United
States
Securities
and Exchange Commission
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant To Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check
the appropriate box:
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Preliminary
Proxy Statement
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☐
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive
Proxy Statement
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☐
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Definitive
Additional Materials
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Soliciting
Material under Rule 14a-12
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COHBAR,
INC.
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
☐
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of the transaction:
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(5)
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Total
fee paid:
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☐
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Fee
paid previously with preliminary materials.
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☐
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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COHBAR,
INC.
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
the Stockholders of CohBar, Inc.:
The
annual meeting of stockholders of CohBar, Inc. (the “Company,” “CohBar,” “we,” “us”
or “our”) will be held on June 15, 2017, at 10:30 a.m. Pacific Time (the “Annual Meeting”). The Annual
Meeting will be a completely virtual meeting of stockholders. You will not be able to attend the Annual Meeting in person. To
participate, vote or submit questions during the Annual Meeting via live webcast, please visit http://www.virtualshareholdermeeting.com/COB17.
The
Annual Meeting will be held for the following purposes:
1.
To elect a Board of Directors, consisting of five (5) members, to serve until the next annual meeting of stockholders or
until their successors are duly elected and qualified;
2. To approve amendments to the Company’s Amended and Restated 2011 Equity Incentive Plan and certain
related matters discussed in the accompanying proxy statement;
3.
To ratify the Audit Committee’s appointment of Marcum LLP as the Company’s independent registered public accounting
firm for the year ending December 31, 2017; and
4.
To consider and act upon any other matter which may properly come before the annual meeting or any adjournment thereof.
Only
stockholders who held their shares at the close of business on April 17, 2017, the record date, are entitled to notice of and
to vote during the Annual Meeting or any adjournment or postponement thereof.
Whether
or not you plan to participate in the Annual Meeting, please complete, date, sign and return the enclosed proxy card, as promptly
as possible in order to ensure your vote is counted at the Annual Meeting.
Alternatively, you may vote over the telephone
or on the Internet as further instructed in these materials. Please note, however, that if your shares are held of record by a
broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that
record holder. A prepaid, self-addressed envelope is enclosed for your convenience.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on June 15, 2017
at 10:30 a.m. Pacific Time via live webcast at
http://www.virtualshareholdermeeting.com/COB17
.
The
proxy statement and annual report to stockholders are available at www.proxyvote.com.
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By
Order of the Board of Directors,
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Jeffrey
F. Biunno
Secretary
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Menlo
Park, CA
April
24, 2017
2017
ANNUAL MEETING OF STOCKHOLDERS
NOTICE
OF ANNUAL MEETING AND PROXY STATEMENT
TABLE
OF CONTENTS
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Page
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PROXY SUMMARY
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1
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QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
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1
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PROPOSAL
NO. 1—ELECTION OF DIRECTORS
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6
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INFORMATION
CONCERNING THE BOARD OF DIRECTORS
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8
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Corporate Governance
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8
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Committees
of the Board
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8
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Communication
with Directors
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10
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Code
of Ethics and Business Conduct
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10
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Policies
and Procedures for Related Person Transactions
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11
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Certain
Relationships and Transactions with Related Persons
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Board
Role in Risk Oversight
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11
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Section
16(a) Beneficial Ownership Reporting Compliance
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11
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STOCK
OWNERSHIP
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12
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Beneficial
Owners of CohBar Stock
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12
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EXECUTIVE
OFFICERS
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13
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COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
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14
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EXECUTIVE
OFFICER COMPENSATION
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15
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Compensation
Philosophy
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15
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Governance
of the Company’s Executive Compensation Program
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Base
Salaries
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Annual
Bonuses
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16
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New
Hire Equity Grants
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Employment
Agreements
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Perquisites
and Other Benefits
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18
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Post-Employment
Obligations
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Tax
and Accounting Considerations
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SUMMARY
COMPENSATION TABLE
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18
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OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
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20
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DIRECTOR
COMPENSATION
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20
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PROPOSAL
NO. 2 — APPROVAL OF AMENDMENTS TO THE COMPANY’S AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN
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21
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AUDIT
COMMITTEE REPORT TO STOCKHOLDERS
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25
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PROPOSAL
NO. 3 — RATIFICATION OF APPOINTMENT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM FOR 2017
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26
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OTHER
MATTERS
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27
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COHBAR,
INC.
1455
Adams Drive, Suite 2050
Menlo
Park, CA 94025
PROXY
STATEMENT
The
Board of Directors of CohBar, Inc. has made these proxy materials available to you on the Internet and has delivered these proxy
materials to you in connection with the solicitation of proxies for use at the 2017 Annual Meeting. The Annual Meeting will be
a virtual meeting, conducted via live webcast on the Internet at http://www.virtualshareholdermeeting.com/COB17 on Thursday, June
15, 2017, at 10:30 a.m. Pacific Time, or at any adjournment or postponement thereof, for the purposes stated herein.
QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why
am I receiving these materials?
We
have sent you these proxy materials because our Board of Directors (sometimes referred to as the “Board”) is soliciting
your proxy to vote at the 2017 Annual Meeting to vote on the proposals described in this proxy statement. However, you do not
need to participate in the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.
We
intend to mail these proxy materials on or about April 24, 2017.
Participating
in the Annual Meeting
We
will be hosting the Annual Meeting live via Internet webcast. You will not be able to attend the meeting in person. A summary
of the information you need to participate in the Annual Meeting online is provided below:
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Any stockholder may listen to the Annual Meeting and participate
live via webcast at http://www.virtualshareholdermeeting.com/COB17. The webcast will begin at 10:30 a.m. Pacific Time on June
15, 2017.
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Stockholders may vote and submit questions during the Annual
Meeting via live webcast.
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To enter the meeting, please have your 16-digit control number which is available on your proxy card. If you
do not have your 16-digit control number, you will be able to listen to the meeting only. You will not be able to vote or submit
questions during the meeting.
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Instructions on how to connect to and participate in the Annual
Meeting via the Internet, including how to demonstrate proof of stock ownership, are posted at http://www.virtualshareholdermeeting.com/COB17.
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Voting
Rights and Outstanding Shares
Only
stockholders of record as of the close of business on April 17, 2017, the record date, are entitled to notice of and to vote at
the Annual Meeting. On the record date, 35,857,701 shares of our common stock were issued, outstanding and entitled to vote. Each
share of our common stock that you own entitles you to one vote on all matters to be voted upon at the Annual Meeting. We will
have a quorum to conduct the business of the Annual Meeting if the holders of one third of the outstanding shares of our common
stock entitled to vote are present themselves or by proxy. Abstentions and broker non-votes (i.e., shares of common stock
held by a broker, bank or other nominee that are represented at the meeting, but that the broker, bank or other nominee is not
empowered to vote on a particular proposal) will be counted in determining whether a quorum is present at the meeting.
Can
I attend the Annual Meeting in person?
We
will be hosting the Annual Meeting via live webcast on the Internet. You will not be able to attend the Annual Meeting in
person. The webcast will start at 10:30 a.m. Pacific Time, on June 15, 2017. Stockholders may vote and submit questions while
connected to the Annual Meeting on the Internet. Any stockholder can listen to and participate in the Annual Meeting live via
the Internet at http://www.virtualshareholdermeeting.com/COB17.
What
do I need in order to be able to participate in the Annual Meeting online?
You will need the 16-digit control number
included on your proxy card in order to be able to vote your shares or submit questions during the meeting.
Instructions on
how to connect and participate in the Annual Meeting via the Internet, including how to demonstrate proof of stock ownership, are
posted at
http://www.virtualshareholdermeeting.com/COB1
7.
If you do not have your 16-digit control number, you will be able to listen to the meeting only—you will not be able to vote
or submit questions during the meeting.
Who
can vote at the Annual Meeting?
Only
stockholders of record at the close of business on April 17, 2017, will be entitled to vote at the Annual Meeting. On the record
date, there were 35,857,701 shares of our common stock outstanding and entitled to vote.
Stockholder
of Record: Shares Registered in Your Name
If
on April 17, 2017, your shares were registered directly in your name with our transfer agent, CST Trust Company (“CST”),
then you are a stockholder of record. As a stockholder of record, you may vote at the Annual Meeting or vote by proxy. Whether
or not you plan to participate in the Annual Meeting online, we urge you to fill out and return the enclosed proxy card or vote
by proxy over the telephone or on the Internet as instructed below to ensure your vote is counted.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If
on April 17, 2017, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other
similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials
are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of
record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other
agent regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you
are not the stockholder of record, you may not vote your shares at the meeting unless you request and obtain a valid proxy from
your broker or other agent.
What
am I voting on?
There
are four matters scheduled for a vote:
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1.
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The
election of the Board of Directors, consisting of five (5) members, to serve until
the next annual meeting of stockholders or until their successors are duly elected and
qualified;
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2.
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The
approval of amendments to the Company’s Amended and Restated 2011 Equity Incentive Plan and certain related matters discussed
in the proxy statement;
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3.
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The
ratification of the Audit Committee’s appointment of Marcum LLP as the Company’s
independent registered public accounting firm for the year ending December 31, 2017;
and
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4.
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Consideration
and action upon any other matter which may properly come before the annual meeting or
any adjournment thereof.
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What
if another matter is properly brought before the meeting?
The
Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters
are properly brought before the meeting, it is the intention of the persons named in the proxy to vote on those matters in accordance
with their best judgment.
How
do I vote?
For
the election of directors, you may either vote “For” all nominees or you may “Withhold” your vote for
any nominee you specify. For approval of the Plan Amendment and ratification of the appointment of Marcum LLP as our independent
registered public accounting firm, you may vote “For” or “Against” or you may abstain from voting.
Please
note that by casting your vote by proxy you are authorizing the individuals listed on the proxy to vote your shares in accordance
with your instructions and in their discretion with respect to any other matter that properly comes before the Annual Meeting
or any adjournments or postponements thereof.
The
procedures for voting are as follows:
Stockholder
of Record: Shares Registered in Your Name
If
you are a stockholder of record, you may vote at the Annual Meeting or vote by proxy using the enclosed proxy card. Alternatively,
you may vote by proxy either by telephone or on the Internet. Whether or not you plan to attend the meeting, we urge you to vote
by proxy to ensure your vote is counted. You may still attend the meeting and vote even if you have already voted by proxy.
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To vote by telephone, dial toll-free 1-800-690-6903 using a touch-tone
phone and follow the recorded instructions. You will be asked to provide the control number from the enclosed proxy card.
Your telephone vote must be received by 11:59 p.m. Eastern Time on June 14, 2017, to be counted.
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To vote on the Internet, go to www.proxyvote.com and follow the
instructions to complete an electronic proxy card. You will be asked to provide the control number from the enclosed proxy
card. Your Internet vote must be received by 11:59 p.m. Eastern Time on June 14, 2017, to be counted.
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To vote using the proxy card, simply complete, sign, date and
return the enclosed proxy card as promptly as possible in the envelope provided. If you return your signed proxy card to us
before the Annual Meeting, we will vote your shares as you direct.
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To vote during the Annual Meeting, follow the instructions posted
at http://www.virtualshareholdermeeting.com/COB17.
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Beneficial
Owner: Shares Registered in the Name of Broker, Bank or Other Agent
If
you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a voting
instruction form with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction
form to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your
broker or bank. To vote at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the
instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.
Internet
proxy voting may be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and
correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet
access, such as usage charges from Internet access providers and telephone companies.
How
many votes do I have?
On
each matter to be voted upon, you have one vote for each share of common stock you own as of April 17, 2017.
What
if I return a proxy card or otherwise vote but do not make specific choices?
If
you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable,
“For” Proposal 1, the election of all nominees for Director, “For” Proposal 2, to approve the Plan Amendment
and “For” Proposal 3, to ratify the appointment of Marcum LLP as our independent registered public accounting
firm for the fiscal year ending December 31, 2017. If any other matter is properly presented at the meeting, your proxy holder
(one of the individuals named on your proxy) will vote your shares using his or her best judgment.
Who
is paying for this proxy solicitation?
The
cost of soliciting proxies, including the preparation, assembly and mailing of the proxies and soliciting material, as well as
the cost of forwarding such material to beneficial owners of our common stock, will be borne by us. Our Directors, officers and
regular employees may, without compensation other than their regular remuneration, solicit proxies personally or by telephone.
What
does it mean if I receive more than one set of proxy materials?
If
you receive more than one set of proxy materials, your shares may be registered in more than one name or in different accounts.
Please follow the voting instructions on each proxy card in the proxy materials to ensure that all of your shares are voted.
Can
I change my vote after submitting my proxy?
Stockholder
of Record: Shares Registered in Your Name
Yes.
You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares,
you may revoke your proxy in any one of the following ways:
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You may submit another properly completed proxy card with a later
date.
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You may grant a subsequent proxy by telephone or through the
Internet.
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You may send a timely written notice that you are revoking your
proxy to our Secretary at 1455 Adams Drive, Suite 2050, Menlo Park, CA 94025. To be timely, a written notice revoking your
proxy must be received by June 14, 2017.
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You may vote during the Annual Meeting, which will be hosted
via the Internet.
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Your
most current proxy card or telephone or Internet proxy is the one that is counted.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker
or bank with respect to changing your vote.
When
are stockholder proposals and director nominations due for the 2017 Annual Meeting of Stockholders?
To
be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by February 14, 2018,
to the attention of our Secretary at CohBar, Inc., 1455 Adams Drive, Suite 2050, Menlo Park, CA 94025. Nothing in this paragraph
shall be deemed to require us to include in our proxy statement and proxy card for such meeting any stockholder proposal which
does not meet the requirements of the Securities and Exchange Commission (“SEC) in effect at the time. Any such proposal
will be subject to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). If you
wish to submit a proposal (including a director nomination) at the 2018 Annual Meeting of Stockholders that is not to be included
in next year’s proxy materials, your written request must be received by our Secretary between February 14, 2018 and March
16, 2018. You are also advised to review our Bylaws, which contain additional requirements about advance notice of stockholder
proposals and director nominations.
What
happens when an entity holds my shares?
If
your shares are held by your broker, bank or other agent as your nominee (that is, in “street name”), that nominee
will provide you with a voting instruction form. Please follow the instructions included on that form regarding how to instruct
your broker, bank or other agent to vote your shares. If you do not give instructions to your broker, bank or other agent, they
can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary”
items. Discretionary items are proposals considered routine under the rules governing how your broker, bank or other agent may
vote shares held in street name in the absence of your voting instructions, and include the ratification of the selection of our
independent registered public accounting firm. On non-discretionary items for which you do not give instructions to your broker,
bank or other agent, which include the election of directors and the approval of the Plan Amendment, the shares will be treated
as “broker non-votes.”
How
many votes are needed to approve each proposal?
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The five (5) nominees receiving the most “For” votes
from the holders of shares present at the Annual Meeting or represented by proxy and entitled to vote on the election of Directors
will be elected. Only votes “For” or “Withheld” will affect the outcome. Abstentions and broker non-votes
will be counted for quorum purposes, but will not be considered votes cast and will not affect the outcome.
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The Plan Amendment will be approved if a majority of votes cast
by the “disinterested” holders of shares present at the Annual Meeting or represented by proxy and entitled to
vote are voted “For” the proposal. For purposes of this resolution, a “disinterested” stockholder
is any stockholder other than an insider of the Company under the rules of the TSX-Venture Exchange or any associate of such
an insider. Abstentions and broker non-votes will be counted for quorum purposes, but will not be considered votes cast and
will not affect the outcome.
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The ratification of the appointment of Marcum LLP as our independent
registered public accounting firm for the fiscal year ending December 31, 2017, will be approved if a majority of votes
cast by holders of shares present at the Annual Meeting or represented by proxy and entitled to vote are voted “For”
the proposal. Abstentions and broker non-votes will be counted for quorum purposes, but will not be considered votes cast
and will not affect the outcome.
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What
is the quorum requirement?
A
quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding one third of the
outstanding shares entitled to vote are present at the meeting or represented by proxy. On the record date, there were 35,857,701
shares outstanding and entitled to vote. Thus, the holders of at least 11,833,042 shares must be present or represented by proxy
at the meeting to have a quorum.
Your
shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker,
bank or other nominee) or if you vote at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement.
If there is no quorum, the meeting may be adjourned to a later date.
How
can I find out the results of the voting at the Annual Meeting?
Preliminary
voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report
on Form 8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available
to us in time to file a Form 8-K within four business days after the meeting, we intend to file a Form 8-K
to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K
to publish the final results.
What
proxy materials are available on the Internet?
The
proxy statement and annual report to stockholders are available at http://www.virtualshareholdermeeting.com/COB17.
PROPOSAL
NO. 1:
ELECTION
OF DIRECTORS
According
to our Bylaws, our Board shall be comprised of such number of directors, not less than one (1), as may be established by the Board
from time to time. The Board has fixed the authorized number of our directors at five (5).
