(1) The Audit Committee reviewed and discussed the reviewed financial statements and related footnotes with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company’s financial statements were prepared in accordance with generally accepted accounting principles.
(2) Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the reviewed financial statements be included in our Form 10-Q, filed with the Securities and Exchange Commission on November 12, 20092
| | Submitted by the members of the Audit Committee |
| | |
| | Dr. Nava Epstein3 |
| | Jacob Ben Gur3 |
| | Hanoch Rappaport |
2 As we are a newly reporting company to the Securities and Exchange Commission, we are not yet required to file an annual report.
3 Member of the Audit Committee when it considered the Financial Statements included in the Form 10-Q filed with the Securities and Exchange Commission on November 12, 2009
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers, directors and persons who beneficially own more than 10% of a registered class of the Company’s equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Such executive officers, directors and greater than 10% beneficial owners are required by Securities and Exchange Commission regulation to furnish the Company with copies of all Section 16(a) forms filed by such reporting persons.
During the last fiscal year, ended December 31, 2008, the Company was not a reporting company to the Securities and Exchange Commission, and therefore its executive officers, directors and persons who beneficially own more than 10% of a registered class of the Company’s equity securities were not required to make any filings with the Commission.
License Agreements
Yissum Research Development Company of the Hebrew University of Jerusalem has granted to us an exclusive, worldwide license for the use, development and commercialization of the H19 gene in consideration of which we have agreed to pay certain royalties to them.
Private Placements
Clal Biotechnology Industries Ltd.
On March 12, 2008, we entered into a Subscription and Registration Rights Agreement with Clal Biotechnology Industries Ltd. (CBI), pursuant to which we agreed to issue 650,000 shares of our common stock to CBI for a purchase price of NIS 3.52 (approximately $1.09) per share, for an aggregate purchase price of NIS 2,288,000 (approximately $708,500). The transaction was subject to the satisfaction of several conditions, including the approval of the transaction by our stockholders, the approval of the registration of the shares of common stock issuable to CBI in the transaction by Tel Aviv Stock Exchange, and approval of the transaction by the Israeli Anti-trust Authority.
On May 1, 2008, our stockholders approved the terms of the transaction as a transaction the result of which would be the sale to CBI of a control block of 25% of our issued capital and voting rights, in accordance with Section 328(b)(1) of the Companies Law.
On May 15, 2008, we completed the sale of the shares of our common stock to CBI contemplated by the March 12, 2008 Subscription and Registration Rights Agreement with CBI.
Pursuant to the terms of the Subscription and Registration Rights Agreement with CBI dated March 12, 2008, we granted CBI certain rights with respect to the registration under the Securities Act of the securities issued to it under that agreement.
On June 22, 2008, we entered into Subscription and Registration Rights Agreements with each of CBI, which at that time was deemed to be a “controlling stockholder” under the Companies Law, Tikcro Technologies Ltd. (Tikcro), and the Provident Fund of the Hebrew University Ltd. (the Provident Fund), for the purchase of an aggregate of (i) 1,222,780 shares of our common stock at a price per share equal to $0.597, for an aggregate purchase price equal to $730,000, (ii) debentures in an aggregate principal amount of $2,920,000 convertible in the aggregate into up to 5,058,002 shares of our common stock at a price per share of $0.716, and (iii) warrants to purchase up to 6,280,783 shares of our common stock at an exercise price of $0.716 per share.
On July 30, 2008 we completed the sale and issuance of the securities to Tikcro, CBI and the Provident Fund contemplated by the Subscription and Registration Rights Agreements dated June 22, 2008.
In connection with the Subscription and Registration Rights Agreements dated June 22, 2008, we granted to CBI, Tikcro and the Provident Fund certain anti-dilution rights and adjustments with respect to the shares of our common stock, convertible debentures and warrants issued to them under those agreements.
We granted CBI, Tikcro and the Provident Fund certain rights with respect to the registration of the securities issued to those parties under such agreements under the Securities Act.
As a condition to the closing of the transactions contemplated by the Subscription and Registration Rights Agreement with Tikcro, we also agreed to undertake the following actions:
· | Executive Committee . We agreed to designate an Executive Committee of our Board of Directors consisting of four members of the board, Professor Hochberg, an independent director who would initially be Nava Epstein (who was later replaced by Mr. Jacob Ben Gur), and the members of our Board of Directors nominated by each of Tikcro and CBI. The functions of the Executive Committee are to include the consummation of any material transaction involving us, the adoption of our annual budgets and any matters relating to our investment policies and working plan. |
· | Consulting Fees . We agreed to pay Tikcro a consulting fee, for as long as a director designated by Tikcro is a member of our board of directors, for consulting services to be provided to us by a representative of Tikcro. The consulting fee consists of an annual payment of $30,000 and an annual issuance of 63,939 shares of our common stock. |
| · | Information Rights. We undertook to furnish CBI and Tikcro certain financial information about us in order to enable the timely reporting of their financial statements, as required under applicable law. |
In connection with, and as a condition to, the closing of the transactions contemplated by the Subscription and Registration Rights Agreements dated June 22, 2008, CBI, Tikcro, Avi Barak (our Chief Executive Officer at the time), and Professor Hochberg (our Chief Scientific Officer and, at the time, Chairman of our Board of Directors), entered into an Irrevocable Voting Agreement regarding voting of shares of our common stock held by such parties in elections of members of our Board of Directors.
Purchase and Exercise of Series 1 Warrants
Between August 14 and 17, 2008, our wholly-owned Israeli subsidiary purchased on the Tel Aviv Stock Exchange 1,812,756 of our Series 1 Warrants, at a purchase price of NIS 0.02 each. On August 18, 2008, our subsidiary exercised all of these warrants for 1,812,756 shares of our common shares at an exercise price of NIS 9.73 each. All remaining outstanding and unexercised Series 1 Warrants expired on August 18, 2008. We funded the exercise of these warrants through an equity investment by us in our subsidiary. By directing our wholly-owned subsidiary to purchase and exercise warrants to purchase our shares, using funding provided by us, we were able to create a pool of treasury stock, at an insignificant cost. This was used beneficially as directed by our Board of Directors, by taking advantage of market conditions to issue stock without expensive and lengthy fundraising procedures, such as the publishing of a prospectus. During May and June 2009, we sold 1,099,756 shares of treasury stock, at an average price of $0.92 per share, and total proceeds of approximately $1,017,000. In August 2009, we sold 713,000 shares of treasury stock, at an average price of $0.79 per share, and total proceeds of approximately $552,000. Following this sale in August 2009, we no longer hold any shares of treasury stock.
