UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant
x
Filed by a Party other than
the Registrant
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Check the appropriate box:
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x
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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 §240.14a-12
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Protalix BioTherapeutics, Inc.
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check
the appropriate box):
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Fee computed on table below
per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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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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Total fee paid:
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Fee paid previously with
preliminary materials.
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Check box if any part of
the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the form or schedule and the date of its filing:
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Amount Previously Paid:
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Form, Schedule or Registration Statement No:
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Filing Party:
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Date Filed:
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June , 2016
Dear Stockholder,
We cordially invite you to attend the 2016
Annual Meeting of Stockholders of Protalix BioTherapeutics, Inc. to be held at 4:00 p.m. on August 7, 2016 at the Protalix BioTherapeutics
Headquarters, 2 Snunit Street, Science Park, Carmiel, Israel. The attached notice of annual meeting and proxy statement describe
the business we will conduct at the meeting and provide information about us that you should consider when you vote your shares.
As set forth in the attached proxy statement, the meeting will be held to consider the election of directors, to approve an advisory
vote on executive compensation, to approve an amendment to our Certificate of Incorporation to increase the number of shares of
our common stock, par value $0.001 per share, authorized for issuance from 150,000,000 to 250,000,000; and to ratify the appointment
of our independent registered public accounting firm for the fiscal year ending December 31, 2016. Please take the time to carefully
read each of the proposals stockholders are being asked to consider and vote on.
When you have finished reading the proxy
statement, please promptly vote your shares either via the Internet, by telephone or by marking, signing, dating and returning
the proxy card in the enclosed envelope. Your vote is important, whether or not you attend the meeting in person. We encourage
you to vote by proxy so that your shares will be represented and voted at the meeting. If you decide to attend the meeting and
vote in person, your proxy may be revoked at your request.
We appreciate your support and look forward
to your attending the meeting.
Sincerely,
Yossi Maimon
Vice President and Chief Financial Officer
2 Snunit Street, Science Park P.O.B. 455, Carmiel 20100, Israel
Tel: 972-4-988-9488 | Fax: 972-4-988-9489 | Web: www.protalix.com
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 7, 2016
To the Stockholders of Protalix BioTherapeutics, Inc.:
The 2016 Annual Meeting of Stockholders of Protalix BioTherapeutics,
Inc. will be held at the following time, date and place for the following purposes:
TIME:
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4:00 p.m., Israel time
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DATE:
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August 7, 2016
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PLACE:
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Protalix BioTherapeutics Headquarters, 2 Snunit Street, Science Park, Carmiel, Israel
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PURPOSES:
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1.
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To elect seven members to the Board of Directors to serve for the ensuing year or until their respective successors have been
duly elected.
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2.
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To approve, on a non-binding advisory basis, the compensation of our named executive officers as disclosed in the proxy statement
that accompanies this notice.
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3.
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To approve an amendment to our Certificate of Incorporation to increase the number of shares of our common stock, par value
$0.001 per share, authorized for issuance from 150,000,000 to 250,000,000.
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4.
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To ratify the appointment of Kesselman & Kesselman, Certified Public Accountant (lsr.), a member of PricewaterhouseCoopers
International Limited, as our independent registered public accounting firm for the fiscal year ending December 31, 2016.
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5.
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To transact such other business that is properly presented at the meeting or any adjournment.
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All of these proposals are more fully described in the proxy
statement that follows. You may vote at the meeting and any adjournments if you were the record owner of our common stock at the
close of business on June 24, 2016. A list of stockholders of record will be available at the meeting and, during the 10 days prior
to the meeting, at the office of our Corporate Secretary at the above address.
Please sign, date and promptly return the enclosed proxy
card in the enclosed envelope, or vote by telephone or Internet (instructions are on your proxy card), so that your shares will
be represented whether or not you attend the annual meeting.
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BY ORDER OF THE BOARD OF DIRECTORS
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Yossi Maimon
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Carmiel, Israel
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Vice President and Chief Financial Officer
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June , 2016
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and Corporate Secretary
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Protalix BioTherapeutics, Inc.
2 Snunit Street, Science Park
POB 455
Carmiel 20100, Israel
972-4-988-9488
PROXY STATEMENT FOR PROTALIX BIOTHERAPEUTICS,
INC.
2016 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 7, 2016
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Why Did You Send Me this Proxy Statement?
We sent you this proxy statement and the
enclosed proxy card because the Board of Directors of Protalix BioTherapeutics, Inc. is soliciting your proxy to vote at the 2016
annual meeting of stockholders and any adjournments of the meeting to be held at 4:00 p.m., Israel time, on August 7, 2016 at our
corporate headquarters, 2 Snunit Street, Science Park, Carmiel, Israel. This proxy statement, along with the accompanying Notice
of Annual Meeting of Stockholders, summarizes the purposes of the meeting and the information you need to know to vote at the annual
meeting.
We anticipate that on or about June , 2016,
we will begin sending this proxy statement, the attached Notice of Annual Meeting and the form of proxy enclosed to all stockholders
entitled to vote at the meeting. Although not part of this proxy statement, we are also sending along with this proxy statement
our Annual Report on Form 10-K which includes financial statements for the fiscal year ended December 31, 2015.
You can
also find a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 on the Internet through the electronic
data system called EDGAR provided by the Securities and Exchange Commission, or the SEC, at
http://www.sec.gov
or through the Investor Relations section of our website at
http://www.protalix.com
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In addition, since we are also listed on the Tel Aviv Stock Exchange, we submit copies of all our filings with the SEC to the
Israeli Securities Authority and the Tel Aviv Stock Exchange. Such copies can be retrieved electronically through the Tel Aviv
Stock Exchange’s Internet messaging system (www.maya.tase.co.il) and through the MAGNA distribution site of the Israeli Securities
Authority (www.magna.isc.gov.il). Our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and information
on the website other than the proxy statement are not part of our proxy soliciting materials.
Additional copies of the Annual
Report on Form 10-K for the fiscal year ended December 31, 2015
are available upon request.
Who Can Vote?
Only holders of record of our common stock,
par value $0.001 per share, on June 24, 2016, the record date, are entitled to vote at the annual meeting. On the record date,
there were shares of common stock outstanding and entitled to vote. The common stock is currently our only outstanding class of
voting stock.
You do not need to attend the annual meeting
to vote your shares. Shares represented by valid proxies, received in time for the meeting and not revoked prior to the meeting,
will be voted at the meeting.
How Many Votes Do I Have?
Each share of common stock that you own
entitles you to one vote.
How Do I Vote?
Whether you plan to attend the annual meeting
or not, we urge you to vote by proxy. Voting by proxy will not affect your right to attend the annual meeting. If your shares are
registered directly in your name through our stock transfer agent, American Stock Transfer & Trust Company, or you have stock
certificates, you may vote:
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By mail.
Complete, date, sign and mail the enclosed proxy card in the enclosed postage prepaid envelope. Your proxy
will be voted in accordance with your instructions. If you sign the proxy card but do not specify how you want your shares voted,
they will be voted as recommended by our Board of Directors.
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By Internet or by telephone.
Follow the instructions attached to the proxy card to vote by Internet or telephone.
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In person at the meeting.
If you attend the meeting, you may deliver your completed proxy card in person or you may
vote by completing a ballot, which will be available at the meeting.
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If your shares are held in “street
name” (held in the name of a bank, broker or other nominee), but not including shares held through a Tel Aviv Stock Exchange
Clearing House Ltd. (“TASE”) member, you must provide the bank, broker or other nominee with instructions on how to
vote your shares and can generally do so as follows:
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By mail.
You will receive instructions from your broker or other nominee explaining how to vote your shares.
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By Internet or by telephone.
Follow the instructions you receive from your broker to vote by Internet or telephone.
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In person at the meeting.
Contact the broker or other nominee who holds your shares to obtain a broker’s proxy
card and bring it with you to the meeting. You will not be able to vote at the meeting unless you have a proxy card from your broker.
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If you own shares that are traded through
the TASE, you may vote your shares in one of the following two ways:
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By mail.
Complete, sign and date the proxy card and attach to it an ownership certificate from the TASE Clearing House
member through which your shares are registered (i.e., your broker, bank or other nominee) indicating that you were the beneficial
owner of the shares on June 24, 2016, the record date for voting, and return the proxy card or voting instruction form, along with
the ownership certificate, to our designated address for that purpose in Israel, 2 Snunit Street, Science Park, P.O. Box 455, Carmiel
20100, Israel. If the TASE member holding your shares is not a TASE Clearing House member, please make sure to include an ownership
certificate from the TASE Clearing House member in which name your shares are registered.
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In person at the meeting.
Attend the meeting, where ballots will be provided. If you choose to vote in person at the
meeting, you need to bring an ownership certificate from the TASE Clearing House member through which your shares are registered
(i.e., your broker, bank or other nominee) indicating that you were the beneficial owner of the shares on June 24, 2016, the record
date for voting. If the TASE member holding your shares is not a TASE Clearing House member, please make sure to include an ownership
certificate from the TASE Clearing House member in which name your shares are registered.
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What am I Voting On?
You are voting on:
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The election of seven members to our Board of Directors to serve for the ensuing year or until their respective successors
have been duly elected (Shlomo Yanai, Moshe Manor, Amos Bar Shalev, Zeev Bronfeld, Yodfat Harel Buchris, Roger D. Kornberg, Ph.D.,
and Aharon Schwartz, Ph.D.).
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To approve, on a non-binding advisory basis, the compensation of our named executive officers as disclosed in this proxy statement.
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To approve an amendment to our Certificate of Incorporation to increase the number of shares of our common stock, par value
$0.001 per share, authorized for issuance from 150,000,000 to 250,000,000.
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The ratification of the appointment of Kesselman and Kesselman, Certified Public Accountant (Isr.), A Member of PricewaterhouseCoopers
International Limited, as our independent registered public accounting firm for the fiscal year ending December 31, 2016.
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How does the Board of Directors Recommend that I Vote at
the Meeting?
The Board of Directors recommends
that you vote as follows:
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“
FOR
” the election or re-election of all director nominees named in the “Proposal 1: Election of Directors”
section in this proxy statement.
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“
FOR
” the approval, on a non-binding advisory basis, our executive compensation as disclosed in the proxy
statement that accompanies this notice and as described in “Proposal 2: Advisory Vote on Executive Compensation” section
in this proxy statement.
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“
FOR
” the amendment to our Certificate of Incorporation to increase the number of shares of our common stock,
par value $0.001 per share, authorized for issuance from 150,000,000 to 250,000,000 as described in “Proposal 3: Amendment
to Increase the Number of Authorized Shares of Common Stock” section in this proxy statement.
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“
FOR
” the ratification of Kesselman and Kesselman as our independent registered public accounting firm for
the 2016 fiscal year, as named in “Proposal 4: Ratification of Independent Registered Public Accounting Firm” section
in this proxy statement.
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If any other matter is properly presented
at the meeting or any adjournment, the proxy card provides that your shares will be voted by the proxy holder listed on the proxy
card in accordance with his or her best judgment. At the time this proxy statement was printed, we knew of no matters that needed
to be acted on at the annual meeting, other than those discussed in this proxy statement.
What Constitutes a Quorum for the Meeting?
Of the shares
of common stock outstanding as of the record date, the holders of at least one-third (1/3) of those shares, or at least shares,
must be present at the meeting in person or represented by proxy to hold the meeting and conduct business. Once a quorum is established
at a meeting, it shall not be broken by the withdrawal of enough votes to leave less than a quorum. Shares held by stockholders
of record who are present at the meeting in person or by proxy are counted for purposes of determining whether a quorum exists.
Abstentions and “broker non-votes” are also counted as present and entitled to vote for purposes of determining whether
a quorum exists. If a quorum is not present, the meeting will be adjourned until a quorum is obtained.
What are the Voting Requirements to Approve a Proposal?
Election of directors
Assuming a quorum is present, nominees for
director will be elected by a plurality of the votes cast by the shares of common stock voting in person or represented by proxy
at the annual meeting. This means that the nominees who receive the most votes will be elected to the Board of Directors. In voting
to elect nominees to the Board of Directors, stockholders may vote in favor of all the nominees or any individual nominee or withhold
their votes as to all the nominees or any individual nominee. Shares not present at the annual meeting have no effect on the election
of directors.
Approval of non-binding advisory resolution on
executive compensation
You may vote “FOR,” “AGAINST”
or “ABSTAIN” on the advisory vote on executive compensation. If a quorum is present, approval requires the affirmative
vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the resolution.
The outcome of this vote is not binding; however, the Board of Directors and the Compensation Committee will consider the outcome
of the vote when developing and reviewing the future executive compensation plans. Abstentions and broker non-votes will have no
effect.
Amendment to Certificate of Incorporation to increase
the number of authorized shares of common stock
You may vote “FOR,” “AGAINST”
or “ABSTAIN” on the proposal to amend our Certificate of Incorporation to increase the number of shares of our common
stock authorized for issuance from 150,000,000 to 250,000,000. The affirmative vote of a majority of the shares of our common stock
outstanding and entitled to vote at the annual meeting is required to approve the amendment to our Certificate of Incorporation
to increase the number of authorized shares of common stock from 150,000,000 to 250,000,000. Abstentions will have the same effect
as an “against” vote. Brokerage firms have authority to vote customers’ non-voted shares held by the firms in
street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have the same effect as
an “against” vote.
