As filed with the Securities and Exchange Commission on February 2, 2022

Registration No.         

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM S-8

 

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

 

 

 

NEUROSENSE THERAPEUTICS LTD.

(Exact name of Registrant as specified in its charter)

 

 

 

State of Israel   Not applicable
(State or other jurisdiction of
incorporation or organization) 		  (I.R.S. Employer
Identification Number)
     

11 Hamenofim St., Building B

Herzliya, Israel 4672562

  4676670
(Address of Principal Executive Offices)   (Zip Code)

 

NeuroSense Therapeutics Ltd. 2018 Employee Share Option Plan

(Full Title of the Plan)

 

Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
(800) 221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

 

Brian K. Rosenzweig
Sarah C. Griffiths
Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018
(212) 841-1000

 

Perry Wildes
Nathan Hyman

Gross & Co.

One Azrieli Center

Tel Aviv 6701101, Israel

Tel: +972 (3) 607-4444

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
    Emerging growth company ☒

  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

 

 

 

PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

The documents containing the information specified by Part I, Items 1 and 2 of Form S-8 have been or will be delivered to participants in the plans covered by this Registration Statement, as specified in Rule 428(b)(1) promulgated by the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”) and the instructions to Form S-8. In accordance with the rules and regulations of the Commission and the instructions to Form S-8, such documents are not being filed with the Commission either as part of the Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act. These documents and the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Part II of this Registration Statement, taken together, constitute a Prospectus that meets the requirements of Section 10(a) of the Securities Act.

 

PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

In this registration statement, NeuroSense Therapeutics Ltd. is sometimes referred to as “Registrant,” “we,” “us” or “our.”

 

Item 3. Incorporation of Documents by Reference.

 

The Securities and Exchange Commission (“SEC”) allows us to incorporate by reference the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this registration statement, and later information filed with the SEC will update and supersede this information. We hereby incorporate by reference into this registration statement the following documents previously filed with the SEC:

 

(a) The Registrant’s prospectus dated December 8, 2021 filed with the SEC pursuant to Rule 424(b) under the Securities Act, as amended (Registration No. 333-260338);

 

(b) The Registrant’s Reports on Form 6-K filed with the SEC on January 4, 2022; January 26, 2022; January 27, 2022; January 31, 2022; and

 

(c) The description of the Registrant’s ordinary shares contained in the Registrant’s registration statement on Form 8-A (File No. 001-41084), filed by the Registrant with the SEC under Section 12(b) of the Securities and Exchange Act, as amended, (the “Exchange Act”) on November 18, 2021 including any amendments or reports filed for the purpose of updating such description.

 

All documents that the Registrant subsequently files pursuant to Sections 13 or 15(d) of the Exchange Act prior to the filing of a post-effective amendment to the registration statement that indicates that all of the ordinary shares offered have been sold or that deregisters all of such shares then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of the filing of such documents.

 

Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such earlier statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

 

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Item 4. Description of Securities.

 

Not applicable.

 

Item 5. Interests of Named Experts and Counsel.

 

Not applicable.

 

Item 6. Indemnification of Directors and Officers.

 

Under the Israeli Companies Law 1999 (the “Companies Law”), a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our amended and restated articles of association include such a provision. A company may not exculpate in advance a director from liability arising from a breach of his or her duty of care in connection with a prohibited dividend or distribution to shareholders.

 

As permitted under the Companies Law, our amended and restated articles of association provide that we may indemnify an office holder in respect of the following liabilities, payments and expenses incurred for acts performed by him or her as an office holder, either in advance of an event or following an event:

 

● a monetary liability incurred by or imposed on the office holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision approved by a competent court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria;

 

● reasonable litigation expenses, including reasonable attorneys’ fees, which were incurred by the office holder as a result of an investigation or proceeding filed against the office holder by an authority authorized to conduct such investigation or proceeding, provided that such investigation or proceeding was either (i) concluded without the filing of an indictment against such office holder and without the imposition on him of any monetary obligation in lieu of a criminal proceeding, (ii) concluded without the filing of an indictment against the office holder but with the imposition of a monetary obligation on the office holder in lieu of criminal proceedings for an offense that does not require proof of criminal intent or (iii) in connection with a monetary sanction;

 

● reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or which were imposed on the office holder by a court (i) in a proceeding instituted against him or her by the company, on its behalf, or by a third party, (ii) in connection with criminal indictment of which the office holder was acquitted or (iii) in a criminal indictment for which the office holder was convicted of an offense that does not require proof of criminal intent;

 

● expenses he or she incurs as a result of administrative proceedings that may be instituted against him or her under Israeli securities laws, if applicable, and payments made to injured persons under specific circumstances thereunder; and

 

● any other matter in respect of which it is permitted or will be permitted under applicable law to indemnify an office holder in the company.

 

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As permitted under the Companies Law, our amended and restated articles of association provide that we may insure an office holder against the following liabilities incurred for acts performed by him or her as an office holder:

 

● a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;

 

● a breach of duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder;

 

● a monetary liability imposed on the office holder in favor of a third party;

 

● expenses he or she incurs as a result of administrative proceedings that may be instituted against him or her under the Israeli securities laws if applicable, and payments made to injured persons under specific circumstances thereunder; and

 

● any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an office holder in the company.

 

Under the Companies Law, a company may not indemnify, exculpate or insure an office holder against any of the following:

 

● a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

 

● a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;

 

● an act or omission committed with intent to derive illegal personal benefit; or

 

● a fine or forfeit levied against the office holder.

 

Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors and, with respect to directors or controlling shareholders, their relatives and third parties in which controlling shareholders have a personal interest, also by the shareholders.

 

Our amended and restated articles of association permit us to exculpate, indemnify and insure our office holders to the fullest extent permitted or to be permitted by law. Our office holders are currently covered by a directors’ and officers’ liability insurance policy. As of the date of this prospectus, no claims for directors’ and officers’ liability insurance have been filed under this policy and we are not aware of any pending or threatened litigation or proceeding involving any of our office holders, including our directors, in which indemnification is sought.

