PROPOSAL 1: ELECTION OF DIRECTORS
At the annual meeting, our stockholders will be asked to elect seven directors for a one-year term expiring at the next annual meeting of stockholders. Each director will hold office until his or her successor has been elected and qualified or until the directors earlier resignation or removal.
Our Board of Directors recommends that the persons named below be elected as directors of our company and it is intended that the accompanying proxy will be voted for their election as directors, unless the proxy contains contrary instructions. Shares of common stock represented by all proxies received by the Board of Directors and not so marked as to withhold authority to vote for any individual nominee or for all nominees will be voted (unless one or more nominees are unable to serve) for the election of the nominees named below. The Board of Directors knows of no reason why any such nominee should be unable or unwilling to
serve, but if such should be the case, proxies will be voted for the election of some other person or the size of the Board of Directors will be fixed at a lower number.
Each of the nominees currently serves as a member of our Board of Directors. The directors are elected by a plurality of the votes cast by the stockholders present or represented by proxy and entitled to vote at the annual meeting.
Nominees for Election to the Board of Directors
The names of the nominees for election to the Board of Directors and certain information about such nominees are set forth below. For information concerning the number of shares of common stock beneficially owned by each nominee, see Security Ownership of Certain Beneficial Owners and Management above.
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Name
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Age
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Position
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Shlomo Yanai
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63
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Chairman of the Board
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Moshe Manor
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60
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President and Chief Executive Officer, Director
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Amos Bar Shalev
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63
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Director
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Zeev Bronfeld
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64
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Director
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Yodfat Harel Buchris
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44
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Director
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Roger D. Kornberg, Ph.D.
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69
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Director
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Aharon Schwartz, Ph.D.
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73
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Director
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Shlomo Yanai.
Shlomo Yanai has served as the Chairman of our Board of Directors since July 2014. Mr. Yanai is currently the Chairman of the Board of Cambrex Corporation (NYSE:CBM) and a director of Quinpario Acquisition Corp. 2 (NASDAQ:QPACU), Sagent Pharmaceuticals, Inc. (NASDAQ:SGNT) and Perrigo Co. plc (NASDAQ:PRGO). From 2012 through 2015, Mr. Yanai served as a director of Lumenis Ltd. Mr. Yanai served as President and Chief Executive Officer of Teva (NASDAQ:TEVA, TASE:TEVA) from March 2007 until May 2012 and, prior to joining Teva, Mr. Yanai was President and Chief Executive Officer of Makhteshim-Agan
Industries Ltd. from 2003 until 2006. Before that, he was a Major General in the Israel Defense Forces, where he served for 32 years, in various positions, the last two positions being Commanding Officer of the Southern Command and Head of the Division of Strategic Planning. Mr. Yanai was the head of the Israeli security delegation to the peace talks at Camp David, Shepherdstown and Wye River. He currently serves as a member of the Board of Governors of the Technion Israel Institute of Technology of Haifa, Israel, and of the International Advisory Board, MBA Program of Ben-Gurion University of the Negev, Israel, as well as an honorary member of the Board of the Institute for Policy and Strategy of the Interdisciplinary Center (IDC), Herzliya, Israel. Mr. Yanai holds a bachelors degree in political science and economics from Tel Aviv University, a masters degree in national resources management from George Washington University, and is a graduate of the
Advanced Management Program of Harvard Business School and U.S. National War College (NDU). Mr. Yanai was the recipient of the Max Perlman Award for Excellence in Global Business Management from Tel Aviv University, Israel in 2005 and was awarded an honorary doctorate by Bar-Ilan University, Israel in 2012. We believe Mr. Yanais qualifications to serve as Chairman of our Board of Directors include his vast global operating experience in the life-science and pharmaceutical and agro-chemicals industry. He also brings a global perspective to the Board, incorporating his industry and Board leadership experience and his distinguished military service.
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Moshe Manor.
Mr. Manor has served as our President and Chief Executive Officer and as a director of our company since November 2014. Mr. Manor served in a number of senior executive positions at Teva (NASDAQ:TEVA, TASE:TEVA) from 1984 through 2012. Most recently, he served as President, Teva Asia & Pacific where he led the strategy and development of a high growth region for Teva. Prior to that, he was Group Vice President, Global Branded Products, leading the Innovative Commercial and Research & Development franchises. From 2006 through 2008, Mr. Manor was Senior Vice President, Global Innovative
Resources, and was responsible for generating over $3 billion in sales with Copaxone® and Azilect®. Previously, he served as director of Teva Israel. Most recently, Mr. Manor serves on the Board of Directors of Kamedis Ltd. and Coronis Partners, and as Chairman of the Board of Directors of a startup company, MEway Pharma. He holds a BA in Economics from the Hebrew University in Jerusalem, and an MBA from the Tel-Aviv University. We believe Mr. Manors qualifications to serve on our Board of Directors include his extensive experience in the life-science and pharmaceutical industry on a global scale.
Amos Bar Shalev.
Mr. Bar Shalev has served as our director since July 2008. Previously, Mr. Bar Shalev served as a director of Protalix Ltd. from 2005 through January 31, 2008, and as our director from December 31, 2006 through January 31, 2008. Mr. Bar Shalev brings to us extensive experience in managing technology companies. Currently, Mr. Bar Shalev serves on the boards of directors of Aposense Ltd. (TASE:APOS), an Israeli publicly-traded company listed on the TASE, since 2011, and of Ocure Ltd. (since 2012) and Velox Ltd. (since 2013), privately-held Israeli companies. From 2004 through 2012, Mr. Bar
Shalev served as a director of Technorov Holdings (1993) Ltd. and managed its portfolio. In addition, he served on the board of directors of Highcon Systems Ltd., a privately-held Israeli company, from 2010 through 2012. From 1997 through 2004, he was a Managing Director of TDA Capital Partners, a management company of the TGF (Templeton Tadiran) Fund. From 2004 through 2007, he was the President of Win Buyer Ltd. He has served on the board of directors of many other companies, including, among others, NESS Ltd. (acquired by BioNess Inc.), Idanit (acquired by Scitex Corporation Ltd.), Objet Geometrix (merged with Stratasys, Inc. (NASDAQ:SSYS)), Verisity, Scitex Vision (acquired by Hewlett Packard), Golden Wings Investment Company Ltd., the venture capital fund of the Israeli Air Force Veterans Business Club, Win Buyer Ltd. and Sun Light Ltd. He received his B.Sc. in Electrical Engineering from the Technion, Israel in 1978 and M.B.A. from the Tel Aviv University in 1981. He holds the
highest award from the Israeli Air Force for technological achievements. We believe Mr. Bar Shalevs qualifications to serve on our Board of Directors include his years of experience in the management of Israeli businesses.
Zeev Bronfeld.
Mr. Bronfeld has served as a director of Protalix Ltd. since 1996 and as our director since December 31, 2006. Mr. Bronfeld brings to us vast experience in management and value building of biotechnology companies. He is an experienced businessman who is involved in a number of biotechnology companies. He was a co-founder of Biocell Ltd., a former Israeli publicly traded holding company that specialized in biotechnology companies and served as its Chief Executive Officer from 1986 through 2015. Mr. Bronfeld currently serves as a director of The Trendlines Group (42T.SI), D.N.A. Biomedical
Solutions Ltd. (DNA:TASE), and Macrocure Ltd. (NASDAQ:MCUR), all of which are public companies. Mr. Bronfeld is also a director of a number of privately-held companies, most of which are involved in the life sciences, such as Entera Bio Ltd., Contipi Medical Ltd. and TransBiodiesel Ltd. From 2004 through 2012, Mr. Bronfeld served as a director of D. Medical Industries Ltd., a company that was dually-listed on the Nasdaq and the TASE. Mr. Bronfeld received a B.A. in Economics from the Hebrew University in 1975. We believe Mr. Bronfelds qualifications to serve on our Board of Directors include his years of experience in the management of private and public Israeli companies, including life science companies.
Yodfat Harel Buchris.
Mrs. Harel Buchris has served as our director since June 2007. Since February 2014, Mrs. Harel Buchris has served as the employer representative in Israels National Labor Court. She is also a Partner and a member of the board of directors of YP and 6 Partners Ltd., a business consulting and investment company. Since February 2016 she has served on the board of directors of Israel Discount Bank Limited (TASE:DSCT) and, since January 2016, on the board of directors of Eltek Ltd. (ELTK:NASDAQ). From 2006 to 2013, Mrs. Harel Buchris served as a Managing Director of Tamares Capital
Ltd., a private investment group with interests in real estate, technology, manufacturing, leisure and media. At Tamares Capital, Mrs. Harel Buchris served as the Business Development Director and the head of the Israel office. Prior to joining Tamares Capital, from 2004 to 2006, she was the Head of the Medical Desk of
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Orbotech, Ltd. (NASDAQ:ORBK), a company providing high-tech inspection and imaging solutions for bare printed circuit board (PCB), flat panel display (FPD) and PCB assembly manufacturing worldwide. Prior to that, from 1994 to 2003, she was a Managing Director of Harel-Hertz Investment House Ltd., a business investment company with offices in Tel Aviv, Israel and Tokyo, Japan. In 2002, Harel-Hertz Investment House became the Israeli representative office for ITX Corporation, a publicly-traded company in Japan. Mrs. Harel Buchris has served on the board of directors of Tamares Capital, Tamares Hotels, El Al, British Israel,
Storewiz, N-trig, Secure Pharma, Siklu and Tamares Telecom. Mrs. Harel Buchris holds a B.A. in Communications and Political Science from Bar Ilan University and an executive M.B.A. from Bradford University, Great Britain. She has also completed programs in Mediation at Gome, Israel Mediation Center, Directors Studies and Advanced Advertising and Marketing at the Israel Management Center. We believe Mrs. Harel Buchris qualifications to serve on our Board of Directors include her experience in the management of Israeli and other businesses.
