(for example, by permitting issuances that would dilute the stock ownership of a personCommittee to make presentations, to provide financial or entity seekingother background information or advice or to effect a changeotherwise participate in the compositionCompensation Committee meetings. The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the board of directors Compensation Committee regarding his compensation.
The Compensation Committee has the authority to delegate to the Chief Executive Officer and/or contemplating a tender offer or other change in control transaction). In addition, our Certificate of Incorporation and our Bylaws include provisions that may have an anti-takeover effect. These provisions, among things, permit the Board to issue Preferred Stock with rights senior to those of the Common Stock without any further vote or action by the stockholders and do not provide for cumulative voting rights, which could make it more difficult for stockholders to effect certain corporate actions and may delay or discourage a change in control.
Our Board is not presently aware of any attempt, or contemplated attempt, to acquire controlofficers of the Company who report directly to the Chief Executive Officer and the Reverse Stock Split Proposal is not part of any plan by our Boardall officers who are “insiders” subject to recommend or implement a series of anti-takeover measures.
Accounting TreatmentSection 16 of the Reverse Stock Split
IfExchange Act (the “Senior Officers”), the Reverse Stock Split is effected,determination of compensation under approved compensation programs, except that compensation action affecting the par value per shareChief Executive Officer or the Senior Officers may not be delegated. The Committee has direct responsibility and power to review and approve corporate goals and objectives relevant to the compensation of our Common Stock will remain unchanged at $0.01. Accordingly, at the Effective Time, the stated capital on the Company’s consolidated balance sheets attributable to our Common Stock will be reduced in proportion toChief Executive Officer, evaluate the sizeperformance of the Reverse Stock Split ratio, and the additional paid-in-capital account will be increased by the amount by which the stated capital is reduced. Our stockholders’ equity, in the aggregate, will remain unchanged. Per share net income or loss will be increased because there will be fewer shares of Common Stock outstanding. The Company does not anticipate that any other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, will arise as a result of the Reverse Stock Split.
Certain U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain U.S. federal income tax consequences of the Reverse Stock Split to stockholders that hold their shares of Common Stock as capital assets for U.S. federal income tax purposes. This summary is based upon the provisions of the U.S. Internal Revenue Code, or the Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as in effect as of the date hereof, and all of which are subject to change and differing interpretations, possibly with retroactive effect. Changes in these authorities or their interpretation may result in the U.S. federal income tax consequences of the Reverse Stock Split differing substantially from the consequences summarized below.
This summary is for general information purposes only and does not address all aspects of U.S. federal income taxation that may be relevant to stockholdersChief Executive Officer in light of their particular circumstances orthose goals and objectives, and approve the compensation level for the Chief Executive Officer based on this evaluation.
Compensation Committee Consultant
Under its charter, the Compensation Committee has the authority, in its sole discretion, to stockholders that may be subject to special tax rules, including, without limitation: (i) persons subject to the alternative minimum tax; (ii) banks, insurance companies,obtain, at our expense, advice of compensation consultants and internal and external legal, accounting or other financial institutions; (iii) tax-exempt organizations; (iv) dealersadvisers that the Compensation Committee considers necessary or appropriate in securities or commodities; (v) regulated investment companies or real estate investment trusts; (vi) partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax purposes and their partners or members); (vii) traders in securities that elect to use the mark-to-market method of accounting; (viii) persons whose “functional currency” is not the U.S. dollar; (ix) persons holding our Common Stock in a hedging transaction, “straddle,” “conversion transaction” or other risk reduction transaction; (x) persons who acquired our Common Stock in connection with employment or the performance of services; (xi) retirement plans; (xii) persons who are not U.S. Holders (as defined below); or (xiii) certain former citizens or long-term residentsits duties. The Compensation Committee has direct responsibility for the oversight of the United States.work of any consultants or advisers engaged for the purpose of advising the Compensation Committee and for the approval of such consultant’s or adviser’s fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Compensation Committee, other than in-house legal counsel and certain other types of advisers, only after assessing the independence of such person in accordance with SEC and Nasdaq requirements that bear upon the adviser’s independence.
In addition, this summaryaccordance with its authority, the Compensation Committee has retained Radford, a part of Aon plc (“Radford”) as its outside compensation consultant during fiscal year 2022. As requested by the Compensation Committee, in 2022, Radford met periodically with the Compensation Committee and provided advice regarding the design and implementation of the Company’s executive compensation programs, as well as our director compensation programs. In particular, Radford:
reviewed and made recommendations regarding executive and non-employee director compensation;
provided market data and performed competitive market analyses, including peer group analyses; and
assisted in the preparation of certain U.S. federal income tax consequences does not addressof our compensation-related disclosures included in this Proxy Statement.
In providing its services to the tax consequences arisingCompensation Committee, with the Compensation Committee’s knowledge, Radford may contact our management from time to time to obtain data and other information from us and to work together in the development of proposals and alternatives for the Compensation Committee to review and consider.
All executive compensation services provided by Radford during 2022 were conducted under the lawsdirection or authority of the Compensation Committee, and all work performed by Radford was approved by the Compensation Committee. Neither Radford nor any foreign, stateof its affiliates maintains any other direct or local jurisdictionindirect business relationships with us or any U.S. federal tax consequencesof our subsidiaries. The Compensation Committee evaluated whether any work provided by Radford raised any conflict of interest for services performed during 2022 and determined that it did not. In order to ensure that Radford is independent, Radford is engaged by, takes direction from, and reports to, only the Compensation Committee and, accordingly, only the Compensation Committee has the right to terminate or replace Radford at any time.
Additionally, during 2022, Radford did not provide any services to us other than U.S. federal income taxation (such as U.S. federal estateregarding executive, employee and gift tax consequences). If a partnership (including any entitydirector compensation and broad-based plans that do not discriminate in scope, terms, or arrangement treated as a partnership for U.S. federal income tax purposes) holds sharesoperation, in favor of our Common Stock,executive officers or directors, and that are available generally to all salaried employees.
Nominating and Corporate Governance Committee
The Nominating Committee currently consists of two directors: Mr. Kariv and Dr. Walts, with Mr. Kariv serving as the tax treatment of a partner in the partnership generally will depend upon the statusChair of the partner,Nominating Committee. Mr. Ran Nussbaum previously served on the activitiesNominating Committee prior to his resignation, effective July 1, 2022. Our Board has determined that each member of our Nominating Committee qualifies as “independent” under applicable Nasdaq rules applicable to Nominating and Corporate Governance Committee members.
The Nominating Committee of the partnership,Board is responsible for identifying and certain determinations made atevaluating candidates to serve as directors of the partner level. Partnerships holding our Common StockCompany (consistent with criteria approved by the Board), reviewing and evaluating incumbent directors, recommending to the Board for selection candidates for election to the Board, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of management and the partners in such partnerships should consult their tax advisors regardingBoard and developing a set of corporate governance principles for the tax consequences to them of the Reverse Stock Split.
We have not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service, or the IRS, regarding the U.S. federal income tax consequences of the Reverse Stock Split, and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or that a court would not sustain any such challenge.Company.