VBIV VBI Vaccines Inc

PROXY STATEMENT

FOR THE 2017 ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS

TABLE OF CONTENTS

VBI Vaccines Inc.

222 Third Street, Suite 2241

Cambridge, MA 02142

PROXY STATEMENT

FOR THE 2017 ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD JUNE 22, 2017

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

This proxy statement (the “Proxy Statement”) and our Annual Report on Form 10-K for the year ended December 31, 2016 (the “Annual Report”) are available at investorvote.com.

The 2017 Annual General and Special Meeting of shareholders (the “Annual Meeting”) of VBI Vaccines Inc. (formerly SciVac Therapeutics, Inc.) (which may be referred to in this Proxy Statement as the “Company,” “VBI,” “we,” “us” or “our”) will be held on June 22, 2017, at 1:00 p.m., Eastern Time, at the Boston Marriott Cambridge, 50 Broadway, Cambridge, Massachusetts 02142.

In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), unless otherwise requested by a particular shareholder, we are providing holders of our common shares (“Common Shares”) with access to the proxy materials for the Annual Meeting over the Internet rather than in paper form, which reduces the environmental impact and costs associated with our Annual Meeting. This proxy procedure permits all shareholders of record, many of whom are unable to attend the Annual Meeting, to vote their Common Shares at the Annual Meeting.

Our Board of Directors (the “Board”) has fixed the close of business on May 4, 2017 as the record date for determining the shareholders entitled to notice of and to vote at the Annual Meeting and any adjournment or postponements thereof.

Accordingly, if you are a shareholder of record (and did not previously request proxy materials be sent to you via e-mail), a one-page Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) has been mailed to you on or about May 11, 2017. Shareholders of record may access the proxy materials on the website listed above or request a printed set of the proxy materials be sent to them by following the instructions in the Notice of Internet Availability. The Notice of Internet Availability also explains how you may request that we send future proxy materials to you by e-mail or in printed form by mail. If you choose the e-mail option, you will receive an e-mail next year with links to those materials and to the proxy voting site. We encourage you to choose this e-mail option, which will allow us to provide you with the information you need in a more timely manner while also helping us to conserve natural resources and save the cost of printing and mailing documents to you. Your election to receive proxy materials by e-mail or in printed form by mail will remain in effect until you terminate it.

If you are a beneficial owner and received Annual Meeting materials, you did not receive these materials directly from us, but your broker, bank or other intermediary, forwarded you a notice with instructions on accessing our proxy materials and directing that organization how to vote your Common Shares, as well as other options that may be available to you for receiving our proxy materials.

Please refer to the question entitled “ What is the difference between holding Common Shares as a shareholder of record or as a beneficial owner ?” below for important details regarding different forms of share ownership.

About The Meeting: Questions and Answers AND PROCEDURAL MATTERS

Why am I receiving these proxy materials?

We have made these proxy materials available on the Internet or are providing them to you in printed form. We do this, as management of the Company, in order to solicit voting proxies for use at our Annual Meeting to be held on June 22, 2017, at 1:00 p.m., Eastern Time, and at any adjournment or postponement thereof. If you are a shareholder of record and you submit your proxy to us, you direct certain of our officers to vote your Common Shares in accordance with the voting instructions in your proxy. If you are a beneficial owner and you follow the voting instructions provided in the notice you receive from your broker, bank or other intermediary, you direct such organization to vote your Common Shares in accordance with your instructions. These proxy materials are being made available or distributed to you on or about May 11, 2017. As a shareholder of record, you are invited to attend the Annual Meeting and we request that you vote on the proposals described in this Proxy Statement.

Can I attend the Annual Meeting?

You may attend the Annual Meeting if, on May 4, 2017 (the “Record Date”), you were a shareholder of record or a beneficial owner. You will be asked to show photo identification and the following:

We will not be able to accommodate guests without proper evidence of Common Share ownership as of the Record Date at the Annual Meeting, including guests of our shareholders.

