DEF 14A of NovoCure Ltd
Filed Apr 22, 2024 · FY20230001645113-24-000011
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our Articles of Association (“Articles”) provide that our Board may consist of between two (2) and thirteen (13) directors, as determined by our Board from time to time. Our Board currently has ten (10) members. Effective from their appointment at the Annual Meeting, directors serve one year terms expiring at the next annual general meeting of shareholders. Each director will hold office until his or her successor has been elected and qualified, or until such director’s earlier death, resignation or removal as provided for in our Articles. If a vacancy arises on our Board during the term of a director’s appointment as a result of death, resignation or removal, then a majority of our directors then in office (acting upon the recommendation of our independent directors or a committee thereof) shall have the power at any time and from time to time to appoint any person to be a director as a replacement to fill the vacancy and such person will serve for the remainder of the term of the director he or she has replaced. Each person nominated for election at the Annual Meeting has agreed to serve if elected, and we have no reason to believe that any nominee will be unable to serve. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as our Board may propose. The following table sets forth, for our director nominees, information with respect to their ages, independence, and length of service on our Board:
ELECTION OF DIRECTORS
| Name | Age | Independent | Director Since | | Asaf Danziger | 57 | No | 2012 | | William Doyle | 61 | No | 2004 | | Jeryl Hilleman | 66 | Yes | 2018 | | David Hung | 66 | Yes | 2018 | | Kinyip Gabriel Leung | 62 | Yes | 2011 | | Martin Madden | 63 | Yes | 2017 | | Allyson Ocean | 52 | Yes | 2023 | | Timothy Scannell | 59 | Yes | 2021 | | Kristin Stafford | 42 | Yes | 2023 | | William Vernon | 68 | Yes | 2006 |
ELECTION OF DIRECTORS
| Nominees for Election to a One-Year Term Expiring at the 2025 Annual General Meeting of Shareholders |
ELECTION OF DIRECTORS
| Asaf Danziger |
ELECTION OF DIRECTORS
Experience: Mr. Danziger has served as our Chief Executive Officer since 2002. From 1998 to 2002, Mr. Danziger was CEO of Cybro Medical, a subsidiary of Imagyn Medical Technologies, Inc., a medical products company. Education: B.Sc. in Material Engineering, Ben Gurion University of the Negev, Israel. Other Public Company Directorships: None. We believe that Mr. Danziger is qualified to serve on our Board due to his service as our Chief Executive Officer and his extensive knowledge of our Company and industry.
ELECTION OF DIRECTORS
| William Doyle |
ELECTION OF DIRECTORS
Experience: Mr. Doyle has served as our Executive Chairman since 2016, as Chairman of the Board since 2009 and as a member of our Board of Directors since 2004. From 2002 to 2018, Mr. Doyle was the managing director of WFD Ventures LLC, a private venture capital firm he co-founded. Prior to 2002, Mr. Doyle was a member of Johnson & Johnson’s Medical Devices and Diagnostics Group Operating Committee and was Vice President, Licensing and Acquisitions. While at Johnson & Johnson, Mr. Doyle was also chairman of the Medical Devices Research and Development Council, and Worldwide President of Biosense-Webster, Inc. and a member of the board of directors of Cordis Corporation and Johnson & Johnson Development Corporation, Johnson & Johnson’s venture capital subsidiary. Earlier in his career, Mr. Doyle was a management consultant in the healthcare group of McKinsey & Company. Mr. Doyle is also a member of the Governing Board of the Pershing Square Sohn Cancer Research Alliance. From 2014 to 2016 he was a member of the investment team at Pershing Square Capital Management L.P., a private investment firm and from November 2016 to January 2021, Mr. Doyle served as the Executive Chairman of BlinkHealth LLC. Education: S.B. in Materials Science and Engineering, Massachusetts Institute of Technology; M.B.A., Harvard Business School. Other Public Company Directorships: Director of Elanco Animal Health, Inc. since 2020 and ProKidney Corp. since 2022. Formerly a director of Minerva Neurosciences, Inc. from 2017 to 2023, OptiNose, Inc. from 2004 to 2020 and Zoetis, Inc. from 2015 to 2016. We believe Mr. Doyle is qualified to serve on our Board due to his business and investment experience and his extensive knowledge of our Company and our industry. Mr. Doyle is a recognized expert in medical devices commercialization with over 20 years’ experience in the advanced technology and healthcare industries as an entrepreneur, executive, management consultant and investor.
ELECTION OF DIRECTORS
| Jeryl Hilleman |
ELECTION OF DIRECTORS
Experience: Ms. Hilleman retired from Intersect ENT, Inc., a medical device company, where she served as Chief Financial Officer from June 2014 to December 2019. Prior to joining Intersect ENT, Ms. Hilleman served as Chief Financial Officer of several public life sciences companies including Ocera Therapeutics, Inc. from 2013 to 2014, Amyris, Inc., from 2008 to 2012, and Symyx Technologies, Inc. from 1997 to 2007. Education: A.B. in History, Brown University; M.B.A., Wharton Graduate School of Business. Other Public Company Directorships: Director of HilleVax since 2021 (HilleVax became public in 2022), director of Minerva Neurosciences, Inc. since 2018 and director of SI-Bone, Inc. since 2019. Formerly a director of Talis Biomedical from 2021 to 2022 and Xenoport, Inc., a biopharmaceutical company, from 2005 until it was acquired in 2016. We believe that Ms. Hilleman is qualified to serve on our Board due to her business and accounting experience serving as an executive and director of several biotechnology and oncology companies.
ELECTION OF DIRECTORS
| David Hung |
ELECTION OF DIRECTORS
Experience: Dr. Hung is the founder, President, Chief Executive Officer and Director of Nuvation Bio Inc., a biotech company, since April 2018. Dr. Hung was previously Chief Executive Officer and a Director of Axovant Sciences, Inc., a biopharmaceutical company, from April 2017 to February 2018. As a founder of Medivation Inc. (“Medivation”), a biopharmaceutical company, he served as President, Chief Executive Officer and a Director of Medivation from 2004 to 2016. From 1998 until 2001, Dr. Hung was employed by ProDuct Health, Inc., a privately held medical device company, as Chief Scientific Officer from 1998 to 1999 and as President and Chief Executive Officer and Director from 1999 to 2001. Education: A.B. in Biology, Harvard College; M.D., University of California, San Francisco, School of Medicine. Other Public Company Directorships: Director of Nuvation Bio Inc. since 2019. Formerly a director of ARYA Sciences Acquisition Corp. from 2018 to 2021, of Establishment Labs Holdings Inc. from 2016 to 2021, of Axovant Sciences, Inc. from 2017 to 2018, and of Medivation from 2004 to 2016. We believe that Dr. Hung is qualified to serve on our Board due to his business leadership experience, his medical background and his experience as an executive in our industry and as the Chief Executive Officer of both clinical and commercial stage pharmaceutical companies.
ELECTION OF DIRECTORS
| Kinyip Gabriel Leung |
ELECTION OF DIRECTORS
Experience: Mr. Leung was the Vice Chairman of our Board and an employee of Novocure from 2011 to 2016, coordinating Novocure’s global commercial operations. From 2003 to 2010, he worked for OSI Pharmaceuticals, Inc. (“OSI”), a specialty pharmaceutical company, prior to its acquisition by Astellas Pharma Inc., last serving as Executive Vice President of OSI and the President of OSI’s Oncology and Diabetes Business. Prior to his tenure at OSI, from 1999 to 2003, Mr. Leung served as Group Vice President of the Global Prescription Business at Pharmacia Corporation, a global pharmaceutical and healthcare company. From 1991 to 1999, Mr. Leung was an executive at Bristol-Myers Squibb Company, a global pharmaceutical and healthcare company. Education: B.S. with High Honors, University of Texas at Austin; M.S. in Pharmacy (with a concentration in Pharmaceutical Marketing), University of Wisconsin-Madison. Other Public Company Directorships: Formerly a director of Pernix Therapeutics Holdings, Inc. from 2016 to 2019, Albany Molecular Research Inc. from 2010 to 2016 and Delcath Systems, Inc. from 2011 to 2014. We believe that Mr. Leung is qualified to serve on our Board due to his extensive knowledge of our business as a former employee of Novocure and his experience in our industry, including global management. Specifically, Mr. Leung was responsible for the launch of erlotinib (Tarceva), a chemotherapy drug for non-small cell lung cancer, while at OSI. While at Pharmacia Corporation, Mr. Leung led its oncology franchise with business and medical affairs operations in over 80 countries. At Bristol-Myers Squibb, he oversaw the growth of chemotherapy drugs Taxol and Paraplatin.
