UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934
Filed by
the Registrant x
Filed by
a Party other than the Registrant ¨
Check the
Appropriate Box:
x Preliminary
Proxy Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨ Definitive
Proxy Statement
¨ Definitive
Additional Materials
¨ Soliciting
Material Pursuant to § 240.14a-12
ORAMED
PHARMACEUTICALS INC.
(Name of
Registrant as Specified in Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x No
fee required
¨ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of
transaction:
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(5)
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Total
fee paid:
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¨ Fee
paid previously with preliminary materials:
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¨
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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ORAMED
PHARMACEUTICALS INC.
Hi-Tech
Park 2/5 Givat Ram
PO Box
39098
Jerusalem,
Israel 91390
________________________
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON MARCH 1, 2011
__________________________
To Our
Stockholders:
You are
cordially invited to attend the Annual Meeting of Stockholders of Oramed
Pharmaceuticals Inc. (the "Company"). The Annual Meeting will be held at Hi-Tech
Park 2/5 Givat Ram, Jerusalem, Israel, on March 1, 2011, at 4:00 p.m. (Israel
time), or at any adjournment or postponement thereof, for the purpose of
considering and taking appropriate action with respect to the
following:
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1.
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To
re-elect five directors of the Company to hold office until our next
annual meeting of stockholders and until their respective successors shall
be elected and qualified;
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2.
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To
ratify the appointment of Kesselman & Kesselman, certified public
accountants in Israel, a member of PricewaterhouseCoopers International
Limited, as the auditors of the Company for the fiscal year ending August
31, 2011;
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3.
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To
authorize the Board of Directors to effect a reverse stock split of the
Company's shares of common stock at a ratio not to exceed one-for-eighteen
and to approve related amendments to the Company’s Articles of
Incorporation and Bylaws;
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4.
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To
approve the reincorporation of the Company from the State of Nevada to the
State of Delaware (including the form of the plan of conversion to
accomplish such reincorporation, together with the exhibits thereto, and
the transactions contemplated thereby);
and
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5.
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To
transact any other business as may properly come before the meeting or any
adjournments thereof.
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Our Board
of Directors has fixed the close of business on January 31, 2011, as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting and at any adjournments or postponement thereof.
All
stockholders are invited to attend the Annual Meeting in
person. Whether or not you plan to attend the meeting, please
complete, date and sign the enclosed proxy card and return it in the enclosed
envelope, as promptly as possible. If you attend the meeting, you may
withdraw the proxy and vote in person. If you have any questions
regarding the completion of the enclosed proxy card or would like directions to
the Annual Meeting, please call + 972-2-566-0001.
You
are entitled to dissenters’ rights under Nevada law with respect to the proposal
to reincorporate the Company from the State of Nevada to the State of Delaware,
provided that you strictly comply with the procedures as described in the
accompanying Proxy Statement.
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By
Order of the Board of Directors,
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Nadav
Kidron
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President,
Chief Executive Officer and
Director
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Jerusalem,
Israel
January
31, 2011
-2-
PROXY
STATEMENT
OF
ORAMED
PHARMACEUTICALS INC.
___________________
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD ON MARCH 1, 2011
___________________
The
enclosed proxy is solicited on behalf of the Board of Directors (the "Board") of
Oramed Pharmaceuticals Inc. (the "Company," "we," "us," or "our"), for use at
the Annual Meeting of Stockholders to be held on March 1, 2011, at 4:00 p.m. (Israel time) (the
"Annual Meeting"), or at any adjournment or postponement thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting. The
Annual Meeting will be held at our offices, Hi-Tech Park 2/5 Givat
Ram, Jerusalem, Israel. We intend to first mail this proxy statement, as
well as the enclosed proxy card, on or about February 1, 2011, to all
stockholders entitled to vote at the Annual Meeting.
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Important
Notice Regarding the Availability of Proxy Materials for the Annual
Meeting:
The
proxy statement, proxy card, and our annual report on Form 10-K are
available at
http://ir.oramed.com/phoenix.zhtml?c=180902&p=irol-sec
Stockholders
may also obtain a copy of these materials by writing to Oramed
Pharmaceuticals Inc., Hi-Tech Park 2/5 Givat Ram, PO Box 39098, Jerusalem,
Israel 91390, attention: Secretary or by e-mailing
yifat@oramed.com.
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QUESTIONS
AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why
am I receiving these materials?
We sent
you this proxy statement, as well as the enclosed proxy card, because our Board
of Directors is soliciting your proxy to vote at the 2011 Annual Meeting of
Stockholders. You are invited to attend the Annual Meeting to vote on the
proposals described in this proxy statement. The Annual Meeting will be
held on Tuesday, March 1, 2011 at 4:00 p.m. (Israel time) at
Hi-Tech Park 2/5 Givat Ram, Jerusalem, Israel. However, you do not need to
attend the meeting to vote your shares. Instead, you may simply complete,
sign and return the enclosed proxy card.
Who
can vote at the Annual Meeting?
Only
stockholders of record at the close of business on January 31, 2011, will be
entitled to vote at the Annual Meeting.
Stockholder
of Record: Shares Registered in Your Name
If on
January 31, 2011, your shares were registered directly in your name with our
transfer agent, Continental Stock Transfer & Trust Company, then you are a
stockholder of record. As a stockholder of record, you may vote in person
at the meeting or vote by proxy. Whether or not you plan to attend the
meeting, we urge you to fill out and return the enclosed proxy card to ensure
your vote is counted.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If on
January 31, 2011, your shares were held, not in your name, but rather in an
account at a brokerage firm, bank, dealer, or other similar organization, then
you are the beneficial owner of shares held in "street name" and these proxy
materials are being forwarded to you by that organization. The organization
holding your account is considered to be the stockholder of record for
purposes of voting at the Annual Meeting. As a beneficial owner, you have
the right to direct your broker or other agent on how to vote the shares in your
account. You are also invited to attend the Annual Meeting. However,
since you are not the stockholder of record, you may not vote your shares in
person at the meeting unless you request and obtain a valid proxy from your
broker or other agent.
-3-
What
am I voting on?
The
matters scheduled for a vote at the Annual Meeting are:
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the
re-election of five directors of the Company to hold office until our next
annual meeting of stockholders and until their respective successors shall
be elected and qualified;
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the
ratification of the appointment of Kesselman & Kesselman, certified
public accountants in Israel, a member of PricewaterhouseCoopers
International Limited, as the auditors of the Company for the fiscal year
ending August 31, 2011;
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·
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the
authorization of the Board of Directors effecting a reverse stock split of
the Company's shares of common stock at a ratio not to exceed
one-for-eighteen and to approve related amendments to the Company’s
Articles of Incorporation and Bylaws;
and
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·
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the
approval of the reincorporation of the Company from the State of Nevada to
the State of Delaware (including the form of the plan of conversion to
accomplish such reincorporation, together with the exhibits thereto, and
the transactions contemplated
thereby).
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Our Board
of Directors recommends that you vote FOR all of the above
proposals.
How
do I vote?
The
procedures for voting are as follows:
Stockholder of
Record: Shares Registered in Your Name
If you
are a stockholder of record, you may vote in person at the Annual Meeting, or
vote by proxy using the enclosed proxy card. Whether or not you plan to attend
the meeting, we urge you to vote by proxy to ensure your vote is counted.
You may still attend the meeting and vote in person if you have already voted by
proxy.
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To
vote in person, come to the Annual Meeting, where a ballot will be made
available to you. Directions to attend the Annual
Meeting where you may vote in person can be found at: http://www.oramed.com/ufiles/map_directions.pdf.
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To
vote using the proxy card, simply complete, sign and date the enclosed
proxy card and return it promptly in the envelope provided. If you
return your signed proxy card to us no less than 24 hours before the
Annual Meeting, we will vote your shares as you direct. The chairman of
the Annual Meeting may, at his discretion, decide to accept proxy cards
even if received less than 24 hours before the Annual
Meeting.