When is the Annual Meeting?

This year, the Annual Meeting will be held on June 22, 2017. Check-in and seating for the Annual Meeting starts at 12:45 p.m., Eastern Time. The Annual Meeting will begin promptly at 1:00 p.m., Eastern Time. Please leave ample time for the check-in procedures.

Where is the Annual Meeting?

This year, the Annual Meeting will be held at the Boston Marriott Cambridge, 50 Broadway, Cambridge, Massachusetts 02142.

What is the difference between holding Common Shares as a shareholder of record or as a beneficial owner?

You are the “shareholder of record” of any Common Shares that are registered directly in your name with the Company’s transfer agent, Computershare Trust Company of Canada. We have sent the Notice of Internet Availability directly to you if you are a shareholder of record. As a shareholder of record, you may grant your voting proxy directly to the Company or to a third party, or vote in person at the Annual Meeting.

You are the “beneficial owner” of any Common Shares (which are considered to be held in “street name”) that are held on your behalf by a brokerage account or by a bank or another intermediary that is the shareholder of record for those Common Shares. If you are a beneficial owner, you did not receive a Notice of Internet Availability directly from VBI, but your broker, bank or other intermediary forwarded you a notice together with voting instructions for directing that organization how to vote your Common Shares. You may also attend the Annual Meeting, but because a beneficial owner is not a shareholder of record, you may not vote in person at the Annual Meeting unless you obtain a “legal proxy” from the organization that holds your Common Shares, giving you the right to vote the Common Shares at the Annual Meeting.

Beneficial holders who have not objected to their intermediary disclosing certain ownership information about themselves to the Company are referred to as “non-objecting beneficial owners” (“NOBOs”). Those non-registered holders who have objected to their intermediary disclosing ownership information about themselves to the Company are referred to as “objecting beneficial owners” (“OBOs”).

The Company is not sending the Notice of Internet Availability directly to NOBOs in connection with the Meeting, but rather has distributed copies of the Notice of Internet Availability (and where specifically requested, the printed proxy materials) to intermediaries for distribution to NOBOs.

The Company does not intend to pay for intermediaries to deliver the Notice of Internet Availability (and where specifically requested, the printed proxy materials) and Form 54-101F7 – Request for Voting Instructions Made by Intermediary to OBOs. As a result, OBOs will not receive the Annual Meeting materials unless their intermediary assumes the costs of delivery.

Who is entitled to vote at the Annual Meeting, and how many votes do they have?

You may vote your Common Shares if you owned them at the close of business on the Record Date. Pursuant to the rights of our shareholders contained in our organizational documents, each Common Share has one vote. VBI’s “Common Shares” is its only outstanding class of shares. There were 40,060,622 Common Shares outstanding as of the Record Date of May 4, 2017.

How can I vote my Common Shares in person at the Annual Meeting?

You may vote Common Shares for which you are the shareholder of record in person at the Annual Meeting. You may vote Common Shares you hold beneficially in street name in person at the Annual Meeting only if you obtain a “legal proxy” from the broker, bank or other intermediary that holds your Common Shares, giving you the right to vote the Common Shares. Even if you plan to attend the Annual Meeting, we recommend that you also direct the voting of your Common Shares by proxy as described below in the question entitled “ How can I vote my Common Shares without attending the Annual Meeting ?”, so that your vote will be counted even if you later decide not to attend the Annual Meeting.

How can I vote my Common Shares without attending the Annual Meeting?

Whether you hold VBI’s Common Shares as a shareholder of record or a beneficial owner, you may direct how your Common Shares are voted without attending the Annual Meeting, by the following means which, in any case, must be received by the Company by 1:00 p.m., Eastern Time, on June 20, 2017 being two business days before the Meeting:

What is a proxy?

