NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 2022
________________________
Dear Sol-Gel Technologies Ltd. Shareholders:
We cordially invite you to attend an Annual Meeting of Shareholders (the “Meeting”) of Sol-Gel Technologies Ltd. (the “Company”) to be held at 4:00 p.m. (Israel
time) on Thursday, May 19, 2022, at our offices at 7 Golda Meir St., Weizmann Science Park, Ness Ziona, Israel.
The Meeting is being called for the following purposes:
| (1) |
To appoint Kesselman & Kesselman, certified public accountants in Israel and a member of PricewaterhouseCoopers International Limited, as the Company’s independent auditors for the year 2022 and for an additional period until the
following annual general meeting; and to inform the shareholders of the aggregate compensation paid to the auditors for the year ended December 31, 2021;
|
| (2) |
To approve an amendment to the Company's
Amended and Restated Articles of Association to provide that all Company directors will be elected or re-elected every year rather than every three
years, except in the case of external directors whose terms of office are governed by the Israeli Companies Law;
|
| (3) |
To approve the re-election of Mr. Alon Seri-Levy, Mr. Moshe Arkin, Mr. Itai Arkin Ms. Hani Lerman, Mr. Shmuel Ben Zvi, Ms. Yaffa Krindel-Sieradzki and Mr. Jonathan B. Siegel to the board of directors of the Company (the "Board of Directors"), each for an additional one-year term until the annual general meeting to be held in 2023;
|
| (4) |
To approve the annual cash bonus plan for 2022 for Dr. Alon Seri-Levy, the Company's chief executive officer; and
|
| (5) |
To approve an amended Compensation Policy for a period of three years.
|
In addition, shareholders at the Meeting will have an opportunity to review and ask questions regarding the financial statements of the Company for the fiscal year ended
December 31, 2021.
The Company is currently unaware of any other matters that may be raised at the Meeting. Should any other matters be properly raised at the Meeting, the persons designated as
proxies shall vote according to their own judgment on those matters.
Our Board of Directors unanimously recommends that you vote in favor of each of the above proposals, which are described in the attached Proxy Statement.
Shareholders of record at the close of business on Wednesday April 13, 2022 are entitled to
notice of and to vote at the Meeting.
Whether or not you plan to attend the Meeting, it is important that your shares be represented and voted at the Meeting. Accordingly, after reading the Notice of Annual Meeting
of Shareholders and attached Proxy Statement, please mark, date, sign and mail the enclosed proxy or voting instruction form as promptly as possible. If voting by mail, the proxy must be received by Broadridge Financial Solutions, Inc. or at our
registered office at least 48 hours (or such shorter period as the Chairman of the Meeting may determine) prior to the appointed time of the Meeting to be validly included in the tally of ordinary shares voted at the Meeting. An earlier deadline
may apply to receipt of your voting instruction form, if indicated therein. Detailed proxy voting instructions are provided both in the Proxy Statement and on the enclosed proxy card and voting instruction form. Proxies may also be executed
electronically via www.proxyvote.com by utilizing the control number sent to you. Shareholders who hold their shares in street name may be able to utilize the control number sent to them to submit their voting instruction to their brokers,
trustees or nominees by other means, if so indicated on their voting instruction form. An electronic copy of the enclosed proxy materials will also be available for viewing at http://ir.sol-gel.com/.
Sol-Gel Technologies Ltd.
SOL-GEL TECHNOLOGIES LTD.
7 Golda Meir St., Weizmann Science Park, Ness Ziona, 7403650, Israel
+972-8-931-3433
__________________________
PROXY STATEMENT
__________________________
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is being furnished in connection with the solicitation of proxies on behalf of the Board of Directors (the “Board”) of Sol-Gel Technologies Ltd. (“Sol-Gel”
or the “Company”) to be voted at an Annual Meeting of Shareholders (the “Meeting”) and at any adjournment thereof, pursuant to the accompanying Notice of Annual Meeting of Shareholders. The Meeting will be held at 4:00 p.m. (Israel
time) on Thursday, May 19, 2022, at our offices at 7 Golda Meir St., Weizmann Science Park, Ness Ziona, Israel.
This Proxy Statement, the attached Notice of Annual Meeting of Shareholders and the enclosed proxy card or voting instruction card are being made available on or about April
15, 2022 to holders of Sol-Gel ordinary shares.
You are entitled to receive notice of, and to vote at, the Meeting, if you hold ordinary shares as of the close of business on Wednesday, April 13, 2022, the record date for
the Meeting. You can vote your shares by attending the Meeting or by following the instructions under “How You Can Vote” below. Our Board urges you to vote your shares so that they will be counted at the Meeting or at any postponements or
adjournments of the Meeting.
