proposal is to nominate a candidate for election to the Board, a questionnaire and
declaration, in form and substance reasonably requested by the Company, signed by the nominee with respect to matters relating to his or her identity, address, background, credentials, expertise, etc., and his or her consent to be named as a
candidate and, if elected, to serve on the Board, and (ix) any other information reasonably requested by the Company. The Company shall be entitled to publish information provided by a proposing shareholder, and the proposing shareholder shall be
responsible for the accuracy thereof. In addition, shareholder proposals must otherwise comply with applicable law and our Articles of Association. Allot may disregard shareholder proposals that are not timely and validly submitted.
The information set forth in this section is, and should be construed as, a “pre-announcement notice” of the 2025 Annual Meeting in accordance with Rule 5C of the Israel
Companies Regulations (Notice of General and Class Meetings in a Public Company), 5760-2000, as amended.
OTHER BUSINESS
The Board is not aware of any other matters that may be presented at the Annual Meeting other than those detailed in the attached Notice.
ADDITIONAL INFORMATION
The Company’s annual report for the fiscal year ended December 31, 2023 filed on Form 20-F with the SEC on April 10, 2024, is available for viewing and download on the SEC’s
website at www.sec.gov, on the Tel-Aviv Stock Exchange filings at www.tase.co.il, as well as under the Investors section of Allot’s website at www.allot.com. In addition, the
Company’s reports of foreign private issuer on Form 6-K are available on the SEC’s website at www.sec.gov. Shareholders may download a copy of any of the foregoing documents without charge at www.allot.com.
The Company is subject to the information reporting requirements of the Exchange Act, applicable to foreign private issuers. We fulfill these requirements by filing reports with
the SEC. The Company’s SEC filings are available to the public on the SEC’s website at www.sec.gov. As a foreign private issuer, the Company is exempt from the rules under the Exchange Act related to the furnishing and content of proxy
statements. The circulation of this proxy statement should not be taken as an admission that the Company is subject to these proxy rules.
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By Order of the Board of Directors, |
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/s/ David Reis |
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David Reis |
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Chairman of the Board of Directors
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November 12, 2024
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