ELECTION OF DIRECTORS
| Martin Madden |
ELECTION OF DIRECTORS
Experience: Mr. Madden retired after a 30-year career at Johnson & Johnson (1986 to January 2017), where he served as Vice President Research and Development of DePuy-Synthes and Vice President Medical Device R&D transformation from February 2016 to January 2017, as Vice President New Product Development, Medical Devices from July 2015 to February 2016, and as Vice president R&D Global Surgery Group from January 2012 to July 2015. Earlier in his career, Mr. Madden was a medical device engineer and innovator, and a leader of cross-functional teams charged with incubating, developing, and launching new products. Education: M.B.A. with Honors, Columbia University; M.S. with Honors in Mechanical Engineering, Carnegie-Mellon University; B.S. in Mechanical Engineering, summa cum laude, University of Dayton. Other Public Company Directorships: Director of Microbot Medical Inc. since 2017. Formerly a director of TSO3, Inc. (acquired by Stryker Corporation) (2018 to 2019). We believe that Mr. Madden is qualified to serve on our Board due to his extensive experience with and his status as a world leader in medical device innovation and new product development. During his thirty year tenure with Johnson & Johnson’s medical device organization, Mr. Madden was an innovator and research leader for nearly every medical device business including cardiology, electrophysiology, peripheral vascular surgery, general and colorectal surgery, aesthetics, orthopaedics, sports medicine, spine, and trauma. As an executive and a vice president of Johnson & Johnson, Mr. Madden served on the management boards of Johnson & Johnson’s Global Surgery Group, Ethicon, Ethicon Endo-Surgery, DePuy-Synthes, and Cordis, with responsibility for research and development – inclusive of organic and licensed/acquired technology. He was also chairman of Johnson & Johnson’s Medical Device Research Council, with responsibility for talent strategy and technology acceleration.
ELECTION OF DIRECTORS
| Allyson Ocean, M.D. |
ELECTION OF DIRECTORS
Experience: Dr. Ocean was elected to our Board in February 2023. Dr. Ocean is currently a Professor of Clinical Medicine at the Weill Medical College of Cornell University, where she has held various positions since 2004. Dr. Ocean also currently serves as a medical oncologist and attending physician in gastrointestinal oncology at NewYork-Presbyterian Hospital/Weill Cornell Medical Center, as well as a medical oncologist at The Jay Monahan Center for Gastrointestinal Health. Education: Tufts University, B.S. and M.D. Other Public Company Directorships: None. We believe that Dr. Ocean is qualified to serve on our Board because she is an internationally recognized academic gastrointestinal medical oncologist, specializing in translational and clinical research, development of novel therapeutics, and patient advocacy. Dr. Ocean is co-founder and Scientific Advisory Board Chair of Let’s Win Pancreatic Cancer, an award-winning non-profit organization missioned to increase access to treatment options and clinical trials for patients with pancreatic cancer. Additionally, Dr. Ocean serves on several scientific advisory boards, from which she brings extensive knowledge from both the clinical and patient experience perspective.
ELECTION OF DIRECTORS
| Timothy Scannell |
ELECTION OF DIRECTORS
Experience: Mr. Scannell was elected to our Board in February 2021. He recently retired after 32 years of service at Stryker Corporation. At Stryker, Mr. Scannell served as President and Chief Operating Officer from 2018 to 2021. Prior to this position, he served as group president of MedSurg and Neurotechnology from 2008 to 2018 and previously served as vice president/general manager of Stryker Biotech and president of Stryker Spine. Education: University of Notre Dame, B.A. and M.B.A. in Business Administration. Other Public Company Directorships: Director since 2014 and Chairman of the Board since 2019 of Insulet Corporation and director of Exact Sciences Corporation since October 2023. Formerly a director of Renalytix plc from March 2022 to October 2023 and of Molekule, Inc. from 2022 to March 2024. We believe Mr. Scannell is qualified to serve on our Board due to his extensive business experience in our industry and as an executive leading a high-growth med-tech public company.
ELECTION OF DIRECTORS
| Kristin Stafford |
ELECTION OF DIRECTORS
Experience: Ms. Stafford was elected to our Board in March 2023. Ms. Stafford is currently Senior Vice President, Chief Accounting Officer for Royalty Pharma plc, a position she has held since December 2018. Prior to this position, she served as Vice President, Finance of Royalty Pharma and Chief Financial Officer of BioPharma Credit plc, an affiliate of Royal Pharma, from 2016 to 2018. Ms. Stafford is a Certified Public Accountant and holds a bachelor of science degree in business administration from Sonoma State University. Education: Sonoma State University, B.S. in Business Administration. We believe that Ms. Stafford is qualified to serve on our Board because of her extensive financial expertise as a senior executive in the pharmaceutical industry and her earlier background as an accounting professional in other industries, including as a company controller and as an independent auditor.
ELECTION OF DIRECTORS
| William Vernon |
ELECTION OF DIRECTORS
Experience: Mr. Vernon has served as our Lead Independent Director since May 2016. Mr. Vernon served as the Chief Executive Officer of Kraft Foods Group, Inc., a food products company, from 2012 to 2014 and also served as its Senior Advisor through May 2015. From 2009 to 2011, Mr. Vernon served as the President of Kraft Foods North America and an Executive Vice President of Kraft Foods. From 2006 to 2009, Mr. Vernon served as the healthcare industry partner for Ripplewood Holdings, a private equity firm. From 1982 to 2006, Mr. Vernon held various roles at Johnson & Johnson. He served as company Group Chairman of DePuy Orthopaedics, a provider of orthopedic products and services, from 2004 to 2005, President of Centocor, a biotechnology company, from 2001 to 2004, President of McNeil Consumer Pharmaceuticals and Nutritionals, Worldwide, an OTC and nutritional products company, from 1999 to 2001 and President of The Johnson & Johnson-Merck Joint Venture, an OTC remedies company, from 1995 to 1999. Education: B.A. in History, Lawrence University; M.B.A., Northwestern University’s Kellogg School of Management. Other Public Company Directorships: Director of Nuvation Bio Inc. since 2021 and director of McCormick & Company since 2017. Formerly a director of Intersect ENT Inc., a healthcare equipment company, from 2015 to 2021, a director of The White Wave Foods Company, a food products company, from 2016 to 2017, a director of Axovant Sciences from 2017 to 2018, a director of Medivation, Inc., from 2006 to 2016, and a director of the Kraft Foods Group from 2012 to 2015. We believe Mr. Vernon is qualified to serve on our Board due to his business and investment experience as an executive in our industry and as the former Chief Executive Officer of a global Fortune 500 company, with particular expertise in marketing.
APPROVAL OF 2024 OMNIBUS INCENTIVE PLAN
APPROVAL OF 2024 OMNIBUS INCENTIVE PLAN We are asking shareholders to approve the NovoCure Limited 2024 Omnibus Incentive Plan (the “2024 Plan”), which was adopted by our Board on April 4, 2024, subject to shareholder approval. We are seeking shareholder approval of the 2024 Plan as a successor to our 2015 Omnibus Incentive Plan (the “2015 Plan”), which will terminate as of the date our shareholders approve the 2024 Plan. If the 2024 Plan is not approved by our shareholders, we will continue to operate our 2015 Plan in accordance with its terms until the earlier of its expiration date in September 2025 or we deplete the available shares under our 2015 Plan.