Ratification of the selection of Kesselman &
Kesselman as our independent auditor
You may vote “FOR,” “AGAINST”
or “ABSTAIN” on the ratification of the selection of Kesselman & Kesselman to serve as our principal independent
registered public accounting firm for the fiscal year ending December 31, 2016. If a quorum is present, ratification of the
appointment of our independent registered public accounting firm requires the affirmative vote of the majority of shares present
in person or represented by proxy at the meeting and entitled to vote on the. Abstentions and broker non-votes will have no effect.
How are My Votes Cast when I Sign and Return a Proxy Card?
When you sign the proxy card or submit your
proxy by telephone or over the Internet, you appoint Moshe Manor, our president and chief executive officer, and Yossi Maimon,
our vice president and chief financial officer, as your representatives at the meeting. Either Moshe Manor or Yossi Maimon will
vote your shares at the meeting as you have instructed them on the proxy card. Each of such persons may appoint a substitute for
himself.
Even if you plan to attend the meeting,
it is a good idea to complete, sign and return your proxy card or submit your proxy by telephone or over the Internet in advance
of the meeting in case your plans change. This way, your shares will be voted by you whether or not you actually attend the meeting.
May I Revoke My Proxy?
If you give us your proxy, you may revoke
it at any time before it is voted at the meeting. There will be no double counting of votes. You may revoke your proxy in any one
of the following ways:
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entering a new vote or by granting a new proxy card or new voting instruction bearing a later date (which automatically revokes
the earlier instructions);
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if your shares are held in street name, re-voting by Internet or by telephone as instructed above (only your latest Internet
or telephone vote will be counted);
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notifying our Corporate Secretary, Yossi Maimon, in writing before the annual meeting that you have revoked your proxy; or
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attending the meeting in person and voting in person. Attending the meeting in person will not in and of itself revoke a previously
submitted proxy unless you specifically request it.
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Can my broker vote my shares for me?
No. A broker “non-vote” occurs
when a broker or nominee holding shares for a beneficial owner does not vote on a particular matter because the matter is not routine
and such broker or nominee does not have the discretionary voting authority to vote the shares for which it is the holder of record
with respect to a particular matter at the annual meeting and such broker or nominee has not received instructions from the beneficial
owner. Broker “non-votes,” and shares as to which proxy authority has been withheld with respect to any matter, are
generally not deemed to be entitled to vote for purposes of determining whether stockholders’ approval of that matter has
been obtained. Pursuant to New York Stock Exchange (“NYSE”) Rule 452, the uncontested election of directors (Proposal No. 1)
and the approval of a non-binding advisory resolution on executive compensation (Proposal No. 2) are non-routine matters and, therefore,
may not be voted upon by brokers without instruction from beneficial owners. Consequently, proxies submitted by brokers for shares
beneficially owned by other persons may not, in the absence of specific instructions from such beneficial owners, vote the shares
in favor of a director nominee or withhold votes from a director nominee at the brokers’ discretion.
Please complete your
proxy and return it as instructed so your vote can be counted.
What if I Receive More than One Proxy Card?
You may receive more than one proxy card
or voting instruction form if you hold shares of our common stock in more than one account, which may be in registered form or
held in street name. Please vote in the manner described under “How Do I Vote?” for each account to ensure that all
of your shares are voted.
What if I do not Vote for Some of the Matters Listed on My
Proxy Card?
If you return your proxy card without indicating
your vote, your shares will be voted
for
the nominees listed on the card;
for
the approval, on an advisory basis,
of the executive compensation;
for
the amendment of our Certificate of Incorporation to increase the number of authorized
shares of common stock; and
for
the ratification of the appointment of Kesselman & Kesselman.
Will My Shares be Voted if I do not Return My Proxy Card
and do not Attend the Annual Meeting?
If your shares are registered in your name
or if you have stock certificates, they will not be voted if you do not return your proxy card by mail or vote at the meeting as
described above under “How Do I Vote?”.
If your shares are held in street name and
you do not provide voting instructions to the bank, broker or other nominee that holds your shares as described above under “How
Do I Vote?,” the bank, broker or other nominee has the authority to vote your shares on certain routine matters scheduled
to come before the meeting even if it does not receive instructions from you. We encourage you to provide voting instructions.
This ensures your shares will be voted at the meeting in the manner you desire.
Is Voting Confidential?
Yes. Only the inspector of elections and
our employees that have been assigned the responsibility for overseeing the legal aspects of the annual meeting will have access
to your proxy card. The inspector of elections will tabulate and certify the vote. Any comments written on the proxy card will
remain confidential unless you ask that your name be disclosed.
What are the Costs of Soliciting these Proxies?
We will pay all of the costs of soliciting
these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees
and directors no additional compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries
to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for
their expenses. From time to time, we may engage a proxy solicitor to help us attain a quorum for the meeting.
Could other Matters be Decided at the Annual Meeting?
We do not know of any other matters that
will be considered at the annual meeting. If any other matters arise at the annual meeting at or by the direction of the board
of directors, the proxies will be voted at the discretion of the proxy holders.
What Happens if the Annual Meeting is Postponed or Adjourned?
Your proxy will still be valid and may be
voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted.
Do I Need a Ticket to Attend the Annual Meeting?
Yes, you will need an admission ticket or
proof of ownership of common stock to enter the annual meeting. If you are a stockholder of record, your admission ticket is the
bottom half of the proxy card sent to you. If you plan to attend the annual meeting, please so indicate when you vote and bring
the ticket with you to the annual meeting. If your shares are held in the name of a bank, broker or other holder of record, your
admission ticket is the left side of your voting information form. If you do not bring your admission ticket, you will need proof
of ownership to be admitted to the annual meeting. A recent brokerage statement or letter from a bank or broker is an example of
proof of ownership. If you arrive at the annual meeting without an admission ticket, we will admit you only if we are able to verify
that you are a stockholder of our company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information,
as of June 24, 2016, regarding beneficial ownership of our common stock:
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each person who is known by us to own beneficially more than 5% of our common stock;
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each of our Chief Executive Officer, our Executive Vice President, Research and Development, our Senior Vice President, Product
Development, our Vice President and Chief Financial Officer and our Chief Operating Officer; and
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all of our directors and executive officers collectively.
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Unless otherwise noted, we believe that
all persons named in the table have sole voting and investment power with respect to all shares of our common stock beneficially
owned by each of them. For purposes of these tables, a person is deemed to be the
beneficial
owner of securities that can be acquired by such person within 60 days from June 24, 2016 upon exercise of options, warrants and
convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and
convertible securities that are held by such person (but not those held by any other person) and that are exercisable within such
60 days from such date have been exercised. The information set forth below is based upon information obtained from the beneficial
owners, upon information in our possession regarding their respective holdings and upon information filed by the holders with the
SEC. The percentages of beneficial ownership are based on shares
of our common stock outstanding as of June 24, 2016.
The address for all directors and officers
is c/o Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455, Carmiel, Israel, 20100.
Name and Address of Beneficial Owner
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Amount and Nature of
Beneficial Ownership
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Percentage of
Class (%)
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Board of Directors and Executive Officers
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Shlomo Yanai (1)
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100,000
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*
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Moshe Manor (2)
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393,750
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*
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Amos Bar Shalev
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1,680
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*
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Zeev Bronfeld (3)
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2,162,481
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2.2
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Yodfat Harel Buchris (4)
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137,424
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*
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Roger D. Kornberg, Ph.D. (5)
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50,000
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*
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Aharon Schwartz, Ph.D.
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—
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—
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Einat Brill Almon, Ph.D. (6)
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704,397
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*
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Yossi Maimon (7)
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578,125
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*
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Tzvi Palash (8)
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301,063
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*
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Yoseph Shaaltiel, Ph.D. (9)
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1,340,582
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1.3
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All executive officers and directors as a
group (11 persons) (10)
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5,769,502
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5.7
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5% Holders
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Baillie Gifford & Co. (11)
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6,406,099
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6.4
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Camber Capital Management LLC (12)
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13,275,000
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13.3
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Pfizer Inc. (13)
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5,649,079
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5.7
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Opaleye Management Inc. (14)
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8,200,000
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8.2
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* less than 1%.
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(1)
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Consists of 100,000 of our common stock issuable upon exercise of outstanding options within 60 days of June 24, 2016. Does
not include 50,000 shares of our common stock underlying options that will not vest within 60 days of June 24, 2016.
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(2)
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Consists of 393,750 of our common stock issuable upon exercise of outstanding options within 60 days of June 24, 2016. Does
not include 506,250 shares of our common stock underlying options that will not vest within 60 days of June 24, 2016.
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(3)
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Consists of shares of our common stock held directly by Mr. Bronfeld.
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(4)
|
Represents shares held by YP & 6 Partners Ltd. Mrs. Harel Buchris is a director and stockholder of YP & 6 Partners
Ltd. Mrs. Harel Buchris disclaims beneficial ownership of these shares except to the extent of her pecuniary interest therein.
|
|
(5)
|
Consists of 50,000 shares of our common stock issuable upon exercise of outstanding options.
|
|
(6)
|
Consists of 519,397 shares of our common stock issuable upon exercise of outstanding options within 60 days of June 24, 2016
and 185,000 restricted shares of our common stock that have vested or will vest within 60 days of June 24, 2016. Does not include
171,875 shares of our common stock underlying options that will not vest within 60 days of June 24, 2016.
|
|
(7)
|
Consists of 10,000 outstanding shares of our common stock held by Mr. Maimon, 383,125 shares of our common stock issuable upon
exercise of outstanding options within 60 days of June 24, 2016 and 185,000 restricted shares of our common stock that have vested
or will vest within 60 days of June 24, 2016. Does not include 171,875 shares of our common stock underlying options that will
not vest within 60 days of June 24, 2016.
|
|
(8)
|
Consists of 199,063 shares of our common stock issuable upon exercise of outstanding options within 60 days of June 24, 2016
and 102,000 restricted shares of our common stock that have vested or will vest within 60 days of June 24, 2016. Does not include
85,938 shares of our common stock underlying options that will not vest within 60 days of June 24, 2016.
|
|
(9)
|
Consists of 463,754 outstanding shares of our common stock held by Dr. Shaaltiel, 666,828 shares of our common stock issuable
upon exercise of outstanding options within 60 days of June 24, 2016 and 210,000 restricted shares of our common stock that have
vested or will vest within 60 days of June 24, 2016. Does not include 189,063 shares of our common stock underlying options that
will not vest within 60 days of June 24, 2016.
|
|
(10)
|
Consists of 2,775,339 outstanding shares of our common stock, 2,312,163 shares of our common stock issuable upon exercise of
outstanding options within 60 days of June 24, 2016 and 682,000 restricted shares of our common stock that have vested or will
vest within 60 days of June 24, 2016. Does not include 1,175,000 shares of our common stock underlying options that will not vest
within 60 days of June 24, 2016.
|
|
(11)
|
Based solely on a Schedule 13F-HR filed on May 5, 2016 by Baillie Gifford & Co. for March 31, 2016.
|
|
(12)
|
Based solely on a Schedule 13F-HR filed on May 13, 2016 by Camber Capital Management LLC for the period ended March 31, 2016.
Does not include shares of common stock issuable upon conversion of our 4.50% convertible notes due 2018 held by Camber Capital
Management.
|
|
(13)
|
Based solely on a Schedule 13G filed on October 23, 2015 by Pfizer Inc.
|
|
(14)
|
Based solely on a Schedule 13F-HR/A filed on May 27, 2016 by Opaleye Management Inc. for March 31, 2016.
|
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange Act requires
our directors, executive officers and holders of more than 10% of our common stock to file with the SEC reports regarding their
ownership and changes in ownership of our equity securities. We believe that all Section 16 filings requirements were met
by our officers and directors during 2015, except that each of Dr. Shaaltiel, Dr. Brill Almon, Mr. Maimon and Mr. Palash made
one late Form 4 filing during 2015. In making this statement, we have relied solely upon examination of the copies of Forms 3,
4 and 5, Schedule 13s and written representations of our former and current directors, officers and 10% stockholders.
PROPOSAL 1: ELECTION OF DIRECTORS
At the annual meeting, our stockholders will be asked to elect
seven directors for a one-year term expiring at the next annual meeting of stockholders. Each director will hold office until his
or her successor has been elected and qualified or until the director’s earlier resignation or removal.
Our Board of Directors recommends that the persons named below
be elected as directors of our company and it is intended that the accompanying proxy will be voted for their election as directors,
unless the proxy contains contrary instructions. Shares of common stock represented by all proxies received by the Board of Directors
and not so marked as to withhold authority to vote for any individual nominee or for all nominees will be voted (unless one or
more nominees are unable to serve) for the election of the nominees named below. The Board of Directors knows of no reason why
any such nominee should be unable or unwilling to serve, but if such should be the case, proxies will be voted for the election
of some other person or the size of the Board of Directors will be fixed at a lower number.
Each of the nominees currently serves as a member of our Board
of Directors. The directors are elected by a plurality of the votes cast by the stockholders present or represented by proxy and
entitled to vote at the annual meeting.
Nominees for Election to the Board of
Directors
The names of the nominees for election to the Board of Directors
and certain information about such nominees are set forth below. For information concerning the number of shares of common stock
beneficially owned by each nominee, see “Security Ownership of Certain Beneficial Owners and Management” above.
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Shlomo Yanai
|
|
63
|
|
Chairman of the Board
|
Moshe Manor
|
|
60
|
|
President and Chief Executive Officer, Director
|
Amos Bar Shalev
|
|
63
|
|
Director
|
Zeev Bronfeld
|
|
64
|
|
Director
|
Yodfat Harel Buchris
|
|
44
|
|
Director
|
Roger D. Kornberg, Ph.D.
|
|
69
|
|
Director
|
Aharon Schwartz, Ph.D.
|
|
73
|
|
Director
|
Shlomo Yanai.
