UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
The information contained in Item 5.02 below is incorporated by reference into this Item 1.01.
The description of the Lindborg Amendment (as defined below) with Dr. Stacy Lindborg does not purport to be complete and is qualified in its entirety by the full text of Amendment No. 3 to Offer Letter Agreement, a copy of which is filed hereto as Exhibit 10.1 and is incorporated herein by reference.
The description of the Kern Separation Agreement (as defined below) with Dr. Ralph Kern does not purport to be complete and is qualified in its entirety by the full text of the Kern Separation Agreement, a copy of which is filed hereto as Exhibit 10.2 and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Amendment No. 3 to Stacy Lindborg’s Offer Letter Agreement
On January 3, 2023, Brainstorm Cell Therapeutics Inc. (the “Company”) and Dr. Stacy Lindborg entered into an amendment (the “Lindborg Amendment”) to Dr. Lindborg’s offer letter agreement (the “Lindborg Agreement”). Pursuant to the Lindborg Amendment, Dr. Lindborg will be appointed to the position of Co-Chief Executive Officer of the Company. In connection with her appointment, and pursuant to the Lindborg Amendment, Dr. Lindborg will receive a Base Salary (as defined in the Lindborg Agreement) of $500,000. Dr. Lindborg will also be eligible to receive (i) an annual merit performance increase of 5% of her Base Salary, which shall be effective as of January 1 of every year, (ii) an annual cash bonus of 40% of the Base Salary, and (iii) a one-time bonus in the form of an equity grant (the “Equity Grant”) of up to 250,000 shares of restricted common stock of the Company, $0.00005 par value per share (“Common Stock”) under the Company’s 2014 Stock Incentive Plan (or any successor or other equity plan then maintained by the Company). The Equity Grant shall vest as to twenty-five percent (25%) of the award on each of the first, second, third and fourth anniversary of the date of grant, provided Dr. Lindborg remains continuously employed by the Company from the date of grant through each applicable vesting date. The Equity Grant shall be subject to accelerated vesting upon a Change of Control (as defined in the Lindborg Agreement and Lindborg Amendment) of the Company, subject to Board approval. In the event of Dr. Lindborg’s termination of employment, any portion of the Equity Grant that is not yet vested (after taking into account any accelerated vesting) shall automatically be immediately forfeited to the Company, without the payment of any consideration to Dr. Lindborg. In the event that the Company terminates the Lindborg Agreement or the Executive’s employment without cause or if Dr. Lindborg terminates the Agreement or employment with good reason, the Company shall pay Dr. Lindborg an amount equal to six months of the Base Salary, subject to delivery and execution of a full and general waiver and release to the Company. If within six months of a Change in Control Dr. Lindborg’s employment is terminated without cause or due to disability or death, the Company shall provide an amount equal to 12 months of the Base Salary, any portion of bonus compensation that Dr. Lindborg would otherwise be entitled to receive, and accelerated vesting of the Equity Grant as described above, subject to delivery and execution of a full and general waiver and release to the Company.
Ralph Kern Separation Agreement
On January 3, 2023, the Company and Dr. Ralph Kern entered into a separation agreement (the “Kern Separation Agreement”). Effective as of January 3, 2023, the Kern Separation Amendment terminates the employment agreement previously entered into between the Company and Dr. Kern on February 28, 2017. The Kern Separation Agreement provides, among other things, that Dr. Kern shall be eligible to receive, in exchange for agreeing and complying with the terms of the Kern Separation Agreement, including the release it contains, (i) a payment of $250,000, payable within 90 days of January 20, 2023 (the “Kern Separation Date”), (ii) a grant of 150,000 non-restricted shares of Common Stock, which shall be granted 90 days after the Kern Separation Date, and (iii) a payment of $125,000 as prorated annual bonus compensation, payable within 30 days of the Kern Separation Date. In addition, all unvested equity and/or equity-based awards that would have vested during the six months following the Kern Separation Date shall vest immediately upon the Kern Separation Date and be treated as described in the preceding sentence.
Effective as of the Kern Separation Date, Dr. Kern will become a member of the Company’s Scientific Advisory Board, which advises the management team on scientific matters such as research, clinical trials and drug development. In connection with Dr. Kern’s appointment to the Scientific Advisory Board, the Company will enter into a consulting agreement (the “Kern Consulting Agreement”), effective as of the Kern Separation Date, with Dr. Kern. Pursuant to the Kern Consulting Agreement, Dr. Kern will provide scientific advisory board consulting services to the Company for $450 per hour for up to ten hours each month, for an initial term of two years, unless earlier terminated in accordance with the terms of the Kern Consulting Agreement.
On January 4, 2023, the Company issued a press release announcing the promotion of Dr. Lindborg and the retirement of Dr. Kern, a copy of which is filed as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Amendment No. 3 to Offer Letter Agreement, dated January 3, 2023, between Brainstorm Cell Therapeutics Inc. and Dr. Stacy Lindborg. | |
| 10.2 | Separation Agreement, effective January 20, 2023, between Brainstorm Cell Therapeutics Inc. and Dr. Ralph Kern. | |
| 99.1 | Press release dated January 4, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BRAINSTORM CELL THERAPEUTICS INC. | ||
| Date: January 4, 2023 | By: | /s/ Chaim Lebovits |
| Chaim Lebovits | ||
| Chief Executive Officer | ||