Why We are Asking our Shareholders to Approve the 2024 Plan
Why We are Asking our Shareholders to Approve the 2024 Plan Currently, we maintain the 2015 Plan to grant share options, restricted share units, performance-based share units and other equity-based and cash-based awards in order to provide long-term incentives to our employees, executives and directors. Our Board decided to adopt and seek approval for the 2024 Plan as the successor to the 2015 Plan because the 2015 Plan would expire pursuant to its terms in September 2025 and the Board desired to update the plan provisions to conform with certain current market practices in response to feedback from our shareholders. The 2024 Plan will not have an automatic replenishment feature (also known as an evergreen provision). Approval of the 2024 Plan by our shareholders will allow us to continue to grant share options, restricted share unit awards, performance-based share awards and other equity-based and cash-based awards in order to secure and retain the services of our employees, executive officers and directors, and to provide long-term incentives that are designed to align the interests of our employees and directors with the interests of our shareholders.
Why You Should Vote to Approve the 2024 Plan
Why You Should Vote to Approve the 2024 Plan Equity awards are an important part of our compensation philosophy. •All full-time employees and Non-Employee Directors are eligible to receive awards:.approximately 63% of our outstanding equity awards are held by our broad employee population and approximately 36% of our outstanding equity awards are held by our executive officers and Non-Employee Directors. •The 2024 Plan incentivizes long-term thinking to align with the interests of our shareholders. •The 2024 Plan underlies our ability to reward, retain and motivate key talent which we believe will result in building long-term shareholder value. •We face strong competition for talent from our peers and equity awards allow us to effectively compete for talent. We believe we manage our equity award use carefully and dilution is reasonable. •We monitor our annual burn rate, dilution and equity expense to ensure we maximize shareholder value. •We use industry benchmarks to competitively grant the appropriate number of equity awards necessary to attract, reward, and retain employees and Non-Employee Directors. We believe the size of our share reserve request is reasonable. •We have adapted our grant practices and guidelines to align with the requested share pool reserve and remain competitive. •We anticipate the requested share pool is adequate to cover equity awards for the next one to two years. The consequences of the 2024 Plan not being approved are significant. We compete for talent with many companies that offer equity incentives as a key element of their compensation programs. Without shareholder approval of the 2024 Plan: •we will lose access to an important compensation tool that is key to our ability to attract, motivate, reward, and retain our key employees and Non-Employee Directors; •we may need to significantly increase the cash component of employee compensation to continue to attract and retain key talent; and •the requested share pool reserve will not become available for issuance, and the 2015 Plan will continue as in effect subject to authorized share limits and annual increases. The Company believes that the following additional details are important for shareholders to consider. Equity Awards Are an Important Part of Our Compensation Philosophy We are a global oncology company with a proprietary platform technology called Tumor Treating Fields ("TTFields"), which are electric fields that exert physical forces to kill cancer cells via a variety of mechanisms. Our key priorities are to drive commercial adoption of Optune Gio® and Optune Lua®, our commercial TTFields devices, and to advance clinical and product development programs intended to extend overall survival in some of the most aggressive forms of cancer. Our Board believes that the 2024 Plan is necessary to ensure that the number of shares available for issuance is sufficient to allow us to continue to attract and retain the services of talented individuals essential to our long-term growth and financial success. Our Board strongly believes that the issuance of equity awards is a key element underlying our ability to attract, retain and motivate our employees, including our executive officers, and is a substantial contributing factor to our success and the growth of our business. To date, we have relied significantly on equity incentives in the form of share option and restricted share unit awards to attract and retain employees, plus performance-based share awards to attract, incentivize and retain executive officers. We believe that equity incentives are necessary for us to remain competitive in the marketplace for executive and other talent, as the offering of shares to all employees is a common practice in our industry. Because of the long-term nature of bringing clinical therapies to market, our Board believes that long-term incentive programs are vital to aligning our employees with our strategy. Therefore, our Board believes that the 2024 Plan is in the best interests of the Company and its shareholders and recommends a vote in favor of this Proposal No. 4. Our equity granting practices are broad-based and play an important role throughout the Company. We are especially proud that we grant all new employees an equity award when they join us, creating alignment with our shareholders from the very beginning. During the past three fiscal years (2021-2023), the number of awards we granted to non-Named Executive Officers was over 73% of the total grants made during the period. Assuming approval of the 2024 Plan, our total overhang, including all awards outstanding and available for grant, will be equal to 25.4% of our total shares outstanding as of the Record Date. Based on our expected grant practices and our current share price, we believe that the adoption of the 2024 Plan and new total share reserve of 9,000,000 shares will provide the Board with flexibility to continue to make annual equity awards to employees and new hires through the next one to two years and will allow us to remain competitive in the marketplace with respect to attracting, retaining and motivating key personnel and Non-Employee Directors. We Believe We Manage Our Equity Incentive Award Use Carefully, and Dilution Is Reasonable Equity awards are a vital part of our overall compensation program. Our compensation philosophy reflects broad-based eligibility for equity incentive awards, and we grant awards to all of our full-time employees. However, we recognize that equity awards dilute existing shareholders, and, therefore, we must responsibly manage the growth of our equity compensation program. We are committed to effectively monitoring our equity compensation share reserve, including our “burn rate,” to maximize shareholders’ value by granting the appropriate number of equity incentive awards necessary to attract, reward, and retain employees and Non-Employee Directors. The tables below show our 2023 overhang and burn rate percentages. We Believe the Size of Our Share Reserve Request Is Reasonable If the 2024 Plan is approved by our shareholders, we expect to have approximately 9,000,000 shares available for grant after our annual meeting (less any shares subject to awards made under the 2015 Plan after April 2, 2024 and prior to the Effective Date and subject to adjustment in the event of certain capitalization events and the share recycling provisions, each as described in the 2024 Plan), which we anticipate (based on our expected grant practices and our current share price) being a pool of shares sufficient for grants through one to two years, and necessary to provide a predictable amount of equity for attracting, retaining, and motivating employees.