Roger D. Kornberg, Ph.D.
Professor Kornberg has served as our director since February 2008. He has served as a director of OphthaliX Inc. (OTCBB:OPLI) since 2012, and as the chairman of the board of directors of two related start-up companies. He also serves as the Chief Scientist of Cocrystal Pharma, Inc. (OTCQB: COCP) (f/k/a Biozone Pharmaceuticals, Inc.) and in 2014 served on their Board of Directors. He served as a director of Teva (NASDAQ:TEVA, TASE:TEVA) from 2007 through 2013. Professor Kornberg is a member of the U.S. National Academy of Sciences and the Winzer Professor of Medicine in the Department
of Structural Biology at Stanford University, Stanford, California. He has been a member of the faculty of Stanford University since 1972. Prior to that, he was a professor at Harvard Medical School. Professor Kornberg is a renowned biochemist and in 2006 he was awarded the Nobel Prize in Chemistry in recognition for his studies of the molecular basis of eukaryotic transcription, the process by which DNA is copied to RNA. Professor Kornberg is also the recipient of several awards, including the 2001 Welch Prize, the highest award granted in the field of chemistry in the United States, and the 2002 Leopold Mayer Prize, the highest award granted in the field of biomedical sciences from the French Academy of Sciences. He received his B.S. in Chemistry from Harvard University in 1967 and his Ph.D. in Chemistry from Stanford University in 1972. He holds honorary degrees from universities in Europe and Israel, including the Hebrew University in Jerusalem, where he currently is a visiting
professor. We believe Professor Kornbergs qualifications to serve on our Board of Directors include his expertise in chemistry and medicine and his experience in the academic arena.
Aharon Schwartz, Ph.D.
Dr. Schwartz retired from Teva in 2011 where he served in a number of positions from 1975 through 2011, the most recent being Vice President, Head of Teva Innovative Ventures from 2008. Dr. Schwartz is currently chairman of the board of directors of a number of life science companies, including BiolineRx Ltd. (NASDAQ:BLRX, TASE:BLRX), DPharm Ltd. (TASE:DPRM), BioCancell Ltd. (TASE:BICL) and CureTech Ltd., and a member of the board of directors of Alcobra Ltd. (NASDAQ:ADHD) and Foamix Pharmaceuticals Ltd. (NASDAQ:FOMX). Dr. Schwartz received his Ph.D. in organic chemistry in 1978 from
the Weizmann Institute, his M.Sc. in organic chemistry from the Technion and a B.Sc. in chemistry and physics from the Hebrew University of Jerusalem. Dr. Schwartz received a second Ph.D. in 2014 from the Hebrew University of Jerusalem in the history and philosophy of science. We believe Dr. Schwartzs qualifications to serve on our Board of Directors include his years of experience in life science companies.
Corporate Governance
Independent Directors
We believe a majority of the members of our Board of Directors are independent from management. When making determinations from time to time regarding independence, the Board of Directors will reference the listing standards adopted by the NYSE MKT as well as the independence standards set forth in the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC under that Act. We anticipate our Board of Directors will analyze whether a director is independent by evaluating, among other factors, the following:
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Whether the member of the Board of Directors has any material relationship with us, either directly, or as a partner, stockholder or officer of an organization that has a relationship with us;
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Whether the member of the Board of Directors is a current employee of our company or any of our subsidiaries, or was an employee of our company or any of our subsidiaries within three years preceding the date of determination;
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Whether the member of the Board of Directors is, or in the three years preceding the date of determination has been, affiliated with or employed by (i) a present internal or external auditor of our company or any affiliate of such auditor or (ii) any former internal or external auditor of our company or any affiliate of such auditor, which performed services for us within three years preceding the date of determination;
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Whether the member of the Board of Directors is, or in the three years preceding the date of determination has been, part of an interlocking directorate, in which any of our executive officers serve on the Compensation Committee of another company that concurrently employs the member as an executive officer;
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Whether the member of the Board of Directors receives any compensation from us, other than fees or compensation for service as a member of the Board of Directors and any committee of the Board of Directors and reimbursement for reasonable expenses incurred in connection with such service and for reasonable educational expenses associated with Board of Directors or committee membership matters;
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Whether an immediate family member of the member of the Board of Directors is a current executive officer of our company or was an executive officer of our company within three years preceding the date of determination;
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Whether an immediate family member of the member of the Board of Directors is, or in the three years preceding the date of determination has been, affiliated with or employed in a professional capacity by (i) a present internal or external auditor of ours or any of our affiliates or (ii) any former internal or external auditor of our company or any affiliate of ours which performed services for us within three years preceding the date of determination; and
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Whether an immediate family member of the member of the Board of Directors is, or in the three years preceding the date of determination has been, part of an interlocking directorate, in which any of our executive officers serve on the Compensation Committee of another company that concurrently employs the immediate family member of the member of the Board of Directors as an executive officer.
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The above list is not exhaustive and we anticipate that the Audit Committee will consider all other factors which could assist it in its determination that a director will have no material relationship with us that could compromise that directors independence.
Under these standards, our Board of Directors has determined that Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris are considered independent pursuant to the rules of the NYSE MKT and Section 10A(m)(3) of the Exchange Act. In addition, our Board of Directors has determined that at least two of these directors are able to read and understand fundamental financial statements and have substantial business experience that results in their financial sophistication, qualifying them for membership on our audit committee. Our Board of Directors has also determined that Mr. Bar Shalev, Mr. Bronfeld, Mrs. Harel
Buchris, Dr. Kornberg, Dr. Schwartz and Mr. Yanai are independent pursuant to the rules of the NYSE MKT.
The position of chairman of the board is not held by our chief executive officer at this time. The Board of Directors does not have a policy mandating the separation of these functions. We believe it is in our best interest that Mr. Yanai serve as the chairman of our board. This decision was based on Mr. Yanais vast global operating experience in the life-science and pharmaceutical and agro-chemicals industry as well as the global perspective he brings to our Board of Directors, incorporating his industry and board leadership experience and his distinguished military service. Our non-management directors hold formal
meetings, separate from management, at least twice per year. We have no formal policy regarding attendance by our directors at annual stockholders meetings, although we encourage such attendance and anticipate most of our directors
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will attend these meetings. Messrs. Yanai, Manor, Bronfeld, Bar Shalev and Dr. Schwartz and Mrs. Harel Buchris attended our 2015 annual meeting of stockholders.
The Boards Role in Risk Oversight
Our Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of business objectives, including organizational and strategic objectives, to improve long-term organizational performance and enhance stockholder value. The involvement of our Board of Directors in setting our business strategy is a key part of its assessment of managements plans for risk management and its determination of what constitutes an appropriate level of risk for the company. The participation of our Board of Directors in our risk oversight process includes receiving regular reports from members
of senior management on areas of material risk to our company, including operational, financial, legal and regulatory, and strategic and reputational risks. While the full board has the ultimate oversight responsibility for the risk management process, various committees of the board also have responsibility for risk management. For example, financial risks, including internal controls, are overseen by the audit committee and risks that may be implicated by our executive compensation programs are overseen by the compensation committee. Upon identification of a risk, the assigned board committee or our full Board of Directors discuss or review risk management and risk mitigation strategies. Additional review or reporting on enterprise risks is conducted as needed or as requested by our Board of Directors or a committee thereof.
Board and Committee Meetings
Our Board of Directors has an Audit Committee, Compensation Committee and Nominating Committee. The following indicates the members of each committee and provides a description of the committees primary functions:
Audit Committee
We require that all Audit Committee members possess the required level of financial literacy and at least one member of the Audit Committee meet the current standard of requisite financial management expertise as required by the NYSE MKT and applicable rules and regulations of the SEC. Messrs. Bar Shalev and Bronfeld, and Mrs. Harel Buchris have been appointed by the Board of Directors to serve on the Audit Committee until their respective successors have been duly elected.
Our Audit Committee operates under a formal charter that governs its duties and conduct. A current copy of the Audit Committee Charter is available on our website at
http://www.protalix.com.
All members of the Audit Committee are independent from our executive officers and management.
Our independent registered public accounting firm reports directly to the Audit Committee.
Our Audit Committee meets with management and representatives of our registered public accounting firm prior to the filing of officers certifications with the SEC to receive information concerning, among other things, effectiveness of the design or operation of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002.
Our Audit Committee has adopted a Policy for Reporting Questionable Accounting and Auditing Practices and Policy Prohibiting Retaliation against Reporting employees to enable confidential and anonymous reporting of improper activities to the Audit Committee.
Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris qualify as audit committee financial experts under the applicable rules of the SEC. In making the determination as to these individuals status as audit committee financial experts, our Board of Directors determined they have accounting and related financial management expertise within the meaning of the aforementioned rules, as well as the listing standards of the NYSE MKT.
Compensation Committee
The Compensation Committee is currently comprised of Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris. The Compensation Committee reviews and approves the compensation of executive officers and key employees and administers our stock incentive plan. A current copy of the Compensation Committee Charter is available on our website at
http://www.protalix.com.
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Nominating Committee
The Nominating Committee, currently comprised of Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris, is responsible for assisting our Board of Directors in selecting nominees for election to the Board of Directors and monitoring the composition of the Board of Directors. A current copy of the Nominating Committee Charter is available on our website at
http://www.protalix.com.