 

We have entered into agreements with each of our current office holders exculpating them from a breach of their duty of care to us to the fullest extent permitted by law, subject to limited exceptions, and undertaking to indemnify them to the fullest extent permitted by law to the extent that these liabilities are not covered by insurance. This indemnification is limited, with respect to any monetary liability imposed in favor of a third party, to events determined as foreseeable by the board of directors based on our activities. The maximum aggregate amount of indemnification that we may pay to our office holders based on such indemnification agreement is the greater of (i) an amount equal to 25% of our shareholders’ equity on a consolidated basis, based on our most recent financial statements made publicly available before the date on which the indemnity payment is made, and (ii) $25 million. Such indemnification amounts are in addition to any insurance amounts. These indemnification agreements will supersede all previous letters of indemnification that we have provided to him or her in the past, if any. However, in the opinion of the SEC, indemnification of office holders for liabilities arising under the Securities Act is against public policy and therefore unenforceable.

 

Item 7. Exemption from Registration Claimed.

 

The Registrant has previously issued options under the 2018 Plan to directors, officers, employees and/or consultants in reliance on the exemption under Rule 701 promulgated under the Securities Act, as transactions by an issuer not involving a public offering and under a written compensatory benefit plan.

 

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Item 8. Exhibits.

 

Exhibit Number

 

Exuhibit Description

 

Form

 

Date

 

Number

 

Filed Herewith

3.1   Amended and Restated Articles of Association of Registrant   F-1/A   12/6/2021   3.1    
4.1   Registrant Specimen Certificate for Ordinary Shares   F-1/A   12/6/2021   4.4    
5.1   Opinion of Gross & Co.               X
10.1   NeuroSense Therapeutics Ltd. 2018 Employee Share Option Plan         X
23.1   Consent of Somekh Chaikin, Member Firm of KPMG International, independent registered public accounting firm               X
23.2   Consent of Gross & Co. (included in Exhibit 5.1)               X
24.1   Power of Attorney (included on the signature page of the Registration Statement)               X
107   Filing Fee Table               X

 

Item 9. Undertakings.

 

(a) The Registrant hereby undertakes:

 

(1) To file, during any period in which offers, or sales are being made, a post-effective amendment to this registration statement:

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(b) The Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Tel Aviv, Israel, on this 2nd day of February 2022.

 

  NEUROSENSE THERAPEUTICS LTD.
     
  By: /s/ Alon Ben-Noon
  Name: Alon Ben-Noon
  Title: Chief Executive Officer

 

POWER OF ATTORNEY

 

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint each of Alon Ben-Noon and Or Eisenberg, with full power of substitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act for him or her in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file this registration statement, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully, to all intents and purposes, as they or he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the date indicated.

 

NAME  

POSITION

  DATE
         
/s/ Alon Ben-Noon   Chief Executive Officer and Director   February 2, 2022
Alon Ben-Noon   (Principal Executive Officer)  
         
/s/ Or Eisenberg   Chief Financial Officer   February 2, 2022
Or Eisenberg   (Principal Financial Officer and
Principal Accounting Officer) 		 
       
/s/ Mark Leuchtenberger   Chair of the Board of Directors   February 2, 2022
Mark Leuchtenberger    
         
/s/ Cary Claiborne   Director   February 2, 2022
Cary Claiborne    
         
/s/ Christine Pellizzari   Director   February 2, 2022
Christine Pellizzari    
         
/s/ Caren Deadorf   Director   February 2, 2022
Caren Deadorf    
         
/s/ Revital Mandil-Levin   Director   February 2, 2022
Revital Mandil-Levin    

  

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AUTHORIZED REPRESENTATIVE

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of NeuroSense Therapeutics Ltd. has signed this registration statement on February 2, 2022.

 

  Cogency Global Inc.
   
  By: /s/ Colleen A. De Vries
    Name: Colleen A. De Vries
  Title: Sr. Vice President, Authorized U.S. Representative – Cogency Global

 

 

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Exhibit 5.1

 

 

Tel-Aviv, February 2, 2022

 

NeuroSense Therapeutics Ltd
11 Hamenofim St., Building B

Herzliya 4672562,

Israel

 

Re:   Registration on Form S-8

 

Ladies and Gentlemen:

 

We have acted as the Israeli counsel to NeuroSense Therapeutics Ltd, a company organized under the laws of the State of Israel (the “Company”), in connection with its filing of a registration statement on Form S-8 on February 2, 2022 (the “Registration Statement”), under the Securities Act of 1933, as amended, relating to the registration of 3,000,000 of the Company’s ordinary shares, no par value per share (the “Plan Shares”), reserved for future issuance under the 2018 Share Option Plan (the “Plan”).

 

In our capacity as counsel to the Company, we have examined originals or copies, satisfactory to us, of the Company’s (i) Amended and Restated Articles of Association, (ii) the Plan, and (iii) resolutions of the Company’s board of directors. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity with the original documents of all documents submitted to us as copies or facsimiles. As to any facts material to such opinion, to the extent that we did not independently establish relevant facts, we have relied on certificates of public officials and certificates of officers or other representatives of the Company. We are admitted to practice law in the State of Israel and the opinion expressed herein is expressly limited to the laws of the State of Israel.

 

On the basis of the foregoing, we are of the opinion that the 3,000,000 Plan Shares being registered pursuant to the Registration Statement, when issued and paid for in accordance with the Plans, pursuant to agreements with respect to the Plans, and, as the case may be, pursuant to the terms of the awards that may be granted under the Plans, will be validly issued, fully paid and non-assessable.

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement.

 

 

Very truly yours,

 

 

/s/ Gross & Co.

 

 

Exhibit 10.1

 

 

 

NEUROSENSE THERAPEUTICS LTD.

 

2018 SHARE OPTION PLAN

 

AMENDED BY THE BOARD OF DIRECTORS

 

ON OCTOBER 31, 2021

 

 

 

 

 

 

NEUROSENSE THERAPEUTICS LTD.

 

2018 SHARE OPTION PLAN

 

1. Purpose. The purpose of this 2018 Share Option Plan (the “Plan”) is to advance the interests of the Company and its shareholders by attracting and retaining the best available personnel for positions of substantial responsibility, providing additional incentive to employees, officers, directors, advisors and consultants and promoting a close identity of interests between those individuals and the Company and/or an Affiliate (as defined below). The provisions specified hereunder apply only to persons who are subject to taxation by the State of Israel with respect to their Options (as defined below).

 

2. Definitions

 

2.1 Defined Terms.      Initially capitalized terms, as used in this Plan, shall have the meaning ascribed thereto as set forth below:

 

“102 Participant” means, an Israeli tax resident who is an employee or a director of the Company or an Israeli Affiliate, on behalf of whom an Option is granted under Section 102.
   