Outstanding Grants and Usage under the 2015 Plan
| As of April 2, 2024 (except where noted) | | | Total number of common shares subject to outstanding options | 11,782,976 | | Weighted-average exercise price of outstanding options | $32.59 | | Weighted-average remaining term of outstanding stock options at March 31, 2024 | 6.3 years | | Total number of shares of common stock subject to outstanding full value awards (RSUs and PSUs (at target)) | 10,349,421 | | Total number of shares of common stock available for grant (1) | 14,585,543 | | Total number of shares of common stock outstanding | 107,606,309 | | Per-share closing price of common stock as reported on Nasdaq on April 2, 2024 | $14.39 |
Outstanding Grants and Usage under the 2015 Plan
(1) Includes PSUs granted at maximum payout that are not included in shares subject to outstanding grants. If the 2024 Plan is approved, we will cancel shares that would have been issuable under the 2015 Plan as of the Effective Date in excess of the 9,000,000 shares requested. We have a broad-based equity award practice: approximately 63% of our outstanding equity awards are held by our broad employee population and approximately 36% of our outstanding equity awards are held by our executive officers and Non-Employee Directors. Assuming approval of the 2024 Plan, our total overhang, including all awards outstanding and available for grant, will be equal to 25.44% of our total shares outstanding as of the Record Date (excluding approximately 3.6 million "outperformance" PSUs that are not probable to vest). The adoption of the 2024 Plan and new total share reserve of 9,000,000 shares will provide the Board with flexibility to continue to make annual equity awards to eligible employees and new hires through the next one to two years and allows us to remain competitive in the marketplace with respect to attracting, retaining and motivating key personnel and Non-Employee Directors. Burn Rate The Company monitors shareholder dilution by tracking the number of shares subject to equity awards that it grants annually, commonly referred to as the burn rate. Burn rate shows how rapidly a company is depleting its shares reserved for equity compensation awards and is defined for this purpose as the number of equity awards granted as incentives during the year divided by the weighted average number of shares of common stock outstanding during the year. The Company has calculated the burn rate for the past three years, as set forth in the following table:
Material Features of the 2024 Plan
Material Features of the 2024 Plan Below is a summary of the 2024 Plan, which is qualified entirely by reference to the complete text of the 2024 Plan, a copy of which is attached as Appendix A to this proxy statement. Purpose of the 2024 Plan. The purpose of the 2024 Plan is to enhance our profitability and value for the benefit of our shareholders by enabling us to offer eligible employees, consultants and Non‑Employee Directors incentive awards in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and our shareholders. Administration. As noted above, the 2024 Plan will be administered by the Compensation Committee. In particular, the Compensation Committee will have the authority, among other items, to: (i) select participants to whom awards may from time to time be granted; (ii) determine, in its sole discretion, the number of ordinary shares to be covered by each award granted under the 2024 Plan; (iii) determine, in its sole discretion, the terms and conditions, not inconsistent with the terms of the 2024 Plan, of any award granted under the 2024 Plan (including, but not limited to, the exercise or purchase price (if any), any restriction, forfeiture or limitation, any vesting schedule or acceleration or waiver thereof); (iv) set the performance criteria and the performance period with respect to any award for which the grant, vesting or payment of such award is conditioned upon the attainment of specified performance criteria and to certify the attainment of any such performance criteria; (v) adopt, alter and repeal sub-plans or programs under the 2024 Plan as it deems necessary or advisable; and (vi) construe and interpret the terms and provisions of the 2024 Plan and any award (and any agreements relating thereto). To the extent permitted by applicable law and applicable exchange rules, the Compensation Committee may (i) delegate to a committee of one or more directors any of the authority of the Compensation Committee under the 2024 Plan, including the right to grant, cancel or suspend awards, and (ii) authorize one or more executive officers to do one or more of the following with respect to individuals who are not subject to Section 16 of the Exchange Act: (A) designate eligible employees and consultants to be recipients of awards and (B) determine the number of shares subject to such awards to be received by such eligible employees and consultants. Available Shares. Subject to the capitalization adjustment provisions and the share recycling provisions, each as contained in the 2024 Plan, the maximum aggregate number of ordinary shares that may be issued or used for reference purposes or with respect to which awards may be granted under the 2024 Plan, other than awards issued as substitute awards in connection with a corporate transaction, will be equal to 9,000,000 shares, less one share for every one share granted under the 2015 Plan after April 2, 2024 and prior to the Effective Date, all of which may be granted as “incentive share options” under the Internal Revenue Code. The number of ordinary shares that remain available for future grants under the 2024 Plan will be reduced by the sum of the aggregate number of ordinary shares which become subject to outstanding awards, other than substitute awards granted in connection with a corporate transaction. Shares issued under the 2024 Plan may be either authorized and unissued ordinary shares or ordinary shares held in or acquired for the treasury of the Company, or both. If, other than with respect to substitute awards granted in connection with a corporate transaction, (i) any ordinary shares subject to an award granted under the 2024 Plan or the 2015 Plan are forfeited, an award granted under the 2024 Plan or the 2015 Plan expires or otherwise terminates without issuance of ordinary shares, or an award granted under the 2024 Plan or the 2015 Plan is settled for cash (in whole or in part) or otherwise does not result in the issuance of all or a portion of the ordinary shares subject to such award, such ordinary shares will, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, be added to the ordinary shares available for grant under the 2024 Plan. In the event that (i) any award granted under the 2024 Plan or the 2015 Plan (other than a substitute award granted in connection with a corporate transaction) is exercised through the tendering of shares (either actually or by attestation) or by the withholding of shares by the Company, or (ii) withholding tax liabilities arising from such award granted under the 2024 Plan or the 2015 Plan (other than a substitute award granted in connection with a corporate transaction) are satisfied by the tendering of shares (either actually or by attestation) or by the withholding of shares by the Company, then in each such case the shares so tendered or withheld shall be added to the shares available for grant under the Plan on a one-for-one basis. On the Record Date, the closing sales price per share of our ordinary shares as reported on the NASDAQ Global Market was $14.39. Change in Control. In the event of our “change in control”, and except as otherwise provided in an award agreement or employment agreement, a participant’s unvested award will not vest and a participant’s award (or any part thereof) will be treated in accordance with one or more of the following methods as determined by the Compensation Committee in its sole discretion: (i) awards may be continued, assumed, have new rights substituted therefor or terminated, as determined by the Committee in its sole discretion, and restrictions to which any restricted shares or any other award granted prior to the change in control are subject will not lapse upon a change in control and the restricted shares or other award will, where appropriate, receive the same distribution as other ordinary shares on such terms as determined by the Compensation Committee in its sole discretion; (ii) the purchase of any awards for an amount of cash or other property equal to the price per share paid in connection with the change in control of ordinary shares covered by such awards, less, in the case of a share option or share appreciation right, the exercise price per ordinary share covered by such award; (iii) the cancellation of any share option or share appreciation award without payment, if the change in control price per ordinary share covered by such award is less than the exercise price per share of such award; or (iv) the acceleration of vesting or lapse of restrictions of an award at any time. Under the 2024 Plan, a “change in control” is generally defined as (i) a change in beneficial ownership of 50% or more of the combined voting power of our then outstanding securities; (ii) a change in the majority composition of the Board; (iii) certain mergers or consolidations involving us; or (iv) our shareholders approve a plan of complete liquidation or the consummation of the sale or disposition of all or substantially all of our assets. No Repricing. Except as permitted pursuant to the capitalization adjustment provisions set forth in the 2024 Plan or in connection with a change in control, an outstanding share option or share appreciation right may not be modified to reduce the exercise or base price thereof nor may a share option or share appreciation award be surrendered (when the option or exercise price per share exceeds the fair market value of a share) in exchange for cash or another award, unless such action is approved by our shareholders.
Material Features of the 2024 Plan