A proxy is a person you appoint to vote on your behalf. If you are a shareholder of record and you submit your proxy to us by using any of the methods described above in the question entitled “ How can I vote my Common Shares without attending the Annual Meeting ?”, you will be appointing Jeff Baxter, our President and Chief Executive Officer, or, failing him, Egidio Nascimento, our Chief Financial Officer, as your proxy (together, the “Management Proxyholders”). The Management Proxyholders will have the authority to appoint a substitute to act as proxy. If you are unable to attend the Annual Meeting, please vote by proxy so that your Common Shares may be voted.

You also have the right to appoint a person other than the Management Proxyholders to represent you at the Meeting by striking out the names of the Management Proxyholders in the accompanying form of proxy and by inserting the desired proxyholder’s name in the blank space provided. A proxyholder need not be a shareholder.

How many Common Shares must be present or represented to conduct business at the Annual Meeting?

The quorum for the transaction of business at a meeting of shareholders is two shareholders, or one or more proxyholders representing two members, or one member and a proxyholder representing another member. If within one-half hour from the time set for the Annual Meeting, a quorum is not present, the Annual Meeting stands adjourned to the same day in the next week at the same place.

What proposals will be voted on at the Annual Meeting?

The proposals scheduled to be voted on at the Annual Meeting are:

What vote is required to approve each proposal?

Proposal 1: Election of Directors . For an uncontested election, the affirmative vote of the holders of Common Shares having a majority of the votes cast by the holders of all Common Shares present or represented and voting on such matter will be required to appoint each nominee as a director. The Majority Voting Policy (as defined in the section below titled “ Proposal 1 – Election of Directors ”) provides that, at a meeting for the uncontested election of directors (being an election where the number of nominees for director is not greater than the number of directors to be elected), each director of the Company that is not elected by the affirmative vote of the holders of Common Shares having a majority of the votes cast by the holders of all Common Shares present or represented and voting on such matter must promptly tender his resignation. You may choose to vote, or withhold your vote, separately for each nominee. A properly executed proxy or voting instructions marked “WITHHOLD” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for the purposes of determining whether there is a quorum.

Proposal 2: Frequency of Holding an Advisory Vote on Executive Compensation . The proposal solicits advice only as to how frequently we should seek future advisory votes on executive compensation and, therefore, there is no minimum number of votes required with respect to the proposal. Instead, the one year, two year or three year period option receiving the largest number of votes cast and constituting at least a majority of the quorum will constitute the advisory vote.

Proposal 3: Say-on-Pay Proposal . The affirmative vote of the holders of Common Shares having a majority of the votes cast by the holders of all Common Shares present or represented and voting on such matter will be required for approval of this proposal.

Proposal 4: Approval of the Appointment of Independent Registered Public Accounting Firm and remuneration to be set by the Audit Committee of the Board . The affirmative vote of the holders of Common Shares having a majority of the votes cast by the holders of all Common Shares present or represented and voting on such matter will be required for approval of this proposal. Under B.C. law, unless waived unanimously by shareholders, a B.C. company must have an auditor and the shareholders of a B.C. company must appoint, at each annual meeting of shareholders, an authorized person as auditor to hold office until the next annual meeting of shareholders. For this reason, you are only permitted to vote for the appointment of EisnerAmper LLP as auditor of the Company for the ensuing year and remuneration to be set by Audit Committee, or to withhold your vote.

Proposal 5: Ratify and confirm Common Share issuances to certain Company consultants, as more specifically described in this Proxy Statement . The affirmative vote of the holders of Common Shares having a majority of the votes cast by the holders of all Common Shares present or represented and voting on such matter will be required for approval of this proposal.

Other Proposals . Any other proposal that might properly come before the meeting will require the affirmative vote of the holders of Common Shares having a majority of the votes cast by the holders of all Common Shares present or represented and voting on such matter at the meeting in order to be approved, except when a different vote is required by law, or our Articles (i.e., the British Columbia equivalent of a U.S. corporation’s bylaws), as amended from time to time (the “Articles”).

How are votes counted?