 “Administrator” means the Board, or a committee to which the Board shall have delegated power to act on its behalf with respect to the Plan.  The Administrator, if it is a committee, shall consist of such number of members (but not less than two (2)) as may be determined by the Board.
   

“Affiliate(s)”

 

means a present or future company that either (i) Controls the Company, (ii) is Controlled by the Company; or (iii) is Controlled by the same person or entity that Controls the Company.
   
“Applicable Law” means all laws applicable to the grant of Options pursuant to this Plan, including but not limited to the requirements under tax laws, social security laws, security laws, companies laws, any stock exchange or quotation system on which the Shares are listed or quoted, the applicable law in the country or jurisdiction of any such system, and the applicable law of any other country or jurisdiction where Options are granted under the Plan.
   
“Articles” means the Articles of Association of the Company, as may be amended from time to time.
   
“Board” means the board of directors of the Company.
   
“Capital Gains Track Through a Trustee” means the Company’s choice of the capital gains track of taxation for share allocation to employees under Section 102 through a trustee.
   

“Cause”

means, when used in connection with the termination of a Participant’s employment with, or services to the Company or an Affiliate, and forming the basis of such termination: (a) the definition ascribed to Cause in the individual employment agreement or services agreement between the Company and/or its Affiliate and the Participant; or (b) if no such definition exists, then any of the following, including but not limited to: dishonesty toward the Company or Affiliate, insubordination, substantial malfeasance or nonfeasance of duty, unauthorized disclosure of confidential information and conduct substantially prejudicial to the business of the Company or Affiliate; or any substantial breach by the Participant of: (A) his or her employment or service agreement with the Company or an Affiliate; or (B) any other obligations towards the Company or an Affiliate.

 

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“Commencement Date” means the date of commencement of the vesting schedule with respect to a Grant of Options which, unless otherwise determined by the Administrator, shall be the date on which such Options shall be granted.
   
“Company” means Neurosense Therapeutics Ltd., a company incorporated under the laws of the State of Israel.
   
“Consultant” means an Israeli resident, who serves as a consultant of the Company or an Israeli resident Affiliate and is not entitled to receive Options under Section 102, on behalf of whom an Option is granted under Section 3(i).
   
“Control” or “Controlled” shall have the meaning ascribed thereto in Section 102.
   
“Date of Grant” shall have the meaning set forth in Section 6.2 of this Plan.
   
“Director” means a member of the Board.
   
“Disability” means total and permanent physical or mental impairment or sickness of a Participant, making it impossible for the Participant to continue such Participant’s employment with or service to the Company or Affiliate.
   
“Earned Income Track” means the Company’s choice of the work income course of taxation for share allocation to employees under Section 102 through a trustee.
   
“Election” shall have the meaning set forth in Section 11.1 of this Plan.
   
“Employee” shall have the meaning set forth in Section 102.
   
“Exercise Notice” shall have the meaning set forth in Section 7.4(a) of this Plan.
   
“Exercise Price” Memeans the price determined by the Administrator in accordance with Section 7.1 below which is to be paid to the Company in order to exercise a Granted Option and convert such Option into an Underlying Share.
   
“Fair Market Value” means, as of any date, the value of a Share determined as follows: (i) if the Company’s shares are listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, Nasdaq Global Market or the Nasdaq Capital Market of the Nasdaq Stock Market, the Fair Market Value shall be the closing sales price of such shares (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; without derogating from the above and solely for the purpose of determining the tax liability pursuant to Section 102 (and in particular Section 102(b)(3)), if on the date of grant the Company’s shares are listed on any established stock exchange or a national market system or if the Company’s shares will be registered for trading within ninety days following the date of grant under the Section 102 Capital Gains Track Through a Trustee, the Fair Market Value of a Share on its date of grant shall be determined in accordance with the average value of the Company’s shares during the thirty trading days immediately preceding the date of grantor during the thirty (30) trading days immediately following the date of registration for trading (if the Company’s shares will be listed within ninety days following the date of grant), as the case may be; or (ii) if the Company’s shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the high bid and low asked prices for the Company’s shares on the last market trading day prior to the day of determination; or (iii) in the absence of an established market for the Company’s shares, the Fair Market Value shall be determined in good faith by the Administrator (including in accordance with an independent third party valuation of the Company which may be obtained by the Administrator).

 

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“Grant Letter” means a written agreement between the Company to a Participant evidencing the terms and conditions of an individual grant of Options. The Grant Letter shall specify among others: (i) the Tax Provision under which the Option is granted; (ii) the Tax Track that the Company has elected according to Section 11 of the Plan (if applicable); (iii) the Exercise Price; (iv) the number of Options granted to the Participant; (v) the Date of Grant; and (vi) the vesting schedule.
   
“Grant of Options” or “Granted Options” means the grant of Options by the Company to a Participant pursuant to a Grant Letter.
   
“Holding Period” means with respect to Options granted under Section 102, the minimum period in which the Options granted to a Participant or, upon exercise thereof, the Underlying Shares, are to be held by the Trustee on behalf of the Participant, in accordance with Section 102, and pursuant to the Tax Track which the Company elected.
   
“IPO” means the initial public offering of shares of the Company and the listing of such shares for trading on any recognized stock exchange or over-the-counter or computerized securities trading system.
   
“ITA” means the Israeli Tax Authority.
   
“Merger Transaction” or “Merger” means any of the following but excluding any Re-organization or Spin-off Transaction: (a) a sale of all or substantially all of the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries; or (b) a sale of all or substantially all of the shares of the share capital of the Company whether by a single transaction or a series of related transactions which occur either over a period of 12 months or within the scope of the same acquisition agreement; or (c) a merger, consolidation or like transaction of the Company with or into another corporation in which the Company is not the surviving entity, including a reverse triangular merger but excluding a merger which falls within the definition of Re-organization.
   
“Option” means an option to purchase one Share of the Company.
   
“Non-Qualified Participant” means a person who is not qualified to receive Options under the provisions of Section 102, on behalf of whom an Option is granted under Section 3(i).
   
“Participant” means 102 Participant, or a Non-Qualified Participant, or a Consultant.
   
“Plan” or “Option Plan” means this 2018 Share Option Plan, as may be amended from time to time.
   

“Re-organization”

 

means, any re-domestication of the Company, share flip, creation of a holding company for the Company which will hold substantially all of the shares of the Company or any other transaction involving the Company in which the ordinary shares of the Company outstanding immediately prior to such transaction continue to represent, or are converted into or exchanged for shares that represent, immediately following such transaction, at least a majority, by voting power, of the share capital of the surviving, acquiring or resulting corporation and in which there is no material change to the interests held by the Shareholders prior to such transaction and thereafter.
   