Agenda Items
The Meeting is being called for the following purposes:
| (1) |
To appoint Kesselman & Kesselman, certified public accountants in Israel and a member of PricewaterhouseCoopers International Limited, as the Company’s independent auditors for the year 2022 and for an additional period until the
following annual general meeting; and to inform the shareholders of the aggregate compensation paid to the auditors for the year ended December 31, 2021;
|
| (2) |
To approve an amendment to the Company's Amended and Restated Articles of Association to provide that all Company
directors will be elected or re-elected every year rather than every three years, except in the case of external directors whose terms of office are governed
by the Israeli Companies Law;
|
| (3) |
To approve the re-election of Mr. Alon Seri-Levy, Mr. Moshe Arkin, Mr. Itai Arkin, Ms. Hani Lerman, Mr. Shmuel Ben Zvi, Ms. Yaffa Krindel-Sieradzki and Mr. Jonathan B. Siegel to the Board, each for an additional three-year term until
the annual general meeting to be held in 2023;
|
| (4) |
To approve the annual cash bonus plan for 2022 for Dr. Alon Seri-Levy, the Company's chief executive officer; and
|
| (5) |
To approve an amended Compensation Policy for a period of three years.
|
In addition, shareholders at the Meeting will have an opportunity to review and ask questions regarding the financial statements of the Company for the fiscal year ended
December 31, 2021.
The Company is currently unaware of any other matters that will come before the Meeting. Should any other matters be properly presented at the Meeting, the persons
designated as proxies shall vote according to their own judgment on those matters.
Board Recommendation
Our Board unanimously recommends that you vote “FOR” each of
the above proposals.
Quorum
On Wednesday, April 13, 2022, we had 23,126,804 ordinary shares issued and outstanding. Each ordinary share outstanding as of the close of business on the record date,
Wednesday, April 13, 2022, is entitled to one vote upon each of the proposals to be presented at the Meeting. Under our Articles of Association, the Meeting will be properly convened if at least two shareholders attend the Meeting in person or
sign and return proxies, provided that they hold shares representing thirty three and one-third (33 1/3%) or more of our voting power. If a quorum is not present within half an hour from the time scheduled for the Meeting, the Meeting will be
adjourned for one week (to the same day, time and place), or to a day, time and place determined by the Board of Directors (which may be earlier or later than said time). At such adjourned meeting the presence of any number of shareholders in
person or by proxy (regardless of the voting power represented by their shares) will constitute a quorum for the business which the original Meeting was called.
Vote Required for Approval of the Proposals
The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person or by proxy and voting thereon (excluding abstentions) is necessary
for the approval of each of the Proposals 1 and 3. Apart from for the purpose of determining a quorum, broker non-votes will not be counted as present and are not entitled to vote.
In addition, the approval of Proposal 4 and 5 requires that either of the following two voting requirements be met as part of the approval by an ordinary majority of shares
present and voting thereon:
| ● |
approval by a majority of the votes of shareholders who are not controlling shareholders and who do not have a personal interest in the approval of the proposal, excluding abstentions; or
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| ● |
the total number of shares held by non-controlling shareholders or anyone on their behalf who do not have a personal interest in the proposal (as described in the previous bullet point) that is voted against the proposal does not
exceed two percent (2%) of the aggregate voting rights in our Company.
|
The approval of Proposal 2 requires the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the voting power represented at the Meeting in person or by
proxy and voting thereon, excluding abstentions.
For purposes of Proposals 4 and 5, a “controlling shareholder” is any shareholder that has the ability to direct the Company’s activities (other than by means of being a
director or other office holder of the Company). A person is presumed to be a controlling shareholder if the person holds or controls, alone or together with others, one-half or more of any one of the “means of control” of the Company. “Means of
control” is defined as any one of the following: (i) the right to vote at a general meeting of the Company or (ii) the right to appoint directors of the Company or its chief executive officer.
A “personal interest” of a shareholder, for purposes of each of the proposals, is (1) a shareholder’s personal interest in the approval of an act or a transaction of the
Company, including (i) the personal interest of any of his or her relatives (which includes for these purposes a shareholder’s spouse, siblings, parents, grandparents, descendants, and spouse’s descendants, siblings, and parents, and the spouse
of any of the foregoing); (ii) a personal interest of a corporation in which a shareholder or any of his/her aforementioned relatives serves as a director or the chief executive officer, owns at least 5% of its issued share capital or its voting
rights or has the right to appoint a director or chief executive officer; and (iii) a personal interest of an individual voting via a power of attorney given by a third party (even if the empowering shareholder has no personal interest), and the
vote of an attorney-in-fact shall be considered a personal interest vote if the empowering shareholder has a personal interest, and all with no regard as to whether the attorney-in-fact has voting discretion or not, but (2) excludes a personal
interest arising solely from the fact of holding shares in the Company. A personal interest excludes a personal interest that does not derive from relationship with a controlling shareholder.
A controlling shareholder and a shareholder that has a personal interest are qualified to participate in the vote on each of the proposals; however, the vote of such
shareholders may not be counted towards the majority requirement described in the first bullet point above and will not count towards the 2% threshold described in the second bullet point above.