All Common Shares entitled to vote and that are voted in person at the Annual Meeting will be counted, and all Common Shares represented by properly executed and unrevoked proxies received prior to the Annual Meeting will be voted at the Annual Meeting as indicated in such proxies. You may vote “FOR” or “WITHHOLD” on each of the nominees for election as director (Proposal 1), and on the approval of the appointment of EisnerAmper LLP as auditor for the ensuing year (Proposal 4). You may vote “FOR,” “AGAINST” or “WITHHOLD” on each of the other proposals.

The Common Shares represented by your proxy will be voted or withheld from voting in accordance with your instructions on any ballot that may be called for and, if you specify a choice with respect to any matter to be acted upon, your Common Shares will be voted accordingly.

What is the effect of not casting a vote or if I submit a proxy but do not specify how my Common Shares are to be voted?

If you are a shareholder of record and you do not vote by proxy card, by telephone, via the Internet or in person at the Annual Meeting, your Common Shares will not be voted at the Annual Meeting. If you submit a proxy, but you do not provide voting instructions, your Common Shares will be voted as recommended by the Board.

If you are a beneficial owner and you do not provide the organization that is the shareholder of record for your Common Shares with voting instructions, the organization will determine if it has the discretionary authority to vote on the particular matter. Under applicable regulations, brokers and other intermediaries have the discretion to vote on routine matters such as Proposal 4 but do not have discretion to vote on non-routine matters such as Proposals 1, 2, 3 or 5. Therefore, if you do not provide voting instructions to that organization, it may vote your Common Shares only on Proposal 4 and any other routine matters properly presented for a vote at the Annual Meeting.

What is the effect of a broker non-vote?

An organization that holds Common Shares for a beneficial owner will have the discretion to vote on routine proposals if it has not received voting instructions from the beneficial owner at least 10 calendar days prior to the Annual Meeting. A broker non-vote occurs when a broker, bank or other intermediary that is otherwise counted as present or represented by proxy does not receive voting instructions from the beneficial owner and does not have the discretion to vote the Common Shares. A broker non-vote will not impact our ability to obtain a quorum for the Annual Meeting and will not otherwise affect the approval of a majority of the votes present in person or represented by proxy and entitled to vote for any Proposals.

What happens if additional matters are presented at the Annual Meeting?

If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place, the proxy holders will vote the proxies held by them as recommended by the Board or, if no recommendation is given, in their own discretion. We do not intend to bring any other matter for a vote at the Annual Meeting, and we do not know of anyone else who intends to do so.

Can I change my vote?

If you are a shareholder of record, you may change your vote by:

However, please note that merely attending the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically request it.

If you are a beneficial owner of Common Shares held in street name, you may generally change your vote by:

However, please consult that organization for any specific rules it may have regarding your ability to change your voting instructions.

What should I do if I receive more than one Notice of Internet Availability, notice from my broker, bank or other intermediary, or set of proxy materials?

You may receive more than one Notice of Internet Availability, notice from your broker, bank or other intermediary or set of proxy materials, including multiple copies of proxy cards or voting instruction cards. For example, if you are a beneficial owner with Common Shares in more than one brokerage account, you may receive a separate notice or voting instruction card for each brokerage account in which you hold Common Shares. If you are a shareholder of record and your Common Shares are registered in more than one name, you will receive more than one Notice of Internet Availability or proxy card. Please complete, sign, date and return each VBI proxy card or voting instruction card that you receive, and/or follow the voting instructions on each Notice of Internet Availability or other notice you receive, to ensure that all your Common Shares are voted.

Who is our Independent Registered Public Accounting Firm and will they be represented at the Annual Meeting?

VBI’s shareholders approved the appointment of EisnerAmper LLP as the auditor of the Company on September 23, 2016, to serve for the ensuing year. Accordingly, EisnerAmper LLP served as the independent registered public accounting firm auditing and reporting on our financial statements for the fiscal year ended December 31, 2016. We expect that representatives of EisnerAmper LLP will be present telephonically at the Annual Meeting. They will have an opportunity to make a statement, if they desire, and will be available to answer appropriate questions at the Annual Meeting.