Although our Board of Directors does not have a formal policy requiring the Nominating Committee to consider the diversity of directors in its nomination process, in considering potential new directors, the Nominating Committee will review
individuals from various disciplines and backgrounds, and consider the following qualifications: broad experience in business, finance or administration; familiarity with national business matters; familiarity with our industry; independence; and prominence and reputation. The committee seeks nominees with a broad diversity of experience, professions, education, skills and backgrounds with a view to having a Board of Directors that represents a diversity of views, experiences, and backgrounds. After making such a review, the Nominating Committee submits the nomination to the full Board of Directors for approval.
The Nominating Committee will consider any nominees submitted by stockholders of record at the time of any such nomination in compliance with applicable rules of the SEC and our By-Laws. The Nominating Committee will determine whether any stockholder nominee meets the qualifications for candidacy described above and in the Nominating Committee Charter. Stockholders nominations for election at the 2017 Annual Meeting of Stockholders must be submitted in writing to Yossi Maimon, Corporate Secretary, not less than 45 days nor more than 75 days prior to the date on which we first mailed this proxy statement. Such written
notice must include the following information: (i) name, age, business address and residence address of the nominee; (ii) the principal occupation or employment of the nominee; (iii) the class and number of shares of our company beneficially owned by the nominee; and (iv) any other information relating to the nominee that would be required to be disclosed in solicitations for proxies for elections of directors pursuant to Regulation 14A of the Exchange Act. The written notice must also include the following information with respect to each stockholder delivering such notice: (i) the name and record address of such stockholder; and (ii) the class and number of shares of our company beneficially owned by the stockholder. Lastly, the written notice must include certain information relating to any derivative or hedging transactions by the stockholder delivering such notice and its Stockholder Associated Persons, as defined in our By-Laws, and other arrangements with other parties regarding
our securities, as presented in detail in our By-Laws. Stockholders can mail any such recommendations, including the criteria outlined above, to Yossi Maimon, Corporate Secretary, Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455, Carmiel 20100, Israel.
During the year ended December 31, 2015, there were seven meetings of our Board of Directors, five meetings of the Audit Committee (and one action by written consent) and two meetings of the Compensation Committee. Our non-management directors hold meetings separate from management at least twice per year. All of our current directors, other than Dr. Kornberg, attended at least 75% of the aggregate number of meetings of the Board of Directors and the committees of the Board of Directors on which they served.
Under the rules of the NYSE MKT, a director of our company will only qualify as an independent director if, among other things, in the opinion of our Board of Directors, that person does not have a material relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board of Directors has determined that none of the non-employee directors has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of the non-employee directors is an independent
director as defined under rules of the NYSE MKT. In addition, the Board of Directors has determined that all members of the Audit Committee meet the independence requirements set forth in Rule 10A-3 under the Exchange Act and that all members of the Compensation Committee meet the independence requirements set forth in Rule 805(c) of the NYSE MKT Listed Company Guide.
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Contacting the Board of Directors
Stockholders who wish to communicate with the Board of Directors may do so by mailing any such communications to Yossi Maimon, Corporate Secretary, Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455, Carmiel 20100, Israel. All communications are distributed to the Board of Directors, as appropriate, depending upon the facts and circumstances outlined in the communications received. For example, if any complaints regarding accounting and/or auditing matters are received, they may be forwarded by our Corporate Secretary to the Audit Committee for review.
Policy Governing Director Attendance at Annual Meetings of Stockholders
We have no formal policy regarding attendance by our directors at annual stockholders meetings, although we encourage such attendance and anticipate most of our directors will attend these meetings. All of our directors except Dr. Kornberg attended our 2015 annual meeting of stockholders.
Compensation of Directors
The following table sets forth information with respect to compensation of our non-employee directors during fiscal year 2015. The fees to our current directors were paid by Protalix Ltd.
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Name
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Fees Earned
or Paid in
Cash
($)
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Option
Award(s)
($)
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Total
($)
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Shlomo Yanai
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200,000
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96,096
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296,096
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Zeev Bronfeld
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80,000
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80,000
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Amos Bar Shalev
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80,000
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80,000
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Yodfat Harel Buchris
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80,000
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80,000
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Roger D. Kornberg
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55,000
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55,000
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Aharon Schwartz
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40,000
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40,000
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Directors fees paid to each of Zeev Bronfeld and Yodfat Harel Buchris are paid to the applicable directors employer in accordance with arrangements between the director and the employer.
Compensation Committee Interlocks and Insider Participation
Our Compensation Committee currently consists of Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris. No member of our Compensation Committee or any executive officer of our company or of Protalix Ltd. has a relationship that would constitute an interlocking relationship with executive officers or directors of another entity. No Compensation Committee member is or was an officer or employee of ours or of Protalix Ltd. Further, none of our executive officers serves on the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or
Compensation Committee.
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MANAGEMENT
Our executive officers, their ages and positions are as follows:
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Name
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Age
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Position
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Moshe Manor
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60
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Director, President and Chief Executive Officer
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Yoseph Shaaltiel, Ph.D.
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63
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Director and Executive VP, Research and Development
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Einat Brill Almon, Ph.D.
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57
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Vice President, Product Development
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Yossi Maimon, CPA
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46
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Vice President, Chief Financial Officer, Treasurer and Secretary
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Tzvi Palash
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59
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Chief Operating Officer
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Moshe Manor.
Mr. Manor has served as our President and Chief Executive Officer and as a director of our company since November 2014. Mr. Manor served in a number of senior executive positions at Teva (NASDAQ:TEVA, TASE:TEVA) from 1984 through 2012. Most recently, he served as President, Teva Asia & Pacific where he led the strategy and development of a high growth region for Teva. Prior to that, he was Group Vice President, Global Branded Products, leading the Innovative Commercial and Research & Development franchises. From 2006 through 2008, Mr. Manor was Senior Vice President, Global Innovative
Resources, and was responsible for generating over $3 billion in sales with Copaxone® and Azilect®. Previously, he served as director of Teva Israel. Most recently, Mr. Manor serves on the Board of Directors of Kamedis Ltd. and Coronis Partners, and as Chairman of the Board of Directors of a startup company, MEway Pharma. He holds a BA in Economics from the Hebrew University in Jerusalem, and an MBA from the Tel-Aviv University. We believe Mr. Manors qualifications to serve on our Board of Directors include his extensive experience in the life-science and pharmaceutical industry on a global scale.
Yoseph Shaaltiel, Ph.D.
Dr. Shaaltiel founded Protalix Ltd. in 1993 and has served as our Executive Vice President, Research and Development since December 31, 2006. Prior to establishing Protalix Ltd., from 1988 to 1993, Dr. Shaaltiel was a Research Associate at the MIGAL Technological Center. He also served as Deputy Head of the Biology Department of the Biological and Chemical Center of the Israeli Defense Forces and as a Biochemist at Makor Chemicals Ltd. Dr. Shaaltiel was a Postdoctoral Fellow at the University of California at Berkeley and at Rutgers University in New Jersey. He has co-authored over 40
articles and abstracts on plant biochemistry and holds seven patents. Dr. Shaaltiel received his Ph.D. in Plant Biochemistry from the Weizmann Institute of Science, an M.Sc. in Biochemistry from the Hebrew University and a B.Sc. in Biology from the Ben Gurion University.
Einat Brill Almon, Ph.D.
Dr. Almon joined Protalix Ltd. in December 2004, originally as a Senior Director and later as a Vice President and then Senior Vice President, Product Development, and became our Senior Vice President, Product Development on December 31, 2006. Dr. Almon has many years of experience in the management of life science projects and companies, including biotechnology and agrobiotech, with direct experience in clinical, device and scientific software development, as well as a strong background and work experience in intellectual property. Prior to joining Protalix Ltd., from 2001 to 2004,
she served as Director of R&D and IP of Biogenics Ltd., a company that developed an autologous platform for tissue-based protein drug delivery. Biogenics, based in Israel, is a wholly-owned subsidiary of Medgenics Inc. Dr. Almon has trained as a biotechnology patent agent at leading IP firms in Israel. Dr. Almon holds a Ph.D. and an M.Sc. in molecular biology of cancer research from the Weizmann Institute of Science, a B.Sc. from the Hebrew University and has carried out Post-Doctoral research at the Hebrew University in the area of plant molecular biology.
Yossi Maimon, CPA.
Mr. Maimon joined Protalix Ltd. on October 15, 2006 as its Chief Financial Officer and became our Vice President and Chief Financial Officer on December 31, 2006. Prior to joining Protalix, from 2002 to 2006, he served as the Chief Financial Officer of Colbar LifeScience Ltd., or Colbar, a biomaterial company focusing on aesthetics, where he led all of the corporate finance activities, fund raisings and legal aspects of Colbar including the sale of Colbar to Johnson and Johnson. Mr. Maimon has a B.A. in accounting from the City University of New York and an MBA from Tel Aviv University, and
he is a Certified Public Accountant in the United States (New York State) and Israel.
Tzvi Palash.
Mr. Palash has served as Protalix Ltd.s Chief Operating Officer since September 6, 2010. Prior to joining Protalix Ltd., from 2006 through 2010, Mr. Palash served as a General Manager of ColBar. In
16
that position, Mr. Palash served as a member of the Global Aesthetic Management Team at the Consumer Group of Johnson & Johnson. Prior to that, from 2001 through 2006, Mr. Palash served as the Vice President, Operations of ColBar, and he has served in different positions at Teva. Mr. Palash has an M.Sc. in Biochemistry from the Hebrew University and a B.Sc. in Biology from the Tel Aviv University.
Family Relationships
There are no family relationships among directors or executive officers of our company.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that includes provisions ranging from restrictions on gifts to conflicts of interest. All of our employees and directors are bound by this Code of Business Conduct and Ethics. Violations of our Code of Business Conduct and Ethics may be reported to the Audit Committee.