Purchase of Plasmids
In January 2007, BioCancell Therapeutics Israel Ltd. entered into a continuous production agreement with Althea Technologies, Inc., an American manufacturer for the production of our plasmids. To date, the manufacturer has executed three production campaigns of the DTA-H19 plasmid, one for the production of GMP material that is used for the Phase IIb clinical study for treatment of superficial bladder cancer, and the second and the third for GMP material for Phase I/IIa clinical trials of BC-819 in the treatment of ovarian and pancreatic cancer for which we paid an aggregate amount of approximately $991,000, $814,000 and $513,000, respectively, as of September 30, 2009.
Toxicology Studies
On July 3, 2008, we ordered toxicology studies from Wuxi AppTec, Inc. (AppTec). In accordance with the terms of the order, AppTec performed toxicology studies over approximately three months using BC-819 on laboratory animals, in accordance with the FDA request regarding new clinical trials in ovarian and pancreatic cancer, at a total cost of $240,000, for which we paid an aggregate amount of $240,000 as of December 31, 2008.
The Company has adopted a Code of Ethics (as such term is defined in Item 406 of Regulation S-K). The Code of Ethics is available on the Company’s website at www.biocancell.com, and in print to any stockholder that requests it. The Code of Ethics applies to the Company’s employees, officers and members of the Board of Directors. The Code of Ethics has been designed to deter wrongdoing and to promote:
| (1) | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
| (2) | Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company; |
| (3) | Compliance with applicable governmental laws, rules and regulations; |
| (4) | The prompt internal reporting or violations of the Code of Ethics to an appropriate person or persons identified in the Code of Ethics; and |
| (5) | Accountability for adherence to the Code of Ethics. |
Non-employee Members of our Board of Directors are offered compensation of NIS 1,800 (approximately $470) per meeting. Employee Members of our Board of Directors do not receive any compensation for their service on our Board of Directors.
DIRECTOR COMPENSATION TABLE
The following table sets forth information regarding the compensation paid to each of our directors who were not our employees during the year ended December 31, 2008:
| Name | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | Other Compensation ($) | | | Total ($) | |
| Jacob Ben Gur | | $ | 15,230 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 15,230 | |
| Gil Bianco | | $ | 6,012 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 6,012 | |
| Nava Epstein | | $ | 14,745 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 14,745 | |
| Tuvia Gilat | | $ | 4,215 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 4,215 | |
| Ofer Goldberg | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Doron Nevo | | $ | 8,529 | | | | — | | | | 1,661 | | | | — | | | | — | | | | — | | | $ | 10,190 | |
| Hanoch Rappaport | | | — | | | | — | | | | 830 | | | | — | | | | — | | | | — | | | | 830 | |
| Alexander Levitzki | | $ | 2,162 | | | | | | | | 1,246 | | | | | | | | | | | | | | | $ | 3,408 | |
| Aviv Boim | | $ | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
COMPENSATION OF EXECUTIVE OFFICERS
Our Compensation Committee evaluates and sets the compensation policies and procedures for our executive officers. Except as provided for in the employment agreements described below, annual reviews generally determine future salary and bonus amounts for our executive officers, as a part of the Company’s compensation procedures.
Summary Compensation Table
The following table sets forth the aggregate cash compensation paid during the 2007 and 2008 fiscal years to our Chief Executive Officer and to our executive officers other than our CEO whose annual salary and bonuses exceeded $100,000 for the applicable years.
| Name and Principal Position | Year | | Salary ($) (1) | | | Bonus ($) (1) | | | Stock Awards ($) (1) | | | Option Awards ($ (1) ) | | | Non-Equity Incentive Plan Compensation ($) (1) | | | Nonqualified Deferred Compensation Earnings ($) (1) | | | All Other Compensation ($) (1) | | Total ($) (1) |
Avi Barak (2) Chief Executive Officer and Director | 2008 | | | 143,100 | | | | 100,000 | | | | — | | | | 7,473 | | | | | (3) | | | — | | | | — | | | | 74,659 | | | | | (4) | | | 325,232 | |
| 2007 | | | 144,000 | | | | — | | | | — | | | | — | | | | | (3) | | | — | | | | — | | | | 73,597 | | | | | (4) | | | 217,597 | |
Abraham Hochberg (5) Chief Scientific Officer and Chairman of the Board of Directors | 2008 | | | 102,099 | | | | 3,654 | | | | — | | | | 4,982 | | | | | (3) | | | — | | | | — | | | | 52,904 | | | | | (5) | | | 163,639 | |
| 2007 | | | 101,511 | | | | 37,027 | | | | — | | | | — | | | | | (3) | | | — | | | | — | | | | 46,583 | | | | | (5) (6) | | | 185,121 | |
Moshe Landsberg Vice President, Technology | 2008 | | | 134,492 | | | | 16,478 | | | | | | | | 13,708 | | | | | | | | | | | | | | | | 22,614 | | | | | (7) | | | 187,292 | |
2007 | | | 92,487 | | | | — | | | | | | | | — | | | | | | | | — | | | | — | | | | 11,524 | | | | | (7) | | | 104,011 | |
| (1) | All compensation received by our executive officers is paid in NIS. For the purposes of completing this table, we converted each NIS denominated amount into U.S. dollars by multiplying the NIS amount by the representative conversion rate as it was published by the Bank of Israel on each date on which the compensation was calculated, so that no single conversion rate has been used |
| (2) | Mr. Barak received compensation from us solely for his services as our Chief Executive Officer only, and not in his capacity as a member of our Board of Directors. |
| (3) | On October 22, 2008, our Board of Directors approved the grants to Mr. Barak and Professor Hochberg of options to purchase 180,000 and 120,000 shares of our common stock, respectively, under our 2007 Stock Option Plan. On December 3, 2008, the grant of these options was approved by our stockholders as an interested transaction under the Israeli Companies Law with a controlling stockholder due to Mr. Barak’s and Professor Hochberg’s execution of an Irreversible Voting Agreement with two of our stockholders. |
| (4) | The items described as All Other Compensation to Mr. Barak for the year ended December 31, 2008 include (i) $26,549 in expenses related to the use of a company car by Mr. Barak, (ii) $6,084 in expenses related to the use of a company cell phone by Mr. Barak, and (iii) $42,026 in contributions by our Israeli subsidiary to executive insurance for Mr. Barak’s benefit. The items described as All Other Compensation to Mr. Barak for the year ended December 31, 2007 include (i) $22,350 in expenses related to the use of a company car by Mr. Barak, (ii) $8,857 in expenses related to the use of a company cell phone by Mr. Barak, and (iii) $42,389 in contributions by our Israeli subsidiary to executive insurance for Mr. Barak’s benefit. |
| (5) | Prof. Hochberg receives compensation from us solely for his services as our Chief Scientific Officer only, and not in his capacity as a member of our Board of Directors. |
