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
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12
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BRAINSTORM CELL THERAPEUTICS 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
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Aggregate number of securities to which
transaction applies: |
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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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Proposed maximum aggregate value of
transaction: |
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Check box if any part of the fee is offset as provided by
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which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
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Date Filed: |
BRAINSTORM CELL THERAPEUTICS INC.
1325 AVENUE OF AMERICAS, 28TH FLOOR
NEW YORK, NY 10019
(201) 488-0460
October 1, 2020
Dear Stockholder:
Brainstorm Cell Therapeutics Inc. will hold its 2020 Annual Meeting
of Stockholders, or Annual Meeting, on November 10, 2020
beginning at 10:00 a.m., Eastern time. Due to health concerns about
the coronavirus, or COVID-19 pandemic, and to support the health
and well-being of our stockholders, employees and partners, the
Annual Meeting will be held as a virtual meeting, conducted via the
internet as a live webcast. You will be able to attend the Annual
Meeting online and submit your questions during the meeting by
visiting www.virtualshareholdermeeting.com/BCLI2020. We look
forward to your attending either virtually or by proxy. The
enclosed notice of meeting, the proxy statement, and the proxy card
from the Board of Directors describe the matters to be acted upon
at the meeting.
Your vote is important. Whether or not you expect to attend the
meeting, your shares should be represented, and we encourage you to
complete, execute and submit the proxy card sent to you.
Individualized details
regarding voting of your shares (by mail, internet or telephone, as
permitted) are included in the materials sent to you.
We strongly encourage you to
vote your shares by proxy prior to the Annual Meeting and, if you
plan to attend the Annual Meeting, to do so virtually via the
Internet.
On behalf of the Board of Directors, we would like to express our
appreciation for your continued interest in our company.
Sincerely yours,
/s/ Chaim Lebovits |
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Chaim Lebovits |
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Chief Executive
Officer |
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BRAINSTORM CELL THERAPEUTICS INC.
1325 AVENUE OF AMERICAS, 28TH FLOOR
NEW YORK, NY 10019
(201) 488-0460
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
November 10, 2020
To the Stockholders of Brainstorm Cell Therapeutics Inc.:
Notice is hereby given that the 2020 Annual Meeting of Stockholders
(the “Meeting”) of Brainstorm Cell Therapeutics Inc. (the
“Company”) will be held on November 10, 2020 at 10:00 a.m.,
Eastern time, virtually via the internet at
www.virtualshareholdermeeting.com/BCLI2020, for the following
purposes:
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1. |
To elect each of Dr. Irit Arbel, Sankesh Abbhi,
Dr. June S. Almenoff, Dr. Jacob Frenkel,
Dr. Anthony Polverino, Malcolm Taub and Uri Yablonka as
members of the Board of Directors of the Company to serve until the
next annual meeting of stockholders and until their successors are
duly elected and qualified or until their earlier resignation or
removal; |
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To approve amendments to the Company’s 2014 Stock Incentive
Plan and the Company’s 2014 Global Share Option Plan to increase
the shared pool of shares available for issuance under the
Company’s current equity plans by 1,600,000 additional shares (from
4,000,000 to 5,600,000 shares) of the Company’s Common Stock;
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To ratify the
appointment of Brightman Almagor Zohar & Co., a Firm in
the Deloitte Global Network, as the Company’s independent
registered public accounting firm for the Company’s current fiscal
year; and |
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To transact such other business that may properly come before
the Meeting and any adjournments or postponements of the Meeting.
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The Board of Directors has fixed the close of business on
September 21, 2020 as the record date for the Meeting. All
stockholders of record on that date are entitled to notice of, and
to vote at, the Meeting.
You may attend and participate in the Meeting virtually via the
Internet at www.virtualshareholdermeeting.com/BCLI2020 where you
will be able to vote electronically and submit questions during the
meeting. You will be able to vote electronically and submit
questions during the meeting only if you use your 16 digit control
number, which will be included in your proxy materials or proxy
card, to log on to the meeting. Whether or not you expect to attend
the Annual Meeting, please submit the enclosed proxy or voting
instructions by mail, telephone or Internet. Submitting a proxy or
voting instructions will not prevent you from attending the Annual
Meeting and voting virtually via the Internet.
YOUR VOTE IS VERY IMPORTANT, WHETHER OR NOT YOU INTEND TO BE
PRESENT AT THE VIRTUAL MEETING. PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED (OR FOLLOW ONLINE VOTING
INSTRUCTIONS, WHERE APPLICABLE). INDIVIDUALIZED DETAILS REGARDING VOTING
OF YOUR SHARES ARE INCLUDED IN THE MATERIALS YOU RECEIVE IN THE
MAIL OR BY EMAIL. IF YOU ATTEND THE VIRTUAL MEETING, YOU
MAY CONTINUE TO HAVE YOUR SHARES VOTED AS INSTRUCTED IN THE
PROXY OR YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES
VIRTUALLY.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Uri Yablonka |
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Uri Yablonka, Chief
Business Officer and Secretary |
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New York, New
York |
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October 1,
2020 |
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BRAINSTORM CELL THERAPEUTICS INC.
PROXY STATEMENT
Annual Meeting of Stockholders
To Be Held on November 10, 2020
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors (the “Board”) of
Brainstorm Cell Therapeutics Inc. (the “Company”, “Brainstorm” or
“we”) for use at the 2020 Annual Meeting of Stockholders (the
“Meeting”) to be held virtually on November 10, 2020, at the
time and place set forth in the accompanying notice of the Meeting
(the “Notice of Meeting”), and at any adjournments or postponements
thereof.
The approximate date on which the Notice of Meeting, this Proxy
Statement, the accompanying proxy card and the Company’s Annual
Report to Stockholders for the fiscal year ended December 31,
2019 (the “2019 Annual Report”) are first being sent to
stockholders is on or about October 1, 2020.
The Company’s principal executive offices are located at 1325
Avenue of Americas, 28th Floor, New York, NY 10019, telephone
number (201) 488-0460.
Important Notice Regarding Availability of Proxy Materials for
the Meeting to Be Held on November 10, 2020: Pursuant to
rules promulgated by the Securities and Exchange Commission
(“SEC”), we have elected to provide access to our proxy materials
both by sending you this full set of proxy materials including a
proxy card, and by notifying you of the availability of our proxy
materials on the Internet. This Proxy Statement, the Notice of
Meeting and the 2019 Annual Report are available at
https://www.proxyvote.com.
Record Date, Outstanding Shares and Voting Rights
Only stockholders of record at the close of business on
September 21, 2020 (the “Record Date”) are entitled to notice
of and to vote at the Meeting. At the close of business on that
date, there were 31,567,592 shares of the Company’s common stock,
$0.00005 par value per share (the “Common Stock”), outstanding and
entitled to vote. Each outstanding share of the Company’s Common
Stock entitles the record holder to cast one (1) vote for each
matter to be voted upon.
The holders of a majority of all shares of the Common Stock issued,
outstanding and entitled to vote are required to be present at the
virtual Meeting or to be represented by proxy at the Meeting in
order to constitute a quorum for the transaction of business. Votes
withheld, abstentions and shares held in “street name” by brokers
or nominees who indicate on their proxies that they do not have
discretionary authority to vote such shares as to a particular
matter (“broker non-votes”) shall be counted for purposes of
determining the presence or absence of a quorum for the transaction
of business at the Meeting.
Election of Directors (Proposal No. 1)
Directors shall be elected by a plurality of the votes cast by the
shares entitled to vote (meaning that the director nominees who
receive the highest number of shares voted “for” their election are
elected). With respect to the election of directors, you may vote
“for” or “withhold” authority to vote for each of the nominees for
the Board. If you “withhold” authority to vote with respect to one
or more director nominees, your vote will have no effect on the
election of such nominees. Broker non-votes will have no effect on
the election of the nominees.”
Amendment to 2014 Stock Incentive Plan and 2014 Global Share
Option Plan (Proposal No. 2) and Ratification of Appointment
of Accounting Firm (Proposal No. 3)
Adoption of Proposal No. 2 and Proposal No. 3 requires
the affirmative vote of the holders of a majority of shares present
in person or represented by proxy and entitled to vote on the
matter (meaning that of the shares represented at the meeting and
entitled to vote, a majority of them must be voted “for” these
proposals for them to be approved). Abstentions will have the same
effect as a vote “against” these proposals, and broker non-votes
will have no effect on the vote for these proposals.
Voting Instructions
A proxy card from the Company, or notice card from your bank,
broker or other nominee for the Meeting has been sent directly to
you by mail or (as permitted) email, together with this Proxy
Statement and the Annual Report, and includes your instructions for
voting by mail, electronically or by telephone (as permitted).
Those stockholders who elect to vote by mail, should complete, sign
and return the proxy card in the prepaid and addressed envelope
that was enclosed with the proxy materials that were sent to them,
and the shares will be voted at the Meeting in the manner directed.
If you complete, sign and return your proxy card, it will be voted
as you direct. Stockholders who elect to vote by internet or
telephone (as permitted) should follow the instructions in the
materials that were sent to them. In the event no choice is
specified on a signed proxy card, the persons named as proxies will
vote:
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FOR the election of each of Dr. Irit Arbel, Sankesh
Abbhi, Dr. June S. Almenoff, Dr. Jacob Frenkel,
Dr. Anthony Polverino, Malcolm Taub and Uri Yablonka as
members of the Board of Directors of the Company; |
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FOR the amendment of the Company’s 2014 Stock
Incentive Plan and 2014 Global Share Option Plan to increase the
number of shares of Common Stock available for issuance thereunder
by 1,600,000 shares, collectively; |
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FOR the ratification of the appointment of Brightman
Almagor Zohar & Co., a Firm in the Deloitte Global
Network, as the Company’s independent registered public accounting
firm for the Company’s current fiscal year; and |
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In their discretion, as to any other matter that may be
properly brought before the Meeting or any adjournments or
postponements thereof. |
If you are a stockholder of record as of the Record Date, you may
vote and submit questions while attending the Meeting virtually via
the Internet. You will need the 16 digit control number included in
your proxy materials or proxy card (if you received a paper
delivery of proxy materials), to enter the Meeting via the
Internet. Instructions on how to attend and participate virtually
via the Internet, including how to demonstrate proof of share
ownership, are posted at
www.virtualshareholdermeeting.com/BCLI2020.
If the shares you own are held in “street name” by a bank, broker
or other nominee, that person, as the record holder of your shares,
is required to vote your shares according to your instructions.
Your bank, broker or other nominee will send you directions on
how to vote those shares. To vote virtually via the Internet at
the 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. Under applicable stock exchange rules, if
you do not give instructions to your bank, broker or other nominee,
it will still be able to vote your shares with respect to certain
“discretionary” items, but will not be allowed to vote your shares
with respect to certain “non-discretionary” items. In the case of
“non-discretionary” items, the shares that do not receive voting
instructions will be treated as “broker non-votes”, the effect of
which is discussed in the section entitled “Record Date,
Outstanding Shares and Voting Rights” above.
Discretionary Items |
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Non-Discretionary Items |
Proposal No. 3 - Ratification of Deloitte as the Company’s
independent registered public accounting firm. |
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Proposal No. 1 - Election of Directors.
Proposal No. 2 — Amendment to the Company’s 2014 Stock
Incentive Plan and 2014 Global Share Option Plan
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Revocability of Proxies
Any stockholder giving a proxy has the power to revoke it at any
time before it is exercised. The proxy may be revoked by filing
with the Company’s Secretary at the Company’s offices, 1325 Avenue
of Americas, 28th Floor, New York, NY 10019, an instrument of
revocation or a duly executed proxy bearing a later date. The proxy
may also be revoked by attending the Meeting and voting virtually
via the internet. If not revoked, the proxy will be voted at the
Meeting in accordance with the stockholder’s instructions indicated
on the proxy card.
Expenses and Solicitation
The cost of this solicitation of proxies will be borne by the
Company. In addition to soliciting stockholders by mail through its
regular employees, the Company may request banks, brokers, and
other custodians, nominees and fiduciaries to solicit their
customers who have stock of the Company registered in the names of
a nominee, and, if so, will reimburse such banks, brokers and other
custodians, nominees and fiduciaries for their reasonable
out-of-pocket costs. Solicitation by officers, directors and
employees of the Company may also be made of some stockholders via
the internet or by mail, telephone or facsimile following the
original solicitation. Such officers, directors and employees will
receive no compensation in connection with any such solicitations,
other than compensation paid pursuant to their duties described
elsewhere in this Proxy Statement.
Householding of Annual Meeting Materials
Some banks, brokers and other nominee record holders may
participate in the practice of “householding” proxy statements,
annual reports and notices of meetings. This means that only one
copy of our Proxy Statement, 2019 Annual Report or Notice of
Meeting may have been sent to multiple stockholders in your
household. If you receive one set of materials due to householding,
you may revoke your consent for future mailings at any time by
contacting Broadridge, either by calling toll-free at
1-800-542-1061, or by writing to Broadridge, Householding
Department, 51 Mercedes Way, Edgewood, NY 11717. You will be
removed from the householding program within 30 days of your
response, following which you will receive an individual copy of
our proxy materials. If you want to receive separate copies of the
Proxy Statement, 2019 Annual Report or Notice of Meeting in the
future, or if you are receiving multiple copies and would like to
receive only one copy for your household, you should contact your
bank, broker, or other nominee record holder, or you may contact
the Company at the above address, email or telephone number.
Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth certain information as of
August 31, 2020 with respect to the beneficial ownership of
our Common Stock by the following: (i) each of our current
directors; (ii) the officers serving as Chief Executive
Officer, Chief Medical Officer and Chief Financial Officer in
fiscal 2019 (the “Named Executive Officers”); (iii) all of our
current executive officers and directors as a group; and
(iv) each person known by the Company to own beneficially more
than five percent (5%) of the outstanding shares of our Common
Stock.
For purposes of the following table, beneficial ownership is
determined in accordance with the rules of the SEC and the
information is not necessarily indicative of beneficial ownership
for any other purpose. Except as otherwise noted in the footnotes
to the table, we believe that each person or entity named in the
table has sole voting and investment power with respect to all
shares of our Common Stock shown as beneficially owned by that
person or entity (or shares such power with his or her spouse).
Under the SEC’s rules, shares of our Common Stock issuable under
options that are exercisable on or within 60 days after
August 31, 2020 (“Presently Exercisable Options”) or under
warrants that are exercisable on or within 60 days after
August 31, 2020 (“Presently Exercisable Warrants”) are deemed
outstanding and therefore included in the number of shares reported
as beneficially owned by a person or entity named in the table and
are used to compute the percentage of the Common Stock beneficially
owned by that person or entity. These shares are not, however,
deemed outstanding for computing the percentage of the Common Stock
beneficially owned by any other person or entity. Unless otherwise
indicated, the address of each person listed in the table is c/o
Brainstorm Cell Therapeutics Inc., 1325 Avenue of Americas, 28th
Floor, New York, NY 10019.
The percentage of the Common Stock beneficially owned by each
person or entity named in the following table is based on
31,566,279 shares of Common Stock outstanding as of August 31,
2020 plus any shares issuable upon exercise of Presently
Exercisable Options and Presently Exercisable Warrants held by such
person or entity.
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Shares Beneficially Owned
(Includes Common Stock,
Presently
Exercisable Options and
Presently
Exercisable Warrants) |
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Name of Beneficial Owner |
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# |
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% |
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Directors and Named Executive Officers |
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Chaim
Lebovits(1) |
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4,511,872 |
(1) |
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13.3 |
% |
Ralph Kern |
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151,540 |
(2) |
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* |
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Preetam Shah |
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36,600 |
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* |
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Uri Yablonka |
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126,429 |
(3) |
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* |
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June Almenoff |
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9,175 |
(4) |
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* |
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Irit Arbel |
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381,275 |
(5) |
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1.2 |
% |
Anthony Polverino |
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15,862 |
(6) |
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* |
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Malcolm Taub |
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53,332 |
(7) |
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* |
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Jacob Frenkel |
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73,331 |
(8) |
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* |
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Sankesh Abbhi |
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2,419,187 |
(9) |
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7.6 |
% |
All current directors and executive officers as a group (10
persons) |
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7,858,603 |
(10) |
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22.1 |
% |
5% Shareholders (other than listed above) |
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N/A (see note 1) |
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* Less than 1%.
(1) |
Includes (i) 1,933,794 shares of Common Stock owned by ACCBT
Corp. acquired through an investment into the Company and
(ii) 2,016,666 shares of Common Stock issuable to ACCBT Corp.
upon the exercise of Presently Exercisable Warrants acquired
through an investment into the Company, (iii) 67,053 shares of
Common Stock owned by ACC International Holdings Ltd.,
(iv) 369,619 shares of Common Stock issuable to Chaim Lebovits
upon the exercise of Presently Exercisable Options and
(v) 31,185 shares of restricted stock. Chaim Lebovits, our
Chief Executive Officer, may be deemed the beneficial owner of
these shares. The address of ACCBT Corp. and ACC International
Holdings Ltd.is Morgan & Morgan Building, Pasea Estate,
Road Town, Tortola, British Virgin Islands. |
(2) |
Includes
35,885 shares of restricted stock. |
(3) |
Includes 108,886 of shares of Common Stock issuable upon the
exercise of Presently Exercisable Options. |
(4) |
Consists of 7,175 shares owned by Meadowlark Management LLC and
2,000 shares of restricted stock. Dr. Almenoff
disclaims beneficial ownership of the shares owned by Meadowlark
Management LLC except to the extent of any pecuniary interest
therein. |
(5) |
Includes 225,442 shares of Common Stock issuable upon the exercise
of Presently Exercisable Options. Dr. Arbel’s address is 6
Hadishon Street, Jerusalem, Israel. |
(6) |
Includes 5,071 shares of restricted stock. |
(7) |
Includes
12,000 shares of restricted stock. |
(8) |
Dr. Frankel joined the board of directors of the Company on
March 31, 2020. Includes 56,667 shares of Common Stock owned
prior to joining the board and 16,664 issuable upon the exercise of
Presently Exercisable Options. |
(9) |
Mr. Abbhi joined the board of directors of the Company on
March 31, 2020. Includes (i) 2,164,530 shares of Common
Stock owned by Abbhi Investments, LLC, (ii) 250,000 shares of
Common Stock issuable to Abbhi Investments, LLC upon the exercise
of Presently Exercisable Warrants and (iii) 4,657 shares of
restricted stock. Sankesh Abbhi is the manager of Abbhi
Investments, LLC and maintains sole voting and investment power
with respect to the Common Stock and Presently Exercisable Warrants
held by Abbhi Investments, LLC. The address of Abbhi Investments,
LLC is 2821 S Bayshore Drive, Miami FL 33133. |
(10) |
Includes (i) 2,266,666 shares of Common Stock issuable upon
the exercise of Presently Exercisable Warrants and
(ii) 720,611 shares of Common Stock issuable upon the exercise
of Presently Exercisable Options. |
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board recommends that the seven nominees named below be elected
to serve on the Board, each of whom is presently serving as a
member of the Board. The affirmative vote of the holders of a
plurality of the votes cast virtually via the internet or by proxy
at an annual meeting of stockholders by the shares entitled to vote
is required for the election by stockholders of directors to the
Board. Shares of Common Stock represented by all proxies received
and not marked so as to withhold authority to vote for any
individual nominee or for all nominees will be voted for the
election of the seven nominees named below. Each nominee has
consented to being named in this Proxy Statement and has indicated
his or her willingness to serve if elected. If for any reason any
nominee should become unable or unwilling to serve, the persons
named as proxies may vote the proxy for the election of a
substitute nominee selected by the Board. The Board has no reason
to believe that any nominee will be unable to serve. Stockholders
may vote for no more than seven nominees for director.