“Retirement” means the termination of a Participant’s employment as a result of his or her reaching the earlier of (i) the age of retirement as defined by the Applicable Law; or (ii) the age of retirement specified in the Participant’s employment agreement.
   
“Section 102” means Section 102 of the Tax Ordinance.

 

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“Section 102 Rules” means the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003.
   
“Section 3(i)” means section 3(i) of the Tax Ordinance and the applicable rules thereto or under applicable regulations.
   
“Share” means, ordinary share(s) of the Company, having a no par value.
   

“Shareholders”

means, the shareholders of the Company.

   

“Spin-off Transaction”

 

means, any transaction in which assets of the Company are transferred or sold to a company or corporate entity in which the Shareholders hold equal stakes, pro-rata to their ownership of the Company.
   
“Tax Ordinance” means the Israeli Income Tax Ordinance [New Version], 1961, as amended, and any regulations, rules, orders or procedures promulgated thereunder.
   
“Tax Provision” means, with respect to the Grant of Options, the provisions of one of the three Tax Tracks in Section 102, or the provisions of Section 3(i).
   
“Tax Track” means one of the three tax tracks described under Section 102, specifically: (1) the Capital Gains Track Through a Trustee; (2) Earned Income Track; or (3) the Income Tax Track Without a Trustee.
   
“Term of the Options” means, with respect to granted but unexercised Options, the time period set forth in Section 9 below.
   
“Trust Agreement” means the agreement/s between the Company and the Trustee regarding the Options granted under this Plan to Section 102 Partipants and the underlying Shares to be held in trust, as in effect from time to time.
   
“Trustee” means a trustee appointed by the Company and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Tax Ordinance, to hold in trust, the Granted Options and the Underlying Shares issued upon exercise of such Options, on behalf of Participants. The Trustee may be replaced from time to time subject to the provisions of Section 102.  
   
“Underlying Shares” means Shares issued or to be issued upon exercise of the Options granted in accordance with the Plan.

 

2.2 General. Without derogating from the meanings ascribed to the capitalized terms above, all singular references in this Plan shall include the plural and vice versa, and reference to one gender shall include the other, unless otherwise required by the context.

 

3. Shares Available for Options. The total number of Underlying Shares reserved for issuance under the Plan and any modification thereof, shall be:

 

(a) 1,140,000 Shares, plus

 

(b) an annual increase to be added as of the first day of the Company’s fiscal year, beginning in 2022 and occurring each year thereafter through 2032, equal to the 4% of the total number of Shares issued and outstanding on a fully-diluted basis as of the end of the Company’s immediately preceding fiscal year (or such lesser number of shares, including no shares, determined by the Board in its sole discretion).

 

Such number of Shares shall be subject to adjustment as required for the implementation of the provisions of the Plan, in accordance with Section 4 below. In the event that Options are expired or forfeited or otherwise terminated in accordance with the provisions of the Plan, such expired or terminated Options shall become available for future grants under the Plan.

 

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4. Adjustments

 

4.1 Changes in Capitalization. Subject to any required action by the Shareholders, the number of Underlying Shares covered by each outstanding Option, and the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan, and the per share exercise price of each such Option, shall be proportionately and equitably adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, combination, reclassification, the payment of a stock dividend on the Shares or any other increase or decrease in the number of such Shares effected without receipt of consideration by the Company without changing the aggregate exercise price, provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration. Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Option. The Administrator may, if it so determines in the exercise of its sole discretion, also make provision for proportionately adjusting the number or class of securities covered by any Option, as well as the price to be paid therefor, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of its outstanding Shares, and in the event of the Company being consolidated with or merged into any other corporation.

 

4.2 Merger Transaction. In the event of a Merger Transaction, any and all outstanding and unexercised unvested Options will be cancelled for no consideration, unless determined otherwise by the Administrator. The Administrator at its sole and absolute discretion may decide: (i) if and how the unvested Options, as the case may be, shall be canceled, exchanged, assumed, replaced, repurchased or accelerated; (ii) if and how vested Options (including Options with respect to which the vesting period has been accelerated) shall be exercised, exchanged, assumed, replaced and/or sold by the Trustee or the Company (as the case may be) on behalf of the Participants, including determining that all unexercised vested Options shall be cancelled for no consideration upon a Merger Transaction; (iii) how Underlying Shares issued upon exercise of the Options granted under of the trust tracks and held by the Trustee on behalf of 102 Participants shall be replaced and/or sold by the Trustee on behalf of these Participant; and (iv) how any treatment of Options and underlying Shares may be made subject to any payment or escrow arrangement, or any other arrangement determined within the scope of the Merger Transaction in relation to Options and underlying Shares of the Company.

 

In the case of assumption and/or substitution of Options, appropriate adjustments shall be made so as to reflect such action and all other terms and conditions of the Grant Letter shall remain unchanged, including but not limited to the vesting schedule, all subject to the determination of the Board, which its determination shall be at its sole discretion and final. The grant of any substitutes for the Options to Participants further to a Merger Transaction, as provided in this section, shall be considered to be in full compliance with the terms of this Plan. The value of the exchanged Options pursuant to this section shall be determined in good faith solely by the Board, based on the Fair Market Value, and its decision shall be final and binding on all the Participants.

 

For the purposes of this section, the mechanism for determining the assumption or exchange as aforementioned shall be agreed upon between the Board and the successor company.

 

Without derogating from the above, in the event of a Merger Transaction the Board shall be entitled, at its sole discretion, to require the Participants to exercise all vested Options within a set time period and sell all of their Shares on the same terms and conditions as applicable to the other shareholders selling their Company’s Shares as part of the Merger Transaction. Each Participant acknowledges and agrees that the Board shall be entitled, subject to any applicable law, to authorize any one of its members to sign any agreement and any share transfer deeds in customary form with respect to the Shares held by such Participant and that such agreement and share transfer deed, as applicable, shall bind the Participant.

 

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Despite the aforementioned and for the avoidance of any doubt, if and when the method of treatment of Options within the scope of a Merger Transaction, as provided above, will in the sole opinion of the Board prevent the consummation of the Merger Transaction, or materially risk the consummation of the Merger Transaction, the Board may determine different treatment for different Options held by Participants such that not all Options will be treated equally within the scope of the Merger Transaction.