| | (6) | The items described as All Other Compensation to Professor Hochberg for the year ended December 31, 2008 include (i) $22,581 in expenses related to the use of a company car by Professor Hochberg, (ii) $7,493 in expenses related to the use of a company cell phone by Professor Hochberg, and (iii) $22,830 in contributions by our Israeli subsidiary to senior employees insurance for Professor Hochberg’s benefit. The items described as All Other Compensation to Professor Hochberg for the year ended 2007 include (i) $19,826 in expenses related to the use of a company car by Professor Hochberg, (ii) $3,739 in expenses related to the use of a company cell phone by Professor Hochberg, and (iii) $23,017 in contributions by our Israeli subsidiary to senior employees insurance for Professor Hochberg’s benefit. |
| (7) | The items described as All Other Compensation to Mr. Landsberg for the year ended December 31, 2008 include (i) $21,041 in expenses related to the use of a company car by Mr. Landsberg, and (ii) $1,573 in expenses related to the use of a company cell phone by Mr. Landsberg. The items described as All Other Compensation to Mr. Landsberg for the year ended 2007 include (i) $10,429 in expenses related to the use of a company car by Mr. Landsberg, and (ii) $1,096 in expenses related to the use of a company cell phone by Mr. Landsberg. |
BioCancell Therapeutics, Inc. 2004 Stock Option Plan and 2007 Stock Option Plan
General Provisions. Our Board of Directors adopted our 2004 Stock Option Plan to allocate up to 2,024,003 shares of our common stock to our directors, employees and consultants. Our Board of Directors adopted our 2007 Stock Option Plan to allocate up to an additional 2,000,000 shares of our common stock to our directors, employees and consultants. Each plan is administered by our Board of Directors and any committee that our Board of Directors may appoint for such purpose. Our Board of Directors or its designated committee may grant options and restricted stock in addition to other compensation instruments under each of the plans. With respect to options, they may grant four types of options under either plan: Approved 102 Capital Gains Options, which are granted only to our directors and employees and qualify for capital gains tax treatments; Approved 102 Ordinary Income Options, which qualify for ordinary income tax treatment; Unapproved 102 Options; and 3(9) Options, which are non-qualified stock options which are granted mostly to our consultants. The number of shares authorized to be issued under each of the plans will be proportionately adjusted for any increase or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, combination or reclassification of the stock or the payment of a stock dividend with respect to the common stock or any other increase or decrease in the number of issued shares of common stock effected without receipt of consideration.
The exercise price of an option granted under our 2004 Stock Option Plan or 2007 Stock Option Plan will be determined by the Board of Directors or its designated committee at the time of the option grant.
Unless stated otherwise in the individual grant, grants of options under either plan will vest and become exercisable according to the following schedule: one-third on the one-year anniversary of the date of grant, followed by one-eighth at the end of every calendar quarter thereafter. The committee, though, may, in its absolute discretion and on such terms and conditions as it deems appropriate, accelerate or otherwise change the time at which options granted under either plan or any portion of any such option will vest. Option grants under either plan also may contain performance goals and measures and the provisions in one option grant need not be identical to any other option grant. All options granted under either plan will expire ten years from the date of grant unless terminated earlier, provided that options granted under Section 422 of the United States Internal Revenue Code of 1986 to a stockholder that holds ten percent or more of our common stock will expire five years from the date of grant unless terminated earlier. With respect to each of the plans, our Board of Directors may reallocate to other employees, directors or consultants the unvested portion of an option that expires prior to its expiration date and the vested but unexercised and unvested portions of an option that was either cancelled or repurchased by us and any such reallocation of shares must be recycled within the plan pursuant to which such option was granted. Our Board of Directors may not reallocate the vested but unexercised portions of an option that expires upon its expiration date.
In the event of the disability or death of a grantee and, in the case of our 2004 Stock Option Plan, the retirement of a grantee, and, in the case of our 2007 Stock Option Plan, the termination of the grantee’s employment by us without cause (as that term is defined in our 2007 Stock Option Plan), the grantee or his legal delegates or successors, as the case may be, may only exercise that portion of the option that had vested as of the date of any such event and may exercise the vested portion within one year from the date of such event. In cases of retirement for options granted under our 2004 Stock Option Plan, if the grantee dies within one year from the date of retirement, the vested portion may be exercised by such deceased grantee’s successor within one year from the date of death so long as the option has not otherwise expired. Furthermore, for options granted under our 2004 Stock Option Plan, in the event that the grantee’s employment was terminated by us without cause (as that term is defined in our 2004 Stock Option Plan), the grantee may exercise that portion of the option that had vested as of such date of termination and may exercise such vested portion within 90 days from such date. In the event that the grantee’s employment was terminated by us for cause or was terminated by the grantee, the grantee shall no longer have the right to exercise any option granted under our 2004 Stock Option Plan held by him irrespective of whether and to what extent his options have vested. For options granted under our 2007 Stock Option Plan, in the event that the grantee’s employment was terminated by us for cause, the grantee may exercise that portion of the option that had vested as of such date of termination and may exercise the vested portion within 90 days from such date.
Our Board of Directors or its appointed committee is entitled, at any time and from time to time, to modify the terms of either plan or to suspend or completely cancel either of the plans, and any such modification, suspension or cancellation may have retroactive effect, provided that the modification, suspension or cancellation does not adversely affect the rights of the grantees in a material way, and any such material and adverse modification, suspension or cancellation will be invalid unless it is approved by the affected grantee.
Termination of an Option. Subject to our Board of Director’s approval, the committee administering either plan may, from time to time, cancel all or any portion of an option granted under such plan, and our obligation with respect to options of such plan will be discharged through (i) payment to the grantee of an amount in cash equal to the excess, if any, of the fair market value of the cancelled option at the date of such cancellation over the aggregate exercise price of the option, (ii) the issuance or transfer to the grantee of common stock with a fair market value at the date of such transfer equal to any such excess, or (iii) a combination of cash and shares with a combined value equal to any such excess, as determined by the committee, in its sole discretion.