At
our annual meeting, our stockholders will elect a board consisting of five (5) directors to serve until our 2017 annual meeting
or until their respective successors are elected and qualified. Our Board has nominated the individuals listed below to serve
on our Board. All of the nominees are currently members of our Board. If any nominee is unable or unwilling to serve as a director
at the time of the annual meeting, our Board may provide for a lesser number of directors or designate a substitute. If our Board
designates a substitute, the proxy holders will have the discretionary authority to vote for the substitute. Proxies may not be
voted for more than five (5) nominees.
Our Board unanimously
recommends that you vote FOR each of the following nominees for election as director:
Jon
L. Stern
, 62,
served
in senior strategic roles with our Company from August 2012 until he was named our chief executive officer in October 2013. He
was also appointed to our board of directors in May 2014. In connection with the appointment of Simon Allen as our chief executive
officer in March 2016, Mr. Stern assumed the role of chief operating officer. From 2009 to 2011 Mr. Stern served as chief
operating officer of The Key Worldwide, a provider of college admissions preparation and coaching services in the U.S. and Asia.
From 2006 to 2008, Mr. Stern served as executive vice president of Integrated China Media, a Guangzhou, China-based provider
of digital entertainment content. From 2003 to 2008, Mr. Stern was a partner in Pacific Arts Group, a publisher of Chinese
Contemporary Fine Art. Mr. Stern founded Digital Sparx in 1999, a distributor of digital entertainment content to movie-goers
and served as president and chief executive officer of that company until 2002. In 1986 Mr. Stern founded Cine Coasters,
Inc., a developer of sports stadium and movie theatre products, and served as its chief executive officer until its sale to a
division of Liberty Media in 1998. Mr. Stern holds an MBA from the Marshall School of Business at the University of Southern
California and a B.S. in Business Administration from The University of California, Berkeley. Our board of directors believes
that Mr. Stern’s substantial experience as an entrepreneur and senior executive of growth stage companies as well as
established businesses and his familiarity as an executive officer of our Company with the day-to-day operations of our business
make him a valuable contributor to our board of directors. Mr. Stern is a full-time employee of our Company.
Albion
J. Fitzgerald
, 68,
has
served as a member of our board of directors since May 2014 and was appointed as chairman in July 2014. Mr. Fitzgerald previously
served as chief executive officer and chairman of the board of directors of ManageIQ, Inc., a provider of global cloud IT systems
management solutions. Mr. Fitzgerald was appointed as a director of ManageIQ in 2007, and served as strategic consultant
to the Company from 2007 until April 2012, and as chief executive officer and chairman of the board of directors from April 2012
until ManageIQ, Inc. was acquired by Red Hat, Inc. in December 2012. In 1992 Mr. Fitzgerald co-founded Novadigm, Inc. (NASDAQ:
NVDM), an international provider of IT systems management solutions to Fortune 500 companies and government agencies with customers
in 26 countries. He served as its chairman and chief technology officer from 1992 and chief executive officer from 1995 until
its acquisition by Hewlett Packard in 2004. Prior to Novadigm, Mr. Fitzgerald founded and served as chief executive officer
of Telemetrix, Inc., a provider of enterprise IT systems and network management solutions. From 1980 to 1989, Mr. Fitzgerald
was a strategic technology consultant to New York University responsible for architecting, building and managing the university’s
computer center and campus-wide multi-media network. Mr. Fitzgerald began his technology career at IBM in 1966. Our board
of directors believes that Mr. Fitzgerald’s extensive experience in founding, funding and building emerging technology
companies, the depth of his technology and business expertise, and his relevant experience as a director and officer of a publicly-traded
enterprise software company make him a valuable contributor to our board of directors.
Dr. Nir
Barzilai
, 61,
co-founded our Company in 2007 and has served as a member of our board of directors since
our conversion to a Delaware corporation in 2009. Dr. Barzilai is the director of the Institute for Aging Research at the
Albert Einstein College of Medicine of Yeshiva University, where he also holds the Ingeborg and Ira Leon Rennert Chair of Aging
Research, is a professor in the Departments of Medicine and Genetics and a member of the Diabetes Research Center. Dr. Barzilai
is also director of the Paul F. Glenn Center for the Biology of Human Aging Research and of the National Institutes of Health’s
(NIH) Nathan Shock Centers of Excellence in the Basic Biology of Aging. Dr. Barzilai has received numerous awards, including
the Beeson Fellow for Aging Research, the Ellison Medical Foundation Senior Scholar in Aging Award, the Paul F. Glenn Foundation
Award, the NIA Nathan Shock Award, and the 2010 Irving S. Wright Award of Distinction in Aging Research. Dr. Barzilai’s
leadership in gerontology research and his experience overseeing numerous research programs related to diseases of aging and mitochondrial
biology makes him an important contributor to our board of directors.
Dr. Pinchas
Cohen
, 59,
co-founded
our Company in 2007 and has served as a member of our board of directors since our conversion to a Delaware corporation in 2009.
He served as our President from 2009 until 2013. Since April 2012, Dr. Cohen has served as dean of the Davis School of Gerontology
at the University of Southern California. He holds the William and Sylvia Kugel Dean’s Chair in Gerontology and acts as
executive director of the Ethel Percy Andrus Gerontology Center. Dr. Cohen was affiliated with the University of California,
Los Angeles School of Medicine, where he was a member of the faculty until 2012. At the UCLA Mattel Children’s Hospital
Dr. Cohen served as director of endocrine/diabetes research and training (from 1999 until 2012), chief of endocrinology and
diabetes (from 2001 until 2012) and as vice chair of research (from 2011 until 2012). Dr. Cohen was also co-director of the
UCSD-UCLA Diabetes and Endocrinology Research Center from 2007 until 2012. Dr. Cohen has received several awards for his
work in the field of aging, including a National Institute of Aging EUREKA Award, the National Institutes of Health Director’s
Transformative Research Award and the Glenn Award for Research in Biological Mechanisms of Aging. He serves on the boards of several
professional journals and societies, including the American Federation for Aging Research and the Growth Hormone Research Society.
Our board of directors believes that Dr. Cohen’s leadership in gerontology research and his experience overseeing numerous
research programs related to diseases of aging and mitochondrial biology makes him an important contributor to our board of directors.
Marc
E. Goldberg
, 60,
joined
our board of directors in November 2014. Mr. Goldberg is a Managing Director at BioVentures Investors, a life science focused
venture and private equity investment firm that he co-founded in 1997. Prior to founding BioVentures, Mr. Goldberg served
as the president and chief executive officer of the Massachusetts Biotechnology Research Institute from 1991 to 1997. From 1987
to 1991, Mr. Goldberg was the vice president of finance and corporate development, chief financial officer, and treasurer
at Safer, Inc., a developer and manufacturer of biopesticides and related products. Prior to joining Safer, he served as the manager
of business development at Genetics Institute. Mr. Goldberg was also Founding President of the Massachusetts Biotechnology
Council and served four terms as its president and as a director from 1985 to 1997. He is currently a member of the Harvard Medical
School Neuroscience Advisory Committee and he previously served as a member of the Beth Israel Deaconess Medical Center Research
Advisory Committee of the board of directors. From 2002 to 2014 Mr. Goldberg served on the Board of Directors of Enanta Pharmaceuticals,
Inc. (NASDAQ:ENTA), a biotechnology company engaged in developing small molecule drugs. He has also served as a director of a
number of private companies within the biotechnology, pharmaceutical and medical technology industries. Mr. Goldberg received
an A.B. from Harvard College, a J.D. from Harvard Law School and an MBA from Harvard Business School. Our board of directors believes
that Mr. Goldberg’s extensive experience in growing and financing emerging biotechnology and pharmaceutical companies, as
well as the depth of his business and financial expertise, make him a valuable contributor to our board of directors.
No
family relationships exist among any of the directors or executive officers. No arrangement or understanding exists between any
director or executive officer and any other person pursuant to which any director was selected as a director or executive officer
of CohBar.
INFORMATION
CONCERNING THE BOARD OF DIRECTORS
Our
Board oversees our overall performance on behalf of our stockholders. Members of our Board stay informed of our business through
discussions with our Chief Executive Officer (“CEO”) and other members of our executive team, by reviewing materials
provided to them, and by participating in regularly scheduled Board and committee meetings.
Corporate Governance
Our
Board is elected by our stockholders to govern the Company’s business and affairs. Our Board selects our senior management
team, which is charged with conducting our business. Having selected our senior management team, our Board acts as an advisor
to senior management, monitors their performance, and provides input on the Company’s strategies, financial objectives and
operating plans.
Our
Board has determined that Albion J. Fitzgerald and Marc E. Goldberg each qualify as an “independent director” under
the applicable rules of the SEC and for the purpose of National Instrument 58-101 –
Disclosure of Corporate Governance
Practices
, and that each such person is free of any relationship that would interfere with the individual exercise of independent
judgment. None of our directors presently hold directorships with other reporting issuers.
Our
Board is responsible for the orientation and education of new members of the Board and all new directors are provided with copies
of our policies. Prior to joining the Board, each new director will meet with our Chairman and Chief Executive Officer. Our Chairman
and Chief Executive Officer are responsible for outlining our business and prospects, both positive and negative, with a view
to ensuring that the new director is properly informed to commence their duties as a director. Each new director is also given
the opportunity to meet with our auditors and counsel. As part of its annual self-assessment process, our Board determines whether
any additional education and training is required for Board members.
Historically,
because of our size and stage of development and the limited number of directors, our Board considered a formal assessment process
to be unnecessary and evaluated its own effectiveness on an ad hoc basis. Currently, our Governance and Nominating Committee is
responsible for annually evaluating and reporting to our Board on the performance and effectiveness of the Board as a whole and
its committees.
Our
Board met four times in 2016, and all of our directors attended the meetings. In addition, our Board maintained oversight of the
Company’s business and operations through frequent review, consideration and discussion of matters affecting the Company
outside of formal board meetings and acted by unanimous written consent to approve corporate actions on several occasions during
2016. Currently, we do not have a policy requiring our Board members’ attendance at the annual meetings of our stockholders.
Committees
of the Board
Our
Board currently has three standing committees: an Audit Committee, a Compensation Committee, and a Governance and Nominating Committee.
Each committee is governed by a written charter that may be amended by our Board at any time. The full text of each committee
charter is available on our website located at www.cohbar.com or in print to any interested party who requests it. Requests should
be sent to the Company Secretary at the address provided on page 1 of this proxy statement.
The
Audit Committee
Our
audit committee consists of Albion J. Fitzgerald, Marc E. Goldberg and Nir Barzilai. Mr. Goldberg serves as the chair of our audit
committee. Our Board has evaluated the independence and qualification of our directors to serve on our Audit Committee based on
applicable rules of NASDAQ, the SEC rules and National Instrument (“NI”) 52-110, and has determined that each of Messrs.
Fitzgerald and Goldberg are an independent director as defined by such standards. Our board of directors determined that each
of the committee members meets the requirements of financial literacy under SEC rules and regulations and by NI 52-110, and
that Mr. Goldberg meets the requirements for designation as an “audit committee financial expert”, as defined under
SEC rules.
Rule
10A-3 of the Securities Exchange Act of 1934, as amended, (“Exchange Act”) requires that the audit committees of public
companies whose securities are traded on certain United States securities exchanges be composed entirely of independent directors,
subject to certain transitional accommodations afforded to newly public issuers. The rules of the TSX-V require that the Company’s
audit committee be composed of at least three members, at least two of whom must be independent. The composition of our audit
committee complies with the requirements of the TSX-V. Although we may in the future seek to compose our audit committee entirely
of independent directors, we do not believe that the inclusion of Dr. Barzilai as a member of our audit committee materially
adversely affects the ability of our audit committee to act independently, nor have we determined that the composition of our
audit committee presents material risks related to the reporting of our financial statements. The Company is a “venture
issuer” as defined in NI 52-110 and is relying on the exemption in section 6.1 of NI 52-110 relating to Parts 3 (
Composition
of Audit Committee
) and 5 (
Reporting Obligations
).
Each
member of the Company’s audit committee has experience and/or an educational background that is relevant to the performance
of his duties as an Audit Committee member. Mr. Goldberg holds J.D. and M.B.A. degrees, and has gained experience relevant to
performance of his Audit Committee duties in high level executive roles, including service as chief financial officer of a biopesticides
manufacturer, and through service as a director and member of the audit committee of a publicly traded biotechnology company.
Mr. Fitzgerald has gained experience relevant to performance of his Audit Committee duties in high level executive roles, including
service as director and chief executive officer of both private and publicly-traded enterprise software companies. Dr. Barzilai
has gained experience relevant to performance of his Audit Committee duties through his roles as an academic and laboratory administrator
and in his capacity as a private investor.
In
fulfilling the duties outlined in its charter, the Audit Committee, among other things, is responsible for:
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selecting
and hiring our independent registered public accountants, and approving the audit and non-audit services to be performed by
such firm;
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evaluating
the qualifications, performance and independence of our independent registered public accountants;
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monitoring
the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial
statements or accounting matters;
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reviewing
the adequacy and effectiveness of our internal control policies and procedures;
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discussing
the scope and results of the audit and interim reviews as well as operating results with management and the independent registered
public accountants;
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preparing
the audit committee report that the SEC requires in our annual proxy statement; and
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reviewing
the fees paid by us to our independent registered public accountants in respect of audit and non-audit services on an annual
basis.
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Our
Audit Committee met four times during 2016, and all of the members of the Audit Committee attended at least 75% of those meetings.
A copy of the full text of the Audit Committee Charter can be found on our website at www.cohbar.com.
The
Compensation Committee
In
fulfilling the duties outlined in its charter, the Compensation Committee, among other things, is responsible for:
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reviewing
and approving compensation of our executive officers, including annual base salary, annual incentive bonuses, specific goals,
equity compensation, employment agreements, severance and change in control arrangements, and any other benefits, compensations
or arrangements;
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reviewing
and recommending compensation goals, bonus and stock compensation criteria for our employees;
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preparing
the compensation committee report required by the SEC to be included in our annual proxy statement; and
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administering,
reviewing and making recommendations with respect to our equity compensation plans.
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Our
Compensation Committee met one time during 2016, and all of the members attended the meeting. A copy of the full text of the Compensation
Committee Charter can be found on our website at www.cohbar.com.
Compensation
Committee Interlocks and Insider Participation
As
of the date of this proxy statement, the Compensation Committee is comprised of two independent directors, Messrs. Fitzgerald
and Goldberg, each of whom were appointed to the committee upon the effective date of our initial public offering in January 2015.
None of the members of the committee have a relationship with CohBar, other than as directors and stockholders. No member of the
Compensation Committee is or was formerly an officer or an employee of CohBar. None of our executive officers served, during the
year ended December 31, 2016, as a member of the compensation committee or on the board of directors of any entity that has
an executive officer serving as a member of the Compensation Committee or the Board.
The
Governance and Nominating Committee
In
fulfilling the duties outlined in its charter, the Governance and Nominating Committee, among other things, is responsible for:
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assisting
our board of directors in identifying, interviewing and recruiting prospective director nominees;
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recommending
director nominees;
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establishing
and reviewing on an annual basis a process for identifying and evaluating nominees for our board of directors;
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annually
evaluating and reporting to the our board of directors on the performance and effectiveness of the board of directors;
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recommending
members for each board committee of our board of directors; and
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annually
presenting a list of individuals recommended for nomination for election to our board of directors at the annual meeting of
our stockholders.
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The
Governance and Nominating Committee will consider recommendations for directorships submitted by stockholders. Stockholders
who wish the Governance and Nominating Committee to consider their directorship recommendations should submit their
recommendations in writing to CohBar, Inc., 1455 Adams Drive, Suite 2050, Menlo Park, CA 94025, Attn: Chairman of Governance
and Nominating Committee. Recommendations by stockholders that are made in accordance with these procedures will receive the
same consideration given to nominations made by the committee.
Nominees
may be suggested by directors, members of management, stockholders or, in some cases, by a third party firm. In identifying and
considering candidates for nomination to the Board, the Governance and Nominating Committee considers a candidate’s quality
of experience, the needs of the Company and the range of talent and experience represented on its Board. In evaluating particular
candidates, the committee will review the nominee’s personal and professional integrity, judgment, experience, and ability
to serve the long-term interest of the stockholders. The committee will also take into account the ability of a director to devote
the time and effort necessary to fulfill his or her responsibilities. The committee also considers matters of diversity, including
gender, race and national origin, education, professional experience and differences in viewpoints and skills. While the Governance
and Nominating Committee does not have a formal policy with respect to diversity, both the Board and the committee believe that
it is essential that Board members represent a diverse range of experience, expertise and viewpoints.
As
of the date of this proxy statement, the Governance and Nominating Committee is comprised of two independent directors, Messrs.
Fitzgerald and Goldberg. Our Governance and Nominating Committee did not meet during 2016.