The Code of Business Conduct and Ethics includes provisions applicable to all of our employees, including senior financial officers and members of our Board of Directors and is posted on our website (
www.protalix.com
). We intend to post amendments to or waivers from any such Code of Business Conduct and Ethics.
Compensation Discussion and Analysis
The primary goals of the Compensation Committee of our Board of Directors with respect to executive compensation are to attract and retain the most talented and dedicated executives possible, to tie annual and long-term cash and stock incentives to achievement of specified performance objectives, and to align executives incentives with stockholder value creation. To achieve these goals, the Compensation Committee implements and maintains compensation plans that tie a portion of executives overall compensation to key strategic goals such as developments in our clinical path, the establishment of key strategic
collaborations, the build-up of our pipeline and the strengthening of our financial position. The Compensation Committee evaluates individual executive performance with a goal of setting compensation at levels the committee believes are comparable with executives in other companies of similar size and stage of development operating in the biotechnology industry while taking into account our relative performance and our own strategic goals.
Elements of Compensation
Executive compensation consists of following elements:
Base Salary.
Base salaries for our executives are established based on the scope of their responsibilities taking into account competitive market compensation paid by other companies for similar positions. Generally, we believe that executive base salaries should be targeted near the median of the range of salaries for executives in similar positions with similar responsibilities at comparable companies. The Compensation Committee convenes, from time to time to evaluate present and future executive compensation, which evaluation generally includes an evaluation of the peer group considered in analyzing
executive compensation. The Compensation Committee intends to continue reviewing and revising the peer group periodically to ensure that it continues to reflect companies similar to our company in size and development stage. The Compensation Committee also reviews executive compensation reports and an analysis of publicly-traded biotechnology companies prepared by third party experts from a well-known consulting firm for additional data and other information regarding executive compensation for comparative purposes.
Base salaries are usually reviewed annually, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. The base salaries of each of our President and Chief Executive Officer, our Executive Vice President, Research and Development, our Senior Vice President, Product Development, our Vice President and Chief Financial Officer and our Chief Operating Officer, who we refer to collectively as the Named Executive Officers, are discussed herein. In March 2016, our Board of Directors adopted certain recommendations of the
Compensation Committee regarding the compensation of our Named Executive Officers with no change in the base salary component, as discussed below.
17
Annual Bonus.
The Compensation Committee has the authority to award discretionary annual bonuses to our executive officers. The discretionary annual bonus awards were intended to compensate officers for achieving financial, clinical, regulatory and operational goals and for achieving individual annual performance objectives. For any given year, the compensation objectives vary, but relate generally to strategic factors such as developments in our clinical path, the execution of a license agreement for the commercialization of product candidates, the establishment of key strategic collaborations, the
build-up of our pipeline and financial factors such as capital raising. Bonuses are awarded generally based on corporate performance, with adjustments made within a range for individual performance, at the discretion of the Compensation Committee. The Compensation Committee determines, on a discretionary basis, the size of the entire bonus pool and the amount of the actual award to each Named Executive Officer.
The Compensation Committee selects, in its discretion, the executive officers of our company or our subsidiary who are eligible to receive bonuses for any given year. Any bonus granted by the Compensation Committee will generally be paid upon the achievement of a specific milestone, subject to certain terms and conditions. The Compensation Committee has not fixed a minimum or maximum award for any executive officers annual discretionary bonus. Each of our executive officers is eligible for a discretionary annual bonus under his or her employment agreement.
Performance Bonus.
In March 2016, the Compensation Committee adopted a new performance-based bonus plan for the Named Executive Officers and other members of our management. The new bonus plan is designed to provide cash bonuses over a three-year period based on our companys achievement of what we consider to be major milestones. The amounts payable to each person for each milestone were determined after consideration of both personal and company objectives and are based on a multiple of the persons monthly salary. Such multiples range from a maximum of 12 months to a minimum of one-half a
month. Each bonus is payable upon the achievement of the applicable milestone, subject to certain terms and conditions. The bonus plan is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
Milestone
|
|
Moshe
Manor
|
|
Yoseph
Shaaltiel, Ph.D.
|
|
Einat Brill
Almon, Ph.D.
|
|
Yossi
Maimon
|
|
Tzvi
Palash
|
Clinical Development Milestone for Certain Product Candidate
|
|
|
$108,000
|
|
|
|
$42,000
|
|
|
|
$72,000
to $108,000
|
|
|
|
$36,000
|
|
|
|
$34,000
|
|
Regulatory Development Milestone for Same Product Candidate
|
|
|
$108,000
to $216,000
|
|
|
|
$84,000
to $168,000
|
|
|
|
$108,000
to $216,000
|
|
|
|
$36,000
to $54,000
|
|
|
|
$34,000
to $68,000
|
|
Clinical Development Milestone for Certain Product Candidate
|
|
|
$54,000
|
|
|
|
$10,500
|
|
|
|
$27,000
to $54,000
|
|
|
|
$9,000
|
|
|
|
$8,500
|
|
Clinical Development Milestone for Certain other Product Candidate
|
|
|
$54,000
|
|
|
|
$10,500
|
|
|
|
$27,000
to $54,000
|
|
|
|
$9,000
|
|
|
|
$8,500
|
|
General Regulatory Milestone
|
|
|
$102,000
|
|
|
|
$42,000
|
|
|
|
$36,000
|
|
|
|
$18,000
|
|
|
|
$102,000
|
|
Substantial Transaction involving a Certain Product Candidate
|
|
|
$128,000
|
|
|
|
$21,000
|
|
|
|
$18,000
|
|
|
|
$115,000
to $141,000
|
|
|
|
$17,000
|
|
Substantial Transaction involving other Product Candidate
|
|
|
$112,000
|
|
|
|
$10,500
|
|
|
|
$9,000
|
|
|
|
$49,000
to $60,000
|
|
|
|
$8,500
|
|
Corporate Finance Milestones
|
|
|
$216,000
|
|
|
|
|
|
|
|
|
|
|
|
$197,000
to $242,000
|
|
|
|
|
|
Early-Stage Clinical Milestones
|
|
|
$72,000
|
|
|
|
$252,000
|
|
|
|
$72,000
|
|
|
|
$36,000
|
|
|
|
$68,000
|
|
Options and Share-Based Compensation.
Our amended 2006 stock incentive plan authorizes us to grant options to purchase shares of common stock, restricted stock and other securities to our employees, directors and consultants. Our Compensation Committee is the administrator of the stock incentive plan. Stock option or other grants are generally made at the commencement of employment and following a significant change in job responsibilities or to meet other special retention or performance objectives. The Compensation Committee reviews and approves stock option and other awards to executive officers
based upon a review of competitive compensation data, its assessment of individual performance, a review of each executives existing long-term incentives, and retention considerations. The exercise price of stock options granted under our amended 2006 stock incentive plan must be equal to at least 100% of the fair market value of our common
18
stock on the date of grant; however, in certain circumstances, grants may be made at a lower price to Israeli grantees who are residents of the State of Israel. See Summary Compensation Table Grants of Plan-Based Awards below for grants of options to our Named Executives Officers during fiscal year 2015.
Severance and Change in Control Benefits.
Pursuant to the employment agreements entered into with each of our executive officers, the executive officer is entitled to be insured by Protalix Ltd. under a Managers Policy in lieu of severance. The intention of such Managers Policies is to provide the Israel-based officers with severance protection of one months salary for each year of employment. In addition, the stock options and restricted stock granted to each of our Named Executive Officers provide that all of such instruments are subject to accelerated vesting immediately upon a
change in control of our company. As part of the new bonus plan adopted in March 2016, it was agreed that the Board of Directors will grant certain cash bonuses to the Named Executive Officers and other of our employees in its sole discretion upon the occurrence of a change in control.
Other Compensation.
Consistent with our compensation philosophy, we intend to continue to maintain our current benefits for our executive officers; however, the Compensation Committee in its discretion may revise, amend, or add to the officers executive benefits if it deems it advisable. As an additional benefit to all of our Israel-based Named Executive Officers and for most of our employees, we generally contribute to certain funds amounts equaling a total of approximately 15% of their gross salaries for certain pension and other savings plans for the benefit of the Named Executive Officers. In
addition, in accordance with customary practice in Israel, our Israel-based executives agreements require us to contribute towards their vocational studies, and to provide annual recreational allowances, a company car and a company phone. We believe these benefits are currently equivalent with median competitive levels for comparable companies.
Executive Compensation.
We refer to the Summary Compensation Table set forth below for information regarding the compensation earned during the fiscal year ended December 31, 2015 by: our President and Chief Executive Officer, our Executive Vice President, Research and Development, our Senior Vice President, Product Development, our Vice President and Chief Financial Officer and our Chief Operating Officer, who we refer to collectively as the Named Executive Officers.
Compensation Committee Report
The above report of the Compensation Committee does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth below with our management. Based on this review and discussion, the Compensation Committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10K and our annual proxy statement on Schedule 14A.
Respectfully submitted on April 5, 2016, by the members of the Compensation Committee of the Board of Directors
.