Also, in the event of a merger or consolidation in which we are not the surviving entity, an acquisition of all of our capital stock or the sale of all or substantially all of our assets, we, in our sole and absolute discretion, may cancel all outstanding options granted under our 2004 Stock Option Plan that remain unexercised prior to the consummation of any such transaction, provided that we send a cancellation notice to each grantee of our 2004 Stock Option Plan at least twenty days prior to the consummation of any such transaction during which notification period each grantee may exercise his options. In cases of merger, our Board of Directors may exchange all outstanding options granted under our 2004 Stock Option Plan that remain unexercised prior to the consummation of the merger for the securities of the surviving corporation or to pay the fair market value of any such option. In the event that we do not send a cancellation notice, or in the event of any changes in our capital structure by reason of stock split, stock dividends, reorganization, issue of rights or convertible or capital stock or any corporate transaction or other events with an similar impact, we may make an equitable adjustment in the number of shares resulting from the exercise of options granted under our 2004 Stock Option Plan and/or the exercise price of such options in order to prevent significant dilution.
With respect to our 2007 Stock Option Plan, in the event of a merger or consolidation in which we are not the surviving entity, an acquisition of all of our capital stock or the sale of all or substantially all of our assets, the person acquiring us, in its sole and absolute discretion, either may convert or exchange options granted under our 2007 Stock Option Plan to options to purchase securities of such person or may cancel all outstanding options granted under our 2007 Stock Option Plan that remain unexercised prior to the consummation of any such transaction, provided that it sends a cancellation notice to each grantee of our 2007 Stock Option Plan at least twenty days prior to the consummation of any such transaction during which notification period each grantee may exercise his options. Other than transactions in which we are acquired, in the event of any changes in our capital structure by reason of stock split, stock dividends, reorganization, issue of rights or convertible or capital stock or any corporate transaction or other events with an similar impact, we may make an equitable adjustment in the number of shares resulting from the exercise of options granted under our 2007 Stock Option Plan and/or the exercise price of such options in order to prevent significant dilution.
Outstanding Grants. As of the date of this proxy, we have 585,489 options outstanding under our 2004 Stock Option Plan. The options under our 2004 Stock Option Plan are not registered for trading on the Tel Aviv Stock Exchange.
As of December 16, 2009, we have 1,047,500 options outstanding under our 2007 Stock Option Plan. We have not issued any shares of our common stock upon exercise of options granted under our 2007 Stock Option Plan. The options under our 2007 Stock Option Plan are not registered for trading on the Tel Aviv Stock Exchange.
Outstanding Option Awards at December 31, 2008
The following are all unexercised options, unvested shares of common stock and any other awards granted under our 2004 Stock Option Plan and 2007 Stock Option Plan held by any of our named executive officers as of December 31, 2008:
| Name | Award Plan | Amount | Status as of December 31, 2008 |
| Avi Barak | 2007 Stock Option Plan | 180,000 options | 15,000 options vested and unexercised 165,000 options unvested |
| Abraham Hochberg | 2007 Stock Option Plan | 120,000 options | 10,000 options vested and unexercised 110,000 options unvested |
| Moshe Landsberg | 2004 Stock Option Plan | 200,000 options | 12,500 options vested and unexercised 187,500 options unvested |
| Moshe Landsberg | 2007 Stock Option Plan | 60,000 options | 3,750 options vested and unexercised 56,250 options unvested |
Employment Agreements
Mr. Avi Barak
Generally. On April 4, 2006, we entered into an employment agreement with Mr. Avi Barak pursuant to which he serves as our Chief Executive Officer on a full-time basis. Either we or Mr. Barak may terminate this agreement upon the provision of four months advance written notice to the other party expressing an intention to terminate the agreement. We also may terminate this agreement for cause, defined in the agreement as any of the following: (a) conviction of any felony involving moral turpitude affecting us; (b) action taken by Mr. Barak intentionally to harm us; (c) embezzlement of our funds; (d) falsification of records or reports; (e) ownership, direct or indirect, of an interest in a person or entity (other than a minority interest in a publicly traded company) in competition with our products or services; (f) any breach of Mr. Barak’s fiduciary duties or duties of care to us (except for conduct taken in good faith) which, to the extent such breach is curable, has not been cured by him within 15 days after his receipt of notice containing a description of the breach or breaches alleged to have occurred; (g) any material breach of his employment agreement which has not been cured by him within 15 days after his receipt of notice from us, containing a description of the breach or breaches alleged to have occurred; (h) any breach by Mr. Barak of his proprietary information, non-competition and assignment of inventions agreement with us; and (i) any other act or omission that constitutes “cause” under the laws of any jurisdiction in which the we conduct our business and in which Mr. Barak is employed at the time of such act. In addition, we may terminate this agreement in the event that Mr. Barak is prevented from continuing his employment with us due to medical reasons for two consecutive months or for an aggregate of 120 days per fiscal year. Mr. Barak must maintain the confidentiality of all proprietary information of ours that he receives through his employment with us. On August 11, 2009, we received a letter from Mr. Barak, announcing his intention to resign his position as CEO, effective January 30, 2010. We appointed Mr. Uri Danon as CEO in Mr. Barak’s place, as of November 1, 2009.
Salary and Other Social Benefits. The agreement provides Mr. Barak with a monthly salary of $12,000. His salary is subject to adjustment throughout the term of the agreement due to increases in the Israeli Consumer Price Index. We also provide Mr. Barak with other social benefits such as a company car, executive insurance, a laptop computer and a cellular telephone. Mr. Barak is entitled to participate in our advanced studies fund and senior employees insurance. We reimburse Mr. Barak for reasonable expenses incurred by him in the course of his employment with us. On December 1, 2008, Mr. Barak announced that in view of the global economic crisis, he agrees to reduce his monthly salary by 7.5% until further notice.
Bonuses. We committed to pay Mr. Barak a one-time bonus of one percent of funds received between March 1, 2009 and March 1, 2012 (in any form, except for loans from banks and grants under the auspices of the Ministry of Industry, Trade and Labor, such as Chief Scientist grants and bi-national funds), provided that at least $10 million is raised. For the purposes of calculating the bonus, amounts provided by known pre-existing investors (i.e. entities from which we have received funds or assets prior to March 1, 2009) will be deducted from the total amount received. In any case, the bonus shall not exceed $100,000. Payment will be made in accordance with the US$/NIS exchange rate known on the date of payment, and VAT shall be added if applicable.
Stock Option Grant. Pursuant to the terms of Mr. Barak’s employment agreement, we granted Mr. Barak options to purchase 500,000 shares of our common stock at an exercise price of $0.01 per share. Mr. Barak exercised these options on March 28, 2007. On October 22, 2008, our Board of Directors approved the grant to Mr. Barak of options to purchase 180,000 shares of common stock pursuant to our 2007 Stock Option Plan, at an exercise price of $0.597 per share. On December 3, 2008, the grant of these options to Mr. Barak was approved by our stockholders as an interested transaction under the Companies Law with a controlling stockholder due to Mr. Barak’s execution of an Irreversible Voting Agreement with several of our other stockholders.