Shlomo Yanai has served as the Chairman
of our Board of Directors since July 2014. Mr. Yanai is currently the Chairman of the Board of Cambrex Corporation (NYSE:CBM) and
a director of Quinpario Acquisition Corp. 2 (NASDAQ:QPACU), Sagent Pharmaceuticals, Inc. (NASDAQ:SGNT) and Perrigo Co. plc (NASDAQ:PRGO).
From 2012 through 2015, Mr. Yanai served as a director of Lumenis Ltd. Mr. Yanai served as President and Chief Executive Officer
of Teva (NASDAQ:TEVA, TASE:TEVA) from March 2007 until May 2012 and, prior to joining Teva, Mr. Yanai was President and Chief Executive
Officer of Makhteshim-Agan Industries Ltd. from 2003 until 2006. Before that, he was a Major General in the Israel Defense Forces,
where he served for 32 years, in various positions, the last two positions being Commanding Officer of the Southern Command and
Head of the Division of Strategic Planning. Mr. Yanai was the head of the Israeli security delegation to the peace talks at Camp
David, Shepherdstown and Wye River. He currently serves as a member of the Board of Governors of the Technion — Israel Institute
of Technology of Haifa, Israel, and of the International Advisory Board, MBA Program of Ben-Gurion University of the Negev, Israel,
as well as an honorary member of the Board of the Institute for Policy and Strategy of the Interdisciplinary Center (IDC), Herzliya,
Israel. Mr. Yanai holds a bachelor’s degree in political science and economics from Tel Aviv University, a master’s
degree in national resources management from George Washington University, and is a graduate of the Advanced Management Program
of Harvard Business School and U.S. National War College (NDU). Mr. Yanai was the recipient of the Max Perlman Award for Excellence
in Global Business Management from Tel Aviv University, Israel in 2005 and was awarded an honorary doctorate by Bar-Ilan University,
Israel in 2012. We believe Mr. Yanai’s qualifications to serve as Chairman of our Board of Directors include his vast global
operating experience in the life-science and pharmaceutical and agro-chemicals industry. He also brings a global perspective to
the Board, incorporating his industry and Board leadership experience and his distinguished military service.
Moshe Manor.
Mr. Manor has served as our President and
Chief Executive Officer and as a director of our company since November 2014. Mr. Manor served in a number of senior executive
positions at Teva (NASDAQ:TEVA, TASE:TEVA) from 1984 through 2012. Most recently, he served as President, Teva Asia & Pacific
where he led the strategy and development of a high growth region for Teva. Prior to that, he was Group Vice President, Global
Branded Products, leading the Innovative Commercial and Research & Development franchises. From 2006 through 2008, Mr. Manor
was Senior Vice President, Global Innovative Resources, and was responsible for generating over $3 billion in sales with Copaxone®
and Azilect®. Previously, he served as director of Teva Israel. Most recently, Mr. Manor serves on the Board of Directors of
Kamedis Ltd. and Coronis Partners, and as Chairman of the Board of Directors of a startup company, MEway Pharma. He holds a BA
in Economics from the Hebrew University in Jerusalem, and an MBA from the Tel-Aviv University. We believe Mr. Manor’s qualifications
to serve on our Board of Directors include his extensive experience in the life-science and pharmaceutical industry on a global
scale.
Amos Bar Shalev.
Mr. Bar Shalev has served as our director
since July 2008. Previously, Mr. Bar Shalev served as a director of Protalix Ltd. from 2005 through January 31, 2008, and as our
director from December 31, 2006 through January 31, 2008. Mr. Bar Shalev brings to us extensive experience in managing technology
companies. Currently, Mr. Bar Shalev serves on the boards of directors of Aposense Ltd. (TASE: APOS), an Israeli publicly-traded
company listed on the TASE, since 2011, and of Ocure Ltd. (since 2012) and Velox Ltd. (since 2013), privately-held Israeli companies.
From 2004 through 2012, Mr. Bar Shalev served as a director of Technorov Holdings (1993) Ltd. and managed its portfolio. In addition,
he served on the board of directors of Highcon Systems Ltd., a privately-held Israeli company, from 2010 through 2012. From 1997
through 2004, he was a Managing Director of TDA Capital Partners, a management company of the TGF (Templeton Tadiran) Fund. From
2004 through 2007, he was the President of Win Buyer Ltd. He has served on the board of directors of many other companies, including,
among others, NESS Ltd. (acquired by BioNess Inc.), Idanit (acquired by Scitex Corporation Ltd.), Objet Geometrix (merged with
Stratasys, Inc. (NASDAQ:SSYS)), Verisity, Scitex Vision (acquired by Hewlett Packard), Golden Wings Investment Company Ltd., the
venture capital fund of the Israeli Air Force Veterans Business Club, Win Buyer Ltd. and Sun Light Ltd. He received his B.Sc. in
Electrical Engineering from the Technion, Israel in 1978 and M.B.A. from the Tel Aviv University in 1981. He holds the highest
award from the Israeli Air Force for technological achievements. We believe Mr. Bar Shalev’s qualifications to serve on our
Board of Directors include his years of experience in the management of Israeli businesses.
Zeev Bronfeld.
Mr. Bronfeld has served as
a director of Protalix Ltd. since 1996 and as our director since December 31, 2006. Mr. Bronfeld brings to us vast experience in
management and value building of biotechnology companies. He is an experienced businessman who is involved in a number of biotechnology
companies. He was a co-founder of Biocell Ltd., a former Israeli publicly traded holding company that specialized in biotechnology
companies and served as its Chief Executive Officer from 1986 through 2015. Mr. Bronfeld currently serves as a director of The
Trendlines Group (42T.SI), D.N.A. Biomedical Solutions Ltd. (DNA:TASE), and Macrocure Ltd. (NASDAQ:MCUR), all of which are public
companies. Mr. Bronfeld is also a director of a number of privately-held companies, most of which are involved in the life sciences,
such as Entera Bio Ltd., Contipi Medical Ltd. and TransBiodiesel Ltd. From 2004 through 2012, Mr. Bronfeld served as a director
of D. Medical Industries Ltd., a company that was dually-listed on the Nasdaq and the TASE. Mr. Bronfeld received a B.A. in Economics
from the Hebrew University in 1975. We believe Mr. Bronfeld’s qualifications to serve on our Board of Directors include his
years of experience in the management of private and public Israeli companies, including life science companies.
Yodfat Harel Buchris.
Mrs. Harel Buchris has
served as our director since June 2007. Since February 2014, Mrs. Harel Buchris has served as the employer representative in Israel’s
National Labor Court. She is also a Partner and a member of the board of directors of YP and 6 Partners Ltd., a business consulting
and investment company. Since February 2016 she has served on the board of directors of Israel Discount Bank Limited (TASE:DSCT)
and, since January 2016, on the board of directors of Eltek Ltd. (ELTK:NASDAQ). From 2006 to 2013, Mrs. Harel Buchris served as
a Managing Director of Tamares Capital Ltd., a private investment group with interests in real estate, technology, manufacturing,
leisure and media. At Tamares Capital, Mrs. Harel Buchris served as the Business Development Director and the head of the Israel
office. Prior to joining Tamares Capital, from 2004 to 2006, she was the Head of the Medical Desk of Orbotech, Ltd. (NASDAQ:ORBK),
a company providing high-tech inspection and imaging solutions for bare printed circuit board (PCB), flat panel display (FPD) and
PCB assembly manufacturing worldwide. Prior to that, from 1994 to 2003, she was a Managing Director of Harel-Hertz Investment House
Ltd., a business investment company with offices in Tel Aviv, Israel and Tokyo, Japan. In 2002, Harel-Hertz Investment House became
the Israeli representative office for ITX Corporation, a publicly-traded company in Japan. Mrs. Harel Buchris has served on the
board of directors of Tamares Capital, Tamares Hotels, El Al, British Israel, Storewiz, N-trig, Secure Pharma, Siklu and Tamares
Telecom. Mrs. Harel Buchris holds a B.A. in Communications and Political Science from Bar Ilan University and an executive M.B.A.
from Bradford University, Great Britain. She has also completed programs in Mediation at Gome, Israel Mediation Center, Directors’
Studies and Advanced Advertising and Marketing at the Israel Management Center. We believe Mrs. Harel Buchris’ qualifications
to serve on our Board of Directors include her experience in the management of Israeli and other businesses.
Roger D. Kornberg, Ph.D.
Professor Kornberg
has served as our director since February 2008. He has served as a director of OphthaliX Inc. (OTCBB:OPLI) since 2012, and as the
chairman of the board of directors of two related start-up companies. He also serves as the Chief Scientist of Cocrystal Pharma,
Inc. (OTCQB: COCP) (f/k/a Biozone Pharmaceuticals, Inc.) and in 2014 served on their Board of Directors. He served as a director
of Teva (NASDAQ:TEVA, TASE:TEVA) from 2007 through 2013. Professor Kornberg is a member of the U.S. National Academy of Sciences
and the Winzer Professor of Medicine in the Department of Structural Biology at Stanford University, Stanford, California. He has
been a member of the faculty of Stanford University since 1972. Prior to that, he was a professor at Harvard Medical School. Professor
Kornberg is a renowned biochemist and in 2006 he was awarded the Nobel Prize in Chemistry in recognition for his studies of the
molecular basis of eukaryotic transcription, the process by which DNA is copied to RNA. Professor Kornberg is also the recipient
of several awards, including the 2001 Welch Prize, the highest award granted in the field of chemistry in the United States, and
the 2002 Leopold Mayer Prize, the highest award granted in the field of biomedical sciences from the French Academy of Sciences.
He received his B.S. in Chemistry from Harvard University in 1967 and his Ph.D. in Chemistry from Stanford University in 1972.
He holds honorary degrees from universities in Europe and Israel, including the Hebrew University in Jerusalem, where he currently
is a visiting professor. We believe Professor Kornberg’s qualifications to serve on our Board of Directors include his expertise
in chemistry and medicine and his experience in the academic arena.
Aharon Schwartz, Ph.D.
Dr. Schwartz retired from Teva
in 2011 where he served in a number of positions from 1975 through 2011, the most recent being Vice President, Head of Teva Innovative
Ventures from 2008. Dr. Schwartz is currently chairman of the board of directors of a number of life science companies, including
BiolineRx Ltd. (NASDAQ:BLRX, TASE:BLRX), DPharm Ltd. (TASE:DPRM), BioCancell Ltd. (TASE:BICL) and CureTech Ltd., and a member of
the board of directors of Alcobra Ltd. (NASDAQ:ADHD) and Foamix Pharmaceuticals Ltd. (NASDAQ:FOMX). Dr. Schwartz received his Ph.D.
in organic chemistry in 1978 from the Weizmann Institute, his M.Sc. in organic chemistry from the Technion and a B.Sc. in chemistry
and physics from the Hebrew University of Jerusalem. Dr. Schwartz received a second Ph.D. in 2014 from the Hebrew University of
Jerusalem in the history and philosophy of science. We believe Dr. Schwartz’s qualifications to serve on our Board of Directors
include his years of experience in life science companies.
Corporate Governance
Independent Directors
We believe a majority of the members of our Board of Directors
are independent from management. When making determinations from time to time regarding independence, the Board of Directors will
reference the listing standards adopted by the NYSE MKT as well as the independence standards set forth in the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated by the SEC under that Act. We anticipate our Board of Directors will analyze
whether a director is independent by evaluating, among other factors, the following:
·
Whether
the member of the Board of Directors has any material relationship with us, either directly, or as a partner, stockholder or officer
of an organization that has a relationship with us;
·
Whether
the member of the Board of Directors is a current employee of our company or any of our subsidiaries, or was an employee of our
company or any of our subsidiaries within three years preceding the date of determination;
·
Whether
the member of the Board of Directors is, or in the three years preceding the date of determination has been, affiliated with or
employed by (i) a present internal or external auditor of our company or any affiliate of such auditor or (ii) any former internal
or external auditor of our company or any affiliate of such auditor, which performed services for us within three years preceding
the date of determination;
·
Whether
the member of the Board of Directors is, or in the three years preceding the date of determination has been, part of an interlocking
directorate, in which any of our executive officers serve on the Compensation Committee of another company that concurrently employs
the member as an executive officer;
·
Whether
the member of the Board of Directors receives any compensation from us, other than fees or compensation for service as a member
of the Board of Directors and any committee of the Board of Directors and reimbursement for reasonable expenses incurred in connection
with such service and for reasonable educational expenses associated with Board of Directors or committee membership matters;
·
Whether
an immediate family member of the member of the Board of Directors is a current executive officer of our company or was an executive
officer of our company within three years preceding the date of determination;
·
Whether
an immediate family member of the member of the Board of Directors is, or in the three years preceding the date of determination
has been, affiliated with or employed in a professional capacity by (i) a present internal or external auditor of ours or any of
our affiliates or (ii) any former internal or external auditor of our company or any affiliate of ours which performed services
for us within three years preceding the date of determination; and
·
Whether
an immediate family member of the member of the Board of Directors is, or in the three years preceding the date of determination
has been, part of an interlocking directorate, in which any of our executive officers serve on the Compensation Committee of another
company that concurrently employs the immediate family member of the member of the Board of Directors as an executive officer.
The above list is not exhaustive and we anticipate that the
Audit Committee will consider all other factors which could assist it in its determination that a director will have no material
relationship with us that could compromise that director’s independence.