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Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If you
are a beneficial owner of shares registered in the name of your broker, bank, or
other agent, you should have received a proxy card and voting instructions with
these proxy materials from that organization rather than from us. Simply
complete and mail the proxy card to ensure that your vote is counted.
Alternatively, you may vote by telephone or over the Internet as instructed by
your broker or bank, if your broker or bank makes telephone or Internet voting
available. To vote in person at the Annual Meeting, you must obtain a
valid proxy from your broker, bank, or other agent. Follow the
instructions from your broker or bank included with these proxy materials, or
contact your broker or bank to request a proxy form.
-4-
How
many votes do I have?
You have
one vote for each share of common stock you own as of the close of business on
January 31, 2011.
What
if I return a proxy card but do not make specific choices?
If you
return a signed and dated proxy card without marking any voting selections, your
shares will be voted "For" matters on the agenda of the Annual Meeting. If
any other matter is properly presented at the meeting, your proxy (one of the
individuals named on your proxy card) will vote your shares using his or her
best judgment.
Who
is paying for this proxy solicitation?
We will
pay for the entire cost of soliciting proxies. In addition to these mailed
proxy materials, our directors and employees may also solicit proxies in person,
by telephone, or by other means of communication. Directors and employees
will not be paid any additional compensation for soliciting proxies. We
may also reimburse brokerage firms, banks and other agents for the cost of
forwarding proxy materials to beneficial owners.
What
does it mean if I receive more than one proxy card?
If you
receive more than one proxy card, your shares are registered in more than one
name or are registered in different accounts. Please complete, sign and
return each proxy card to ensure that all of your shares are voted.
Can
I change my vote after submitting my proxy?
Yes.
You can revoke your proxy at any time before the final vote at the
meeting. If you are the record holder of your shares, you may revoke your
proxy in any one of three ways:
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You
may submit another properly completed proxy card with a later
date.
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You
may send a written notice that you are revoking your proxy to our
Secretary at Hi-Tech Park 2/5 Givat Ram, PO Box 39098, Jerusalem, Israel
91390.
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You
may attend the meeting and vote in person. Simply attending the
Annual Meeting will not, by itself, revoke your
proxy.
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If your
shares are held by your broker or bank as a nominee or agent, you should follow
the instructions provided by your broker or bank.
How
are votes counted?
Votes
will be counted by the inspector of election appointed for the meeting, who will
separately count "For," "Abstain" and "Withhold."
If your
shares are held by your broker as your nominee (that is, in "street name"), you
will need to obtain a proxy form from the institution that holds your shares and
follow the instructions included on that form regarding how to instruct your
broker to vote your shares. If you do not give instructions to your broker, your
broker can vote your shares with respect to "discretionary" items, but not with
respect to "non-discretionary" items. Discretionary items are proposals
considered routine under the rules of the New York Stock Exchange on which your
broker may vote shares held in street name in the absence of your voting
instructions. On non-discretionary items for which you do not give your broker
instructions, the shares will be treated as broker non-votes. There
are no discretionary items scheduled for a vote at the Annual Meeting, except
for Proposal 2.
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How
many votes are needed to approve each proposal?
The
approval of Proposals 1, 2, 3 and 4 require the affirmative vote of the holders
of a majority of shares of common stock present, in person or by proxy, and
voting on the matter. Other than for the purpose of establishing a quorum, as
discussed in the following paragraph, abstentions and broker non-votes will not
affect the outcome of the election of directors.
What
is the quorum requirement?
A quorum
of stockholders is necessary to hold a valid meeting. A quorum will be
present if holders of at least 10% of the outstanding shares are represented by
stockholders present at the meeting or by proxy. As of [________], 2011,
there were [________] shares of common stock outstanding and entitled to
vote. Your shares will be counted towards the quorum only if you submit a valid
proxy (or one is submitted on your behalf by your broker, bank or other nominee)
or if you vote in person at the meeting. Abstentions and broker
non-votes will be counted towards the quorum requirement. If there is no
quorum, either the chairman of the meeting or a majority of the votes present
may adjourn the meeting to another date.
How
can I find out the results of the voting at the Annual Meeting?
Preliminary
voting results will be announced at the Annual Meeting. Final voting
results will be reported in an immediate report on Form 8-K.
INTERNAL
REVENUE SERVICE CIRCULAR 230 NOTICE:
TO ENSURE
COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230, STOCKHOLDERS ARE HEREBY
NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES CONTAINED OR REFERRED TO
IN THIS PROXY STATEMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE
USED, BY ANY STOCKHOLDER FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE
IMPOSED ON THE STOCKHOLDER UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION
IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR
MATTERS ADDRESSED HEREIN; AND (C) STOCKHOLDERS SHOULD SEEK ADVICE BASED ON THEIR
PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
SECURITY
OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of [________], 2011 by: (i) by each person
who is known by us to own beneficially more than 5% of our common stock; (ii)
each director and nominee for director; (iii) each of our current executive
officers; and (iv) all of our directors and executive officers as a
group. On such date, we had [________] shares of common stock
outstanding.
As used
in the table below and elsewhere in this form, the term “beneficial ownership”
with respect to a security consists of sole or shared voting power, including
the power to vote or direct the vote and/or sole or shared investment power,
including the power to dispose or direct the disposition, with respect to the
security through any contract, arrangement, understanding, relationship, or
otherwise, including a right to acquire such power(s) during the next 60 days
following [_______], 2011. Inclusion of shares in the table does not, however,
constitute an admission that the named stockholder is a direct or indirect
beneficial owner of those shares. Unless otherwise indicated, each
person or entity named in the table has sole voting power and investment power
(or shares that power with that person’s spouse) with respect to all shares of
capital stock listed as owned by that person or entity.
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Name and Address of
Beneficial Owner
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Number of Shares
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Percentage of Shares
Beneficially Owned
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Nadav
Kidron †‡
10
Itamar Ben Avi St.
Jerusalem,
Israel
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[______] |
(1)
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[__] | % | ||||
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Zeev
Bronfeld
6
Uri St.
Tel-Aviv,
Israel
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[______] | [__] | % | |||||
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Miriam
Kidron †‡
2
Elza St.
Jerusalem,
Israel
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[______] |
(2)
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[__] | % | ||||
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Apollo
Nominees Inc
One
Financial Place Suite 100 Lower Collymore Rock
St.
Michael, Barbados
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[______] |
(3)
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[__] | % | ||||
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Hadasit
Medical Research Services & Development Ltd.
P.O.
Box 12000
Jerusalem,
Israel
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[______] | [__] | % | |||||
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Leonard
Sank †
3
Blair Rd Camps Bay
Cape
Town, South Africa
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[______] |
(4)
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[__] | % | ||||
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Harold
Jacob †
Haadmur
Mebuyon 26
Jerusalem,
Israel
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[______] |
(5)
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* | |||||
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Michael
Berelowitz †
415
East 37th Street
New
York, NY, USA
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— | — | ||||||
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Yifat
Zommer ‡
P.O.
Box 39098,
Jerusalem,
Israel
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[______] |
(6)
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* | |||||
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All
current executive officers and directors, as a group (six
persons)
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[______] |
(7)
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[__] | % | ||||
_________________
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*
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Less
than 1%
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†
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Indicates
Director
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‡
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Indicates
Officer
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(1)
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Includes
[______] shares of common stock issuable upon the exercise of outstanding
stock options.
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(2)
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Includes
[______] shares of common stock issuable upon the exercise of outstanding
stock options.
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(3)
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Includes
[______] shares of common stock issuable upon the exercise of warrants
beneficially owned by the referenced
entity.
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(4)
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Includes
[______] shares of common stock issuable upon the exercise of warrants
beneficially owned by the referenced
entity.
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(5)
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Consists
of [______] shares of common stock issuable upon the exercise of
outstanding stock options.