A shareholder must inform our Company before the vote (or if voting by proxy, indicate on the proxy card) whether or not such shareholder is a
controlling shareholder or has a personal interest, and failure to do so disqualifies the shareholder from participating in the vote on Proposal 4 and 5. If you believe that you, or a related party of
yours, is a controlling shareholder or possesses a personal interest and you wish to participate in the vote on this proposal, you should indicate the existence of a personal interest on the enclosed proxy card or on the voting instruction form
(if applicable) and should furthermore contact our Corporate Controller, Eyal Ben-Or, at +972-8-931-3437 or Eyal.Ben-Or@sol-gel.com, who will advise you as to how to submit your vote for this proposal. If you hold your shares in “street name” (i.e., shares that are held through a bank, broker or other nominee) and believe that you are a controlling shareholder or possess a personal interest in the
approval of this proposal, you may also contact the representative managing your account, who could then contact our Corporate Controller on your behalf.
How You Can Vote
You can vote your shares by attending the Meeting or by completing and signing a proxy card or voting instruction form. If you are a shareholder of record, that is, your
shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, these proxy materials are being sent directly to you. The form of proxy card that has been sent to you can be completed, signed and
returned in the envelope that was enclosed with it, or executed electronically via www.proxyvote.com by utilizing the control number sent to you. This provides the primary means for authorizing the voting of your ordinary shares without
attending the Meeting in person. You may change your mind and cancel your proxy card by sending us written notice, by signing and returning a proxy card with a later date, or by voting in person or by proxy at the Meeting. We will not be able to
count a proxy card unless we receive it at our principal executive offices at 7 Golda Meir St., Weizmann Science Park, Ness Ziona, 7403650, Israel, or Broadridge Financial Solutions, Inc. receives it in the enclosed envelope, not later than 6:59
a.m. Israel time on Thursday, May 19, 2022 (11:59 p.m. Eastern Time on Wednesday, May 18, 2022) or such shorter period prior to the Meeting as the Chairman of the Meeting may determine.
If your ordinary shares are held in a brokerage account or by a trustee or nominee, you are considered to be the beneficial owner of shares held in “street name,” and these
proxy materials are being forwarded to you together with a voting instruction form by the broker, trustee or nominee or an agent hired by the broker, trustee or nominee. Please follow the instructions provided by your broker, trustee or nominee
to direct them how to vote your shares. Shareholders who hold their shares in street name may be able to utilize the control number appearing on their voting instruction form to submit their voting instruction to their brokers, trustees or
nominees by other means, if so indicated on their voting instruction form. All votes should be submitted by 6:59 a.m. Israel time on Thursday, May 19, 2022 (11:59 p.m. Eastern Time on Wednesday, May 18, 2022), or such other deadline as may be
indicated on the voting instruction form, in order to be counted towards the tally of ordinary shares voted at the Meeting (unless the Chairman of the Meeting extends that deadline). Alternatively, if you wish to attend the Meeting and vote in
person, you must obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the Meeting.
If you provide specific instructions (by marking a box) with regard to the proposals, your shares will be voted as you instruct. If you sign and return your proxy card
without giving specific instructions with respect to a particular proposal, your shares may be voted in favor of the proposals in accordance with the recommendation of the Board. However, if you are a beneficial owner of shares and do not specify
how you want to vote on your voting instruction form, your broker will generally not be permitted to instruct the depositary to cast a vote with respect to that proposal (commonly referred to as a “broker non-vote”). In that circumstance, the
shares held by you will be included in determining the presence of a quorum at the Meeting, but are not considered “present” for the purpose of voting on the relevant proposal. Such shares have no impact on the outcome of the voting on such
proposal. If your shares are held of record by a bank, broker, or other nominee, we urge you to give instructions to your bank, broker, or other nominee as to how your shares should be voted so that you thereby participate in the voting on these
important matters. In all cases, you must remember to indicate in writing and/or contact the Company if you are a controlling shareholder or have a personal interest in the approval of Proposals 4 and 5. If you sign and return your proxy card or
voting instruction form, the persons named as proxies will vote in their discretion on any other matters that properly come before the Meeting.
Who Can Vote
You are entitled to receive notice of the Meeting and to vote at the Meeting if you are a shareholder of record at the close of business on Wednesday, April 13, 2022. You are
also entitled to notice of the Meeting and to vote at the Meeting if you held ordinary shares through a bank, broker or other nominee that is one of our shareholders of record at the close of business on Wednesday, April 13, 2022, or which appear
in the participant listing of a securities depository on that date.
Revocation of a Proxy
Shareholders may revoke the authority granted by their execution of proxies at any time before the effective exercise thereof by filing with us a written notice of revocation
or duly executed proxy bearing a later date, or by voting in person at the Meeting. Unless otherwise indicated on the form of proxy, shares represented by any proxy in the enclosed form, if the proxy is properly executed and received by the
Company at least 48 hours (or such shorter period as the Chairman of the Meeting may determine) prior to the Meeting, will be voted in favor of the proposal and any other matters that may be presented to the Meeting, as described above.