The Board currently has the following seven members: Dr. Irit
Arbel, Sankesh Abbhi, Dr. June S. Almenoff,
Dr. Jacob Frenkel, Dr. Anthony Polverino, Malcolm Taub
and Uri Yablonka. Biographical and certain other information
concerning the Company’s directors and the nominees for election to
the Board is set forth below.
Nominees for Election to the Board of Directors
Name |
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Age |
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Position |
Dr. Jacob Frenkel |
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77 |
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Chairperson and Director |
Dr. Irit Arbel |
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59 |
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Vice-Chairperson and Director |
Sankesh Abbhi |
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34 |
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Director |
Dr. June S. Almenoff |
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63 |
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Director |
Dr. Anthony Polverino |
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57 |
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Director |
Malcolm Taub |
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73 |
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Director |
Uri Yablonka |
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43 |
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Director, EVP, Chief Business Officer and Secretary |
Additional Information Regarding Members of the Board of
Directors
Nominees:
Dr. Jacob Frenkel joined the Company in March 2020
as a director and Chairperson. Dr. Frenkel serves Chairman of
the Board of Trustees of the Group of Thirty, which is a private,
nonprofit, Consultative Group on International Economic and
Monetary Affairs. Dr. Frenkel served as Chairman of JPMorgan
Chase International from 2009 to 2020 and is currently serving as a
Senior Advisor to JPMorgan Chase. From 2001 to 2011 he served as
Chairman and CEO of the G-30, from 2004 to 2009 as Vice Chairman of
American International Group, Inc., and from 2000 to 2004 as
Chairman of Merrill Lynch International. Between 1991 and 2000 he
served two terms as the Governor of the Bank of Israel.
Dr. Frenkel serves as Chairman of the Board of Governors of
Tel Aviv University, where he is also Chairman of the
Frenkel-Zuckerman Institute for Global Economics. He holds a B.A.
in economics and political science from the Hebrew University of
Jerusalem, and an M.A. and Ph.D. in economics from the University
of Chicago. We believe that Dr. Frenkel possesses specific
attributes that qualify her to serve on our Board, including his
valuable leadership skills and his deep knowledge of the financial
industry.
Dr. Irit Arbel, one of the Company's co-founders,
joined the Company in May 2004 as a director and served as
President of the Company for six months. Currently, Dr. Arbel
is the Vice-Chairperson of the Board and the Chair of the
Governance, Nominating and Compensation Committee. Dr. Arbel
serves as CEO of Neurochords, a biotechnology firm developing
graphene- based scaffold for nerve reconstruction in acute spinal
cord and peripheral nerve injury, a position she has held since
August 2018. Prior to Neurochords, Dr. Arbel served as
Executive Vice President, Research and Development at Savicell
Diagnostic Ltd from July 2012 until August 2018. From
2009 through 2011, Dr. Arbel served as Chairperson of Real
Aesthetics Ltd., a company specializing in cellulite ultrasound
treatment, and BRH Medical, developer of medical devices for wound
healing. She was also Director of M&A at RFB Investment House,
a private investment firm focusing on early stage technology
related companies. Previously, Dr. Arbel was President and
Chief Executive Officer of Pluristem Life Systems, a biotechnology
company, and prior to that, Israeli Sales Manager of Merck,
Sharp & Dohme, a pharmaceutical company. Dr. Arbel
earned her Post Doctorate degree in 1997 in Neurobiology, after
performing research in the area of Multiple Sclerosis.
Dr. Arbel also holds a Chemical Engineering degree from the
Technion, Israel's Institute of Technology. We believe that
Dr. Arbel possesses specific attributes that qualify her to
serve on our Board including Dr. Arbel’s extensive experience
in the biotechnology field and significant leadership skills as a
chief executive officer. Dr. Arbel previously served as our
President, which service has given her a deep knowledge of the
Company and its business and directly relevant management
experience.
Sankesh Abbhi joined the Company in March 2020 as a
director. Since 2016, Mr. Abbhi has been with ArisGlobal, a
leading provider of cloud-based, end-to-end, drug development
technology solutions for over 250 of the world’s leading life
sciences companies, CROs and government health authorities, serving
as the President and CEO since December 2017. Mr. Abbhi,
also advises Abbhi Capital, his wholly owned family office, in its
corporate investments in life sciences, healthcare and technology
companies. Prior to leading ArisGlobal and Abbhi Capital,
Mr. Abbhi founded Synowledge, a knowledge process outsourcing
company. Mr. Abbhi earned a BA in Economics from Columbia
University. We believe that Mr. Abbhi possesses specific
attributes that qualify him to serve on our Board including his
valuable leadership skills and his deep knowledge of financial
matters.
Dr. Anthony Polverino joined the Company on
February 5, 2018 as a director. Dr. Polverino is
currently Executive Vice President Early Development and Chief
Scientific Officer of Zymeworks Inc., which he joined in
September of 2018, and where he is responsible for
establishing the vision, strategy, and general management of the
organization and overseeing the advancement of products from
discovery research through translational research/early development
to create a seamless link to clinical development. Prior to
Zymeworks Dr. Polverino was the interim chief scientific
officer of Kite (now a wholly-owned subsidiary of Gilead Sciences),
which he joined in 2015, and where he was responsible for
establishing Kite's strategic non-clinical R&D roadmap to
support its current and future portfolio. Prior to this, he was the
Vice President of research at Kite, where his responsibilities
included corporate goal setting, budget allocation, scientific and
investor interactions, business development in-licensing and
partnership deals. Dr. Polverino spent 20 years in positions
of increasing responsibilities at Amgen, Inc., most recently
as executive director of its Therapeutic Innovation Unit, where he
managed research programs in oncology, metabolic disease,
inflammatory disease and schizophrenia. Prior to Amgen, he was a
postdoctoral scientist at Cold Spring Harbor Laboratory, where he
worked primarily on oncology research. Dr. Polverino is an
author of several patents, and has been published in nearly 40
scientific and peer-reviewed journals. He earned a B.Sc. in
Biochemistry/Physiology and a B.Sc. (Honors) in Pharmacology, both
from Adelaide University in Adelaide, Australia and a Ph.D. in
Biochemistry from Flinders University, also in Adelaide. We believe
that Dr. Polverino possesses specific attributes that qualify
him to serve on our Board including his deep knowledge of the
pharmaceutical industry.
Dr. June S. Almenoff joined the Company on
February 26, 2017 as a director. Dr. Almenoff has served
as the Chief Scientific Officer of RedHill Biopharma Ltd. since
May 2019. Dr. Almenoff is an accomplished executive with
20+ years of experience in the pharmaceutical industry. She has
broad therapeutic development and strategic experience including
gastroenterology, rare disease, immune-inflammation, infectious
diseases, CNS. She served as President and CMO of Furiex
Pharmaceuticals from 2010 to 2014. During her 4-year tenure, the
company’s valuation increased ~10-fold, culminating in its
acquisition by Actavis plc for ~$1.2B in 2014. Furiex’s lead
product, eluxadoline (Viberzi TM), a novel gastrointestinal drug,
is approved and marketed in US and EU. Prior to joining Furiex,
Dr. Almenoff was at GlaxoSmithKline (GSK) from 1997 to 2010,
where she held various positions of increasing responsibility in
the R&D organization. During her 12 years at GSK, she was a
Vice President in the Clinical Safety organization, chaired a
PhRMA-FDA working group and worked in the area of scientific
licensing. Dr. Almenoff also led the development of pioneering
systems for minimizing risk in drug development which have been
widely adapted by industry and regulators. Dr. Almenoff also
served as CMO and COO of Innovate Biopharmaceuticals (2018).
Dr. Almenoff is currently an independent Board Director and
drug development consultant with broad therapeutic expertise. She
has served as Executive Chair of RDD Pharma, a private, GI clinical
stage biopharma company (2015-18) where she helped the company
secure Series B as well as US Govt. Dept of Defense funding
and currently serves as an independent director (since 2015). She
was a Director of Tigenix NV (Nasdaq: TIG) from 2016-18, until its
acquisition for ~$600M. Dr. Almenoff has served on the Board
of Ohr Pharmaceuticals (Nasdaq: OHRP) since 2013, and serves on the
investment advisory board of the Harrington Discovery Institute, a
venture philanthropy, and the Scientific Advisory Board of Redhill
Biopharma (RDHL). She is a consultant and advisor to numerous
biopharma companies and investors in the areas of translational
medicine, clinical development, and commercial strategy in product
development. Dr. Almenoff received her B.A. cum laude from
Smith College and graduated with AOA honors from the M.D.-Ph.D.
program at the Icahn (Mt. Sinai) School of Medicine. She completed
post-graduate medical training at Stanford University Medical
Center (Internal Medicine, Infectious Diseases) and served on
the faculty of Duke University School of Medicine. She is an
adjunct Professor at Duke and a Fellow of the American College of
Physicians (FACP) and has authored more than 50 publications. We
believe that Dr. Almenoff possesses specific attributes that
qualify her to serve on our Board including her valuable leadership
skills and her deep knowledge of pharmaceutical product
development.
Malcolm Taub joined the Company in March 2009 as a
director. Since October 2010, Mr. Taub has been a Partner
at Davidoff Malito & Hutcher LLP, a full-service law and
government relations firm. From 2001 to September 30, 2010,
Mr. Taub was the Managing Member of Malcolm S. Taub LLP, a law
firm which practiced in the areas of commercial litigation, among
other practice areas. Mr. Taub also works on art transactions,
in the capacity as an attorney and a consultant. Mr. Taub has
also served as a principal of a firm which provides consulting
services to private companies going public in the United States.
Mr. Taub has acted as a consultant to the New York Stock
Exchange in its Market Surveillance Department. Mr. Taub acts
as a Trustee of The Gateway Schools of New York and The Devereux
Glenholme School in Washington, Connecticut. Mr. Taub has
served as an adjunct professor at Long Island University, Manhattan
Marymount College and New York University Real Estate Institute.
Mr. Taub holds a B.A. from Brooklyn College and a J.D. from
Brooklyn Law School. Mr. Taub formerly served on the Board of
Directors of Safer Shot, Inc. (formerly known as Monumental
Marketing Inc.). We believe that Mr. Taub possesses specific
attributes that qualify him to serve on our Board including
Mr. Taub’s vast law experience and his demonstrated leadership
skills as a managing member of a law firm.
Uri Yablonka joined the Company on June 6, 2014 as
Chief Operating Officer and as a member of the Board. On
March 6, 2017 he was appointed Executive Vice President, Chief
Business Officer and ceased to serve as the Company’s Chief
Operating Officer. Prior to joining the Company, Mr. Yablonka
served since December 2010 as owner and General Manager of Uri
Yablonka Ltd., a business consulting firm. He also served since
January 2011 to May 2014 as Vice President, Business
Development at ACC International Holdings Ltd. (Holdings). Holdings
is also an affiliate of ACCBT Corp. Prior to serving with Holdings,
Mr. Yablonka served as Senior Partner of PM-PR Media
Consulting Ltd. From 2008 to January 2011, Mr. Yablonka
was Senior Partner at PM-PR Media Consulting Ltd., where he led
public relations and strategy consulting for a wide range of
governmental and private organizations. From 2002 to 2008, he
served as a correspondent at the Maariv Daily News Paper, including
extensive service as a Diplomatic Correspondent. We believe that
Mr. Yablonka’s skills and experience provide the variety and
depth of knowledge, judgment and vision necessary for the effective
oversight of the Company. His experience in business consulting and
development and media experience are expected to be valuable to the
Company in its current stage of growth and beyond, and his
governmental experience can provide valuable insight into issues
faced by companies in regulated industries such as ours. We believe
that these skills and experiences qualify Mr. Yablonka to
serve as a director of the Company.
The Board of Directors recommends a vote FOR the election of the
nominees named above as directors of the Company.
Qualifications of Directors
The Board believes that each director has valuable individual
skills and experiences that, taken together, provide the variety
and depth of knowledge, judgment and vision necessary for the
effective oversight of the Company. As indicated in the foregoing
biographies, the directors have extensive experience in a variety
of fields, including biotechnology (Drs. Arbel, Almenoff and
Polverino and Mr. Abbhi), business consulting and development
(Dr. Frenkel, Dr. Polverino and Mr. Yablonka), media
(Mr. Yablonka) and law (Mr. Taub), each of which the
Board believes provides valuable knowledge about important elements
of our business. Most of our directors have leadership experience
at major companies or firms with operations inside and outside the
United States and/or experience on other companies’ boards, which
provides an understanding of ways other companies address various
business matters, strategies and issues. As indicated in the
foregoing biographies, the directors have each demonstrated
significant leadership skills, including as a chief executive
officer (Dr. Arbel and Mr. Abbhi), executive officer
(Drs. Almenoff and Polverino, and Mr. Yablonka), as a
managing member of a law firm (Mr. Taub) or as general manager
of a business consulting firm (Mr. Yablonka). A number of the
directors have extensive public policy, government or regulatory
experience, which can provide valuable insight into issues faced by
companies in regulated industries such as the Company. One of the
directors (Dr. Arbel) has served as the President of the
Company and one is currently serving as Chief Business Officer
(Mr. Yablonka), which service has given each a deep knowledge
of the Company and its business and directly relevant management
experience. The Board believes that these skills and experiences
qualify each individual to serve as a director of the Company.
Certain Arrangements
On June 1, 2015 pursuant to the Company’s First Amendment to
the Second Amended and Restated Director Compensation Plan, we
granted a stock option to Irit Arbel, the Company’s Vice
Chairperson of the Board of Directors, to purchase up to 6,667
shares of Common Stock at a purchase price of $0.75 per share. On
February 26, 2017 pursuant to the Company’s Second Amendment
to the Second Amended and Restated Director Compensation Plan, we
granted a stock option to Dr. Arbel to purchase up to 6,667
shares of Common Stock at a purchase price of $0.75 per share. On
July 13, 2017 pursuant to the Company’s Third Amendment to the
Second Amended and Restated Director Compensation Plan, we granted
a stock option to Dr. Arbel to purchase up to 12,000 shares of
Common Stock at a purchase price of $0.75 per share. Each option
was fully vested and exercisable on the date of grant.
Pursuant to a February 26, 2017 resolution of the Board,
Dr. Almenoff receives the following compensation for her
service on the Board: an annual cash award in the amount of
$30,000, paid in biannual installments. Dr. Almenoff will not
receive annual director awards under the Director Compensation
Plan, but in the event that Dr. Almenoff serves as a member of
any committee of the Board she will be entitled to committee
compensation under the Director Compensation Plan.
Dr. Almenoff is a member of the Audit Committee.
On March 6, 2020, the Company entered into a Securities
Purchase Agreement with Abbhi Investments, LLC pursuant to which
the Company sold 1,250,000 shares of the Company’s Common Stock in
a registered direct offering, at a purchase price per share of
$8.00 for a total purchase price of $10,000,000. In connection
therewith, the Company also issued a warrant to purchase 250,000
shares of Common Stock at an exercise price of $15.00 per share,
with an expiration date of the third anniversary of the date of
issuance. The offering was made pursuant to the Company’s shelf
registration statement on Form S-3 (Registration
No. 333-225517) and related March 6, 2020 prospectus
supplement. Pursuant to the Securities Purchase Agreement, Abbhi
Investments, LLC was entitled to appoint Sankesh Abbhi to serve as
a member of the Board at any time prior to April 30, 2020 by
giving notice to the Company of such appointment, and
Mr. Abbhi shall continue to serve for so long as Abbhi
Investments, LLC remains the beneficial owner of Common Stock.
Uri Yablonka serves as the Company’s EVP & Chief Business
Officer and is compensated for all services as an officer and
director of the Company pursuant to an employment agreement with
the Company and related compensation described under “Executive
Employment Agreements” in the Executive Compensation section
below.
Involvement in Certain Legal Proceedings
None of our directors or executive officers has during the past ten
years:
|
· |
been convicted in
a criminal proceeding or been subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses); |
|
· |
had any bankruptcy
petition filed by or against the business or property of the
person, or of any partnership, corporation or business association
of which he was a general partner or executive officer, either at
the time of the bankruptcy filing or within two years prior to that
time; |
|
|
|
|
· |
been subject to
any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction or
federal or state authority, permanently or temporarily enjoining,
barring, suspending or otherwise limiting, his involvement in any
type of business, securities, futures, commodities, investment,
banking, savings and loan, or insurance activities, or to be
associated with persons engaged in any such activity; |
|
· |
been found by a
court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended,
or vacated; |
|
|
|
|
· |
been the subject
of, or a party to, any federal or state judicial or administrative
order, judgment, decree, or finding, not subsequently reversed,
suspended or vacated (not including any settlement of a civil
proceeding among private litigants), relating to an alleged
violation of any federal or state securities or commodities law or
regulation, any law or regulation respecting financial institutions
or insurance companies including, but not limited to, a temporary
or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist
order, or removal or prohibition order, or any law or regulation
prohibiting mail or wire fraud or fraud in connection with any
business entity; or |
|
|
|
|
· |
been the subject
of, or a party to, any sanction or order, not subsequently
reversed, suspended or vacated, of any self-regulatory organization
(as defined in Section 3(a)(26) of the Exchange Act, any
registered entity (as defined in Section 1(a)(29) of the
Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent
exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a
member. |
PROPOSAL NO. 2
APPROVAL OF AMENDMENTS TO THE COMPANY’S 2014 STOCK INCENTIVE
PLAN AND THE COMPANY’S 2014 GLOBAL SHARE OPTION PLAN TO INCREASE
THE SHARED POOL OF SHARES AVAILABLE FOR ISSUANCE UNDER THE
COMPANY’S CURRENT EQUITY PLANS BY 1,600,000 ADDITIONAL SHARES (FROM
4,000,000 TO 5,600,000 SHARES) OF COMPANY COMMON STOCK.