Detrimental Activity. Awards granted under the 2024 Plan are subject to recovery in the event the participant engages in “Detrimental Activity” within one year of the vesting or exercise of the award. Detrimental activity includes (i) the disclosure of confidential information, (ii) activity by the participant that would allow us to terminate the participant for cause or (iii) breach of any agreement between the participant and us or an Affiliate (including, without limitation, any written employment agreement or noncompetition or non-solicitation agreement). Effective Date, Termination and Amendment. The 2024 Plan will become effective on the date it is approved by our shareholders at the annual meeting. Notwithstanding any other provision of the 2024 Plan, the Board or the Compensation Committee, to the extent permitted by law, may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the 2024 Plan or suspend or terminate the 2024 Plan entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or specifically provided in the 2024 Plan, the rights of a participant with respect to awards granted prior to such amendment, suspension or termination, may not be substantially impaired without the consent of such participant. Without the approval of the holders of the ordinary shares entitled to vote in accordance with applicable law, no amendment may be made which would (i) increase the aggregate number of ordinary shares that may be issued under the 2024 Plan (except in connection with the capitalization adjustment provisions of the 2024 Plan); (ii) change the classification of individuals eligible to receive awards under the 2024 Plan; (iii) modify the prohibition on repricing set forth in the 2024 Plan; or (iv) require shareholder approval under the rules of any exchange or system on which the our securities are listed or traded at our the request. Eligibility. Participants in the 2024 Plan will consist of members of the Board as well as our employees and consultants if selected by the Compensation Committee for participation in the 2024 Plan. As of the Record Date, approximately 1,432 employees and 8 non-employee directors would be eligible to participate in the 2024 Plan if selected by the Compensation Committee. Consultants have received awards on occasion, with three consultants having received awards in the past year. Share Options and Share Appreciation Rights The 2024 Plan provides for the grant of share options and share appreciation rights. The Compensation Committee will determine the conditions to the exercisability of each share option and share appreciation right. Each share option will be exercisable for no more than ten (10) years after its date of grant. If the share option is an incentive share option and the optionee owns greater than ten percent (10%) of the voting power of all of our shares of capital stock (a “ten percent holder”), then the share option will be exercisable for no more than five years after its date of grant. Except in the case of substitute awards granted in connection with a corporate transaction, the exercise price of a share option will not be less than 100% of the fair market value of an ordinary share on the date of grant, unless the share option is an incentive share option and the optionee is a ten percent holder, in which case the exercise price will be the price required by the Internal Revenue Code. Each share appreciation right will be exercisable for no more than ten (10) years after its date of grant. Other than in the case of substitute awards granted in connection with a corporate transaction, the base price of a share appreciation right will not be less than 100% of the fair market value of an ordinary share on the date of grant. A share appreciation right entitles the holder to receive upon exercise (subject to withholding taxes) ordinary shares or, to the extent provided in the award agreement, cash or a combination thereof, with an aggregate value equal to the difference between the fair market value of the ordinary shares on the exercise date and the base price of the share appreciation right. All of the terms relating to the exercise, cancellation or other disposition of share options and share appreciation rights upon a termination of employment of a participant will be set forth in the award agreement. Notwithstanding anything in the award agreement to the contrary, the holder of a share option or share appreciation will not be entitled to receive dividend equivalents with respect to the ordinary shares subject to such share option or share appreciation right. Restricted Share Awards. The 2024 Plan provides for the grant of restricted share awards. Restricted share awards are subject to forfeiture if the holder does not remain continuously in our employment during the restriction period or if specified performance measures (if any) are not attained during the performance period. Unless otherwise set forth in a restricted share award agreement, the holder of restricted shares has rights as a shareholder, including the right to vote and receive dividends with respect to the restricted shares and to participate in any capital adjustments applicable to all holders of our ordinary shares; provided, however, that any divided or other distribution paid with respect to restricted shares will be deposited by us and will be subject to the same restrictions as the ordinary shares with respect to which such dividend or distribution was made. All of the terms relating to the satisfaction of performance measures and the termination of a restriction period or performance period relating to a restricted share award, or the forfeiture and cancellation of a restricted share award upon a termination of employment will be set forth in the award agreement. Other Share-Based Awards. The 2024 Plan provides for the grant of other-share based awards, which are awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to ordinary shares, including but not limited to, ordinary shares awarded purely as a bonus and not subject to any restrictions or conditions, ordinary shares in payment of the amounts due under an incentive or performance plan sponsored or maintained by the us, share equivalent units, restricted share units, and awards valued by reference to book value of ordinary shares. The participant shall have the right to receive any dividends with respect any ordinary shares covered by other share-based awards, subject to and conditioned upon the full vesting of the awards, provided that the payment of dividends with respect to the number of ordinary shares covered by other share-based awards shall be deferred until, and conditioned upon, the expiration of the applicable vesting period with respect to the awards. All of the terms relating to the satisfaction of performance measures and the termination of a restriction period or performance period relating to an other share-based award, or the forfeiture and cancellation of an other share-based award upon a termination of employment will be set forth in the award agreement.
AUDIT COMMITTEE
| 2023 DIRECTOR COMPENSATION |
AUDIT COMMITTEE
| Director Compensation Program |
AUDIT COMMITTEE
| Equity Compensation |
AUDIT COMMITTEE
| 2023 Director Compensation Table |
AUDIT COMMITTEE
| Name | Fees earned or paid in cash ($)(1) | Stock awards ($)(2)(3) | Option awards ($)(2)(3) | All other compensation ($) | Total ($) | | William Doyle (4) | — | — | — | 1,427,799 | 1,427,799 | | Jeryl Hilleman | 70,000 | — | 376,094 | — | 446,094 | | David Hung | 50,000 | — | 376,094 | — | 426,094 | | Kinyip Gabriel Leung | 60,000 | 187,487 | 188,047 | — | 435,534 | | Martin Madden | 70,000 | — | 376,094 | — | 446,094 | | Allyson Ocean | 29,569 | — | 667,695 | | 697,264 | | Timothy Scannell | 73,000 | 187,487 | 188,047 | — | 448,534 | | Kristin Stafford | 28,264 | — | 668,672 | | 696,936 | | William Vernon | 100,000 | 187,487 | 188,047 | — | 475,534 |
Created shareholder value by building a profitable business
| WHAT WE DON'T DO | | No share option repricing - Our equity plan does not permit repricing of underwater share options without shareholder approvalX | | No excessive perks - Our perquisites are limited to those with business-related rationale or customary in the competitive marketX | | No gross-ups in the event of a change in control - We do not provide any tax reimbursement payments (including “gross-ups”) on any severance or change-in-control payments or benefitsX | | No special health or welfare benefits - Our executive officers participate in broad-based, company-sponsored health and welfare benefits programs on the same basis as our other full-time employees. Executives do not have access to special benefits programsX |
Created shareholder value by building a profitable business
At our 2023 Annual Meeting, our shareholders expressed support for our executive compensation program, with 67.4% of the votes cast (excluding abstentions and broker non-votes) voting in favor of the compensation of our NEOs as disclosed in the 2023 proxy statement. The Compensation Committee considered this result to be somewhat supportive of the Company's NEO compensation philosophy and practices, but also acknowledged further consideration of shareholder feedback was necessary. In 2023 and 2024, as part of our ongoing shareholder outreach efforts, we contacted shareholders comprising approximately 47% of total ownership of our Ordinary Shares and engaged in discussion with each of those shareholders who expressed an interest in meeting with us. The Chair of our Compensation Committee (who is also our Lead Director) and the Chair of our Nominating and Corporate Governance Committee were made available to these shareholders if they wished to include them in these discussions. Our Chief Human Resources Officer and General Counsel led the discussions, with members of our legal and corporate responsibility teams also participating. The opinions of our shareholders are important to us and we are committed to taking investor feedback into account when designing our executive compensation programs. A common theme we have heard from our investors is that a focus on long-term performance-based equity awards is desirable, along with awards that are aligned to delivering long-term total shareholder return. In keeping with our commitment to consider the feedback we receive through these shareholder discussions and in consultation with our independent executive compensation consultant (see below), our long-term incentive program continues to include time-based restricted share units ("RSUs") with three-year vesting, share options with four year vesting, and performance-based share units with at least a three-year measurement period as a meaningful part of our NEO annual equity award allocations. We implemented and maintained this equity program for our NEOs in response to feedback from key investors and to align our long-term pay incentives with our shareholders' interests. Certain shareholders, who collectively held in excess of 19% of our Ordinary Shares at the time of the 2023 Annual Meeting, indicated that, while they were supportive of our executive compensation program, internal guidelines required them to vote "no" with respect to our 2023 "Say On Pay" proposal due to the annual 4% automatic increase in share availability in our 2015 Plan. The 2015 Plan was adopted prior to our initial public offering and expires in September 2025. The Compensation Committee and our management have taken this feedback under advisement and In response to this feedback and feedback received from other shareholders, we are seeking approval for the 2024 Plan, which, if approved by shareholders pursuant to Proposal 4 described above, will remove the automatic increases. The Compensation Committee will continue to consider shareholder input as well as the results of our say-on-pay votes when making future compensation decisions for our NEOs. We expect to continue our shareholder engagement efforts through further direct outreach to large institutional shareholders, as well as through regular investor relations channels, such as investor road shows, analyst meetings and other conferences and meetings, and welcome any feedback from shareholders throughout the year.
CEO All Other NEOs
CEO All Other NEOs As described below in "Long-Term Incentives - 2020 Performance Awards to CEO and Executive Chairman" (beginning on page 56), Mr. Danziger did not receive any equity awards in 2023. In March 2020, the Committee granted Messrs. Doyle and Danziger performance-based restricted share units ("PSUs") to further align their interests with the interests of shareholders by rewarding them for attainment of critical clinical and FDA achievements and share price performance. The awards consist of target shares and outperformance shares. The PSU award was granted in lieu of any future annual equity awards during the performance period.