Solicitation of Proxies
Proxies are being distributed to shareholders on or about Friday, April 15, 2022 . Certain officers, directors, employees, and agents of the Company, none of whom will receive
additional compensation therefor, may solicit proxies by telephone, email, or other personal contact. We will bear the cost for the solicitation of the proxies, including postage, printing, and handling, and will reimburse the reasonable expenses
of brokerage firms and others for forwarding material to beneficial owners of shares..
Voting Results
The final voting results will be tallied by the Company’s Corporate Controller based on the information provided by the Company’s transfer agent or otherwise, and the overall
results of the Meeting will be published following the Meeting in a report on Form 6-K that will be furnished to the U.S. Securities and Exchange Commission (the “SEC”).
Availability of Proxy Materials
Copies of the proxy card, the notice of the Meeting and this Proxy Statement are available at the “Investor Relations” portion of our Company’s website, http://ir.sol-gel.com/.
The contents of that website are not a part of this Proxy Statement.
PROPOSAL NO. 1
APPOINTMENT OF AUDITORS
Under the Israeli Companies Law (the “Companies Law”) and the Company’s Amended and Restated Articles of Association (the “Articles”), the shareholders of the
Company are authorized to appoint the Company’s independent auditors. Under the Articles, the Board of Directors or a committee of the Board of Directors, if such determination was delegated to a committee, is authorized to determine the
independent auditors’ remuneration. In addition, the Listing Rules of The NASDAQ Stock Market (“Nasdaq”) require that the Company’s audit committee approve the re-appointment and remuneration of the independent auditors.
At the Meeting, shareholders will be asked to approve the re-appointment of Kesselman & Kesselman, certified public accountants in Israel and a member of
PricewaterhouseCoopers International Limited, as the Company's auditors for the year ending December 31, 2022 and for an additional period until the next annual general meeting. Kesselman & Kesselman has no relationship with the Company or
with any affiliate of the Company except to provide audit services and tax consulting services.
Information on fees paid to the Company's independent auditors may be found in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission.
It is proposed that the following resolution be adopted at the Meeting:
“RESOLVED, that Kesselman & Kesselman be, and hereby is, appointed as the independent auditors of the Company for the year 2022
and for an additional period until the next annual general meeting.”
The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person or by proxy and voting thereon (excluding abstentions) is required
to adopt the proposed resolution.
The Board of Directors and audit committee recommend that the shareholders vote “FOR” the proposed resolution.
PROPOSAL NO. 2
APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF ASSOCIATION
Article 56 of the Articles currently classifies the Company directors into three classes, with the directors of each class serving for staggered three-year terms. Accordingly,
only one class of directors currently stands for election at each of the Company’s annual meeting of shareholders, such that shareholders vote on and elect one-third of the Board each year. For the reasons described below, the Board believes that
declassifying the Board is in the best interests of the Company and its shareholders. Accordingly, the Board has approved, and recommends that our shareholders approve, amendments to our Articles to declassify the Board and provide for the annual
election of directors other than for our external directors whose terms of office are governed by the Israeli Companies Law.
The proposed amendments to the Articles 56 to 58 Articles are attached to this proxy statement as Appendix A (marked to show changes from the current Articles).
Historically, the Company has viewed the classified structure of the Board as benefiting shareholders by promoting continuity and stability in the management of the business
and affairs of the Company and encouraging directors to take a long-term perspective. Although these may continue to be important benefits, the Board has considered the fact that classified boards may be viewed as having the effect of reducing
the accountability of directors to shareholders. The Board also recognizes the benefit of providing shareholders an annual opportunity to express their satisfaction or dissatisfaction with the actions of the members of the Board of Directors. The
Board of Directors believes it is important for it to maintain shareholders confidence by demonstrating that it is responsive and accountable to shareholders and committed to strong corporate governance.
If the amendment is adopted, at each annual meeting of shareholders, except in the case of external directors whose terms of office are governed by the Israeli Companies Law,
each director shall be elected for a term expiring at the next succeeding annual meeting of shareholders and until such director’s successor shall have been elected.
It is proposed that the following resolution be adopted at the Meeting:
“RESOLVED, to approve an amendment to the Company's Articles of Association to provide that all Company directors will be elected or re-elected every year rather than every three years, other than external directors whose term of office is governed by the Israeli Companies Law.”
The affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power represented at the Meeting in person or by proxy and voting
thereon, excluding abstentions, is required to adopt the proposed resolution.
The Board of Directors recommends that the shareholders vote “FOR” the proposed resolution.
PROPOSAL NO. 3
RE-ELECTION OF MR. ALON SERI-LEVY MR. MOSHE ARKIN, MR. ITAI ARKIN
MS. HANI LERMAN, MR. SHMUEL BEN ZVI, MS. YAFFA KRINDEL-SIERADZKI AND
MR. JONATHAN B. SIEGEL AS DIRECTORS
Currently, the Company's non-external directors are divided into three classes with staggered three-year terms. Each class consists, as nearly equal in number as practicable,
of one-third of the total number of directors constituting the entire Board (other than the external directors). The term of one class of directors expires at each annual general meeting, at which each of the successors elected to replace the
directors of the class whose term expired at such annual general meeting shall be elected to hold office until the third annual general meeting next succeeding his or her election and until his or her respective successor has been elected and
qualified.