 

4.3 Fraction of Shares. In the event that the Company will be required to issue to a Participant a fraction of a Share pursuant to this Section 4, the Company will not issue fraction of a Share and the number of Shares shall be rounded down to the closest whole number of Shares.

 

4.4 Calculation. For the purposes of this section, the Company’s calculation will be final, and the Participant shall have no claims or demands against the Company or anyone on its behalf.

 

4.5 Re-Organization. In the event of a Re-Organization the Shares underlying the Options subject to the Plan shall be exchanged or converted into Shares of the Company or successor company in accordance with the exchange effectuated in relation to the Shares of the Company, and the Exercise Price and quantity of shares shall be adjusted in accordance with the terms of the Re-organization. The adjustments required thereby shall be determined in good faith solely by the Board.

 

4.6 Spin-Off Transaction. In the event of a Spin-Off Transaction, the Board may determine that the holders of Options shall be entitled to receive equity in the new company formed as a result of the Spin-Off Transaction, in accordance with equity granted to the ordinary Shareholders within the Spin-Off Transaction, taking into account the terms of the Options, including the vesting schedule and Exercise Price. The determination regarding the Participant’s entitlement within the scope of a Spin-Off Transaction shall be in the sole and absolute discretion of the Board.

 

5. Administration of the Plan

 

5.1 Power. Subject to the Applicable Law, the Articles and any resolution to the contrary by the Board, the Administrator is authorized, at its sole and absolute discretion, to exercise all powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan (subject to the approval of the Board, if such approval is required by the Applicable Law) including, without limitation:

 

(A) to determine: (i) the Participants in the Plan, the number of Options for each Participant’s benefit and the Exercise Price; (ii) the time or times at which Options shall be granted; (iii) whether, to what extent, and under what circumstances an Option may be settled, canceled, forfeited, exchanged, or surrendered; (iv) any terms and conditions in addition to those specified in the Plan under which an Option may be granted; (v) any measures, and to take any actions, as deemed necessary or advisable for the administration and implementation of the Plan; (vi) the terms and conditions under which a Participant may elect to receive Ordinary Shares upon the exercise of the Option or in exchange for the Underlying Shares; (vii) subject to Applicable Law, to make an Election and (viii) to appoint a Trustee; and

 

(B) to interpret the provisions of the Plan and to take all actions resulting therefrom including without limitation: (i) subject to Section 7 below, to accelerate the date on which Granted Option under the Plan becomes exercisable; (ii) to waive or amend Plan provisions relating to exercise of Options, including exercise of Options after termination of employment, for any reason; and (iii) to amend any of the terms of the Plan, or any prior determinations of the Administrator.

 

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5.2 Limitations. Notwithstanding the provisions of Section 5.1 above, no interpretations, determinations or actions of the Administrator shall contradict the provisions of Applicable Law, and no waiver or amendment with respect to the Plan shall have a material adverse affect on any Participant’s rights in connection with any Granted Option under the Plan without receiving the consent of such Participant.

 

6. Grant of Options

 

6.1 Conditions for Granting Options. Options may be granted at any time after the fulfillment of all of the following conditions: (i) the Plan has been approved by the necessary corporate bodies of the Company; (ii) thirty (30) days after a request for approval of the Plan has been filed for approval with the ITA or any longer period, as pursuant to the requirements of the Tax Ordinance; (iii) the Grant has been approved by the necessary corporate bodies of the Company; and (iv) all other approvals, consents or requirements necessary by Applicable Law have been received or met.

 

6.2 Date of grant. The date on which Options shall be deemed granted under the Plan shall be the date on which the Company’s Board approved the grant or the date specified as the date of grant in the Grant Letter, if specified (the “Date of Grant”).

 

6.3 Eligibility for Options. The Administrator may grant Options to any Employee, officer, Director, or Consultant of the Company and its Affiliates.

 

6.4 Grant Letter. Any grant of Options to a Participant shall be made in a form of a Grant Letter and shall include a copy of the Plan. The receipt by a Participant of such Grant Letter shall be deemed as consent by such Participant that the Option is subject to all the terms and conditions of the Grant Letter and the Plan.

 

6.5 Material Breach. In an event of a material breach by a Participant of the terms of this Plan or the Grant Letter provided to the Participant, or the applicable engagement agreement with such Participant, and without derogating from any of the remedies available to the Company under any Applicable Law, the Company may, at its sole discretion, after sending a written notice to such Participant, forfeit the right of the Participant to some or all the Options granted to such Participant.

 

7. Exercise of Options and Sale of Shares

 

7.1 Exercise Price; Purchase Price. The Exercise Price per Underlying Share deliverable upon the exercise of an Option shall be determined by the Administrator. The Exercise Price shall be set forth in the respective Grant Letter.

 

7.2 Vesting Schedule. All Options granted on a certain date may be subjected to continued employment with or service to the Company or Affiliate by the Participant, become vested and exercisable in accordance with the vesting schedule as shall be determined by the Administrator for each Participant and detailed in the respective Grant Letter.

 

7.3 minimum Exercise. Unless otherwise determined by the Administrator, no exercise of Options by any Participant shall be for a quantity of less than 10% of the Granted Options. An Option may not be exercised for fractional shares. The exercise of a portion of the Granted Options shall not cause the expiration, termination or cancellation of the remaining unexercised Options.

 

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7.4 Manner of Exercise. An Option may be exercised by and upon the fulfillment of the following prerequisite terms and conditions:

 

(A) Exercise Notice- The signing by the Participant, and delivery to both the Company (at its principal office) and the Trustee (if the Options are held by a Trustee), of an exercise notice form as prescribed by the Administrator, with such details including but not limited to: (i) the identity of the Participant; (ii) the number of Options to be exercised; and (iii) the Exercise Price to be paid (the “Exercise Notice”).

 

(B) Exercise Price- The payment by the Participant to the Company, in such manner as shall be determined by the Administrator, of the Exercise Price with respect to all the Options exercised, as set forth in the Exercise Notice.

 

(C) Issuance of Underlying Shares- Upon the delivery of a duly signed Exercise Notice and the payment to the Company of the Exercise Price with respect to all the Options specified therein, the Company shall issue the Underlying Shares to the Trustee (according to the applicable Holding Period) or to the Participant, as the case may be.

 

(D) Expenses- All costs and expenses including broker fees and bank commissions, derived from the exercise of Options or Underlying Shares, shall be borne solely by the Participant.