A
full copy of the Governance and Nominating Committee Charter can be found on our website at www.cohbar.com.
Communication
with Directors
All
interested parties may send correspondence to our Board or to any individual director at the following address: CohBar, Inc.,
1455 Adams Drive, Suite 2050, Menlo Park, CA, 94025.
Your
communications should indicate that you are a stockholder of CohBar. Depending on the subject matter, we will either forward the
communication to the director or directors to whom it is addressed, attempt to handle the inquiry directly, or not forward the
communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic. Correspondence marked
confidential will not be opened prior to forwarding to the Board or any individual director.
Code of Ethics
and Business Conduct
The
board of directors encourages and promotes a culture of ethical business conduct through communication and supervision as part
of their overall stewardship responsibility. Our board of directors adopted a code of ethics and business conduct applicable to
all of our employees, including our executive officers and directors, and those employees responsible for financial reporting.
Our code of ethics and business conduct establishes procedures that allow our directors, officers and employees to confidentially
submit their concerns regarding questionable ethical, moral, accounting or auditing matters, without fear of retaliation. The
code of business conduct and ethics will be available on our website upon completion of the offering. We expect that, to the extent
required by law, any amendments to the code, or any waivers of its requirements, will be disclosed on our website and in mandatory
filings.
Policies and
Procedures for Related Person Transactions
Our
board of directors has adopted a policy stating that our executive officers, directors, nominees for election as a director, beneficial
owners of more than 5% of any class of our common stock and any members of the immediate family of any of the foregoing persons
are not permitted to enter into a related person transaction with us without the prior consent of the independent members of our
board of directors. Under this policy, any request for us to enter into a transaction with an executive officer, director, nominee
for election as a director, beneficial owner of more than 5% of any class of our common stock or any member of the immediate family
of any of the foregoing persons, in which the amount involved exceeds $120,000 and pursuant to which such person would have a
direct or indirect interest must first be presented to the independent members of our board of directors for review, consideration
and approval. In approving or rejecting any such proposal, the independent members of our board of directors are to consider the
material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms
generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s
interest in the transaction.
Certain Relationships
and Transactions with Related Persons
In
addition to the compensation arrangements discussed below in the sections entitled “Employment Agreements”, the following
is a description of each transaction in the year ended December 31, 2016 and each currently proposed transaction in which:
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we
have been or are to be a participant;
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the
amount involved exceeded or exceeds the lesser of (i) $120,000 or (ii) one percent of the average of our total assets
as of the fiscal years ended December 31, 2016 and 2015; and
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any
of our directors, executive officers or holders of more than 5% of our capital stock, or any immediate family member of or
person sharing the household with any of these individuals had or will have a direct or indirect material interest.
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Consulting
Agreements
Drs.
Cohen and Barzilai each provide consulting services to our Company pursuant to agreements that provide for annual compensation
of $42,000. Each agreement provides for an annual service term and can be extended by mutual consent of both parties. The service
term under the agreement with Dr. Cohen expired in September 2015, and the service term under the agreement with Dr. Barzilai
expired in November 2015. Drs. Cohen and Barzilai continue to provide services under the terms of these consulting agreements.
Board Role
in Risk Oversight
While
risk management is primarily the responsibility of our management team, our Board is responsible for overall supervision of risk
management efforts as they relate to the key business risks we face. Management identifies, assesses, and manages the risks
most critical to our operations and routinely advises our Board regarding those matters. Areas of material risk may include
operational, financial, legal and regulatory, human capital, information technology and security, and strategic and reputational
risks. Our Board’s role in risk oversight is consistent with our leadership structure, with senior management having responsibility
for assessing and managing risk exposure, and our Board and its committees providing oversight as necessary in connection with
those efforts.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a)
of the Exchange Act requires our directors and executive officers, as well as persons who own more than 10% of our outstanding
common stock, to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership of shares
of our common stock. Based solely on a review of copies of such forms furnished to us and written representations from our executive
officers, directors and 10% stockholders, we believe that all Section 16(a) filing requirements applicable to CohBar were timely
made with respect to the fiscal year ended December 31, 2016.
STOCK
OWNERSHIP
BENEFICIAL
OWNERS OF COHBAR STOCK
The
following table sets forth information regarding beneficial ownership of our common stock as of April 17, 2017, the most recent
practicable date for computing beneficial ownership, by:
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each
of our named executive officers;
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each
of our directors;
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each
person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; and
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all
of our directors and executive officers as a group.
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We
have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership
of securities to persons who possess sole or shared voting or investment power with respect to those securities. Unless otherwise
indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown
as beneficially owned by them, subject to applicable community property laws.
Applicable
percentage ownership is based on 35,857,701 shares of our common stock issued and outstanding as of April 17, 2017. The number
of shares of common stock used to calculate the percentage ownership of each listed person includes the shares of common stock
underlying options and warrants held by such persons that are currently exercisable or convertible, or will be exercisable or
convertible within 60 days of April 17, 2017. We did not deem these shares outstanding, however, for the purpose of computing
the percentage ownership of any other person.
Name
and Address of Beneficial Owner
(1)
|
|
Number
of Shares
Beneficially Owned
|
|
|
Percentage
of Shares
Beneficially Owned
|
|
Simon
Allen
(2)
|
|
|
353,950
|
|
|
|
*
|
|
Pinchas
Cohen
|
|
|
5,449,703
|
|
|
|
15.20
|
%
|
Nir
Barzilai
|
|
|
5,044,516
|
|
|
|
14.07
|
%
|
Jon
Stern
(3)
|
|
|
1.837.298
|
|
|
|
4.94
|
%
|
Jeffrey
Biunno
(4)
|
|
|
329.420
|
|
|
|
*
|
|
Albion
Fitzgerald
(5)
|
|
|
2.036.440
|
|
|
|
5.64
|
%
|
Marc
Goldberg
(6)
|
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|
161,458
|
|
|
|
*
|
|
Kenneth
Cundy
(7)
|
|
|
547,500
|
|
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|
1.50
|
%
|
Directors
and executive officers as a group (8 people)
|
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|
15,760,286
|
|
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|
40.61
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%
|
(1)
|
The
address for each director and executive officer is c/o CohBar, Inc., 1455 Adams Drive, Suite 2050, Menlo Park, CA 94025.
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(2)
|
Shares
beneficially owned includes 353,750 shares of common stock subject to stock options exercisable within 60 days of April 17,
2017.
|
(3)
|
Shares
beneficially owned includes: (i) 503,241 shares of common stock subject to stock options exercisable within 60 days
of April 17, 2017; (ii) 804,057 shares of common stock subject to currently exercisable warrants and (iii) 22,000 shares
of common stock held in accounts of Mr. Stern’s children.
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(4)
|
Shares
beneficially owned includes: (i) 326,420 shares of common stock subject to stock options exercisable within 60 days of April
17, 2017 and (ii) 1,000 shares of common stock held in an account of Mr. Biunno’s daughter.
|
(5)
|
Shares
beneficially owned includes: (i) 6,982 shares of common stock subject to currently exercisable warrants; and (ii) 261,458
shares of common stock subject to stock options exercisable within 60 days of April 17, 2017.
|
(6)
|
Shares
beneficially owned consists of shares of common stock subject to stock options exercisable within 60 days of April
17, 2017.
|
(7)
|
Shares
beneficially owned includes 537,500 shares of common stock subject to stock options exercisable within 60 days of April 17,
2017.
|
|
|
*
|
less
than 1.0%
|
EXECUTIVE
OFFICERS
The
following table identifies our executive officers as of the date of this proxy statement, the positions they hold and the year
in which they began serving as officers of CohBar. Our Board elects all of our executive officers, who hold office until their
respective successors are elected and qualified.
Name
|
|
Age
|
|
Current
Position(s) with CohBar
|
|
Officer
Since
|
Simon
Allen
|
|
48
|
|
Chief
Executive Officer
|
|
2016
|
Jeffrey
F. Biunno
|
|
50
|
|
Chief
Financial Officer, Secretary and Treasurer
|
|
2013
|
Jon
L. Stern
|
|
62
|
|
Chief
Operating Officer, Director
|
|
2014
|
Kenneth
C. Cundy
|
|
58
|
|
Chief
Scientific Officer
|
|
2014
|
For
information on Jon Stern’s business background, see “Nominees” under “Election of Directors” above.
Simon
Allen
joined
our Company as chief executive officer in March 2016. Prior to joining us, Mr. Allen was a consultant to Solstice Biologics, a
biotechnology company focused on nucleic acid therapeutics. From March 2011 to January 2015, Mr. Allen served as the Chief Business
Officer at Ambrx, Inc., a clinical stage biotechnology company, and was an advisor and consultant to that company from September
2010 to February 2011. From April 2008 to June 2010, he served in a variety of senior positions at Kalypsys, Inc., culminating
in his role as Chief Executive Officer. Mr. Allen previously served as the Chief Commercial Officer of CovX from 2006 to
2008 and as the Vice President, Business and Corporate Development, of Nuvelo Inc. from 2004 to 2006. He previously held business
development and analyst roles at SkyePharma PLC, Corixa Corporation (formerly Coulter Pharmaceuticals) and Burdett, Buckeridge
and Young. Mr. Allen graduated from the University of Sydney with a B.S. in Biochemistry, Microbiology and Genetics and earned
his M.B.A. from the Australian Graduate School of Management.
Jeffrey
F. Biunno
joined our
Company in October 2013 as chief financial officer and was appointed secretary and treasurer in September 2014. Prior to joining
CohBar, Mr. Biunno served as chief financial officer, secretary and treasurer of ManageIQ, Inc., a provider of global cloud
IT systems management solutions, from March 2012 until its acquisition by Red Hat, Inc. in December 2012. From February 2009 until
March 2012 Mr. Biunno served as vice president and worldwide controller of Dialogic Inc., a provider of mobile telecommunications
network software and hardware enterprise solutions then listed on NASDAQ. Mr. Biunno founded Scalable Financial Solutions,
LLC, a financial consulting firm, and operated it from March 2008 to January 2009. From February 2005 to March 2008, Mr. Biunno
worked at Geller & Company, a financial services consulting firm. From 1997 to 2004, Mr. Biunno served as vice president
and corporate controller of Novadigm, Inc. (NASDAQ: NVDM), an international provider of IT systems management solutions to Fortune
500 companies and government agencies. Mr. Biunno received a B.S. in accounting and an MBA in finance from Montclair State
University. Mr. Biunno is a certified public accountant and a chartered global management accountant. Mr. Biunno is
a full-time employee of our Company.
Kenneth
C. Cundy
joined
our Company as chief scientific officer in November 2014. From December, 2012 to November, 2014, Dr. Cundy served as the
chief scientific officer for XenoPort, Inc., a biopharmaceutical company focused on the development of product candidates for
the potential treatment of neurological disorders. He served XenoPort, Inc. as senior vice president of preclinical and clinical
sciences from 2011 to 2012, as its vice president of preclinical development from 2004 to 2011, and as its vice president of biopharmaceutics
from 2000 to 2004. From 1992 to 2000, Dr. Cundy was senior director of biopharmaceutics at Gilead Sciences, Inc. Prior to Gilead
Sciences, from 1988 to 1992 Dr. Cundy was principal research investigator at Sterling Drug, a pharmaceutical division of Eastman
Kodak Company. He received a B.S. in pharmacy from the University of Manchester and was registered as a pharmacist in the UK.
He received a Ph.D. in pharmaceutical sciences from the University of Kentucky and postdoctoral training in biochemistry at the
University of California, Berkeley. Dr. Cundy is a full-time employee of our Company.
COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
April 24, 2017
The Compensation
Committee of the Board oversees our compensation programs on the Board’s behalf.
The Compensation
Committee reviewed and discussed with management the executive officer compensation disclosure included in this Proxy Statement.
Based on the review and discussion, the Compensation Committee recommended to the Board that the report on executive officer compensation
be included in this Proxy Statement, for the 2017 Annual Meeting of Stockholders, which will be filed with the SEC.
Respectfully submitted,
Albion J. Fitzgerald
Marc E. Goldberg
EXECUTIVE
OFFICER COMPENSATION
In
this section of the proxy statement we identify the material elements of our compensation programs for all of our executive officers,
including an overview of our executive compensation philosophy and the processes and methodology we use in making executive pay
decisions. We currently have three executive officers: our Chief Executive Officer, Chief Financial Officer, and Chief Scientific
Officer. These executives comprise our “Named Executive Officers” (NEOs) for purposes of applicable SEC disclosure
regulations. Our NEOs are as follows:
Name
|
|
Position
|
Simon
Allen
|
|
Chief
Executive Officer
|
Jeffrey
F. Biunno
|
|
Chief
Financial Officer, Secretary and Treasurer
|
Jon
L. Stern
|
|
Chief
Operating Officer, Director
|
Kenneth
C. Cundy
|
|
Chief
Scientific Officer
|
Compensation
Philosophy
Compensation
of our executive officers is designed to provide compensation that is competitive, as well as consistent with our early stage
of development. Our board recognizes the need to provide a compensation package that will attract and retain qualified and experienced
executives as well as align the compensation level of each executive to that executive’s level of responsibility. Our compensation
arrangements are not divided formally into long-term and short-term plans; however as a general matter our compensation programs
may include shorter term incentive compensation in the form of annual cash bonuses payable on achievement of individual and Company
performance goals that may be established from time to time, and longer term incentives through the grant of stock options with
vesting over a period of years. We do not maintain a pension plan that provides for cash or other payments upon retirement.
Our
board has not undertaken a formal evaluation of the implications of the risks associated with our compensation policies and practices.
However, risk management is a consideration of our board when implementing our compensation program and the board does not believe
that our compensation programs encourage unnecessary or inappropriate risk taking, including risks that are likely to have a material
adverse effect on the Company.
Governance
of the Company’s Executive Compensation Program
The
Compensation Committee has overall responsibility for the evaluation, approval and oversight of our compensation plans, policies
and programs and the total direct compensation of our executive officers.
The
Compensation Committee has sole responsibility for determining our Chief Executive Officer’s compensation and for reviewing
it with our Board. Our Chief Executive Officer provides recommendations to the Committee on compensation matters for our other
executive officers. In making its recommendations, the Committee draws on survey data from subscription services and published
reports, as well as on the experience of the Committee members, to identify compensation trends for companies in our industry
at similar stages of development.
Base Salaries
Base
salaries of our executive officers are intended to attract and retain executives (as part of the total compensation package) by
providing a competitive base level of compensation. Base salaries are typically considered by the Compensation Committee on an
annual basis, as well as in connection with the hiring of a new executive from outside the Company, a promotion or other changes
in an incumbent executive’s job responsibilities. Base salaries of executive officers are determined by evaluating the responsibilities
of the position, the experience and performance of the individual, and by reference to the competitive marketplace median for
corporate executives in comparable positions (similarity in scope, duties and responsibilities).
Annual Bonuses
Each
NEO is eligible to receive an annual cash bonus up to a target bonus amount expressed as a flat amount or as a percentage of such
NEO’s base salary. The performance of our executives is reviewed by the Compensation Committee for an annual performance
period based on the officer’s date of hire and the payment of a bonus and the amount thereof (up to the target bonus amount)
is based on evaluative criteria established by the Compensation Committee. In January 2017 the Compensation Committee determined
bonus awards for Mr. Biunno and Dr. Cundy for their annual performance periods ended in the fourth quarter of 2016. Mr. Biunno
and Dr. Cundy were awarded bonuses equal to 100% of their target awards, $50,000 and $75,000, respectively. Also in January 2017,
Mr. Stern’s performance was reviewed for a performance period beginning in April 2015 and ending on December 31, 2016. Mr.
Stern was awarded a bonus of $149,500, equivalent to 100% of his annual target bonus potential earned over the period of approximately
21 months. In future periods the performance of our executive officers will be evaluated and bonuses awards will be determined
based on a common calendar year performance period, rather than annual periods coinciding with the original hire date of each
executive.
The
2016 base salaries and target bonus amounts for our NEOs were as follows:
Name and Principal
Position
|
|
Base
Annual Salary
|
|
|
Target
Bonus
|
|
|
|
($)
|
|
|
($)
|
|
Simon
Allen
(1)
|
|
|
340,000
|
|
|
|
136,000
|
|
Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
F. Biunno
|
|
|
200,000
|
|
|
|
50,000
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jon
L. Stern
(2)
|
|
|
250,000
|
|
|
|
87,500
|
|
Chief
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth
C. Cundy
|
|
|
300,000
|
|
|
|
75,000
|
|
Chief
Scientific Officer
|
|
|
|
|
|
|
|
|
(1)
Mr. Allen joined the Company in March 2016.
(2)
Mr. Stern served as the Company’s Chief Executive Officer until being appointed as Chief Operating Officer in connection
with Mr. Allen’s hire in March 2016.