Our stockholders are being asked to approve Amendment No. 3
(the “U.S. Plan Amendment”) to our 2014 Stock Incentive Plan (the
“2014 U.S. Plan”) and Amendment No. 3 (the “Global Plan
Amendment” and together with the U.S. Plan Amendment, the “Plan
Amendments”) to our 2014 Global Share Option Plan (the “2014 Global
Plan” and together with the 2014 U.S. Plan, the “Equity Plans”)
which together would increase the shared pool of shares available
for issuance under the Company’s current equity plans by 1,600,000
additional shares (from 4,000,000 to 5,600,000 shares) of Company
Common Stock. The U.S. Plan Amendment and the Global Plan Amendment
were approved by the Board of Directors on September 30, 2020,
subject to stockholder approval in order to satisfy applicable
Listing Rules of NASDAQ.
The amended 2014 U.S. Plan and 2014 Global Plan would allow for the
issuance of up to an aggregate 5,600,000 shares (subject to
adjustment for certain changes in the Company’s capitalization) of
our Common Stock, which pool is shared between the 2014 U.S. Plan
and the 2014 Global Plan, and, accordingly, shares issued pursuant
to awards issued under either the 2014 Global Plan or the 2014 U.S.
Plan shall reduce the number of shares available for issuance under
the other plan.
The Board believes the approval of the Plan Amendments are in
the best interests of the Company and its stockholders and are
important to the Company’s ability to hire and retain senior
executives as the Company moves toward commercialization, and
therefore recommends a vote “FOR” Proposal No. 2 approving
Amendment No. 3 to the Company’s 2014 Stock Incentive Plan and
Amendment No. 3 to the 2014 Global Share Option Plan, to
increase the shared pool of shares available for issuance under the
Company’s current equity plans by 1,600,000 additional shares (from
4,000,000 to 5,600,000 shares) of Company Common Stock.
Background and Rationale of the Proposal
Our Board believes that adding an additional 1,600,000 shares to
the shared pool of shares available for issuance under the Equity
Plans will provide sufficient shares for us to continue to grant
meaningful long term incentive compensation to our current and
future employees, directors and consultants through approximately
2022, and that the approval of Proposal No. 2 is essential to
permit us to continue to provide long-term, equity-based incentives
to present and future key employees and directors.
Our Board believes that our future success depends, in large part,
upon our ability to maintain a competitive position in attracting,
retaining and motivating key personnel, including key new hires of
senior executives as the Company proceeds toward commercialization.
We operate in an extremely competitive environment with respect to
the hiring and retention of qualified employees. As a result, our
approach to compensation considers the full range of compensation
techniques that enable us to compete with our peers to attract and
retain key personnel. Equity compensation is one of the critical
components of our compensation package because it (i) develops
a culture of ownership among our employees, (ii) aligns the
interests of employees and non-employee directors with the
interests of our other stockholders and (iii) preserves our
cash resources. We believe that the addition of 1,600,000 shares of
our common stock issuable under the Equity Plans will allow us to
continue to recruit leading professionals for key positions within
our company as well as to retain and incentivize our current
employees.
Our employees are some of our most valuable assets, and such awards
are crucial to our ability to motivate individuals in our service
to achieve our goals. We strongly believe that the approval of the
proposed share increase is instrumental to our continued success.
Accordingly, we are seeking stockholder approval of an increase in
the number of shares issuable under our Equity Plans.
If Proposal No. 2 is not approved the Company may not have
sufficient available shares under the Equity Plans to make annual
director and executive officer grants described in this Proxy
Statement and the 2019 Annual Report. We may also be unable to
issue new discretionary equity grants under the Equity Plans to new
and existing employees. Our executive officers and directors have
an interest in Proposal No. 2.
New Plan Benefits under the Amended 2014 U.S. Plan and the
Amended 2014 Global Plan
Awards under the Amended 2014 U.S. Plan and the Amended 2014 Global
Plan will be determined by the Governance, Nominating and
Compensation Committee (the “GNC Committee”), in its discretion,
and except for the automatic annual grants and the Contingent
Option Shares described above, awards and the terms of any awards
under the Equity Plans for the current year or any future year are
not determinable.
Plan Benefits under the Amended 2014 U.S. Plan and the Amended
2014 Global Plan
The following table provides information concerning the benefits
that were received by the following persons and groups under the
Amended 2014 U.S. Plan and the Amended 2014 Global Plan as of the
record date:
Name and Position |
|
Number of Shares
Under Amended
2014 U.S. Plan
(#)
|
|
|
Number of
Shares under
Amended
Global Share
Plan
(#)
|
|
Chaim Lebovits, Chief Executive Officer |
|
|
- |
|
|
|
494,359 |
|
Ralph
Kern, President and Chief Medical Officer |
|
|
223,540 |
|
|
|
- |
|
Preetam
Shah, Chief Financial Officer |
|
|
225,000 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
All current executive
officers, as a group |
|
|
623,540 |
|
|
|
589,900 |
|
All
current directors who are not executive officers, as a group |
|
|
127,516 |
|
|
|
227,332 |
|
Each
nominee for election as a director |
|
|
|
|
|
|
|
|
Dr. Jacob Frenkel |
|
|
8,333 |
|
|
|
50,000 |
|
Dr. Irit Arbel |
|
|
- |
|
|
|
177,332 |
|
Sankesh Abbhi |
|
|
4,657 |
|
|
|
- |
|
Dr. June S. Almenoff |
|
|
2,000 |
|
|
|
- |
|
Dr. Anthony Polverino |
|
|
15,862 |
|
|
|
- |
|
Malcolm Taub |
|
|
61,999 |
|
|
|
- |
|
Uri Yablonka |
|
|
- |
|
|
|
95,541 |
|
Each
associate of any executive officers, current directors or director
nominees |
|
|
751,056 |
|
|
|
817,232 |
|
Each
other person who received or is to receive 5% of awards |
|
|
- |
|
|
|
- |
|
All current employees including all current officers who are not
executive officers, as a group |
|
|
492,875 |
|
|
|
261,086 |
|
We anticipate filing a Registration Statement on Form S-8 with
the SEC to register the additional amount of new shares of our
Common Stock to be included in the aggregate share reserve under
the Equity Plans, as amended by the U.S. Plan Amendment and the
Global Plan Amendment, effective upon and subject to stockholder
approval of Proposal No. 2, as soon as practicable upon such
stockholders’ approval of the Plan Amendments.
The following is a brief summary of the principal provisions of the
2014 U.S. Plan, as amended by the U.S. Plan Amendment, and the 2014
Global Plan, as amended by the Global Plan Amendment. This summary
does not purport to be complete and is qualified in its entirety by
reference to the text of the Equity Plans, as amended by the Plan
Amendments. A copy of the U.S. Plan Amendment is annexed to this
proxy statement as Appendix A, and a copy of the Global Plan
Amendment is annexed to this proxy statement as Appendix B.
The 2014 U.S. Plan and the 2014 Global Plan are attached as
Appendix B and Appendix C, respectively, to the
Company’s definitive proxy statement filed with the SEC on
July 22, 2014
https://www.sec.gov/Archives/edgar/data/1137883/000114420414044070/v384044_def14a.htm
and may be accessed from the SEC’s website at
www.sec.gov and from the Investors section of the
Company’s website at www.brainstorm-cell.com and may
be obtained without charge upon written request to Brainstorm Cell
Therapeutics Inc., 1325 Avenue of Americas, 28th Floor, New York,
NY 10019, Attention: Chief Financial Officer. References to the
Board in this summary shall include the GNC Committee of the Board
or any similar committee appointed by the Board to administer the
2014 U.S. Plan or 2014 Global Plan.
Summary of the 2014 Stock Incentive Plan (as amended)
The 2014 U.S. Plan as amended would allow for the issuance of up to
5,600,000 shares (subject to adjustment for certain changes in the
Company’s capitalization) of our Common Stock, which pool shall be
shared with the 2014 Global Share Option Plan described below and,
accordingly, shares issued pursuant to awards issued under either
the 2014 Global Plan or the 2014 U.S. Plan shall reduce the number
of shares available for issuance under the other plan.
The 2014 U.S. Plan is intended to be a broad-based plan that allows
for the issuance of equity awards to our employees and members of
the Board. Approximately 7 employees, or about 16% of our employee
population, currently participate in our equity incentive
compensation programs. In addition, consultants and advisors, as
well as our non-employee directors, currently participate in our
equity incentive compensation programs.
Types of Awards; Shares Available for Issuance
The 2014 U.S. Plan allows for the issuance of incentive stock
options intended to qualify under Section 422 of the Internal
Revenue Code (the “Code”), nonstatutory stock options, and
restricted stock awards; we refer to these securities as Awards.
Subject to adjustment in the event of stock splits, stock dividends
or similar events, Awards may be made under the 2014 U.S. Plan for
up to 5,600,000 (subject to stockholder approval of Proposal
No. 2) shares of our Common Stock (which pool shall be shared
with the 2014 Global Plan). In addition, if any Award granted under
the 2014 U.S. Plan expires or is terminated, surrendered,
cancelled, forfeited or otherwise results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall
again be available for the grant of Awards under the 2014 Global
Plan or the 2014 U.S. Plan (subject, in the case of incentive stock
options, to any limitations under the Code). However, shares of
Common Stock delivered to us by a participant to purchase Common
Stock upon exercise of an Award or to satisfy tax withholding
obligations (including shares retained from the Award creating the
tax obligation) shall not be added back to the number of shares of
Common Stock available for the future grant of Awards under the
2014 U.S. Plan. In addition, Common Stock repurchased by us on the
open market using proceeds from the exercise of an Award shall not
increase the number of shares of Common Stock available for future
grant of Awards under the 2014 U.S. Plan or the 2014 Global
Plan.
The pool of shares available for issuance under the 2014 U.S. Plan
is the same pool of shares reserved and available for issuance
under the 2014 Global Plan. Accordingly, shares issued pursuant to
awards under either the 2014 Global Plan or the 2014 U.S. Plan
shall reduce the number of shares available for future issuance
under each plan, and shares that are returned under such plans are
returned to the shared pool.
Certain sub-limitations apply to the shares available for issuance
under the 2014 U.S. Plan. The maximum number of shares with respect
to which Awards may be granted to any participant under the 2014
U.S. Plan is 1,000,000 shares per calendar year.
In connection with a merger or consolidation of an entity with us
or our acquisition of property or stock of an entity, our Board may
grant Awards under the 2014 U.S. Plan in substitution for an option
or other stock or stock-based Awards granted by such entity or an
affiliate thereof on such terms as our Board determines appropriate
in the circumstances, notwithstanding any limitation on Awards
contained in the 2014 U.S. Plan. Substitute Awards granted under
the 2014 U.S. Plan in connection with a merger or consolidation of
an entity with Brainstorm Cell Therapeutics Inc. or the acquisition
by Brainstorm Cell Therapeutics Inc. of property or stock of an
entity shall not count against the overall share limits and
sub-limitations described above, except as required by reason of
Section 422 and related provisions of the Code.
Shares issued under the 2014 U.S. Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.
Descriptions of Awards
Options. Optionees receive the right to purchase a
specified number of shares of Common Stock at a specified option
price and subject to such other terms and conditions as are
specified in connection with the option grant. Options may not be
granted at an exercise price that is less than 100% of the fair
market value of the Common Stock on the effective date of grant;
provided, however, that if our Board approves the grant of an
option with an exercise price to be determined on a future date,
the exercise price may not be less than 100% of the fair market
value of the Common Stock on such future date. Under present law,
incentive stock options may not be granted at an exercise price
less than 110% of the fair market value in the case of stock
options granted to optionees holding more than 10% of the total
combined voting power of all classes of our stock. Under the terms
of the 2014 U.S. Plan, stock options may not be granted for a term
in excess of 10 years (and, under present law, five years in the
case of incentive stock options granted to optionees holding
greater than 10% of the total combined voting power of all classes
of our stock). Any or all of the Awards available under the 2014
U.S. Plan may be in the form of incentive stock options. The 2014
U.S. Plan permits participants to pay the exercise price of options
using one or more of the following manners of payment:
(i) payment by cash, check or wire transfer, or, except as may
otherwise be provided in the applicable option agreement or
approved by our Board, in connection with a “cashless exercise”
through a broker, (ii) to the extent provided in the
applicable option agreement or approved by our Board, and subject
to certain conditions, by surrender to us of shares of Common Stock
owned by the participant valued at their fair market value,
(iii) to the extent provided in an applicable nonstatutory
stock option agreement or approved by our Board, and subject to
certain conditions, by delivery of a notice of “net exercise” as a
result of which we will retain a number of shares of Common Stock
otherwise issuable pursuant to the stock option equal to the
aggregate exercise price for the portion of the option being
exercised divided by the fair market value of our Common Stock on
the date of exercise, (iv) to the extent provided in the
applicable option agreement or approved by our Board, by any other
lawful means, or (v) any combination of the foregoing.
Limitation on Repricing of Options; Other
Limitations. With respect to options, unless such action is
approved by stockholders or permitted under the terms of the 2014
U.S. Plan in connection with certain changes in capitalization and
reorganization events, we may not (i) amend any outstanding
option granted under the 2014 U.S. Plan to provide an exercise
price per share that is lower than the then-current exercise price
per share of such outstanding option, (ii) cancel any
outstanding option (whether or not granted under the 2014 U.S.
Plan) and grant in substitution therefor new Awards under the 2014
U.S. Plan (other than certain Awards granted in connection with our
merger or consolidation with, or acquisition of, another entity,
covering the same or a different number of shares of Common Stock
and having an exercise price or measurement price per share lower
than the then-current exercise price per share of the cancelled
option, (iii) cancel in exchange for a cash payment any
outstanding option with an exercise price per share above the
then-current fair market value of our Common Stock, or
(iv) take any other action under the 2014 U.S. Plan that
constitutes a “repricing” within the meaning of the rules of
the Nasdaq Stock Market. No option granted under the 2014 U.S. Plan
shall contain any provision entitling the grantee to the automatic
grant of additional options in connection with any exercise of the
original option or provide for the payment or accrual of dividend
equivalents.
Restricted Stock Awards. We may issue Awards
entitling recipients to acquire shares of our Common Stock subject
to our right to repurchase all or part of such shares at their
issue price or other stated or formula price (or to require
forfeiture of such shares if issued at no cost) from the recipient
in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the
applicable restriction period established for such Award. We refer
to these Awards as Restricted Stock. Unless otherwise provided in
the applicable Award agreement, any dividend declared and paid by
us with respect to a share of Restricted Stock shall be paid to the
participant (without interest) only if and when such shares of
Restricted Stock become free from any applicable restrictions on
transferability and forfeitability.
Performance Awards. Restricted Stock granted under
the 2014 U.S. Plan may be made subject to achievement of
performance goals. We refer to these types of Awards as Performance
Awards.
Such performance measures (i) may vary by participant and may
be different for different Awards; and (ii) may be particular
to a participant or the department, branch, line of business,
subsidiary or other unit in which the participant works and may
cover such period as may be specified by the GNC Committee. The GNC
Committee may adjust downwards, but not upwards, the number of
shares payable pursuant to such Awards and may not waive the
achievement of the applicable performance measures except in the
case of the death or disability of the participant or a change in
control of Brainstorm Cell Therapeutics Inc. Dividend equivalents
with respect to Performance Awards will be subject to the same
restrictions on transfer and forfeitability as the underlying
Performance Award.
Transferability of Awards
Except as the Board may otherwise determine or provide in an Award
in connection with certain gratuitous transfers, Awards may not be
sold, assigned, transferred, pledged or otherwise encumbered by the
person to whom they are granted, either voluntarily or by operation
of law, except by will or the laws of descent and distribution or,
other than in the case of an incentive stock option, pursuant to a
qualified domestic relations order. During the life of the
participant, Awards are exercisable only by the participant. A
participant’s rights to sell Common Stock may be subject to certain
limitations (including a lock-up period), as will be requested by
the Company or its underwriters. Without derogating from the scope
of the above, the Committee may designate certain periods, at its
reasonable discretion, with respect to all or certain groups of
participants and/or with respect to all or certain types of awards,
during which the vesting and/or exercise of awards and/or sale of
Common Stock shall be restricted or prohibited, including without
limitation, in order to comply with applicable laws in any relevant
jurisdiction and/or rules of any exchange on which the
Company’s shares are traded (“Blackout Periods”). During such
Blackout Periods, participants will not be able to exercise the
options (or other awards) and/or receive and/or sell the Common
Stock held by or on behalf of the participants and the Company
shall not bear any liability to participants for any claim, loss or
liability that may result from such restrictions.
Eligibility to Receive Awards
Employees, officers, directors, consultants and advisors of
Brainstorm Cell Therapeutics Inc. and of our present or future
parent or subsidiary corporations and any other business venture in
which Brainstorm Cell Therapeutics Inc. has a controlling interest
(as determined by our Board) are eligible to be granted Awards
under the 2014 U.S. Plan. However, incentive stock options may only
be granted to our employees, employees of our present or future
parent or subsidiary corporations, and employees of any other
entities the employees of which are eligible to receive incentive
stock options under the Code. As of August 31, 2020,
approximately 5 non-employee directors, 4 executive officers, 3
employees who are not executive officers and 2 consultants would be
eligible to receive Awards under the 2014 U.S. Plan upon approval,
including our executive officers and non-employee directors. The
granting of Awards under the 2014 U.S. Plan is discretionary, and
we cannot now determine the number or type of Awards to be granted
in the future to any particular person or group, except that Awards
are subject to the limitations described above.
Administration
Our Board administers the 2014 U.S. Plan and is authorized to grant
Awards and to adopt, amend and repeal the administrative rules,
guidelines and practices relating to the 2014 U.S. Plan and to
construe and interpret the provisions of the 2014 U.S. Plan and any
Award agreements entered into under the 2014 U.S. Plan. Our Board
may correct any defect, supply any omission or reconcile any
inconsistency in the 2014 U.S. Plan or any Award in the manner and
to the extent it shall deem expedient and it shall be the sole and
final judge of such expediency.
Pursuant to the terms of the 2014 U.S. Plan, our Board may delegate
authority under the 2014 U.S. Plan to one or more committees or
subcommittees of our Board. Our Board has authorized the GNC
Committee to administer certain aspects of the 2014 U.S. Plan,
including the granting of awards to directors and executive
officers. The GNC Committee, with the input of management, selects
the recipients of Awards and determines, in addition to other
items, and subject to the terms of the 2014 U.S. Plan:
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the number of shares of Common Stock covered by Awards and the
terms and conditions of such Awards, including the dates upon which
such Awards become exercisable or otherwise vest; |
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the exercise price of Awards; |
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the effect on Awards of a change in control of Brainstorm Cell
Therapeutics Inc.; and |
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the duration of Awards.
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To the extent permitted by applicable law, our Board may delegate
to one or more of our officers the power to grant stock options and
certain Awards to our employees or non-executive officers and to
exercise such other powers under the 2014 U.S. Plan as the Board
may determine, provided that the Board shall fix the terms of the
Awards to be granted by such officers (including the exercise price
of such Awards, which may include a formula by which the exercise
price will be determined) and the maximum number of shares subject
to Awards that the officers may grant. No officer shall be
authorized to grant Awards to any of our executive officers.