Who will serve as inspector of election?

A representative from Computershare Trust Company of Canada will act as the inspector of election (scrutineer) and count the votes at the Annual Meeting.

Where can I find the voting results of the Annual Meeting?

We will publish final voting results in our Current Report on Form 8-K, which will be filed with the SEC and made available on its website at www.sec.gov, and an equivalent “Report of Voting Results,” which will be filed with an accompanying news release with the Canadian Securities Administrators (the “CSA”) and made available on SEDAR.com, promptly after the Annual Meeting.

Who will bear the cost of soliciting votes for the Annual Meeting?

VBI will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes. We may reimburse brokerage firms, custodians, nominees, fiduciaries and other persons representing beneficial owners for their reasonable expenses in forwarding solicitation material to those beneficial owners. Our directors, officers and employees may also solicit proxies in person or by other means. These directors, officers and employees will not be additionally compensated but may be reimbursed for reasonable out-of-pocket expenses incurred in doing so.

What percentage of our Common Shares do our directors and officers own?

As of March 31, 2017, our director-nominees and executive officers beneficially owned approximately 34.1% of our outstanding Common Shares. See the discussion under the heading “ Security Ownership of Certain Beneficial Owners and Management ” on page 27 for more details.

What are the recommendations of our Board?

The recommendations of our Board are set forth together with the description of each proposal in this Proxy Statement. In summary, the Board recommends a vote:

With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.

If you sign and return your proxy card but do not specify how you want to vote your Common Shares, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board.

Governance of the Company

Our business, property and affairs are managed by, or under the direction of, our Board, in accordance with the Business Corporations Act (British Columbia) (the “BCBCA”) and our Articles. Members of the Board are kept informed of our business through discussions with the Chief Executive Officer and other key members of management, by reviewing materials provided to them by management, and by participating in meetings of the Board and its Committees. There are no family relationships between any director, executive officer or person nominated to become a director.

We continue to review our corporate governance policies and practices by comparing our policies and practices with those suggested by various groups or authorities active in evaluating or setting best practices for corporate governance of public companies. Based on this review, we have adopted, and will continue to adopt, changes that the Board believes are the appropriate corporate governance policies and practices for our Company.

Shareholder Communications

Shareholders may communicate with the members of the Board, either individually or collectively, by writing to the Board at VBI Vaccines Inc., 222 Third Street, Suite 2241, Cambridge, MA 02142. These communications will be reviewed by the office of the Secretary as agent for the non-employee directors in facilitating direct communication to the Board. The Secretary’s office will treat communications containing complaints relating to accounting, internal accounting controls or auditing matters as reports under our Code of Business Conduct and Ethics (“Code of Ethics”). Further, the Secretary’s office will disregard communications that are bulk mail, solicitations to purchase products or services not directly related either to us or the non-employee directors’ roles as members of the Board, sent other than by shareholders in their capacities as such or from particular authors or regarding particular subjects that the non-employee directors may specify from time to time, and all other communications which do not meet the applicable requirements or criteria described below, consistent with the instructions of the non-employee directors.

General Communications . The Secretary’s office will summarize all shareholder communications directly relating to our business operations, the Board, our officers, our activities or other matters and opportunities closely related to us. This summary and copies of the actual shareholder communications will then be circulated to the Chairman of our Nominating and Governance Committee (the “Governance Committee”).

Shareholder Proposals and Director Nominations and Recommendations . Shareholder proposals are reviewed by the Secretary’s office for compliance with the requirements for such proposals set forth in our Articles, the BCBCA, and in Regulation 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Shareholder proposals that meet these requirements will be summarized by the Secretary’s office. Summaries and copies of the shareholder proposals are circulated to the Chairman of the Governance Committee.