 

7.5 Exercise Restrictions. Notwithstanding anything to the contrary herein, in the event the Participant initiates any legal proceedings to be maintained or instituted against the Company or its Representatives or participates in any manner in any legal proceedings against the Company or its respective Representatives at any time, the Participant’s right to exercise any unexercised Options granted to such Participant, whether vested or not on such date, shall cease as of such date and the Options shall thereupon expire. For purposes of this Section only, the term “Representatives” shall mean the respective past, present and future officers, directors, employees, consultants, holders of equity securities, Affiliates, successors and assigns.

 

8. Waiver of Option Rights. At any time prior to the expiration of any unexercised Granted Option, a Participant may waive his rights to such Option by a written notice to the Company’s principal office. Such notice shall specify the number of Granted Options, which the Participant waives, and shall be signed by the Participant. Upon receipt by the Company of a notice of waiver of such rights, such Options shall expire and shall become available for future Grants under the Plan.

 

9. Term of the Options. Unless earlier terminated pursuant to the provisions of this Plan, all granted but unexercised Options shall expire and cease to be exercisable at 5:00 p.m. Israel time on the 10th anniversary of the Commencement Date of such Options.

 

10. Termination of Employment

 

10.1 Termination of Employment. If a Participant ceases to be an employee, director, officer or Consultant of the Company or Affiliate for any reason (“Termination of Employment”) other than by reason of death, Retirement, Disability or Cause, then any vested but unexercised Options on the date of Termination of Employment (as shall be determined by the Company or Affiliate, at its sole discretion) granted on the Participant’s behalf (“Exercisable Options”) may be exercised, if not previously expired, on or prior to the earlier of: (a) 90 days after the date of Termination of Employment; or (b) the end of the Term of the Options. All other Granted Options for the benefit of Participant shall expire upon the date of Termination of Employment.

 

10.2 Termination for Cause. In the event of Termination of Employment of a Participant for Cause, then: (A) the Participant’s right to exercise any unexercised Granted Options, whether vested or not on the date of Termination of Employment, shall cease as of such date of Termination of Employment, and the Options shall thereupon expire, and (B) any unvested Shares shall terminate and expire on the day the Participant has been notified of his/her dismissal. Pending a determination of whether a Participant’s conduct, activities or circumstances give rise to Cause, the Administrator shall have the authority to suspend the exercise, payment, delivery or settlement of all or any portion of such Participant’s outstanding Awards pending any investigation of the matter. If subsequent to the Participant’s Termination of Employment, but prior to the exercise of Options granted to such Participant, the Administrator determines that either prior or subsequent to the Participant’s Termination of Employment, the Participant engaged in conduct which would constitute Cause, then the Participant’s right to exercise the Options granted to such Participant shall immediately cease upon such determination and the Options shall thereupon expire. The determination by the Administrator as to the occurrence of Cause shall be final and conclusive for all purposes of this Plan.

 

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10.3 Termination by Reason of Death, Retirement, or Disability

 

(A) Death- If Termination of Employment is by reason of death of the Participant, than his/her estate, personal representative or beneficiaries may exercise the Participant’s Options, to the extent it was vested within the sixty (60) days period following the Participant’s death, at any time but not later than the earlier of: (i) the one (1) year anniversary of Participant’s death; or (ii) the end of the Term of the Options. All other Options granted for the benefit of a Participant and which have not vested within such 60-days period shall expire upon the date of death.

 

(B) Disability and Retirement- If Termination of Employment is by reason of Retirement or Disability of the Participant, the Participant may exercise any portion of the Options which have vested within the ninety (90) days period following the date of Retirement or Disability, at any time but not later than the earlier of: (i) the one (1) year anniversary of the date of Retirement or Disability, as the case may be; or (ii) the end of the Term of the Options. All other options for the benefit of a Participant and which have not vested within such 90 days period shall expire upon the date of Retirement or Disability, as applicable.

 

10.4 Exceptions. In special circumstances pertaining to the Termination of Employment of a certain Participant, the Administrator may at its sole discretion decide to extend any of the periods stated above in Sections 10.1-10.3.

 

10.5 Transfer of Employment or Service. Subject to the receipt of appropriate approvals from the ITA, if applicable, a Participant’s right to Options granted to him/her under this Plan shall not be terminated, expire or forfeited solely as a result of the fact that the Participant’s employment or service as an employee, officer or director changes from the Company to an Affiliate or vice versa. Any and all tax consequence of such a transfer, if any, shall be solely borne by the Participant.

 

11. Options and Tax Provisions. All Options shall be granted under the Plan in accordance with one of the following Tax Provisions:

 

(A) The Company may grant Options to 102 Participant in accordance with the provisions of Section 102 and the Section 102 Rules; and

 

(B) The Company may Grant Options to Non-Qualified Participant in accordance with the provisions of Section 3(i).

 

11.1 Tax Provision Selection. The Company shall elect under which Tax Provision each Option is granted at its sole discretion and in accordance with any Applicable Law (the “Election”). The Company shall notify each Participant in the Grant Letter, under which Tax Provision the Options and/or Shares are granted and, if applicable, under which Tax Track, each Option is granted.

 

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11.2 Section 102 Trustee Tax Tracks.

 

(a) If the Company elects to grant Options to 102 Participants through: (i) the Capital Gains Track Through a Trustee; or (ii) the Earned Income Track, then, in accordance with the requirements of Section 102, the Company shall appoint a Trustee who will hold in trust at least for the Holding period on behalf of each 102 Participant the granted Options and the Underlying Shares issued upon exercise of such Options.

 

(b) The Holding Period for the Options and/or Shares will be as follows: (i) The Capital Gains Tax Track Through a Trustee - if the Company elects to grant the Options according to the provisions of this track, then the Holding Period will be 24 months from the Date of Grant, or such period as may be determined in any amendment of Section 102; and (ii) Earned Income Track - if the Company elects to grant Options according to the provisions of this track, then the Holding Period will be 12 months from the Date of Grant, or such period as may be determined in any amendment of Section 102.

 

(c) Subject to Section 102 and the Section 102 Rules, Participants shall not be able to receive from the Trustee, nor shall they be able to sell or dispose of the Options or Underlying Shares before the end of the applicable Holding Period. If a Participant sells or removes the Options or the Underlying Shares form the Trustee before the end of the applicable Holding Period (“Breach”), the Participant shall pay all applicable taxes imposed on such Breach by Section 7 of the Section 102 Rules.