CEO All Other NEOs
We have designed our executive compensation program to attract, retain and motivate superior executive talent by providing compensation, in the aggregate, that we believe is reasonable and competitive. We provide our executives with incentives that we believe will both reward the achievement of performance goals that directly correlate to the enhancement of shareholder and stakeholder value and facilitate executive retention. We strive to align our executives’ interests with those of shareholders through long-term incentives, with a portion linked to specific performance metrics. Because we know of no precedent for our business model and cancer therapy, we believe it is vital to our current and future success, and to the continued creation of value for our shareholders, that we retain our experienced leadership team with a proven track record of innovation and success. Our Compensation Committee’s annual compensation review for 2023 included an analysis of data, comparing the Company’s executive and director compensation levels and practices against a peer group of medical device, diagnostics and biopharmaceuticals companies. Frederic W. Cook & Co., Inc. ("FW Cook") provided our Compensation Committee with advice, counsel and recommendations with respect to the composition of the peer group and competitive data used for assessing our compensation program. Our Compensation Committee used this and other information provided by FW Cook to reach an independent recommendation regarding compensation to be paid to our Executive Chairman, CEO, directors and other executives. Our Compensation Committee’s final recommendation was then given to the independent directors of our Board for review and final approval. Our Compensation Committee reviewed the companies included in the prior year’s peer group of publicly-traded companies with respect to revenue, market capitalization and research and development expense, each as compared to the same metrics for the Company, and determined that certain adjustments were necessary for 2023 in light of the Company's growth in revenues and its market capitalization at the time of the Compensation Committee's review. Following this review, one historical peer was removed and two new peers were added to our peer group. Specifically, we added CRISPR Therapeutics AG and Inspire Medical Systems, Inc. and we removed Moderna, Inc. The peer group of publicly-traded companies set forth below was used to analyze 2023 executive compensation:
CEO All Other NEOs
| Compensation Consultant |
CEO All Other NEOs
| Annual Incentives |
CEO All Other NEOs
In general, the annual incentives, including the cash bonus opportunities of each executive officer, are determined by the achievement of pre-determined targets and personal objectives. Under their respective employment agreements, the NEOs have pre-established target bonus amounts (expressed as a percentage of base salary) payable at the discretion of our Board and Compensation Committee based on actual performance. Our Board-approved annual incentive plan targets for 2023 were tied to our corporate objectives, which are described below. These targets were intended to incentivize the achievement of our strategic operating plan and were designed to be attainable with strong coordinated performance by management. The achievement of each target is based on the Compensation Committee’s assessment of performance, ranging from 0% to 200%, which the Compensation Committee may adjust in its discretion under appropriate circumstances. Each target is also weighted. The cumulative payout is determined by aggregating the weighted scores, which can then be modified up or down by up to 20% if the Compensation Committee determines that other corporate achievements warrant such adjustment. Achievement below the 50% level for any target would receive a zero score. No achievement can exceed a 200% score. Achievement between the target levels are extrapolated on a linear basis. The Compensation Committee may also assess the individual performance or achievements of each NEO and determine if a further adjustment (upward or downward) of their annual incentive award is warranted (no adjustment was made for 2023).
CEO All Other NEOs
As shown above, our Board and Compensation Committee determined that the Company met or exceeded expectations of certain objectives, but did not meet the target goal of others. However, threshold performance was met in all cases. Based on the total performance outcomes, upon the recommendation of our Compensation Committee, our Board determined that the executive team (including the NEOs) earned incentive bonuses at 89% of target for 2023. The table below shows the target bonus award as a percentage of each NEO’s 2023 base salary and the actual bonus payments to our NEOs for 2023 performance, which were paid on or before April 1, 2024.
CEO All Other NEOs
| Named executive officer | FY 2023 target bonus (% Base Salary) | Realization (%) corporate achievement/ individual performance | Actual FY 2023 bonus ($) | | Asaf Danziger (1) | 75% | 89%/100% | 507,742 | | Wilhelmus Groenhuysen | 60% | 89%/100% | 328,410 | | Ashley Cordova | 60% | 89%/100% | 280,350 | | Pritesh Shah | 60% | 89%/100% | 267,000 | | Francis Leonard (2) | 60% | 89%/100% | 253,650 | | Barak Ben-Arye (3) | 50% | 89%/100% | 203,409 |
CEO All Other NEOs
| Long-term Incentives |
CEO All Other NEOs
Our executive compensation program ties a substantial portion of each executive’s overall compensation to the achievement of our key strategic, financial and operational goals, using a blend of time-based and performance-based equity awards to help align the interests of our executives with those of our shareholders. Recognizing the importance of the continuity and continued dedication of the management team and other key employees to achieving our Company’s key objectives, and after carefully considering the equity participation of such employees, the highly competitive labor market in which we compete to attract and retain employees, and our other near-term and long-term business objectives (including building a global oncology business and running up to four global phase 3 pivotal clinical studies simultaneously over the next few years), our Compensation Committee granted time-based option awards, RSUs awards and PSUs to our NEOs in March 2023 (other than Mr. Danziger). Our Compensation Committee believes that options, RSUs and PSUs have strong retention value and granting such awards to members of management and key employees, including our executive officers, is in the best interests of the Company and our shareholders given the importance of such personnel to achieving our short-term and long-term Company objectives. Our Compensation Committee recognizes that, given the executive officers’ lengthy tenures with our Company and the unique nature of our business, the loss of any one of the executive officers may adversely impact the achievement of our objectives until a qualified replacement could be hired and become familiar with our Company’s business. For 2023, we awarded our NEOs (other than our CEO) a mix of one-third (1/3) options, one-third (1/3), RSUs and one-third (1/3) PSUs, on average, based on the grant date target fair values. As described below in "Long-Term Incentives - 2020 Performance Awards to CEO and Executive Chairman" (beginning on page 56), our CEO did not receive any equity awards in 2023. In March 2020, the Committee granted our CEO and Executive Chairman longer-term PSUs to further align their interests with the interests of shareholders by rewarding them for attainment of critical clinical and FDA achievements and share price performance. The awards consist of target shares and outperformance shares. This PSU award was granted in lieu of any future annual equity awards during the performance period. Our Compensation Committee sets guidelines for the value of share options to be awarded based on competitive compensation data. For 2023, the number of share options awarded to each NEO (other than the CEO) was determined following an analysis of benchmarking data provided by FW Cook comparing equity award types and levels granted by our peer group and consideration of the compensation philosophy factors discussed above. The grant date values and number of shares awarded to our NEOs are provided in the 2023 Grants of Plan-Based Awards Table and corresponding footnotes.
CEO All Other NEOs
The Committee granted our NEOs, other than our CEO, Mr. Danziger, time-based RSU awards to support our compensation philosophy, provide significant performance incentives and create retention value, as presented in the 2023 Grants of Plan-Based Awards Table. The RSUs granted in 2023 vest ratably over three years.
CEO All Other NEOs
| Performance-based Restricted Share Units |
CEO All Other NEOs
In 2023, following consultation with FW Cook and careful consideration of analysis and advice on pay competitiveness, incentive plan design, performance measurement, design and use of equity compensation, relevant market practices and trends with respect to the compensation of our executive officers and feedback received from shareholders during our outreach efforts, the Committee granted the NEOs, other than Mr. Danziger, PSUs to further align their interests with the interests of shareholders by rewarding them for attainment of certain key milestones. The 2023 PSU awards are eligible to vest upon our attaining the milestones described below. To earn the 2023 PSU awards, the NEO must remain an employee of the Company through of the date of vesting, which is three years from the date of grant. Twenty-five percent (25%) of a target number of 2023 PSUs are eligible to be earned on the vesting date subject to achieving each of the following targets: (1) the Company files a premarket approval application that has been accepted by the FDA (a "PMA Submission") for non-small cell lung cancer consistent with the Company’s LUNAR pivotal trial (the "LUNAR Submission"), (2) the Company files a PMA Submission for ovarian cancer consistent with the Company’s INNOVATE-3 pivotal trial (the “INNOVATE-3 Submission”), (3) the Company has begun active marking efforts in the United Kingdom, France, Germany, Japan or the United States, as determined by the Compensation Committee in its sole discretion (an "Indication Launch"), for non-small cell lung cancer consistent with the LUNAR Submission (the “LUNAR Launch”), and (4) the Company receives FDA approval of the INNOVATE-3 Submission (the "INNOVATE Approval"). No 2023 PSUs will vest if none of the above targets are achieved. Fifty-percent (50%) of an outperformance number of 2023 PSUs are eligible to be earned on the vesting date subject to achieving each of the following targets: (1) if the LUNAR Launch has occurred and the Company has completed a PMA Submission for either (a) brain metastases consistent with the Company’s METIS pivotal trial or (b) pancreatic cancer consistent with the Company’s PANOVA-3 pivotal trial, and (2) if the INNOVATE Approval has occurred and the Company has achieved Indication Launch for ovarian cancer consistent with the INNOVATE-3 Submission. Our Compensation Committee intends to continue to granting awards with performance-based vesting criteria in future years as a part of our ongoing compensation program.
