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of 24 1 www.MazorRobotics.com Annual training Code of Business Conduct and Ethics and related policies and procedures Ran Grinshtein, Corporate Controller Corporate Controller April 2015 Slide 2 Agenda Code of Business Conduct and Ethics Whistleblower Policy Foreign Corrupt Practices Act (FCPA) and Anti-Bribery Policy StatementForeign Corrupt Practices Act (FCPA) and Anti-Bribery Policy Statement Gifts, Travel and Entertainment Policy, including Sunshine Act requirements recapGifts, Travel and Entertainment Policy, including Sunshine Act requirements recap Insider Trading Policy Disclosure Policy Mazor Robotics Confidential 2 Slide 3 of 24 3 www.MazorRobotics.com Code of Business Conduct and Ethics Whistleblower Policy Ran Grinshtein, Corporate Controller Corporate Controller April 2015 Slide 4 This presentation is made for training purposes only and is not intended to replace the responsibility to read and adopt the entire policy Mazor Robotics Confidential of 104 Slide 5 Code of Business Conduct and Ethics Code of Business Conduct and Ethics (COC) and the related policies and procedures presented today were written by management with legal counsels and adopted by the Board of Directors, or Management Although COC and other policies existed in Mazor prior to start of trading on Nasdaq, since Mazor is subject to the U.S. Security and Exchange Commission (SEC) rules, those policies were strengthen and updated to comply with applicable laws and regulations Mazor Robotics Confidential 5 Slide 6 Code of Business Conduct and Ethics (contd) Mazor employees are required to: Comply with COC and related policies and procedures, as will be discussed today Enforce and provide guidance (referrals) to the employees when encountering with such business and ethical issues Report violations to CFO or CEO COC can be found on Mazors website and is to be communicated to all employees, on an ongoing basis COC to be communicated to main suppliers and customers Mazor Robotics Confidential 6 Slide 7 Code of Business Conduct and Ethics (contd) 7 Ethics: The Company is committed to the ideals of uncompromising honesty and integrity Conflicts of interest Actions that are based on interests, other than those of the company You may not exploit your position, or relationship with the Company for personal gain Marketing, advertising and sales The Company does not engage in false or misleading claims to its customers, competitors or the public Public reporting of Financial and Non-financial information Slide 8 Code of Business Conduct and Ethics (contd) 8 Gifts, bribes, kickbacks and Corruption A kickback or bribe includes any item intended to improperly obtain favorable treatment. Gift policy will be presented separately International business conduct Interaction with government officials FCPA policy will be presented separately Quality and Regulatory compliance Open, constructive, professional relationship with regulators on matters of regulatory policy, submissions, compliance, product performance Compliance with laws and regulations Slide 9 Code of Business Conduct and Ethics (contd) 9 Improper use or theft of property Fair dealing, Fair competition and Anti-trust laws compliance No Associate should take unfair advantage of anyone through manipulation, abuse of privileged information, misrepresentation of facts, or any other unfair-dealing practice. Insider trading - will be presented separately Whistleblower policy Slide 10 Whistleblower Policy Employees complaint regarding accounting and auditing matters. Confidential complaint may be sent to Audit Committee (AC) chairman and in the future via hotline service provider; The complaint may be sent anonymously. Scope of matters Fraud or error in preparation, evaluation, review, or audit of the financial statements Fraud or error in recording and maintaining of the financial records Deficiencies or noncompliance with internal accounting controls Misrepresentation or false statements by senior officer, or accounting department regarding a matter contained in the financial report, financial records, or audit reports Deviation from full and fair reporting of the Companys financial condition. Mazor Robotics Confidential 10 Slide 11 Whistleblower Policy Treatment of Complaints Initial review and acknowledge receipt, when applicable Review by legal counsel, outside counsel, or other organ, as determined by the AC. Review will be under oversight and direction of the AC. Complainants are not to act on their own in conducting any investigative activities, nor do they have a right to participate in any investigative activities other than as requested by the Audit Committee. Corrective actions can be ordered by the AC, according to its judgment AC Chairman will provide the AC with periodic reports tracking the receipt, investigation