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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
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Effective September
6, 2019 (the “Commencement Date”), Brainstorm Cell Therapeutics Inc. (the “Company”) appointed Preetam
Shah, PhD, MBA, as its Executive Vice President, Chief Financial Officer and Treasurer.
On September 5,
2019, the Company and Dr. Shah entered into an employment agreement (the “Agreement”). Pursuant to the Agreement, Dr.
Shah will be paid an annual salary of $350,000 (the “Base Salary”). Dr. Shah will be eligible to receive an annual
cash bonus equal to 40% of his base salary, subject to the satisfaction of performance goals to be established each year. Dr. Shah
will receive other benefits that are generally made available to the Company’s employees.
Pursuant to the
Agreement, Dr. Shah received on the Commencement Date, a one-time grant of stock options under the Company’s 2014 Stock Incentive
Plan (the “Plan”) (i) to purchase up to 100,000 shares of common stock of the Company, $0.00005 par value (“Common
Stock”), at an exercise price equal to $3.96 per share, and (ii) to purchase up to 100,000 shares of Common Stock at an exercise
price per share equal to $6.00 per share (together, the “Options”). Each Option shall vest and become exercisable as
follows: 25% of the shares underlying the Option shall vest and become exercisable on the first anniversary of the date of grant,
and the remaining shares underlying the Option shall vest and become exercisable in equal quarterly installments thereafter, until
fully vested and exercisable on the fourth anniversary of the date of grant, provided that Dr. Shah remains continuously employed
by the Company from the date of grant through each applicable vesting date. Each Option shall have a ten (10) year term. Any unvested
shares underlying the Options as of the date of Dr. Shah’s employment termination shall automatically terminate.
Pursuant to the
Agreement, Dr. Shah received on the Commencement Date, a one-time grant under the Plan of 25,000 shares of restricted common stock
of the Company (the “Restricted Stock Grant”), which shall vest as to 100% of the award on the one year anniversary
of the grant date, provided Dr. Shah remains continuously employed by the Company from the date of grant through the vesting date.
In the event of Dr. Shah’s termination of employment prior to the one-year anniversary of the grant date, the Restricted
Stock Grant shall automatically be immediately forfeited to the Company, without the payment of any consideration to Dr. Shah.
The Agreement
contains termination provisions, pursuant to which if the Company terminates the Agreement or Dr. Shah’s employment without
Cause (as defined in the Agreement) or if Dr. Shah terminates the Agreement or his employment thereunder with Good Reason (as defined
in the Agreement), the Company shall: (i) pay Dr. Shah, as severance pay, a lump sum equal to three (3) months of Base Salary;
(ii) pay Dr. Shah any bonus compensation that Dr. Shah would be entitled to receive during the period of employment in that fiscal
year; (iii) immediately vest such number of equity or equity based awards that would have vested during the three (3) months following
the date of termination of employment; and (iv) continue to provide Dr. Shah’s health insurance benefits during the three
(3) months following the date of termination of employment, unless otherwise provided by a subsequent employer. The foregoing severance
payments are conditional upon Dr. Shah executing a waiver and release in favor of the Company in a form reasonably acceptable to
the Company.
Prior to joining the Company, Dr. Shah served as Director, Healthcare
Investment Banking at Barclays Capital Plc. since June 2016, and served as Vice President, Healthcare Investment Banking at Canaccord
Genuity Inc. from 2013 to 2016 and was actively involved in closing numerous M&A, equity, debt transactions for publicly traded
companies. Prior to his investment banking career, Dr. Shah founded Saisarva LLC. and was a financial consultant from 2010-2013
for healthcare-focused private equity firms, hedge funds, and global pharmaceutical companies. From 2006-2009, Dr. Shah served
as Vice President, U.S. Operations and Investments at Reliance Capital USA Ventures LLC, an affiliate of Reliance ADA Group Companies.
Dr. Shah is 47 years
old. There is no arrangement or understanding between Dr. Shah and any other person pursuant to which he was appointed as Executive
Vice President, Chief Financial Officer and Treasurer of the Company. There have been no transactions and are no currently proposed
transactions to which the Company or any of its subsidiaries was or is a party in which Dr. Shah has a material interest, which
are required to be disclosed under Item 404(a) of Regulation S-K. There are no family relationships between Dr. Shah and any member
of the Board or other executive officer of the Company.