Awards to non-employee directors will only be granted and
administered by a committee, all the members of which are
independent as defined by Section 5605(a)(2) of the
Nasdaq Listing Rules.
The Board may at any time provide that any Award will become
immediately exercisable in whole or in part, free of some or all
restrictions or conditions, or otherwise realizable in whole or in
part, as the case may be, except as otherwise provided under the
terms of the 2014 U.S. Plan in the case of Performance Awards.
Except as otherwise provided under the 2014 U.S. Plan, each Award
may be made alone or in addition or in relation to any other Award.
The terms of each Award need not be identical, and our Board need
not treat participants uniformly. Our Board shall determine the
effect on an Award of the disability, death, retirement,
termination or other cessation of employment, authorized leave of
absence or other change in the employment or other status of a
participant and the extent to which, and the period during which,
the participant (or the participant’s legal representative,
conservator, guardian or designated beneficiary) may exercise
rights under the Award.
We are required to make equitable adjustments (in the manner
determined by our Board) to the number and class of securities
available under the 2014 U.S. Plan, the share counting
rules and sub-limits set forth in the 2014 U.S. Plan, and any
outstanding Awards under the 2014 U.S. Plan to reflect stock
splits, stock dividends, recapitalizations, combinations of shares,
reclassifications of shares, spin-offs and other similar changes in
capitalization or events or any dividends or distributions to
holders of our Common Stock other than ordinary cash dividends.
All decisions by the Board shall be made in the Board’s sole
discretion and shall be final and binding on all persons having or
claiming any interest on the 2014 U.S. Plan or in any Award.
Amendment of Awards. Except as otherwise provided
under the 2014 U.S. Plan with respect to repricing outstanding
stock options, Performance Awards or actions requiring stockholders
approval, our Board may amend, modify or terminate any outstanding
Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of
exercise or realization, and converting an incentive stock option
to a nonstatutory stock option, provided that the participant’s
consent to any such action will be required unless our Board
determines that the action, taking into account any related action,
does not materially and adversely affect the participant’s rights
under the 2014 U.S. Plan or the change is otherwise permitted under
the terms of the 2014 U.S. Plan in connection with a change in
capitalization or reorganization event.
Reorganization Events
Definitions. The 2014 U.S. Plan contains provisions
addressing the consequences of any reorganization event. A
“reorganization event” is defined under the terms of the 2014 U.S.
Plan to mean (a) a merger, acquisition or reorganization of
the Company with one or more other entities in which the Company is
not the surviving entity or resulting in the Company being the
surviving entity and there is a change in the ownership of Common
Stock of the Company, such that another person or entity owning
fifty percent (50%) or more of the outstanding voting power of the
Company’s securities by virtue of the transaction, (b) a sale
of all or substantially all of the assets or shares of the Company
to another entity, or (c) any liquidation or dissolution of
the Company.
Awards Other than Restricted Stock; Options Available to the
Board. Under the 2014 U.S. Plan, if a reorganization
event occurs, our Board may take any one or more of the following
actions as to all or any (or any portion of) outstanding Awards
other than Restricted Stock on such terms as the Board determines
(except to the extent specifically provided otherwise in an
applicable Award agreement or another agreement between a
participant and us): (A) provide that such Awards shall be
assumed, or substantially equivalent Awards shall be substituted,
by the acquiring or succeeding corporation (or an affiliate
thereof), (B) upon written notice to a participant, provide
that all of the participant’s unexercised Awards will terminate
immediately prior to the consummation of such reorganization event
unless exercised by the participant (to the extent then
exercisable) within a specified period following the date of such
notice, (C) provide that outstanding Awards shall become
exercisable, realizable, or deliverable, or restrictions applicable
to an Award shall lapse, in whole or in part prior to or upon such
reorganization event, (D) in the event of a reorganization
event under the terms of which holders of Common Stock will receive
upon consummation thereof a cash payment for each share surrendered
in the reorganization event, which we refer to as the Acquisition
Price, make or provide for a cash payment to participants with
respect to each Award held by a participant equal to (X) the
number of shares of Common Stock subject to the vested portion of
the Award (after giving effect to any acceleration of vesting that
occurs upon or immediately prior to such reorganization event)
multiplied by (Y) the excess, if any, of (I) the
Acquisition Price over (II) the exercise, measurement or
purchase price of such Award and any applicable tax withholdings,
in exchange for the termination of such Award, (E) provide
that, in connection with our liquidation or dissolution, Awards
shall convert into the right to receive liquidation proceeds (if
applicable, net of the exercise, measurement or purchase price
thereof and any applicable tax withholdings) and (F) any
combination of the foregoing. Our Board is not obligated to treat
all Awards, all Awards held by a participant, or all Awards of the
same type, identically.
For purposes of clause (A) above (providing for the assumption
of Awards by an acquiring or succeeding corporation), an Award
(other than Restricted Stock) shall be considered assumed if,
following the consummation of the reorganization event, such Award
confers the right to purchase or receive pursuant to the terms of
such Award, for each share of Common Stock subject to the Award
immediately prior to the consummation of the reorganization event,
the consideration (whether cash, securities or other property)
received as a result of the reorganization event by holders of
Common Stock for each share of Common Stock held immediately prior
to the consummation of the reorganization event (and if holders
were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares of
Common Stock); provided however, that if the consideration received
as a result of the reorganization event is not solely Common Stock
of the acquiring or succeeding corporation (or an affiliate
thereof), we may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be received upon the
exercise or settlement of the Award to consist solely of such
number of shares of Common Stock of the acquiring or succeeding
corporation (or an affiliate thereof) that the Board determined to
be equivalent in value (as of the date of such determination or
another date specified by the Board) to the per share consideration
received by holders of outstanding shares of Common Stock as a
result of the reorganization event.
Provisions Applicable to Restricted Stock. Upon the
occurrence of a reorganization event other than our liquidation or
dissolution, our repurchase and other rights with respect to
outstanding Restricted Stock shall inure to the benefit of our
successor and shall, unless the Board determines otherwise, apply
to the cash, securities or other property which the Common Stock
was converted into or exchanged for pursuant to such reorganization
event in the same manner and to the same extent as they applied to
such Restricted Stock; provided, however, that the Board may
provide for termination or deemed satisfaction of such repurchase
or other rights under the instrument evidencing any Restricted
Stock or any other agreement between a participant and us, either
initially or by amendment.
Upon the occurrence of a reorganization event involving our
liquidation or dissolution, except to the extent specifically
provided to the contrary in the instrument evidencing any
Restricted Stock or any other agreement between the participant and
us, all restrictions and conditions on all Restricted Stock then
outstanding shall automatically be deemed terminated or
satisfied.
Provisions for Foreign Participants
Our Board may from time to time establish one or more sub-plans
under the 2014 U.S. Plan for purposes of satisfying applicable
securities, tax or other laws of various jurisdictions. Our Board
shall establish such sub-plans by adopting supplements to the 2014
U.S. Plan containing any limitations on our Board’s discretion
under the 2014 U.S. Plan as our Board shall deem necessary or
desirable and any additional terms and conditions not otherwise
inconsistent with the 2014 U.S. Plan that our Board shall deem
necessary or desirable. All supplements adopted by our Board shall
be deemed to be part of the 2014 U.S. Plan, but each supplement
shall apply only to participants within the affected
jurisdiction.
Amendment or Termination
Our Board may amend, suspend or terminate the 2014 U.S. Plan or any
portion thereof at any time provided that (i) no amendment
that would require stockholder approval under the rules of the
Nasdaq Stock Market may be made effective unless and until our
stockholders approve such amendment; and (ii) if the Nasdaq
Stock Market amends the rules of the Nasdaq Stock Market so
that such rules no longer require stockholder approval of
material amendments to equity compensation plans, then, from and
after the effective date of such amendment to the rules of the
Nasdaq Stock Market, no amendment to the 2014 U.S. Plan
(A) materially increasing the number of shares authorized
under the 2014 U.S. Plan (other than as provided for in the 2014
U.S. Plan in connection with substitute Awards, changes in
capitalization or reorganization events), (B) expanding the
types of Awards that may be granted under the 2014 U.S. Plan, or
(C) materially expanding the class of participants eligible to
participate in the 2014 U.S. Plan shall be effective unless and
until our stockholders approve such amendment. In addition, if at
any time the approval of our stockholders is required as to any
other modification or amendment under Section 422 of the Code
or any successor provision with respect to incentive stock options,
the Board may not effect such modification or amendment without
such approval. Unless otherwise specified in the amendment, any
amendment to the 2014 U.S. Plan adopted in accordance with the
procedures described above shall apply to, and be binding on the
holders of, all Awards outstanding under the 2014 U.S. Plan at the
time the amendment is adopted, provided that the Board determines
that such amendment, taking into account any related action, does
not materially and adversely affect the rights of participants
under the 2014 U.S. Plan.
Effective Date and Term of 2014 U.S. Plan
The 2014 U.S. Plan became effective on August 14, 2014, the
date the plan was approved by our stockholders. No Awards shall be
granted under the 2014 U.S. Plan after the expiration of 10 years
from the effective date, but Awards previously granted may extend
beyond that date.
Federal Income Tax Information
The following discussion outlines generally the federal income tax
consequences of participation in the 2014 U.S. Plan. Individual
circumstances may vary and each participant should rely on his or
her own tax counsel for advice regarding federal income tax
treatment under the 2014 U.S. Plan.
Non-Qualified Options (nonstatutory stock options). A
participant will not recognize income upon the grant of an option
or at any time prior to the exercise of the option or a portion
thereof. At the time the participant exercises a non-qualified
option or portion thereof, he or she will recognize compensation
taxable as ordinary income in an amount equal to the excess of the
fair market value of our common stock on the date the option is
exercised over the price paid for our common stock, and we will
then be entitled to a corresponding deduction. Depending upon the
period shares of our common stock are held after exercise, the sale
or other taxable disposition of shares acquired through the
exercise of a non-qualified option generally will result in a short
or long-term capital gain or loss equal to the difference between
the amount realized on such disposition and the fair market value
of such shares when the non-qualified option was exercised.
Incentive Stock Options. A participant who exercises an
incentive stock option will not be taxed at the time he or she
exercises the option or a portion thereof. Instead, he or she will
be taxed at the time he or she sells our common stock purchased
pursuant to the option. The participant will be taxed on the
difference between the price he or she paid for our common stock
and the amount for which he or she sells our common stock. If the
participant does not sell the stock prior to two years from the
date of grant of the option and one year from the date the stock is
transferred to him or her, the participant will be entitled to
capital gain or loss treatment based upon the difference between
the amount realized on the disposition and the aggregate exercise
price and we will not get a corresponding deduction. If the
participant sells the stock at a gain prior to that time, the
difference between the amount the participant paid for the stock
and the lesser of the fair market value on the date of exercise or
the amount for which the stock is sold, will be taxed as ordinary
income and the Company will be entitled to a corresponding
deduction; if the stock is sold for an amount in excess of the fair
market value on the date of exercise, the excess amount is taxed as
capital gain. If the participant sells the stock for less than the
amount he or she paid for the stock prior to the one or two year
periods indicated, no amount will be taxed as ordinary income and
the loss will be taxed as a capital loss. Exercise of an incentive
option may subject a participant to, or increase a participant’s
liability for, the alternative minimum tax.
Stock Awards. A participant will not be taxed upon the grant
of a stock award if such award is not transferable by the
participant or is subject to a “substantial risk of forfeiture,” as
defined in the Code. However, when the shares of our common stock
that are subject to the stock award are transferable by the
participant and are no longer subject to a substantial risk of
forfeiture, the participant will recognize compensation taxable as
ordinary income in an amount equal to the fair market value of the
stock subject to the stock award, less any amount paid for such
stock, and we will then be entitled to a corresponding deduction.
However, if a participant so elects at the time of receipt of a
stock award, he or she may include the fair market value of the
stock subject to the stock award, less any amount paid for such
stock, in income at that time and we also will be entitled to a
corresponding deduction at that time.
Other Awards. A participant will not recognize income upon
the grant of certain equity incentives such as restricted stock
units, deferred restricted stock units, performance awards, stock
appreciation rights or dividend equivalent rights. Generally, at
the time a participant receives payment under any such award, he or
she will recognize compensation taxable as ordinary income in an
amount equal to the cash or the fair market value of our common
stock received, and we will then be entitled to a corresponding
deduction.
Potential Limitation on Company Tax Deductions. Before
January 1, 2018, Section 162(m) of the Internal
Revenue Code denied a tax deduction to any publicly held
corporation for compensation over $1 million to any of the named
executive officers (other than the Chief Financial Officer) unless
the compensation was paid pursuant to a plan that is
performance-based and was approved by our stockholders. Effective
January 1, 2018, Section 162(m) was amended to
disallow a federal income tax deduction for compensation over $1
million to any of the named executive officer, regardless of
whether the compensation is performance-related. Under a transition
rule, Section 162(m) as in effect before the amendment
continues to apply to compensation payable to a binding written
contract in effect on November 2, 2017 that is not materially
modified. It is possible that compensation attributable to equity
compensation, when combined with cash compensation and all other
types of compensation received by a covered employee from the
Company, may cause this limitation to be exceeded in any particular
year.
Summary of the 2014 Global Share Option Plan (as
amended)
Administration. The 2014 Global Plan is administered
by the GNC Committee of the Board.
Participation. The 2014 Global Plan provides that the
persons eligible for participation in the 2014 Global Plan shall
include employees, officers, directors, and/or service providers
such as consultants, or advisers of the Company or any affiliate,
or any other person who is not an employee (also referred to as
non-employee). As of August 31, 2020, approximately 1
non-employee directors, 2 executive officers, 21 employees who are
not executive officers and 2 consultants would be eligible to
receive Awards under the 2014 Global Plan upon approval, including
our executive officers and non-employee directors. In determining
the eligibility of an individual to be granted awards pursuant to
the 2014 Global Plan, as well as in determining the number of
awards to be granted to any individual, the GNC Committee takes
into account the position and responsibilities of the individual
being considered, the nature and value to the Company or its
subsidiaries of the individual’s service and accomplishments, his
or her present and potential contribution to the success of the
Company or its subsidiaries, and such other factors as the GNC
Committee deems relevant.
Terms and Provisions of Options. Options granted
under the 2014 Global Plan are exercisable at such times and during
such period as is set forth in the award agreement, and shall
terminate upon the earlier of (i) the date set forth in the
award agreement, (ii) the expiration of ten (10) years
from the date of grant, or (iii) the expiration of any
extended period in any of the events set forth below. The award
agreement may contain such provisions and conditions as may be
determined by the GNC Committee. The option exercise price for each
share subject to an option shall be determined by the GNC Committee
in its sole and absolute discretion in accordance with applicable
law (and may be less than fair market value, subject to applicable
law), subject to any guidelines as may be determined by the Board
from time to time. The exercise price shall be payable upon the
exercise of an option in cash, check, or wire transfer.
An option or any right with respect thereto of any optionee to
exercise an option granted under the 2014 Global Plan is not
assignable or transferable, nor may it be given as collateral nor
may any right with respect thereto be given to a third party
whatsoever, other than by will or the laws of descent and
distribution, or as specifically otherwise allowed under the 2014
Global Plan. Moreover, during the lifetime of the optionee, each
and all of such optionee’s rights to purchase shares under the 2014
Global Plan shall be exercisable only by the optionee.
In the event of a termination of optionee’s employment or service,
all options granted to such optionee shall immediately expire.
Notwithstanding the foregoing and unless otherwise determined in
the optionee’s award agreement, an option may be exercised after
the date of termination as follows: If the termination is without
cause, the unexpired vested options still in force may be exercised
within a period of three (3) months after the date of such
termination. If such termination of employment is the result of
death or disability, the vested unexpired options still in force
may be exercised within a period of twelve (12) months after such
date of termination. If such termination of employment or service
is for cause, any outstanding unexercised option will immediately
expire and terminate, and the optionee shall not have any right in
respect thereof. In no event shall an option be exercisable after
the date upon which it expires by its terms. The GNC Committee has
the authority to extend the term of all or part of the vested
options beyond the date of such termination for a period not to
exceed the period during which the options by their terms would
otherwise have been exercisable.
Restricted Stock. Restricted stock and other
equity-based awards may be issued to all participants either alone
or in addition to other awards granted under the 2014 Global Plan.
Such awards will be subject to such conditions and restrictions as
the GNC Committee may determine. These conditions and restrictions
may include the achievement of certain performance goals and/or
continued employment with the Company through a specified
restricted period. The purchase price (if any) of shares of
restricted stock will be determined by the GNC Committee. If the
performance goals and other restrictions are not attained, the
grantee will automatically forfeit their awards of restricted stock
to the Company.
Merger; Acquisition; Reorganization. The 2014 Global
Plan provides that in the event of a merger, acquisition, or
reorganization of the Company or in the event of a sale of all or
substantially all of the assets or shares of the Company to another
entity (a “Transaction”) the unexercised or restricted portion of
each award shall be assumed or substituted for an appropriate
number of shares of each class of shares or other securities of the
successor corporation (or a parent or subsidiary of the successor
corporation) as were distributed to the stockholders of the Company
in connection with the Transaction. In the case of such assumption
and/or substitution of awards, appropriate adjustments shall be
made to the exercise price so as to reflect such award and all
other terms and conditions of the award agreements, all subject to
the determination of the GNC Committee or the Board, which
determination shall be in their sole discretion and final. The 2014
Global Plan further provides that in the event that the outstanding
shares shall at any time be changed or exchanged by declaration of
a share dividend (bonus shares), share split or reverse share
split, combination or exchange of shares, recapitalization, or any
other like event by or of the Company, and as often as the same
shall occur, then the number, class and kind of shares subject to
the 2014 Global Plan or subject to any awards theretofore granted,
and the exercise prices, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares
without changing the aggregate exercise price, provided, however,
that no adjustment shall be made by reason of the distribution of
subscription rights on outstanding shares. Upon the occurrence of
any of the above, the class and aggregate number of shares issuable
pursuant to the 2014 Global Plan, in respect of which awards have
not yet been exercised, shall be appropriately adjusted.
The Board or the GNC Committee shall also have the power to
determine that in certain award agreements there shall be a clause
instructing that if in any Transaction the successor corporation
(or parent or subsidiary of the successor corporation) does not
agree to assume or substitute the awards, the vesting dates of
outstanding awards shall be accelerated so that any unvested or
restricted award or any portion thereof shall be immediately vested
ten (10) days prior to the effective date of the
Transaction.
Upon voluntary dissolution or liquidation of the Company, the
Company shall immediately notify all unexercised award holders of
such voluntary liquidation, and the award holders shall then have
ten (10) days to exercise any unexercised vested options or
vested award held by them at that time. Upon the expiration of such
ten-day period, all remaining outstanding awards will terminate
immediately.