and resolution of each complaint. No Retaliation Against Whistleblowers Mazor Robotics Confidential 11 Slide 12 of 24 12 www.MazorRobotics.com Foreign Corrupt Practices Act (FCPA) and Anti-Bribery Policy Statement Ran Grinshtein, Corporate Controller Corporate Controller April 2015 Slide 13 Understand the global context and legal framework of anti-bribery and corruption laws Understand what bribery is, and what is forbidden Learn the risks and penalties associated with bribery through some specific scenarios Learn to identify potential bribery risks and what to do Quiz (Q & A) 13 Training Outline Slide 14 U.S. Foreign Corrupt Practices Act (FCPA) FCPA, enacted in 1977, has two main provisions: prohibits the payment of bribes to government officials to assist in obtaining or retaining business requires issuers to maintain accurate books and records and have a system of internal controls sufficient to, among other things, provide reasonable assurances that transactions are executed and assets are accessed and accounted for in accordance with management's authorization Mazor Robotics Confidential 14 Slide 15 In general terms, bribery means the offer, promise, giving or receipt of anything of value (payment or payment-in-kind) from or to anyone in return for the following reasons: Obtain or retain business Secure an improper advantage 15 What is bribery ? Slide 16 Gifts, hospitality and donations may be forms of bribery. A lavish bottle of alcohol Airline upgrade Vacation weekend Expensive birthday gift Donation to favorite charity Are all potential forms of bribery Illegal payments via third parties, do not protect the company Payment does not actually have to take place and business benefit does not have to be provided 16 Bribery definition Slide 17 Today, companies and their management may be liable for bribes paid anywhere in the world by anyone associated with them, including their employees, distributors, suppliers and agents. we are committed to zero tolerance of bribery and corruption in all our business globally. Mazor, its management and employees are all at risk for personal and corporate exposure in the case of bribery and corruption by the company or third parties on its behalf. 17 What are the risks? Slide 18 Payments by J&J to hospital staff, including doctors, to encourage them to purchase J&J equipment and consumables (70M USD) http://www.sec.gov/news/press/2011/2011-87.htm Smyth and Nephew held accountable for bribes paid by its distributor to incentivize government hospitals to purchase its equipment and consumables (22M USD) http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171486478#.VOka3PmsVZg Biomet had direct commitments to pay commissions to government hospital employees for purchase its equipment as well as special travel expenses (22M USD) http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171487958#.VOkbiPmsVZg Orthofix falsified accounts with regards to cash payments of bribes (5.2M USD) http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171483164 18 Recent FCPA settlements (1/2) Slide 19 Pfizer sponsored participation in medical conferences in exchange for purchase of products http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171483696#.VOkijfmsVZg Eli Lilly both engaged in fictitious marketing agreements for the Russian market to funnel bribes and its employees used cash to pay bribes to the Chinese market (29M USD) http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171487116#.VOkh3vmsVZg Stryker made illegal payments to Mexico, Poland, Romania, Argentina, and Greece to obtain business and then recorded the expenses falsely. (13.2 million USD) http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540044262#.VOkjVvmsVZg Avon made 8 million USD worth of payments in cash, gifts, travel and entertainment to gain Chinese official implementing and overseeing direct selling regulations in China (135 million USD) http://www.sec.gov/news/pressrelease/2014-285.html#.VOkhrfmsVZg 19 Recent FCPA settlements (2/2) Slide 20 Payments in cash No business rationale for payment Distributor/ supplier / reseller has been dictated Bank account in unrelated country to business being conducted Payments to private account Excessive hospitality Donations to charity selected by third party Documentation does not fit business scenario 20 Red Flags (examples) Slide 21 Reporting Potential Violations Adding a mechanism to report to CFO in case of potential violation of the FCPA or this Policy. No retaliation against a person reporting in good faith. Changes to FCPA policy (to be approved by BOD) Slide 22 You are late on a delivery and trying to get your goods sent on time to your customer. The customs officials are giving you a hard time because of the category and classification of the products. Can you make a payment to the customs officials to help with the classification and speed up the export process ? 