Under these standards, our Board of Directors has determined
that Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris are considered “independent” pursuant to the rules of the
NYSE MKT and Section 10A(m)(3) of the Exchange Act. In addition, our Board of Directors has determined that at least two of these
directors are able to read and understand fundamental financial statements and have substantial business experience that results
in their financial sophistication, qualifying them for membership on our audit committee. Our Board of Directors has also determined
that Mr. Bar Shalev, Mr. Bronfeld, Mrs. Harel Buchris, Dr. Kornberg, Dr. Schwartz and Mr. Yanai are “independent” pursuant
to the rules of the NYSE MKT.
The position of chairman of the board is not held by our chief
executive officer at this time. The Board of Directors does not have a policy mandating the separation of these functions. We believe
it is in our best interest that Mr. Yanai serve as the chairman of our board. This decision was based on Mr. Yanai’s vast
global operating experience in the life-science and pharmaceutical and agro-chemicals industry as well as the global perspective
he brings to our Board of Directors, incorporating his industry and board leadership experience and his distinguished military
service. Our non-management directors hold formal meetings, separate from management, at least twice per year. We have no formal
policy regarding attendance by our directors at annual stockholders meetings, although we encourage such attendance and anticipate
most of our directors will attend these meetings. Messrs. Yanai, Manor, Bronfeld, Bar Shalev and Dr. Schwartz and Mrs. Harel
Buchris attended our 2015 annual meeting of stockholders.
The Board’s Role in Risk Oversight
Our Board of Directors oversees an enterprise-wide approach
to risk management, designed to support the achievement of business objectives, including organizational and strategic objectives,
to improve long-term organizational performance and enhance stockholder value. The involvement of our Board of Directors in setting
our business strategy is a key part of its assessment of management’s plans for risk management and its determination of
what constitutes an appropriate level of risk for the company. The participation of our Board of Directors in our risk oversight
process includes receiving regular reports from members of senior management on areas of material risk to our company, including
operational, financial, legal and regulatory, and strategic and reputational risks. While the full board has the ultimate oversight
responsibility for the risk management process, various committees of the board also have responsibility for risk management. For
example, financial risks, including internal controls, are overseen by the audit committee and risks that may be implicated by
our executive compensation programs are overseen by the compensation committee. Upon identification of a risk, the assigned board
committee or our full Board of Directors discuss or review risk management and risk mitigation strategies. Additional review or
reporting on enterprise risks is conducted as needed or as requested by our Board of Directors or a committee thereof.
Board and Committee Meetings
Our Board of Directors has an Audit Committee, Compensation
Committee and Nominating Committee. The following indicates the members of each committee and provides a description of the committees’
primary functions:
Audit Committee
We require that all Audit Committee members
possess the required level of financial literacy and at least one member of the Audit Committee meet the current standard of requisite
financial management expertise as required by the NYSE MKT and applicable rules and regulations of the SEC. Messrs. Bar Shalev
and Bronfeld, and Mrs. Harel Buchris have been appointed by the Board of Directors to serve on the Audit Committee until their
respective successors have been duly elected.
Our Audit Committee operates under a formal
charter that governs its duties and conduct. A current copy of the Audit Committee Charter is available on our website at
http://www.protalix.com
.
All members of the Audit Committee are independent
from our executive officers and management.
Our independent registered public accounting
firm reports directly to the Audit Committee.
Our Audit Committee meets with management
and representatives of our registered public accounting firm prior to the filing of officers’ certifications with the SEC
to receive information concerning, among other things, effectiveness of the design or operation of our internal controls over financial
reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002.
Our Audit Committee has adopted a Policy for
Reporting Questionable Accounting and Auditing Practices and Policy Prohibiting Retaliation against Reporting employees to enable
confidential and anonymous reporting of improper activities to the Audit Committee.
Messrs. Bar Shalev and Bronfeld and Mrs. Harel
Buchris qualify as “audit committee financial experts” under the applicable rules of the SEC. In making the determination
as to these individuals’ status as audit committee financial experts, our Board of Directors determined they have accounting
and related financial management expertise within the meaning of the aforementioned rules, as well as the listing standards of
the NYSE MKT.
Compensation Committee
The Compensation Committee is currently comprised
of Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris. The Compensation Committee reviews and approves the compensation
of executive officers and key employees and administers our stock incentive plan. A current copy of the Compensation Committee
Charter is available on our website at
http://www.protalix.com
.
Nominating Committee
The Nominating Committee, currently comprised of Messrs. Bar
Shalev and Bronfeld and Mrs. Harel Buchris, is responsible for assisting our Board of Directors in selecting nominees for election
to the Board of Directors and monitoring the composition of the Board of Directors. A current copy of the Nominating Committee
Charter is available on our website at
http://www.protalix.com
. Although our Board of Directors does not have a formal policy
requiring the Nominating Committee to consider the diversity of directors in its nomination process, in considering potential new
directors, the Nominating Committee will review individuals from various disciplines and backgrounds, and consider the following
qualifications: broad experience in business, finance or administration; familiarity with national business matters; familiarity
with our industry; independence; and prominence and reputation. The committee seeks nominees with a broad diversity of experience,
professions, education, skills and backgrounds with a view to having a Board of Directors that represents a diversity of views,
experiences, and backgrounds. After making such a review, the Nominating Committee submits the nomination to the full Board of
Directors for approval.
The Nominating Committee will consider any nominees submitted
by stockholders of record at the time of any such nomination in compliance with applicable rules of the SEC and our By-Laws. The
Nominating Committee will determine whether any stockholder nominee meets the qualifications for candidacy described above and
in the Nominating Committee Charter. Stockholders’ nominations for election at the 2017 Annual Meeting of Stockholders must
be submitted in writing to Yossi Maimon, Corporate Secretary, not less than 45 days nor more than 75 days prior to the date on
which we first mailed this proxy statement. Such written notice must include the following information: (i) name, age, business
address and residence address of the nominee; (ii) the principal occupation or employment of the nominee; (iii) the class and number
of shares of our company beneficially owned by the nominee; and (iv) any other information relating to the nominee that would be
required to be disclosed in solicitations for proxies for elections of directors pursuant to Regulation 14A of the Exchange Act.
The written notice must also include the following information with respect to each stockholder delivering such notice: (i) the
name and record address of such stockholder; and (ii) the class and number of shares of our company beneficially owned by the stockholder.
Lastly, the written notice must include certain information relating to any derivative or hedging transactions by the stockholder
delivering such notice and its Stockholder Associated Persons, as defined in our By-Laws, and other arrangements with other parties
regarding our securities, as presented in detail in our By-Laws. Stockholders can mail any such recommendations, including the
criteria outlined above, to Yossi Maimon, Corporate Secretary, Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O.
Box 455, Carmiel 20100, Israel.
During the year ended December 31, 2015, there were seven meetings
of our Board of Directors, five meetings of the Audit Committee (and one action by written consent) and two meetings of the Compensation
Committee. Our non-management directors hold meetings separate from management at least twice per year. All of our current directors,
other than Dr. Kornberg, attended at least 75% of the aggregate number of meetings of the Board of Directors and the committees
of the Board of Directors on which they served.
Under the rules of the NYSE MKT, a director of our company will
only qualify as an “independent director” if, among other things, in the opinion of our Board of Directors, that person
does not have a material relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director. The Board of Directors has determined that none of the non-employee directors has a relationship that would interfere
with the exercise of independent judgment in carrying out the responsibilities of a director and that each of the non-employee
directors is an “independent director” as defined under rules of the NYSE MKT. In addition, the Board of Directors
has determined that all members of the Audit Committee meet the independence requirements set forth in Rule 10A-3 under the Exchange
Act and that all members of the Compensation Committee meet the independence requirements set forth in Rule 805(c) of the NYSE
MKT Listed Company Guide.
Contacting the Board of Directors
Stockholders who wish to communicate with the Board of Directors
may do so by mailing any such communications to Yossi Maimon, Corporate Secretary, Protalix BioTherapeutics, Inc., 2 Snunit Street,
Science Park, P.O. Box 455, Carmiel 20100, Israel. All communications are distributed to the Board of Directors, as appropriate,
depending upon the facts and circumstances outlined in the communications received. For example, if any complaints regarding accounting
and/or auditing matters are received, they may be forwarded by our Corporate Secretary to the Audit Committee for review.
Policy Governing Director Attendance at Annual Meetings of
Stockholders
We have no formal policy regarding attendance by our directors
at annual stockholders meetings, although we encourage such attendance and anticipate most of our directors will attend these meetings.
All of our directors except Dr. Kornberg attended our 2015 annual meeting of stockholders.
Compensation of Directors
The following table sets forth information with respect to compensation
of our non-employee directors during fiscal year 2015. The fees to our current directors were paid by Protalix Ltd.
Name
|
|
Fees Earned or
Paid in Cash ($)
|
|
|
Option
Award(s) ($)
|
|
|
Total ($)
|
|
Shlomo Yanai
|
|
|
200,000
|
|
|
|
96,096
|
|
|
|
296,096
|
|
Zeev Bronfeld
|
|
|
80,000
|
|
|
|
|
|
|
|
80,000
|
|
Amos Bar Shalev
|
|
|
80,000
|
|
|
|
|
|
|
|
80,000
|
|
Yodfat Harel Buchris
|
|
|
80,000
|
|
|
|
|
|
|
|
80,000
|
|
Roger D. Kornberg
|
|
|
55,000
|
|
|
|
|
|
|
|
55,000
|
|
Aharon Schwartz
|
|
|
40,000
|
|
|
|
|
|
|
|
40,000
|
|
Directors’ fees paid to each of Zeev
Bronfeld and Yodfat Harel Buchris are paid to the applicable director’s employer in accordance with arrangements between
the director and the employer.
Compensation Committee Interlocks and
Insider Participation
Our Compensation Committee currently consists
of Messrs. Bar Shalev and Bronfeld and Mrs. Harel Buchris. No member of our Compensation Committee or any executive officer of
our company or of Protalix Ltd. has a relationship that would constitute an interlocking relationship with executive officers
or directors of another entity. No Compensation Committee member is or was an officer or employee of ours or of Protalix Ltd.
Further, none of our executive officers serves on the board of directors or compensation committee of any entity that has one
or more executive officers serving as a member of our Board of Directors or Compensation Committee.
MANAGEMENT
Our executive officers, their ages and positions are as follows:
Name
|
|
Age
|
|
Position
|
Moshe Manor
|
|
60
|
|
Director, President and Chief Executive Officer
|
Yoseph Shaaltiel, Ph.D.
|
|
63
|
|
Director and Executive VP, Research and Development
|
Einat Brill Almon, Ph.D.
|
|
57
|
|
Vice President, Product Development
|
Yossi Maimon, CPA
|
|
46
|
|
Vice President, Chief Financial Officer, Treasurer and Secretary
|
Tzvi Palash
|
|
59
|
|
Chief Operating Officer
|
Moshe Manor.
Mr. Manor has served as our President and
Chief Executive Officer and as a director of our company since November 2014. Mr. Manor served in a number of senior executive
positions at Teva (NASDAQ:TEVA, TASE:TEVA) from 1984 through 2012. Most recently, he served as President, Teva Asia & Pacific
where he led the strategy and development of a high growth region for Teva. Prior to that, he was Group Vice President, Global
Branded Products, leading the Innovative Commercial and Research & Development franchises. From 2006 through 2008, Mr. Manor
was Senior Vice President, Global Innovative Resources, and was responsible for generating over $3 billion in sales with Copaxone
®
and Azilect
®
. Previously, he served as director of Teva Israel. Most recently, Mr. Manor serves on the Board of
Directors of Kamedis Ltd. and Coronis Partners, and as Chairman of the Board of Directors of a startup company, MEway Pharma. He
holds a BA in Economics from the Hebrew University in Jerusalem, and an MBA from the Tel-Aviv University. We believe Mr. Manor’s
qualifications to serve on our Board of Directors include his extensive experience in the life-science and pharmaceutical industry
on a global scale.
Yoseph Shaaltiel, Ph.D.
Dr. Shaaltiel founded
Protalix Ltd. in 1993 and has served as our Executive Vice President, Research and Development since December 31, 2006. Prior to
establishing Protalix Ltd., from 1988 to 1993, Dr. Shaaltiel was a Research Associate at the MIGAL Technological Center. He also
served as Deputy Head of the Biology Department of the Biological and Chemical Center of the Israeli Defense Forces and as a Biochemist
at Makor Chemicals Ltd. Dr. Shaaltiel was a Postdoctoral Fellow at the University of California at Berkeley and at Rutgers University
in New Jersey. He has co-authored over 40 articles and abstracts on plant biochemistry and holds seven patents. Dr. Shaaltiel received
his Ph.D. in Plant Biochemistry from the Weizmann Institute of Science, an M.Sc. in Biochemistry from the Hebrew University and
a B.Sc. in Biology from the Ben Gurion University.
Einat Brill Almon, Ph.D.
Dr. Almon joined Protalix Ltd.
in December 2004, originally as a Senior Director and later as a Vice President and then Senior Vice President, Product Development,
and became our Senior Vice President, Product Development on December 31, 2006. Dr. Almon has many years of experience in the management
of life science projects and companies, including biotechnology and agrobiotech, with direct experience in clinical, device and
scientific software development, as well as a strong background and work experience in intellectual property. Prior to joining
Protalix Ltd., from 2001 to 2004, she served as Director of R&D and IP of Biogenics Ltd., a company that developed an autologous
platform for tissue-based protein drug delivery. Biogenics, based in Israel, is a wholly-owned subsidiary of Medgenics Inc. Dr.