Amos Bar Shalev
Zeev Bronfeld
Yodfat Harel Buchris
19
Summary Compensation Table
The following table sets forth a summary for the fiscal years ended December 31, 2015, 2014, and 2013, respectively, of the cash and non-cash compensation awarded, paid or accrued by us or Protalix Ltd. to our President and Chief Executive Officer, our Executive Vice President, Research and Development, our Senior Vice President, Product Development, our Vice President and Chief Financial Officer and our Chief Operating Officer, who we refer to collectively as the Named Executive Officers. There were no restricted stock awards, long-term incentive plan payouts or other compensation paid during fiscal years 2015,
2014, and 2013 by us or Protalix Ltd. to the Named Executive Officers, except as set forth below. All of the Named Executive Officers are employees of our subsidiary, Protalix Ltd. All currency amounts are expressed in U.S. dollars.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Award(s)
($)
|
|
Option
Award(s)
($)
|
|
All Other
Compensation
($)
(1)
|
|
Total
($)
|
Moshe Manor
(2)
President and
Chief Executive Officer
|
|
|
2015
|
|
|
|
334,708
|
|
|
|
|
|
|
|
|
|
|
|
427,864
|
|
|
|
95,823
|
|
|
|
858,395
|
|
|
|
2014
|
|
|
|
93,667
|
|
|
|
|
|
|
|
|
|
|
|
200,962
|
|
|
|
18,399
|
|
|
|
313,028
|
|
Yoseph Shaaltiel, Ph.D.
Executive Vice President,
Research and Development
|
|
|
2015
|
|
|
|
271,730
|
|
|
|
85,000
|
|
|
|
110,244
|
|
|
|
112,497
|
|
|
|
74,058
|
|
|
|
653,529
|
|
|
|
2014
|
|
|
|
305,548
|
|
|
|
90,000
|
|
|
|
232,979
|
|
|
|
62,651
|
|
|
|
84,719
|
|
|
|
775,897
|
|
|
|
2013
|
|
|
|
302,901
|
|
|
|
120,000
|
|
|
|
429,927
|
|
|
|
140,770
|
|
|
|
81,672
|
|
|
|
1,075,270
|
|
Einat Brill Almon, Ph.D.
Senior Vice President,
Product Development
|
|
|
2015
|
|
|
|
234,899
|
|
|
|
117,500
|
|
|
|
97,120
|
|
|
|
102,215
|
|
|
|
62,362
|
|
|
|
614,096
|
|
|
|
2014
|
|
|
|
263,917
|
|
|
|
85,000
|
|
|
|
205,244
|
|
|
|
56,170
|
|
|
|
68,489
|
|
|
|
678,820
|
|
|
|
2013
|
|
|
|
261,505
|
|
|
|
100,000
|
|
|
|
378,745
|
|
|
|
126,208
|
|
|
|
66,600
|
|
|
|
933,058
|
|
Yossi Maimon, CPA
Vice President,
Chief Financial Officer
|
|
|
2015
|
|
|
|
266,776
|
|
|
|
246,009
|
|
|
|
97,120
|
|
|
|
102,215
|
|
|
|
68,398
|
|
|
|
780,518
|
|
|
|
2014
|
|
|
|
299,090
|
|
|
|
225,000
|
|
|
|
205,244
|
|
|
|
56,170
|
|
|
|
74,493
|
|
|
|
859,997
|
|
|
|
2013
|
|
|
|
292,096
|
|
|
|
110,000
|
|
|
|
378,745
|
|
|
|
126,208
|
|
|
|
67,739
|
|
|
|
974,788
|
|
Tzvi Palash
Chief Operating Officer
|
|
|
2015
|
|
|
|
208,106
|
|
|
|
60,000
|
|
|
|
53,547
|
|
|
|
49,141
|
|
|
|
71,192
|
|
|
|
441,986
|
|
|
|
2014
|
|
|
|
233,669
|
|
|
|
50,000
|
|
|
|
113,161
|
|
|
|
11,413
|
|
|
|
74,520
|
|
|
|
482,763
|
|
|
|
2013
|
|
|
|
231,668
|
|
|
|
20,000
|
|
|
|
208,822
|
|
|
|
72,055
|
|
|
|
72,105
|
|
|
|
604,650
|
|
|
(1)
|
Includes employer contributions to pension and/or insurance plans and other miscellaneous payments.
|
|
(2)
|
Mr. Manor commenced his tenure as our President and Chief Executive Officer as of November 1, 2014.
|
Grants of Plan-Based Awards
The following table summarizes the grant of awards made to the Named Executive Officers during 2015 as of December 31, 2015.
|
|
|
|
|
|
|
Name
(a)
|
|
Grant Date
(b)
|
|
All Other Stock
Awards: Number of
Shares of Stock or
Units
(#) (i)
|
|
Grant Date
Fair Value of
Stock and
Option Awards
($) (l)
|
Yoseph Shaaltiel
|
|
|
March 23, 2015
|
|
|
|
275,000
|
|
|
|
270,252
|
|
Einat Brill Almon
|
|
|
March 23, 2015
|
|
|
|
250,000
|
|
|
|
245,684
|
|
Yossi Maimon
|
|
|
March 23, 2015
|
|
|
|
250,000
|
|
|
|
245,684
|
|
Tzvi Palash
|
|
|
March 23, 2015
|
|
|
|
125,000
|
|
|
|
122,842
|
|
20
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information with respect to the Named Executive Officers concerning equity awards as of December 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)
|
Moshe Manor
|
|
|
281,250
|
|
|
|
618,750
|
|
|
|
2.37
|
|
|
|
9/29/2024
|
|
|
|
|
|
|
|
|
|
Yoseph Shaaltiel
|
|
|
122,162
|
|
|
|
|
|
|
|
0.001
|
|
|
|
6/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
263,728
|
|
|
|
|
|
|
|
5.00
|
|
|
|
2/7/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
2.65
|
|
|
|
2/25/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
145,000
|
|
|
|
|
|
|
|
6.90
|
|
|
|
2/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,375
|
|
|
|
40,163
|
|
|
|
|
|
|
|
|
275,000
|
|
|
|
1.72
|
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
|
Einat Brill Almon
|
|
|
311,272
|
|
|
|
|
|
|
|
5.00
|
|
|
|
2/7/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
|
|
|
|
|
|
|
6.90
|
|
|
|
2/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,688
|
|
|
|
35,382
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
1.72
|
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
|
Yossi Maimon
|
|
|
175,000
|
|
|
|
|
|
|
|
5.00
|
|
|
|
2/7/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
|
|
|
|
|
|
|
6.90
|
|
|
|
2/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,688
|
|
|
|
35,382
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
1.72
|
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
|
Tzvi Palash
|
|
|
160,000
|
|
|
|
|
|
|
|
7.55
|
|
|
|
8/29/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,125
|
|
|
|
19,508
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
1.72
|
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
|
Option exercises during 2015 and vested stock awards for Named Executive Officers as of December 31, 2015 were as follows:
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
(a)
|
|
Number of
Shares
Acquired on
Exercise
(#) (b)
|
|
Value
Received on
Exercise
($) (c)
|
|
Number of
Shares
Acquired on
Vesting
(#) (d)
|
|
Value
Received on
Vesting
($) (e)
|
Moshe Manor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yoseph Shaaltiel
|
|
|
|
|
|
|
|
|
|
|
52,500
|
|
|
|
|
|
Einat Brill Almon
|
|
|
|
|
|
|
|
|
|
|
46,250
|
|
|
|
|
|
Yossi Maimon
|
|
|
|
|
|
|
|
|
|
|
46,250
|
|
|
|
|
|
Tzvi Palash
|
|
|
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25,500
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Potential Payments upon Termination or Change-in-Control/Corporate Transaction
Each of our Named Executive Officers (while they remain employed by our company) is entitled to be insured by Protalix Ltd. under a Managers Policy in lieu of severance upon termination. The intention of such Managers Policies is to provide our officers with severance protection of one months salary for each year of employment. We do not provide any change in control/corporate transaction benefits to our Named Executive Officers except for certain cash bonuses at the boards sole discretion and the acceleration of the vesting periods for outstanding options and restricted stock. Had we experienced a
change in control/corporate
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transaction on December 31, 2015, the value of the acceleration of the vesting period of Mr. Manors options would be zero; as of the same date all exercise prices of options held by each of our other Named Executive Officers were above the market value of our shares and, accordingly, the value of the acceleration of the stock options held by each of them as of such date would be zero. In addition, had we experienced a change in control/corporate transaction on December 31, 2015, the value of the acceleration of vesting of the restricted stock held by each of Dr. Shaaltiel, Dr. Brill Almon, Mr. Maimon and Mr. Palash would
be $40,163, $35,382, $35,382, and $19,508, respectively.
Employment Arrangements
Moshe Manor.
Mr. Manor joined Protalix Ltd. as its President and Chief Executive Officer pursuant to an employment agreement dated September 28, 2014. Pursuant to the employment agreement, his current monthly base salary is NIS 95,000 (approximately $25,200) and Mr. Manor is entitled to an annual discretionary bonus subject to the sole discretion of our Board of Directors. The Board of Directors shall determine the bonus on the basis of agreed-upon annual objectives which shall include both measurable and strategic parameters. The monthly salary is subject to cost of living adjustments from time to time as
may be required by law. The Board of Directors also granted to Mr. Manor options to purchase 900,000 shares of our common stock at an exercise price equal to $2.37 per share, the closing sales price of the common stock on the NYSE MKT for the last trading day immediately preceding the effective date of the grant. The options vest over four years on a quarterly basis in 16 equal increments, subject to certain conditions. Vesting of the options will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Companys 2006 Stock Incentive Plan, as amended. Mr. Manors employment agreement is terminable by our company on 90 days written notice for any reason during the first year of the agreements term and on 180 days written notice thereafter. Mr. Manor may terminate the agreement on 90 days written notice for any reason during its term. We may terminate the Agreement for cause without notice. Mr. Manor is entitled to be
insured by the Company under a Managers Policy in lieu of severance, company contributions towards vocational studies, annual recreational allowances, a company car and a company phone. Mr. Manor is entitled to 24 working days of vacation.
Yoseph Shaaltiel, Ph.D.