22 Scenario A Slide 23 No! This situation is similar to the Nature Sunshine Products case enforced by the US Government (SEC). Their products (vitamins and supplements sold in various grocery stores) were classified as medicines in Brazil. In order to speed up shipments and exports, certain illegal payments were made to Brazilian customs officials and incorrectly documented by the Company. 23 Slide 24 You are hosting potential new clients, resellers and distributors in your country. You want to show them a good time while introducing them to the your products and brand. Can you host them for an all-included 5 star weekend tour of your local sights ? 24 Scenario B Slide 25 No! Entertaining, travel and hosting, as well as gifts to potential clients, clients, and distributors should be pre-approved and made in accordance with the Companys our Code of Business Conduct and Ethics, Mazors FCPA Policy and Mazors Gift and Entertainment Policy Extra-ordinary expenses related to hospitality have been the subject of numerous FCPA cases in the recent years. An extreme example was charges against Veraz due (among other circumstances) to a flower bouquet sent to the wife of a clients CEO (a Chinese government company). 25 Slide 26 A Israel technology company traded on the NASDAQ is seeking to secure the approval of the Chinese government to provide the countrys first wireless network. The Minister of Communications requests that a subordinate be permitted to visit the companys headquarters in California to view a demonstration of the technology. How should the company respond to this request? Scenario C Slide 27 It is not illegal under the FCPA to provide travel expenses to a government official to view a product demonstration in the U.S. This is considered a legitimate marketing expense. If a governmental official requests a visit to view a product demonstration in the U.S. and insists that company also pay for the travel expenses of his family, this is considered a bribe and is strictly prohibited. Slide 28 There is an increase in international legislation regarding anti-bribery of foreign officials: OECD Anti-Bribery Convention (1997) Council of Europe Criminal Law Convention on Corruption (2000) United Nations Convention against Corruption (2003) The Israeli Penal Code (2008) Federal Law of Russia (2011/ 2013) International laws allow for both extremely large fines and penalties as well as prison sentences. 28 Legal Trends Slide 29 It is your duty to inform Mazors CFO of any red flags and other issues. Mazor will conduct a prompt and thorough investigation. We will not retaliate for Making a good-faith report; Refusing to submit to a violation of law; Participating in an investigation. We are counting on you! Slide 30 REMEMBER: Stay alert and avoid complications Do not engage in bribery Ask for guidance if you are uncertain of how to proceed Properly and accurately report all payments made while doing business Do not falsify information Report any suspicious incidents by any Mazor employee, distributor or agent Slide 31 International and local laws are increasingly stringent, have broad international reach, and severe personal and corporate fines and penalties. Payments, or giving anything of value, should not be made to customer or supplier except as part of standard, documented, legitimate approved business deal. Mazor cannot be complacent about unethical behavior by its employees, suppliers and resellers and potential risks of bribery and corruption. If there is any doubt regarding the legitimacy of the business partner, or the nature of the deal, please contact the CFO. 31 Summary Slide 32 of 24 32 www.MazorRobotics.com Gifts, Travel and Entertainment Policy Sunshine Act recap Ran Grinshtein, Corporate Controller Corporate Controller April 2015 Slide 33 T&E and Gift Policy Employee cannot offer, give or promise money or anything of value to anyone in connection with a business activity for the purpose of securing an improper advantage or inducing an action in violation of a lawful or ethical duty. Entertainment and Hosting In conjunction with business activity Submitting a detailed invoice Reasonable Provide information of: third parties hosted, third parties attending and purpose of the meeting Slide 34 T&E and Gift Policy Guidelines for entertainment and hosting: Any meal over 500 USD requires pre-approval of VP Obligation of the Company to host third party, Hosting by third party - reasonable and modest event, primary purpose is a business meeting or promotional event. In case of 2 or more Employees, payment will be made by the senior Employee. USAEurope and Asia 75-100 USD75-100 EurosVP approval Above 100 USDAbove 100 EurosCEO, or CFO approval Slide 35 Sunshine Act recap What should be on the Concur report Mazor Robotics