Almon has trained as a biotechnology patent agent at leading IP firms in Israel. Dr. Almon holds a Ph.D. and an M.Sc. in molecular
biology of cancer research from the Weizmann Institute of Science, a B.Sc. from the Hebrew University and has carried out Post-Doctoral
research at the Hebrew University in the area of plant molecular biology.
Yossi Maimon, CPA.
Mr. Maimon joined Protalix
Ltd. on October 15, 2006 as its Chief Financial Officer and became our Vice President and Chief Financial Officer on December 31,
2006. Prior to joining Protalix, from 2002 to 2006, he served as the Chief Financial Officer of Colbar LifeScience Ltd., or Colbar,
a biomaterial company focusing on aesthetics, where he led all of the corporate finance activities, fund raisings and legal aspects
of Colbar including the sale of Colbar to Johnson and Johnson. Mr. Maimon has a B.A. in accounting from the City University of
New York and an MBA from Tel Aviv University, and he is a Certified Public Accountant in the United States (New York State) and
Israel.
Tzvi Palash.
Mr. Palash has served
as Protalix Ltd.’s Chief Operating Officer since September 6, 2010. Prior to joining Protalix Ltd., from 2006 through 2010,
Mr. Palash served as a General Manager of ColBar. In that position, Mr. Palash served as a member of the Global Aesthetic Management
Team at the Consumer Group of Johnson & Johnson. Prior to that, from 2001 through 2006, Mr. Palash served as the Vice President,
Operations of ColBar, and he has served in different positions at Teva. Mr. Palash has an M.Sc. in Biochemistry from the Hebrew
University and a B.Sc. in Biology from the Tel Aviv University.
Family Relationships
There are no family relationships among directors
or executive officers of our company.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct
and Ethics that includes provisions ranging from restrictions on gifts to conflicts of interest. All of our employees and directors
are bound by this Code of Business Conduct and Ethics. Violations of our Code of Business Conduct and Ethics may be reported to
the Audit Committee.
The Code of Business Conduct and Ethics includes
provisions applicable to all of our employees, including senior financial officers and members of our Board of Directors and is
posted on our website (
www.protalix.com
). We intend to post amendments to or waivers from any such Code of Business Conduct
and Ethics.
Compensation Discussion and Analysis
The primary goals of the Compensation
Committee of our Board of Directors with respect to executive compensation are to attract and retain the most talented and dedicated
executives possible, to tie annual and long-term cash and stock incentives to achievement of specified performance objectives,
and to align executives’ incentives with stockholder value creation. To achieve these goals, the Compensation Committee implements
and maintains compensation plans that tie a portion of executives’ overall compensation to key strategic goals such as developments
in our clinical path, the establishment of key strategic collaborations, the build-up of our pipeline and the strengthening of
our financial position. The Compensation Committee evaluates individual executive performance with a goal of setting compensation
at levels the committee believes are comparable with executives in other companies of similar size and stage of development operating
in the biotechnology industry while taking into account our relative performance and our own strategic goals.
Elements of Compensation
Executive compensation
consists of following elements:
Base Salary.
Base salaries
for our executives are established based on the scope of their responsibilities taking into account competitive market compensation
paid by other companies for similar positions. Generally, we believe that executive base salaries should be targeted near the median
of the range of salaries for executives in similar positions with similar responsibilities at comparable companies. The Compensation
Committee convenes, from time to time to evaluate present and future executive compensation, which evaluation generally includes
an evaluation of the peer group considered in analyzing executive compensation. The Compensation Committee intends to continue
reviewing and revising the peer group periodically to ensure that it continues to reflect companies similar to our company in size
and development stage. The Compensation Committee also reviews executive compensation reports and an analysis of publicly-traded
biotechnology companies prepared by third party experts from a well-known consulting firm for additional data and other information
regarding executive compensation for comparative purposes.
Base salaries are usually reviewed
annually, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities,
performance and experience. The base salaries of each of our President and Chief Executive Officer, our Executive Vice President,
Research and Development, our Senior Vice President, Product Development, our Vice President and Chief Financial Officer and our
Chief Operating Officer, who we refer to collectively as the “Named Executive Officers,” are discussed herein. In March
2016, our Board of Directors adopted certain recommendations of the Compensation Committee regarding the compensation of our Named
Executive Officers with no change in the base salary component, as discussed below.
Annual Bonus
.
The Compensation Committee has the
authority to award discretionary annual bonuses to our executive officers. The discretionary annual bonus awards were intended
to compensate officers for achieving financial, clinical, regulatory and operational goals and for achieving individual annual
performance objectives. For any given year, the compensation objectives vary, but relate generally to strategic factors such as
developments in our clinical path, the execution of a license agreement for the commercialization of product candidates, the establishment
of key strategic collaborations, the build-up of our pipeline and financial factors such as capital raising. Bonuses are awarded
generally based on corporate performance, with adjustments made within a range for individual performance, at the discretion of
the Compensation Committee. The Compensation Committee determines, on a discretionary basis, the size of the entire bonus pool
and the amount of the actual award to each Named Executive Officer.
The Compensation Committee selects, in its discretion, the executive
officers of our company or our subsidiary who are eligible to receive bonuses for any given year. Any bonus granted by the Compensation
Committee will generally be paid upon the achievement of a specific milestone, subject to certain terms and conditions. The Compensation
Committee has not fixed a minimum or maximum award for any executive officer’s annual discretionary bonus. Each of our executive
officers is eligible for a discretionary annual bonus under his or her employment agreement.
Performance Bonus
.
In
March 2016, the Compensation Committee adopted a new performance-based bonus plan for the Named Executive Officers and other members
of our management. The new bonus plan is designed to provide cash bonuses over a three-year period based on our company’s
achievement of what we consider to be major milestones. The amounts payable to each person for each milestone were determined after
consideration of both personal and company objectives and are based on a multiple of the person’s monthly salary. Such multiples
range from a maximum of 12 months to a minimum of one-half a month. Each bonus is payable upon the achievement of the applicable
milestone, subject to certain terms and conditions. The bonus plan is summarized as follows:
Milestone
|
|
Moshe
Manor
|
|
|
Yoseph
Shaaltiel, Ph.D.
|
|
|
Einat Brill
Almon, Ph.D.
|
|
|
Yossi
Maimon
|
|
|
Tzvi
Palash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical Development Milestone for Certain Product Candidate
|
|
$
|
108,000
|
|
|
$
|
42,000
|
|
|
|
$72,000
to $108,000
|
|
|
$
|
36,000
|
|
|
$
|
34,000
|
|
Regulatory Development Milestone for Same Product Candidate
|
|
|
$108,000
to $216,000
|
|
|
|
$84,000
to $168,000
|
|
|
|
$108,000
to $216,000
|
|
|
|
$36,000
to $54,000
|
|
|
|
$34,000
to $68,000
|
|
Clinical Development Milestone for Certain Product Candidate
|
|
$
|
54,000
|
|
|
$
|
10,500
|
|
|
|
$27,000
to $54,000
|
|
|
$
|
9,000
|
|
|
$
|
8,500
|
|
Clinical Development Milestone for Certain other Product Candidate
|
|
$
|
54,000
|
|
|
$
|
10,500
|
|
|
|
$27,000
to $54,000
|
|
|
$
|
9,000
|
|
|
$
|
8,500
|
|
General Regulatory Milestone
|
|
$
|
102,000
|
|
|
$
|
42,000
|
|
|
$
|
36,000
|
|
|
$
|
18,000
|
|
|
$
|
102,000
|
|
Substantial Transaction involving a Certain Product Candidate
|
|
$
|
128,000
|
|
|
$
|
21,000
|
|
|
$
|
18,000
|
|
|
|
$115,000
to $141,000
|
|
|
$
|
17,000
|
|
Substantial Transaction involving other Product Candidate
|
|
$
|
112,000
|
|
|
$
|
10,500
|
|
|
$
|
9,000
|
|
|
|
$49,000
to $60,000
|
|
|
$
|
8,500
|
|
Corporate Finance Milestones
|
|
$
|
216,000
|
|
|
|
|
|
|
|
|
|
|
|
$197,000
to $242,000
|
|
|
|
|
|
Early-Stage Clinical Milestones
|
|
$
|
72,000
|
|
|
$
|
252,000
|
|
|
$
|
72,000
|
|
|
$
|
36,000
|
|
|
$
|
68,000
|
|
Options and Share-Based Compensation.
Our amended 2006 stock incentive plan authorizes us to grant options to purchase shares of common stock, restricted stock and other
securities to our employees, directors and consultants. Our Compensation Committee is the administrator of the stock incentive
plan. Stock option or other grants are generally made at the commencement of employment and following a significant change in job
responsibilities or to meet other special retention or performance objectives. The Compensation Committee reviews and approves
stock option and other awards to executive officers based upon a review of competitive compensation data, its assessment of individual
performance, a review of each executive’s existing long-term incentives, and retention considerations. The exercise price
of stock options granted under our amended 2006 stock incentive plan must be equal to at least 100% of the fair market value of
our common stock on the date of grant; however, in certain circumstances, grants may be made at a lower price to Israeli grantees
who are residents of the State of Israel. See “Summary Compensation Table – Grants of Plan-Based Awards” below
for grants of options to our Named Executives Officers during fiscal year 2015.
Severance and Change in Control
Benefits.
Pursuant to the employment agreements entered into with each of our executive officers, the executive officer
is entitled to be insured by Protalix Ltd. under a Manager’s Policy in lieu of severance. The intention of such Manager’s
Policies is to provide the Israel-based officers with severance protection of one month’s salary for each year of employment.
In addition, the stock options and restricted stock granted to each of our Named Executive Officers provide that all of such instruments
are subject to accelerated vesting immediately upon a change in control of our company. As part of the new bonus plan adopted in
March 2016, it was agreed that the Board of Directors will grant certain cash bonuses to the Named Executive Officers and other
of our employees in its sole discretion upon the occurrence of a change in control.
Other Compensation.
Consistent
with our compensation philosophy, we intend to continue to maintain our current benefits for our executive officers; however, the
Compensation Committee in its discretion may revise, amend, or add to the officer’s executive benefits if it deems it advisable.
As an additional benefit to all of our Israel-based Named Executive Officers and for most of our employees, we generally contribute
to certain funds amounts equaling a total of approximately 15% of their gross salaries for certain pension and other savings plans
for the benefit of the Named Executive Officers. In addition, in accordance with customary practice in Israel, our Israel-based
executives’ agreements require us to contribute towards their vocational studies, and to provide annual recreational allowances,
a company car and a company phone. We believe these benefits are currently equivalent with median competitive levels for comparable
companies.
Executive Compensation.
We refer to the “Summary Compensation Table” set forth below for information regarding the compensation earned during
the fiscal year ended December 31, 2015 by: our President and Chief Executive Officer, our Executive Vice President, Research
and Development, our Senior Vice President, Product Development, our Vice President and Chief Financial Officer and our Chief Operating
Officer, who we refer to collectively as the “Named Executive Officers.”
Compensation Committee Report
The above report of the Compensation Committee does not constitute
soliciting material and shall not be deemed filed or incorporated by reference into any other filing by us under the Securities
Act of 1933 or the Securities Exchange Act of 1934.
The Compensation Committee has reviewed and
discussed the Compensation Discussion and Analysis set forth below with our management. Based on this review and discussion, the
Compensation Committee has recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our
Annual Report on Form 10–K and our annual proxy statement on Schedule 14A.
Respectfully submitted on April 5, 2016, by
the members of the Compensation Committee of the Board of Directors
.
Amos Bar Shalev
Zeev Bronfeld
Yodfat Harel Buchris
Summary Compensation Table
The following table sets forth a summary for
the fiscal years ended December 31, 2015, 2014, and 2013, respectively, of the cash and non-cash compensation awarded, paid or
accrued by us or Protalix Ltd. to our President and Chief Executive Officer, our Executive Vice President, Research and Development,
our Senior Vice President, Product Development, our Vice President and Chief Financial Officer and our Chief Operating Officer,
who we refer to collectively as the “Named Executive Officers.” There were no restricted stock awards, long-term incentive
plan payouts or other compensation paid during fiscal years 2015, 2014, and 2013 by us or Protalix Ltd. to the Named Executive
Officers, except as set forth below. All of the Named Executive Officers are employees of our subsidiary, Protalix Ltd. All currency
amounts are expressed in U.S. dollars.