Dr. Shaaltiel founded Protalix Ltd. in 1993 and currently serves as our Executive Vice President, Research and Development. Dr. Shaaltiel entered into an employment agreement with Protalix Ltd. on September 1, 2001. Pursuant to the employment agreement, his current monthly base salary is NIS 80,750 (approximately $21,400) per month. The employment agreement is terminable by Protalix Ltd. on 90 days written notice for any reason and we may terminate the agreement for cause without notice. In addition, vesting of all of Dr. Shaaltiels options and restricted shares will be
accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Companys 2006 Stock Incentive Plan, as amended. Dr. Shaaltiel is entitled to be insured by Protalix Ltd. under a Managers Policy in lieu of severance, company contributions towards vocational studies, annual recreational allowances, a company car and a company phone. Dr. Shaaltiel is entitled to 29 working days of vacation.
Einat Brill Almon, Ph.D.
Dr. Brill Almon joined Protalix Ltd. on December 19, 2004 as its Vice President, Product Development, pursuant to an employment agreement effective on December 19, 2004 by and between Protalix Ltd. and Dr. Brill Almon, and currently serves as our Senior Vice President, Product Development. Pursuant to the employment agreement, her current monthly base salary is NIS 69,825 per month (approximately $18,500). She is also entitled to certain specified bonuses in the event that Protalix achieves certain specified clinical development milestones within specified timelines. In addition,
vesting of all of Dr. Brill Almons options and restricted shares will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Companys 2006 Stock Incentive Plan, as amended. The employment agreement is terminable by either party on 60 days written notice for any reason and we may terminate the agreement for cause without notice. Dr. Brill Almon is entitled to be insured by Protalix Ltd. under a Managers Policy in lieu of severance, company contributions towards vocational studies, annual recreational allowances, a company car and a company phone at up to NIS 1,000 per month. Dr. Brill Almon is entitled to 29 working days of vacation.
Yossi Maimon, CPA.
Mr. Maimon joined Protalix Ltd. as its Chief Financial Officer pursuant to an employment agreement effective as of October 15, 2006 by and between Protalix Ltd. and Mr. Maimon and currently serves as our Chief Financial Officer. Pursuant to the employment agreement, his current monthly
22
base salary is NIS 69,825 (approximately $18,500) and Mr. Maimon is entitled to an annual discretionary bonus and additional discretionary bonuses in the event Protalix achieves significant financial milestones, subject to the Boards sole discretion. The monthly salary is subject to cost of living adjustments from time to time. In addition, vesting of all of Mr. Maimons options and restricted shares will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Companys 2006 Stock Incentive Plan, as amended. The employment agreement is terminable by either
party on 60 days written notice for any reason and we may terminate the agreement for cause without notice. Mr. Maimon is entitled to be insured by Protalix Ltd. under a Managers Policy in lieu of severance, company contributions towards vocational studies, annual recreational allowances, a company car and a company phone. Mr. Maimon is entitled to 29 working days of vacation.
Tzvi Palash.
Mr. Palash joined Protalix Ltd. as its Chief Operating Officer pursuant to an employment agreement effective September 6, 2010 and currently serves as our Chief Operating Officer. Pursuant to the employment agreement, Mr. Palashs current monthly base salary is NIS 65,550 (approximately $17,350) and Mr. Palash is entitled to an annual discretionary bonus for performance subject to the sole discretion of our compensation committee. The monthly salary is subject to cost of living adjustments from time to time as may be required by law. In addition, vesting of all of Mr. Palashs options
and restricted shares will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Companys 2006 Stock Incentive Plan, as amended. The employment agreement is terminable by either party on 60 days written notice for any reason and we may terminate the agreement for cause without notice. Mr. Palash is entitled to be insured by Protalix Ltd. under a Managers Policy in lieu of severance, company contributions towards vocational studies, annual recreational allowances, a company car, a company phone, a company laptop and lodging accommodations in the Carmiel area. Mr. Palash is entitled to 27 working days of vacation.
Amended 2006 Stock Incentive Plan
Our Board of Directors and a majority of our stockholders approved our 2006 Stock Incentive Plan on December 14, 2006. Our stockholders approved an amendment to the plan on June 17, 2012 and subsequently on November 10, 2014. Of the 13,841,655 shares originally reserved for issuance under the plan, as amended, as of December 31, 2015, there are outstanding options and unvested restricted stock covering 7,085,510 shares of our common stock in the aggregate, subject to adjustment for a stock split or any future stock dividend or other similar change in our common stock or our capital structure. As of December 31, 2015, options
to acquire 760,844 shares of common stock remain available for grant under the amended 2006 Stock Incentive Plan.
Our amended 2006 Stock Incentive Plan provides for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights and dividend equivalent rights, collectively referred to as awards. Stock options granted under the amended 2006 Stock Incentive Plan may be either incentive stock options under the provisions of Section 422 of the Internal Revenue Code, or non-qualified stock options. Incentive stock options may be granted only to employees. Awards other than incentive stock options may be granted to employees, directors and consultants.
The amended 2006 Stock Incentive Plan is also designed to comply with the provisions of the Israeli Income Tax Ordinance New Version, 1961 (including as amended pursuant to Amendment 132 thereto) (the tax ordinance) and is intended to enable us to grant awards to grantees who are Israeli residents as follows: (i) awards to employees pursuant to Section 102 of the tax ordinance; and (ii) awards to non-employees pursuant to Section 3(I) of the tax ordinance. For this purpose, employee refers only to employees, office holders and directors of our company or a related entity excluding those who are
considered Controlling Stockholders pursuant to, or otherwise excluded by, the tax ordinance. In accordance with the terms and conditions imposed by the Tax Ordinance, grantees who receive awards under the amended 2006 stock incentive plan may be afforded certain tax benefits in Israel as described below.
Our Board of Directors or the Compensation Committee, referred to as the plan administrator, will administer our amended 2006 stock incentive plan, including selecting the grantees, determining the number of shares to be subject to each award, determining the exercise or purchase price of each award, and determining the vesting and exercise periods of each award.
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The exercise price of stock options granted under the 2006 stock incentive plan must be equal to at least 100% of the fair market value of our common stock on the date of grant; however, in certain circumstances, grants may be made at a lower price to Israeli grantees who are residents of the State of Israel. If, however, incentive stock options are granted to an employee who owns stock possessing more than 10% of the voting power of all classes of our stock or the stock of any parent or subsidiary of our company, the exercise price of any incentive stock option granted must equal at least 110% of the fair market value on the
grant date and the maximum term of these incentive stock options must not exceed five years. The maximum term of all other awards must not exceed 10 years (or five years in the case of an incentive stock option granted to any participant who owns stock representing more than 10% of the voting power of all classes of our stock or the stock of any parent or subsidiary of our company). The plan administrator will determine the exercise or purchase price (if any) of all other awards granted under the amended 2006 stock incentive plan.
Under the amended 2006 stock incentive plan, incentive stock options and options to Israeli grantees may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of the participant only by the participant. Other awards shall be transferable by will or by the laws of descent or distribution and to the extent and in the manner authorized by the plan administrator by gift or pursuant to a domestic relations order to members of the participants immediate family. The amended 2006 stock incentive
plan permits the designation of beneficiaries by holders of awards, including incentive stock options.
If the service of a participant in the amended 2006 stock incentive plan is terminated for any reason other than cause, the participant may exercise awards that were vested as of the termination date for a period ending upon the earlier of 12 months from the date of termination (or such shorter or longer period set forth in the award agreement) or the expiration date of the awards unless otherwise determined by the plan administrator. If the service of a participant in the amended 2006 stock incentive plan is terminated for cause, the participant may exercise awards that were vested as of the termination date for a period
ending upon the earlier of 14 days from the date of termination (or such shorter or longer period set forth in the award agreement) or the expiration date of the awards unless otherwise determined by the plan administrator.
In the event of a corporate transaction, all awards will terminate unless assumed by the successor corporation. Unless otherwise provided in a participants award agreement, in the event of a corporate transaction and with respect to the portion of each award that is assumed or replaced, then such portion will automatically become fully vested and exercisable immediately upon termination of a participants service if the participant is terminated by the successor company or us without cause within 12 months after the corporate transaction. With respect to the portion of each award that is not assumed or replaced,
such portion will automatically become fully vested and exercisable immediately prior to the effective date of the corporate transaction so long as the participants service has not been terminated prior to such date.
In the event of a change in control, except as otherwise provided in a participants award agreement, following a change in control (other than a change in control that also is a corporate transaction) and upon the termination of a participants service without cause within 12 months after a change in control, each award of such participant that is outstanding at such time will automatically become fully vested and exercisable immediately upon the participants termination. In addition, the stock options and shares of restricted stock issued to each of our Named Executive Officers are subject to accelerated
vesting immediately upon a corporate transaction or a change in control of our company, as defined in our amended 2006 stock incentive plan.
Under our amended 2006 stock incentive plan, a corporate transaction is generally defined as:
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a merger or consolidation in which we are not the surviving entity, except for the principal purpose of changing our companys state of incorporation;
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the sale, transfer or other disposition of all or substantially all of our assets;
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the complete liquidation or dissolution of our company;
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any reverse merger in which we are the surviving entity but our shares of common stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other
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property, whether in the form of securities, cash or otherwise, or in which securities possessing more than forty percent (40%) of the total combined voting power of our outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger; or
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acquisition in a single or series of related transactions by any person or related group of persons of beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of our outstanding securities but excluding any such transaction or series of related transactions that the plan administrator determines not to be a corporate transaction (provided however that the plan administrator shall have no discretion in connection with a corporate transaction for the purchase of all or substantially all of our shares unless the principal purpose of such transaction is changing our companys state of incorporation).