New
Hire Equity Grants
Our
executive officers generally are provided an equity grant upon commencement of their employment. The Committee reviews the equity
position of executive officers on a periodic basis. Additionally, an executive officer’s overall equity position is reviewed
at the time of promotion and an additional grant may be considered. Equity awards granted to our NEOs upon their hire are described
under “Employment Agreements.”
Employment
Agreements
Simon
Allen
.
We entered into an Executive Employment Agreement with Mr. Allen, dated March 7, 2016, which sets forth
conditions of Mr. Allen’s at-will employment with our Company. Mr. Allen also executed the Company’s standard
form of Proprietary Information and Inventions Assignment Agreement. The Executive Employment Agreement entitles Mr. Allen to
a base salary of $340,000 annually, and eligibility for an annual bonus of up to forty percent (40%) of his annual salary, payable
at the discretion of the board of directors upon achievement of performance targets established by the board of directors from
time to time. Mr. Allen also was granted options to purchase up to an aggregate of 1,456,000 shares of our common stock at
an exercise price of $1.55. 1,132,000 shares subject to the option award will become vested and exercisable in installments based
on Mr. Allen’s continued employment on periodic vesting dates over a four (4) year term. 324,000 shares subject to the option
award vest based both on Mr. Allen’s continued service through the relevant vesting dates during the four (4) year
vesting term and the achievement of performance criteria established in connection with the option award. The Executive Employment
Agreement entitles Mr. Allen to certain severance payments and other benefits if his employment is terminated by us without cause,
or upon his resignation for good reason as defined in the Executive Employment Agreement. Upon such termination of Mr. Allen’s
employment he would be entitled to a severance payment equal to seventy-five percent of his then current base salary, and reimbursement
for any COBRA coverage elected by Mr. Allen for himself and the members of his immediate family for a period of nine (9)
months following such termination. Additionally, any options that would have vested during the twelve (12) month period immediately
following his termination date would vest and become exercisable immediately. If, however, Mr. Allen’s termination without
cause or resignation with “good reason” occurs within 12 months following a change in control of the Company, then
the severance amount payable to him would be increased to 100% of his then current base salary, COBRA reimbursement would extend
for a period of 12 months, and vesting of up to 100% of the options subject to the option award would be accelerated.
Jon
L. Stern
.
We entered into an Executive Employment Agreement with Mr. Stern, dated April 11, 2014, which
sets forth conditions of Mr. Stern’s at-will employment with our Company. Mr. Stern also executed the Company’s
standard form of Proprietary Information and Inventions Assignment Agreement. Mr. Stern’s current base salary is $250,000
annually, and he is eligible under the agreement for an annual bonus of up to thirty-five percent (35%) of his annual salary,
payable at the discretion of the board of directors upon achievement of performance targets established by the board of directors
from time to time. The Executive Employment Agreement entitles Mr. Stern to certain severance payments and other benefits
if his employment is terminated by us without cause, or upon his resignation for good reason as defined in the Executive Employment
Agreement. Upon any such termination of Mr. Stern’s employment he would be entitled to a severance payment equal to
fifty percent (50%) of his then current base salary, and reimbursement for any COBRA coverage elected by Mr. Stern for
himself and the members of his immediate family for a period of six months following such termination. Additionally, any options
that would have vested during the twelve (12) month period immediately following his termination date would vest and become
exercisable immediately. On April 9, 2014 Mr. Stern was granted options to purchase 478,245 shares of our common stock
at an exercise price of $0.26. The options vest and become exercisable over 36 equal monthly installments commencing May 1,
2013. Pursuant to the Stock Option Agreement applicable to Mr. Stern’s award and our 2011 Equity Incentive Plan, the
options immediately vest and become exercisable under certain circumstances, including a change of control.
Jeffrey
F. Biunno
. We entered into an Executive Employment Agreement with Mr. Biunno, dated November 27, 2013, which, as
amended on July 11, 2016, sets forth certain conditions of Mr. Biunno’s at-will employment with the Company. Mr. Biunno
also executed the Company’s standard form of Proprietary Information and Inventions Assignment Agreement. The Executive
Employment Agreement entitles Mr. Biunno to a base salary of $200,000 annually, and eligibility for an annual bonus of up
to $50,000 payable at the discretion of the board of directors upon achievement of performance targets established by the board
of directors. The Executive Employment Agreement entitles Mr. Biunno to certain severance payments and other benefits if
his employment is terminated by us without cause, or upon his resignation for good reason as defined in the Executive Employment
Agreement. Upon any such termination of Mr. Biunno’s employment he would be entitled to a severance payment in an aggregate
gross amount equal to fifty percent (50%) of his then current base salary, and reimbursement for any COBRA coverage elected
by Mr. Biunno for himself and the members of his immediate family for a period of six months following such termination. Additionally,
any options that would have vested during the twelve (12) month period immediately following his termination date would vest and
become exercisable immediately. On April 9, 2014 Mr. Biunno was granted options to purchase 364,377 shares of our common
stock at an exercise price of $0.26 per share. 236,845 shares subject to the option grant vest based solely on Mr. Biunno’s
continued service. One quarter (1/4) of such shares vested and became exercisable on October 31, 2014 and the remaining
shares subject to the option will vest in 36 monthly installments thereafter. 127,532 shares subject to the option grant vest
based both on Mr. Biunno’s continued service through the relevant vesting date and completion of our initial public
offering. As our initial public offering was completed in January 2015, one quarter (1/4) of shares subject to the option
became vested on October 31, 2014, and the remaining shares subject to the option become exercisable in 36 monthly installments
thereafter. Pursuant to the Stock Option Agreement applicable to Mr. Biunno’s award and our 2011 Equity Incentive Plan,
the options immediately vest and become exercisable under certain circumstances, including a change of control.
Kenneth
C. Cundy
.
We entered into an Executive Employment Agreement with Dr. Cundy, dated November 17, 2014, which sets
forth certain conditions of Dr. Cundy’s at-will employment with the Company as the Company’s Chief Scientific Officer.
Dr. Cundy also executed the Company’s standard form of Proprietary Information and Inventions Assignment Agreement. The
Executive Employment Agreement entitles Dr. Cundy to a base salary of $300,000 annually, and eligibility for an annual bonus of
up to $75,000 payable at the discretion of the board of directors upon achievement of performance targets established by the board
of directors. Dr. Cundy was also granted options to purchase up to 860,000 shares of our common stock at an exercise price
of $0.73 per share. One quarter (1/4) of those options will vest and become exercisable on the first (1st) anniversary of Dr. Cundy’s
first date of employment and the remaining shares subject to the option will vest in thirty-six (36) equal monthly installments
thereafter. The Executive Employment Agreement entitles Dr. Cundy to certain severance payments and other benefits if his employment
is terminated by us without cause, or upon his resignation for good reason as defined in the Executive Employment Agreement. Upon
any such termination of Dr. Cundy’s employment he would be entitled to a severance payment equal to fifty percent (50%)
of his then current base salary, and reimbursement for any COBRA coverage elected by Dr. Cundy for himself and the members of
his immediate family for a period of six months following such termination. Additionally, any options that would have vested
during the twelve (12) month period immediately following his termination date would vest and become exercisable immediately.
Pursuant to the Stock Option Agreement applicable to Dr. Cundy’s award and our 2011 Equity Incentive Plan if, upon or at
any time following a following a change in control of the Company, Dr. Cundy’s employment is terminated without cause or
he resigns for “good reason,” then vesting of all of the options subject to the option award would be accelerated.
Perquisites
and Other Benefits
Historically,
we have not provided perquisites or other personal benefits to our executive officers. We do not have a pension plan that provides
for payments to any of our executives at, following, or in connection with retirement and do not plan to establish one in the
near future. We may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate
to assist an individual executive officer in the performance of his or her duties, to make our executive officers more efficient
and effective, and for recruitment, motivation or retention purposes. We do not expect that these perquisites or other personal
benefits will be a significant aspect of our executive compensation program. All future practices with respect to perquisites
or other personal benefits will be approved and subject to periodic review by the Compensation Committee.
Post-Employment
Obligations
Other
than those provisions contained in the executive employment agreements with Messrs. Allen, Stern, Biunno and Dr. Cundy, we
do not have any severance or change in control agreements with any of our executive officers. The severance provisions for Mr. Allen
entitles him to a severance payment equal to seventy five percent (75%) of his then current annual base salary in certain
events of termination. The severance provisions for Messrs. Stern and Biunno and Dr. Cundy provide that each is entitled
to a severance payment equal to fifty percent (50%) of his then current annual base salary in certain events of termination.
Additionally, Messrs. Allen, Biunno and Stern and Dr. Cundy are each entitled to vesting acceleration of any options that
would have become exercisable during the 12 months following such termination and reimbursement for any COBRA coverage elected
for themselves and the members of their immediate families for a period of nine months, for Mr. Allen, and six months, for Messrs.
Biunno and Stern and Dr. Cundy, following the applicable date of termination. For a description of certain events that trigger
immediate vesting of outstanding option awards see the section captioned “Employment Agreements” above.
Tax and Accounting
Considerations
Section 162(m)
of the Internal Revenue Code limits the amount we can deduct for compensation paid to our Chief Executive Officer and three other
most highly-compensated executive officers (excluding the Chief Financial Officer) in any year to $1 million. The limit on deductibility
does not apply to performance-based compensation meeting certain requirements.
Our
general philosophy is to structure executive compensation to maximize deductibility under Section 162(m). In 2015, 100% of
our executive compensation was tax deductible. Should an executive officer’s compensation approach $1 million in the future,
the Committee will consider deductibility of compensation under Section 162(m) as one (but not the sole) factor in setting
executive compensation.
SUMMARY
COMPENSATION TABLE
The
following table summarizes the compensation earned by, awarded to or paid to our NEOs in the years ended December 31, 2016
and 2015:
|
|
Fiscal
|
|
Salary
|
|
|
Bonus
|
|
|
Option
Awards
(5)
|
|
|
All
Other
Compensation
|
|
|
Total
|
|
Name
and Principal Position
|
|
Year
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
Simon
Allen
(1)
|
|
2016
|
|
|
268,077
|
|
|
|
—
|
|
|
|
1,209,655
|
|
|
|
—
|
|
|
|
1,477,732
|
|
Chief
Executive Officer
|
|
2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jon
L. Stern
(2)
|
|
2016
|
|
|
250,000
|
|
|
|
83,875
|
(6)
|
|
|
—
|
|
|
|
11,835
|
|
|
|
345,710
|
|
Chief
Operating Officer
|
|
2015
|
|
|
250,000
|
|
|
|
84,375
|
(6)
|
|
|
—
|
|
|
|
15,780
|
|
|
|
350,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
F. Biunno
(3)
|
|
2016
|
|
|
200,000
|
|
|
|
50,000
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
250,000
|
|
Chief
Financial Officer
|
|
2015
|
|
|
200,000
|
|
|
|
50,000
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth
C. Cundy
(4)
|
|
2016
|
|
|
300,000
|
|
|
|
75,000
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
375,000
|
|
Chief
Scientific Officer
|
|
2015
|
|
|
300,000
|
|
|
|
75,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
375,000
|
|
(1)
|
Mr.
Allen was appointed as our Chief Executive Officer in March 2016.
|
(2)
|
Mr. Stern
served as our Chief Strategy Officer from May 1, 2012, and as our Chief Executive Officer from October 2013 until his appointment
as our Chief Operating Officer on March 7, 2016. “Other Compensation” reflects cash payments made to Mr. Stern
in lieu of participation in the Company’s health plan.
|
(3)
|
Mr. Biunno
was appointed as our Chief Financial Officer in October 2013.
|
(4)
|
Dr.
Cundy was appointed as Chief Scientific Officer in November 2014.
|
(5)
|
Reflects
the aggregate grant date fair value of the applicable stock option, calculated in accordance with Accounting Standards Codification
Topic 718.
|
(6)
|
Mr.
Stern is eligible for a discretionary bonus, the amount of which is paid based on evaluation of his performance during the
reviewed period, up to a maximum amount of $87,500 for performance over an annual period. In October 2015, Mr.
Stern was awarded a bonus of $75,000 in respect of the annual performance period ended April 2015. In January 2017, Mr. Stern’s
performance was reviewed for a performance period beginning in April 2015 and ending on December 31, 2016. Mr. Stern was awarded
a bonus of $149,500, equivalent to 100% of his annual target bonus potential earned over the period of approximately 21 months.
The amount reported in the bonus column for 2016 reflects a pro-rated portion of the $149,500 bonus paid to Mr. Stern attributable
to his service in fiscal 2016.The amount reported in the bonus column for fiscal 2015 reflects (i) a pro-rated portion the
$75,000 bonus paid to Mr. Stern attributable to his service in fiscal 2015, and (ii) a pro-rated portion of the $149,500 bonus
paid to Mr. Stern attributable to his service in fiscal 2015. The bonus earned by Mr. Stern for the annual period ended April
2015 was paid in 2016. The bonus earned by Mr. Stern for the period April 2015 through December 2016 was paid in 2017.
|
(7)
|
The
bonus earned by Mr. Biunno in 2015 was paid in 2016, and bonuses earned by Mr. Biunno and Dr. Cundy in 2016 were paid in 2017.
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following tables set forth certain information regarding outstanding stock options and stock awards held by our NEOs as of December 31,
2016.
|
|
|
|
Option
Awards
|
|
Name
|
|
Grant Date(1)
|
|
Number of Securities
Underlying
Unexercised Options
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
|
|
Exercisable (#)
|
|
|
Unexercisable (#)
|
|
|
|
|
|
|
Jon
L. Stern
|
|
4/11/2014
|
|
|
478,245
|
|
|
|
—
|
|
|
|
0.26
|
|
|
4/11/2024
|
Jeffrey
F. Biunno
|
|
4/09/2014
(2)
|
|
|
288,496
|
|
|
|
75,881
|
|
|
|
0.26
|
|
|
4/09/2024
|
Kenneth
C. Cundy
|
|
11/20/2014
(3)
|
|
|
447,925
|
|
|
|
412,075
|
|
|
|
0.73
|
|
|
11/20/2024
|
Simon Allen
|
|
3/7/2016
(4)
|
|
|
—
|
|
|
|
1,132,000
|
|
|
|
1.55
|
|
|
3/07/2026
|
(1)
|
All
of the options identified are subject to the provisions of the 2011 Equity Incentive Plan and the applicable option award
agreement, and have a maximum term of ten years.
|
(2)
|
Options
vest based on continued service, with one quarter of such options vesting on October 31, 2014 and the remaining shares
subject to the option vesting in thirty-six monthly installments thereafter.
|
(3)
|
Options
vest based on continued service, with one quarter of such options vesting on November 17, 2015 and the remaining shares subject
to the option vesting in thirty-six monthly installments thereafter.
|
(4)
|
Options
vest based on continued service, with one quarter of such options vesting on March 7, 2017 and the remaining shares subject
to the option vesting in thirty-six monthly installments thereafter.
|
DIRECTOR
COMPENSATION
On
November 20, 2014, the board of directors approved compensation for Albion J. Fitzgerald and Marc E. Goldberg for their services
to the Company as directors. Messrs. Goldberg and Fitzgerald are each entitled to an annual cash retainer of $15,000 and were
each granted options to purchase up to 250,000 shares of common stock in connection with the initial adoption of the director
compensation plan. Other than Messrs. Goldberg and Fitzgerald, none of our directors receive compensation specifically for their
services as directors. All directors are entitled to reimbursement of ordinary expenses incurred in connection with attendance
at meetings of our Board.
2016
Directors Compensation
Name
|
|
Fees
Earned or
Paid
in
Cash
($)
|
|
|
Option
Awards
($)
|
|
|
All
Other
Compensation
($)(1)
|
|
|
Total
($)
|
|
Nir
Barzilai
|
|
|
—
|
|
|
|
—
|
|
|
|
42,000
|
|
|
|
42,000
|
|
Pinchas
Cohen
|
|
|
—
|
|
|
|
—
|
|
|
|
42,000
|
|
|
|
42,000
|
|
Albion
J. Fitzgerald
(2)
|
|
|
15,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,000
|
|
Marc
E. Goldberg
(2)
|
|
|
15,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,000
|
|
(1)
|
Represents
fees paid to Drs. Barzilai and Cohen for consulting services.
|
(2)
|
Messrs.
Fitzgerald and Goldberg were appointed to our board of directors in May 2014 and November 2014, respectively.
|
PROPOSAL
NO. 2:
APPROVAL
OF AMENDMENTS TO
THE
COMPANY’S AMENDED AND RESTATED 2011 EQUITY INCENTIVE PLAN
Background
Our
2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”), allows us to grant incentive stock options,
nonstatutory stock options, stock appreciation rights, restricted stock awards and restricted stock unit awards.to our employees,
officers and directors.