Name and Principal Position
|
|
Year
|
|
|
Salary($)
|
|
|
Bonus ($)
|
|
|
Stock
Award(s) ($)
|
|
|
Option Award(s)
($)
|
|
|
All Other
Compensation
($)(1)
|
|
|
Total ($)
|
|
Moshe Manor (2)
|
|
|
2015
|
|
|
|
334,708
|
|
|
|
|
|
|
|
|
|
|
|
427,864
|
|
|
|
95,823
|
|
|
|
858,395
|
|
President and
|
|
|
2014
|
|
|
|
93,667
|
|
|
|
|
|
|
|
-
|
|
|
|
200,962
|
|
|
|
18,399
|
|
|
|
313,028
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yoseph Shaaltiel, Ph.D.
|
|
|
2015
|
|
|
|
271,730
|
|
|
|
85,000
|
|
|
|
110,244
|
|
|
|
112,497
|
|
|
|
74,058
|
|
|
|
653,529
|
|
Executive Vice President,
|
|
|
2014
|
|
|
|
305,548
|
|
|
|
90,000
|
|
|
|
232,979
|
|
|
|
62,651
|
|
|
|
84,719
|
|
|
|
775,897
|
|
Research and Development
|
|
|
2013
|
|
|
|
302,901
|
|
|
|
120,000
|
|
|
|
429,927
|
|
|
|
140,770
|
|
|
|
81,672
|
|
|
|
1,075,270
|
|
Einat Brill Almon, Ph.D.
|
|
|
2015
|
|
|
|
234,899
|
|
|
|
117, 500
|
|
|
|
97,120
|
|
|
|
102,215
|
|
|
|
62,362
|
|
|
|
614,096
|
|
Senior Vice President,
|
|
|
2014
|
|
|
|
263,917
|
|
|
|
85,000
|
|
|
|
205,244
|
|
|
|
56,170
|
|
|
|
68,489
|
|
|
|
678,820
|
|
Product Development
|
|
|
2013
|
|
|
|
261,505
|
|
|
|
100,000
|
|
|
|
378,745
|
|
|
|
126,208
|
|
|
|
66,600
|
|
|
|
933,058
|
|
Yossi Maimon, CPA
|
|
|
2015
|
|
|
|
266,776
|
|
|
|
246,009
|
|
|
|
97,120
|
|
|
|
102,215
|
|
|
|
68,398
|
|
|
|
780,518
|
|
Vice President,
|
|
|
2014
|
|
|
|
299,090
|
|
|
|
225,000
|
|
|
|
205,244
|
|
|
|
56,170
|
|
|
|
74,493
|
|
|
|
859,997
|
|
Chief Financial Officer
|
|
|
2013
|
|
|
|
292,096
|
|
|
|
110,000
|
|
|
|
378,745
|
|
|
|
126,208
|
|
|
|
67,739
|
|
|
|
974,788
|
|
Tzvi Palash
|
|
|
2015
|
|
|
|
208,106
|
|
|
|
60,000
|
|
|
|
53,547
|
|
|
|
49,141
|
|
|
|
71,192
|
|
|
|
441,986
|
|
Chief Operating Officer
|
|
|
2014
|
|
|
|
233,669
|
|
|
|
50,000
|
|
|
|
113,161
|
|
|
|
11,413
|
|
|
|
74,520
|
|
|
|
482,763
|
|
|
|
|
2013
|
|
|
|
231,668
|
|
|
|
20,000
|
|
|
|
208,822
|
|
|
|
72,055
|
|
|
|
72,105
|
|
|
|
604,650
|
|
|
(1)
|
Includes employer contributions to pension and/or insurance
plans and other miscellaneous payments.
|
|
(2)
|
Mr. Manor commenced his tenure as our President and Chief
Executive Officer as of November 1, 2014.
|
Grants of Plan-Based Awards
The following table summarizes the grant of awards made to the
Named Executive Officers during 2015 as of December 31, 2015.
Name
|
|
Grant Date
|
|
All Other Stock Awards:
Number of Shares of Stock or Units (#)
|
|
|
Grant Date Fair Value
of Stock and Option Awards ($)
|
|
(a)
|
|
(b)
|
|
(i)
|
|
|
(l)
|
|
Yoseph Shaaltiel
|
|
March 23, 2015
|
|
|
275,000
|
|
|
|
270,252
|
|
Einat Brill Almon
|
|
March 23, 2015
|
|
|
250,000
|
|
|
|
245,684
|
|
Yossi Maimon
|
|
March 23, 2015
|
|
|
250,000
|
|
|
|
245,684
|
|
Tzvi Palash
|
|
March 23, 2015
|
|
|
125,000
|
|
|
|
122,842
|
|
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information
with respect to the Named Executive Officers concerning equity awards as of December 31, 2015.
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
|
|
Option
Exercise
Price ($)
|
|
|
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 ($)
|
|
Moshe Manor
|
|
|
281,250
|
|
|
|
618,750
|
|
|
|
2.37
|
|
|
9/29/2024
|
|
|
—
|
|
|
|
—
|
|
Yoseph Shaaltiel
|
|
|
122,162
|
|
|
|
-
|
|
|
|
0.001
|
|
|
6/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
263,728
|
|
|
|
-
|
|
|
|
5.00
|
|
|
2/7/2018
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
2.65
|
|
|
2/25/2019
|
|
|
|
|
|
|
|
|
|
|
|
145,000
|
|
|
|
-
|
|
|
|
6.90
|
|
|
2/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,375
|
|
|
|
40,163
|
|
|
|
|
-
|
|
|
|
275,000
|
|
|
|
1.72
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
Einat Brill Almon
|
|
|
311,272
|
|
|
|
-
|
|
|
|
5.00
|
|
|
2/7/2018
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
|
|
|
-
|
|
|
|
6.90
|
|
|
2/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
34,688
|
|
|
|
35,382
|
|
|
|
|
-
|
|
|
|
250,000
|
|
|
|
1.72
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
Yossi Maimon
|
|
|
175,000
|
|
|
|
-
|
|
|
|
5.00
|
|
|
2/7/2018
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
|
|
|
|
|
|
|
6.90
|
|
|
2/25/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
34,688
|
|
|
|
35,382
|
|
|
|
|
-
|
|
|
|
250,000
|
|
|
|
1.72
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
Tzvi Palash
|
|
|
160,000
|
|
|
|
|
|
|
|
7.55
|
|
|
8/29/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,125
|
|
|
|
19,508
|
|
|
|
|
-
|
|
|
|
125,000
|
|
|
|
1.72
|
|
|
3/23/2025
|
|
|
|
|
|
|
|
|
Option exercises during 2015 and vested stock
awards for Named Executive Officers as of December 31, 2015 were as follows:
Option Exercises and Stock Vested
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on Exercise (#)
|
|
|
Value Received on
Exercise ($)
|
|
|
Number of Shares Acquired
on Vesting (#)
|
|
|
Value Received on
Vesting ($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
Moshe Manor
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Yoseph Shaaltiel
|
|
|
-
|
|
|
|
-
|
|
|
|
52,500
|
|
|
|
|
|
Einat Brill Almon
|
|
|
-
|
|
|
|
-
|
|
|
|
46,250
|
|
|
|
|
|
Yossi Maimon
|
|
|
-
|
|
|
|
-
|
|
|
|
46,250
|
|
|
|
|
|
Tzvi Palash
|
|
|
-
|
|
|
|
-
|
|
|
|
25,500
|
|
|
|
|
|
Potential Payments upon Termination or
Change-in-Control/Corporate Transaction
Each of our Named Executive Officers (while they remain employed
by our company) is entitled to be insured by Protalix Ltd. under a Manager’s Policy in lieu of severance upon termination.
The intention of such Manager’s Policies is to provide our officers with severance protection of one month’s salary
for each year of employment. We do not provide any change in control/corporate transaction benefits to our Named Executive Officers
except for certain cash bonuses at the board’s sole discretion and the acceleration of the vesting periods for outstanding
options and restricted stock. Had we experienced a change in control/corporate transaction on December 31, 2015, the value of the
acceleration of the vesting period of Mr. Manor’s options would be zero; as of the same date all exercise prices of options
held by each of our other Named Executive Officers were above the market value of our shares and, accordingly, the value of the
acceleration of the stock options held by each of them as of such date would be zero. In addition, had we experienced a change
in control/corporate transaction on December 31, 2015, the value of the acceleration of vesting of the restricted stock held by
each of Dr. Shaaltiel, Dr. Brill Almon, Mr. Maimon and Mr. Palash would be $40,163, $35,382, $35,382, and $19,508, respectively.
Employment Arrangements
Moshe Manor.
Mr. Manor joined Protalix Ltd. as its President
and Chief Executive Officer pursuant to an employment agreement dated September 28, 2014. Pursuant to the employment agreement,
his current monthly base salary is NIS 95,000 (approximately $25,200) and Mr. Manor is entitled to an annual discretionary bonus
subject to the sole discretion of our Board of Directors. The Board of Directors shall determine the bonus on the basis of agreed-upon
annual objectives which shall include both measurable and strategic parameters. The monthly salary is subject to cost of living
adjustments from time to time as may be required by law. The Board of Directors also granted to Mr. Manor options to purchase 900,000
shares of our common stock at an exercise price equal to $2.37 per share, the closing sales price of the common stock on the NYSE
MKT for the last trading day immediately preceding the effective date of the grant. The options vest over four years on a quarterly
basis in 16 equal increments, subject to certain conditions. Vesting of the options will be accelerated in full upon a Corporate
Transaction or a Change in Control, as those terms are defined in the Company’s 2006 Stock Incentive Plan, as amended. Mr.
Manor’s employment agreement is terminable by our company on 90 days written notice for any reason during the first year
of the agreement’s term and on 180 days written notice thereafter. Mr. Manor may terminate the agreement on 90 days written
notice for any reason during its term. We may terminate the Agreement for cause without notice. Mr. Manor is entitled to be insured
by the Company under a Manager’s Policy in lieu of severance, company contributions towards vocational studies, annual recreational
allowances, a company car and a company phone. Mr. Manor is entitled to 24 working days of vacation.
Yoseph Shaaltiel, Ph.D.
Dr. Shaaltiel founded Protalix
Ltd. in 1993 and currently serves as our Executive Vice President, Research and Development. Dr. Shaaltiel entered into an employment
agreement with Protalix Ltd. on September 1, 2001. Pursuant to the employment agreement, his current monthly base salary is NIS
80,750 (approximately $21,400) per month. The employment agreement is terminable by Protalix Ltd. on 90 days’ written notice
for any reason and we may terminate the agreement for cause without notice. In addition, vesting of all of Dr. Shaaltiel’s
options and restricted shares will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are
defined in the Company’s 2006 Stock Incentive Plan, as amended. Dr. Shaaltiel is entitled to be insured by Protalix Ltd.
under a Manager’s Policy in lieu of severance, company contributions towards vocational studies, annual recreational allowances,
a company car and a company phone. Dr. Shaaltiel is entitled to 29 working days of vacation.
Einat Brill Almon, Ph.D.
Dr. Brill Almon joined Protalix
Ltd. on December 19, 2004 as its Vice President, Product Development, pursuant to an employment agreement effective on December
19, 2004 by and between Protalix Ltd. and Dr. Brill Almon, and currently serves as our Senior Vice President, Product Development.
Pursuant to the employment agreement, her current monthly base salary is NIS 69,825 per month (approximately $18,500). She is also
entitled to certain specified bonuses in the event that Protalix achieves certain specified clinical development milestones within
specified timelines. In addition, vesting of all of Dr. Brill Almon’s options and restricted shares will be accelerated in
full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Company’s 2006 Stock Incentive
Plan, as amended. The employment agreement is terminable by either party on 60 days’ written notice for any reason and we
may terminate the agreement for cause without notice. Dr. Brill Almon is entitled to be insured by Protalix Ltd. under a Manager’s
Policy in lieu of severance, company contributions towards vocational studies, annual recreational allowances, a company car and
a company phone at up to NIS 1,000 per month. Dr. Brill Almon is entitled to 29 working days of vacation.
Yossi Maimon, CPA.
Mr. Maimon joined Protalix Ltd. as
its Chief Financial Officer pursuant to an employment agreement effective as of October 15, 2006 by and between Protalix Ltd. and
Mr. Maimon and currently serves as our Chief Financial Officer. Pursuant to the employment agreement, his current monthly base
salary is NIS 69,825 (approximately $18,500) and Mr. Maimon is entitled to an annual discretionary bonus and additional discretionary
bonuses in the event Protalix achieves significant financial milestones, subject to the Board’s sole discretion. The monthly
salary is subject to cost of living adjustments from time to time. In addition, vesting of all of Mr. Maimon’s options and
restricted shares will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in
the Company’s 2006 Stock Incentive Plan, as amended. The employment agreement is terminable by either party on 60 days’
written notice for any reason and we may terminate the agreement for cause without notice. Mr. Maimon is entitled to be insured
by Protalix Ltd. under a Manager’s Policy in lieu of severance, company contributions towards vocational studies, annual
recreational allowances, a company car and a company phone. Mr. Maimon is entitled to 29 working days of vacation.
Tzvi Palash.
Mr. Palash joined Protalix Ltd. as its Chief
Operating Officer pursuant to an employment agreement effective September 6, 2010 and currently serves as our Chief Operating Officer.
Pursuant to the employment agreement, Mr. Palash’s current monthly base salary is NIS 65,550 (approximately $17,350) and
Mr. Palash is entitled to an annual discretionary bonus for performance subject to the sole discretion of our compensation committee.
The monthly salary is subject to cost of living adjustments from time to time as may be required by law. In addition, vesting of
all of Mr. Palash’s options and restricted shares will be accelerated in full upon a Corporate Transaction or a Change in
Control, as those terms are defined in the Company’s 2006 Stock Incentive Plan, as amended. The employment agreement is terminable
by either party on 60 days’ written notice for any reason and we may terminate the agreement for cause without notice. Mr.
Palash is entitled to be insured by Protalix Ltd. under a Manager’s Policy in lieu of severance, company contributions towards
vocational studies, annual recreational allowances, a company car, a company phone, a company laptop and lodging accommodations
in the Carmiel area. Mr. Palash is entitled to 27 working days of vacation.
Amended 2006 Stock Incentive Plan
Our Board of Directors and a majority of our
stockholders approved our 2006 Stock Incentive Plan on December 14, 2006. Our stockholders approved an amendment to the plan on
June 17, 2012 and subsequently on November 10, 2014. Of the 13,841,655 shares originally reserved for issuance under the plan,
as amended, as of December 31, 2015, there are outstanding options and unvested restricted stock covering 7,085,510 shares of our
common stock in the aggregate, subject to adjustment for a stock split or any future stock dividend or other similar change in
our common stock or our capital structure. As of December 31, 2015, options to acquire 760,844 shares of common stock remain available
for grant under the amended 2006 Stock Incentive Plan.