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(6)
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Consists
of [______] shares of common stock issuable upon the exercise of
outstanding stock options.
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(7)
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Includes
[______] shares of common stock issuable upon the exercise of outstanding
stock options.
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PROPOSAL
1:
RE-ELECTION
OF DIRECTORS
The
number of directors comprising our Board of Directors is currently set at five
and our Board is presently composed of five members. Vacancies on our
Board of Directors may be filled by persons elected by a majority of our
remaining directors. A director elected by our Board of Directors to
fill a vacancy (including any vacancy created by an increase in the number of
directors) shall serve until the next meeting of stockholders at which the
election of directors is considered and until such director’s successor is
elected and qualified.
Each
nominee is currently a director of the Company. If re-elected at the
Annual Meeting, each of the nominees below would serve until our 2012 Annual
Meeting of Stockholders, and until his or her successor is elected and has
qualified, or until such director’s earlier death, resignation or
removal.
Biographical
Summaries of Nominees for the Board of Directors
The
following is a brief account of the education and business experience during at
least the past five years of each director nominee, indicating the principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried
out.
Mr. Nadav Kidron,
36, was appointed President, Chief
Executive Officer and director in March 2006. From 2003 to 2006, he was
the managing director at the Institute of Advanced Jewish Studies – Bar Ilan
University. From 2001 to 2003, he was a legal intern at Wine Mishaiker and
Erenstof Law Offices in Jerusalem, Israel. Mr. Kidron holds an LLB from Bar –
Ilan University and is currently enrolled in the International MBA program at
Bar – Ilan University.
Dr. Miriam
Kidron, 69, was appointed Chief Medical and
Technology Officer and director in March 2006. Dr. Kidron is a
pharmacologist and a biochemist with a PhD in biochemistry. From 1990 to 2007,
Dr. Kidron has been a senior researcher in the Diabetes Unit at Hadassah
University Hospital in Jerusalem, Israel. During 2003 and 2004, Dr. Kidron
served as a consultant to Emisphere Technologies Inc., a company that
specializes in developing broad-based proprietary drug delivery platforms. Dr.
Kidron was formerly a visiting professor at the Medical School at the University
of Toronto (Canada), and is a member of the American, European and Israeli
Diabetes Associations. Dr. Kidron is a recipient of the Bern Schlanger
Award.
Mr. Leonard Sank,
45, was appointed a director
in October 2007. Mr. Sank is a South African entrepreneur and businessman who is
devoted to entrepreneurial endeavors and initiatives. He has over 20 years of
experience playing important leadership roles in developing businesses. He
was a director in Eastvaal Motor Group, a diversified retail motor business. He
was also a director in Vecto Finance, a credit lending business. He has also
served as a director of Macsteel Service Centres SA Pty Ltd., South Africa’s
largest private company. He also serves on the board of local
non-profit charity organizations in Cape Town, where he
resides.
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Dr. Harold Jacob,
57, was appointed a director
in July 2008. Since 1998, Dr. Jacob has served as the president of Medical
Instrument, a company which provides a range of support and consulting services
to start-up and early stage companies as well as patenting its own proprietary
medical devices. Dr. Jacob has advised a spectrum of companies in the past and
he served as a consultant and then as the Director of Medical Affairs at Given
Imaging Ltd., during the years 1997 to 2003, a company that developed the first
swallowable wireless pill camera for inspection of the intestine. He has
licensed patents to a number of companies including Kimberly Clark Ballard.
Since 2003, Dr. Jacob has served as the CEO of NanoVibronix, a medical device
company using surface acoustics to prevent catheter acquired infection as well
as other applications. He practiced clinical gastroenterology in New York and
served as Chief of Gastroenterology at St. Johns Episcopal Hospital and South
Nassau Communities Hospital in the years 1986-1995, and was a Clinical Assistant
Professor of Medicine at SUNY during the years 1983-1990. Dr. Jacob founded and
served as Editor in Chief of Endoscopy Review and has authored numerous
publications in the field of gastroenterology.
Dr. Michael
Berelowitz, 66, was appointed a director
in June 2010. Since 2009, Dr. Berelowitz has served as Senior Vice President and
Head of Clinical Development and Medical Affairs in the Specialty Care Business
Unit at Pfizer, Inc. From 1996 to 2009 he served in various roles at Pfizer,
Inc., beginning as a Medical Director in the Diabetes Clinical Research team and
then assuming positions of increasing responsibility until being appointed to
his present role. Prior to that, Dr. Berelowitz spent a number of years in
academia. Among his public activities, Dr. Berelowitz has served on the board of
directors of the American Diabetes Association, the Clinical Initiatives
Committee of the Endocrine Society, and has chaired the Task Force on Research
of the New York State Council on Diabetes. He has also served on several
editorial boards, including the Journal of Clinical Endocrinology and Metabolism
and Endocrinology, Reviews in Endocrine and Metabolic Disorders and Clinical
Diabetes. Dr. Berelowitz has authored and co-authored more than 100
peer-reviewed journal articles and book chapters in the areas of pituitary
growth hormone regulation, diabetes and metabolic disorders.
Vote
Required
The
affirmative vote of the holders of a majority of shares of common stock present,
in person or by proxy, and voting on the matter is required for the approval
thereof.
The
Board of Directors unanimously recommends that you vote "FOR" all of the
nominees listed above.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
and Executive Officers
The name
and age of each of the five director nominees and of our executive officers, his
or her position with us and the period during which such person has served as a
director or officer of the Company are set forth below.
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Name
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Age
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Position
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Serving Since
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Nadav
Kidron
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36
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President,
Chief Executive Officer and Director
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2006
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Miriam
Kidron
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69
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Chief
Medical and Technology Officer and Director
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2006
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Leonard
Sank
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45
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Director
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2007
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Harold
Jacob
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56
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Director
and member of the Scientific Advisory Board
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2008
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Michael
Berelowitz
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66
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Director
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2010
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Yifat
Zommer
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37
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Chief
Financial Officer, Treasurer and Secretary
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2009
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Dr.
Miriam Kidron is Mr. Nadav Kidron’s mother. There are no other directors or
officers of the Company who are related by blood or marriage.
Biographical
summaries for our directors are set forth under "Proposal 1: Re-election of
Directors - Biographical Summaries of Nominees for the Board of Directors"
above. The following is a brief account of the education and business experience
of our executive officers who are not directors, indicating principal occupation
and the name and principal business of the organization in which such occupation
and employment were carried out.
Ms. Yifat Zommer,
37, was appointed as Chief Financial
Officer, Treasurer and Secretary in April 2009. From April 2007 to
October 2008, Ms. Zommer served as Chief Financial Officer of Witech
Communications Ltd., a subsidiary of IIS Intelligence Information Systems Ltd, a
company operating in the field of video transmission using wireless
communications. From April 2006 to April 2007, Ms. Zommer acted as Chief
Financial Officer for CTWARE Ltd, a telecommunication company. Prior to that she
was an audit manager in PricewaterhouseCoopers (PwC), where she served for five
years. Ms. Zommer holds a Bachelor of Accounting and Economics degree from the
Hebrew University and Business Administration (MBA) from Tel-Aviv University.
Ms. Zommer is a certified public accountant in Israel.
Board
of Directors
There are
no agreements with respect to the election of directors. Each
director is elected for a period of one year at our annual meeting of
stockholders and serves until the next such meeting and until his or her
successor is duly elected. The Board may also appoint additional
directors up to a maximum of fifteen directors. A director so chosen or
appointed will hold office until the next annual meeting of stockholders. The
Board has determined that Leonard Sank, Harold Jacob and Michael Berelowitz are
independent as defined under the rules promulgated by the NASDAQ Stock Market.
For the past three years, we have not held an annual meeting of
stockholders.