Limitations; Blackout Periods The 2014 Global Plan
provides that each participant’s rights to sell shares may be
subject to certain limitations (including a lock-up period), as
will be requested by the Company or its underwriters, and the
participant unconditionally agrees and accepts any such
limitations. The GNC Committee may designate certain periods, at
its reasonable discretion, with respect to all or certain groups of
participants and/or with respect to all or certain types of awards,
during which the vesting and/or exercise of awards and/or sale of
shares shall be restricted or prohibited, including without
limitation, in order to comply with applicable laws in any relevant
jurisdiction and/or rules of any exchange on which the
Company’s shares are traded (“Blackout Periods”). During such
Blackout Periods, participants will not be able to exercise the
options (or other awards) and/or receive and/or sell the shares
held by or on behalf of the participants and the Company shall not
bear any liability to participants for any claim, loss or liability
that may result from such restrictions.
Termination and Amendment. Unless sooner terminated,
the 2014 Global Plan shall terminate ten (10) years from
July 9, 2014, the date upon which it was adopted by the Board.
The Board may at any time terminate or suspend the 2014 Global Plan
or make such modification or amendment as it deems advisable;
provided, however, that no amendment, alteration, suspension or
termination of the 2014 Global Plan shall impair the rights of any
participant, unless mutually agreed otherwise by the participant
and the Company. Termination of the 2014 Global Plan prior to the
termination date shall not affect the Board of Director’s ability
to exercise the powers granted to it thereunder with respect to
awards granted under the 2014 Global Plan prior to the date of such
earlier termination. The Company shall obtain the approval of the
Company’s stockholders for amendment to the 2014 Global Plan if
stockholders’ approval is required under any applicable law or if
stockholders’ approval is required by any authority or by any
governmental agencies or national securities exchanges.
Israeli Appendix and Tax Matters
Section 102 of the Israeli Income Tax Ordinance (New Version),
1961, as amended (the “Section 102”; “Tax Ordinance”,
respectively) shall apply to allocation of Awards and/or shares to
employees, directors and office holders, but excluding controlling
shareholders (as defined in Section 32(9) of the
Ordinance) (the “Employees”). Awards granted under Section 102
may be classified as Approved 102 Award to be held by a trustee for
the benefit of the Employees for such period of time as required by
Section 102 or any regulations, rules or orders or
procedures promulgated thereunder (the “Trustee”; “Holding Period”,
respectively) or as Unapproved 102 Award, without a trustee. The
Trustee is appointed by the Company and approved by the Israeli Tax
Authorities. Under the trustee track, the trustee may not release
any Approved 102 Awards or shares allocated or issued upon exercise
of Approved 102 Awards prior to the end of the Holding Period and
the full payment of participant’s tax liabilities arising from
Approved 102 Awards which were granted to him and/or any shares
allocated or issued upon exercise of such Awards. With respect to
any Approved 102 Award, a participant shall not sell or release
from trust any share received upon the exercise of an Approved 102
Award and/or any share received subsequently following any
realization of rights, including bonus shares, until the lapse of
the Holding Period described above. If any such sale or release
shall occur during the Holding Period the sanctions under
Section 102 shall apply and shall be borne by such
participant. Approved 102 Awards may either be classified as
“ordinary income award” or “capital gains award”. The
classification of the type of awards as “ordinary income award” or
“capital gain award” depends on the election made by the Company
prior to the date of grant, and obligates the Company to grant such
type of award to all of its Employees for a period of one year
following the year during which the elected type of awards were
first granted.
We expect to grant Awards to our Employees as Approved 102 Awards
under the capital gain track. The 2014 Global Plan and the relevant
election will be appropriately filed with the Israeli tax
authorities at least 30 days before the grants of Approved 102
Awards are made. Under such track, the Employee will be taxed at
capital gain rates upon the sale of shares received following the
exercise of such awards or upon release of such shares from trust,
whichever is earlier, provided that the conditions of the “capital
gains track” are met.
Equity Compensation Plan Information
The following table summarizes certain information regarding our
equity compensation plans as of December 31, 2019.
Plan
category |
|
Number
of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
(a) |
|
|
Weighted
Average
exercise price of
outstanding
options, warrants
and rights
(b) |
|
|
Number
of securities
remaining available for
future issuance under equity
compensation plan
(excluding securities
referenced in column (a))
(c) |
|
Equity
compensation plans approved by security holders: |
|
1,293,007 |
(1) |
|
$ |
3.0142 |
(2) |
|
2,146,689 |
(3) |
Equity
compensation plans not approved by security holders: |
|
— |
|
|
— |
|
|
— |
|
Total |
|
|
1,293,007 |
|
|
$ |
3.0142 |
|
|
|
2,146,689 |
|
|
(1) |
Includes 1,293,007 shares of common
stock issuable upon the exercise of outstanding options only. |
|
(2) |
Since restricted stock units do not have any exercise price,
such units are not included in the weighted average exercise price
calculation. |
|
(3) |
A total of 3,439,696 shares of our
Common Stock are reserved for issuance in aggregate under the
Equity Plans and the Prior Plans. Any awards granted under either
the 2014 Global Plan or the 2014 U.S. Plan will reduce the total
number of shares available for future issuance under the other
plan. |
Required Vote
Approval of the proposed Plan Amendments requires the affirmative
vote of the holders of a majority of shares present in person or
represented by proxy and entitled to vote on the matter at the
virtual annual meeting.
Brainstorm Recommendation
We believe strongly that the approval of the Plan Amendments are
essential to our continued success. Our employees and directors are
among our most valuable assets. Stock options and other awards such
as those provided under the Equity Plans are vital to our ability
to attract and retain outstanding and highly skilled individuals.
Such awards are also crucial to our ability to motivate employees
to achieve our goals and to retain qualified directors. Our Board
approved the Plan Amendments, subject to stockholder approval. If
the stockholders do not approve Proposal No. 2 amending the
Equity Plans, our ability to grant any further options to our
employees and members of our Board or make any further awards of
stock will be severely impaired. This could adversely impact our
ability to attract, retain and motivate current and prospective
employees and members of the Board. For the reasons stated above
the stockholders are being asked to approve Amendment No. 3 to
the 2014 U.S. Plan and Amendment No. 3 to the 2014 Global
Plan.
The Board believes the approval of the Plan Amendments are in
the best interests of the Company and its stockholders and are
essential to the Company’s ability to hire and retain senior
executives as the Company moves toward commercialization, and
therefore recommends a vote “FOR” Proposal No. 2 approving
Amendment No. 3 to the Company’s 2014 Stock Incentive Plan and
Amendment No. 3 to the 2014 Global Share Option Plan, to
increase the shared pool of shares available for issuance under the
Company’s current equity plans by 1,600,000 additional shares (from
4,000,000 to 5,600,000 shares) of Company Common Stock.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF BRIGHTMAN ALMAGOR
ZOHAR & CO., A FIRM IN THE DELOITTE GLOBAL NETWORK, AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE
CURRENT FISCAL YEAR
The Board has appointed Deloitte as the Company’s independent
registered public accounting firm to audit the Company’s financial
statements for the current fiscal year. Deloitte has audited the
financial statements of the Company since the fiscal year ended
December 31, 2008. The Board is asking the Company’s
stockholders to ratify the appointment of Deloitte as the Company’s
independent registered public accounting firm. Although
ratification is not required by the Company’s Bylaws or otherwise,
the Board is submitting the appointment of Deloitte to the
stockholders for ratification as a matter of good corporate
practice. If the stockholders do not ratify the selection of
Deloitte as the Company’s independent registered public accounting
firm, the Board will reconsider its selection. Even if the
appointment is ratified, the Board, in its discretion, may direct
the appointment of a different independent registered public
accounting firm at any time during the year if the Board determines
that such a change would be in the Company’s and its stockholders’
best interests. A representative of Deloitte is not expected to be
present at the Meeting and will not have the opportunity to make a
statement or be available to respond to appropriate questions from
stockholders.
The Board recommends a vote FOR ratification of the appointment
of Brightman Almagor Zohar & Co., a Firm in the Deloitte
Global Network, as the Company’s independent registered public
accounting firm for the Company’s current fiscal year.
CORPORATE GOVERNANCE AND BOARD MATTERS
Independence of Members of Board
The Board of Directors of the Company (the “Board”) has determined
that each of Dr. Frenkel, Dr. Arbel, Mr. Abbhi,
Dr. Almenoff, Dr. Polverino and Mr. Taub satisfies
the criteria for being an “independent director” under the
standards of the Nasdaq Stock Market, Inc. (“Nasdaq”) and has
no material relationship with the Company other than by virtue of
service on the Board of Directors. Mr. Yablonka is not
considered an “independent director.”
The Board of Directors is comprised of a majority of independent
directors and the Governance, Nominating and Compensation Committee
(the “GNC Committee”) and the Audit Committee are comprised
entirely of independent directors.
Board Leadership Structure
On March 30, 2020, the Board elected Dr. Frenkel to serve
as Chairperson of the Board. The Chairperson presides at all Board
meetings. The Chairperson’s role and responsibilities include
maintaining an active relationship with the Chief Executive
Officer, participating in preparation for Board meetings
(suggesting agenda items as appropriate), serving as a supplemental
channel for communications between Board members and the Chief
Executive Officer and providing counsel to individual directors on
the performance of their duties. The position of Chair and Chief
Executive Officer are separate. Together, the Chairperson and Chief
Executive Officer provide strategic guidance and oversight to the
Company. The Board believes that Dr. Frenkel serving as
Chairperson is optimal because it will provide the Board with
strong and consistent leadership, and the other members of the
Board bring various perspectives and opinions. Taken together, the
Board believes that this leadership structure provides an
appropriate balance of experienced leadership, independent
oversight and management input.
Risk Management and Oversight Process
The Board takes an active role, as a whole and at the committee
level, in overseeing management of our Company’s risks. Generally,
the entire Board, the Audit Committee and the GNC Committee are
involved in overseeing risks associated with the Company and
monitor and assess those risks in reviews with management and with
the Company’s outside advisors and independent registered public
accounting firm. The Audit Committee reviews regulatory risk,
operational risk and enterprise risk, particularly as they relate
to financial reporting, on a regular basis with management, the
Company’s independent registered public accounting firm and the
Company’s outside consultants and advisors. In its regular
meetings, the Audit Committee discusses the scope and plan for the
internal audit and includes management in its review of accounting
and financial controls, assessment of business risks and legal and
ethical compliance programs. The GNC Committee monitors the
Company’s governance and succession risk by review with management
and outside advisors. The GNC Committee also monitors CEO
succession and the Company’s compensation policies and related
risks by reviews with management. The GNC Committee periodically
reviews our compensation programs for employees to assure that
these programs do not create risks that are reasonably likely to
have a material adverse effect on the company.
Prohibitions on Hedging of Securities
Pursuant to Brainstorm’s Policy on Trading of Securities and Public
Disclosures, all Brainstorm personnel are strictly prohibited from
engaging in "short sales" of securities of Brainstorm (sales of
securities that are not then owned), and are prohibited from buying
or selling, directly or indirectly, in the over-the-counter market,
through an exchange or otherwise, options to purchase or sell
securities of Brainstorm (i.e., puts, calls, straddles, etc.).
Brainstorm believes that trading in options signals to the market
and regulatory authorities that the individual engaged in such
trading may possess material non-public information. Even if the
individual is not trading on material non-public information,
Brainstorm seeks to avoid even the appearance of impropriety. All
Brainstorm personnel are also prohibited from trading of other
derivative securities, the value of which is derived from the value
of the common stock of Brainstorm. Further, all transactions in
securities of Brainstorm (including option exercises, gifts, loans,
pledges, hedges, contributions to a trust or any other transfer) by
members of the Board, executive officers and employees who directly
report to the Chief Executive Officer or the Chief Financial
Officer, must be approved in advance by the Company’s Chief
Financial Officer.
Diversity
While the Company does not
have a formal diversity policy, the Board considers diversity in
identifying director nominees. The Board and the GNC Committee
believe that it is important that our directors represent diverse
viewpoints. In addition to diversity of experience, the GNC
Committee seeks director candidates with a broad diversity of
professions, skills and backgrounds. The GNC Committee discusses
Board composition, including the diversity of the Board,
annually.
Board Meetings
The Board held three meetings during the fiscal year ended
December 31, 2019. During the fiscal year ended
December 31, 2019, each incumbent director attended at least
75% of the aggregate of the total number of meetings of the Board
and the total number of meetings of the committees on which he or
she served. The Company’s directors are encouraged to attend the
Company’s annual meeting of stockholders. All of the Company’s
directors attended the prior year’s annual meeting.
Committees of the Board of Directors
Audit Committee
On February 7, 2008, the Board of Directors (“Board”)
established a standing Audit Committee in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of
1934, which assists the Board in fulfilling its responsibilities to
stockholders concerning our financial reporting and internal
controls, and facilitates open communication among the Audit
Committee, Board, outside auditors and management. The Audit
Committee discusses with management and our outside auditors the
financial information developed by us, our systems of internal
controls and our audit process. The Audit Committee is solely and
directly responsible for appointing, evaluating, retaining and,
when necessary, terminating the engagement of the independent
auditor. The independent auditors meet with the Audit Committee
(both with and without the presence of management) to review and
discuss various matters pertaining to the audit, including our
financial statements, the report of the independent auditors on the
results, scope and terms of their work, and their recommendations
concerning the financial practices, controls, procedures and
policies employed by us. The Audit Committee preapproves all audit
services to be provided to us, whether provided by the principal
auditor or other firms, and all other services (review, attest and
non-audit) to be provided to us by the independent auditor. The
Audit Committee coordinates the Board’s oversight of our internal
control over financial reporting, disclosure controls and
procedures and code of conduct. The Audit Committee is charged with
establishing procedures for (i) the receipt, retention and
treatment of complaints received by us regarding accounting,
internal accounting controls or auditing matters; and (ii) the
confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters. The
Audit Committee reviews all related party transactions on an
ongoing basis, and all such transactions must be approved by the
Audit Committee. The Audit Committee is authorized, without further
action by the Board, to engage such independent legal, accounting
and other advisors as it deems necessary or appropriate to carry
out its responsibilities. The Board has adopted a written charter
for the Audit Committee, which is available in the corporate
governance section of our website at
www.brainstorm-cell.com. The Audit Committee currently
consists of Mr. Taub (Chair), Dr. Almenoff and
Dr. Arbel, each of whom is independent within the meaning of
The NASDAQ Marketplace Rules and Rule 10A-3 under the
Exchange Act. The Board of Directors has determined that
Dr. Arbel is an “audit committee financial expert” as defined
in Item 407(d)(5) of Regulation S-K. The Audit Committee held
four meetings during the fiscal year ended December 31,
2019.
GNC Committee
On June 27, 2011, the Board established a standing Governance,
Nominating and Compensation Committee (the “GNC Committee”), which
assists the Board in fulfilling its responsibilities relating to
(i) compensation of the Company’s executive officers,
(ii) the director nomination process and (iii) reviewing
the Company’s compliance with SEC corporate governance
requirements. The Board has adopted a written charter for the GNC
Committee, which is available in the corporate governance section
of our website at www.brainstorm-cell.com. The GNC
Committee currently consists of Dr. Arbel (Chair),
Dr. Polverino and Mr. Taub, each of whom is independent
as defined under applicable NASDAQ listing standards. The GNC
Committee held two meetings during the fiscal year ended
December 31, 2019.
The GNC Committee determines salaries, incentives and other forms
of compensation for the Chief Executive Officer and the executive
officers of the Company and reviews and makes recommendations to
the Board with respect to director compensation. The GNC Committee
meets without the presence of executive officers when approving or
deliberating on executive officer compensation, but may invite the
Chief Executive Officer to be present during the approval of, or
deliberations with respect to, other executive officer
compensation. In addition, the GNC Committee administers the
Company’s stock incentive compensation and equity-based plans.
The GNC Committee makes recommendations to the Board concerning all
facets of the director nominee selection process. Generally, the
GNC Committee identifies candidates for director nominees in
consultation with management and the independent members of the
Board, through the use of search firms or other advisers, through
the recommendations submitted by stockholders or through such other
methods as the GNC Committee deems to be helpful to identify
candidates. Once candidates have been identified, the GNC Committee
confirms that the candidates meet the independence requirements and
qualifications for director nominees established by the Board. The
GNC Committee may gather information about the candidates through
interviews, questionnaires, background checks, or any other means
that the GNC Committee deems to be helpful in the evaluation
process. The GNC Committee meets to discuss and evaluate the
qualities and skills of each candidate, both on an individual basis
and taking into account the overall composition and needs of the
Board. Upon selection of a qualified candidate, the GNC Committee
would recommend the candidate for consideration by the full
Board.
In considering whether to include any particular candidate in the
Board’s slate of recommended director nominees, the Board will
consider the candidate’s integrity, education, business acumen,
knowledge of the Company’s business and industry, age, experience,
diligence, conflicts of interest and the ability to act in the
interests of all stockholders. The Board believes that experience
as a leader of a business or institution, sound judgment, effective
interpersonal and communication skills, strong character and
integrity, and expertise in areas relevant to our business are
important attributes in maintaining the effectiveness of the Board.
As a matter of practice, the Board considers the diversity of the
backgrounds and experience of prospective directors as well as
their personal characteristics (e.g., gender, ethnicity, age) in
evaluating, and making decisions regarding, Board composition, in
order to facilitate Board deliberations that reflect a broad range
of perspectives. The Board does not assign specific weights to
particular criteria and no particular criterion is a prerequisite
for each prospective nominee. The Company believes that the
backgrounds and qualifications of its directors, considered as a
group, should provide a significant breadth of experience,
knowledge and abilities that will allow the Board to fulfill its
responsibilities.
GNC Committee Interlocks and Insider
Participation
During 2019, Dr. Arbel, Dr. Polverino and Mr. Taub
served as members of our GNC Committee. No member of the GNC
Committee was an employee or officer of the Company during 2019, is
a former officer of the Company, or had any other relationship with
us requiring disclosure herein.
During the last fiscal year, none of our executive officers served
as: (1) a member of the compensation committee (or other
committee of the board of directors performing equivalent functions
or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers
served on our GNC Committee; (2) a director of another entity,
one of whose executive officers served on our GNC Committee; or
(3) a member of the compensation committee (or other committee
of the board of directors performing equivalent functions or, in
the absence of any such committee, the entire board of directors)
of another entity, one of whose executive officers served on our
Board of Directors.
Stockholder Communication with the Board
Under the Policy, stockholders may also send written communications
to the Board or any individual members, to the attention of the
Company’s Secretary at the Company’s offices, 1325 Avenue of
Americas, 28th Floor, New York, NY 10019. All such communications
will be relayed accordingly, except for mass mailings, job
inquiries, surveys, business solicitations or advertisements,
personal grievances, matters as to which the Company tends to
receive repetitive or duplicate communications, or patently
offensive or otherwise inappropriate material.
Family Relationships
There are no family relationships between the executive officers or
directors of the Company.