CEO All Other NEOs
In March 2020, following consultation with FW Cook and careful consideration of analysis and advice on pay competitiveness, incentive plan design, performance measurement, design and use of equity compensation, relevant market practices and trends with respect to the compensation of our executive officers and feedback received from shareholders through our outreach efforts at that time, the Committee granted Mr. Doyle, our Executive Chairman and Mr. Danziger, our CEO, PSUs to further align their interests with the interests of shareholders by rewarding them for attainment of critical clinical and FDA achievements and share price performance. The awards consist of target shares and outperformance shares. The PSUs were granted in lieu of any future annual equity awards during the performance period (which ends upon the earlier of achievement of all targets or six years). The PSUs will vest upon achievement of the following targets in the following increments, and subject to each executive's continued service through the vesting date: (1) fifty percent (50%) of the target shares are earned for either (x) each successful completion of up to two specified clinical studies (twenty-five percent (25%) of the total target shares for each) or (y) the First FDA Approval and Second FDA Approval (each as defined below) (25% of total target shares for each); (2) fifty percent (50%) of the target shares are earned each for either (x) up to two FDA acceptances of a PMA submission by the Company for a new indication (twenty-five percent (25%) of the total target shares for each) or (y) the First FDA Approval and Second FDA Approval (twenty-five percent (25%) of the total target shares for each); (3) fifty percent (50%) of the outperformance shares are earned if the Company receives one PMA for a new indication (the “First FDA Approval”) within six (6) years of the grant date so long as the Company’s share price, as calculated in accordance with the award agreement, has increased by at least twenty-five percent (25%) from the grant date to a measurement date (the “TSR Vesting Condition”); and (4) fifty percent (50%) of the outperformance Shares will vest if the Company receives a second PMA for an indication unrelated to the First FDA Approval (the “Second FDA Approval”) within six (6) years of the grant date so long as the Company’s TSR Vesting Condition is met. Earned target shares and outperformance shares related to the First FDA Approval are eligible to vest on the earlier of the date of vesting of the outperformance shares relating to the Second FDA Approval and the sixth anniversary of the grant date; however, no shares under the awards may vest until the fifth anniversary of the grant date, regardless of when earned. The PSUs are in lieu of any future equity awards for Messrs. Doyle and Danziger from the date of grant until the sixth anniversary of the date of grant. Our Compensation Committee believes that the PSUs awarded to Messrs. Doyle and Danziger in 2020 support the creation of sustained shareholder value as we strive to achieve our most critical long-term objectives. These awards are intended to increase the ownership interests of Messrs. Doyle and Danziger and benefit shareholders in the following ways: Executives’ Financial Success is Closely Linked to the Company’s Growth: The PSUs only vest upon the achievement of critical performance targets during the performance period. As the Company achieves each of these targets, the vesting percentage increases, up to the maximum amount. If the Company fails to receive one or two FDA approvals during the performance period, 50% or 90%, respectively, of the PSUs will not vest. The unbalanced vesting structure ensures that a significant number (or all) of the PSUs only vest if one or both FDA approvals are obtained and TSR Vesting Conditions are met, which will likely result in significant shareholder return and directly aligns the executives’ compensation with shareholder interests. Performance-Based, “At-Risk” Award: Despite the high fair value of the PSUs as shown in the compensation tables in the year of grant, it is not certain what percentage of the PSUs will vest, if at all. Such percentage is dependent on the Company’s achievement of the targets described above. High Performance Thresholds: The PSUs set forth five key performance targets that are challenging to meet and that are directly tied to the creation of significant shareholder value over the performance period. For the executives to achieve full value of the PSU award, the Company will need to receive two FDA approvals to treat two solid tumor cancers with patient incidences multiples higher than our current US market. For this reason, the unbalanced vesting structure of the PSUs provides that 90% of the award only vests upon achievement of two FDA approvals (40% vests upon achievement of the First FDA Approval and a further 50% vests upon achievement of the Second FDA Approval). Further, if the executives do not achieve these two very critical targets for the Company, they will not achieve the full value of the PSU award. The vesting structure and targets are designed to incentivize the executives to achieve two FDA approvals and TSR Vesting Conditions, which are aligned with the creation of significant shareholder value over the performance period and shareholder interests. Extended Vesting Periods: The PSUs vest only upon achievement of the performance targets. In addition, the PSUs will not vest any earlier than the third anniversary of the grant date, even if a performance target is achieved prior to the third anniversary of the grant date and any outperformance awards cannot vest until the fifth anniversary of the grant date, even if those targets are achieved earlier. The extended vesting period is designed to incentivize focus on the long-term interests of the Company and reward achievement of key performance targets over an extended period of time. The extended vesting periods also serve as a retention mechanism by increasing the incentive for the executives to stay at the Company and not pursue opportunities outside the Company. As of the end of fiscal year 2023, two of the 25% target PSU achievements have occurred: one successful completion of a specified clinical study and one acceptance of a PMA by the FDA. No Additional Equity Awards during the Performance Period: The PSU award was granted in lieu of any future annual equity awards during the performance period. The Committee does not anticipate granting additional equity awards during the performance period. When considering the theoretical value of equity awards that would have been granted to the executives during the performance period, we believe shareholders benefit more from this performance-based program that only pays the executives on achievement of key performance targets, rather than the passage of time (for time-based options and RSUs) or shorter-term performance goals. Service requirement: PSU awards will only vest only if the executive continues to provide service to the Company through the performance period, including the extended vesting period described above. Alignment of Financial Interests with those of Shareholders: The PSUs only vest upon the achievement of the targets described above. These targets are designed to be aligned with the long-term shareholder interests. The PSU awards to Messrs. Doyle and Danziger were intended to incentivize the creation of sustained shareholder value and support the achievement of our most critical long-term objectives. The performance targets were designed to be challenging but achievable with strong management performance. Our Compensation Committee believes that performance-based equity awards, in addition to granting time-based options and time-based RSUs, incentivize and further align the interests of executives with the interests of shareholders.
CEO All Other NEOs
We provide limited executive perquisites to some of our NEOs and limited change-in-control benefits as described further below. We generally provide our executives in the United States, Switzerland and Israel with the same benefits provided to all other employees in the United States, Switzerland and Israel, respectively. Mr. Groenhuysen receives a financial planning allowance pursuant to his employment agreement. In the United States, we sponsor a tax-qualified 401(k) defined contribution plan. Our 401(k) plan, which is generally available to all employees, allows participants to defer amounts of their annual compensation before taxes, up to the maximum amount specified by the U.S. Internal Revenue Code of 1986, as amended (the "Code"). We currently match 50% of the first 6% of a participant’s annual compensation that he or she contributes, up to the maximum permitted by law. In 2023, we did not provide any profit-sharing contributions to our 401(k) plan. In Israel, we generally provide our executives, including NEOs, with severance, pension, disability and education benefits in line with both Israeli law as well as customary compensation practices among technology companies, including medical device companies. In accordance with certain exceptions under Israeli law, Messrs. Danziger and Ben-Arye are entitled to contractual severance benefits rather than the amounts specified by statute. Such contractual arrangements are common for employees in Israel in the technology sector. For Messrs. Danziger and Ben-Arye, we have contractually agreed to adhere to the provisions of the General Approval and to contribute on a monthly basis to a Managers Insurance Policy (bituach menahalim) on his behalf with respect to severance, pension and disability benefits. In addition, we contribute to an advance study fund/professional education fund (keren hishtalmut) for the benefit of Messrs. Danziger and Ben-Arye. The employment agreement for Mr. Danziger also provides that unused vacation days may be accumulated (for two subsequent years) or redeemed under certain limitations. Each executive is also entitled to recuperation pay (d’mey havra’ah) in accordance with the provisions of the applicable law (with the number of days determined based on seniority). Mr. Danziger is also entitled to one month of paid sick days, fully compensated based on his regular base salary, per each year. Unused sick days may be accumulated for use in subsequent years, up to the maximum of six months. For additional details with respect to the amounts contributed to the Managers Insurance Policy and professional education fund, please see the footnotes to the 2023 Summary Compensation Table below. Except as described above, we do not currently sponsor or contribute to any qualified or non-qualified defined benefit plan or any non-qualified defined contribution plan, and we do not currently maintain (or have any outstanding obligation with respect to) any traditional non-qualified deferred compensation plan or other deferred compensation plans.