There
have been no events under any bankruptcy act, no criminal proceedings and no
judgments, injunctions, orders or decrees material to the evaluation of the
ability and integrity of any director, executive officer, or control person of
the Company during the past ten years.
Board
Meeting Attendance
During
the year ended August 31, 2010, our Board held six meetings and took actions by
written consent on 13 occasions. No incumbent director of the meeting
attended fewer than 75% of the aggregate of: (i) the total number of
meetings of the Board (during the period for which such director served as a
director); and (ii) the total number of meetings held by all committees of
the Board on which such director served (during the period for which such
director served on such committees). Board members are encouraged to attend our
annual meetings of stockholders.
-10-
Committees
To date,
the Board has not established any committees. The Board has not established a
nominating committee or an audit committee because it believes that the Board,
of which three of its five members are independent directors, is qualified to
fulfill these functions.
Section
16(a) Beneficial Ownership Reporting Compliance
Based
solely upon a review of Forms 3, 4 and 5, and amendments thereto, furnished to
us during fiscal year 2010, we believe that during fiscal year 2010, our
executive officers, directors and all persons who own more than ten percent of a
registered class of our equity securities complied with all Section 16(a) filing
requirements.
Code
of Ethics
We have
adopted a Code of Ethics for our officers, directors and employees. A copy of
the Code of Ethics is available on our website at www.oramed.com.
Board
Leadership Structure and Role in Risk Oversight
Mr. Nadav
Kidron serves as our President, Chief Executive Officer and on our Board of
Directors. None of our independent directors serves as the lead independent
director. We believe that this leadership structure is appropriate to our
Company given the current size and operations of the Company. Our Board of
Directors' role in risk oversight includes risk analysis and assessment in
connection with each financial and business review, update and decision-making
proposal and is an integral part of all Board deliberations. The Board's role in
our risk oversight is consistent with our leadership structure, with our
President and Chief Executive Officer and other members of senior management
having responsibility for assessing and managing our risk exposure, and the
Board of Directors providing oversight in connection with those
efforts.
Stockholder
Communications
Although
we have not adopted a formal process for stockholder communications with our
Board of Directors, we believe stockholders should have the ability to
communicate directly with the Board so that their views can be heard by the
Board or individual directors, as applicable, and that appropriate and timely
responses are provided to stockholders. All communications regarding general
matters should be directed to the Secretary of the Company at the address below
and should prominently indicate on the outside of the envelope that it is
intended for the complete Board of Directors or for any particular
director(s). If no designation is made, the communication will be
forwarded to the entire Board. Stockholder communications to the
Board should be sent to:
Corporate
Secretary
Oramed
Pharmaceuticals Inc.
Hi-Tech
Park 2/5 Givat Ram
PO Box
39098
Jerusalem,
Israel 9139
Certain
Relationships and Related Transactions and Director Independence
Except as
otherwise indicated below, during the fiscal year 2010 we have not been a party
to any transaction, proposed transaction, or series of transactions in which the
amount involved exceeds the lesser of $120,000 or one percent of the average of
our total assets at year-end for the last two completed fiscal years, and in
which, to our knowledge, any of our directors, officers, five percent beneficial
security holder, or any member of the immediate family of the foregoing persons
has had or will have a direct or indirect material interest.
-11-
Our
policy is to enter into transactions with related parties on terms that, on the
whole, are no less favorable than those available from unaffiliated third
parties. Based on our experience in the business sectors in which we operate and
the terms of our transactions with unaffiliated third parties, we believe that
all of the transactions described below met this policy standard at the time
they occurred. All related parties transactions are approved by our board of
directors.
On March
8, 2006, and July 8, 2009, we entered into two agreements with Hadasit to
provide consulting and clinical trial services for total consideration of
$400,000. The clinical trials to be conducted by Hadasit are managed by Dr.
Kidron, our Chief Medical and Technology Officer and Director, through its
research fund in Hadasit. The fees paid by the Company to Hadasit are deposited
into a Hadasit research account in the name of Dr. Kidron. Pursuant to the
general policy of Hadasit with respect to its research funds, Dr. Kidron is
entitled to receive a management fee in the rate of 10% of all the funds
deposited into this research fund, including the funds paid by the Company under
the said agreements. Since March 2006, only the funds paid by the Company are
deposited in this account.
On June
1, 2010, our subsidiary Oramed Ltd., entered into an agreement with D.N.A
Biomedical Solutions Ltd (formerly,
Laser Detect Systems Ltd.) ("D.N.A"), for the establishment of a new company to
be called Entera Bio Ltd. ("Entera"). Under the terms of a license agreement
that was entered into between Oramed and Entera, Oramed will out-license
technology to Entera, on an exclusive basis, for the development of oral
delivery drugs for certain indications to be agreed upon between the
parties. The out-licensed technology differs from our main delivery
technology that is used for oral insulin and GLP-1 Analog and is subject to a
different patent application. Entera's initial development effort will be an
oral formulation for the treatment of osteoporosis. Mr. Zeev Bronfeld, who is
one of D.N.A's controlling shareholders, holds approximately 10.71% of our
outstanding common stock.
The Board
has determined that Leonard Sank, Harold Jacob and Michael Berelowitz are
independent as defined under the rules promulgated by the NASDAQ Stock
Market.
See
"Compensation of Executive Officers and Directors - Employment and Consulting
Agreements" below for information as to agreements with our employees and
consultants.
-12-
COMPENSATION
OF EXECUTIVE OFFICERS AND DIRECTORS
Summary
Compensation Table
The
following table sets forth the compensation earned during the years ended August
31 2009 and 2010 by our President and Chief Executive Officer, our Chief Medical
and Technology Officer, our Chief Financial Officer and former Chief Financial
Officer (the "Named Executive Officers"):
|
Name and Principal
Position
|
Year
(1)
|
Salary
($)
|
Option
Awards
($)
(2)
|
All Other
Compensation
($)
(3)
|
Total
($)
|
|||||||||||||
|
Nadav
Kidron
|
2010
|
159,919 | 236,344 | 10,783 | 407,046 | |||||||||||||
|
President
and CEO and director (4)
|
2009
|
155,359 | 153,855 | 15,474 | 324,688 | |||||||||||||
|
Miriam
Kidron
|
2010
|
160,092 | 236,344 | 7,727 | 404,163 | |||||||||||||
|
Chief
Medical and Technology Officer and director (5)(6)
|
2009
|
154,983 | 153,855 | 11,539 | 320,377 | |||||||||||||
|
Yifat
Zommer
|
2010
|
76,896 | 81,803 | 26,979 | 185,678 | |||||||||||||
|
CFO,
Treasurer and Secretary (7)
|
2009
|
20,468 | 19,946 | 11,245 | 51,659 | |||||||||||||
|
Chaime
Orlev
CFO
and Secretary (8)
|
2009
|
59,300 |
Nil
|
25,544 | 84,844 | |||||||||||||
_______________
|
1
|
The
information is provided for each fiscal year which begins on September 1
and ends on August 31.
|
|
2
|
The
amounts reflect the compensation expense in accordance with FAS 123(R) of
these option awards. The assumptions used to determine the fair value of
the option awards for fiscal years ended August 31, 2010 and 2009 are set
forth in the notes to our audited consolidated financial statements
included in our annual report on Form 10-K for fiscal year ended August
31, 2010. Our Named Executive Officers will not realize the value of these
awards in cash unless and until these awards are exercised and the
underlying shares subsequently
sold.
|
|
3
|
See
All Other Compensation Table below.
|
|
4
|
Mr.
Kidron was appointed as our President, CEO and Director on March 8, 2006
and receives compensation from our subsidiary through KNRY, an Israeli
entity owned by Mr. Kidron. See "Employment and Consulting
Agreements."
|
|
5
|
Dr.