The Board of Directors has nominated each of Mr. Alon Seri-Levy, Mr. Moshe Arkin, Mr. Itai Arkin, Ms. Hani Lerman, Mr. Shmuel Ben Zvi, Ms. Yaffa Krindel-Sieradzki and Mr.
Jonathan B. Siegal to be re-elected as a director for an additional one-year term until the annual general meeting to be held in 2023. This proposal assumes the approval of the amendment to the Articles to provide that all Company directors will
be elected or re-elected every year rather than every three years as proposed in Proposal 2.
The Company is not aware of any reason why any of the nominees, if elected, should not be able to serve as a director.
Each of Mr. Alon Seri-Levy, Mr. Moshe Arkin, Mr. Itai Arkin, Ms. Hani Lerman, Mr. Shmuel Ben Zvi, Ms. Yaffa Krindel-Sieradzki and Mr. Jonathan B. Siegal has attested to the
Board of Directors and to the Company that he or she meets all the requirements in connection with the election of directors under the Companies Law, per the statement substantially in the form attached hereto as Appendix B.
The following information with respect to the nominees is based upon the information furnished by the nominees:
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Name
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Age
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Position
|
|
Alon Seri-Levy
|
60
|
Chief Executive Officer and Director
|
|
Moshe Arkin
|
69
|
Executive Chairman of the Board of Directors
|
|
Itai Arkin
|
33
|
Director
|
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Hani Lerman
|
49
|
Director
|
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Shmuel Ben Zvi
|
62
|
Independent Director
|
|
Yaffa Krindel-Sieradzki
|
67
|
Independent Director
|
|
Jonathan B. Siegal
|
49
|
Independent Director
|
Dr. Alon Seri-Levy co-founded Sol-Gel and has served as our chief executive officer since our inception in 1997
and as a member of our board of directors until 2014. Prior to founding Sol-Gel, Dr. Seri-Levy established the computer-aided drug design department at Peptor Ltd., an Israeli research and development company that specialized in the development
of peptide-based drug products. Dr. Seri-Levy holds a Ph.D. in Chemistry (summa cum laude) from The Hebrew University of Jerusalem, Israel, and conducted his post-doctoral studies at Oxford University, United Kingdom. Dr. Seri-Levy was
appointed to our board of directors immediately following the pricing of our initial public offering.
Mr. Moshe Arkin has served as chairman of our board of directors since 2014. in May 2022 Mr. Moshe Arkin's role
has been expanded to Executive Chairman to reflect Mr. Arkin’s expanded role at the Company. Mr. Moshe Arkin currently sits on the board of directors of several private pharmaceutical and medical device companies including Exalenz Bioscience
Ltd., a developer of advanced systems for gastrointestinal and liver disorders since 2006, SoniVie Ltd., a company developing systems for the treatment of pulmonary arterial hypertension, Digma Medical, a company developing systems to treat
insulin resistance present in type 2 diabetes and other metabolic syndrome diseases, and Valcare Medical, a company developing heart valve devices. From 2005 to 2008, Mr. Moshe Arkin served as the head of generics at Perrigo Company and from
2005 until 2011 as the vice chairman of its board of directors. Prior to joining us, Mr. Moshe Arkin served as a director of cCAM Biotherapeutics Ltd., a company focused on the discovery and development of novel immunotherapies to treat cancer
from 2012 until its acquisition in 2015 by Merck & Co., Inc. Mr. Moshe Arkin served as chairman of Agis Industries Ltd. from its inception in 1972 until its acquisition by Perrigo Company in 2005. Mr. Moshe Arkin holds a B.A. in psychology
from the Tel Aviv University, Israel.
Mr. Itai Arkin became a member of our board of directors immediately following the pricing of our initial public
offering. Mr. Itai Arkin currently serves as Investment Manager at Arkin Holdings Ltd.. Mr. Itai Arkin holds a B.A. in business administration (cum laude) from Interdisciplinary Center, Herzliya, Israel, and an MBA (cum laude) from Tel Aviv
University. Mr. Itai Arkin is the son of Mr. Moshe Arkin, the chairman of our board of directors and sole beneficial owner of Arkin Dermatology, our controlling shareholder.
Ms. Hani Lerman became a member of our board of directors immediately following pricing of our initial public
offering. Ms. Lerman has served as chief financial officer at Arkin Holdings since 2015. From 2010 until 2014, Ms. Lerman served as chief financial officer of Sansa Security (f/k/a Discretix Technologies), and from 2006 until 2010, she served
as chief financial officer of Storwize, which was acquired by IBM in 2010. She served as a board member of Exalenz Bioscience and of Sphera Global Healthcare. She holds a Master's degree in business administration with a major in finance from
Tel-Aviv University, Israel, and a B.A. in economics and accounting from Tel-Aviv University, Israel.