CEO All Other NEOs
Our Policy on Recoupment of Incentive Compensation (the “Recoupment Policy”) applies to all executive officers (as designated by the Board) and any individual who served as an executive officer in the three year period prior to the date of the event that triggered the Recoupment Policy (each, a “Covered Executive”). The Recoupment Policy requires the Board to recover from a Covered Executive, subject to limited exceptions, an amount of any annual or long-term incentive compensation payment or award made or granted to the Covered Executive during the three year period preceding the filing of our financial statements that we are required to prepare containing an accounting restatement due to the material noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “Restatement”). The amount to be recovered is the amount of such payment exceeded the amount that otherwise would have been paid had it been determined based on the restated amounts. Our Recoupment Policy is intended to comply with final rules adopted by NASDAQ in satisfaction of the requirements of the Dodd-Frank Act. Our employment agreements with our executive officers and the terms of the 2015 Plan contain provisions that automatically incorporate by reference the compensation recovery terms of the Dodd-Frank Act. In addition, going forward and if approved by our shareholders, our new 2024 Plan will subject all awards granted thereunder to the terms of our Recoupment Policy. To the extent the terms of such plans or agreements are inconsistent with any future changes to the applicable rules and listing standards, the requirements of the rules and listing standards will apply. Our Board believes that requiring executive officers to hold significant amounts of our Ordinary Shares strengthens their alignment with the interest of our shareholders and promotes achievement of long-term business objectives. Accordingly, our share ownership guidelines are intended to align more closely the interests of our executive officers with the interests of our shareholders and to continue to promote our commitment to sound corporate governance. Under these guidelines, our executive officers are required to achieve ownership of our Ordinary Shares valued at three times their annual base salary (six times in the case of our CEO and our Executive Chairman) within five years of becoming an executive officer or, in the case of officers serving at the time the guidelines were initially adopted, within five years of the date of adoption of the guidelines. Outstanding but unvested PSUs and unvested share options do not count towards the ownership guidelines. The ownership levels of our executive officers and directors as of April 2, 2024 are set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” below. Executive Officers and directors who are not in compliance with the ownership guidelines are expected to refrain from selling our shares until they come into compliance.
CEO All Other NEOs
During 2023, at the direction of our Compensation Committee, FW Cook, with the assistance of our management, conducted a review of our compensation policies and practices and presented the findings to our Compensation Committee. After consideration of the information presented, our Compensation Committee concluded that our compensation programs are designed with an appropriate balance of risk and reward in relation to our overall business strategy and do not encourage excessive or unnecessary risk-taking behavior. In making this determination, our Compensation Committee considered our pay mix, our base salaries, and the attributes of our incentive and other variable compensation programs, including our annual bonus plan, our equity compensation plans and our sales compensation plans. We also have in place numerous business controls such as quarterly reviews of sales compensation, the Recoupment Policy and other internal business and operational approval processes. Our Compensation Committee believes that the design of our compensation programs as outlined in the "Compensation Discussion and Analysis" places emphasis on long-term incentives and competitive base salaries, while a portion of the total annual compensation is tied to short-term performance in the form of an annual bonus. Our Compensation Committee concluded that the mix and design of the elements of our compensation policies and practices do not motivate imprudent risk-taking. Consequently, we are satisfied that any potential risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on us.
COMPENSATION COMMITTEE
| 2023 Summary Compensation Table |
COMPENSATION COMMITTEE
| Named executive officer and principal position | Fiscal year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option awards ($)(3) | Non-equity incentive plan compensation ($) | All other compensation ($) | Total ($) | | Asaf Danziger (4) Chief Executive Officer | 2023 | 756,093 | 0 | 0 | 0 | 507,742 | 257,191 | 1,521,026 | | | 2022 | 830,649 | 0 | 0 | 579,437 | 584,220 | 284,645 | 2,278,951 | | | 2021 | 876,086 | 0 | 0 | 0 | 0 | 284,150 | 1,160,236 | | Wilhelmus Groenhuysen (5) Chief Operating Officer | 2023 | 615,000 | 0 | 3,333,263 | 1,668,842 | 328,410 | 22,150 | 5,967,665 | | | 2022 | 615,000 | 0 | 3,533,227 | 2,084,406 | 369,000 | 22,649 | 6,624,282 | | | 2021 | 615,000 | 0 | 3,833,245 | 1,914,408 | 0 | 24,308 | 6,386,961 | | Ashley Cordova (6) Chief Financial Officer | 2023 | 525,000 | 0 | 3,666,543 | 1,835,713 | 280,350 | 9,460 | 6,317,066 | | | 2022 | 507,500 | 100,000 | 3,966,624 | 1,942,647 | 315,000 | 10,893 | 6,842,664 | | | 2021 | 477,500 | 0 | 3,333,248 | 1,664,746 | 0 | 8,950 | 5,484,444 | | Pritesh Shah (7) Chief Commercial Officer | 2023 | 500,000 | 0 | 2,933,327 | 1,468,561 | 267,000 | 11,250 | 5,180,138 | | | 2022 | 500,000 | 0 | 3,499,863 | 2,006,171 | 300,000 | 10,599 | 6,316,633 | | | 2021 | 500,000 | 0 | 3,333,248 | 1,664,746 | 0 | 8,900 | 5,506,894 | | Francis Leonard (8) President, CNS Cancers US | 2023 | 475,000 | 0 | 2,866,517 | 1,435,196 | 253,650 | 8,874 | 5,039,237 | | | 2022 | 475,000 | 0 | 3,299,814 | 2,102,893 | 237,500 | 10,599 | 6,125,806 | | Barak Ben-Arye (9) General Counsel | 2023 | 432,835 | 0 | 2,733,205 | 1,368,467 | 203,409 | 125,728 | 4,863,644 |
COMPENSATION COMMITTEE
| 2023 Grants of Plan-Based Awards |
COMPENSATION COMMITTEE
| Outstanding Equity Awards at 2023 Fiscal Year End |
COMPENSATION COMMITTEE
| 2023 Option Exercises and Stock Vested |
COMPENSATION COMMITTEE
| Potential Payments upon Termination or Change in Control |
COMPENSATION COMMITTEE
| Pay Versus Performance |
COMPENSATION COMMITTEE
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Other NEOs (1) | Average Compensation Actually Paid to Other NEOs (2) | Cumulative Total Shareholder Return (3) | Peer Group Cumulative Total Shareholder Return (4) | Net Income (Millions) (5) | Company-Selected Measure: Net Revenue (Millions) (6) | | 2023 | $1,521,026 | $(5,225,762) | $5,473,623 | $(1,202,184) | $18 | $119 | $(207) | $509.338 | | 2022 | $2,278,951 | $2,075,757 | $6,477,346 | $5,788,737 | $87 | $114 | $(93) | $537.840 | | 2021 | $1,179,283 | $(31,518,263) | $5,653,771 | $(12,875,003) | $89 | $126 | $(58) | $535.031 | | 2020 | $8,956,704 | $53,324,965 | $7,398,969 | $44,401,582 | $205 | $126 | $20 | $494.366 |
COMPENSATION COMMITTEE
| 2023 PAY RATIO |