Involvement in Certain Legal Proceedings
None.
ADDITIONAL INFORMATION
Executive Officers
Set forth below is a summary description of the principal
occupation and business experience of each of the Company’s current
executive officers.
Name |
|
Age |
|
|
Position |
Chaim Lebovits |
|
|
49 |
|
|
Chief Executive Officer |
Ralph
Kern, MD, MHSc |
|
|
63 |
|
|
President and Chief Medical Officer |
David
Setboun, PharmD., MBA |
|
|
46 |
|
|
Executive Vice President, Chief Operating Officer |
Preetam
Shah, Ph.D., MBA |
|
|
48 |
|
|
Executive Vice President, Chief Financial Officer and
Treasurer |
Uri
Yablonka |
|
|
44 |
|
|
Executive Vice President, Chief Business Officer, Secretary and
Director |
Arturo
Araya |
|
|
50 |
|
|
Chief
Commercial Officer |
Stacy
Lindborg, Ph.D. |
|
|
50 |
|
|
Executive Vice President, Head of Global Clinical Research |
Anthony
Waclawski, Ph.D. |
|
|
59 |
|
|
Executive Vice President, Global Head of Regulatory Affairs |
Chaim Lebovits has been serving as our Chief Executive
Officer since September of 2015. Mr. Lebovits
joined the Company as President in connection with his arrangement
of an equity investment by ACC Biotech in the Company in
July 2007. On August 1, 2013, the Company appointed
Mr. Lebovits as its Principal Executive Officer, and he
assumes the duties and responsibilities of the Chief Executive
Officer on an interim basis until June 2014. During his tenure
with the Company, Mr. Lebovits has been instrumental in the
various capital raises undertaken by the Company and in his
capacity as President Mr. Lebovits managed relatively low burn
rates and was very instrumental in the major decisions of the
Company’s focus and direction, including the decision to focus on
Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s
Disease) as a first indication. Mr. Lebovits led efforts to
attract the clinical sites first in Israel and later in the United
States, building strong relationships for the Company with many
leading Key Opinion Leaders and Centers of Excellence for ALS
in the United States. Mr. Lebovits controls ACC Holdings
International, and its subsidiaries including ACC BioTech, which is
focused on the biotechnology sector. He has been at the forefront
of natural resource management and has spent years leading the
exploration and development of resources in Israel and served as a
member of the boards of directors of several companies in the
industry. Mr. Lebovits has also held senior positions for the
worldwide Chabad Lubavitch organization, the largest Jewish
organization in the world today.
Dr. Ralph Kern joined the Company on March 6, 2017
as Chief Operating Officer and Chief Medical Officer. He currently
serves as President and Chief Medical Officer since
April 2020. Prior to joining the Company, Dr. Kern was
Senior Vice President, Head Worldwide Medical at Biogen Inc. since
2016. Prior positions at Biogen Inc. include Vice President, Head
of Global Therapeutic Areas from 2015 to 2016 and Vice President,
Head of Global Medical Neurology in 2015. Dr. Kern has also
served Novartis Pharmaceuticals Corporation as Vice President, Head
Neuroscience Medical Unit from 2014 to 2015 and as Vice President,
Head MS Medical Unit from 2011 to 2014. He also worked for Genzyme
Corporation from 2006 to 2011 where he served as Global Medical
Director, Personalized Genetic Health (2010-2011), Head of Medical
Affairs, Canada (2006-2008), General Manager, Fabry Disease
(2008-2010) and Head of Medical Affairs, Canada (2006-2008). He
also served as University Neurology Program Director at the
University of Toronto (2003-2006), Consultant Neurologist at Mount
Sinai Hospital (2001-2006) and Director, EMG, EEG and Evoked
Potential Laboratory at The Credit Valley Hospital (1988-2001).
David Setboun, PharmD, MBA joined the Company on
April 7, 2020 at Executive Vice President, Chief Operating
Officer. Most recently, Dr. Setboun served as VP Corporate
Development, Strategy & Business at Life Biosciences from
July 2018 to April 2020. From June 2015 to
June 2018, he served as President, Biogen, France where he
launched Biogen’s rare disease franchise. Prior to his tenure at
Biogen, Dr. Setboun, served as President, AstraZeneca,
Portugal from 2012 to 2015. Prior to this role, Dr. Setboun
led the European Sales & Marketing function as
AstraZeneca’s VP Europe From 2002 to 2009, Dr. Setboun
directed national and international teams and projects for Eli
Lilly and Company in France and the USA. Dr. Setboun received
his Pharmaceutical Doctorate (Pharm.D.) from University Paris XI in
1997 and his MBA from H.E.C Paris in 2001.
Preetam Shah, Ph.D., MBA joined the Company on
September 6, 2019 as Executive Vice President, Chief Financial
Officer and Treasurer. Prior to joining the Company, Preetam Shah
served as Director, Healthcare Investment Banking at Barclays
Capital Plc. since June 2016. He has also served as Vice
President, Healthcare Investment Banking at Canaccord Genuity Inc.
from 2013 to 2016. 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 completed
his post-doctoral fellowship in Infectious Diseases from Stanford
University School of Medicine. He holds a Ph.D. in Microbiology
from the University of Mississippi Medical Center and a M.B.A. in
Finance from the Wharton School, University of Pennsylvania.
Uri Yablonka joined the Company on June 6, 2014 as
Chief Operating Officer and as a member of the Board. On
March 6, 2017 he was appointed Executive Vice President, Chief
Business Officer and ceased to serve as the Company’s Chief
Operating Officer. Prior to joining the Company, Mr. Yablonka
served since December 2010 as owner and General Manager of Uri
Yablonka Ltd., a business consulting firm. He also served since
January 2011 as Vice President, Business Development at ACC
International Holdings Ltd. (Holdings). Holdings is also an
affiliate of ACCBT Corp. Prior to serving with Holdings,
Mr. Yablonka served as Senior Partner of PM-PR Media
Consulting Ltd. From 2008 to January 2011, Mr. Yablonka
was Senior Partner at PM-PR Media Consulting Ltd., where he led
public relations and strategy consulting for a wide range of
governmental and private organizations. From 2002 to 2008, he
served as a correspondent at the Maariv Daily News Paper, including
extensive service as a Diplomatic Correspondent. We believe that
Mr. Yablonka’s skills and experience provide the variety and
depth of knowledge, judgment and vision necessary for the effective
oversight of the Company. His experience in business consulting and
development and media experience are expected to be valuable to the
Company in its current stage of growth and beyond, and his
governmental experience can provide valuable insight into issues
faced by companies in regulated industries such as ours. We believe
that these skills and experiences qualify Mr. Yablonka to
serve as a director of the Company.
Arturo O. Araya has served as the Chief Commercial Officer
of the Company since August 2018. He also served as a director
of the Company from February, 2017 to November, 2018. From 2002 to
2016, Mr. Araya worked for Novartis Pharmaceutical
Corporation, where he served as the Vice President and Head of
Global Commercial for Novartis’ Cell and Gene Therapies Unit
(June 2014 to July 2016), where he led a cross-functional
team to globally commercialize a portfolio of cell and gene
therapies. In his prior role as Novartis’ Global Brand Leader for
CTL019 (September 2012-May 2014), a CAR-T therapy, he was
responsible for developing early launch plans, including worldwide
and multiple indication forecasts and resource modeling. He has led
the Oncology Unit for Novartis in seven countries
(March 2002-August 2012). Prior to his tenure at
Novartis, Mr. Araya was with Bristol-Myers Squibb Company
(1999-2002), most recently as Associate Director of Marketing
Intelligence, Business Development & Licensing. He earned
an M.B.A. from the University of Michigan, and an M.A. and B.S. in
Engineering from the University of Connecticut.
Stacy Lindborg, PhD joined the Company on June 1, 2020
at Executive Vice President, Head of Global Clinical Research.
Dr. Lindborg previously served at Biogen Inc. from 2012 to
2020, where she was most recently Vice President, Analytics and
Data Science. She also served on the R&D governance team during
a time of significant growth for Biogen, and was active in guiding
the firm's long-term vision for growth through analytics and by
stimulating innovative development platforms to increase
productivity. Dr. Lindborg holds a Ph.D. in statistics from
Baylor University.
Anthony Waclawski, Ph.D. joined the Company in
September 2020 as Executive Vice President, Global Head of
Regulatory Affairs. From November 2016 to September 2020,
Dr. Waclawski served as Head Regulatory and Pharmaceutical
Sciences, Innovative Medicines Development at Bristol-Myers
Squibb. From June 2014 to October 2016, he served as Vice
President, Global Submissions and Regulatory Policy at
Bristol-Myers Squibb. Dr. Waclawski earned a Ph.D. and M.S. in
pharmaceutical sciences and a B.S. in pharmacy from Rutgers
University.
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth certain summary information with
respect to the compensation paid during the fiscal years ended
December 31, 2019 and 2018 earned by our Named Executive
Officers. In the table below, columns required by the regulations
of the SEC have been omitted where no information was required to
be disclosed under those columns.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
Option |
|
|
Stock |
|
|
All Other |
|
|
|
|
|
|
|
|
|
Salary |
|
|
Bonus |
|
|
Awards |
|
|
Awards |
|
|
Compensation |
|
|
|
|
Name and Principal Position |
|
Year |
|
|
($) |
|
|
($) |
|
|
($) (1) (2) |
|
|
($) (1) (2) |
|
|
($)(3) |
|
|
Total ($) |
|
Chaim Lebovits (*)
Chief Executive Officer (4) |
|
|
2018 |
|
|
|
500,000 |
|
|
|
750,000 |
(5) |
|
|
- |
|
|
|
133,472 |
(7) |
|
|
195,398 |
|
|
|
1,578,870 |
|
|
|
|
2019 |
|
|
|
500,000 |
|
|
|
250,000 |
(6) |
|
|
- |
|
|
|
125,364 |
(8) |
|
|
180,912 |
|
|
|
1,056,276 |
|
Ralph Kern, Chief
Medical Officer (9) |
|
|
2018 |
|
|
|
500,000 |
|
|
|
150,000 |
(10) |
|
|
- |
|
|
|
119,000 |
(12) |
|
|
72,650 |
|
|
|
841,650 |
|
|
|
|
2019 |
|
|
|
500,000 |
|
|
|
150,000 |
(11) |
|
|
- |
|
|
|
139,000 |
(13) |
|
|
63,145 |
|
|
|
852,145 |
|
Preetam Shah, Chief
Financial Officer (14) |
|
|
2019 |
|
|
|
109,375 |
|
|
|
- |
|
|
|
414,757 |
(15) |
|
|
99,000 |
(15) |
|
|
23,760 |
|
|
|
646,892 |
|
(*) These Named Executive Officers were paid in NIS; the amounts
above are the U.S. dollar equivalent. The conversion rate used was
the average of the 2019 daily rates between the U.S. dollar and the
NIS as published by the Bank of Israel, the central bank of
Israel.
(1) The amounts shown in the “Option Awards” and “Stock
Awards” columns represent the aggregate grant date fair value of
awards computed in accordance with ASC 718, not the actual amounts
paid to or realized by the Named Executive Officer during fiscal
2018 and fiscal 2019. ASC 718 fair value amount as of the grant
date for stock options generally is spread over the number of
months of service required for the grant to vest.
(2) The fair value of each stock option award is estimated as
of the date of grant using the Black-Scholes valuation model.
Additional information regarding the assumptions used to estimate
the fair value of all stock option awards is included in Note 11 to
Consolidated Financial Statements.
(3) Includes management insurance (which includes pension,
disability insurance and severance pay), payments towards such
employee’s education fund, Israeli social security and amounts
paid for use of a Company car. Each Named Executive Officer also
receives gross-up payments for the taxes on these benefits.
(4) On September 22, 2015, the Company appointed Chaim
Lebovits as its Chief Executive Officer.
(5) In April and in July 2018, the Company paid
Mr. Lebovits, in addition to his target discretionary bonus
amount of $250,000, an extra $500,000 in recognition of his ongoing
and outstanding contributions towards the Company’s overall
performance in fiscal year 2018.
(6) During 2019, the Company paid Mr. Lebovits a
discretionary cash bonus payment of $250,000 in recognition of his
contributions to the Company’s performance in fiscal year 2019.
(7) On July 26, 2018 Mr. Lebovits received a grant
of 31,185 shares of restricted Common Stock.
(8) On July 26, 2019 Mr. Lebovits received a grant
of 31,185 shares of restricted Common Stock.
(9) Dr. Kern’s employment with the Company began on
March 6, 2017.
(10) In March 2018, the Company paid Mr. Kern a
discretionary cash bonus payment of $150,000 in recognition of his
contributions to the Company’s performance in fiscal year 2018.
(11) In August 2019, the Company paid Mr. Kern a
discretionary cash bonus payment of $150,000 in recognition of his
contributions to the Company’s performance in fiscal year 2019.
(12) On March 6, 2018 Dr. Kern received a grant of 35,885
shares of restricted Common Stock.
(13) On March 6, 2019 Dr. Kern received a grant of 35,885
shares of restricted Common Stock.
(14) Mr. Shah’s employment with the Company began on
September 6, 2019.
(15) On September 6, 2019, Mr. Shah received a grant of
25,000 shares of restricted Common Stock and also an option to
purchase up to 100,000 shares of Common Stock under the 2014 Global
Plan, at an exercise price per share equal to $3.96 per share and
an option to purchase up to 100,000 shares of Common Stock under
the 2014 Global Plan, at an exercise price per share equal to
$6.00.
Executive Employment Agreements
Chaim Lebovits
On September 28, 2015, Chaim Lebovits, the Company’s Chief
Executive Officer and President, and the Company’s wholly owned
subsidiary Brainstorm Cell Therapeutics Ltd. (the “Subsidiary”),
entered into an employment agreement, which was amended on
March 7, 2016, July 26, 2017 and June 23, 2020 (as
amended, the “Lebovits Employment Agreement”). Pursuant to the
Lebovits Employment Agreement, Chaim Lebovits is paid a salary at
the annual rate of $500,000 (the “Base Salary”). Mr. Lebovits
also receives other benefits that are generally made available to
the Subsidiary’s employees. In addition, he is provided with a
cellular phone and a company car, with all costs including taxes
borne by the Subsidiary.
Pursuant to the Lebovits Employment Agreement, Mr. Lebovits
was granted a stock option under the Company’s 2014 Global Share
Option Plan on September 28, 2015 for the purchase of up to
369,619 shares of the Company’s Common Stock at a per share
exercise price of $2.45, which grant is fully vested and
exercisable and shall be exercisable for a period of two years
after termination of employment. Pursuant to the Lebovits
Employment Agreement, Mr. Lebovits was granted on
July 26, 2017, and is also eligible to receive, an annual cash
bonus equal to 50% of his base salary, subject to his satisfaction
of pre-established performance goals to be authorized by the Board
based on an assessment of Mr. Lebovits’s performance each
year. Performance is evaluated through a performance management
framework and a bonus range based on the target bonus.
Pursuant to the Lebovits Employment Agreement, Mr. Lebovits
received on July 26, 2017, and is entitled to receive on each
anniversary thereafter (provided he remains Chief Executive
Officer), a grant of restricted stock under the Company’s 2014
Global Share Option Plan (or any successor or other equity plan
then maintained by the Company) comprised of a number of shares of
Common Stock with a fair market value (determined based on the
price of the Common Stock at the end of normal trading hours on the
business day immediately preceding the Effective Date according to
Nasdaq) equal to 30% of Mr. Lebovits’ Base Salary. Each grant
shall vest as to twenty-five percent (25%) of the award on each of
the first, second, third and fourth anniversary of the date of
grant, provided Mr. Lebovits remains continuously employed by
the Company from the date of grant through each applicable vesting
date. Each grant shall be subject to accelerated vesting upon a
Change of Control (as defined in the Lebovits Employment Agreement)
of the Company. In the event of Mr. Lebovits’ termination of
employment, any portion of a grant that is not yet vested (after
taking into account any accelerated vesting) shall automatically be
immediately forfeited to the Company, without the payment of any
consideration to Mr. Lebovits.
Pursuant to the Lebovits Employment Agreement, on July 26,
2017, Mr. Lebovits also received a fully vested and
exercisable option to purchase up to 41,580 shares of Common Stock,
with an exercise price per share of $4.81. The option was
fully-vested and exercisable until the 2nd anniversary of the date
of grant, when it expired unexercised. The Lebovits Employment
Agreement contains termination provisions, pursuant to which if the
Company terminates the Employment Agreement or Mr. Lebovits’
employment without Cause (as defined in the agreement) or if
Mr. Lebovits terminates the employment agreement or his
employment thereunder with Good Reason (as defined in the
agreement), the Company shall: (i) within 90 days pay
Mr. Lebovits, as severance pay, a lump sum equal to six
(6) months of Base Salary (which shall increase to nine
(9) months after July 26, 2019 and twelve (12) months
after July 26, 2020) (provided Mr. Lebovits is actively
employed by the Company on such dates) (the “Payment Period”);
(ii) pay Mr. Lebovits within 30 days of his termination
of employment any bonus compensation that Mr. Lebovits would
be entitled to receive during the Payment Period in the absence of
his termination without Cause or for Good Reason;
(iii) immediately vest such number of equity or equity based
awards that would have vested during the six (6) months
following the date of termination of employment; and
(iv) shall continue to provide to Mr. Lebovits health
insurance benefits during the Payment Period, unless otherwise
provided by a subsequent employer. The foregoing severance payments
are conditional upon Mr. Lebovits executing a waiver and
release in favor of the Company in a form reasonably acceptable to
the Company.
Dr. Ralph Kern
On February 28, 2017, the Company and Dr. Ralph Kern
entered into an employment agreement, effective March 6, 2017,
which sets forth the terms of Dr. Kern’s employment (as
amended by Amendment No. 1 dated March 3, 2017, the
“Agreement”). Pursuant to the Agreement, Dr. Kern is paid an
annual salary of $500,000 (the “Base Salary”), which may be
increased (but not decreased) at the sole discretion of the Board.
Dr. Kern is also eligible to receive an annual cash bonus
equal to 30% of his base salary, subject to his satisfaction of
pre-established performance goals to be mutually agreed upon by the
Board and Dr. Kern. Performance is evaluated through a
performance management framework and a bonus range based on the
target bonus. Dr. Kern also receives other benefits that are
generally made available to the Company’s employees.
Pursuant to the Agreement, Dr. Kern received on March 6,
2017, and is entitled to receive on each anniversary thereafter
(provided he remains employed by the Company), a grant of
restricted stock under the Company’s 2014 Stock Incentive Plan (or
any successor or other equity plan then maintained by the Company)
comprised of a number of shares of common stock of the Company,
$0.00005 par value (“Common Stock”) with a fair market value
(determined based on the price of the Common Stock at the end of
normal trading hours on the business day immediately preceding
March 6, 2017 according to Nasdaq) equal to 30% of
Dr. Kern’s Base Salary. Each equity grant vests as to
twenty-five percent (25%) of the award on each of the first,
second, third and fourth anniversary of the date of grant, provided
Dr. Kern remains continuously employed by the Company from the
date of grant through each applicable vesting date. Each equity
grant is subject to accelerated vesting upon a Change of Control
(as defined in the Agreement) of the Company. In the event of
Dr. Kern’s termination of employment, any portion of an equity
grant that is not yet vested (after taking into account any
accelerated vesting) shall automatically be immediately forfeited
to the Company, without the payment of any consideration to
Dr. Kern.