Kidron was appointed as our Chief Medical and Technology Officer and
Director on March 8, 2006 and receives compensation from our subsidiary
through KNRY, an Israeli entity owned by Mr. Kidron. See "Employment and
Consulting Agreements."
|
|
6
|
See
"Certain Relationships and Related Transactions and Director Independence"
for a description of management fees received by Dr. Kidron from
Hadasit.
|
|
7
|
Ms.
Zommer was appointed as our CFO, Treasurer and Secretary on April 19,
2009
|
|
8
|
Mr.
Orlev served as our CFO and Secretary from May 1, 2008 through March 31,
2009.
|
All
Other Compensation Table
All Other
Compensation amounts in the Summary Compensation Table consist of the
following:
-13-
|
Name
|
Year
|
Automobile
Related
Expenses
($)
|
Manager’s
Insurance *
($)
|
Education
Fund*
($)
|
Total
($)
|
|||||||||||||
|
Nadav
Kidron
|
2010
|
10,783 |
Nil
|
Nil
|
10,783 | |||||||||||||
|
Miriam
Kidron
|
2010
|
7,727 |
Nil
|
Nil
|
7,727 | |||||||||||||
|
Yifat
Zommer
|
2010
|
9,814 | 11,466 | 5,699 | 26,979 | |||||||||||||
__________
|
*
|
Manager’s
insurance and education funds are customary benefits provided to employees
based in Israel. Manager’s insurance is a combination of severance savings
(in accordance with Israeli law), defined contribution tax-qualified
pension savings and disability insurance premiums. An Education fund is a
savings fund of pre-tax contributions to be used after a specified period
of time for educational or other permitted
purposes.
|
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth information concerning stock options and stock awards
held by the Named Executive Officers as of August 31, 2010.
|
Option Awards
|
|||||||||||||
|
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|||||||||
|
Nadav
Kidron
|
850,000 | (1) | - | 0.45 |
08/01/12
|
||||||||
| 720,000 | (2) | 144,000 | (2) | 0.54 |
05/06/18
|
||||||||
| 864,000 | (5) | 612,000 | (2) | 0.49 |
04/20/20
|
||||||||
|
Miriam
Kidron
|
3,361,360 | (3) | - | 0.001 |
08/13/12
|
||||||||
| 850,000 | (1) | - | 0.45 |
08/01/12
|
|||||||||
| 720,000 | (2) | 144,000 | (2) | 0.54 |
05/06/18
|
||||||||
| 864,000 | (5) | 612,000 | (2) | 0.49 |
04/20/20
|
||||||||
|
Yifat
Zommer
|
- | 400,000 | (4) | 0.47 |
10/19/19
|
||||||||
_____________
|
(1)
|
On
August 2, 2007, 850,000 options were granted to each of Nadav Kidron and
Miriam Kidron under the 2006 Stock Option Plan at an exercise price of
$0.45 per share; the options vested immediately and have an expiration
date of August 2, 2012.
|
|
(2)
|
On
May 7, 2008, 864,000 options were granted to each of Nadav Kidron and
Miriam Kidron under the 2008 Stock Option Plan at an exercise price of
$0.54 per share, 144,000 of such options vested immediately on the date of
grant and the remainder will vest in twenty equal monthly installments,
commencing on June 7, 2008. The options have an expiration date of May 7,
2018.
|
|
(3)
|
On
August 14, 2007 3,361,630 stock options were granted to Miriam Kidron, at
an exercise price of $0.001 per share; the options vested immediately and
have an expiration date of August 14, 2012. These options were not issued
pursuant to any outstanding award
plans.
|
|
(4)
|
On
June 3, 2009, 400,000 options were granted to Yifat Zommer under the 2008
Stock Option Plan at an exercise price of $0.47 per share. The options
vest in three equal annual installments, commencing October 19, 2010, and
expire on October 19, 2019.
|
|
(5)
|
On
April 21, 2010, 864,000 options were granted to each of Nadav Kidron and
Miriam Kidron under the 2008 Stock Option Plan at an exercise price of
$0.49 per share, 108,000 of such options vested immediately on the date of
grant and the remainder will vest in twenty one equal monthly
installments, commencing on May 31, 2010. The options have an expiration
date of April 20, 2020.
|
-14-
Stock
Option Plans
2006 Stock Option Plan
On
October 15, 2006, the Board adopted the 2006 Stock Option Plan (the "2006 Plan")
in order to attract and retain quality personnel. Under the 2006 Plan, 3,000,000
shares have been reserved for the grant of options by the Board. In addition,
under the terms of the 2006 Plan, options that have expired or been terminated
for any reason prior to being exercised may be reissued. As of August
31, 2010, options with respect to1,700,000 shares
were outstanding under the 2006 Plan, which amount reflects the
aggregate grant of options with respect to 3,350,000 shares, of
which 1,650,000 expired through August 31, 2010.
2008 Stock Incentive Plan
On May 5,
2008, the Board adopted the 2008 Stock Incentive Plan (the "2008 Plan") in order
to attract and retain quality personnel. The 2008 Plan provides for the grant of
stock options, restricted stock, restricted stock units and stock appreciation
rights, collectively referred to as "awards." Stock options granted under the
Plan may be either incentive stock options under the provisions of Section 422
of the Internal Revenue Code, or non-qualified stock options. Incentive stock
options may be granted only to our employees or to our parent or subsidiary.
Awards other than incentive stock options may be granted to employees, directors
and consultants. Under the 2008 Plan, 8,000,000 shares have been reserved for
the grant of options, which may be issued at the discretion of our Board from
time to time. As of August 31, 2010, options with respect to 6,739,200 shares
have been granted under the 2008 Plan, 978,000 of which have been
forfeited.
Other
On August
14, 2007, we granted Dr. Miriam Kidron options to purchase up to 3,361,360
shares at an exercise price of $0.001; the options vested immediately and have
an expiration date of August 14, 2012. These options are not governed by any of
the plans detailed above.
Stock
Options Grants
We made
the following stock options grants to the Named Executive Officers and directors
during the year ending August 31, 2010:
|
|
·
|
On
April 21, 2010, 864,000 options were granted to each of Nadav Kidron and
Miriam Kidron under the 2008 Stock Option Plan at an exercise price of
$0.49 per share, 108,000 of such options vested immediately on the date of
grant and the remainder will vest in twenty equal monthly installments,
commencing on May 31, 2010. The options have an expiration date of April
20, 2020.
|
|
|
·
|
On
July 8, 2010, 300,000 options were granted to a director at an exercise
price of $0.48 per share. The options vest in three equal annual
installments commencing on July 8, 2011 and will expire on July 7,
2020.
|
Employment
and Consulting Agreements
Effective
August 1, 2007, we entered into employment agreements with KNRY Ltd. ("KRNY"),
pursuant to which Nadav Kidron and Dr. Miriam Kidron provided employment
services to our company. Based on the agreements, Nadav Kidron served as the
President and Chief Executive officer and Miriam Kidron served as the Chief
Medical and Technology Officer of the Company. As remuneration for such
services, KNRY was paid $20,000 per month, commencing on August 1,
2007.
-15-
On July
1, 2008, Oramed Ltd., our Israeli subsidiary, entered into a consulting
agreement with KNRY, whereby Mr. Nadav Kidron, through KNRY, provides services
as President and Chief Executive Officer of both the Company and Oramed Ltd.
(the "Nadav Kidron Consulting Agreement"). Additionally, on July 1, 2008, Oramed
Ltd. entered into a consulting agreement with KNRY whereby Dr. Miriam Kidron,
through KNRY, provides services as Chief Medical and Technology Officer of both
the Company and Oramed Ltd. (the "Miriam Kidron Consulting Agreement" and
together with the Nadav Kidron Consulting Agreement, the "Consulting
Agreements"). The Consulting Agreements replace the employment agreements
entered into between the Company and KNRY, dated as of August 1, 2007 referenced
above.