Dr. Shmuel (Muli) Ben Zvi became a member of our board of directors immediately following pricing of our initial
public offering. Dr. Ben Zvi is currently a board member and member of the credit, technology, resources and strategy committees at Bank Leumi, and a board member and member of the audit committee and compensation committee of VBL Therapeutics.
From 2004 to 2014, Dr. Ben Zvi held various managerial positions at Teva Pharmaceuticals Industries Ltd., including Vice President of Finance and Vice President of Strategy. From 2000 to 2004, Dr. Ben Zvi was the financial advisor to the Chief
of General Staff of the Israel Defense Forces and head of the Defense Ministry budget department. Dr. Ben Zvi holds a Ph.D. in economics from Tel-Aviv University, Israel and participated in the Harvard Business School Advanced Management
Program (AMP).
Ms. Yaffa Krindel-Sieradzki became a member of our
board of directors on February 23, 2018. Ms. Krindel-Sieradzki currently serves on the board of Itamar Medical Ltd., a medical device company publicly traded on both Nasdaq and the Tel Aviv Stock Exchange ("TASE"), BGN Technologies Ltd.,
the technology transfer company of Ben Gurion University, and three private medical device companies, as follows: EZbra Advanced Wound Care Ltd., Theranica Bio Electronics Ltd. and Trisol Medical Ltd. Ms. Krindel-Sieradzki has served on the
board of directors of numerous companies publicly traded on Nasdaq. From 1997 until 2007, Ms. Krindel-Sieradzki served as Partner and Managing Partner of Star Ventures, a private venture capital fund headquartered in Munich, Germany. Before
joining Star Ventures, Ms. Krindel served from 1992 to 1996 as CFO and VP Finance of Lannet Data Communications Ltd., an Israeli telecommunications company publicly traded on Nasdaq which is now part of Avaya Inc. From 1993 to 1997, she served
as CFO and later as director of BreezeCOM Ltd., an Israeli telecommunications company which traded on Nasdaq and TASE. Ms. Krindel-Sieradzki has earned an M.B.A. from Tel Aviv University and a B.A. in Economics and Japanese Studies from the
Hebrew University in Jerusalem, both with honors.
Jonathan B. Siegel became a member of our board of directors on September 13, 2018. Mr. Siegel is the founder and
CEO of JBS Healthcare Ventures since formation in 2017. In June 2021, he also assumed the role of CEO and Chairman of the board of OPY Acquisition Corp. I, a public Nasdaq-listed company. Previously, he was a partner and healthcare sector head
at Kingdon Capital Management from 2011 until 2017. Prior to joining Kingdon, Mr. Siegel was a healthcare portfolio manager at SAC Capital Advisors from 2005 until 2011; an associate director of pharmaceutical and specialty pharmaceutical
research at Bear, Stearns & Co.; a pharmaceuticals research associate at Dresdner Kleinwort Wasserstein; and a consultant to the Life Sciences Division of Computer Sciences Corporation. Mr. Siegel has worked as a research associate at the
Novartis Center for Immunobiology at Harvard Medical School and as a research assistant at Tufts University School of Medicine. He is also a director at Jaguar Health, Inc., a Nasdaq listed company, and has served on the board of advisors of
Vitalis LLC, a private pharmaceutical company, since March 2019 and as a director of Napo Therapeutics S.p.A, the majority owned Italian subsidiary of Napo Pharmaceuticals and Jaguar Health, Inc. since November 2021. Mr. Siegel received a BS in
Psychology from Tufts University in 1995 and an MBA from Columbia Business School in 1999.
It is proposed that the following resolution be adopted at the Meeting:
“RESOLVED, that Mr. Alon Seri-Levy, Mr. Moshe Arkin, Mr. Itai Arkin Ms. Hani Lerman, Mr. Shmuel Ben Zvi, Ms. Yaffa Krindel-Sieradzki and Mr. Jonathan B. Siegal be, and each of them hereby is, elected to hold office as a director of the Company for an additional one-year term until the annual general
meeting to be held in 2023.”
The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person or by proxy and voting thereon (excluding abstentions) is required
to adopt the proposed resolution.
The Board of Directors recommends that the shareholders vote “FOR” the proposed resolution.
PROPOSAL NO. 4
APPROVAL OF ANNUAL CASH BONUS PLAN FOR 2022 FOR DR. ALON SERI-LEVY
OUR CHIEF EXECUTIVE OFFICER
Annual cash bonuses are intended to promote the Company’s work plan and business strategy by rewarding officers for the achievement of the Company’s business and financial
goals through teamwork and collaboration.
Consistent with the Company’s compensation policy and subject to the limitations set forth therein, the Company may determine with respect to each year, target and maximum
annual cash bonuses as well as the related objectives and related weights, including applicable thresholds and the formula for calculating the annual cash bonuses to be granted to the Company’s chief executive officer. The Compensation Committee
and the Board have approved, and are recommending that the shareholders approve, the following annual cash bonus plan for 2022 for Dr. Alon Seri-Levy, the Company’s chief executive officer, which shall consist of two parts, a target cash bonus
(the "Target Cash Bonus") and a special cash bonus (the "Special Cash Bonus").