Confidential 35 Sunshine Act : Yes Attendee Type: Healthcare Professional - Dr/Surgeon/MD/DO/DCP/DPM Recipient Name: Suffix(MD/DO/DCP/DPM): $ Amount paid: NPI(10 digits)#: State License #: Taxonomy code: Primary Address: City of Travel: State of Travel Reporting on payments to U.S. physicians of over 10$. Slide 36 T&E and Gift Policy Granting Gifts: Guidelines: The company encourages employees to use company branded gifts with total value of $50, without the prior approval, as set forth several gifts intended for one third party within same calendar quarter shall be considered as one gift no gifts or other item of value may be given to any public or government official, unless permitted by FCPA policy AmountAuthorization level Up to 50 USDManagers approval Up to 100 USDVice Presidents Approval Above 100 USDCEO, or CFO approval Slide 37 T&E and Gift Policy Receiving Gifts It is forbidden for Employees to receive gifts or benefits from third parties in such way it could be interpreted as influencing their decision process It is forbidden to receive gifts from customers or suppliers, unless of nominal value and it will be offensive not to accept such gift In event of receiving a gift, other than of nominal value, the gift shall be given to HR department Slide 38 T&E and Gift Policy Third party offers you a gift Yes No Accept the gift and give it to the Human Resource department Is the item a promotional items of nominal value (up to $50)? Kindly decline acceptance of gifts, to comply with Company's policy You may accept the gift No Yes Would it be offensive to the third party, if you do not accept such item? Slide 39 of 24 39 www.MazorRobotics.com Insider Trading Policy Ran Grinshtein, Corporate Controller Corporate Controller April 2015 Slide 40 Insider Trading - policy Highlights Objective: ensure compliance with securities laws and to avoid even the appearance of improper conduct by anyone associated with the Company The Policy provides guidelines to directors, officers, employees and other related individuals of Mazor Robotics Ltd., with respect to transactions in the Company's securities Failure to comply with the policy could result in a serious violation of the securities laws by you and/or the Company and can result in both civil penalties and criminal fines and imprisonment. Individual Responsibility: Every Company Affiliated Person has the individual responsibility to comply with this Policy against insider trading, regardless of whether the Company has recommended a trading window to that person or any other Insiders of the Company. Mazor Robotics Confidential of 1040 Slide 41 Applicability of Policy This Policy applies to all transactions in the Company's securities, including ordinary shares, American depositary shares, American depositary receipts, options for ordinary shares It applies to all officers of the Company, all members of the Company's Board of Directors, and all employees of, and consultants and contractors to, the Company and its subsidiaries/branches who receive or have access to Material Nonpublic Information Insiders are defined: Company Affiliated Persons, members of their immediate families (which include spouse and minor children), members of their households, other family members living with them or who are supported by them, are sometimes referred to in this Policy as "Insiders" Mazor Robotics Confidential 4 of 10 Slide 42 Insider Trading - policy Highlights Trading on Material Nonpublic Information - No Insider shall engage in any transaction involving a purchase or sale of the Company's securities, during any period commencing with the time that he or she first receives Material Nonpublic Information concerning the Company, and ending at the close of business on the Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material Tipping. No Insider shall disclose ("Tip") Material Nonpublic Information to any other person (including family members) Confidentiality of Nonpublic Information - disclosure of such information is forbidden Care should be taken to prevent the disclosure of Material Nonpublic Information during all contact including phone calls and casual conversation Mazor Robotics Confidential of 1042 Slide 43 Block Period Official period - The period beginning two weeks before the end of the last month of each calendar quarter and ending two Trading Days following the date of public disclosure of the financial results for that quarter From time to time, the Company may also notify that directors, officers, selected employees and others are required to suspend trading because of developments known to the Company and not yet disclosed to the public. NOTWITHSTANDING THESE TIMING GUIDELINES, IT IS ILLEGAL FOR ANY PERSON TO TRADE WHILE IN POSSESSION OF MATERIAL NONPUBLIC INFORMATION, INCLUDING SITUATIONS IN WHICH THE PERSON IS AWARE OF MAJOR DEVELOPMENTS