The
Consulting Agreements are both terminable by either party upon 60 days prior
written notice. The Consulting Agreements provide that KNRY (i) will be paid,
under each of the Consulting Agreements, in New Israeli Shekels a gross amount
of NIS 50,400 per month and (ii) will be reimbursed for reasonable expenses
incurred in connection with performance of the Consulting
Agreements.
Pursuant
to the Consulting Agreements, KNRY, Nadav Kidron and Miriam Kidron each agree
that during the term of the Consulting Agreements and for a 12 month period
thereafter, none of them will compete with Oramed Ltd. nor solicit employees of
Oramed Ltd.
On
November 2, 2008, we entered into indemnification agreements with our directors
and executive officers pursuant to which we agreed to indemnify each director
and executive officer for any liability he or she may incur by reason of the
fact that he or she serves as our director or executive officer, to the maximum
extent permitted by law.
The
Company, through its Israeli subsidiary, Oramed Ltd., has entered into an
employment agreement with Yifat Zommer as of April 19, 2009, pursuant to which
Ms. Zommer was appointed as Chief Financial Officer, Treasurer and Secretary of
Oramed. On August 31, 2009, the agreement was amended, pursuant to which Ms.
Zommer's gross monthly salary will be NIS 22,000 ($5,764). In accordance with
the employment agreement, as amended, as of October 19, 2009, Ms. Zommer’s gross
monthly salary was increased to NIS 24,200 ($6,340).
On
April 19, 2009, Oramed and Ms. Zommer also entered into an indemnification
agreement, pursuant to which Oramed agrees to indemnify Ms. Zommer for any
liability she may incur by reason of the fact that she serves as Oramed’s CFO,
to the maximum extent permitted by law.
Director
Compensation
Directors
are entitled to reimbursement for reasonable travel and other out-of-pocket
expenses incurred in connection with attendance at meetings of our Board.
Effective June 1, 2010, each independent director is entitled to receive as
remuneration for his or her service as a member of the Board a sum equal to
$10,000 per annum, to be paid quarterly and shortly after the close of each
quarter (for the period from September 1, 2008 to May 31, 2010 - $8,000 per
annum). The Board may award special remuneration to any director undertaking any
special services on behalf of us other than services ordinarily required of a
director.
Other
than indicated in this proxy statement, no director received and/or accrued any
compensation for his or her services as a director, including committee
participation and/or special assignments.
-16-
The
following table sets forth director compensation for the year ended August 31,
2010.
|
Name of Director
|
Fees Earned or Paid
in Cash
($)
|
Option Awards (1)
($)
|
Total
($)
|
|||||||||
|
Nadav
Kidron (2)
|
||||||||||||
|
Miriam
Kidron (2)
|
||||||||||||
|
Leonard
Sank
|
8,500 | 45,218 | 53,718 | |||||||||
|
Harold
Jacob
|
8,500 | 45,218 | 53,718 | |||||||||
|
Michael
Berelowitz
|
2,500 | 11,201 | 13,701 | |||||||||
_______________
|
(1)
|
The
amounts reflect the compensation expense in accordance with FAS 123(R) of
these option awards. The assumptions used to determine the fair value of
the option awards are set forth in Note 8 of our audited consolidated
financial statements included in our annual report on Form 10-K for the
fiscal year ended August 31, 2010. Our directors will not realize the
value of these awards in cash unless and until these awards are exercised
and the underlying shares subsequently
sold.
|
|
(2)
|
Please
refer to the summary compensation table for executive compensation with
respect to the named individual.
|
PROPOSAL
2:
RATIFICATION
OF AUDITORS
At the
Annual Meeting, the stockholders will be asked to ratify the reappointment of
Kesselman & Kesselman, certified public accountants in Israel, a member of
PricewaterhouseCoopers International Limited, as our auditors for the fiscal
year ending August 31, 2011. Kesselman & Kesselman serves as the auditor of
our controlled subsidiaries, as well. Kesselman & Kesselman have no other
relationship to us or with any of our affiliates, except as auditors and tax
consultants. A representative of the auditors will not be present at the Annual
Meeting.
We
incurred the following fees to Kesselman & Kesselman for services rendered
during the fiscal years ended August 31, 2010 and 2009:
|
Summary:
|
2010
|
2009
|
||||||
|
Audit
fees(1)
|
$ | 65,880 | $ | 60,000 | ||||
|
Tax
fees(2)
|
$ | 15,000 | ||||||
____________
|
|
(1)
|
Amount
represents fees paid for professional services for the audit of
our consolidated annual
financial statements and review of our
interim consolidated financial statements included in
quarterly reports and services that are normally provided by our
accountants in connection with statutory and regulatory filings or
engagements.
|
|
|
(2)
|
Amount
represents fees paid for professional services for tax compliance and tax
advice.
|
We do not
have an Audit Committee. As such, our entire Board of Directors acts as our
audit committee. No formal pre-approval process has been adopted.
Vote
Required
The
affirmative vote of the holders of a majority of shares of common stock present,
in person or by proxy, and voting on the matter is required for the approval
thereof.
The
Board of Directors unanimously recommends that you vote "FOR" re-appointment
of our auditors.
-17-
PROPOSAL
3:
REVERSE
STOCK SPLIT
Our
shares of common stock are quoted on the OTC Bulletin Board. In order for our
shares of common stock to be listed on the Nasdaq Capital Market, the NYSE Amex
or on another recognized stock exchange, we must satisfy various listing
standards. For instance, Nasdaq requires, among other things, to have
shareholders' equity of at least $5 million and there must be at least one
million shares of common stock held by persons other than officers, directors
and beneficial owners of greater than 10% of our total outstanding shares, often
referred to as the public float, that have an aggregate market value of at least
$15 million. Additionally, there must be at least three market makers for our
shares of common stock and at least 300 persons must each own at least 100
shares of common stock. We would also be subject to various corporate governance
requirements under stock exchange rules for listed companies.
We would
also be required to maintain a market price for our shares of common stock in
compliance with the stock exchange rules. Nasdaq's minimum bid price requirement
is $1.00 per share.
If we do
not meet the initial listing requirements, our shares of common stock will
continue to trade on the OTC Bulletin Board or in the "pink sheets" maintained
by the National Quotation Bureau, Inc. These alternatives are generally
considered to be less efficient and less broad-based than the Nasdaq Capital
Market or NYSE Amex.
Purpose
of the Reverse Share Split
The
purpose of the reverse share split is to increase the market price per share of
our common stock. The Board intends to effect a reverse share split only if it
believes that a decrease in the number of shares outstanding is likely to
improve the trading price of our common stock and is necessary to facilitate our
listing on a recognized stock exchange. If the reverse stock split is authorized
by our shareholders, our Board of Directors will have the discretion to
implement the reverse stock split once during the next 12 months, or effect no
reverse share split at all.
Our Board
of Directors has requested that shareholders approve an exchange ratio range, as
opposed to approval of a specified exchange ratio, in order to give the Board of
Directors maximum discretion and flexibility to determine the exchange ratio
based, among other factors, upon prevailing market, business and economic
conditions at the time. No further action on the part of the shareholders will
be required to either effect or abandon the reverse share split.
If
shareholders approve the reverse share split but no reverse share split is
effected within 12 months after the Annual Meeting, the Board of Director's
authority to effect the reverse share split will terminate.
Board
of Directors Determination
Our Board
of Directors has unanimously recommended that our shareholders authorize an
amendment to our Articles of Incorporation and Bylaws effecting a reverse share
split of our common stock at a ratio, to be established by the Board in its sole
discretion, not to exceed one-for-eighteen, or to abandon the reverse share
split. The amendments to the Articles of Incorporation and Bylaws would effect
the reverse share split by (i) reducing the number of our issued and outstanding
shares of common stock, as well as the number of our authorized but unissued
shares, by the ratio to be determined by the Board of Directors, not to exceed
one-for-eighteen, and (ii) effecting a proportionate increase in the par value
based on the ratio to be determined by the Board of Directors.