Eligibility
Dr. Seri-Levy would be eligible to receive the Target Cash Bonus for the year 2022, without the need for further shareholder approval, subject to the following: (i) continuous
employment of Dr. Seri-Levy at the Company through December 31, 2022; (ii) achievement of the Company’s 2022 objectives described below; (iii) achievement of the Dr. Seri-Levy’s 2022 Personal Objectives described below; (iv) all other terms of
the bonus plan as set forth below; and (v) the limitations of the compensation policy and applicable law.
Dr. Seri-Levy would be eligible to receive the Special Cash Bonus for the year 2022, without the need for further shareholder approval, subject to the following: (i) continuous
employment of Dr. Seri-Levy at the Company through December 31, 2022; (ii) achievement of all of the Company objectives described below; (iii) achievement of the special objectives described below; (iv) other terms of the bonus plan as set forth
below; and (v) the limitations of the compensation policy and applicable law.
Company and Special Objectives
The Compensation Committee and the Board determined certain licensing commercialization and production and quantifiable performance indicators as Dr. Seri-Levy’s personal goals
for 2022 (the “2022 Personal Objectives”) and certain clinical, commercialization, production and regulatory quantifiable performance indictors as the Company’s goals for 2022 (the "Company's 2022 Objectives"). In addition, the
Compensation Committee and the Board determined additional licensing performance indicators as Dr. Seri-Levy’s special goals for 2022 (the "Special 2022 Objectives") for which Dr. Seri-Levy will be entitled to a Special Cash Bonus.
Target Cash Bonus and Special Cash Bonus
The Target Cash Bonus for Dr. Seri-Levy, which is the cash bonus amount that Dr. Seri-Levy will be entitled to receive upon achievement of all of Dr. Seri-Levy’s 2022 Personal
Objectives and all of the Company's 2022 Objectives, will be six monthly salaries calculated as described below. Dr. Seri-Levy's monthly salary is NIS 90,000. In addition to the Target Cash Bonus, Dr. Seri-Levy will also be entitled to a Special
Cash Bonus of an additional six monthly salaries if the Special 2022 Objectives are achieved in full, with a lower amount if the Special 2022 Objectives are not achieved in full.
Dr. Seri Levy's Target Cash bonus shall be calculated as follows: (i) 40% of the Target Cash Bonus shall be paid upon achievement of Dr. Seri-Levy’s 2022 Personal Objectives,
each such objective being allocated a weight, with a payout for achievement of Dr. Seri-Levy’s 2022 Personal Objectives to be paid pro rata based on the weighted percentage of objectives achieved, (ii) 40% of the Target Cash Bonus shall be paid
upon achievement of the Company 2022 Objectives, each such objective being allocated a weight, with a payout for achievement of the Company's 2022 Objectives to be paid pro rata based on the weighted percentage of objectives achieved; and (iii)
an additional 20% of the Target Cash Bonus shall be paid to Dr. Seri-Levy if the closing share price reaches certain thresholds during 2022.
It is proposed that the following resolutions be adopted at the Meeting:
“RESOLVED, to approve the annual cash bonus plan for 2022 for Dr. Seri-Levy, the Company’s chief executive officer, as
described in the Proxy Statement.”
The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person or by proxy and voting thereon (excluding abstentions) is required
to adopt the proposed resolution. In addition, the approval of the proposal requires that either of the following two voting requirements be met:
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approval by a majority of the votes of shareholders who are not controlling shareholders and who do not have a personal interest in the approval of the proposal that is voted at the Meeting, excluding abstentions; or
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the total number of shares held by non-controlling shareholders or anyone on their behalf who do not have a personal interest in the proposal (as described in the previous bullet point) that is voted against the proposal does not
exceed two percent (2%) of the aggregate voting rights in our Company.
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The Board of Directors and the compensation committee recommend that the shareholders vote “FOR” the proposed resolution.
AMENDED COMPENSATION POLICY
Under the Companies Law, the terms of employment and service of officers and directors of public companies, such as the Company, must be determined in accordance with a
directors and officers compensation policy. The compensation policy must be reviewed and approved by (i) the compensation committee, (ii) the board of directors and (iii) the shareholders of the Company (except in limited circumstances set
forth in the Companies Law) every three years, and in the case of a company that initially offers shares to the public, five years after such company became publicly traded and thereafter every three years. The shareholders of the Company
approved the adoption of the Company’s current Compensation Policy (the “Compensation Policy”) prior to the initial public offering of the Company.
Following the recommendation of the Compensation Committee, the Board of Directors approved amendments to the Compensation Policy and recommended its approval by the
shareholders in the form attached hereto as Appendix C (marked to show changes from the current Compensation Policy) (the “Amended Compensation Policy”). The general description of the proposed amendments to the Compensation Policy
described below is qualified in its entirety by reference to the full text of the proposed Amended Compensation Policy attached hereto.