 

(d) In the event of a distribution of rights, including an issuance of bonus shares, in connection with Options and/or Underlying Shares (the “Additional Rights”), all such Additional Rights shall be granted and/or issued to the Trustee for the benefit of Participants, and shall be held by the Trustee at least for the remainder of the Holding Period applicable to the Options and/or Underlying Shares, as applicable. Such Additional Rights shall be treated in accordance with the provisions of the applicable Tax Track.

 

11.3 Income Tax Track Without a Trustee. If the Company elects to grant Options to 102 Participants according to the provisions of the Income Tax Track Without a Trustee, then the Options will not be subject to a Holding Period.

 

11.4 Concurrent Conditions. The Holding Period, if any, is in addition to the vesting period with respect to Options, as specified in Section 7.2 of the Plan or in the Grant Letter. The Holding Period and vesting period may run concurrently, but neither is a substitute for the other, and each are independent terms and conditions for granted Options.

 

11.5 Trust Agreement. The terms and conditions applicable to the trust relating to the Tax Track elected by the Company, as appropriate, shall be set forth in Trust Agreement.

 

12. Term of Shares Held In Trust. Unless otherwise extended by the Administrator, in its sole discretion, no Underlying Shares issued upon exercise of Options shall be held by the Trustee on behalf of the Participant for a period longer than ten (10) years after the end of the Term of the applicable Options. The Administrator shall instruct the Trustee as to the transfer of any Underlying Shares

 

13. Rights as a Shareholder. Unless otherwise specified in the Plan, a Participant shall not have any rights as a Shareholder with respect to Underlying Shares issued under this Plan, until such time as the Shares shall be registered in the name of the Participant in the Company’s register of Shareholders

 

13.1 Dividend. The Participants shall be entitled to receive any cash dividend paid to the Shareholders with respect to Underlying Shares issued to them under this Plan. Payments of such dividend to the Participants shall be subject to any required tax being withheld or otherwise deducted by the Trustee or the Company, as agreed between the Company and the Trustee, in accordance with Applicable Law.

 

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14. No Special Employment Rights. Nothing contained in this Plan shall confer upon any Participant any right with respect to the continuation of employment by or service to the Company or Affiliate or to interfere in any way with the right of the Company or Affiliate, to terminate such employment or service or to increase or decrease the compensation of the Participant. The Options are extraordinary, one-time benefits granted to the Participants and are not and shall not be deemed a salary component for any purpose whatsoever, including, in connection with calculating severance compensation under any Applicable Law.

 

15. Restrictions on Sale of Options and Shares

 

15.1 Options. Options may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent.

 

15.2 Acceleration Provision. The Administrator, at its sole discretion, may decide to add a provision in certain Grant Letters, according to which in case of a Merger or IPO, all or some of the unvested Options or/and Shares, shall automatically accelerate, and become fully vested and exercisable upon such event.

 

15.3 Acknowledgement To Restrictions. As a condition for the grant of Options and issuance of Underlying Shares thereunder, each Participant shall acknowledge the terms and provisions of the corporate documents of the Company, including organizational documents, as amended from time to time, and all other agreements among the Shareholders which are applicable to the holders of the Company’s Shares and shall agree to be bound by their terms with respect to any restriction applicable to the Shares of the Company (including without limitation, any right of first refusal, co-sale and bring along provisions, as applicable).

 

16. Tax Matters.

 

(a) This Plan shall be governed by, and shall conform with and be interpreted so as to comply with, the requirements of Section 102 and any written approval or ruling from the ITA. All tax consequences under any Applicable Law (other than stamp duty) which may arise from the Grant of the Options, from the exercise of Options or from the holding or sale of the Underlying Shares (or other securities issued under the Plan) by or on behalf of the Participant or from any other event or act hereunder (whether any act of the Participant or of the Company or its Affiliates or of the Trustee), shall be borne solely on the Participant. The Participant shall indemnify the Company and/or Affiliate and /or the Trustee, as the case may be, and hold them harmless, against and from any liability for any such tax or any penalty, interest or indexing.

 

(b) Except as otherwise required by Applicable Law, the Company shall not be obligated to honor the exercise of any Option by or on behalf of a Participant or the sale, exchange or other transfer of any Underlying Shares issued upon exercise of Options until all tax consequences (if any) arising from the exercise of such Options or sale, exchange or other transfer of Shares are resolved to the full satisfaction of the Company. Without derogating from the above, the Company and/or, when applicable, the Trustee shall not be required to release any share certificate to a Participant until all required payments have been fully made.

 

(c) If the Company elects to grant Options according to the provisions of the Income Tax Track Without a Trustee, and if prior to the Exercise of any and/or all of these Options, such Participant ceases to be an Employee, director, or officer of the Company or Affiliate, the Participant shall deposit with the Company a guarantee or other security as required by law, in order to ensure the payment of applicable taxes upon the Exercise of such Options, as the case may be.

 

(d) It is clarified that if any grants made under either of the tax tracks under Section 102 do not comply with the requirement of such tax route, the grant shall be considered subject to the Income Tax Track Without a Trustee, or Section 3(i) or Section 2 of the Tax Ordinance, as applicable, and the Participant irrevocably waives any claim and/or demand it has or may have with respect to the tax treatment of the Option.

 

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17. Withholding Taxes.

 

(a) Whenever an amount with respect to withholding tax relating to Options granted to a Participant and/or Underlying Shares issued upon the exercise thereof is due from the Participant and/or the Company and/or an Affiliate, the Company and/or an Affiliate and/or the Trustee shall have the right to demand from a Participant such amount that would be sufficient to satisfy any applicable withholding tax requirements related thereto, and whenever Shares or any other non-cash assets are to be delivered pursuant to the exercise of an Option and the sale of Underlying Shares, or transferred thereafter, the Company and/or an Affiliate and/or the Trustee shall have the right to require the Participant to remit to the Company and/or to the Affiliate, or to the Trustee an amount in cash sufficient to satisfy any applicable withholding tax requirements related thereto, and if such amount is not timely remitted, the Company and/or the Affiliate and/or the Trustee shall have the right to withhold or set-off (subject to Applicable Law) such Shares or any other non-cash assets pending payment by the Participant of such amounts.