-18-
Our Board
of Directors has determined that the listing of our shares of common stock on a
recognized stock exchange, such as Nasdaq or NYSE Amex, is in the best interests
of our shareholders. If our shares of common stock were not listed on a stock
exchange because of failure to satisfy the minimum $1.00 price per share
requirement, trading in our shares of common stock would continue on the OTC
Bulletin Board. Our Board of Directors believes that the liquidity in the
trading market for our shares of common stock would be increased by listing on a
stock exchange, which could increase the trading price and decrease the
transaction costs of trading our shares of common stock.
The Board
of Directors also believes that a higher share price may help generate investor
interest in the Company. Some brokerage firms may be reluctant to recommend
lower priced securities to their clients. Investors may also be dissuaded from
purchasing lower priced stocks because brokerage commissions, as a percentage of
the total transaction cost, tend to be higher for these stocks. Our Board of
Directors further believes that a higher share price would help us attract and
retain employees and other strategic partners since some potential employees and
strategic partners may be less likely to work for or with a company with a low
share price.
Risks
of a Reverse Share Split
While our
Board of Directors believes that the potential advantages of a reverse share
split outweigh the risks, if the Board does effect a reverse share split there
can be no assurance that:
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our
shares of common stock will trade at a price in proportion to the
reduction in the number of outstanding shares resulting from the reverse
shares split;
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the
reverse share split will result in a per share price high enough to
attract and retain employees and strategic
partners;
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the
bid price of our shares of common stock after a reverse share split can be
maintained at or above $1.00;
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our
shares of common stock will not be rejected from listing on a stock
exchange for other reasons;
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the
liquidity of our shares of common stock will not be adversely affected by
the reduced number of shares that would be outstanding after the reverse
share split;
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engaging
in a reverse share split will not be perceived in a negative manner by
investors, analysts or other stock market participants;
or
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the
reverse share split will not result in some shareholders owning "odd-lots"
of less than 100 shares of common stock, potentially resulting in higher
brokerage commissions and other transaction costs than the commissions and
costs of transactions in "round-lots" of even multiples of 100
shares.
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Effects
of the Reverse Share Split on our Shares of Common Stock
A reverse
share split will reduce the number of shares of common stock issued and
outstanding and the number of shares authorized but unissued, into a
proportionately fewer number of shares of common stock. It will also result in
an adjustment of the par value of our shares of common stock. For example, if
our Board of Directors implements a one-for-five reverse share split of our
shares of common stock, then a stockholder holding 500 shares of common stock
$0.001 par value, before the reverse share split would hold 100 shares of common
stock, $0.005 par value, after the reverse share split, and the number of our
authorized shares of common stock will decrease from 200,000,000 to 40,000,000
shares of common stock and the number of shares of common stock outstanding
would decrease from [________] to [________]. However, each stockholder's
proportionate ownership of the issued and outstanding shares of common stock
immediately following the effectiveness of the reverse share split would remain
the same.
The
reverse share split will also affect the outstanding options under our equity
incentive plans and outstanding warrants. Generally, such securities include
provisions providing for adjustments to the number of shares of common stock in
the event of a reverse share split in order to maintain the same economic
effect. For example, if our Board of Directors implements a one-for-five reverse
share split, each of the outstanding options to purchase our shares of common
stock would represent the right to purchase that number of shares of common
stock equal to 20% of the shares of common stock previously covered by the
options and the exercise price per share would be five times the previous
exercise price. The same applies to our outstanding warrants to
purchase common stock.
Certain
U.S. Federal Income Tax Consequences
The
following discussion summarizing certain federal income tax consequences is
based on the Internal Revenue Code of 1986, as amended, and is for general
information only. It does not discuss consequences that may apply to special
classes of taxpayers (e.g., non-resident aliens or broker-dealers). It also does
not discuss state and local tax issues. Stockholders are urged to consult
their own tax advisors to determine the particular consequences to
them.
Generally,
a reverse share split will not result in the recognition of gain or loss for
U.S. federal income tax purposes. The adjusted tax basis of the aggregate number
of new shares of common stock will be the same as the adjusted basis of the
aggregate number of shares of common stock held by a shareholder immediately
prior to the reverse share split and the holding period of the shares of common
stock after the reverse share split will include the holding period of the
shares of common stock held prior to the reverse share split. No gain or loss
will be recognized by the Company as a result of the reverse share
split.
Certain
Israeli Tax Consequences
The
following discussion summarizing certain Israeli income tax consequences for
Israeli stockholders is based on the Israeli Income Tax Ordinance [New Version],
1961, as amended (the "Tax Ordinance"), and is for general information only.
Stockholders are urged to
consult their own tax advisors to determine the particular consequences to
them.
Generally,
a reverse share split will not result in the recognition of gain or loss for
Israeli income tax purposes. The adjusted tax basis of the aggregate number of
new shares of common stock will be the same as the adjusted tax basis of the
aggregate number of shares of common stock held by a shareholder immediately
prior to the reverse share split and the holding period of the shares of common
stock after the reverse share split will include the holding period of the
shares of common stock held prior to the reverse share split. No gain or loss
will be recognized by the Company as a result of the reverse share
split.
Fractional
Shares
In order
to avoid the expense and inconvenience of issuing fractional shares in
connection with the reverse share split, we will round any fractional share that
results from the reverse share split to the nearest whole share, with any half
share being rounded down.
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Exchange
of Share Certificates
Shortly
after the reverse share split becomes effective, stockholders will be notified
and offered the opportunity at their own expense to surrender their current
certificates to our stock transfer agent in exchange for the issuance of new
certificates reflecting the reverse share split. Commencing on the effective
date of the reverse share split, each certificate representing pre-reverse share
split shares of common stock will be deemed for all purposes to evidence
ownership of post-reverse share split shares of common stock, as the case may
be.
Appraisal
Rights
No
appraisal rights are available under Nevada Law to any shareholder who dissents
from the proposals to approve the reverse share split. If the reverse share
split is effected after the reincorporation contemplated by Proposal No. 4, no
appraisal rights are available under Delaware Law to any shareholder who
dissents from the proposals to approve the reverse share split.
Vote
Required
The
affirmative vote of the holders of a majority of shares of common stock present,
in person or by proxy, and voting on the matter is required for approval of the
reverse share split under Nevada corporate statutes.
The
Board of Directors unanimously recommends that you vote "FOR" approval of the
reverse share split.
PROPOSAL
4:
REINCORPORATION
OF THE COMPANY FROM THE STATE OF NEVADA
TO
THE STATE OF DELAWARE
In this
section of the proxy statement, we sometimes refer to the Company as a Nevada
corporation before reincorporation as "Oramed Nevada" and the Company as a
Delaware corporation after reincorporation as "Oramed Delaware."
Our Board
has unanimously approved and recommends to our stockholders this Proposal No. 4
to change the Company’s state of incorporation from the State of Nevada to the
State of Delaware (the "Reincorporation"). If our stockholders
approve this Proposal No. 4, we will accomplish the Reincorporation by
domesticating in Delaware as provided in the Delaware General Corporation Law,
as amended (the "DGCL"), and the Nevada Revised Statutes, as amended (the
"NRS").
Summary
Assuming
that stockholder approval of this Proposal No. 4 is obtained and the
Reincorporation becomes effective:
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the
affairs of the Company will cease to be governed by Nevada corporation
laws, the Company’s existing Articles of Incorporation and the Company’s
existing Bylaws, and the affairs of the Company will become subject to
Delaware corporation laws, a new Certificate of Incorporation and new
Bylaws, as more fully described
below;
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the
resulting Delaware corporation (i.e., Oramed Delaware) will (i) be deemed
to be the same entity as Oramed Nevada for all purposes under the laws of
Delaware, (ii) continue to have all of the rights, privileges and powers
of Oramed Nevada, (iii) continue to possess all of the properties of
Oramed Nevada, and (iv) continue to have all of the debts, liabilities and
obligations of Oramed Nevada;
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each
outstanding share of Oramed Nevada common stock will continue to be an
outstanding share of Oramed Delaware common stock, and each outstanding
option, warrant or other right to acquire shares of Oramed Nevada common
stock will continue to be an outstanding option, warrant or other right to
acquire shares of Oramed Delaware common
stock;
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each
employee benefit plan, incentive compensation plan or other similar plan
of Oramed Nevada will continue to be an employee benefit plan, incentive
compensation plan or other similar plan of Oramed Delaware;
and
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each
director and officer of Oramed Nevada will continue to hold their
respective offices with Oramed
Delaware.