Shareholder nominations for directors are reviewed by the Board for compliance with the requirements for director nominations that are set forth in our Articles. Shareholder nominations for directors that meet these requirements are then circulated to the Chairman of the Governance Committee for consideration and evaluation by the Governance Committee.

The Governance Committee will consider director candidates recommended by shareholders. If a director candidate is recommended by a shareholder, the Governance Committee expects to evaluate such candidate in the same manner it evaluates director candidates it identifies. Shareholders desiring to make a recommendation to the Governance Committee should follow the procedures set forth above regarding shareholder nominations for directors.

Retention of Shareholder Communications . Any shareholder communications which are not circulated to the Chairman of the Governance Committee because they do not meet the applicable requirements or criteria described above will be retained by the Secretary’s office for at least 90 calendar days from the date on which they are received, so that these communications may be reviewed by the directors generally if such information relates to the Board as a whole, or by any individual to whom the communication was addressed, should any director elect to do so.

Distribution of Shareholder Communications . Except as otherwise required by law or upon the request of a non-employee director, the Chairman of the Governance Committee will determine when and whether a shareholder communication should be circulated among one or more members of the Board and/or Company management.

Attendance at Annual Meetings . We encourage our Board members to attend the annual meeting each year.

Independence of Directors

The Governance Committee operates pursuant to a charter, which can be viewed on our website at http://www.vbivaccines.com (under the “Investors” section). In determining the independence of our directors, we apply the definition of “independent director” provided under the listing rules of The NASDAQ Stock Market LLC (“NASDAQ”) and National Instrument 58-101 – Disclosure of Corporate Governance Practices of the CSA. Pursuant to these rules, the Governance Committee concluded its review of director independence in November 21, 2016. After considering all relevant facts and circumstances, the Board affirmatively determined that each of Drs. Gillis (the Chairman) and De Wilde and Messrs. Requadt, Rubin and Logal are independent of us under these rules (being the majority of the Board). Mr. Baxter is not independent of us as he is Chief Executive Officer and President. Mr. Chawla is not independent of us as a representative of Perceptive Credit Holdings, LP (“Perceptive Credit”) on our Board pursuant to our existing credit facility with Perceptive Credit.

The independent directors are not expected to hold regularly scheduled meetings at which non-independent directors and members of management are not in attendance. Where deemed necessary by the independent directors, the independent directors will hold in-camera sessions exclusive of the non-independent director and members of management, which process will facilitate open and candid discussion amongst the independent directors.

The Board did not meet in 2016 prior to the VBI-SciVac Merger, and acted by unanimous written consent one time over that period. Following the VBI-SciVac Merger, the Board was reconstituted and held seven meetings in 2016. Attendance was as follows: Dr. Gillis (five); Mr. Baxter (seven); Dr. De Wilde (seven); Mr. Logal (seven); Mr. Requadt (six); Mr. Chawla (six); and Mr. Rubin (four).

Mandate of our Board

A copy of the Board Mandate, adopted as of September 23, 2016, can be viewed on our website at www.vbivaccines.com (under the “Investors” section), and is incorporated by reference herein.

Committees of our Board

The Board has three standing committees, the Audit Committee, the Compensation Committee and the Governance Committee. The Board held seven meetings during the year ended December 31, 2016. No member of our Board attended fewer than 75% of the aggregate of (i) the total number of meetings of the Board (held during the period for which he or she was a director) and (ii) the total number of meetings held by all committees of the Board on which such director served (held during the period that such director served).

Audit Committee

Our Audit Committee is comprised of Adam Logal, Steven Gillis and Steven D. Rubin, with Mr. Logal serving as Chairman. Dr. Gillis, Mr. Logal and Mr. Rubin are considered independent in accordance with the NASDAQ rules. We designate Mr. Logal, an independent director as “independence” for Audit Committee members is defined in NASDAQ Rule 5605(c)(2)(A), as the audit committee financial expert, within the meaning of Item 407(d)(5) of Regulation S-K. The Audit Committee operates pursuant to a charter, which can be viewed on our website at www.vbivaccines.com (under the “Investors” section). During 2016, the Audit Committee met in person or by telephone, or acted by unanimous written consent, four times.