We
believe our success is due to our highly talented employee base and that future success depends on the ability to attract and
retain high caliber personnel. Our headquarters is located in Silicon Valley where we must compete with many companies for a limited
pool of talented people. The ability to grant equity awards is a necessary and powerful recruiting and retention tool for us to
obtain the quality personnel we need to move our business forward.
A
full copy of the 2011 Plan, including the proposed amendments, is attached to this proxy statement as Annex A. Members of
our Board and our named executive officers have an interest in this proposal because they are eligible to receive awards under
the 2011 Plan.
Summary of
the Proposal
The
rules of the TSX-Venture Exchange (or TSX-V) provide that the maximum number of shares which can be reserved under a stock option
plan is equal to 20% of the number of shares of the issuer which are outstanding on the date the plan is approved by stockholders.
The 2011 Plan was originally approved by our Board of Directors and our stockholders on January 3, 2012. The Amended and Restated
2011 Plan was adopted by our Board of Directors on November 3, 2014 and approved by our stockholders on December 15, 2014. The
2011 Plan reserves up to 6,453,069 shares of our common stock for issuance in connection with awards thereunder, which is equal
to 20% of the number of shares of our common stock which were outstanding immediately after the closing of our initial public
offering and concurrent private placement on January 6, 2015. In accordance with TSX-V rules, the 2011 Plan also provides that
the number of shares reserved for issuance under awards granted to insiders (as defined under the TSX-V rules and which includes
our directors and senior officers) may not exceed 10% of the number of issued shares without the approval of a majority of votes
cast by the “disinterested” stockholders. For purposes of this proposal, a “disinterested” stockholder
is any stockholder other than an insider of the Company under the TSX-V rules or any associate of such an insider.
Our
Board of Directors approved an amendment to the 2011 Plan on April 11, 2017, subject to approval by our stockholders at our 2017
annual meeting. We are seeking “disinterested” stockholder approval of amendments to the 2011 Plan that (a) increase
the number of shares reserved for issuance thereunder by 718,471; and (b) removes the restriction on issuances of shares under
the 2011 Plan to our insiders in excess of 10% of the number of outstanding shares of our common stock. The approval also gives
us authorization to issue options to our insiders in excess of 10% of the number of outstanding shares of our common stock. After
giving effect to the increase there would be 7,171,540 total shares reserved for issuance under the 2011 Plan (including shares
reserved for issuance under currently outstanding stock options), which is equal to 20% of the number of shares of our common
stock which are presently outstanding. If the amendment to the 2011 Plan is not approved by stockholders, the aggregate number
of shares reserved under the 2011 Plan will remain as is and the 2011 Plan will continue in effect, as is.
The Importance
of the Proposed Increase in Shares
We
believe the ability to grant competitive equity awards is a necessary and powerful recruiting and retention tool for us to obtain
the quality personnel we need to move our business forward. If we are unable to offer competitive equity packages to hire, retain
and motivate employees, especially our senior officers, this could significantly hamper our plans for growth and adversely affect
our ability to operate our business. In addition, if we are unable to grant competitive equity awards, we may be required to offer
additional cash-based incentives to replace equity as a means of competing for talent.
The 2011 Plan
Shares
Available for Awards
. There are currently 6,453,069 shares of our common stock reserved for issuance under the 2011 Plan.
As of the date hereof there were outstanding options to purchase 5,618,497 shares of our common stock and 834,572 shares of our
common stock remained available for issuance under the 2011 Plan. In January 2016 we issued a warrant to purchase 125,000 shares
of the Company’s common stock to an investor relations firm as partial compensation for consulting services it will provide
to us over a two year period. The warrant has a term of three years and is subject to vesting over the two year service
period. Pursuant to applicable policies of the TSX-V, the shares issuable under the warrant will be counted against the limit
of shares authorized for issuance under the 2011 Plan, notwithstanding that the warrant was not issued under the 2011 Plan. After
giving effect to this limitation and the 26,250 stock options that have been exercised, there are 683,322 shares remaining available
for issuance under the 2011 Plan.
Eligibility
.
Awards may be granted to our employees, directors, and consultants, except that only our employees are eligible to receive incentive
stock options.
Administration
.
The 2011 Plan provides that it shall be administered by our board of directors or a committee appointed by our board of directors,
which shall be constituted to comply with laws, regulations or the rules of any stock exchange or quotation system on which shares
of our common stock are then listed or quoted related to the administration of stock option plans. The compensation committee
acts as the administrator of our 2011 Plan. The compensation committee has the full and final power and authority to determine
the terms of awards under the 2011 Plan, including designating the persons who will receive awards, the types of awards that will
be granted, the fair market value of the shares of common stock underlying each option granted to each participant if the shares
are not listed on an exchange or regularly quoted by a recognized securities dealer, and the terms, conditions and restrictions
applicable to each award and the underlying shares.
Stock
Options
. Under our 2011 Plan, the administrator may grant employee participants incentive stock options, which qualify for
special tax treatment under U.S. tax law, and may grant nonqualified stock options to any participants. The administrator establishes
the duration of each option at the time such option is granted, with a maximum duration of 10 years from the effective date of
the grant; provided, however, that an incentive stock option granted to a participant who owns, at the time the option is granted,
more than 10% of the total combined voting power of all classes of our stock may not have a term in excess of 5 years. The administrator
also establishes any vesting requirements, including performance criteria or passage of time, which must be satisfied prior to
the exercise of the options. The administrator also establishes the exercise price of options on the date such options are granted.
Incentive stock options must have an exercise price per share that is not less than the fair market value of a share of our common
stock on the grant date and, pursuant to the rules of the TSX-V, not less than the Discounted Market Price, and in the case of
grants of incentive stock options to an employee who owns, at the time the option is granted, more than 10% of the total combined
voting power of all classes of our stock, the exercise price may not be less than 110% of the fair value. The method of payment
of the exercise price for shares being purchased pursuant to a stock option is determined by the administrator, provided that
the exercise price for options granted after effectiveness of the 2011 Plan may be paid only by cash or check. Unless otherwise
determined by the administrator and included in the participant’s stock option agreement, after the termination of the participant’s
employment or service, such participant may exercise his or her option for 90 days, except that if the termination results from
the participant’s death or disability the exercise period is 12 months.
Adjustment
of Shares
. The number of shares issued or reserved for issuance pursuant to the 2011 Plan is subject to adjustment in order
to prevent diminution or enlargement of benefits intended to be made available under the plan in the event of any dividend or
other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of our common stock, or our other securities, or other change of our corporate structure that
affects our corporate structure.
Change
in Control Provisions
. Stock options and other awards under the Plan may be subject to acceleration of vesting and exercisability
upon or after a change in control as may be provided in the agreement applicable to the option or award, or as may be provided
in any other written agreement between us and the awardee, or as may be determined by the administrator, but in the absence of
such provision, no such acceleration shall occur. The plan defines a change in control as the occurrence, in a single transaction
or a series of related transactions of any of the following events: (i) any person (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes beneficial owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
our securities that represent 50% or more of the total voting power represented by all of our then-outstanding voting securities
(except for any such change in beneficial ownership occurring as a result of a private financing transaction that was approved
by our board of directors); (ii) a merger, consolidation or similar transaction after consummation of which our stockholders immediately
prior thereto do not own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent
(50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or
(B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such merger,
consolidation or similar transaction, in each case in substantially the same proportions as their ownership of the outstanding
voting securities of the Company immediately prior to such transaction; or (iii) a sale, lease, exclusive license or other disposition
of all or substantially all of our assets.
Other
Terms
. Unless our board of directors determines otherwise, and subject to applicable laws and exchange rules, a participant
may not sell, pledge, assign, transfer or otherwise dispose of any option or restricted stock purchase right other than by will
or the laws of descent and distribution, and the option or restricted stock purchase right may be exercised during the lifetime
of the participant only by the participant. No shares of our common stock may be issued upon the exercise of an award unless such
exercise and issuance, and the delivery to the participant of the shares of our common stock underlying such award, comply with
all laws, regulations or the rules of any stock exchange or quotation system on which shares of our common stock are then listed
or quoted related to the administration of stock option plans.
The
2011 Plan includes additional restrictions on the grant of awards based on requirements of the TSX-V. The restrictions include
the following:
|
●
|
The
number of shares reserved for issuance under the 2011 Plan may not be amended without
stockholder approval and the aggregate number of shares reserved for issuance under the
2011 Plan is not permitted to exceed 20% of the number of our issued and outstanding
shares as of the date our stockholders approve any such amendment.
|
|
●
|
The
aggregate number of options granted to any one person under the 2011 Plan in a 12 month
period must not exceed five percent (5%) of the outstanding shares of common stock (on
a non-diluted basis, calculated on the date the option is granted), unless the Company
has obtained disinterested stockholder approval.
|
|
●
|
In
the aggregate, no more than ten percent (10%) of the issued and outstanding shares of
common stock (on a non-diluted basis) may be reserved at any time for insiders (as defined
in the TSX-V rules) under the 2011 Plan, unless the Company has obtained disinterested
stockholder approval. The restriction would be eliminated upon disinterested stockholder
approval of the Plan Amendment.
|
|
●
|
The
number of options granted to insiders within any 12-month period, cannot exceed ten percent
(10%) of the issued and outstanding shares of common stock, unless the Company has obtained
disinterested stockholder approval.
|
|
●
|
Options
shall not be granted if the exercise thereof would result in the issuance of more than
two percent (2%) of the issued shares of common stock of the Company in any 12-month
period to any one consultant of the Company.
|
|
●
|
Options
shall not be granted if the exercise thereof would result in the issuance of more than
two percent (2%) of the issued shares of common stock of the Company in any 12-month
period to persons engaged to provide investor relations activities.
|
|
●
|
The
number of shares of common stock subject to an option granted to any one participant
shall be determined by the board of directors, but no one participant shall be granted
an option to purchase a number of shares of common stock that exceeds the maximum number
permitted by the rules of the TSX-V.
|
Amendment
and Termination
. Our board of directors may amend, alter, suspend or terminate the 2011 Plan, provided that any such change
that would adversely affect the holder of a previously granted award requires the holder’s written consent, and provided
further that stockholder approval is required for any amendment to the extent necessary or desirable to comply with laws, regulations
or the rules of any stock exchange or quotation system on which shares of our common stock are then listed or quoted related to
the administration of stock option plans.
Certain
United States Federal Income Tax Matters
The
following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in
the 2011 Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations
will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s
death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside.
As a result, tax consequences for any particular participant may vary based on individual circumstances.
Options
. Under present law, an optionee will
not recognize any taxable income on the date a non-qualified option (“NSO”) is granted pursuant to the 2011 Plan.
Upon exercise of the option, however, the optionee must recognize, in the year of exercise, compensation taxable as ordinary income
in an amount equal to the difference between the option price and the fair market value of Company common stock on the date of
exercise. Upon the sale of the shares, any resulting gain or loss will be treated as capital gain or loss. The Company will receive
an income tax deduction in its fiscal year in which NSOs are exercised equal to the amount of ordinary income recognized by those
optionees exercising options, and must comply with applicable tax withholding requirements.
Incentive
stock options (“ISOs”) granted under the 2011 Plan are intended to qualify for favorable tax treatment under Section
422 of the Internal Revenue Code. Under Section 422, an optionee recognizes no taxable income when the option is granted. Further,
the optionee generally will not recognize any taxable income when the option is exercised if he or she has at all times from the
date of the option’s grant until three months before the date of exercise been an employee of the Company. The Company ordinarily
is not entitled to any income tax deduction upon the grant or exercise of an ISO. This favorable tax treatment for the optionee,
and the denial of a deduction for the Company, will not, however, apply if the optionee disposes of the shares acquired upon the
exercise of an incentive stock option within two (2) years from the granting of the option or one (1) year from the receipt of
the shares.
Stock
Appreciation Rights.
Generally, a recipient of a SAR will recognize compensation taxable as ordinary income equal to
the value of the shares of Company common stock or the cash received in the year that the stock appreciation right is exercised.
The Company normally will receive a corresponding deduction equal to the amount of compensation the recipient is required to recognize
as ordinary taxable income, and must comply with applicable tax withholding requirements.
Restricted
Stock Awards
. Generally, no income is taxable to the recipient of a restricted stock award in the year that the award is granted.
Instead, the recipient will recognize compensation taxable as ordinary income equal to the fair market value of the shares in
the year in which the risks of forfeiture restrictions lapse. Alternatively, if a recipient makes an election under Section 83(b)
of the Internal Revenue Code, the recipient will, in the year that the restricted stock award is granted, recognize compensation
taxable as ordinary income equal to the fair market value of the shares on the date of the award. The Company normally will receive
a corresponding deduction equal to the amount of compensation the recipient is required to recognize as ordinary taxable income,
and must comply with applicable tax withholding requirements.
Stock
Units
. A recipient of stock units will generally recognize compensation taxable as ordinary income in an amount equal to the
fair market value of the shares (or the amount of cash) distributed to settle the stock units on the vesting date(s). The Company
normally will receive a corresponding deduction at the time of vesting, equal to the amount of compensation the recipient is required
to recognize as ordinary taxable income, and must comply with applicable tax withholding requirements.
Code
Section 409A
. We intend that awards granted under the 2011 Plan comply with, or otherwise be exempt from, Code Section 409A,
but make no representation or warranty to that effect.
Code
Section 162(m).
Under Code Section 162(m), we are generally prohibited from deducting compensation paid to “covered
employees” in excess of $1,000,000 per person in any year. “Covered employees” are defined as the principal
executive officer and any one of the three highest paid executive officers (other than the principal executive officer or the
principal financial officer) as of the close of the applicable taxable year. Compensation that qualifies as “performance-based”
is excluded for purposes of calculating the amount of compensation subject to the $1,000,000 limit. The requirements that must
be satisfied to qualify as performance-based compensation under Code Section 162(m) include stockholder approval of the performance
goals under the 2011 Plan, setting individual annual limits on each type of award, approving the material terms of the 2011 Plan
and certain other requirements.
New
Plan Benefits
2011
Equity Incentive Plan
The
2011 Plan administrator, in its discretion, selects the person(s) to whom awards may be granted and the number of shares subject
to each such grant. For this reason, it is not possible to determine the benefits or amounts that will be received by any particular
individual(s) in the future. If the Plan Amendment is approved by our disinterested stockholders, the number of shares reserved
for issuance under the 2011 Plan to insiders (as defined under the TSX-V rules and which includes our directors and senior officers)
will no longer be limited to 10% of the number of our issued shares. For purposes of this proposal, a “disinterested”
stockholder is any stockholder other than an insider of the Company under the TSX-V rules or any associate of such an insider.
THE
BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR
approval of the foregoing
AmendmentS to the CohBar, Inc. 2011 Equity Incentive Plan
AUDIT
COMMITTEE REPORT TO STOCKHOLDERS *
Each
current member of the Audit Committee meets the financial literacy requirements under SEC rules and regulations and by NI 52-110.
In addition, our Board has determined that Mr. Goldberg qualifies as an “audit committee financial expert” under the
regulations of the SEC. Although all members of our Audit Committee meet the current SEC regulatory requirements for financial
literacy and the Board has determined that Mr. Goldberg qualifies as an “audit committee financial expert,” members
of our Audit Committee are not professionally engaged in the practice of auditing or accounting and are not technical experts
in auditing or accounting.
The
Audit Committee oversees CohBar’s financial reporting process on behalf of the Board and operates under a written charter,
approved by the Audit Committee and ratified by the Board. In fulfilling its oversight responsibilities, the Audit Committee reviewed
the audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2016 with management prior
to issuance, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness
of significant judgments, and the clarity of disclosures in the financial statements.
Management
has the primary responsibility for the preparation, presentation and integrity of CohBar’s financial statements and the
reporting process, including internal control over financial reporting and disclosure controls and procedures. Management is responsible
for maintaining and evaluating appropriate accounting and financial reporting principles and internal controls and procedures
designed to ensure compliance with accounting standards and applicable laws and regulations.
The
Audit Committee reviewed with the independent registered public accounting firm, which is responsible for expressing an opinion
on the conformity of CohBar’s audited financial statements with accounting principles generally accepted in the United States,
their judgments as to the quality, not just the acceptability, of CohBar’s accounting principles. The Audit Committee also
has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard
No. 16,
Communications with Audit Committees
. The Audit Committee has received the written disclosures and the
letter from the independent registered public accounting firm required by the Public Company Accounting Oversight Board regarding
the independent registered public accounting firm communications with the Audit Committee concerning independence, and has discussed
with the independent registered public accounting firm the independent registered public accounting firm’s independence
from CohBar and its management, and has considered whether the independent registered public accounting firm’s provision
of any non-audit services to CohBar is compatible with maintaining such firm’s independence.
The
Audit Committee discussed with CohBar’s independent registered public accounting firm the overall scope and plans for their
audit. In addition, the Audit Committee met with the independent registered public accounting firm, with and without management
present, to discuss the results of their examination, the overall quality of CohBar’s financial reporting for the year ended
December 31, 2016.