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Under our amended 2006 stock incentive plan, a change of control is defined as:
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the direct or indirect acquisition by any person or related group of persons of beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of our outstanding securities pursuant to a tender or exchange offer made directly to our stockholders and which a majority of the members of our board (who have generally been on our board for at least 12 months) who are not affiliates or associates of the offeror do not recommend stockholders accept the offer; or
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a change in the composition of our board over a period of 12 months or less, such that a majority of our board members ceases, by reason of one or more contested elections for board membership, to be comprised of individuals who were previously directors of our company.
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Unless terminated sooner, the amended 2006 stock incentive plan will automatically terminate on December 31, 2020. Our Board of Directors has the authority to amend, suspend or terminate our amended 2006 stock incentive plan. No amendment, suspension or termination of the amended 2006 stock incentive plan shall adversely affect any rights under awards already granted to a participant. To the extent necessary to comply with applicable provisions of federal securities laws, state corporate and securities laws, the Internal Revenue Code, the rules of any applicable stock exchange or national market system, and the rules of any
non-U.S. jurisdiction applicable to awards granted to residents therein (including the Tax Ordinance), we shall obtain stockholder approval of any such amendment to the 2006 stock incentive plan in such a manner and to such a degree as required.
Impact of Israeli Tax Law
The awards granted to employees pursuant to Section 102 of the Tax Ordinance under the amended 2006 stock incentive plan may be designated by us as approved options under the capital gains alternative, or as approved options under the ordinary income tax alternative.
To qualify for these benefits, certain requirements must be met, including registration of the options in the name of a trustee. Each option, and any shares of common stock acquired upon the exercise of the option, must be held by the trustee for a period commencing on the date of grant and deposit into trust with the trustee and ending 24 months thereafter.
Under the terms of the capital gains alternative, we may not deduct expenses pertaining to the options for tax purposes.
Under the amended 2006 stock incentive plan, we may also grant to employees options pursuant to Section 102(c) of the Tax Ordinance that are not required to be held in trust by a trustee. This alternative, while facilitating immediate exercise of vested options and sale of the underlying shares, will subject the optionee to the marginal income tax rate of up to 50% as well as payments to the National Insurance Institute and health tax on the date of the sale of the shares or options. Under the 2006 stock incentive plan, we may also grant to non-employees options pursuant to Section 3(I) of the Tax Ordinance. Under that
section, the income tax on the benefit arising to the optionee upon the exercise of options and the issuance of common stock is generally due at the time of exercise of the options.
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These options shall be further subject to the terms of the tax ruling that has been obtained by Protalix Ltd. from the Israeli tax authorities in connection with the merger. Under the tax ruling, the options issued by us in connection with the assumption of Section 102 options previously issued by Protalix Ltd. under the capital gains alternative shall be issued to a trustee, shall be designated under the capital gains alternative and the issuance date of the original options shall be deemed the issuance date for the assumed options for the calculation of the respective holding period.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
All related party transactions are reviewed and approved by the Audit Committee, as required by the Audit Committee Charter.
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AUDIT COMMITTEE REPORT
The information contained in this report shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filings with the Securities and Exchange Commission, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
The Audit Committee of our Board of Directors operates under a written charter adopted by our Board of Directors, and currently consists of Amos Bar Shalev, Zeev Bronfeld and Yodfat Harel Buchris. All members of the committee fall under the independence requirements contemplated by Rule 10A-3 under the Exchange Act.
As described more fully in its charter, the Audit Committee provides oversight of the quality and integrity of our consolidated financial statements, internal controls and financial reporting process, and our process to manage business and financial risks and compliance with legal, ethical and regulatory requirements. In addition, the Audit Committee interacts directly with and evaluates the qualifications, independence and performance of the independent auditors, Kesselman & Kesselman, and is responsible for the appointment, compensation, retention and oversight of the work of the auditors.
Management is responsible for the preparation, presentation and integrity of the consolidated financial statements, and evaluation of and assessment of the effectiveness of our internal control over financial reporting. The independent auditors are responsible for performing an independent audit of the consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board. The Audit Committees responsibility is to monitor and oversee these processes.
The Audit Committee has reviewed and discussed the audited consolidated financial statements with our Board of Directors and management. Management has represented to the audit committee that our consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles. The Audit Committee discussed with Kesselman & Kesselman the matters required to be discussed by Statement of Auditing Standards No. 61,
Communications with Audit Committees
. In addition, the independent auditors provided the Audit Committee with the written disclosures and letter required by Independence
Standards Board Standard No. 1,
Independence Discussions with Audit Committees
, and the Audit Committee has discussed with Kesselman & Kesselman that firms independence from our company.
Based on the review and discussions of the audited consolidated financial statements and discussions with management and Kesselman & Kesselman, the Audit Committee recommended to Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 for filing with the SEC.
Respectfully submitted,
Members of the Protalix BioTherapeutics, Inc.
Audit Committee
Amos Bar Shalev
Zeev Bronfeld
Yodfat Harel Buchris
Our Board of Directors recommends that stockholders vote FOR the election or re-election of all director nominees named in this Proposal 1: Election of Directors.
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PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), which was signed into law in July 2010, added Section 14A to the Exchange Act. The Dodd-Frank Act requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of the our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC.
We believe that the executive compensation program for the named executive officers, as described in Compensation Discussion and Analysis, is based on a pay-for-performance culture and seeks to align the interests of our named executive officers with the interests of our stockholders. We believe that our compensation programs are designed to reward our named executive officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total stockholder return, while at the same time creating a culture that focuses executives on prudent risk management and
appropriately rewards them for performance. Our executive compensation program is also designed to be competitive with our peer companies, and seeks to enable us to attract and retain the best possible executive talent.
We also believe that the extensive disclosure of compensation information provided in this proxy statement provides our stockholders the information they need to make an informed decision as they weigh the pay of the named executive officers in relation to our performance. This Say-on-Pay proposal gives you the stockholder the opportunity to endorse or not endorse the compensation we paid to the named executive officers through the resolution set forth below.
RESOLVED, that the compensation paid to the named executive officers of Protalix BioTherapeutics, Inc., as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion included in this proxy statement, is hereby APPROVED.
Because your vote is advisory, it will not be binding upon our company, our Board of Directors or the Compensation Committee. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC. Our company, our Board of Directors, and the Compensation Committee will consider the outcome of the vote when evaluating future executive compensation arrangements for our named executive officers.
This proposal is provided as required pursuant to Rule 14a-21(a) of the Exchange Act.
Our Board of Directors recommends that stockholders vote FOR the approval of the executive compensation as disclosed in this proxy statement and as described in this Proposal 2: Advisory Vote on Executive Compensation.
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PROPOSAL 3: AMENDMENT TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
On May 8, 2016, our Board of Directors authorized and approved an amendment to our Certificate of Incorporation (Certificate) to increase the number of authorized shares of our common stock, par value $0.001 per share, from 150,000,000 to 250,000,000 (the Amendment). We are not proposing any change to the authorized number of shares of preferred stock. Under the Delaware General Corporation Law, we are required to obtain the affirmative vote of the holders of a majority of our outstanding shares of common stock to amend the Certificate to increase the number of shares of authorized common stock. Our
Board of Directors determined that the Amendment is advisable and in the best interest of the Company and our stockholders and recommends that our stockholders approve the Amendment.
Description of Common Stock
The Certificate currently authorizes the issuance of 150,000,000 shares of common stock, par value $0.001 per share, and 100,000,000 shares of preferred stock, par value $0.0001 per share, for a total of 250,000,000 shares of capital stock. As of June 1, 2016, there were 99,808,238 shares of common stock issued and outstanding, and no shares of preferred stock issued and outstanding.
As discussed in this proxy statement under the heading Amended 2006 Stock Incentive Plan, we have reserved a number of additional shares of common stock for future issuance under our equity compensation plans. As of December 31, 2015, a total of 7,085,510 shares of common stock are reserved for issuance upon the exercise of outstanding stock options under our 2006 Stock Incentive Plan, as amended, and a total of 760,844 shares of common stock are reserved for issuance in connection with future grants of stock options and/or future issuances of shares under the plan. In addition, 631,866 shares of common stock are
reserved for issuance upon the exercise of other outstanding stock options and 14,618,644 shares of common stock are reserved for issuance upon the conversion of our outstanding convertible promissory notes. After taking into account the total number of shares of common stock issued and outstanding, in addition to the aggregate number of shares of common stock reserved for future issuance as described in this paragraph, approximately 82% of our authorized shares of common stock has been issued or reserved for issuance.
Purpose of the Amendment
Our Board of Directors believes that it is in our best interest, and in the best interest of our stockholders, to increase the number of authorized shares of common stock available for future issuance. Our Board of Directors has determined that increasing the number of authorized shares of common stock available for future issuance will provide our company with greater flexibility in considering and planning our future business needs. Such plans may involve the issuance, from time to time, of additional shares of common stock. If approved, the Amendment will provide our Board of Directors the authority and flexibility to
pursue a variety of business and financial objectives without further action of the stockholders (except when required by applicable law or regulation). We anticipate that we may issue additional shares of common stock in the future in connection with one or more of the following:
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financing transactions, such as public or private offerings;
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issuances pursuant to the conversion of outstanding or future convertible securities;
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issuances under current and future stock incentive plans;
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issuances in connection with any partnerships, strategic alliances, collaborations or other similar transactions;
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issuances in connection with strategic investments;
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any other proper corporate purpose.