Mr. Uri Danon
Generally. On October 18, 2009, we entered into an employment agreement with Mr. Uri Danon, pursuant to which he has serves as our Chief Executive Officer since November 1, 2009. Either we or Mr. Danon may terminate this agreement upon the provision of ninety days advance written notice to the other party expressing an intention to terminate the agreement. We also may terminate this agreement for cause, defined in the agreement as including the following on the part of Mr. Danon: (i) a material breach of any term of the agreement; (ii) any breach of Mr. Danon's fiduciary duties to us, including, without limitation, any material conflict of interest for the promotion of his benefit; (iii) fraud, felonious conduct or dishonesty; (iv) embezzlement of our funds; (v) any conduct which is materially injurious to us, monetary or otherwise; (vi) conviction of any felony; (vii) misconduct, gross negligence or willful misconduct in performance of duties and/or responsibilities assigned in the agreement; or (viii) refusal to perform the duties and/or responsibilities assigned in the agreement for any reason other than illness or incapacity, or disregard or insubordination of any lawful resolution and/or instruction of the Board of Directors with respect to Mr. Danon's duties and/or responsibilities towards us.
Salary and Other Social Benefits. The agreement provides Mr. Danon with a monthly salary of 42,000 NIS (approximately $11,350). His salary is subject to adjustment throughout the term of the agreement due to cost-of-living increases. We will also provide Mr. Danon with other social benefits such as a company car, a laptop computer, a cellular telephone, and pension and similar payments. We will reimburse Mr. Danon for reasonable expenses incurred by him in the course of his employment with us.
Bonuses. Mr. Danon is entitled to receive a bonus at such time as we shall raise an aggregate amount of $10 million between January 30, 2010 and the termination of his employment with us, in any form, except for loans from financial institutions and grants under the auspices of the Israeli Ministry of Industry, Trade and Labor, such as Chief Scientist grants and bi-national funds. The amount of the bonus will be $100,000, subject to a deduction of a pro-rata portion based on the funds raised provided by investors from which we have received funds or assets prior to January 30, 2010. Payment will be made in cash if more than $5 million in aggregate has been raised in equity offerings, or in stock options otherwise.
Non-Competition, Non-Solicitation and Confidentiality. Under the terms of his employment agreement, Mr. Danon must refrain from competing with us during the term of his employment and for one year from the date of termination of his employment with us. Further, during his employment and for one year after his employment terminates, Mr. Danon may not offer or solicit any of our or our subsidiary’s employees away from their dealings with us or our subsidiary. He also must grant us all rights in any products that he develops during the course of his employment with us. In addition, Mr. Danon must maintain the confidentiality of all proprietary information of ours that he receives through his employment with us.
Stock Option Grant. Pursuant to the terms of Mr. Danon's employment agreement, we intend to grant Mr. Danon options to purchase 450,000 shares of our common stock at an exercise price of 3.18 NIS (approximately $0.86) per share, pursuant to our 2007 Stock Option Plan, of which options to purchase 80,000 shares will vest immediately, and the remainder will vest over the course of four years, with partial acceleration in return for the achievement of pre-determined milestones by pre-set dates.
Professor Abraham Hochberg
Generally. On December 1, 2005, we entered into an employment agreement with Professor Abraham Hochberg pursuant to which he will serve as our Chief Scientist for a term of three years ending on December 1, 2008. Under the terms of this agreement, Professor Hochberg manages our research and development activities and reports these activities to our Board of Directors. We may terminate this agreement upon the provision of six months advance written notice. Professor Hochberg may terminate this agreement upon the provision of three months notice. We also may terminate this agreement for cause, meaning any of the following: (a) a material breach of Professor Hochberg’s obligations regarding confidentiality and non-competition, as set out in the agreement; (b) conviction of any felony involving moral turpitude affecting us; (c) any material breach of his employment agreement which has not been cured by him within 15 days after his receipt of notice from us, containing a description of the breach or breaches alleged to have occurred; (d) the habitual neglect or gross failure by Professor Hochberg to adequately perform the duties of his position; (e) any act of moral turpitude or criminal action connected to his employment with us; or (f) Professor Hochberg’s refusal to comply with or his violation of lawful instructions of our CEO or Board of Directors. In addition, we may terminate this agreement in the event that Professor Hochberg is prevented from continuing his employment with us due to medical reasons for 90 consecutive days or for an aggregate of 120 days per fiscal year, but in the event of such termination, Professor Hochberg will be entitled to receive three months additional salary from us and also severance payments in accordance with the Israeli Severance Pay Law. Professor Hochberg must maintain the confidentiality of all of our proprietary information that he receives through his employment with us. On October 22, 2008 our Board of Directors approved the extension of Professor Hochberg's employment agreement for a period of three years.
Salary and Other Social Benefits. The agreement provides Professor Hochberg with a monthly salary of $6,000, which was raised to $8,500 in July 2007 upon the approval of our stockholders. In October 2008, our Board of Directors recommended that our stockholders restate Professor Hochberg’s salary at a fixed monthly rate of NIS 36,000. His salary is subject to adjustment throughout the terms of the agreement due to increases in the Israeli Consumer Price Index. We also provide Professor Hochberg with other social benefits such as a company car. Professor Hochberg is entitled to participate in our advanced studies fund and senior employees insurance as well as annual leave and convalescence pay and sick leave. We reimburse Professor Hochberg for reasonable expenses incurred by him in the course of his employment with us. On December 1, 2008, Professor Hochberg announced that in view of the global economic crisis, he agrees to reduce his monthly salary by 7.5% until further notice. On December 3, 2008, our stockholders approved the extension of the employment agreement and restatement of Professor Hochberg’s salary as an interested transaction under the Companies Law with a controlling stockholder, due to Professor Hochberg’s execution of an Irreversible Voting Agreement with several of our other stockholders.
In addition, Professor Hochberg receives a bonus of 7.5% of the amount of grants that we receive in which he is listed as the leading researcher in the research to be funded by such grants, and that are approved for our use by our Board of Directors, other than grants provided by the Office of the Chief Scientist of the Ministry of Industry, Trade and Labor of Israel.
Non-Competition and Non-Solicitation. Under the terms of the employment agreement, Professor Hochberg may not offer or solicit any of our or our subsidiary’s employees, consultants, customers, suppliers, distributors, agents or contractors away from their dealings with us or our subsidiary during his employment and for 12 months after his employment terminates. Professor Hochberg has promised to cede to us all right, title and interest to any and all intellectual property created during his course of employment with us and has undertaken not to make use of it and not to compete with us for a period of twelve months after termination of his employment with us.