The
Audit Committee has determined that provision by Marcum LLP of other non-audit services is compatible with maintaining Marcum
LLP’s independence. The Audit Committee and the Board have also recommended, subject to stockholder ratification, the selection
of Marcum LLP as CohBar’s independent registered public accounting firm for the year ending December 31, 2017.
Respectfully Submitted,
Marc E. Goldberg,
Chairman
Albion J. Fitzgerald
Nir Barzilai
*
The information contained in the Report of the Audit Committee shall not be deemed “soliciting material” or be incorporated
by reference by any general statement incorporating this proxy statement into any filings under either the Securities Act of 1933,
as amended, or the Exchange Act (together the “Acts”), except to the extent CohBar specifically incorporates such
report by reference, and further, such Report shall not otherwise be deemed filed under the Acts.
PROPOSAL
NO. 3:
RATIFICATION
OF APPOINTMENT OF REGISTERED INDEPENDENT PUBLIC
ACCOUNTING
FIRM FOR 2017
The
Audit Committee has appointed Marcum LLP as our registered independent public accounting firm to audit our consolidated financial
statements for the year ended December 31, 2017. Although we are not required to seek stockholder approval of this appointment,
the Board has determined it to be sound corporate governance to do so. If the appointment is not ratified by stockholders, the
Audit Committee will investigate the possible bases for the negative vote and will reconsider the appointment in light of the
results of its investigation.
We
employed Marcum LLP as our registered independent public accounting firm during 2016. There have been no disagreements with Marcum
LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which,
if not resolved to the satisfaction of Marcum LLP, would have caused Marcum LLP to make reference to the matter in their report.
A representative of Marcum LLP is expected to be present at the annual stockholders’ meeting. The representative will be
given the opportunity to make a statement on behalf of Marcum LLP if the representative so desires, and the representative will
be available to respond to appropriate stockholder questions.
We
understand the need for Marcum LLP to maintain objectivity and independence in its audit of our financial statements. To minimize
relationships that could appear to impair the objectivity of Marcum LLP, the Audit Committee has restricted the non-audit services
that Marcum LLP may provide. It is the policy of the Audit Committee to pre-approve all audit and permissible non-audit services
provided by our independent auditors.
Under
these policies, with Audit Committee pre-approval, we may use Marcum LLP for the following categories of non-audit services: merger
and acquisition due diligence and audit services; tax services; internal control reviews; employee benefit plan audits; and reviews
and procedures that we engage Marcum LLP to undertake to provide assurances on matters not required by laws or regulations.
The
aggregate fees and expenses billed, or expected to be billed, for professional services rendered by Marcum LLP for the years ended
December 31, 2016 and 2015 were as follows:
Type
|
|
2016
|
|
|
2015
|
|
Audit
Fees (1)
|
|
$
|
107,263
|
|
|
$
|
110,624
|
|
Tax
Fees (2)
|
|
|
8,549
|
|
|
|
8,000
|
|
Total
Fees
|
|
$
|
115,812
|
|
|
$
|
118,624
|
|
(1)
|
Audit
Fees consist of fees billed and expected to be billed for services rendered for the audits of our financial statements for
the fiscal years ended December 31, 2016 and 2015.
|
(2)
|
Tax
Fees consist of fees billed for professional services related to preparation of our U.S.
federal and state income tax returns and tax advice.
|
Tax
services in 2016 and 2015 were approved by our Board of Directors. All future permitted audit, audit-related, tax and other
services that the independent auditors may perform are expected to be pre-approved in accordance with pre-approval policies and
procedures adopted by our audit committee pursuant to that committee’s charter, as amended or modified from time to time.
The
Audit Committee believes that the foregoing expenditures are compatible with maintaining the independence of our independent registered
public accounting firm.
THE BOARD UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR
THE RATIFICATION OF THE AUDIT COMMITTEE’S APPOINTMENT OF MARCUM LLP AS
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
OTHER
MATTERS
As
of the date of this proxy statement, the Board is not aware of any other matters that may come before the annual meeting. The
persons named in the enclosed proxy card intend to vote the proxy in accordance with their best judgment if any other matters
properly come before the annual meeting.
We
will provide, without charge, on the written request of any beneficial owner of shares of our common stock entitled to vote at
the Annual Meeting of Stockholders, a copy of our Annual Report on Form 10-K as filed with the SEC for our fiscal year ended December 31,
2016. Written requests should be mailed to CohBar, Inc., 1455 Adams Drive, Suite 2050, Menlo Park, CA 94025, Attn: Company Secretary.
Please
return the enclosed proxy card as soon as possible. Unless a quorum consisting of a majority of the outstanding shares entitled
to vote is represented at the annual stockholders’ meeting, no business can be transacted. Therefore, please be sure to
date and sign your proxy card exactly as your name appears on your stock certificate and return it in the enclosed postage prepaid
return envelope. Please act promptly to ensure that you will be represented at this important meeting.
|
By Order of the Board of Directors
|
|
|
|
|
|
Jeffrey
F. Biunno
Secretary
|
ANNEX A
Cohbar,
Inc.
Amended
and restated 2011 Equity Incentive Plan
Adopted
by the Board of Directors: November 3, 2014
Approved
by the Stockholders: December 15, 2014
Termination
Date: December 15, 2024
1.
General.
(a) Eligible
Stock Award Recipients.
The persons eligible to receive Stock Awards are Employees, Directors and Consultants.
(b) Available
Stock Awards.
The Plan provides for the grant of the following Stock Awards: (i) Incentive Stock Options; (ii) Nonstatutory
Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; and (v) Restricted Stock Unit Awards.
(c) Purpose.
The Company, by means of the Plan, seeks to secure and retain the services of the group of persons eligible to receive Stock
Awards as set forth in Section 1(a), to provide incentives for such persons to exert maximum efforts for the success of the Company
and any Affiliate, and to provide a means by which such eligible recipients may be given an opportunity to benefit from increases
in value of the Common Stock through the granting of Stock Awards.
2.
Administration.
(a) Administration
by Board.
The Board shall administer the Plan unless and until the Board delegates administration of the Plan to a Committee
or Committees, as provided in Section 2(c).
(b) Powers
of Board.
The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i)
To
determine from time to time (A) which of the persons eligible under the Plan shall be granted Stock Awards, (B) when
and how each Stock Award shall be granted, (C) what type or combination of types of Stock Award shall be granted, (D) the
provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted
to receive cash or Common Stock pursuant to a Stock Award, (E) the number of shares of Common Stock with respect to which
a Stock Award shall be granted to each such person, and (F) the Fair Market Value applicable to a Stock Award.
(ii)
To
construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for
administration of the Plan. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the
Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan or Stock
Award fully effective.
(iii)
To
settle all controversies regarding the Plan and Stock Awards granted under it.
(iv)
To
accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will
vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.
(v)
To
suspend or terminate the Plan at any time. Suspension or termination of the Plan shall not impair rights and obligations under
any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant.
(vi)
To
amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, amendments relating to Incentive
Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to bring the Plan or Stock
Awards granted under the Plan into compliance therewith, subject to the limitations, if any, of applicable law. The Board may
by resolution amend the Plan and any option granted hereunder without stockholder approval, subject to applicable laws and the
policies of the Exchange. However, the Board will not be permitted, in the absence of stockholder and Exchange approval, to amend
the terms of an option held by an Insider of the Company (other than to extend the expiry date of an option, subject to such date
being extended by virtue of Section 5 below). Except as provided above, rights under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (1) the Company requests the consent of the affected
Participant, and (2) such Participant consents in writing.
(vii)
To
submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy
the requirements of Section 422 of the Code regarding Incentive Stock Options.
(viii)
To
approve forms of Stock Award Agreements for use under the Plan and to amend the terms of any one or more Stock Awards, including,
but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Stock Award
Agreement, subject to any specified limits in the Plan that are not subject to Board discretion;
provided, however
, that
except with respect to amendments that disqualify or impair the status of an Incentive Stock Option, a Participant’s rights
under any Stock Award shall not be impaired by any such amendment unless (A) the Company requests the consent of the affected
Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, subject to the limitations of applicable
law, if any, the Board may amend the terms of any one or more Stock Awards without the affected Participant’s consent if
necessary to maintain the qualified status of the Stock Award as an Incentive Stock Option or to bring the Stock Award into compliance
with Section 409A of the Code.
(ix)
Generally,
to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan or Stock Awards.
(x)
To
adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors
or Consultants who are foreign nationals or employed outside the United States.
(xi)
Subject
to the policies of the Exchange and, if required by such policies, approval of the stockholders of the Company, to effect, at
any time and from time to time, with the consent of any adversely affected Participant, (A) the reduction of the exercise
price (or strike price) of any outstanding Option or SAR under the Plan, (B) the cancellation of any outstanding Option or
SAR under the Plan and the grant in substitution therefore of (1) a new Option or SAR under the Plan or another equity plan
of the Company covering the same or a different number of shares of Common Stock, (2) a Restricted Stock Award, (3) a
Restricted Stock Unit Award, (4) cash and/or (5) other valuable consideration (as determined by the Board, in its sole
discretion), or (C) any other action that is treated as a repricing under generally accepted accounting principles;
provided,
however
, that no such reduction or cancellation may be effected if it is determined, in the Company’s sole discretion,
that such reduction or cancellation would result in any such outstanding Option becoming subject to the requirements of Section 409A
of the Code; and
provided further that
, any reduction in the exercise price (or strike price) of an Option or SAR held
by an Optionholder or SAR holder who is an Insider of the Company at the time of the proposed reduction will require disinterested
shareholder approval.
(c) Delegation
to Committee.
The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration
of the Plan is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee
of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the
Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The Committee may, at any time, abolish the subcommittee
and/or revest in the Committee any powers delegated to the subcommittee. The Board may retain the authority to concurrently administer
the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(d) Effect
of Board’s Decision.
All determinations, interpretations and constructions made by the Board in good faith shall not
be subject to review by any person and shall be final, binding and conclusive on all persons.
3.
Shares
Subject to the Plan.
(a) Share
Reserve
. The Plan is a “fixed” stock option plan reserving for issuance up to a maximum of 20% of the Company’s
issued shares of Common Stock as of the date of the implementation of the Plan. Subject to Section 9(a) relating to Capitalization
Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective
Date shall not exceed six million four hundred fifty-three thousand sixty-nine (6,453,069) (the “
Share Reserve
”).
Further, if a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such
Stock Award having been issued or (ii) is settled in cash (
i.e.
, the Participant receives cash rather than stock), such
expiration, termination or settlement shall not reduce (or otherwise offset) the number of shares of Common Stock that may be
available for issuance under the Plan. For clarity, the limitation in this Section 3(a) is a limitation in the number of shares
of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards
except as provided in Section 7(a).
(b) Reversion
of Shares to the Share Reserve
. If any shares of Common Stock issued pursuant to a Stock Award are forfeited back to or repurchased
by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then
the shares that are forfeited or repurchased shall revert to and again become available for issuance under the Plan. Also, any
shares reacquired by the Company pursuant to Section 8(g) or as consideration for the exercise of an Option shall again become
available for issuance under the Plan. Notwithstanding the provisions of this Section 3(b), any such shares shall not be
subsequently issued pursuant to the exercise of Incentive Stock Options.
(c) Source
of Shares.
The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including
shares repurchased by the Company on the open market or otherwise.
4.
Eligibility.
(a) Eligibility
for Specific Stock Awards
. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation”
or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock
Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants;
provided, however
, that
Nonstatutory Stock Options and SARs may not be granted to Employees, Directors and Consultants who are providing Continuous Service
only to any “parent” of the Company, as such term is defined in Rule 405, unless the stock underlying such Stock
Awards is treated as “service recipient stock” under Section 409A of the Code because the Stock Awards are granted
pursuant to a corporate transaction (such as a spin off transaction) or unless such Stock Awards comply with the distribution
requirements of Section 409A of the Code.
(b) Ten
Percent Stockholders
. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of
such Option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant.
(c) Consultants
.
A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, either the offer or sale of the Company’s
securities to such Consultant is not exempt under Rule 701 because of the nature of the services that the Consultant is providing
to the Company, because the Consultant is not a natural person, or because of any other provision of Rule 701, unless the Company
determines that such grant need not comply with the requirements of Rule 701 and will satisfy another exemption under the Securities
Act as well as comply with the securities laws of all other relevant jurisdictions.
5.
Provisions
Relating to Options and Stock Appreciation Rights.
Each
Option or SAR shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options
shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates
are issued, a separate certificate or certificates shall be issued for shares of Common Stock purchased on exercise of each type
of Option. If an Option is not specifically designated as an Incentive Stock Option, then the Option shall be a Nonstatutory Stock
Option. For greater certainty, no SAR will be granted under the Plan so long as the shares of Common Stock of the Company are
listed on the TSX-V and the Company is classified as a “Tier 2 Issuer” by the TSX-V. The provisions of separate Options
or SARs need not be identical;
provided, however
, that each Option Agreement or Stock Appreciation Right Agreement shall
conform to (through incorporation of provisions hereof by reference in the applicable Stock Award Agreement or otherwise) the
substance of each of the following provisions:
(a) Term.
Subject to the provisions Section 4(b) regarding Ten Percent Stockholders, no Option or SAR shall be exercisable after
the expiration of ten (10) years from the date of its grant or such shorter period specified in the Stock Award Agreement.
(i)
Should
the expiry date of an option fall within a Black Out Period (as hereinafter defined) or within nine business days following the
expiration of a Black Out Period, such expiry date of the option shall be automatically extended without any further act or formality
to that date which is the tenth business day after the end of the Black Out Period, such tenth business day to be considered the
expiry date for such option for all purposes under the Plan. The ten business day period referred to in this paragraph may not
be extended by the Board. “Black Out Period” means the period during which the relevant Participant is prohibited
from exercising an option due to trading restrictions imposed by the Company pursuant to any policy of the Company respecting
restrictions on trading that is in effect at that time.
(b) Exercise
Price.
Subject to the provisions of Section 4(b) regarding Incentive Stock Options granted to Ten Percent Stockholders,
the exercise price (or strike price) of each Option or SAR shall be not less than one hundred percent (100%) of the Fair Market
Value of the Common Stock subject to the Option or SAR on the date the Option or SAR is granted. Notwithstanding the foregoing,
an Option or SAR may be granted with an exercise price (or strike price) lower than one hundred percent (100%) of the Fair Market
Value of the Common Stock subject to the Option or SAR if such Option or SAR is granted pursuant to an assumption of or substitution
for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions
of Sections 409A and 424(a) of the Code (whether or not such stock awards are Incentive Stock Options). Each SAR will be
denominated in shares of Common Stock equivalents. For so long as such shares are listed on the TSX-V, no option shall be granted
with an exercise price at a discount to the market price. The “market price” shall have the meaning defined in the
rules and policies of the TSX-V. Notwithstanding the foregoing, options may be granted with a per Share exercise price other than
as required above in accordance with, and pursuant to, a transaction described in Section 424 of the Code, subject to the rules
of the Exchange. Once the exercise price has been determined by the Board, accepted by the Exchange and the option has been granted,
the exercise price of an option may be reduced upon receipt of Board approval, subject to the policies of the Exchange and, if
required by such policies, approval of the stockholders of the Company.
(c) Number
of Optioned Shares.
The aggregate number of shares of Common Stock that may be issued pursuant to the exercise of options
awarded under the Plan and all other security based compensation arrangements of the Company six million four hundred fifty-three
thousand sixty-nine (6,453,069) shares, being 20% of the shares of Common Stock issued as of the date of the implementation of
the Plan, subject to the following additional limitations for so long as the shares of Common Stock are listed on the TSX-V:
(i)
the
aggregate number of options granted to any one person under the Plan within any 12-month period must not exceed five percent (5%)
of the then outstanding shares of Common Stock (on a non-diluted basis), unless the Company has obtained disinterested stockholder
approval;
(ii)
in
the aggregate, no more than ten percent (10%) of the issued and outstanding shares of Common Stock (on a non-diluted basis) may
be reserved at any time for Insiders under the Plan, unless the Company has obtained disinterested stockholder approval;
(iii)
the
number of options granted to Insiders within any 12-month period, cannot exceed ten percent (10%) of the issued and outstanding
shares of Common Stock, unless the Company has obtained disinterested stockholder approval;
(iv)
the
aggregate number of Options granted to any one Consultant within a 12-month period shall not exceed two percent (2%) of the issued
shares of Common Stock of the Company;
(v)
the
aggregate number of Options granted to all Persons retained to provide Investor Relations Activities within a 12-month period
shall not exceed two percent (2%) of the issued shares of Common Stock of the Company. For the avoidance of doubt, options may
not be granted to Consultants performing investor relations activities; and
(vi)
the
number of shares of Common Stock subject to an option granted to any one Participant shall be determined by the Board, but no
one Participant shall be granted an option to purchase a number of shares of Common Stock that exceeds the maximum number permitted
by the Exchange.
