Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers
Compensatory
Arrangements of Certain Officers
Employment
Agreements
On
November 19, 2020, Orgenesis Inc., a Nevada corporation (the “Company”) entered into an executive directorship agreement
effective as of October 1, 2020 with Vered Caplan, the Company’s President and Chief Executive Officer (the “Executive
Directorship Agreement”), that supersedes and replaces the Executive Employment Agreement dated March 30, 2017 between the
Company and Ms. Caplan (the “Prior Agreement”). Pursuant to the Executive Directorship Agreement, Ms. Caplan will
continue to serve the Company as its Chairperson of the Board of Directors (the “Board”). Pursuant to the Executive
Directorship Agreement, Ms. Caplan shall receive in consideration for her serving as Chairperson of the Board an annual regular
Board fee in the amount of $75,000 payable by the Company in equal quarterly installments in advance. In addition, Ms. Caplan
may be eligible for non-recurring special Board fees as reviewed and approved by the Compensation Committee of the Board (the
“Compensation Committee”) and then reviewed and ratified by the Board. In addition, Ms. Caplan may be granted option
awards from time to time at the discretion of the Compensation Committee.
Ms.
Caplan’s position as Chairperson of the Board under the Executive Directorship Agreement may be terminated for any reason
by either Ms. Caplan or the Company upon 90 days prior written notice (the “Notice Period”), provided that the Company
may terminate such appointment as Chairperson at any time during the Notice Period subject to certain conditions. Such termination
as Chairperson of the Board will be deemed a termination even if Ms. Caplan remains as a regular director of the Board. Upon termination
by the Company of Ms. Caplan’s employment other than for cause or by Ms. Caplan for any reason whatsoever, in addition to
any Accrued Obligations (as defined therein) she shall be entitled to receive a lump sum payment equal to the sum of (i) the annual
regular Board fee (the “Board Fee”) and (ii) the greater of actual or target annual performance bonus to which she
may have been entitled to as of the termination date (in each case, less all customary and required taxes and related deductions).
Ms.
Caplan’s position under the Executive Directorship Agreement may be terminated in the event of a Change of Control (as defined
therein) by the Company other than for cause or by Ms. Caplan for any reason whatsoever. In the event of a Change of Control and
if, within one year following such Change of Control, employment under the Executive Directorship Agreement is terminated by the
Company other than for cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued Obligations, she shall be
entitled to receive a lump sum payment equal to one and a half times the sum of (i) the Board Fee and (ii) the target annual performance
remuneration to which she may have been entitled as of the termination date (in each case, less all customary and required taxes
and related deductions).
In
addition, on November 19, 2020, Orgenesis Services Sàrl, a Swiss corporation and wholly-owned, direct subsidiary of the
Company (“Orgenesis Services”), and Ms. Caplan entered into a personal employment agreement (the “Swiss Employment
Agreement” and together with the Executive Directorship Agreement, the “Agreements”), pursuant to which Ms.
Caplan will serve as Chief Executive Officer, President and Chairperson of the Board of Directors of Orgenesis Services and will
be a material provider of services to the Company pursuant to a services agreement between the Company and Orgenesis Services.
The Swiss Employment Agreement provides that Ms. Caplan is entitled to a monthly base salary of CHF 13,345.05 (equivalent to $14,583
based on the current exchange rate), and an annual representation fee of CHF 24,000 (equivalent to $26,226 based on the current
exchange rate), payable in monthly installments of CHF 2,000. Ms. Caplan is eligible to receive a bonus at the absolute discretion
of Orgenesis Services and its compensation committee. Ms. Caplan may also be granted option awards from time to time, as per the
recommendation of the compensation committee of Orgenesis Services as reviewed and approved by the Compensation Committee. Under
the Swiss Employment Agreement, Ms. Caplan is entitled to paid annual vacation days, monthly travel allowance, sick leave, expenses
reimbursement and a mobile phone. The Swiss Employment Agreement has an effective date as of October 1, 2020.
Employment
under the Swiss Employment Agreement may be terminated for any reason by Ms. Caplan or by Orgenesis Services other than for just
cause (as defined therein) upon six months prior written notice or by Orgenesis Services other than for just cause in the event
of a Change of Control (as defined therein) of the Company upon at least 12 months prior written notice. Upon termination by Orgenesis
Services of Ms. Caplan’s employment without just cause or by Ms. Caplan for any reason whatsoever, in addition to any Accrued
Obligations (as defined therein), she shall be entitled to receive a lump sum payment equal to the sum of (i) her Base Salary
(as defined therein) at the rate in effect as of the termination date and (ii) the greater of actual or target annual performance
bonus to which she may have been entitled to for the year in which employment terminates (in each case, less all customary and
required taxes and employment-related deductions). In the event of a Change of Control and if, within one year following such
Change of Control, employment is terminated by Orgenesis Services other than for cause or by Ms. Caplan for any reason whatsoever,
in addition to any Accrued Obligations she shall be entitled to receive a lump sum payment equal to one and a half times the sum
of (i) her Base Salary and (ii) the target annual performance bonus to which she may have been entitled to for the year in which
employment terminates (in each case, less all customary and required taxes and employment-related deductions).
The
Swiss Employment Agreement provides for customary protections of Orgenesis Services’ confidential information and intellectual
property.
The
terms of the Agreements are substantially the same terms as the Prior Agreement.
Special
remuneration
On
November 19, 2020, the Compensation Committee approved a special remuneration of $400,000 to Ms. Caplan for her outstanding service
in the business development of the Company and its affiliates. The payment of such remuneration was made at the time of entry
into the Agreements.