THAT HAVE NOT YET BEEN PUBLICLY ANNOUNCED BY THE COMPANY. TRADING IN THE COMPANY'S SECURITIES DURING THE TRADING WINDOW SHOULD NOT BE CONSIDERED A "SAFE HARBOR," AND ALL DIRECTORS, OFFICERS AND OTHER INSIDERS SHOULD USE GOOD JUDGMENT AT ALL TIMES. Mazor Robotics Confidential of 1043 Slide 44 Potential Criminal and Civil Liability and/or Disciplinary Action Liability for Insider Trading In the United States there are substantial civil penalties and criminal sanctions which may be assessed for insider trading. Civil penalties are a payment of a penalty of up to three times the illicit windfall. In addition, Insiders may be subject to criminal fines of up to $5,000,000 and up to twenty years in prison for engaging in transactions in the Company's securities at a time when they have knowledge of Material Nonpublic Information regarding the Company. Liability for Tipping - The civil penalties and criminal sanctions for tipping by an Insider are the same as the ones for an Insider conducting insider trading, even if the disclosing person did not profit from the trading. Mazor Robotics Confidential of 1044 Slide 45 Access Insiders. Access Insiders are: (1) members of the board of directors, (2) the executive officers, (3) the controller, and (4) the investor relations department of the Company Preclearance of Trades. The Company has determined that all Access Insiders should refrain from trading in the Company's securities, even during the Trading Window, without first complying with the Company's "preclearance" process. Each Access Insider should contact the CFO prior to commencing any trade in the Company's securities. Rule 144 and Section 16 Matters for Directors and Officers The practical effect of Rule 144 is that directors and officers who sell the Companys securities may be required to comply with a number of requirements including holding period, volume limitation, manner of sale and filing requirements. each officer and director should contact the CFO regarding compliance with Rule 144 of the U.S. Mazor Robotics Confidential of 1045 Slide 46 Specific Requirements Speculative Trading. No Insider may engage in transactions of a speculative nature at any time. All Insiders are prohibited from short selling the Companys securities or engaging in transactions involving the Companys based derivative securities Open Orders. Any Insider who has placed a limit order or open instruction to buy or sell the Companys securities shall bear responsibility for canceling such instructions immediately upon becoming in possession of Material Nonpublic Information Ad hoc Restrictions. The CFO has the authority to impose restrictions on trading in the Companys securities by appropriate individuals at any time. In such event, the CFO will notify the affected individuals, either personally, by email or by voicemail, to inform them of the restrictions. Mazor Robotics Confidential of 1046 Slide 47 of 24 47 www.MazorRobotics.com Disclosure Policy Ran Grinshtein, Corporate Controller Corporate Controller April 2015 Slide 48 Disclosure Policy of Mazor Robotics - Highlights Policy Objective : Committed to a consistent disclosure that covers all communications with the investment community, business and industry community and the media. To provide all interested parties with fair and equal access to factual information about our businesses and our strategic objectives, in order to enable investors to reasonably gauge the performance of the Company as a whole. To ensure that public communications about material events or developments concerning the Company are timely, accurate and broadly disseminated in accordance with all applicable legal and regulatory requirements. Mazor Robotics Confidential 48 Slide 49 Disclosure Policy of Mazor Robotics - Highlights Applies to all employees, officers, and directors of the Company, and those authorized to speak on its behalf (e.g. consultant PR/IR etc.). This Disclosure Policy covers material disclosure in all documents and statements communicated in writing, orally, and electronically with analysts, investors, journalists, market professionals and the public. This policy prohibits all employees, officers, directors of the Company and those authorized to speak on its behalf from discussing material, non-public information with anyone outside the Company (including family members, relatives or friends), except as permitted by this policy. Any employee who violates this Disclosure Policy may face disciplinary action, including termination of his or her employment with the Company. Mazor Robotics Confidential 49 Slide 50 Disclosure Policy of Mazor Robotics - Highlights Material information : Generally any material if a reasonable investor would consider it important in making an investment decision, purchase or sale of the Company's securities information, if made public, would