 

(b) In any case where a tax is required to be withheld in connection with the delivery of Shares of the Company or of an Affiliate under the Plan, the Administrator may at its sole discretion (subject to Applicable Law) grant (either at the time of the grant or thereafter) to a Participant the right to elect, pursuant to such rules and subject to such conditions as the Administrator may establish, that: (i) the Company reduce the number of Shares to be delivered by (or otherwise reacquire from the Participant) the appropriate number of Shares, valued in a consistent manner at their Fair Market Value or at the sales price in accordance with authorized procedures for cashless exercises, necessary to satisfy the minimum applicable withholding obligation on exercise, vesting or payment; or (ii) have the Company withhold from proceeds of the sale of such Shares (either through a voluntary sale or through a mandatory sale arranged by the Company on the Participant’s behalf) the minimum amount required to be withheld.(c) Until all taxes have been paid in accordance with Rule 7 of the Section 102 Rules or any other Applicable Law, Options and/or Underlying Shares may not be sold, transferred, assigned, pledged, encumbered, or otherwise willfully hypothecated or disposed of, and no power of attorney or deed of transfer, whether for immediate or future use may be validly given. Notwithstanding the foregoing, the Options and the Underlying Shares may be validly transferred upon the death of a Participant in accordance with Section 19 of this Plan, provided that the transferee thereof shall be subject to the provisions of Section 102 and the Section 102 Rules as would have been applicable to the deceased Participant in the event he/she would have survived.

 

18. No Transfer of Options. The Trustee shall not transfer Options to any third party, including a 102 Participant, except in accordance with instructions received from the Administrator.

 

19. Transfer of Rights Upon Death. No transfer of any Option or Underlying Share issued upon the exercise thereof by will or by the laws of descent shall be effective to bind the Company unless the Company shall have been furnished with all of the following signed and notarized documents: (i) a written request for such transfer and a copy of the legal documents creating and confirming the right of the person acting with respect to the Participant’s estate and of the transferee; (ii) written consent by the transferee to pay any payment due according to the provisions of the Plan and otherwise comply by all the terms of the Plan; and (iii) any such other evidence as the Administrator may deem necessary to establish the right to the transfer of the Granted Options or Underlying Shares issued upon the exercise thereof and the validity of the transfer.

 

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20. No Right of Others to Options. Subject to the provisions of the Plan, no person other than the Participant shall have any right with respect to Options granted to the Participants under the Plan.

 

21. Expenses and Receipts. The expenses incurred in connection with the administration and implementation of the Plan (including any applicable stamp duty) shall be borne by the Company. Any proceeds received by the Company in connection with the exercise of any Option may be used for general corporate purposes.

 

22. Required Approvals. The Plan is subject to the receipt of all approvals required under the Applicable Law including under the Tax Ordinance.

 

23. Treatment of Participants. There is no obligation for uniformity of treatment of Participants.

 

24. No Conflicts. In the event of any conflict between the terms of the Plan and the Grant Letter, the Plan shall prevail, unless the Grant Letter stated specifically that the conflicting provision in the Grant Letter shall prevail.

 

25. Participant Undertakings. By entering into this Plan, the Participant shall: (i) agree and acknowledge that he or she have received and read the Plan, the Grant Letter and the Trust Agreement; (ii) undertake all the provisions set forth in Section 3(i) or Section 102 as applicable (including provisions regarding the applicable Tax Track that the Company has elected), the Plan, the Grant Letter and the Trust Agreement (if applicable); (iii) sign any required documentation, including but not limited, an irrevocable power of attorney and proxy; and (iv) to the extent the Options are granted under Section 102, the 102 Participant shall undertake that subject to the provisions of Section 102 and the Section 102 Rules, he/she shall not sell or release the Options or Underlying Shares from trust before the end of the Holding Period (if any).

 

26. Governing Law and Jurisdiction. This Plan shall be governed by and construed and enforced in accordance with the laws of the State of Israel, without giving effect to its principles of conflict of laws. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matters pertaining to this Plan.

 

27. Non-Exclusivity of the Plan. The adoption of this Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangements or imposing any limitations on the power of the Board to adopt other incentive arrangements as it may deem desirable, including, without limitation, the granting of shares or options otherwise than under this Plan.

 

* * * * *

 

 

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Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated November 10, 2021, with respect to the financial statements of NeuroSense Therapeutics Ltd., incorporated herein by reference.

 

 

/s/ Somekh Chaikin

Member Firm of KPMG International

February 2, 2022

Tel Aviv, Israel

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

S-8

(Form Type)

 

NeuroSense Therapeutics Ltd.

(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered and Carry Forward Securities

 

  Security
Type 		Security
Class
Title 		Fee
Calculation
or Carry
Forward Rule 		Amount
Registered (1) 		  Proposed
Maximum
Offering
Price Per
Unit (2) 		Maximum
Aggregate
Offering
Price (2) 		Fee
Rate 		Amount of
Registration
Fee
Fees to Be
Paid 		Equity Ordinary shares, no par value per share, issuable upon exercise of awards outstanding pursuant to the 2018 Share Option Plan Rule 457(h) 837,500   $2.35 $1,968,390 .0000927 $182.47
Fees
Previously
Paid 		Equity Ordinary shares, no par value per share, issuable upon future awards pursuant to the 2018 Share Option Plan(3) Rule 457(c) 2,162,500   $1.86 $4,022,250  .0000927 $372.87
  Total Offering Amounts     $5,990,640   $555.34
  Net Fee Due         $555.34

  

(1) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement shall also cover any additional ordinary shares of the Registrant that become issuable under the NeuroSense Therapeutics Ltd. 2018 Share Option Plan (the “2018 Plan”) by reason of any share dividend, share split, recapitalization or similar transaction effected without the Registrant’s receipt of consideration that would increase the number of outstanding ordinary shares. In addition, pursuant to Rule 416(c) under the Securities Act, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefits plan described herein.

 

(2) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) and Rule 457(h) promulgated under the Securities Act. The offering price per share and the aggregate offering price (a) for shares underlying outstanding awards granted under the 2018 Plan are based upon the weighted-average exercise price of such outstanding option awards and (b) for shares reserved for future issuance under the 2018 Plan are based on the average of the high (1.94) and low ($1.78) prices of ordinary shares on the Nasdaq Capital Market on January 28, 2022.

 

(3) Includes shares issuable pursuant to an annual “evergreen” increase to be added as of the first day of the Company’s fiscal year, beginning in 2022 and occurring each year thereafter through 2032, equal to 4% of the total number of shares issued and outstanding on a fully-diluted basis as of the end of the Company’s immediately preceding fiscal year (or such lesser number of shares, including no shares, determined by the board of directors in its sole discretion).