Agreement Regarding Allocation of Royalties With Yissum. In accordance with the directives of the management of the Hebrew University of Jerusalem, any royalties that we pay pursuant to our exclusive license agreement with Yissum are allocated as follows: 40% to Professor Hochberg; 20% to Professor Hochberg's research laboratory; and 40% to Yissum and the Hebrew University of Jerusalem.
Stock Option Grant. On October 22, 2008, our Board of Directors approved the grant of options to purchase 120,000 shares of our common stock at an exercise price of $0.597 per share. These options will vest in twelve equal quarterly portions. On December 3, 2008, the grant of these options to Professor Hochberg was approved by our stockholders as an interested transaction under the Israeli Company Law with a controlling stockholder due to Professor Hochberg’s execution of an Irrevocable Voting Agreement with several of our other stockholders.
Mr. Moshe Landsberg
Generally. On February 15, 2007, we entered into a consulting agreement with Mr. Moshe Landsberg pursuant to which he serves as our Vice President of Technology on a part-time basis commencing on April 1, 2007, and later, upon mutual agreement, on a full-time basis. We may terminate this agreement upon the provision of four months advance written notice expressing our intention to terminate the agreement. Mr. Landsberg may terminate this agreement upon the provision of two months advance written notice to us expressing his intention to terminate the agreement. In addition, we may terminate this agreement in the event that Mr. Landsberg is prevented from continuing his consultancy with us due to medical reasons for two consecutive months or for an aggregate of 120 days per fiscal year. Mr. Landsberg must maintain the confidentiality of all of our proprietary information that he receives through his consulting with us.
Salary and Other Social Benefits. The agreement provides Mr. Landsberg with a monthly salary of NIS 40,000 and NIS 50,000 as compensation for his part-time and full-time consultancy with us, respectively (approximately $10,000 and $12,500, respectively). His payment terms may be adjusted in the future according to the Israeli Consumer Price Index to account for the cost of living. We also provide Mr. Landsberg with other social benefits such as a company car.
Bonuses. We have agreed to pay Mr. Landsberg an annual bonus of two monthly salaries in the event that Mr. Landsberg satisfies certain performance criteria as agreed upon in advance and in writing with us.
Stock Option Grant. Pursuant to the terms of Mr. Landsberg’s consulting agreement, on October 22, 2008, our Board of Directors approved the grant of options to purchase 260,000 shares of our common stock at an exercise price of NIS 1.27 (approximately 31 cents) per share. These options will vest according to the following schedule: one sixteenth of the options will vest at the end of every calendar quarter, from the time of grant and until all are vested.
Tax and Accounting Considerations
The federal tax laws impose requirements in order for compensation payable to the CEO and certain executive officers to be fully deductible. The Company believes it has taken appropriate actions to maximize its income tax deduction. IRC Section 162(m) generally precludes a public corporation from taking a deduction for compensation in excess of $1,000,000 for its CEO or any of its three other highest-paid executive officers (other than the CEO or Chief Financial Officer), unless certain specific and detailed criteria are satisfied.
Annually, the Company reviews all compensation programs and payments to determine the tax impact on the Company as well as on the executive officers. In addition, the Company reviews the impact of its programs against other considerations, such as accounting impact, stockholder alignment, market competitiveness, effectiveness and perceived value to employees. Because many different factors influence a well-rounded, comprehensive executive compensation program, some compensation may not be deductible under IRC Section 162(m). The Company will continue to monitor developments and assess alternatives for preserving the deductibility of compensation payments and benefits to the extent reasonably practicable, consistent with its compensation policies and as determined to be in the best interests of the Company and its stockholders.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis in this proxy report with management. Based on its review and discussion with management, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and also be incorporated by reference in our Registration Statement on Form S-1, filed with the Securities and Exchange Commission on December 17, 2008 and as amended 4 .
THE COMPENSATION COMMITTEE
Doron Nevo
Compensation Committee Interlocks and Insider Participation
The current member of the Compensation Committee is Mr. Doron Nevo. No member of the Compensation Committee has a relationship that would constitute an interlocking relationship with the Company’s executive officers or other directors.
The following table sets forth information as of the date of this proxy regarding our equity compensation plans, our 2004 Stock Option Plan and our 2007 Stock Option Plan, under which we grant securities exercisable for shares of our common stock to employees, directors and consultants of our company and employees, directors and consultants of our present and future subsidiaries.
4 As we are a newly reporting company to the Securities and Exchange Commission, we are not yet required to file an annual report.
| Plan Category | Number of Shares to Be Issued upon Exercise of Outstanding Options | Weighted Average Exercise Price of Outstanding Options | Number of Shares Remaining Available for Future Issuance under Equity Compensation Plans (excluding shares in Column A) |
| Equity Compensation Plans approved by stockholders | 585,489 | | $ | 0.15 | | 8,761 |
| Equity Compensation Plans not approved by securityholders | 1,047,500 | | $ | 0.43 | | 452,500 |
| Total | 1,632,989 | | $ | 0.33 | | 461,261 |
Insurance for Indemnification of Directors and Officers
We have undertaken to indemnify our officers and directors to the full extent permitted by Delaware law for any liabilities that they may incur for any action taken as an officer or director or in any other joint venture, partnership or enterprise. The indemnification includes any monetary liability imposed on the officer or director because of a verdict, fine, penalty, settlement agreement or any other reasonable amount or expense accrued by the officer or director in connection with any threat, activity, pending procedure, claim or civil, criminal or administrative proceeding or investigation, including any activity by or on behalf of us in which the officer or director is an interested party or is liable to an interested party, or where the officer or director has been threatened that he will become an interested party due to his being an officer or director. We will compensate an officer or director in advance for any reasonable amount that he has paid for any claim against him (including litigation costs and the costs of preparing an adequate defense) after the officer or director agrees that he will bear the detailed costs himself if it is found that the officer or director is not entitled to receive compensation under such officer or director’s indemnification agreement or our Amended and Restated Certificate of Incorporation. The conclusion of any proceeding with a judgment, order, settlement agreement, indictment or similar conclusion against an officer or director will not give rise to the assumption that the officer or director acted in a manner other than in our best interests or, in respect to a criminal charge, had no reasonable grounds for assuming that his actions were illegal.