Our amended 2006 Stock Incentive Plan provides
for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights and dividend equivalent rights,
collectively referred to as “awards.” Stock options granted under the amended 2006 Stock Incentive Plan may be either
incentive stock options under the provisions of Section 422 of the Internal Revenue Code, or non-qualified stock options. Incentive
stock options may be granted only to employees. Awards other than incentive stock options may be granted to employees, directors
and consultants.
The amended 2006 Stock Incentive Plan is also
designed to comply with the provisions of the Israeli Income Tax Ordinance New Version, 1961 (including as amended pursuant to
Amendment 132 thereto) (the “tax ordinance”) and is intended to enable us to grant awards to grantees who are Israeli
residents as follows: (i) awards to employees pursuant to Section 102 of the tax ordinance; and (ii) awards to non-employees pursuant
to Section 3(I) of the tax ordinance. For this purpose, “employee” refers only to employees, office holders and directors
of our company or a related entity excluding those who are considered “Controlling Stockholders” pursuant to, or otherwise
excluded by, the tax ordinance. In accordance with the terms and conditions imposed by the Tax Ordinance, grantees who receive
awards under the amended 2006 stock incentive plan may be afforded certain tax benefits in Israel as described below.
Our Board of Directors or the Compensation
Committee, referred to as the “plan administrator,” will administer our amended 2006 stock incentive plan, including
selecting the grantees, determining the number of shares to be subject to each award, determining the exercise or purchase price
of each award, and determining the vesting and exercise periods of each award.
The exercise price of stock options granted
under the 2006 stock incentive plan must be equal to at least 100% of the fair market value of our common stock on the date of
grant; however, in certain circumstances, grants may be made at a lower price to Israeli grantees who are residents of the State
of Israel. If, however, incentive stock options are granted to an employee who owns stock possessing more than 10% of the voting
power of all classes of our stock or the stock of any parent or subsidiary of our company, the exercise price of any incentive
stock option granted must equal at least 110% of the fair market value on the grant date and the maximum term of these incentive
stock options must not exceed five years. The maximum term of all other awards must not exceed 10 years (or five years in the case
of an incentive stock option granted to any participant who owns stock representing more than 10% of the voting power of all classes
of our stock or the stock of any parent or subsidiary of our company). The plan administrator will determine the exercise or purchase
price (if any) of all other awards granted under the amended 2006 stock incentive plan.
Under the amended 2006 stock incentive plan,
incentive stock options and options to Israeli grantees may not be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of the participant
only by the participant. Other awards shall be transferable by will or by the laws of descent or distribution and to the extent
and in the manner authorized by the plan administrator by gift or pursuant to a domestic relations order to members of the participant’s
immediate family. The amended 2006 stock incentive plan permits the designation of beneficiaries by holders of awards, including
incentive stock options.
If the service of a participant in the amended
2006 stock incentive plan is terminated for any reason other than cause, the participant may exercise awards that were vested as
of the termination date for a period ending upon the earlier of 12 months from the date of termination (or such shorter or longer
period set forth in the award agreement) or the expiration date of the awards unless otherwise determined by the plan administrator.
If the service of a participant in the amended 2006 stock incentive plan is terminated for cause, the participant may exercise
awards that were vested as of the termination date for a period ending upon the earlier of 14 days from the date of termination
(or such shorter or longer period set forth in the award agreement) or the expiration date of the awards unless otherwise determined
by the plan administrator.
In the event of a corporate transaction, all
awards will terminate unless assumed by the successor corporation. Unless otherwise provided in a participant’s award agreement,
in the event of a corporate transaction and with respect to the portion of each award that is assumed or replaced, then such portion
will automatically become fully vested and exercisable immediately upon termination of a participant’s service if the participant
is terminated by the successor company or us without cause within 12 months after the corporate transaction. With respect to the
portion of each award that is not assumed or replaced, such portion will automatically become fully vested and exercisable immediately
prior to the effective date of the corporate transaction so long as the participant’s service has not been terminated prior
to such date.
In the event of a change in control, except
as otherwise provided in a participant’s award agreement, following a change in control (other than a change in control that
also is a corporate transaction) and upon the termination of a participant’s service without cause within 12 months after
a change in control, each award of such participant that is outstanding at such time will automatically become fully vested and
exercisable immediately upon the participant’s termination. In addition, the stock options and shares of restricted stock
issued to each of our Named Executive Officers are subject to accelerated vesting immediately upon a corporate transaction or a
change in control of our company, as defined in our amended 2006 stock incentive plan.
Under our amended 2006 stock incentive plan,
a corporate transaction is generally defined as:
·
a
merger or consolidation in which we are not the surviving entity, except for the principal purpose of changing our
company’s state of incorporation;
·
the
sale, transfer or other disposition of all or substantially all of our assets;
·
the
complete liquidation or dissolution of our company;
·
any
reverse merger in which we are the surviving entity but our shares of common stock outstanding immediately prior to such
merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or
otherwise, or in which securities possessing more than forty percent (40%) of the total combined voting power of our
outstanding securities are transferred to a person or persons different from those who held such securities immediately prior
to such merger; or
·
acquisition
in a single or series of related transactions by any person or related group of persons of beneficial ownership of
securities possessing more than fifty percent (50%) of the total combined voting power of our outstanding securities but
excluding any such transaction or series of related transactions that the plan administrator determines not to be a corporate
transaction (provided however that the plan administrator shall have no discretion in connection with a corporate transaction
for the purchase of all or substantially all of our shares unless the principal purpose of such transaction is changing our
company’s state of incorporation).
Under our amended 2006 stock incentive
plan, a change of control is defined as:
·
the
direct or indirect acquisition by any person or related group of persons of beneficial ownership of securities possessing
more than fifty percent (50%) of the total combined voting power of our outstanding securities pursuant to a tender or
exchange offer made directly to our stockholders and which a majority of the members of our board (who have generally been on
our board for at least 12 months) who are not affiliates or associates of the offeror do not recommend stockholders accept
the offer; or
·
a
change in the composition of our board over a period of 12 months or less, such that a majority of our board members ceases,
by reason of one or more contested elections for board membership, to be comprised of individuals who were previously
directors of our company.
Unless terminated sooner, the amended 2006
stock incentive plan will automatically terminate on December 31, 2020. Our Board of Directors has the authority to amend, suspend
or terminate our amended 2006 stock incentive plan. No amendment, suspension or termination of the amended 2006 stock incentive
plan shall adversely affect any rights under awards already granted to a participant. To the extent necessary to comply with applicable
provisions of federal securities laws, state corporate and securities laws, the Internal Revenue Code, the rules of any applicable
stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to awards granted to residents
therein (including the Tax Ordinance), we shall obtain stockholder approval of any such amendment to the 2006 stock incentive plan
in such a manner and to such a degree as required.
Impact of Israeli Tax Law
The awards granted to employees pursuant to
Section 102 of the Tax Ordinance under the amended 2006 stock incentive plan may be designated by us as approved options under
the capital gains alternative, or as approved options under the ordinary income tax alternative.
To qualify for these benefits, certain requirements
must be met, including registration of the options in the name of a trustee. Each option, and any shares of common stock acquired
upon the exercise of the option, must be held by the trustee for a period commencing on the date of grant and deposit into trust
with the trustee and ending 24 months thereafter.
Under the terms of the capital gains alternative,
we may not deduct expenses pertaining to the options for tax purposes.
Under the amended 2006 stock incentive plan,
we may also grant to employees options pursuant to Section 102(c) of the Tax Ordinance that are not required to be held in trust
by a trustee. This alternative, while facilitating immediate exercise of vested options and sale of the underlying shares, will
subject the optionee to the marginal income tax rate of up to 50% as well as payments to the National Insurance Institute and health
tax on the date of the sale of the shares or options. Under the 2006 stock incentive plan, we may also grant to non-employees options
pursuant to Section 3(I) of the Tax Ordinance. Under that section, the income tax on the benefit arising to the optionee upon the
exercise of options and the issuance of common stock is generally due at the time of exercise of the options.
These options shall be further subject to
the terms of the tax ruling that has been obtained by Protalix Ltd. from the Israeli tax authorities in connection with the merger.
Under the tax ruling, the options issued by us in connection with the assumption of Section 102 options previously issued by Protalix
Ltd. under the capital gains alternative shall be issued to a trustee, shall be designated under the capital gains alternative
and the issuance date of the original options shall be deemed the issuance date for the assumed options for the calculation of
the respective holding period.
Certain
relationships and related transactions
All related party transactions are
reviewed and approved by the Audit Committee, as required by the Audit Committee Charter.
AUDIT COMMITTEE REPORT
The information contained in this report shall not be deemed
to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such
information be incorporated by reference into any future filings with the Securities and Exchange Commission, or subject to the
liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate
it by reference into a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.
The Audit Committee of our Board of Directors operates under
a written charter adopted by our Board of Directors, and currently consists of Amos Bar Shalev, Zeev Bronfeld and Yodfat Harel
Buchris. All members of the committee fall under the independence requirements contemplated by Rule 10A-3 under the Exchange Act.
As described more fully in its charter, the Audit Committee
provides oversight of the quality and integrity of our consolidated financial statements, internal controls and financial reporting
process, and our process to manage business and financial risks and compliance with legal, ethical and regulatory requirements.
In addition, the Audit Committee interacts directly with and evaluates the qualifications, independence and performance of the
independent auditors, Kesselman & Kesselman, and is responsible for the appointment, compensation, retention and oversight
of the work of the auditors.
Management is responsible for the preparation, presentation
and integrity of the consolidated financial statements, and evaluation of and assessment of the effectiveness of our internal control
over financial reporting. The independent auditors are responsible for performing an independent audit of the consolidated financial
statements in accordance with the standards of the Public Company Accounting Oversight Board. The Audit Committee’s responsibility
is to monitor and oversee these processes.
The Audit Committee has reviewed and discussed the audited consolidated
financial statements with our Board of Directors and management. Management has represented to the audit committee that our consolidated
financial statements were prepared in accordance with U.S. generally accepted accounting principles. The Audit Committee discussed
with Kesselman & Kesselman the matters required to be discussed by Statement of Auditing Standards No. 61,
Communications
with Audit Committees
. In addition, the independent auditors provided the Audit Committee with the written disclosures and
letter required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees
, and the
Audit Committee has discussed with Kesselman & Kesselman that firm’s independence from our company.
Based on the review and discussions of the audited consolidated
financial statements and discussions with management and Kesselman & Kesselman, the Audit Committee recommended to Board of
Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2015 for filing with the SEC.
|
Respectfully submitted,
|
|
|
|
Members of the Protalix BioTherapeutics, Inc.
|
|
Audit Committee
|
|
|
|
Amos Bar Shalev
|
|
Zeev Bronfeld
|
|
Yodfat Harel Buchris
|
Our Board of Directors recommends that
stockholders vote “FOR” the
election or re-election of all director nominees named in this “Proposal 1:
Election of Directors.”
PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE
COMPENSATION
The Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 (the “Dodd-Frank Act”), which was signed into law in July 2010, added Section 14A to
the Exchange Act. The Dodd-Frank Act requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding,
advisory basis, the compensation of the our named executive officers as disclosed in this proxy statement in accordance with the
compensation disclosure rules of the SEC.
We believe that the executive compensation
program for the named executive officers, as described in “Compensation Discussion and Analysis,” is based on a pay-for-performance
culture and seeks to align the interests of our named executive officers with the interests of our stockholders. We believe that
our compensation programs are designed to reward our named executive officers for the achievement of short-term and long-term strategic
and operational goals and the achievement of increased total stockholder return, while at the same time creating a culture that
focuses executives on prudent risk management and appropriately rewards them for performance. Our executive compensation program
is also designed to be competitive with our peer companies, and seeks to enable us to attract and retain the best possible executive
talent.
We also believe that the extensive disclosure
of compensation information provided in this proxy statement provides our stockholders the information they need to make an informed
decision as they weigh the pay of the named executive officers in relation to our performance. This “Say-on-Pay” proposal
gives you the stockholder the opportunity to endorse or not endorse the compensation we paid to the named executive officers through
the resolution set forth below.
“RESOLVED, that the compensation
paid to the named executive officers of Protalix BioTherapeutics, Inc., as disclosed pursuant to Item 402 of Regulation S-K, including
the Compensation Discussion and Analysis, compensation tables and narrative discussion included in this proxy statement, is hereby
APPROVED.”
Because your vote is advisory, it will
not be binding upon our company, our Board of Directors or the Compensation Committee. The vote on this resolution is not intended
to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers,
as described in this proxy statement in accordance with the compensation disclosure rules of the SEC. Our company, our Board of
Directors, and the Compensation Committee will consider the outcome of the vote when evaluating future executive compensation arrangements
for our named executive officers.
This proposal is provided as required
pursuant to Rule 14a-21(a) of the Exchange Act.
Our Board of Directors recommends that stockholders vote
“FOR” the approval of the executive compensation as disclosed in this proxy statement and as described in this “Proposal
2: Advisory Vote on Executive Compensation.”
PROPOSAL 3: AMENDMENT TO INCREASE THE
NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
On May 8, 2016, our Board of Directors
authorized and approved an amendment to our Certificate of Incorporation (“Certificate”) to increase the number of
authorized shares of our common stock, par value $0.001 per share, from 150,000,000 to 250,000,000 (the “Amendment”).