The role of the Audit Committee is to:

Compensation Committee

Our Compensation Committee is comprised of Michel De Wilde and Scott Requadt, with Mr. Requadt serving as Chairman. Dr. De Wilde and Mr. Requadt are both considered independent in accordance with the NASDAQ rules. During 2016, the Compensation Committee did not meet.

The purpose of the Compensation Committee is to aid the Board in meeting its responsibilities with regard to oversight and determination of executive compensation. Among other things, the Compensation Committee reviews, recommends and approves salaries and other compensation of the Company’s executive officers, and will administer the Company’s equity incentive plans (including reviewing, recommending and approving stock option and other equity incentive grants to executive officers). A copy of the charter of the Compensation Committee is available on our website at www.vbivaccines.com (under the “Investors” section).

The Compensation Committee may form and delegate a subcommittee consisting of one or more members to perform the functions of the Compensation Committee. The Compensation Committee may engage outside advisers, including outside auditors, attorneys and consultants, as it deems necessary to discharge its responsibilities. The Compensation Committee has sole authority to retain and terminate any compensation expert or consultant to be used to provide advice on compensation levels, including sole authority to approve the fees of any expert or consultant and other retention terms. In addition, the Compensation Committee considers, but is not bound by, the recommendations of our Chief Executive Officer with respect to the compensation packages of our other executive officers.

Governance Committee

Our Governance Committee is comprised of Steven D. Rubin, Michel De Wilde and Steven Gillis, with Mr. Gillis serving as Chairman. The Board has determined that all members of our Governance Committee are independent under the NASDAQ rules. During 2016, the Governance Committee met in person or by telephone, or acted by unanimous written consent, two times.

The role of the Governance Committee is to:

A copy of the charter of the Governance Committee is available on our website at www.vbivaccines.com (under the “Investors” section).

Assessments

The Board and each individual director are periodically assessed regarding its or his effectiveness and contribution. The assessment considers: (i) in the case of the Board, its mandate; and (ii) in the case of an individual director, the competencies and skills he is expected to possess in the context of the current composition of the Board.

Director Qualifications and Diversity

The Governance Committee is responsible for identifying candidates for Board positions as well as nominating such candidates for election to our Board. All of the members of the Governance Committee are independent.

The Board seeks independent directors who represent a diversity of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. Candidates should have substantial experience with one or more publicly traded companies or should have achieved a high level of distinction in their chosen fields. The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and senior executives, particularly those with experience in immunology; research and development; finance and accounting.

There is no difference in the manner in which the Governance Committee evaluates nominees for director based on whether the nominee is recommended by a shareholder. In evaluating nominations to the Board, the Governance Committee also looks for certain personal attributes, such as integrity, ability and willingness to apply sound and independent business judgment, comprehensive understanding of a director’s role in corporate governance, availability for meetings and consultation on Company matters and the willingness to assume and carry out fiduciary responsibilities. Each of the candidates nominated for election to our Board was recommended by the Governance Committee.

In the fall of 2014 the CSA introduced policies requiring companies to either adopt or explain why they have not adopted: (a) policies with respect to term limits for directors; and (b) policies and targets designed to increase participation by women in board matters and in executive positions. Given the re-constitution of the Board following the completion of the VBI-SciVac Merger this past year, the Governance Committee has begun considering the substance of appropriate policies, but has not yet adopted formal policies or targets on either term limits or diversity. Two of seven (29%) of the Company’s executive officers are female, while the Company currently has no female directors.

The Board and the Governance Committee recognize the valuable contributions made to board deliberations and management by people of different gender, experience and background. Selection is made as per the criteria described above and elsewhere in this Circular (such as based on merit, skills, qualifications, needs of the Company at the time, etc.). However, the Board is mindful of the benefit of diversity in the Company’s leadership positions and the need to maximize the effectiveness of the Board and management in their decision making abilities.