likely affect the market price of the Company's securities, positive or negative. Information relates to future, speculative or contingent events and even if it is significant only when considered in combination with publicly available information. In doubt you should refer to the Companys Chief Financial Officer (the CFO) for clarification. Material information is also all nonpublic information, information is considered public only if announcement in one of the following ways: filed with securities regulatory authorities (e.g. filings with the U.S. Securities and Exchange Commission (the SEC)); Issuance of press releases; or Meetings with members of the press and the public Mazor Robotics Confidential 50 Slide 51 Examples of material information : Financial results; Projections of future earnings or losses; News of a pending or proposed merger or acquisition; Significant new joint ventures and strategic partnerships; New product or project announcements of a significant nature; Changes in control of the Company or major changes in senior management; Significant product defects or modifications; New equity or debt offerings or other material financial transactions; Significant litigation exposure due to actual or threatened litigation; Significant actions by regulatory bodies; Receipt, cancellation or deferral of significant purchase orders; Significant actions by the U.S. FDA and other regulatory bodies; Any of the above with respect to a subsidiary, or other affiliate of the Company. Mazor Robotics Confidential 51 Slide 52 Disclosure Policy of Mazor Robotics - Highlights Selective disclosure is the disclosure of material, non-public information to any individual or group prior to the broad public dissemination of that information. It is against the law and Company policy to selectively disclose material, non-public information to people or groups outside of the Company at any time. Authorized Spokespersons - the only people who may communicate with the press on behalf of the Company) The Chairman of the Board CEO and CFO with respect to all matters, including financial matters; and The Vice President of Marketing with respect to marketing, technical and other such matters, including speaking with industry media and analysts. Others as nominated from time to time by the CFO or CEO Mazor Robotics Confidential 52 Slide 53 Instructions to employees who are not Authorized Spokesperson Employees are instructed not to initiate contact with or to respond to inquiries from the investment community or the news media under any circumstances Employees, who receive inquiries from investors, analysts or the media must refer all such inquiries to the CFO. Employees are reminded that they should never discuss the performance of the Company, their business unit, new contracts or other significant non-public information outside the Company in any forum, such as casual conversations, discussions with potential or existing customers or other contacts and while using any communication means, including and not limited to internet chat rooms, blogs or Twitter. When responding to information requests (RFIs) in the routine course of business, employees are instructed to refer strictly to information the Company publicly and officially disclosed, such as the Companys SEC filings and news releases or available on Companys Web site. Accidental disclosure of material nonpublic information should be reported immediately to the Disclosure Committee/CFO. Any information about the Company which is published by a third party is not considered public information and should not be repeated, unless it was publicly announced by the Company through a news release or SEC filing. Mazor Robotics Confidential 53 Slide 54 Other matters included in the policy News release will be issued on new material developments, unless the Disclosure Committee determines that such developments should remain confidential for the time being and appropriate control of that insider information is instituted along with ensuring that insider trading on such information is prohibited. Teleconferences with analysts and investors are held in conjunction with the Companys quarterly earnings releases and other significant events. Rumors The Company does not comment on rumors in the marketplace, or speculation on acquisitions, divestitures, clients, or unusual activity in the stock. Analysts - The Company will provide fair access to Company information and officials within the limits of its time and resources. All analysts and investors will at least have access to the CFO. Quite Period - beginning two weeks before the end of the last month of each calendar quarter and ending two trading days following the date the quarterly results are publicly announced. Providing Guidance Electronic communication media guidelines Mazor Robotics Confidential 54