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Our Board of Directors evaluates such opportunities, from time to time, and considers different capital structuring alternatives designed to advance our business strategy. If additional authorized shares of common stock are available, transactions dependent upon the issuance of additional shares would be less likely to be impeded or undermined by delays and uncertainties occasioned by the need to obtain prior stockholder authorization. Our Board of Directors will have the discretion to issue the shares of common stock without further stockholder action, except as may be required for a particular transaction by applicable law
or regulation, or the NYSE MKT Company Guide. As of the date of this Proxy Statement, we have no specific plans, agreements or commitments to issue any shares of common stock for which approval of the proposed Amendment is required. Nevertheless, our Board of Directors believes the additional authorized shares will provide us with needed flexibility to issue shares of common stock in the future without the potential expense and delay incident to obtaining stockholder approval for a particular issuance. Our Board of Directors believes that a failure to approve this proposed Amendment may restrict our ability to manage our capital needs and may therefore be detrimental to the interests of our stockholders.
Possible Effects of the Amendment
The issuance of additional shares of common stock may, among other things, have a dilutive effect on earnings per share and on stockholders equity and voting rights. Furthermore, future sales of substantial amounts of our common stock, or the perception that these sales might occur, could adversely affect the prevailing market price of our common stock or limit our ability to raise additional capital. Stockholders should recognize that, as a result of this proposal, they will own a smaller percentage of shares relative to the total authorized shares of our company than they presently own.
The issuance of additional shares of common stock could also have the effect of making it more difficult for a third party to acquire, or discouraging a third party from attempting to acquire, control of our company. For example, we could issue additional shares of common stock so as to dilute the stock ownership or voting rights of persons seeking to obtain control of our company without our agreement. Similarly, the issuance of additional shares of common stock to certain persons allied with our management could have the effect of making it more difficult to remove our current management by diluting the stock ownership or
voting rights of persons seeking to cause such removal. We have not proposed the increase in the number of authorized shares of common stock with the intention of using the additional authorized shares for anti-takeover purposes.
Neither the Delaware General Corporation Law, the Certificate, nor our Bylaws provides for appraisal or other similar rights for dissenting stockholders in connection with this proposal. Accordingly, our stockholders will have no right to dissent and obtain payment for their shares.
The text of the proposed Amendment is set forth in Exhibit A attached to this Proxy Statement, and this discussion is qualified in its entirety by reference to Exhibit A. If this proposed Amendment is approved by the stockholders, it will become effective upon filing of a Certificate of Amendment with the Secretary of State of the State of Delaware. We expect to file the Certificate of Amendment promptly upon approval by our stockholders. In accordance with the Delaware General Corporation Law, however, our Board of Directors may elect to abandon the Amendment without further action by the stockholders at any time prior to the
effectiveness of the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware, notwithstanding stockholder approval of the Amendment.
Our Board of Directors recommends that stockholders vote FOR the approval of the Amendment to the Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock from 150,000,000 to 250,000,000 as disclosed in this proxy statement and as described in this Proposal 3: Amendment to Increase the Number of Authorized Shares of Common Stock.
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PROPOSAL 4: RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Board of Directors, upon the recommendation of its Audit Committee, has ratified the selection of Kesselman & Kesselman to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2016. The Audit Committee of our Board of Directors is solely responsible for selecting our independent public accountants. Although stockholder approval is not required to appoint Kesselman & Kesselman as our independent public accountants, we believe that submitting the appointment of Kesselman & Kesselman to our stockholders for ratification is a matter of good corporate governance. If our
stockholders do not ratify the appointment, then the appointment will be reconsidered by the Audit Committee. Even if the appointment is ratified, the Audit Committee may engage a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interest of our Corporation and our stockholders. The proxy will be voted as specified, and if no specification is made, the proxy will be cast FOR this proposal.
During our fiscal year ended December 31, 2015, there were no disagreements with Kesselman & Kesselman on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which if not resolve to their satisfaction would have caused them to make reference to the subject matter of the disagreements in connection with their opinion.
The audit report of Kesselman & Kesselman on our consolidated financial statements for the years ended December 31, 2014 and 2015 did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.
The Audit Committee will consider whether the provision of any other services by Kesselman & Kesselman is compatible with maintaining the independence of Kesselman & Kesselman. The Audit Committee has concluded that Kesselman & Kesselman is independent.
Representatives of Kesselman & Kesselman will be present at the annual meeting and available to answer stockholders questions.
Our Board of Directors recommends that stockholders vote FOR the ratification of the appointment of Kesselman & Kesselman for the fiscal year ending December 31, 2016.
The following table sets forth fees billed to us by our independent registered public accounting firm during the fiscal years ended December 31, 2015 and 2014 for: (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements; (ii) services by our independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and that are not reported as Audit Fees; (iii) services rendered in connection with tax compliance, tax advice and tax planning; and (iv) all other fees for services rendered.
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Year Ended December 31,
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2015
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2014
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Audit Fees
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$
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231,000
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$
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246,000
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Audit Related Fees
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$
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34,000
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$
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10,000
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Tax Fees
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$
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45,600
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$
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51,380
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All Other Fees
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Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
Prior to entering into the engagement letter with our independent registered accountants, our Audit Committee approved the 2016 audit fees. For fiscal year 2016, our Audit Committee has approved fees for certain permissible non-audit services to be rendered by our independent registered accounting firm.
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STOCKHOLDER PROPOSALS
All stockholder proposals intended to be presented at our 2017 Annual Meeting of Stockholders must be submitted in writing to Yossi Maimon, Corporate Secretary, Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455, Carmiel 20100, Israel and received by us no later than March 2, 2017, and must comply in all other respects with applicable rules and regulations of the SEC relating to such inclusion. Such notice must include, with respect to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the
reasons for conducting such business at the annual meeting; (ii) the name and record address of the stockholder proposing such business; (iii) the class and number of shares of our company which are beneficially owned by the stockholder; and (iv) any material interest of the stockholder in such business. In addition, the notice must include certain information relating to any derivative or hedging transactions by the stockholder delivering such notice and its Stockholder Associated Persons, as defined in our By-Laws, and other arrangements with other parties regarding our securities, as presented in detail in our By-Laws.
Any such proposal submitted with respect to our 2017 Annual Meeting of Stockholders which is submitted outside the requirements of Rule 14a-8 under the Exchange Act will be considered timely if we receive written notice of that proposal not less than 45 days nor more than 75 days prior to the date in 2017 on which we first mailed this proxy statement in 2016; however, if the date of the annual meeting is changed by more than 30 days from the date of the prior years annual meeting, the notice will be considered untimely if it is not received at least 90 days prior to the newly announced date that we will mail our proxy
statement.
ANNUAL REPORT TO STOCKHOLDERS
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC, which provides additional information about us, will be distributed to all stockholders entitled to vote along with the proxy materials. Additional copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 are available on the Internet at
http://www.sec.gov
and
http://www.protalix.com
and are also available in paper form without charge upon written request to Investor Relations, Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455, Carmiel 20100, Israel.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as householding, potentially means extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are stockholders of our company will be householding our proxy materials. A single proxy statement may be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once a stockholder has received notice from its broker that it will be householding communications to such stockholders address, householding will continue until such stockholder is notified otherwise or until such stockholder notifies its broker or us that it no longer wishes to participate in
householding. If, at any time, a stockholder no longer wishes to participate in householding and would prefer to receive a separate proxy statement and annual report in the future such stockholder may (1) notify its broker or (2) direct its written request to: Yossi Maimon, Corporate Secretary, Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455, Carmiel 20100, Israel, +972 (4) 988-9488, ext. 143. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request householding of their communications should contact their broker. In addition, we will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the annual report and proxy statement to such stockholders at a shared address to which a single copy of the documents was delivered.
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OTHER MATTERS
Our Board of Directors knows of no other business to be acted upon at the annual meeting. However, if any other business properly comes before the Annual Meeting of Stockholders, it is the intension of the persons named in the enclosed proxy to vote on such matters in accordance with their best judgment.
The prompt return of your proxy is appreciated and will be helpful in obtaining the necessary vote. Therefore, whether or not you expect to attend the annual meeting please sign the proxy and return it in the enclosed envelope or vote by internet or telephone.
BY ORDER OF THE BOARD OF DIRECTORS,
Yossi Maimon
Vice President and Chief Financial Officer and
Corporate Secretary
Carmiel, Israel
June 30, 2016
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Appendix A
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION OF
PROTALIX BIOTHERAPEUTICS, INC.
(Pursuant to Section 242 of the
General Corporation Law of the State of Delaware)
Protalix BioTherapeutics, Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
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1.
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The name of the corporation is Protalix BioTherapeutics, Inc. (the Corporation). The Certificate of Incorporation of the Corporation was filed with the Secretary of the State of Delaware on March 30, 2016.
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2.
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This Certificate of Amendment to Certificate of Incorporation of the Corporation was duly adopted by the Board of Directors of the Corporation pursuant to a resolution setting forth the proposed amendment of the Certificate of Incorporation and declaring said amendment to be advisable.
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3.
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Article III of the Certificate of Incorporation is hereby deleted in its entirety and replaced with the following:
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The Corporation is authorized to issue the following shares of capital stock: (a) 250,000,000 shares of common stock, par value $.001 per share (the Common Stock); and (b) 100,000,000 shares of preferred stock, par value $.0001 per share (the Preferred Stock). The voting rights, the rights of redemption and other relative rights and preferences of the Preferred Stock shall be established by the Board of Directors.
The Board of Directors may authorize the issuance of such stock to such persons upon such terms and for such consideration in cash, property or services as the Board of Directors may determine and as may be allowed by law. The just valuation of such property or services shall be fixed by the Board of Directors. All such stock when issued shall be fully paid and exempt from assessment.
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4.
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The aforesaid amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
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[Remainder of this page intentionally left blank.]
A-1
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to Certificate of Incorporation to be signed by its duly authorized President and Chief Executive Officer this day of , 2016.
PROTALIX BIOTHERAPEUTICS, INC.
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By:
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Moshe Manor
President and Chief Executive Officer
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A-2