In considering the recently adopted CSA guidelines, the Governance Committee has determined to monitor developments in this area while reviewing the Company’s own practices in order to adopt a policy that is meaningful for the Company.

Code of Ethics

We adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) applicable to our principal executive officer and principal financial and accounting officer and any persons performing similar functions. In addition, the Code of Ethics applies to our employees, officers, directors, agents and representatives. The Code of Ethics requires, among other things, that our employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner and otherwise act with integrity and in our best interest.

The Code of Ethics includes procedures for reporting violations of the Code of Ethics. In addition, the Sarbanes-Oxley Act of 2002, as amended, requires companies to have procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The Code of Ethics is intended to comply with the rules of the SEC and includes these required procedures. The Code of Ethics is available on our website at www.vbivaccines.com (under the “Investors” section).

In order to ensure that directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest, interested directors are required to declare their interest and abstain from voting on the transaction or agreement.

Risk Oversight

Our Board provides risk oversight for our entire company by receiving management presentations, including risk assessments, and discussing these assessments with management. The Board’s overall risk oversight, which focuses primarily on risks and exposures associated with current matters that may present material risk to our operations, plans, prospects or reputation, is supplemented by the various committees. The Audit Committee discusses with management and our independent registered public accounting firm our risk management guidelines and policies, our major financial risk exposures and the steps taken to monitor and control such exposures. Our Compensation Committee oversees risks related to our compensation programs and discusses with management its annual assessment of our employee compensation policies and programs. Our Governance Committee oversees risks related to corporate governance and management and director succession planning.

Board Leadership Structure

The Chairman of the Board presides at all meetings of the Board at which he is present. The Chairman is appointed on an annual basis by at least a majority vote of the remaining directors. Currently, the offices of Chairman of the Board and Chief Executive Officer are separated. The Company has no fixed policy with respect to the separation of the offices of the Chairman of the Board and Chief Executive Officer. The Board believes that the separation of the offices of the Chairman of the Board and Chief Executive Officer is in the best interests of the Company and will review this determination from time to time. The Chairman of the Board plays a critical role by leading the Board in its management and supervision of the business of the Company. The Board has developed written position descriptions for the Chief Executive Officer, the Chairman of the Board and the Chair of each of its committees.

Review, Approval or Ratification of Transactions with Related Persons

The Board reviews issues involving potential conflicts of interest, and reviews and approves all related party transactions, including those required to be disclosed as a “related party” transaction under applicable federal securities laws. The Board has not adopted any specific procedures for conducting reviews of potential conflicts of interest and considers each transaction in light of the specific facts and circumstances presented. However, to the extent a potential related party transaction is presented to the Board, the Company expects that the Board would become fully informed regarding the potential transaction and the interests of the related party, and would have the opportunity to deliberate outside of the presence of the related party. The Company expects that the Board would only approve a related party transaction that was in the best interests of the Company, and further would seek to ensure that any completed related party transaction was on terms no less favorable to the Company than could be obtained in a transaction with an unaffiliated third party. Other than as described under the section titled, “Certain Relationships and Related Transactions,” no transaction requiring disclosure under applicable federal securities laws occurred during fiscal year 2016 that was submitted to the Board for approval as a “related party” transaction.

Compliance with Section 16 of the Exchange Act

The Company was a foreign private issuer until December 31, 2016. By virtue of that status, for the fiscal year ended December 31, 2016 our directors, executive officers and persons who own more than 10% of our outstanding Common Shares (collectively, the “Section 16 insiders”) were not subject to the requirements under Section 16(a) of the Exchange Act to file initial reports of ownership in our Common Shares and reports of changes in ownership in such Common Shares with the SEC. As a result of its recent transition to domestic reporting status, the Section 16 insiders are required to comply with Section 16 beginning with the fiscal year commencing January 1, 2017 and ending December 31, 2017.

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