The Amended Compensation Policy principles were designed, inter alia, to grant proper, fair and well-considered compensation to officers and directors, in alignment with the
Company's long-term best interests and overall organizational strategy. Part of the rationale is that the Amended Compensation Policy should encourage a sense of identification with the Company and its objectives on the part of its officers and
directors. Additionally, the Amended Compensation Policy intends, inter alia, to allow the Company to preserve and recruit senior executives with specific professional knowledge and unique expertise and with the ability to lead the Company to
business success and to face the challenges confronted by the Company, to grant rational, appropriate and fair compensation to officers and directors, taking into consideration their duties and areas of responsibilities, giving focus on the
contribution of the officers and directors to achieve the Company objectives and performance maximization.
The Compensation Committee and the Board have approved the following main changes to the Compensation Policy:
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The current Compensation Policy does not provide a maximum base salary for the executive officers. The Amended Compensation Policy provides for the following maximum base salaries: (i) for a Company CEO resident in Israel, a maximum
monthly base salary not exceeding NIS 120,000; (ii) for Company executive officers (other than Board of Directors member or CEO) resident in Israel, a monthly base salary not exceeding NIS 90,000; (iii) for a Company CEO resident in the
U.S. or another location outside of Israel, an annual base salary not exceeding USD 600,000; and (iv) for Company executive officers (other than Board of Directors member or CEO) resident in the U.S. or another location outside of
Israel, an annual base salary not exceeding USD 400,000, in each case subject to increases in the consumer price index in the relevant jurisdiction in which the executive resides.
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In determining these amounts, the Compensation Committee and Board took into account, among others, the Company’s size and industry, the international nature of its business
and that as a Nasdaq listed company, the Company needs to provide competitive compensation to attract qualified executives, particularly outside of Israel. In connection with the establishment of the maximum base salary in the Amended
Compensation Policy, the Company engaged the services of a compensation consultant and conducted a peer survey.
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Providing for a cap on the aggregate amount of special bonuses and any discretionary bonus paid in any year to any executive officer of twelve (12) monthly salaries. The Compensation Committee and Board determined that the existing
separate cap for signing bonus should be kept as is due to the need at times to pay a signing bonus to encourage a talented executive to join the Company from another employer and at times to compensation him/her for any bonus such
executive would forfeit from his/her existing employer to join the Company.
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Increasing the minimum vesting period of equity awards granted to executive officers from two years to three years.
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Providing that the first tranche of all equity awards granted to executives may not vest and become exercisable prior to the first anniversary of the date of grant.
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Providing that the determination of the fair value of a grant shall be made on the date of approval by the Board rather than on the date of grant. For equity awards subject to shareholder approval, the Company is currently not able
to determine the fair value of such equity awards in advance of the shareholder meeting to approve the grant, which makes it difficult for the Board to determine in advance if a grant of equity complies with the Compensation Policy. The
proposed change is intended to address this by enabling the Board to determine fair value at the time it approves the equity grants.
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Providing for a cap on the adjustment period/retirement bonus and advance notice period to twelve (12) monthly salaries.
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It is proposed that the following resolutions be adopted at the Meeting:
“RESOLVED that, the Amended Compensation Policy for the Company's directors and officers, in the form attached hereto as Appendix C,
for a term of three years from approval by this General Meeting, be, and is hereby approved.”
The affirmative vote of the holders of a majority of the voting power represented at the Meeting in person or by proxy and voting thereon (excluding abstentions) is required
to adopt the proposed resolution. In addition, the approval of the proposal requires that either of the following two voting requirements be met:
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approval by a majority of the votes of shareholders who are not controlling shareholders and who do not have a personal interest in the approval of the proposal that is voted at the Meeting, excluding abstentions; or
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the total number of shares held by non-controlling shareholders or anyone on their behalf who do not have a personal interest in the proposal (as described in the previous bullet point) that is voted against the proposal does not
exceed two percent (2%) of the aggregate voting rights in our Company.
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The Board and the compensation committee recommend that the shareholders vote “FOR” the proposed resolution.
OTHER MATTERS
Our Board does not intend to bring any matters before the Meeting other than those specifically set forth in the Notice of Annual Meeting of Shareholders and knows of no
matters to be brought before the Meeting by others. If any other matters properly come before the Meeting, it is the intention of the persons named in the accompanying proxy to vote such proxy in accordance with their judgment and based on the
recommendation of the Board.
ADDITIONAL INFORMATION
The Company’s annual report on Form 20-F/A, filed with the SEC on April 7, 2022, is available on the SEC’s website at www.sec.gov as well as under the Investor
Relations section of the Company’s website at http://ir.sol-gel.com.
The Company is subject to the information reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) applicable to foreign private issuers. The
Company fulfills these requirements by filing reports with the SEC. The Company’s SEC filings are also available to the public on the SEC’s website at www.sec.gov. As a foreign private issuer, the Company is exempt from the rules under the
Exchange Act related to the furnishing and content of proxy statements. The circulation of this Proxy Statement should not be taken as an admission that the Company is subject to those proxy rules.
Ness Ziona, Israel
April 14, 2022