In a number of circumstances, an officer or director will not be entitled to indemnification or advance reimbursement for expenditures if: (i) a competent court of law has made a final verdict or order that a claim or claims against an officer or director arose out of deception or bad faith or that the officer or director was misled or, that the indemnification is not permitted under prevailing law; (ii) the verdict or order by the court stemmed from a claim regarding the Exchange Act, or other federal or state laws; (iii) an act or omission occurred for which the officer or director is not entitled to receive compensation under Delaware law; (iv) the proceedings or claims were initiated by the officer or director that were not in self-defense other than proceedings brought to pay compensation or where our Board of Directors has approved of the proceedings and the decision to file them; (v) expenditures or obligations of any kind were paid directly to the officer or director by the insurance company under the directors and officers liability policy; or (vi) the claim relates to abuse of information that is not available to the public by the officer or director in all matters pertaining to the purchase and/or sale of our common stock. We will not be obligated to compensate an officer or director for every amount paid in the framework of a settlement agreement that was drawn up by the officer or director without our written consent. We will not sign any settlement agreement that would affect any proceedings against an officer or director without his written consent.
We currently maintain directors’ and officers’ liability insurance for the purpose of paying these types of claims. The insurance policy provides coverage in an amount of $5,000,000 per claim or per the aggregate loss arising from all claims for each insurance period, and an additional coverage of up to $1,000,000 for legal expenses. We may decide to cancel our indemnification agreements with our officers and directors, but we will still be obligated to compensate an officer or director for any claims resulting from actions prior to the cancellation of the indemnification agreement
This report has been provided by the Board of Directors of the Company.
| | Avi Barak |
| | Aviv Boim |
| | Doron Nevo |
| | Hanoch Rappaport |
| | Abraham Hochberg |
PROPOSAL 2
OPTIONS TO INDEPENDENT DIRECTORS
The Board of Directors has approved the grant of 30,000 options under the 2007 Stock Option Plan to each independent director elected at the Special Meeting, which are exercisable into our common stock, par value of $ 0.01. Pursuant to the Israeli Companies law and regulations, any option grant to an independent director must be approved by the stockholders of the corporation.
The proposed vesting dates of the securities are as follows: 2,500 at the end of each of the twelve calendar quarters from the date on which the resolution was adopted by the special meeting.
To that best of our knowledge, and based on information provided to us by the offerees, there are no agreements, whether in writing or oral, between either of the offerees and a holder of our shares concerning the acquisition or sale of our securities, or concerning the voting rights therein.
Realization of option deeds following termination of engagement with an offeree
Should the engagement with the offeree terminate, other than as a result of a cause (as that term is defined in our 2007 Stock Option Plan) or in circumstances of death or disability, the options eligible to be exercised, shall be exercisable by the offeree (or his/her legal representatives/heirs in the event of death) within 12 months of the date on which one of said events occurs; however, in no event may the options be exercised after they have expired. In the event of death, the provisions of the 2007 Stock Option Plan shall apply to the heirs.
Should the termination of the engagement be for cause, the options held by the offeree, which are eligible to be exercised, may be exercised by the offeree within 30 days of the date on which the engagement terminated, but, in any event, not following expiration of the option. The exercise of the director’s rights pursuant to the provisions of any law shall not confer upon us the right to cancel the option deeds based on the claim of dishonesty or lack of obedience.
Options not yet exercisable shall expire upon termination of the engagement, save any contrary provisions in the agreement regulating the engagement or in the allotment letter with respect to a specific offeree.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2 RELATING TO OPTIONS.
PROPOSAL 3
CONFERRAL OF REMUNERATION TO THE DIRECTOR, MR. AVIV BOIM
Our Board of Directors has approved payment of NIS 1,800 to Mr. Boim for each day in which he participates in a meeting of the Board of Directors of the Company and/or one of its committees, up to a limit of $6 , 000 US dollars per calendar year, for as long as he serves as a director in the Company. The Board of Directors has further approved the grant of 20,000 options under the 2007 Stock Option Plan to Mr. Boim, which are exercisable into our common stock, par value of $0.01. Pursuant to the Companies Law and regulations, any option grant to a director considered by Israeli regulations to be a controlling stockholder, must be approved by the stockholders of the corporation.
The proposed vesting dates of the securities are as follows: 10,000 at the end of six and twelve months from the date on which the resolution was adopted by the special meeting.
To that best of our knowledge, there are no agreements, whether in writing or oral, between the offeree and any holder of our shares concerning the acquisition or sale of our securities, or concerning the voting rights therein.
Realization of option deeds following termination of engagement with an offeree
Should the engagement with the offeree terminate, other than as a result of a cause (as that term is defined in our 2007 Stock Option Plan) or in circumstances of death or disability, the options eligible to be exercised, shall be exercisable by the offeree (or his legal representatives/heirs in the event of death) within 12 months of the date on which one of said events occurs; however, in no event may the options be exercised after they have expired. In the event of death, the provisions of the 2007 Stock Option Plan shall apply to the heirs.
Should the termination of the engagement be for cause, the options held by the offeree, which are eligible to be exercised, may be exercised by the offeree within 30 days of the date on which the engagement terminated, but, in any event, not following expiration of the option. The exercise of the director’s rights pursuant to the provisions of any law shall not confer upon us the right to cancel the option deeds based on the claim of dishonesty or lack of obedience.
Options not yet exercisable shall expire upon termination of the engagement, save any contrary provisions in the agreement regulating the engagement or in the allotment letter with respect to a specific offeree.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 3.
PROPOSAL 4
APPROVAL OF INCREASE OF THE COMPANY’S REGISTERED SHARE CAPITAL
Our Board of Directors has recommended that the general meeting authorize the Board to approve an increase of our authorized share capital by 15,000,000 common shares having a par value of 0.01 US dollars each, as needed in the judgment of the Board.
As of December 16, 2009, our authorized share capital is 50,000,000 common shares, having a par value of 0.01 US dollars each. As a result of the said resolution, our authorized share capital shall amount to 65,000,000 common shares having a par value of 0.01 US dollars each.
As of December 16, 2009, our fully diluted share capital is 32,128,324 shares, comprised of 16,356,550 shares outstanding, and an additional 15,771,774 shares underlying convertible bonds, warrants and options issued to the public, investors, underwriters, consultants, directors and employees. In addition, our Board of Directors has reserved an additional 894,000 shares underlying options which it intends to allocate to directors, employees and consultants, upon receipt of approval from the TASE. As a result, there are 16,977,676 shares in our authorized capital that have not been allocated or reserved.
We have filed an S-1 Form with the SEC, describing a proposed offering of up to 16,000,000 shares, made up of 8,000,000 shares, 4,000,000 Series 3 warrants, and 4,000,000 Series 4 warrants. If such an offering were to be fully subscribed, we would have 977,676 shares in our authorized capital that have not been allocated or reserved.
As such an offering is not expected to raise sufficient funds to sustain us until we become profitable, our Board of Directors has recommended that the general meeting authorize it to increase the share capital by the aforementioned 15,000,000 common shares, when it deems the increase necessary for the purpose of additional allocations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 4.