(d) Purchase
Price for Options.
The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be paid as determined
by the Board in its sole discretion, by any combination of the methods of payment set forth below,
only to the extent
permitted by applicable law and by permission of the TSX-V so long as the shares of Common Stock of the Company are listed on
the TSX-V. The Board shall have the authority to grant Options that do not permit all of the following methods of payment (or
otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize
a particular method of payment. The permitted methods of payment are as follows:
(i)
by
cash, check, bank draft or money order payable to the Company;
(ii)
pursuant
to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the
stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions
to pay the aggregate exercise price to the Company from the sales proceeds;
(iii)
by
delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;
(iv)
if
the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will
reduce the number of shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair Market Value
that does not exceed the aggregate exercise price;
provided, however
, that the Company shall accept a cash or other payment
from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in
the number of whole shares to be issued;
provided further
, that shares of Common Stock will no longer be outstanding under
an Option and will not be exercisable thereafter to the extent that (A) shares are used to pay the exercise price pursuant
to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares
are withheld to satisfy tax withholding obligations;
(v)
according
to a deferred payment or similar arrangement with the Optionholder;
provided, however
, that interest shall compound at
least annually and shall be charged at the minimum rate of interest necessary to avoid (A) the imputation of interest income
to the Company and compensation income to the Optionholder under any applicable provisions of the Code, and (B) the classification
of the Option as a liability for financial accounting purposes; or
(vi)
in
any other form of legal consideration that may be acceptable to the Board.
(e) Exercise
and Payment of a SAR.
To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company
in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR. The appreciation distribution
payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market
Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents
in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR on such date,
over (B) the strike price that will be determined by the Board at the time of grant of the SAR. The appreciation distribution
in respect to a SAR may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration,
as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such SAR.
(f) Transferability
and Assignability of Options and SARs.
All benefits, rights and options accruing to any Participant or Optionholder in accordance
with the terms and conditions with the Plan shall not be transferable or assignable except as provided herein or as otherwise
determined by the Board under terms that are not prohibited by applicable tax and securities laws, and
then only to the
extent
, if any, permitted by the TSX-V so long as the shares of Common Stock of the Company are listed on the TSX-V. The
Board may, in its sole discretion, impose additional limitations on the transferability of Options and SARs in the applicable
Stock Award Agreement.
(i) Restrictions
on Transfer.
An Option or SAR shall not be transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Participant only by the Participant;
provided, however
, that the Board may, in
its sole discretion, permit transfer of the Option or SAR and in a manner that is not prohibited by applicable tax and securities
laws (including but not limited to Rule 701) upon the Participant’s request. Except as explicitly provided herein, neither
an Option nor a SAR may be transferred for consideration.
(ii) Domestic
Relations Orders.
Upon receiving written permission from the Board or its duly authorized designee, an Option or SAR may be
transferred pursuant to a domestic relations order;
provided, however
, that if an Option is an Incentive Stock Option,
such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.
(iii) Beneficiary
Designation.
Upon receiving written permission from the Board or its duly authorized designee, the Participant may, by delivering
written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in
the event of the death of the Participant, shall thereafter be the beneficiary of the Option or SAR with the right to exercise
the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation,
the executor or administrator of the Participant’s estate shall be entitled to exercise the Option or SAR and receive the
Common Stock or other consideration resulting from such exercise.
(g) Vesting
Generally.
The total number of shares of Common Stock subject to an Option or SAR may vest and therefore become exercisable
in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on
the time or times when it may or may not be exercised (which may be based on the satisfaction of performance goals or other criteria)
as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary, provided that all Options issued
to persons retained to provide Investor Relations Activities must vest in stages over a period of not less than 12 months with
no more than 1/4 vesting in any three month period. The provisions of this Section 5(g) are subject to any Option or SAR
provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.
(h) Termination
of Continuous Service.
Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the
Participant and the Company, in the event that a Participant’s Continuous Service terminates (other than for Cause or upon
the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant
was entitled to exercise such Stock Award as of the date of termination of Continuous Service) but only within such period of
time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous
Service (or such longer or shorter period specified in the applicable Stock Award Agreement, which period shall not be less than
thirty (30) days if necessary to comply with applicable laws unless such termination is for Cause) or (ii) the expiration
of the term of the Option or SAR as set forth in the Stock Award Agreement. If, after termination of Continuous Service, the Participant
does not exercise his or her Option or SAR within the time specified herein or in the Stock Award Agreement (as applicable), the
Option or SAR shall terminate.
(i) Extension
of Termination Date.
Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant
and the Company, if the exercise of the Option or SAR following the termination of the Participant’s Continuous Service
(other than for Cause or upon the Participant’s death or Disability) would be prohibited at any time solely because the
issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR
shall terminate on the earlier of (i) the expiration of a total period of three (3) months (that need not be consecutive)
after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be
in violation of such registration requirements, (ii) the date 12 months after the termination of such Participant’s Continuous
Service, or (iii) the expiration of the term of the Option or SAR as set forth in the applicable Stock Award Agreement. In
addition, unless otherwise provided in a Participant’s Stock Award Agreement, if the immediate sale of any Common Stock
received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than
for Cause) would violate the Company’s insider trading policy, then the Option or SAR shall terminate on the earlier of
(i) the expiration of a period equal to the applicable post-termination exercise period after the termination of the Participant’s
Continuous Service during which the sale of Common Stock received upon exercise of the Option or SAR would not be in violation
of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the
applicable Stock Award Agreement.
(j) Disability
of Participant.
Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant
and the Company, in the event that a Participant’s Continuous Service terminates as a result of the Participant’s
Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise
such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier
of (i) the date twelve (12) months following such termination of Continuous Service (or such shorter period specified
in the Stock Award Agreement, which period shall not be less than six (6) months if necessary to comply with applicable laws),
or (ii) the expiration of the term of the Option or SAR as set forth in the Stock Award Agreement. If, after termination
of Continuous Service, the Participant does not exercise his or her Option or SAR within the time specified herein or in the Stock
Award Agreement (as applicable), the Option or SAR shall terminate.
(k) Death
of Participant.
Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant
and the Company, in the event that (i) a Participant’s Continuous Service terminates as a result of the Participant’s
death, or (ii) the Participant dies within the period (if any) specified in the Stock Award Agreement after the termination of
the Participant’s Continuous Service for a reason other than death, then the Option or SAR may be exercised (to the extent
the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate or administrator
or by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise
the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date twelve
(12) months following the date of death (or such shorter period specified in the Stock Award Agreement, which period shall
not be less than six (6) months if necessary to comply with applicable laws), or (ii) the expiration of the term of
such Option or SAR as set forth in the Stock Award Agreement. If, after the Participant’s death, the Option or SAR is not
exercised within the time specified herein or in the Stock Award Agreement (as applicable), the Option or SAR shall terminate.
(l) Termination
for Cause.
Except as explicitly provided otherwise in a Participant’s Stock Award Agreement, if a Participant’s
Continuous Service is terminated for Cause, the Option or SAR shall terminate upon the termination date of such Participant’s
Continuous Service, and the Participant shall be prohibited from exercising his or her Option or SAR from and after the time of
such termination of Continuous Service.
(m) Non-Exempt
Employees
. No Option or SAR granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act
of 1938, as amended, shall be first exercisable for any shares of Common Stock until at least six months following the date
of grant of the Option or SAR. Notwithstanding the foregoing, consistent with the provisions of the Worker Economic Opportunity
Act, (i) in the event of the Participant’s death or Disability, (ii) upon a Corporate Transaction in which such Option or
SAR is not assumed, continued or substituted, (iii) upon a Change in Control in which the vesting of such Options or SARs accelerates,
or (iv) upon the Participant’s retirement (as such term is defined for purposes of the Fair Labor Standards Act of 1938)
the vested portion of any Options and SARs may be exercised earlier than six months following the date of grant. The foregoing
provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting
of an Option or SAR will be exempt from his or her regular rate of pay.
(n) Early
Exercise of Options.
An Option may, but need not, include a provision whereby the Optionholder may elect at any time before
the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock
subject to the Option prior to the full vesting of the Option. Subject to the “Repurchase Limitation” in Section 8(l),
any unvested shares of Common Stock so purchased may be subject to a repurchase right in favor of the Company or to any other
restriction the Board determines to be appropriate. Provided that the “Repurchase Limitation” in Section 8(l)
is not violated, the Company shall not be required to exercise its repurchase right until at least six (6) months (or such
longer or shorter period of time required to avoid classification of the Option as a liability for financial accounting purposes)
have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option Agreement.
(o) Right
of Repurchase
. Subject to the “Repurchase Limitation” in Section 8(l), an Option or SAR may include
a provision whereby the Company may elect to repurchase all or any part of the vested shares of Common Stock acquired by the Participant
pursuant to the exercise of the Option or SAR.
(p) Right
of First Refusal
. An Option or SAR may include a provision whereby the Company may elect to exercise a right of first refusal
following receipt of notice from the Participant of the intent to transfer all or any part of the shares of Common Stock received
upon the exercise of the Option or SAR. Such right of first refusal shall be subject to the “Repurchase Limitation”
in Section 8(l). Except as expressly provided in this Section 5(p) or in the Stock Award Agreement, such right of first
refusal shall otherwise comply with any applicable provisions of the bylaws of the Company.
6.
Provisions
of Restricted Stock Awards and Restricted Stock Units.
(a) Restricted
Stock Awards.
For greater certainty, no Restricted Stock Awards will be granted under the Plan so long as the shares of Common
Stock of the Company are listed on the TSX-V and the Company is classified as a “Tier 2 Issuer” by the TSX-V. Each
Restricted Stock Award Agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate.
To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock may be (A) held
in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse,
or (B) evidenced by a certificate, which certificate shall be held in such form and manner as determined by the Board. The
terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate
Restricted Stock Award Agreements need not be identical;
provided, however
, that each Restricted Stock Award Agreement
shall conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) Consideration
.
A Restricted Stock Award may be awarded in consideration for (A) cash or cash equivalents, (B) past or future services actually
or to be rendered to the Company or an Affiliate, or (C) any other form of legal consideration that may be acceptable to
the Board in its sole discretion and permissible under applicable law.
(ii) Vesting
.
Subject to the “Repurchase Limitation” in Section 8(l), shares of Common Stock awarded under the Restricted
Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the
Board.
(iii) Termination
of Participant’s Continuous Service
. If a Participant’s Continuous Service terminates, the Company may receive
through a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant that have
not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.
(iv) Transferability
.
Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement shall be transferable by the Participant only
upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole
discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted
Stock Award Agreement.
(v) Dividends.
A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting
and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.
(b) Restricted
Stock Unit Awards.
For greater certainty, no Restricted Stock Unit Awards will be granted under the Plan so long as the shares
of Common Stock of the Company are listed on the TSX-V and the Company is classified as a “Tier 2 Issuer” by the TSX-V.
Each Restricted Stock Unit Award Agreement shall be in such form and shall contain such terms and conditions as the Board shall
deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms
and conditions of separate Restricted Stock Unit Award Agreements need not be identical,
provided, however
, that each Restricted
Stock Unit Award Agreement shall conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise)
the substance of each of the following provisions:
(i) Consideration.
At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the
Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid
(if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of
legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law.
(ii) Vesting.
At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions or conditions to the vesting
of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.
(iii) Payment
.
A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination
thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.
(iv) Additional
Restrictions.
At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such
restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted
Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.
(v) Dividend
Equivalents.
Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit
Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board,
such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in
such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of
such dividend equivalents will be subject to all the terms and conditions of the underlying Restricted Stock Unit Award Agreement
to which they relate.
(vi) Termination
of Participant’s Continuous Service.
Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement,
such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination
of Continuous Service.
(vii) Compliance
with Section 409A of the Code.
Notwithstanding anything to the contrary set forth herein, any Restricted Stock Unit Award
granted under the Plan that is not exempt from the requirements of Section 409A of the Code shall contain such provisions
so that such Restricted Stock Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions,
if any, shall be determined by the Board and contained in the Restricted Stock Unit Award Agreement evidencing such Restricted
Stock Unit Award. For example, such restrictions may include, without limitation, a requirement that any Common Stock that is
to be issued in a year following the year in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed
pre-determined schedule.
7.
Covenants
of the Company.
(a) Availability
of Shares.
During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common
Stock reasonably required to satisfy such Stock Awards.
(b) Securities
Law Compliance.
The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan
such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock
Awards;
provided, however
, that this undertaking shall not require the Company to register under the Securities Act the
Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure
to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant shall
not be eligible for the grant of a Stock Award or the subsequent issuance of Common Stock pursuant to the Stock Award if such
grant or issuance would be in violation of any applicable securities law.
(c) Necessary
Approvals.
The ability of a Participant to exercise options and the obligations of the Company to issue and deliver shares
of Common Stock in accordance with the Plan is subject to any approvals which may be required from stockholders of the Company
and any regulatory authority or stock exchange having jurisdiction over the securities of the Company. If any shares of Common
Stock cannot be issued to any Participant for whatever reason, the obligation of the Company to issue such shares of Common Stock
shall terminate and any option exercise price paid to the Company will be returned to the Participant.
(d) Time
of Granting Options.
The date of grant of an option shall, for all purposes, be the date on which the Board makes the determination
granting such option, or such later date as is determined by the Board. Notice of the determination shall be given to each Participant
to whom an option is so granted within a reasonable time after the date of such grant.
(e) Conditions
Upon Issuance of Shares.
(i) Legal
Compliance.
Shares of Common Stock shall not be issued pursuant to the exercise of an option unless the exercise of such option
and the issuance and delivery of such Shares comply with Applicable Laws and shall be further subject to the approval of counsel
for the Company with respect to such compliance.
(ii) Investment
Representations.
As a condition to the exercise of an option, the Board may require a person exercising such option to represent
and warrant at the time of any such exercise that the shares of Common Stock are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is
required.
(f) Inability
to Obtain Authority.
The Company’s inability to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Common Stock
hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such
requisite authority shall not have been obtained.
(g) No
Obligation to Notify or Minimize Taxes.
The Company shall have no duty or obligation to any Participant to advise such holder
as to the time or manner of exercising such Stock Award. Furthermore, the Company shall have no duty or obligation to warn or
otherwise advise such holder of a pending termination or expiration of a Stock Award or a possible period in which the Stock Award
may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of
such Stock Award.
8.
Miscellaneous.
(a) Use
of Proceeds from Sales of Common Stock.
Proceeds from the sale of shares of Common Stock pursuant to Stock Awards shall constitute
general funds of the Company.
(b) Corporate
Action Constituting Grant of Stock Awards.
Corporate action constituting a grant by the Company of a Stock Award to any Participant
shall be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when
the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the
Participant.
(c) Stockholder
Rights.
No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to such Stock Award unless and until (i) such Participant has satisfied all requirements for
the exercise of the Stock Award, or the issuance of shares thereunder, pursuant to its terms, and (ii) the issuance of the
Common Stock pursuant to the Stock Award has been entered into the books and records of the Company.
(d) No
Employment or Other Service Rights.
Nothing in the Plan, any Stock Award Agreement or any other instrument executed thereunder
or in connection with any Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve
the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the
Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause,
(ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate,
or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of
the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
(e) Incentive
Stock Option $100,000 Limitation.
To the extent that the aggregate Fair Market Value (determined at the time of grant) of
Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar
year (under all plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions
thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options,
notwithstanding any contrary provision of the applicable Option Agreement.
(f) Investment
Assurances.
The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock
Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience
in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable
and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award, and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account
and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (x) the issuance of the shares upon the exercise
or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement
under the Securities Act, or (y) as to any particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice
of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate
in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common
Stock.
(g) Withholding
Obligations.
Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its sole discretion, satisfy any
federal, state or local tax withholding obligation relating to a Stock Award by any of the following means (in addition to the
Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means:
(i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common
Stock issued or otherwise issuable to the Participant in connection with the Stock Award;
provided, however
, that no shares
of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lesser amount
as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding
payment from any amounts otherwise payable to the Participant; (iv) withholding cash from a Stock Award settled in cash;
or (v) by such other method as may be set forth in the Stock Award Agreement.
(h) Electronic
Delivery
. Any reference herein to a “written” agreement or document shall include any agreement or document delivered
electronically or posted on the Company’s intranet.
(i) Deferrals.
To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock
or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Stock Award may be deferred and may
establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in
accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions
while a Participant is still an employee. The Board is authorized to make deferrals of Stock Awards and determine when, and in
what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination
of employment or retirement, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance
with applicable law.
(j) Compliance
with Section 409A.