We are not proposing any change to the authorized number of shares of preferred stock. Under the Delaware General Corporation Law,
we are required to obtain the affirmative vote of the holders of a majority of our outstanding shares of common stock to amend
the Certificate to increase the number of shares of authorized common stock. Our Board of Directors determined that the Amendment
is advisable and in the best interest of the Company and our stockholders and recommends that our stockholders approve the Amendment.
Description of Common Stock
The Certificate currently authorizes the
issuance of 150,000,000 shares of common stock, par value $0.001 per share, and 100,000,000 shares of preferred stock, par value
$0.0001 per share, for a total of 250,000,000 shares of capital stock. As of June 1, 2016, there were 99,808,238 shares of common
stock issued and outstanding, and no shares of preferred stock issued and outstanding.
As discussed in this proxy statement under
the heading “Amended 2006 Stock Incentive Plan,” we have reserved a number of additional shares of common stock for
future issuance under our equity compensation plans. As of December 31, 2015, a total of 7,085,510 shares of common stock are reserved
for issuance upon the exercise of outstanding stock options under our 2006 Stock Incentive Plan, as amended, and a total of 760,844
shares of common stock are reserved for issuance in connection with future grants of stock options and/or future issuances of shares
under the plan. In addition, 631,866 shares of common stock are reserved for issuance upon the exercise of other outstanding stock
options and 14,618,644 shares of common stock are reserved for issuance upon the conversion of our outstanding convertible promissory
notes. After taking into account the total number of shares of common stock issued and outstanding, in addition to the aggregate
number of shares of common stock reserved for future issuance as described in this paragraph, approximately 82% of our authorized
shares of common stock has been issued or reserved for issuance.
Purpose of the Amendment
Our Board of Directors believes that it
is in our best interest, and in the best interest of our stockholders, to increase the number of authorized shares of common stock
available for future issuance. Our Board of Directors has determined that increasing the number of authorized shares of common
stock available for future issuance will provide our company with greater flexibility in considering and planning our future business
needs. Such plans may involve the issuance, from time to time, of additional shares of common stock. If approved, the Amendment
will provide our Board of Directors the authority and flexibility to pursue a variety of business and financial objectives without
further action of the stockholders (except when required by applicable law or regulation). We anticipate that we may issue additional
shares of common stock in the future in connection with one or more of the following:
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financing transactions, such as public or private offerings;
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issuances pursuant to the conversion of outstanding or future convertible securities;
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issuances under current and future stock incentive plans;
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issuances in connection with any partnerships, strategic alliances, collaborations or other similar transactions;
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issuances in connection with strategic investments;
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any other proper corporate purpose.
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Our Board of Directors evaluates such
opportunities, from time to time, and considers different capital structuring alternatives designed to advance our business strategy.
If additional authorized shares of common stock are available, transactions dependent upon the issuance of additional shares would
be less likely to be impeded or undermined by delays and uncertainties occasioned by the need to obtain prior stockholder authorization.
Our Board of Directors will have the discretion to issue the shares of common stock without further stockholder action, except
as may be required for a particular transaction by applicable law or regulation, or the NYSE MKT Company Guide. As of the date
of this Proxy Statement, we have no specific plans, agreements or commitments to issue any shares of common stock for which approval
of the proposed Amendment is required. Nevertheless, our Board of Directors believes the additional authorized shares will provide
us with needed flexibility to issue shares of common stock in the future without the potential expense and delay incident to obtaining
stockholder approval for a particular issuance. Our Board of Directors believes that a failure to approve this proposed Amendment
may restrict our ability to manage our capital needs and may therefore be detrimental to the interests of our stockholders.
Possible Effects of the Amendment
The issuance of additional shares of common
stock may, among other things, have a dilutive effect on earnings per share and on stockholders’ equity and voting rights.
Furthermore, future sales of substantial amounts of our common stock, or the perception that these sales might occur, could adversely
affect the prevailing market price of our common stock or limit our ability to raise additional capital. Stockholders should recognize
that, as a result of this proposal, they will own a smaller percentage of shares relative to the total authorized shares of our
company than they presently own.
The issuance of additional shares of common
stock could also have the effect of making it more difficult for a third party to acquire, or discouraging a third party from attempting
to acquire, control of our company. For example, we could issue additional shares of common stock so as to dilute the stock ownership
or voting rights of persons seeking to obtain control of our company without our agreement. Similarly, the issuance of additional
shares of common stock to certain persons allied with our management could have the effect of making it more difficult to remove
our current management by diluting the stock ownership or voting rights of persons seeking to cause such removal. We have not proposed
the increase in the number of authorized shares of common stock with the intention of using the additional authorized shares for
anti-takeover purposes.
Neither the Delaware General Corporation
Law, the Certificate, nor our Bylaws provides for appraisal or other similar rights for dissenting stockholders in connection with
this proposal. Accordingly, our stockholders will have no right to dissent and obtain payment for their shares.
The text of the proposed Amendment is
set forth in Exhibit A attached to this Proxy Statement, and this discussion is qualified in its entirety by reference to Exhibit
A. If this proposed Amendment is approved by the stockholders, it will become effective upon filing of a Certificate of Amendment
with the Certificate with the Secretary of State of the State of Delaware. We expect to file the Certificate of Amendment promptly
upon approval by our stockholders. In accordance with the Delaware General Corporation Law, however, our Board of Directors may
elect to abandon the Amendment without further action by the stockholders at any time prior to the effectiveness of the filing
of the Certificate of Amendment with the Secretary of State of the State of Delaware, notwithstanding stockholder approval of the
Amendment.
Our Board of Directors recommends that stockholders vote
“FOR” the approval of the Amendment to the Certificate of Incorporation to Increase the Number of Authorized Shares
of Common Stock from 150,000,000 to 250,000,000 as disclosed in this proxy statement and as described in this “Proposal 3:
Amendment to Increase the Number of Authorized Shares of Common Stock.”
PROPOSAL 4: RATIFICATION OF APPOINTMENT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Board of Directors, upon
the recommendation of its Audit Committee, has ratified the selection of Kesselman & Kesselman to serve as our independent
registered public accounting firm for the fiscal year ending December 31, 2016. The Audit Committee of our Board of Directors is
solely responsible for selecting our independent public accountants. Although stockholder approval is not required to appoint Kesselman
& Kesselman as our independent public accountants, we believe that submitting the appointment of Kesselman & Kesselman
to our stockholders for ratification is a matter of good corporate governance. If our stockholders do not ratify the appointment,
then the appointment will be reconsidered by the Audit Committee. Even if the appointment is ratified, the Audit Committee may
engage a different independent registered public accounting firm at any time during the year if it determines that such a change
would be in the best interest of our Corporation and our stockholders. The proxy will be voted as specified, and if no specification
is made, the proxy will be cast “FOR” this proposal.
During our fiscal year ended
December 31, 2015, there were no disagreements with Kesselman & Kesselman on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which if not resolve to their satisfaction would have caused them
to make reference to the subject matter of the disagreements in connection with their opinion.
The audit report of Kesselman
& Kesselman on our consolidated financial statements for the years ended December 31, 2014 and 2015 did not contain any adverse
opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.
The Audit Committee will consider
whether the provision of any other services by Kesselman & Kesselman is compatible with maintaining the independence of Kesselman
& Kesselman. The Audit Committee has concluded that Kesselman & Kesselman is independent.
Representatives of Kesselman
& Kesselman will be present at the annual meeting and available to answer stockholders questions.
Our Board of Directors recommends that
stockholders vote “FOR” the ratification of the appointment of Kesselman & Kesselman for the fiscal year ending
December 31, 2016.
The following table sets forth fees billed to us by our independent
registered public accounting firm during the fiscal years ended December 31, 2015 and 2014 for: (i) services rendered for the audit
of our annual financial statements and the review of our quarterly financial statements; (ii) services by our independent registered
public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and that
are not reported as Audit Fees; (iii) services rendered in connection with tax compliance, tax advice and tax planning; and (iv)
all other fees for services rendered.
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Year Ended December 31,
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2015
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2014
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Audit Fees
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$
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231,000
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$
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246,000
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Audit Related Fees
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$
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34,000
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$
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10,000
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Tax Fees
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$
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45,600
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$
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51,380
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All Other Fees
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-
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-
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Policy on Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services of Independent Auditors
Prior to entering into the engagement letter with our independent
registered accountants, our Audit Committee approved the 2016 audit fees. For fiscal year 2016, our Audit Committee has approved
fees for certain permissible non-audit services to be rendered by our independent registered accounting firm.
STOCKHOLDER PROPOSALS
All stockholder proposals intended to be presented at our 2017
Annual Meeting of Stockholders must be submitted in writing to Yossi Maimon, Corporate Secretary, Protalix BioTherapeutics, Inc.,
2 Snunit Street, Science Park, P.O. Box 455, Carmiel 20100, Israel and received by us no later than March 10, 2017, and must comply
in all other respects with applicable rules and regulations of the SEC relating to such inclusion. Such notice must include, with
respect to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired
to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and record
address of the stockholder proposing such business; (iii) the class and number of shares of our company which are beneficially
owned by the stockholder; and (iv) any material interest of the stockholder in such business. In addition, the notice must include
certain information relating to any derivative or hedging transactions by the stockholder delivering such notice and its Stockholder
Associated Persons, as defined in our By-Laws, and other arrangements with other parties regarding our securities, as presented
in detail in our By-Laws.
Any such proposal submitted with respect to our 2017 Annual
Meeting of Stockholders which is submitted outside the requirements of Rule 14a-8 under the Exchange Act will be considered timely
if we receive written notice of that proposal not less than 45 days nor more than 75 days prior to the date in 2017 on which we
first mailed this proxy statement in 2016; however, if the date of the annual meeting is changed by more than 30 days from the
date of the prior year’s annual meeting, the notice will be considered untimely if it is not received at least 90 days prior
to the newly announced date that we will mail our proxy statement.
ANNUAL REPORT TO STOCKHOLDERS
Our Annual Report on Form 10-K for the fiscal year ended December
31, 2015 filed with the SEC, which provides additional information about us, will be distributed to all stockholders entitled to
vote along with the proxy materials. Additional copies of our Annual Report on Form 10-K for the fiscal year ended December 31,
2015 are available on the Internet at http://www.sec.gov and http://www.protalix.com and are also available in paper form without
charge upon written request to Investor Relations, Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455,
Carmiel 20100, Israel.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries
(e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders
sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly
referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are
stockholders of our company will be “householding” our proxy materials. A single proxy statement may be delivered to
multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once a
stockholder has received notice from its broker that it will be “householding” communications to such stockholder’s
address, “householding” will continue until such stockholder is notified otherwise or until such stockholder notifies
its broker or us that it no longer wishes to participate in “householding.” If, at any time, a stockholder no longer
wishes to participate in “householding” and would prefer to receive a separate proxy statement and annual report in
the future such stockholder may (1) notify its broker or (2) direct its written request to: Yossi Maimon, Corporate Secretary,
Protalix BioTherapeutics, Inc., 2 Snunit Street, Science Park, P.O. Box 455, Carmiel 20100, Israel, +972 (4) 988-9488, ext. 143.
Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request “householding”
of their communications should contact their broker. In addition, we will promptly deliver, upon written or oral request to the
address or telephone number above, a separate copy of the annual report and proxy statement to such stockholders at a shared address
to which a single copy of the documents was delivered.
OTHER MATTERS
Our Board of Directors knows of no other business to be acted
upon at the annual meeting. However, if any other business properly comes before the Annual Meeting of Stockholders, it is the
intension of the persons named in the enclosed proxy to vote on such matters in accordance with their best judgment.
The prompt return of your proxy is appreciated and will be helpful
in obtaining the necessary vote. Therefore, whether or not you expect to attend the annual meeting please sign the proxy and return
it in the enclosed envelope or vote by internet or telephone.
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BY ORDER OF THE BOARD OF DIRECTORS,
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Yossi Maimon
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Vice President and Chief Financial Officer and Corporate Secretary
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Carmiel, Israel
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June , 2016
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Appendix A
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION OF
PROTALIX BIOTHERAPEUTICS, INC.
(Pursuant to Section 242 of the
General Corporation Law of the State of Delaware)
Protalix BioTherapeutics,
Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
1. The
name of the corporation is Protalix BioTherapeutics, Inc. (the “Corporation”). The Certificate of Incorporation of
the Corporation was filed with the Secretary of the State of Delaware on March 30, 2016.
2. This
Certificate of Amendment to Certificate of Incorporation of the Corporation was duly adopted by the Board of Directors of the Corporation
pursuant to a resolution setting forth the proposed amendment of the Certificate of Incorporation and declaring said amendment
to be advisable.
3. Article
III of the Certificate of Incorporation is hereby deleted in its entirety and replaced with the following:
The Corporation is authorized to issue
the following shares of capital stock: (a) 250,000,000 shares of common stock, par value $.001 per share (the “Common
Stock”); and (b) 100,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”).
The voting rights, the rights of redemption and other relative rights and preferences of the Preferred Stock shall be established
by the Board of Directors.
The Board of Directors may authorize
the issuance of such stock to such persons upon such terms and for such consideration in cash, property or services as the Board
of Directors may determine and as may be allowed by law. The just valuation of such property or services shall be fixed by the
Board of Directors. All such stock when issued shall be fully paid and exempt from assessment.
4. The
aforesaid amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
[Remainder of this page intentionally left
blank.]
IN WITNESS WHEREOF,
the Corporation has caused this Certificate of Amendment to Certificate of Incorporation to be signed by its duly authorized President
and Chief Executive Officer this day of , 2016.
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PROTALIX BIOTHERAPEUTICS, INC.
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By:
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Moshe Manor
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President and Chief Executive Officer
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