Pursuant to the Agreement, on March 6, 2017, Dr. Kern
also received an option under the 2014 U.S. Plan to purchase up to
47,847 shares of Common Stock with an exercise price per share of
$4.18. The option was fully vested and exercisable until the 2nd
anniversary of the date of grant, when it expired unexercised.
The Agreement contains termination provisions, pursuant to which if
the Company terminates the Agreement or Dr. Kern’s employment
without Cause (as defined in the Agreement) or if Dr. Kern
terminates the Agreement or his employment thereunder with Good
Reason (as defined in the Agreement), the Company shall:
(i) within 90 days pay Dr. Kern, as severance pay, a lump
sum equal to six (6) months of Base Salary (which shall
increase to nine (9) months after the second anniversary of
March 6, 2017 and twelve (12) months after the third
anniversary of March 6, 2017) (provided Dr. Kern is
actively employed by the Company on such dates) (the “Payment
Period”); (ii) pay Dr. Kern within 30 days of his
termination of employment any bonus compensation that Dr. Kern
would be entitled to receive during the Payment Period in the
absence of his termination without Cause or for Good Reason;
(iii) immediately vest such number of equity or equity based
awards that would have vested during the six (6) months
following the date of termination of employment; and
(iv) shall continue to provide to Dr. Kern health
insurance benefits during the Payment Period, unless otherwise
provided by a subsequent employer. The foregoing severance payments
are conditional upon Dr. Kern executing a waiver and release
in favor of the Company in a form reasonably acceptable to the
Company.
Preetam Shah
On September 5, 2019, the Company and Preetam Shah, PhD, MBA,
the Company’s Executive Vice President, Chief Financial Officer and
Treasurer, entered into an employment agreement, pursuant to which
Dr. Shah receives an annual salary of $350,000 and is 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 also receives other benefits that are
generally made available to the Company’s employees. Pursuant to
the agreement, Dr. Shah received on September 6, 2019, a
one-time grant of stock options under the Company’s 2014 Stock
Incentive Plan (i) to purchase up to 100,000 shares of 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. 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
September 6, 2019, a one-time grant under the 2014 Stock
Incentive Plan of 25,000 shares of restricted common stock of the
Company, 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.
Terms of Option Awards
Stock option grants to the Named Executive Officers are described
in the summaries of their executive employment agreements above and
incorporated herein. Unless otherwise stated, option grants issued
to Named Executive Officers prior to August 14, 2014 were made
pursuant to the Company’s 2004 Global Share Option Plan and grants
issued to Named Executive Officers on or after August 14, 2014
were made pursuant to the Company’s 2014 Stock Incentive Plan or
the 2014 Global Share Option Plan, and expire on the tenth
anniversary of the grant date.
Outstanding Equity Awards
The following table sets forth information regarding equity awards
granted to the Named Executive Officers that are outstanding as of
December 31, 2019. In the table below, columns required by the
regulations of the SEC have been omitted where no information was
required to be disclosed under those columns.
Outstanding Equity Awards at December 31, 2019
|
|
Option Awards |
|
|
Stock Awards |
|
Name |
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable |
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable |
|
|
Option
Exercise
Price
($) |
|
|
Option
Expiration
Date |
|
|
Number
of Shares
or Units
of Stock
That Have
Not Vested
(#)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
|
|
Chaim Lebovits |
|
|
369,619 |
|
|
|
- |
|
|
|
2.45 |
|
|
|
9/28/2025 |
|
|
|
23,38915,593 |
(2) |
|
|
66,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,389 |
(3) |
|
|
100,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,185 |
(4) |
|
|
133,472 |
|
Ralph
Kern |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
17,943 |
(5) |
|
|
76,794 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,885 |
(6) |
|
|
115,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,914 |
(7) |
|
|
153,588 |
|
Preetam
Shah |
|
|
- |
|
|
|
100,000 |
(8) |
|
|
3.96 |
|
|
|
9/05/2029 |
|
|
|
25,000 |
(9) |
|
|
107,000 |
|
|
|
|
|
|
|
|
100,000 |
(8) |
|
|
6.00 |
|
|
|
9/05/2029 |
|
|
|
|
|
|
|
|
|
(1) |
Based
on the fair market value of our Common Stock on December 31,
2019 ($4.28 per share). |
|
|
(2) |
Restricted stock
award vests 25% on each of the 1st, 2nd,
3rd and 4th anniversary of date of grant
(July 26, 2017), provided that Chaim Lebovits remains
continuously employed by the Company from the date of grant through
each applicable vesting date. |
|
|
(3) |
Restricted stock
award vests 25% on each of the 1st, 2nd,
3rd and 4th anniversary of date of grant
(July 26, 2018), provided that Chaim Lebovits remains
continuously employed by the Company from the date of grant through
each applicable vesting date. |
|
|
(4) |
Restricted stock
award vests 25% on each of the 1st, 2nd,
3rd and 4th anniversary of date of grant
(July 26, 2019), provided that Chaim Lebovits remains
continuously employed by the Company from the date of grant through
each applicable vesting date. |
|
|
(5) |
Restricted stock
award vests 25% on each of the 1st, 2nd,
3rd and 4th anniversary of date of grant
(March 6, 2017), provided that Ralph Kern remains continuously
employed by the Company from the date of grant through each
applicable vesting date. |
|
|
(6) |
Restricted stock
award vests 25% on each of the 1st, 2nd,
3rd and 4th anniversary of date of grant
(March 6, 2018), provided that Ralph Kern remains continuously
employed by the Company from the date of grant through each
applicable vesting date. |
|
|
(7) |
Restricted stock
award vests 25% on each of the 1st, 2nd,
3rd and 4th anniversary of date of grant
(March 6, 2019), provided that Ralph Kern remains continuously
employed by the Company from the date of grant through each
applicable vesting date. |
|
|
(8) |
Stock options 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 Preetam Shah
remains continuously employed by the Company from the date of grant
through each applicable vesting date. |
|
|
(9) |
Restricted stock
award shall vest as to 100% of the award on the one year
anniversary of the grant date (September 6, 2019), provided
Preetam Shah remains continuously employed by the Company from the
date of grant through the vesting date. |
Stock Incentive Plans
During the fiscal year ended December 31, 2019, the Company
had outstanding awards for stock options under four plans:
(i) the 2004 Global Stock Option Plan and the Israeli Appendix
thereto (the “2004 Global Plan”) (ii) the 2005 U.S. Stock
Option and Incentive Plan (the “2005 U.S. Plan,” and together with
the 2004 Global Plan, the “Prior Plans”); (iii) the 2014
Global Share Option Plan and the Israeli Appendix thereto (which
applies solely to participants who are residents of Israel) (the
“2014 Global Plan”); and (iv) the 2014 Stock Incentive Plan
(the “2014 U.S. Plan” and together with the 2014 Global Plan, the
2014 Plans).
The 2004 Global Plan and 2005 U.S. Plan expired on
November 25, 2014 and March 28, 2015, respectively.
Grants that were made under the Prior Plans remain outstanding
pursuant to their terms. The 2014 Plans were approved by the
stockholders on August 14, 2014 (at which time the Company
ceased to issue awards under each of the 2005 U.S. Plan and 2004
Global Plan) and amended on June 21, 2016 and
November 29, 2018. Unless otherwise stated, option grants
prior to August 14, 2014 were made pursuant to the Company’s
Prior Plans, and grants issued on or after August 14, 2014
were made pursuant to the Company’s 2014 Plans, and expire on the
tenth anniversary of the grant date.
The 2014 Plans have a shared pool of 4,000,000 shares of common
stock available for issuance. The exercise price of the options
granted under the 2014 Plans may not be less than the nominal value
of the shares into which such options are exercised. Any options
under the 2014 Plans that are canceled or forfeited before
expiration become available for future grants.
Compensation of Directors
The following table sets forth certain summary information with
respect to the compensation paid during the fiscal year ended
December 31, 2019 earned by each of the directors of the
Company. In the table below, columns required by the regulations of
the SEC have been omitted where no information was required to be
disclosed under those columns.
Director Compensation Table for Fiscal 2019
|
|
Fees |
|
|
|
|
|
Option |
|
|
|
|
|
|
Earned
or |
|
|
Stock |
|
|
Awards |
|
|
|
|
|
|
Paid
in |
|
|
Awards |
|
|
($) |
|
|
Total |
|
Name |
|
Cash ($) |
|
|
($)(1) |
|
|
(1)(2) |
|
|
($) |
|
Dr. Irit Arbel |
|
|
- |
|
|
|
- |
|
|
|
84,366 |
(3) |
|
|
84,366 |
|
Dr. June S. Almenoff |
|
|
30,000 |
(4) |
|
|
7,780 |
(5) |
|
|
|
|
|
|
37,780 |
|
Mr. Chen Schor |
|
|
30,000 |
(8) |
|
|
|
|
|
|
|
|
|
|
30,000 |
|
Dr. Anthony Polverino |
|
|
12,500 |
(6) |
|
|
21,819 |
(7) |
|
|
- |
|
|
|
34,319 |
|
Mr. Malcolm Taub |
|
|
- |
|
|
|
46,680 |
(9) |
|
|
- |
|
|
|
46,680 |
|
Uri
Yablonka |
|
|
- |
|
|
|
- |
|
|
|
44,402 |
(10) |
|
|
44,402 |
|
(1)
|
The amounts shown in the “Stock Awards” and “Option Awards” columns
represent the aggregate grant date fair value of awards computed in
accordance with ASC 718, not the actual amounts paid to or realized
by the directors during fiscal 2019.
|
|
|
(2) |
The fair value of
each stock option award is estimated as of the date of grant using
the Black-Scholes valuation model. Additional information regarding
the assumptions used to estimate the fair value of all stock option
awards is included in Note 10 - Share-based compensation to
employees and to directors to Consolidated Financial
Statements. |
|
|
(3) |
At
December 31, 2019, Dr. Arbel had options (vested and
unvested) to purchase 233,887 shares of Common Stock. |
|
|
(4) |
Represents amounts
paid to Dr. Almenoff for services as a director. |
|
|
(5) |
At
December 31, 2019, Dr. Almenoff was entitled to 2,000
shares of unvested restricted Common Stock (restricted share
issuance in process at year end). |
|
|
(6) |
Represents amounts
paid to Dr. Polverino for his services as a director. |
|
|
(7) |
At
December 31, 2019, Dr. Polverino had 2,000 shares of
unvested restricted Common Stock (restricted share issuance in
process at year end). |
|
|
(8) |
Represents the
amount paid to Mr. Schor for his services as a director.
Mr. Schor resigned from our Board on March 30, 2020. |
|
|
(9) |
At
December 31, 2019, Mr. Taub had 12,000 shares of unvested
restricted Common Stock (restricted share issuance in process at
year end). |
|
|
(10) |
At December 31, 2019, Mr. Yablonka had options (vested
and unvested) to purchase 113,331 shares of Common Stock.
|
Director Compensation Plan
We review the level of compensation of our non-employee directors
on a periodic basis. To determine how appropriate the current level
of compensation for our non-employee directors is, we have
historically obtained data from a number of different sources,
including publicly available data describing director compensation
in peer companies and survey data collected by an independent
compensation consultant. Those of our directors who are not
employees of Brainstorm receive compensation for their services as
directors as follows:
The Company’s Second Amended and Restated Director Compensation
Plan was approved July 9, 2014 and amended on April 29,
2015, February 26, 2017 and July 13, 2017 (as amended,
the “Director Compensation Plan”). Under the Director Compensation
Plan, each eligible director is granted an annual award immediately
following each annual meeting of stockholders beginning with the
2014 annual meeting. For non-U.S. directors, this annual award
consists of a nonqualified stock option to purchase 13,333 shares
of Common Stock. For U.S. directors, at their option, this annual
award is either (i) a nonqualified stock option to purchase
6,666 shares of Common Stock or (ii) 6,666 shares of
restricted stock. Additionally, each member of the GNC Committee or
Audit Committee of the Board receives (i) a nonqualified stock
option to purchase 2,000 shares of Common Stock or (ii) in the
case of U.S. directors and at their option, 2,000 shares of
restricted stock. The chair of the GNC Committee or Audit Committee
will instead of the above committee award receive (i) a
nonqualified stock option to purchase 3,333 shares of Common Stock
or (ii) in the case of U.S. directors and at their option,
3,333 shares of restricted stock. Any eligible participant who is
serving as chairperson of the Board shall also receive (i) a
nonqualified stock option to purchase 6,666 shares of Common Stock
or (ii) in the case of U.S. directors and at their option,
6,666 shares of restricted stock. Awards are granted on a pro rata
basis for directors serving less than a year at the time of grant.
The exercise price for options for U.S. directors will be equal to
the closing price per share of the Common Stock on the grant date
as reported on the Over-the-Counter Bulletin Board or the national
securities exchange on which the Common Stock is then traded. The
exercise price for options for non-U.S. directors is $0.75. Every
option and restricted stock award will vest monthly as to 1/12 the
number of shares subject to the award over a period of twelve
months from the date of grant, provided that the recipient remains
a member of the Board on each such vesting date, or, in the case of
a committee award, remains a member of the committee on each such
vesting date. Every non-employee director of the Company is
eligible to participate in the Director Compensation Plan, except
that Chen Schor, Dr. June S. Almenoff, Arturo O. Araya
(until he commenced service as an employee in August, 2018) and
Dr. Anthony Polverino are not entitled receive annual director
awards under the Director Compensation Plan, but are entitled to
committee compensation under the Director Compensation Plan in the
event that they qualify for and serve as a member of any committee
of the Board. Mr. Schor, Dr. Almenoff, Mr. Araya and
Dr. Polverino’s director compensation is further discussed
below.
Pursuant to a February 26, 2017 resolution of the Board,
Dr. Almenoff receives the following compensation for her
service on the Board: an annual cash award in the amount of
$30,000, paid in biannual installments. Dr. Almenoff will not
receive annual director awards under the Director Compensation
Plan, but in the event that Dr. Almenoff serves as a member of
any committee of the Board she will be entitled to committee
compensation under the Director Compensation Plan.
Dr. Almenoff serves as a member of the Audit Committee.
Pursuant to resolutions of the Board, Dr. Polverino receives
the following compensation for his service on the Board: an annual
cash award in the amount of $12,500, paid in biannual installments,
and an annual restricted stock award valued at $12,500 on the date
of grant, as determined based on the closing price of the Company’s
common stock at the end of normal trading hours on the date of
grant, or the previous closing price in the event the grant date
does not fall on a business day. The grant vests in 12 consecutive,
equal monthly installments commencing on the one-month anniversary
of the date of grant, until fully vested on the first anniversary
of the date of grant. Dr. Polverino does not receive annual
director awards under the Director Compensation Plan, but in the
event that he serves as a member of any committee of the Board he
is entitled to committee compensation under the Director
Compensation Plan. Dr. Polverino serves on the GNC Committee.
In November 2018 he received a grant of 1,667 shares of Common
Stock for prior GNC Committee services.
Pursuant resolution of the Board, Mr. Araya received the
following compensation for his service on the Board: an annual cash
award in the amount of $12,500, paid in biannual installments, and
an annual restricted stock award valued at $12,500 on the date of
grant, as determined based on the closing price of the Company’s
common stock at the end of normal trading hours on the date of
grant, or the previous closing price in the event the grant date
does not fall on a business day. Mr. Araya also received a
grant of 1,249 shares of restricted stock for his service on the
GNC Committee. All grants ceased vesting and Mr. Araya
resigned as a member of the GNC effective August 28, 2018, in
connection with Mr. Araya commencing employment with the
Company as its Chief Commercial Officer. Mr. Araya ceased
serving as a member of the Board on November 29, 2018.
On February 26, 2017 the Amended and Restated Executive
Director Agreement between the Company and Chen Schor dated
November 11, 2011 was terminated by mutual agreement of Chen
Schor and the Company, and the Board approved that Chen Schor was
to receive the following compensation for his then service on the
Board: an annual cash award in the amount of $30,000, paid in
biannual installments; that Mr. Schor will not receive annual
director awards under the Director Compensation Plan, but in the
event that Mr. Schor serves as a member of any committee of
the Board he will be entitled to committee compensation under the
Director Compensation Plan; and that the restricted stock grant
(the “Schor Grant”) of 60,000 shares of restricted Common Stock
previously granted to Mr. Schor under the Company’s 2014 Stock
Incentive Plan will continue to vest as previously agreed: 20,000
on: (a) August 22, 2015 (b) 20,000 on
August 22, 2016 and (c) 20,000 on August 22, 2017
(at which time the Grant was fully vested). Mr. Schor served
as a member of the audit committee from November 2017 to
November 2019. Mr. Schor resigned form our Board on
March 30, 2020 and is no longer receiving any compensation
from the Company.
On July 13, 2017 pursuant to the Company’s Third Amendment to
the Second Amended and Restated Director Compensation Plan, we
granted a stock option to Dr. Arbel to purchase up to 12,000
shares of Common Stock at a purchase price of $0.75 per share,
which was fully vested and exercisable on the date of grant.
On December 12, 2019, the following grants were made under the
Director Compensation Plan to the eligible directors:
Dr. Arbel received a stock option to purchase 25,333 shares of
Common Stock for her service as a director, chairperson of the
Board, chair of the GNC Committee and a member of the Audit
Committee; Dr. Almenoff received 2,000 shares of restricted
stock for her service as a member of the Audit Committee;
Dr. Polverino received 2,000 shares of restricted stock for
his service as a member of the GNC Committee; and Mr. Taub
received 12,000 shares of restricted stock for his service as a
director, chair of the Audit Committee and a member of the GNC
Committee.
Certain Relationships and Related Transactions
The Audit Committee of our Board reviews and approves all
related-party transactions. A “related-party transaction” is a
transaction that meets the minimum threshold for disclosure under
the relevant SEC rules (transactions involving amounts
exceeding the lesser of $120,000 or one (1) percent of the
average of the smaller reporting company's total assets at year-end
for the last two fiscal years in which a “related person” or entity
has a direct or indirect material interest). “Related persons”
include our executive officers, directors, 5% or more beneficial
owners of our Common Stock, immediate family members of these
persons and entities in which one of these persons has a direct or
indirect material interest. When a potential related-party
transaction is identified, management presents it to the Audit
Committee to determine whether to approve or ratify it.