To the extent that the Board determines that any Stock Award granted hereunder is subject to Section 409A
of the Code, the Stock Award Agreement evidencing such Stock Award shall incorporate the terms and conditions necessary to avoid
the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Stock Award Agreements
shall be interpreted in accordance with Section 409A of the Code.
(k) Compliance
with Exemption Provided by Rule 12h-1(f)
. If at the end of the Company’s most recently completed fiscal year: (i) the
aggregate of the number of persons who hold outstanding compensatory employee stock options to purchase shares of Common Stock
granted pursuant to the Plan or otherwise (such persons, “
Holders of Options
”) equals or exceeds 500,
and (ii) the Company's assets exceed $10 million, then the following restrictions shall apply during any period during which the
Company does not have a class of its securities registered under Section 12 of the Exchange Act and is not required to file reports
under Section 15(d) of the Exchange Act: (A) the Options and, prior to exercise, the shares of Common Stock acquired upon exercise
of the Options may not be transferred until the Company is no longer relying on the exemption provided by Rule 12h-1(f) promulgated
under the Exchange Act (“
Rule 12h-1(f)
”), except: (1) as permitted by Rule 701(c) promulgated under
the Securities Act, (2) to a guardian upon the disability of the Holder of Options, or (3) to an executor upon the death of the
Holder of Options (collectively, the “
Permitted Transferees
”);
provided, however
, that the following
transfers are permitted: (i) transfers by the Holder of Options to the Company, and (ii) transfers in connection with a change
of control or other acquisition involving the Company, if following such transaction, the Options no longer remain outstanding
and the Company is no longer relying on the exemption provided by Rule 12h-1(f);
provided further
, that any Permitted Transferees
may not further transfer the Options; (B) except as otherwise provided in (A) above, the Options and shares of Common Stock acquired
upon exercise of the Options are restricted as to any pledge, hypothecation, or other transfer, including any short position,
any “put equivalent position” as defined by Rule 16a-1(h) promulgated under the Exchange Act, or any “call equivalent
position” as defined by Rule 16a-1(b) promulgated under the Exchange Act by the Holder of Options prior to exercise of an
Option until the Company is no longer relying on the exemption provided by Rule 12h-1(f); and (C) at any time that the Company
is relying on the exemption provided by Rule 12h-1(f), the Company shall deliver to Holders of Options (whether by physical or
electronic delivery or written notice of the availability of the information on an internet site) the information required by
Rule 701(e)(3), 701(e)(4) and 701(e)(5) promulgated under the Securities Act every six months, including financial statements
that are not more than 180 days old;
provided, however
, that the Company may condition the delivery of such information
upon the Holder of Options’ agreement to maintain its confidentiality.
(l) Repurchase
Limitation
. The terms of any repurchase right shall be specified in the Stock Award Agreement. The repurchase price for vested
shares of Common Stock shall be the Fair Market Value of the shares of Common Stock on the date of repurchase. The repurchase
price for unvested shares of Common Stock shall be the lower of (i) the Fair Market Value of the shares of Common Stock on
the date of repurchase or (ii) their original purchase price. However, the Company shall not exercise its repurchase right
until at least six months (or such longer or shorter period of time necessary to avoid classification of the Stock Award
as a liability for financial accounting purposes) have elapsed following delivery of shares of Common Stock subject to the Stock
Award, unless otherwise specifically provided by the Board.
9.
Adjustments
upon Changes in Common Stock; Other Corporate Events.
(a) Capitalization
Adjustments
. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust: (i) the
class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), and (ii) the class(es) and
number of securities and price per share of stock subject to outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive.
(b) Dissolution
or Liquidation
. Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of
the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock
not subject to a forfeiture condition or the Company’s right of repurchase) shall terminate immediately prior to the completion
of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject
to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock
Award is providing Continuous Service.
(c) Corporate
Transaction.
The following provisions shall apply to Stock Awards in the event of a Corporate Transaction unless otherwise
provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and
the holder of the Stock Award or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. Except
as otherwise stated in the Stock Award Agreement, in the event of a Corporate Transaction, then, notwithstanding any other provision
of the Plan, the Board may take one or more of the following actions with respect to Stock Awards, contingent upon the closing
or completion of the Corporate Transaction:
(i)
arrange
for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume
or continue all or any portion of the Stock Award or to substitute a similar stock award for all or any portion of the Stock Award
(including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to
the Corporate Transaction);
(ii)
arrange
for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to
the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent
company);
(iii)
accelerate
the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised),
with such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;
provided, however
, that the Board may require Participants to complete and deliver to the Company a notice of exercise
before the effective date of a Corporate Transaction, which is contingent upon the effectiveness of such Corporate Transaction;
(iv)
arrange
for the lapse of any reacquisition or repurchase rights held by the Company with respect to the Stock Award;
(v)
cancel
or arrange for the cancellation of all or any portion of the Stock Award, to the extent not vested or not exercised prior to the
effective time of the Corporate Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion,
may consider appropriate; and
(vi)
make
a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the
holder of the Stock Award would have received upon the exercise of the Stock Award, over (B) any exercise price payable by
such holder in connection with such exercise. For clarity, this payment may be zero ($0) if the value of the property is equal
to or less than the exercise price. Payments under this provision may be delayed to the same extent that payment of consideration
to the holders of the Company’s Common Stock in connection with the Corporate Transaction is delayed as a result of escrows,
earn outs, holdbacks or any other contingencies.
The
Board need not take the same action with respect to all Stock Awards or with respect to all Participants. The Board may take different
actions with respect to the vested and unvested portions of a Stock Award.
(d) Change
in Control.
A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in
Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement
between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration shall occur.
10.
Termination
or Suspension of the Plan.
(a) Plan
Term.
The Plan has been adopted by the Board subject to approval by (i) the TSX-V and, (ii) the Company’s stockholders,
and shall become effective upon the receipt of such approvals. The Plan shall continue in effect for a term of ten (10) years
from the later of (A) the effective date of the Plan or (B) the most recent Board or stockholder approval of an increase in the
number of shares of Common Stock reserved for issuance under the Plan. The Board may suspend or terminate the Plan at any time.
(b) No
Impairment of Rights.
Suspension or termination of the Plan shall not impair rights and obligations under any Stock Award
granted while the Plan is in effect except with the written consent of the affected Participant.
11.
Choice
of Law.
The
law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan,
without regard to that state’s conflict of laws rules.
12.
Definitions.
As used in the Plan, the following definitions shall apply to the capitalized terms indicated below:
(a)
“
Affiliate
”
means, at the time of determination, any “parent” or “majority-owned subsidiary” of the Company, as such
terms are defined in Rule 405. The Board shall have the authority to determine the time or times at which “parent”
or “majority-owned subsidiary” status is determined within the foregoing definition.
(b)
“
Board
”
means the Board of Directors of the Company.
(c)
“
Capitalization
Adjustment
” means any change that is made in, or other events that occur with respect to, the Common Stock subject
to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash,
large nonrecurring cash dividend, stock split, reverse stock split liquidating dividend, combination of shares, exchange of shares,
change in corporate structure, or any similar equity restructuring transaction, as that term is used in Financial Accounting Standards
Board Accounting Standards Codification Topic 718. Notwithstanding the foregoing, the conversion of any convertible securities
of the Company shall not be treated as a Capitalization Adjustment.
(d)
“
Cause
”
shall have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term
and, in the absence of such agreement, such term means with respect to a Participant, the occurrence of any of the following events:
(i) such Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the
laws of the United States or any state thereof; (ii) such Participant’s attempted commission of, or participation in,
a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional, material violation of any contract
or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant’s
unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such Participant’s
gross misconduct. The determination that a termination of the Participant’s Continuous Service is either for Cause or without
Cause shall be made by the Company in its sole discretion. Any determination by the Company that the Continuous Service of a Participant
was terminated with or without Cause for the purposes of outstanding Stock Awards held by such Participant shall have no effect
upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
(e)
“
Change
in Control
” means the occurrence, in a single transaction or in a series of related transactions, of any one or
more of the following events:
(i)
any
Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation
or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the
Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in
a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the
issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “
Subject Person
”)
exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition
of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur
(but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition
had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated
percentage threshold, then a Change in Control shall be deemed to occur;
(ii)
there
is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior
thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent
(50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or
(B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such
merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding
voting securities of the Company immediately prior to such transaction; or
(iii)
there
is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting
securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding
voting securities of the Company immediately prior to such sale, lease, license or other disposition.
Notwithstanding
the foregoing definition or any other provision of this Plan, (A) the term Change in Control shall not include a sale of
assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the
definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate
and the Participant shall supersede the foregoing definition with respect to Stock Awards subject to such agreement;
provided,
however
, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement,
the foregoing definition shall apply.
(f)
“
Code
”
means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(g)
“
Committee
”
means a committee of one or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c),
provided, however
, that at any time the shares of Common Stock are registered under Section 12(b) or 12(g) of the Exchange
Act, then the Board shall consider that certain exemptions from the provisions of Section 16(b) of the Exchange Act may not be
available if such committee is composed other than solely of at least two (2) members who are “nonemployee directors”
as contemplated by Rule 16b-3 of the Exchange Act.
(h)
“
Common
Stock
” means the common stock of the Company.
(i)
“
Company
”
means CohBar, Inc., a Delaware corporation.
(j)
“
Consultant
”
means an individual, other than an Employee or Director, that:
(i)
is
engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Company or to an
affiliate of the Company, other than services provided in relation to a distribution of securities of the Company;
(ii)
provides
the services under a written contract between the Company or any affiliate and the individual;
(iii)
in
the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the affairs and business
of the Company or an affiliate of the Company; and
(iv)
has
a relationship with the Company or an affiliate of the Company that enables the individual to be knowledgeable about the business
and affairs of the Company.
(k)
“
Continuous
Service
” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director
or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company
or an Affiliate as an Employee, Director, or Consultant or a change in the Entity for which the Participant renders such service,
provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, shall
not terminate a Participant’s Continuous Service;
provided, however
, that if the Entity for which a Participant is
rendering service ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s
Continuous Service shall be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example,
a change in status from an employee of the Company to a consultant of an Affiliate or to a Director shall not constitute an interruption
of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s
sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of (i) any leave of absence
approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers
between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence shall be treated as
Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave
of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise
required by law.
(l)
“
Corporate
Transaction
” means the occurrence, in a single transaction or in a series of related transactions, of any one or
more of the following events:
(i)
the
consummation of a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of
the consolidated assets of the Company and its Subsidiaries;
(ii)
the
consummation of a sale or other disposition of at least fifty percent (50%) of the outstanding securities of the Company;
(iii)
the
consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv)
the
consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged
by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or
otherwise.
(m)
“
Director
”
means a member of the Board.
(n)
“
Disability
”
means, with respect to a Participant, the inability of a Participant to engage in any substantially gainful activity by reason
of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12) months as provided in Sections 22(e)(3) and
409A(a)(2)(c)(i) of the Code and shall be determined by the Board on the basis of such medical evidence as the Board deems warranted
under the circumstances.
(o)
“
Effective
Date
” means the effective date of this Plan, which is the earlier of (i) the date that this Plan is first approved
by the Company’s stockholders, or (ii) the date this Plan is adopted by the Board.
(p)
“
Employee
”
means any individual who is considered an employee of the Company or Affiliate under the Code (and for whom income tax deductions
must be made at source).
(q)
“
Entity
”
means a corporation, partnership, limited liability company or other entity.
(r)
“
Exchange
”
means the TSX-V, or any other securities exchange or quotation system on which the shares of Common Stock may be listed or quoted
at the relevant time.
(s)
“
Exchange
Act
” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(t)
“
Exchange
Act Person
” means any natural person, Entity or “group” (within the meaning of Section 13(d) or
14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (i) the Company or
any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee
or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or
indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company;
or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange
Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company’s then outstanding securities.
(u)
“
Fair
Market Value
” means, as of any date, the value of shares of Common Stock determined as follows:
(i)
if
the shares of Common Stock are listed on any established stock exchange, including without limitation the TSX Venture Exchange
or the Toronto Stock Exchange, or a national market system, including without limitation the Nasdaq Global Select Market, the
Nasdaq Global Market or the Nasdaq Capital Market, its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported by such
stock exchange or national market system;
(ii)
if
shares of Common Stock are regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high bid and low asked prices for the shares of Common Stock on the day of determination;
or
(iii)
in
the absence of an established market for the shares of Common Stock, the Fair Market Value thereof shall be determined by the
Board in compliance with Section 409A of the Code or, in the case of an Incentive Stock Option, in compliance with Section 422
of the Code.
(v)
“
Incentive
Stock Option
” means an option that qualifies as an “incentive stock option” within the meaning of Section 422
of the Code and the regulations promulgated thereunder.
(w)
“
Insider
”
has the meaning defined in the rules of TSX-V.
(x)
“
Investor
Relations Activities
” has the meaning defined in the rules of TSX-V.
(y)
“
Nonstatutory
Stock Option
” means an Option that does not qualify as an Incentive Stock Option.
(z)
“
Officer
”
means any person designated by the Company as an officer.
(aa)
“
Option
”
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
(bb)
“
Option
Agreement
” means a written agreement between the Company and an Optionholder evidencing the terms and conditions
of an Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.
(cc)
“
Optionholder
”
means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Option.
(dd)
“
Own
,”
“
Owned
,” “
Owner
,” “
Ownership
” A person or Entity
shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership”
of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship
or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(ee)
“
Participant
”
means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Stock Award.
(ff)
“
person
”
has the meaning set forth in the TSX Venture Exchange Corporate Finance Manual, as amended from time to time.
(gg)
“
Plan
”
means this CohBar, Inc. 2011 Equity Incentive Plan.
(hh)
“
Restricted
Stock Award
” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).
(ii)
“
Restricted
Stock Award Agreement
” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing
the terms and conditions of a Restricted Stock Award. Each Restricted Stock Award Agreement shall be subject to the terms and
conditions of the Plan.
(jj)
“
Restricted
Stock Unit Award
” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions
of Section 6(b).
(kk)
“
Restricted
Stock Unit Award Agreement
” means a written agreement between the Company and a holder of a Restricted Stock Unit
Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement shall
be subject to the terms and conditions of the Plan.
(ll)
“
Rule
405
” means Rule 405 promulgated under the Securities Act.
(mm)
“
Rule
701
” means Rule 701 promulgated under the Securities Act.
(nn)
“
Securities
Act
” means the Securities Act of 1933, as amended.
(oo)
“
Stock
Appreciation Right
” or “
SAR
” means a right to receive the appreciation on Common Stock
that is granted pursuant to the terms and conditions of Section 5.
(pp)
“
Stock
Appreciation Right Agreement
” means a written agreement between the Company and a holder of a Stock Appreciation
Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement shall be
subject to the terms and conditions of the Plan.
(qq)
“
Stock
Award
” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory
Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, or a Stock Appreciation Right.
(rr)
“
Stock
Award Agreement
” means a written agreement between the Company and a Participant evidencing the terms and conditions
of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(ss)
“
Subsidiary
”
means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether,
at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability
company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation
in profits or capital contribution) of more than fifty percent (50%).
(tt)
“
Ten
Percent Stockholder
” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate.
(uu)
“
TSX-V
”
means the TSX Venture Exchange.
FIRST
AMENDMENT TO
AMENDED
AND RESTATED 2011 EQUITY INCENTIVE PLAN
|
1.
|
Section
3(a) of the Plan is deleted in its entirety and replaced by the following new provision:
|
Share
Reserve
. The Plan is a “fixed” stock option plan reserving for issuance up to a maximum of 20% of the
Company’s issued shares of Common Stock as of the date of the implementation of the Plan. Subject to Section 9(a)
relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock
Awards from and after the Effective Date shall not exceed seven million one hundred seventy-one thousand five hundred forty
(7,171,540) (the “
Share Reserve
”). Further, if a Stock Award or any portion thereof (i) expires or
otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in cash
(
i.e.
, the Participant receives cash rather than stock), such expiration, termination or settlement shall not reduce
(or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan. For clarity,
the limitation in this Section 3(a) is a limitation in the number of shares of Common Stock that may be issued pursuant to
the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section
7(a).
|
2.
|
The
first paragraph of Section 5(c) of the Plan is deleted in its entirety and replaced by
the following new provision:
|
Number
of Optioned Shares.
The aggregate number of shares of Common Stock that may be issued pursuant to the exercise of options
awarded under the Plan and all other security based compensation arrangements of the Company hereunder shall not exceed the Share
Reserve, subject to the following additional limitations for so long as the shares of Common Stock are listed on the TSX-V:
|
3.
|
Section
5(c)(ii) of the Plan is deleted in its entirety.
|
|
Effective:
|
April
11, 2017
|
|
|
|
|
Attest:
|
/s/
Jeffrey F. Biunno
|
|
|
Jeffrey
Biunno
|
|
|
Secretary
|
A-27
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