GENERAL
The Management of the Company does not know of any matters other than those stated in this Proxy Statement which are to be presented for action at the meeting.
The Company will bear the cost of preparing, assembling and mailing the Proxy, Proxy Statement and other material which may be sent to the stockholders in connection with this solicitation. In addition to the solicitation of proxies by use of the mails, officers and regular employees may solicit the return of proxies. Proxies may be solicited by mail, personal interview, telephone and telegraph.
BioCancell Website
In addition to the information about the Company and its subsidiaries contained in this proxy statement, extensive information about the Company can be found on our website located at www.biocancell.com, including information about our management team, products and services and our corporate governance practices.
The corporate governance information on our website includes the Company’s Corporate Governance Guidelines, the Code of Conduct and the charters of each of the committees of the Board of Directors. These documents can be accessed at www.biocancell.com. Printed versions of our Corporate Governance Guidelines, our Code of Conduct and the charters for our Board committees can be obtained, free of charge, by writing to the Company at: Beck Science Center, 8 Hartom St, Har Hotzvim, Jerusalem 97775 Israel, Attn: Corporate Secretary.
This information about BioCancell’s website and its content, together with other references to the website made in this proxy statement, is for information only and the content of the Company’s website is not deemed to be incorporated by reference in this proxy statement or otherwise filed with the Securities and Exchange Commission.
The Company will provide without charge to each person being solicited by this Proxy a copy of our Registration Statement on Form S-1, filed with the Securities and Exchange Commission on December 17, 2008 and as amended5, including the financial statements and the schedules thereto. All such requests should be directed to Avraham Hampel, Secretary, BioCancell Therapeutics Inc., Beck Science Center, 8 Hartom St, Har Hotzvim, Jerusalem 97775 Israel.
5 As we are a newly reporting company to the Securities and Exchange Commission, we are not yet required to file an annual report.
AT THE NEXT ANNUAL MEETING
Stockholder Proposals. Proposals of stockholders intended to be included in the Company’s proxy statement and form of proxy for use in connection with the Company’s 2010 Annual Stockholder Meeting must be received by the Company’s Secretary at the Company’s principal executive offices at Beck Science Center, 8 Hartom St, Har Hotzvim, Jerusalem 97775 Israel, no later than December 30, 2009 (90 days preceding the one-year anniversary of the date of our 2009 Annual Stockholder Meeting6), and must otherwise satisfy the procedures prescribed by Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). It is suggested that any such proposals be submitted by certified mail, return receipt requested.
Pursuant to Rule 14a-4 under the Exchange Act, stockholder proxies obtained by our Board of Directors in connection with our 2010 Annual Stockholder Meeting will confer on the named proxies discretionary authority to vote on any matters presented at the annual meeting which were not included in the Company’s proxy statement in connection with such annual meeting, unless notice of the matter to be presented at the annual meeting is provided to the Company’s Secretary before February 13, 2010 (the 45th day preceding the one-year anniversary of our 2009 Annual Stockholder Meeting6).
| | By Order of the Board of Directors |
| | |
| | Avraham Hampel, Secretary |
| | |
| Dated: December 16, 2009 | |
6 As we are a newly reporting company to the Securities and Exchange Commission, we were not required to file a proxy in 2009.
Company Details
Company Name: BioCancell Therapeutics, Inc.
Company Address: Beck Science Center, 3rd Floor, 8 Hartom St, Jerusalem 97775, Israel.
Company Number (Company Registrar): 560025744 - Company registered under the laws of the State of Delaware.
Time and Date of Meeting: January 21, 2010 at 11:00 a . m .
Type of Meeting: Extraordinary General Meeting
Date of Record: December 21, 2009
Stockholder Details:
Stockholder Name:
Israeli ID Number:
If stockholder does not hold an Israeli ID card:
Passport Number:
Issuing Country:
Valid Until:
If stockholder is a Company:
Company Number:
Country of Registration:
FORM OF PROXY
BIOCANCELL THERAPEUTICS INC.
Beck Science Center
8 Hartom St, Har Hotzvim
Jerusalem 97775 Israel
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Avi Barak as Proxy, with the power to appoint his substitute, and hereby authorizes him to represent and to vote, as designated on the reverse side, all the shares of the Common Stock of BioCancell Therapeutics Inc. held of record by the undersigned on December 21, 2009, at the Special Meeting of Stockholders to be held on January 21, 2010 or at any adjournment or postponement thereof.
(Continued and to be signed on the reverse side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR’ THE ELECTION OF THE NOMINEES FOR INDEPENDENT DIRECTOR IN PROPOSAL ONE AND ‘FOR’ PROPOSALS TWO, THREE AND FOUR.
PLEASE SIGN, DATE AND RETURN PROMPTLY. PLEASE MARK YOUR VOTE IN BLACK INK AS SHOWN HERE S
| Agenda Item | Vote | |
| | For | Against | Abstain |
Reappointment of independent directors | Are You A Controlling Party |
| Yes | No |
| 1.a. Orly Yarkoni – independent director | | | | | |
| 1.b. David Schlachet – independent director | | | | | |
| 2. Allocation of Options to independent directors | | | | | |
| 3. Participation Fee Payment and Options Allocation for Mr. Aviv Boim | | | | | |
| 4. Increase of Authorized Capital of the Company | | | | |
Validity of Voting Deed:
The Deed of a stockholder not registered in the Company Stockholders Registry is valid provided together with a power of attorney. The Deed of a stockholder registered in the Company Stockholders Registry is valid if provided together with a facsimile of the stockholder’s ID card, passport or certificate of incorporation.
The proof of ownership, ID card, passport or certificate of incorporation (as applicable) must be presented to the Company’s Secretary according to the details provided herein up to 72 hours before the vote.
Details (where relevant):
Below are the details regarding my being an interested / controlling party for the purposes of the proposed resolution (as per Section 275 of the Companies Law):
______________ ____________
Date Signature
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. WHEN SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN. WHEN SIGNING AS EXECUTOR, ADMINISTRATOR, ATTORNEY, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF THE SIGNER IS A CORPORATION, PLEASE SIGN FULL CORPORATE NAME BY DULY AUTHORIZED OFFICER, GIVING FULL TITLE AS SUCH. IF SIGNER IS A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON. NOT MARKING THIS SECTION WILL BE CONSIDERED AS ABSTAINING. THE VOTE OF A STOCKHOLDER WHO DOES NOT COMPLETE THIS SECTION OF WHO TICKS “YES” WITHOUT PROVIDING DETAILS, WILL NOT BE INCLUDED IN THE FINAL TALLY OF VOTES.