The Audit Committee reviews the material facts of any related-party
transaction and either approves or disapproves of the entry into
the transaction. If advance approval of a related-party transaction
is not feasible, then the transaction will be considered and, if
the Audit Committee determines it to be appropriate, ratified by
the Audit Committee. No director may participate in the approval of
a transaction for which he or she is a related party.
Investment Agreement with ACCBT Corp.
We are party to a July 2, 2007 subscription agreement and
related registration rights agreement and warrants, amended
July 31, 2009, May 10, 2012, May 19, 2014 and
November 2, 2017 (together as amended, the “ACCBT Documents”)
with ACCBT, a company under the control of Mr. Chaim Lebovits,
our Chief Executive Officer, pursuant to which, for an aggregate
purchase price of approximately $5.0 million, we sold to ACCBT
1,920,461 shares of our Common Stock (the “Subscription Shares”)
and warrants to purchase up to 2,016,666 shares of our Common Stock
(the “ACCBT Warrants”). The ACCBT Warrants contain cashless
exercise provisions, which permit the cashless exercise of up to
50% of the underlying shares of Common Stock. 672,222 of the ACCBT
Warrants have an exercise price of $3.00 and the remainder have an
exercise price of $4.35. All of the ACCBT Warrants are presently
outstanding.
Pursuant to the terms of the ACCBT Documents, ACCBT has the
following rights for so long as ACCBT or its affiliates hold at
least 5% of our issued and outstanding share capital:
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Board Appointment Right: ACCBT has the right to appoint 30% of the
members of our Board and any of our committees and the Board of
Directors of our subsidiaries.
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· |
Preemptive Right: ACCBT has the right to receive thirty days’
notice of, and to purchase a pro rata portion (or greater under
certain circumstances where offered shares are not purchased by
other subscribers) of, securities issued by us, including options
and rights to purchase shares. This preemptive right does not
include issuances under our equity incentive plans.
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· |
Consent Right: ACCBT’s written consent is required for Brainstorm
transactions greater than $500,000.
|
In addition, ACCBT is entitled to demand and piggyback registration
rights, whereby ACCBT may request, upon 15 days’ written notice,
that we file, or include within a registration statement to be
filed, with the Securities and Exchange Commission for ACCBT’s
resale of the Subscription Shares, as adjusted, and the shares of
our Common Stock issuable upon exercise of the ACCBT Warrants. We
registered 1,920,461 shares of Common Stock and 2,016,666 shares of
Common Stock underlying the ACCBT Warrants on registration
statement No. 333-201705 dated January 26, 2015 pursuant
to ACCBT’s registration rights.
The foregoing description reflects the November 2, 2017
Warrant Amendment Agreement between the Company and ACCBT, pursuant
to which the rights and privileges of the ACCBT Entities relating
to the management of the Company were reduced, in exchange for a
five (5) year extension of the expiration of the Company
warrants held by the ACCBT Entities. Pursuant to the amendment, the
ACCBT Documents were amended as follows: (i) the ACCBT
Entities existing right to appoint 50.1% of the Board of Directors
of the Company and its subsidiaries was reduced to 30%;
(ii) the ACCBT Entities’ consent rights regarding Company
matters pursuant to the ACCBT Documents were limited to
transactions greater than $500,000 (previous to the amendment the
consent right was for transactions of $25,000 or more); and
(iii) the expiration date of each of the ACCBT Warrants was
extended until November 5, 2022 (the previous expiration date
was November 5, 2017).
Mr. Lebovits, the Company’s Chief Executive Officer, is deemed
to control ACCBT. Mr. Lebovits employment agreement with the
Company and related employee compensation are described under
“Executive Employment Agreements” in the Executive Compensation
section above. Additionally, Mr. Yablonka, the Company’s
Director, EVP and Chief Business Officer serves as Vice President,
Business Development at ACC International Holdings Ltd., an
affiliate of ACCBT Corp.
Securities Purchase Agreement with Abbhi Investments,
LLC
We are party to a Securities Purchase Agreement with Abbhi
Investments, LLC pursuant to which the Company sold 1,250,000
shares of the Company’s Common Stock in a registered direct
offering, at a purchase price per share of $8.00 for a total
purchase price of $10,000,000. In connection therewith, the Company
also issued a warrant to purchase 250,000 shares of Common Stock at
an exercise price of $15.00 per share, with an expiration date of
the third anniversary of the date of issuance. The offering was
made pursuant to the Company’s shelf registration statement on
Form S-3 (Registration No. 333-225517) and related
March 6, 2020 prospectus supplement. Pursuant to the
Securities Purchase Agreement, Abbhi Investments, LLC was entitled
to appoint Sankesh Abbhi to serve as a member of the Board at any
time prior to April 30, 2020 by giving notice to the Company
of such appointment, and Mr. Abbhi shall continue to serve for
so long as Abbhi Investments, LLC remains the beneficial owner of
Common Stock.
Independent Registered Public Accounting Firm
Principal Accountant Fees and Services
The following table presents fees for professional audit services
rendered by Brightman Almagor Zohar & Co., a Firm in the
Deloitte Global Network (“Deloitte”) for the audit of our financial
statements for the fiscal years ended December 31, 2018 and
2019 and fees billed for other services rendered by Deloitte during
those periods.
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
Audit Fees (1) |
|
$ |
55,000 |
|
|
$ |
58,000 |
|
Audit-Related Fees |
|
$ |
- |
|
|
$ |
- |
|
Tax Fees
(2) |
|
$ |
11,000 |
|
|
$ |
28,000 |
|
All Other
Fees |
|
$ |
- |
|
|
$ |
- |
|
Total
Fees |
|
$ |
66,000 |
|
|
$ |
86,000 |
|
(1)
|
Audit fees are comprised of fees for professional services
performed by Deloitte for the audit of our annual financial
statements and the review of our quarterly financial statements, as
well as other services provided by Deloitte in connection with
statutory and regulatory filings or engagements.
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|
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(2) |
Tax fees are comprised of fees for preparation of tax returns to
the Company and the services performed by Deloitte in connection
with Inter-Company matters.
|
We did not use Deloitte for financial information system design and
implementation. These services, which include designing or
implementing a system that aggregates source data underlying the
financial statements and generates information that is significant
to our financial statements, are provided internally or by other
service providers. We did not engage Deloitte to provide compliance
outsourcing services.
Pre-approval Policies
Our Audit Committee is responsible for pre-approving all services
provided by our independent auditors. All of the above services and
fees were reviewed and approved by the Audit Committee before the
services were rendered.
The Board of Directors has considered the nature and amount of fees
billed by Deloitte and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining
Deloitte’s independence.
Audit Committee Financial Expert
The Board has determined that Dr. Irit Arbel is an “audit
committee financial expert” as defined in Item 407(d)(5) of
Regulation S-K. Dr. Arbel is serving as the “audit committee
financial expert” in accordance with Nasdaq
Rule 5605(c)(2)(B).
Audit Committee Report
The Audit Committee of the Board has reviewed and discussed the
Company’s audited financial statements for the fiscal year ended
December 31, 2019 with the Company’s management. The Audit
Committee has discussed with Deloitte, the Company’s independent
registered public accounting firm, the matters required to be
discussed by Statement on Auditing Standards No. 61, as
amended. The Audit Committee has discussed with Deloitte its
independence and has received the written disclosures and the
letter from Deloitte required by the applicable requirements of the
Public Company Accounting Oversight Board regarding the independent
accountant’s communications with the Audit Committee concerning
independence. The Audit Committee has also considered whether
Deloitte’s provision of non-audit services to the Company is
compatible with maintaining Deloitte’s independence. Based on such
reviews and discussions, among other things, the Audit Committee
recommended to the Board that the audited financial statements be
included in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2019.
AUDIT COMMITTEE
Malcolm Taub (Chair)
Dr. Irit Arbel
Dr. June S. Almenoff
The information contained in the foregoing Audit Committee Report
shall not be deemed to be “soliciting material” or “filed” or
incorporated by reference into any of the Company’s previous or
future filings with the SEC, or subject to the liabilities of
Section 18 of the Exchange Act, except to the extent
specifically incorporated by reference into a document filed under
the Securities Act of 1933, as amended or the Exchange Act.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10%
of our Common Stock (collectively, the “Reporting Persons”), to
file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to
provide us with copies of those filings. Based solely on our review
of the copies of such forms received by us, or written
representations from the Reporting Persons, we believe that during
the fiscal year ended December 31, 2019 all Reporting Persons
complied with the applicable requirements of
Section 16(a) of the Exchange Act, except for the late
filings of Form 4s by June Almenoff, Anthony
Polverino, Irit Arbel, Malcolm Taub and Uri Yablonka in
February 2020.
Other Matters
The Board does not know of any other matters which may come before
the Meeting. However, if any other matters are properly presented
at the Meeting, it is the intention of the persons named in the
accompanying proxy to vote, or otherwise act, in accordance with
their judgment on such matters. Discretionary authority for them to
do so is contained in the enclosed proxy card.
An adjournment of the Meeting may be made from time to time by the
chairman of the Meeting or by approval of the holders of shares
representing a majority of the votes present in person or by proxy
at the Meeting, whether or not a quorum exists. In their
discretion, the proxies named in the proxy card are authorized to
vote upon any adjournment of the Meeting.
Stockholder Proposals
Proposals of stockholders intended for inclusion in the Company’s
proxy statement for the annual meeting of stockholders to be held
in 2021 or special meeting of stockholders held in lieu thereof in
accordance with Rule 14a-8 promulgated under the Exchange Act,
must be received by the Company at its principal executive offices
at the following address: Brainstorm Cell Therapeutics Inc., 1325
Avenue of Americas, 28th Floor, New York, NY 10019 not later than
June 3, 2021 in order to be included in the Company’s proxy
statement relating to the 2021 meeting of stockholders. Any such
proposal must also comply with the requirements as to form and
substance established by the SEC in order to be included in the
proxy statement relating to the 2021 meeting of stockholders.
Pursuant to Rule 14a-4 promulgated under the Exchange Act
(“Rule 14a-4”), stockholders who wish to make a proposal or
nominate a director at the 2021 meeting of stockholders, other than
a proposal intended for inclusion in the Company’s proxy statement
for the 2021 meeting of stockholders, must notify the Company not
later than August 17, 2021. If a stockholder who wishes to
present such a proposal fails to notify the Company by
August 17, 2021, and such proposal is brought before the 2021
meeting of stockholders, then under the SEC’s proxy rules, the
proxies solicited by management with respect to such meeting will
confer discretionary voting authority with respect to such
stockholder proposal on those persons selected by management to
vote the proxies. Even if a stockholder makes a timely
notification, those persons selected by management to vote the
proxies may still exercise discretionary voting authority under
circumstances consistent with Rule 14a-4.
In order to curtail controversy as to the date on which a proposal
was received by the Company, it is suggested that stockholders
submit any proposals they might have by certified mail, return
receipt requested to the Company.
Incorporation by Reference
The SEC allows the Company to incorporate information “by
reference” into this Proxy Statement, which means that we may
disclose important information to you by referring you to another
document filed separately with the SEC. The information
incorporated by reference herein is deemed to be a part of this
Proxy Statement and is being delivered to you with this Proxy
Statement.
This Proxy Statement incorporates by reference our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, a
copy of which (without exhibits) is being delivered to you with
this Proxy Statement and which contains important information about
the Company that is not set forth in this Proxy Statement.
Annual Report on Form 10-K
Together with this Proxy Statement, the Company is sending a copy
of its 2019 Annual Report on Form 10-K (without exhibits) to
all of its stockholders of record as of September 21, 2020.
The 2019 Annual Report contains the Company’s audited consolidated
financial statements for the fiscal years ended December 31,
2018 and 2019.
A copy of the Company’s Annual Report on Form 10-K (with all
exhibits) for the fiscal year ended December 31, 2019 filed
with the SEC may be accessed from the SEC’s website at
www.sec.gov and from the Investors section of the Company’s
website at www.brainstorm-cell.com and may be obtained
without charge upon written request to Brainstorm Cell Therapeutics
Inc., 1325 Avenue of Americas, 28th Floor, New York, NY 10019,
Attention: Chief Executive Officer.
By Order of the Board of Directors
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/s/ Uri
Yablonka |
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Uri Yablonka, Chief Business Officer
and Secretary |
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New York, New York |
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October 1, 2020 |
|
Appendix A
BRAINSTORM CELL THERAPEUTICS INC.
AMENDMENT NO. 3
TO
2014 STOCK INCENTIVE PLAN
The 2014 Stock Incentive Plan (the “Plan”) of Brainstorm Cell
Therapeutics Inc., a Delaware corporation (the “Company”), is
hereby amended by this AMENDMENT NO. 3 as follows:
Section 4(a)(1) of the Plan is hereby deleted in its
entirety and a new Section 4(a)(1) is inserted in lieu
thereof which shall read as follows:
“(1). Authorized Number of Shares. Subject to adjustment
under Section 7, Awards may be made under the Plan for up to
5,600,000 shares (which number reflects any stock split or reverse
stock split prior to the date of its adoption, and which number
shall be automatically adjusted after the date of its adoption in
accordance with Section 7(a) below) of common stock,
$0.00005 par value per share, of the Company (the “Common Stock”).
Subject to such overall limitation, no more than 5,600,000 shares
of Common Stock (subject to adjustment under Section 7) may be
issued under the Plan in the form of Incentive Stock Options (as
defined in Section 5(b)). Shares issued under the Plan may
consist in whole or in part of authorized but unissued shares or
treasury shares.”
Except as set forth above, the remainder of the Plan remains in
full force and effect.
**********
Adopted by the Board of Directors of the Company: September 30,
2020.
Adopted by the Stockholders of the Company: __, 2020.
Appendix B
BRAINSTORM CELL THERAPEUTICS INC.
AMENDMENT NO. 3
TO
2014 GLOBAL SHARE OPTION PLAN
The 2014 Global Share Option Plan (the “Plan”) of Brainstorm Cell
Therapeutics Inc., a Delaware corporation (the “Company”), is
hereby amended by this AMENDMENT NO. 3 as follows:
Section 5.1 of the Plan is hereby deleted in its entirety and
a new Section 5.1 is inserted in lieu thereof which shall read
as follows:
“5.1 The Company has reserved 5,600,000 (which number reflects any
stock split or reverse stock split prior to the date of its
adoption, and which number shall be automatically adjusted after
the date of its adoption in accordance with Section 7 below)
authorized but unissued Shares for the purposes of the Plan and for
the purpose of the Company’s other share option plans when
applicable, subject to adjustment as set forth in Section 7
below. The pool of shares available for issuance under the Plan is
the same pool of shares reserved and available for issuance under
the 2014 Stock Incentive Plan (the “U.S. Plan”). Accordingly,
shares issued pursuant to awards under either the Plan or the U.S.
Plan shall reduce the number of shares available for future
issuance under each plan. The shares available for issuance under
the U.S. Plan and the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company. Any Shares
which remain unissued and which are not subject to outstanding
Awards at the termination of the Plan shall cease to be reserved
for the purpose of the Plan, but until termination of the Plan the
Company shall at all times reserve a sufficient number of Shares to
meet the requirements of the Plan. Should any Award for any reason
expire or be canceled prior to its exercise or relinquishment in
full, the Share or Shares subject to such Award may again be
subjected to an Award under the Plan or under future plans.”
Except as set forth above, the remainder of the Plan remains in
full force and effect.
**********
Adopted by the Board of Directors of the Company:
September 30, 2020.
Adopted by the Stockholders of the Company: __, 2020.
VOTE BY
INTERNET Before The Meeting - Go to
www.proxyvote.com BRAINSTORM CELL THERAPEUTICS INC. 1325 AVENUE OF
AMERICAS 28TH FLOOR NEW YORK, NY 10019 Use the Internet to transmit
your voting instructions and for electronic delivery of information
up until 11:59 p.m. Eastern Time on November 9, 2020. Have your
proxy card in hand when you access the web site and follow the
instructions to obtain your records and to create an electronic
voting instruction form. During The Meeting - Go to
www.virtualshareholdermeeting.com/BCLI2020 You may attend the
meeting via the Internet and vote during the meeting. Have the
information that is printed in the box marked by the arrow
available and follow the instructions. VOTE BY PHONE -
1-800-690-6903 Use any touch-tone telephone to transmit your voting
instructions up until 11:59 p.m. Eastern Time on November 9, 2020.
Have your proxy card in hand when you call and then follow the
instructions. VOTE BY MAIL Mark, sign and date your proxy card and
return it in the postage-paid envelope we have provided or return
it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,
NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS
FOLLOWS: D24212-P44842 KEEP THIS PORTION FOR YOUR RECORDS THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY BRAINSTORM CELL THERAPEUTICS INC. For Withhold
For All To withhold authority to vote for any individual The Board
of Directors recommends you vote FOR the following: All All Except
nominee(s), mark "For All Except" and write the number(s) of the
nominee(s) on the line below. 1.Election of Directors Nominees: !!!
01) Dr. Jacob Frenkel 02) Dr. Irit Arbel 03) Sankesh Abbhi 04) Dr.
June S. Almenoff 05) Dr. Anthony Polverino 06) Malcolm Taub 07) Uri
Yablonka The Board of Directors recommends you vote FOR the
following proposal: For Against Abstain ! !! The Board of Directors
recommends you vote FOR the following proposal: For Against Abstain
3.To ratify the appointment of Brightman Almagor Zohar & Co., a
firm in the Deloitte Global Network, as the Company's independent
registered public!!! accounting firm for the current fiscal year.
NOTE: Such other business as may properly come before the meeting
or any adjournment thereof. Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney, executor,
administrator, or other fiduciary, please give full title as such.
Joint owners should each sign personally. All holders must sign. If
a corporation or partnership, please sign in full corporate or
partnership name by authorized officer. Signature [PLEASE SIGN
WITHIN BOX]DateSignature (Joint Owners)Date
Important Notice Regarding the Availability of
Proxy Materials for the Annual Meeting: The Notice and Proxy
Statement and Form 10-K are available at
www.proxyvote.com. D24213-P44842 BRAINSTORM CELL THERAPEUTICS INC.
Annual Meeting of Stockholders November 10, 2020 at 10:00 AM This
proxy is solicited by the Board of Directors The stockholder(s)
hereby appoint(s) Chaim Lebovits, Dr. Ralph Kern, Preetam Shah and
Uri Yablonka, or any one of them, as proxies, each with the power
to appoint (his/her) substitute, and hereby authorize(s) them to
represent and to vote, as designated on the reverse side of this
ballot, all of the shares of common stock of BRAINSTORM CELL
THERAPEUTICS INC. that the stockholder(s) is/are entitled to vote
at the Annual Meeting of Stockholders to be held at 10:00 AM,
Eastern Time on November 10, 2020, virtually via the internet at
www.virtualshareholdermeeting.com/BCLI2020 and
any adjournment or postponement thereof. This proxy, when properly
executed, will be voted in the manner directed herein. If no such
direction is made, this proxy will be voted in accordance with the
Board of Directors' recommendations. Continued and to be signed on
reverse side
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