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General
Information
Our Board
has adopted a plan of conversion substantially in the form attached as Appendix A to this proxy
statement (the "Plan of Conversion") to accomplish the
Reincorporation. Assuming the presence of a quorum at the Annual
Meeting, this Proposal No. 4 will be approved by stockholders by the affirmative
vote of a majority of the shares, present in person or represented by proxy and
voting on the matter, representing common stock outstanding at the close of
business on the record date. Assuming that stockholder approval of
this Proposal No. 4 is obtained, the Company will file with the Nevada Secretary
of State articles of conversion in form reasonably acceptable to the Secretary
of the Company (the "Nevada Articles of Conversion") and will file with the
Delaware Secretary of State (i) a certificate of conversion in form reasonably
acceptable to the Secretary of the Company (the "Delaware Certificate of
Conversion") and (ii) a certificate of incorporation, which will govern the
Company as a Delaware corporation, substantially in the form attached as Exhibit A to the Plan of
Conversion (the "Delaware Certificate of Incorporation"). In
addition, assuming that stockholder approval of this Proposal No. 4 is obtained,
our Board will adopt Bylaws for Oramed Delaware substantially in the form
attached as Exhibit B to
the Plan of Conversion (the "Delaware Bylaws"), and the Company will enter into
a new indemnification agreement with each director and officer of Oramed
Delaware based upon provisions of Delaware law substantially in the form
attached as Exhibit C to
the Plan of Conversion (the "Delaware Indemnification
Agreement"). Approval of this Proposal No. 4 by our stockholders will
constitute approval of the Plan of Conversion, the Delaware Certificate of
Incorporation and the Delaware Bylaws.
The
Reincorporation will not affect the trading of the shares of the Company’s
common stock on the OTC Bulletin Board under the same symbol
"ORMP.OB." Oramed Delaware will continue to file periodic reports and
other documents as and to the extent required by the rules and regulations of
the Securities and Exchange Commission (the "SEC"). Stockholders who
own shares of Oramed Nevada common stock that are freely tradable prior to the
Reincorporation will continue to have freely tradable shares in Oramed Delaware
after the Reincorporation, and stockholders holding restricted shares of Oramed
Nevada common stock prior to the Reincorporation will continue to hold their
shares in Oramed Delaware after the Reincorporation subject to the same
restrictions on transfer to which their shares are presently
subject. In summary, the Reincorporation will not change the
respective positions under federal securities laws of the Company or its
stockholders.
-22-
Reasons
for the Reincorporation
Delaware
is a nationally recognized leader in adopting and implementing comprehensive and
flexible corporate laws. The DGCL is frequently revised and updated
to accommodate changing legal and business needs and is more comprehensive,
widely used and interpreted than other state corporate laws, including the
NRS.
In
addition, Delaware courts (such as the Court of Chancery and the Delaware
Supreme Court) are highly regarded for their considerable expertise in dealing
with corporate legal issues and for producing a substantial body of case law
construing the DGCL, with multiple cases concerning areas that Nevada courts
have not considered. Because the judicial system is based largely on
legal precedents, the abundance of Delaware case law should serve to enhance the
relative clarity and predictability of many areas of corporate law, which should
offer added advantages to the Company by allowing our Board and management to
make corporate decisions and take corporate actions with greater assurance as to
the validity and consequences of those decisions and actions.
The
Reincorporation may also make it easier to attract future candidates willing to
serve on our Board because many such candidates are already familiar with
Delaware corporate law, including provisions relating to director
indemnification, from their past business experience.
In
addition, in the opinion of our Board, underwriters and other members of the
financial services industry may be more willing and better able to assist in
capital-raising programs for corporations having the greater flexibility
afforded by the DGCL. Based on publicly available data, over half of
publicly-traded corporations in the United States and more than 60% of the
Fortune 500 companies are incorporated in Delaware.
Changes
as a Result of Reincorporation
If this
Proposal No. 4 is approved, the Reincorporation will effect a change in the
legal domicile of the Company and other changes of a legal nature, the most
significant of which are described below in the section entitled "Comparison of
the Company’s Stockholders’ Rights Before and After the
Reincorporation." The Reincorporation is not expected to affect any
of the Company’s material contracts with any third parties, and the Company’s
rights and obligations under such material contractual arrangements will
continue as rights and obligations of Oramed Delaware. The
Reincorporation itself will not result in any change in headquarters, business,
jobs, management, location of any of the Company’s offices or facilities, number
of employees, assets, liabilities or net worth (other than as a result of the
costs incident to the Reincorporation) of the Company. Further, the
directors and officers of Oramed Nevada immediately prior to the Reincorporation
will be the directors and officers of Oramed Delaware immediately after the
Reincorporation, and the subsidiaries of Oramed Nevada immediately prior to the
Reincorporation will be the subsidiaries of Oramed Delaware immediately after
the Reincorporation.
The
Plan of Conversion
The
Reincorporation will be effected pursuant to the Plan of Conversion to be
adopted by Oramed Nevada. The Plan of Conversion provides that the
Company will convert into a Delaware corporation and will be subject to all of
the provisions of the DGCL. By virtue of the conversion, all of the
rights, privileges and powers of Oramed Nevada, all property owned by Oramed
Nevada, all debts due to Oramed Nevada and all other causes of action belonging
to Oramed Nevada immediately prior to the conversion will remain vested in
Oramed Delaware following the conversion. In addition, by virtue of
the conversion, all debts, liabilities and duties of the Company immediately
prior to the conversion will remain attached to Oramed Delaware following the
conversion. Each director and officer of Oramed Nevada will continue
to hold their respective offices with Oramed Delaware. Oramed
Delaware will remain as the same entity following the
conversion.
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If this
Proposal No. 4 is approved, it is anticipated that our Board will cause the
Reincorporation to be effected as soon as practicable
thereafter. However, the Reincorporation may be delayed by our Board
or the Plan of Conversion may be terminated and abandoned by action of our Board
at any time prior to the effective time of the Reincorporation, whether before
or after the approval by the Company’s stockholders, if our Board determines for
any reason that such delay or termination would be in the best interests of the
Company and its stockholders. If this Proposal No. 4 is approved by
our stockholders, the Reincorporation would become effective upon the filing
(and acceptance thereof by the Nevada Secretary of State and the Delaware
Secretary of State, as applicable) of the Nevada Articles of Conversion, the
Delaware Certificate of Conversion and the Delaware Certificate of
Incorporation.
Oramed
Nevada stockholders will not be required to exchange their Oramed Nevada stock
certificates Oramed Nevada for new Oramed Delaware stock
certificates. Following the effective time of the Reincorporation,
any Oramed Nevada stock certificates submitted to the Company for transfer,
whether pursuant to a sale or otherwise, will automatically be exchanged for
Oramed Delaware stock certificates. Oramed stockholders should not
destroy any stock certificate(s) and should not submit any certificate(s) to the
Company unless and until requested to do so.
Effect
of Not Obtaining the Required Vote for Approval
If we
fail to obtain the requisite vote of stockholders for approval of this Proposal
No. 4, the Reincorporation will not be consummated and the Company will continue
to be incorporated in Nevada and governed by Nevada corporation laws, the
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws.
Description
of the Company’s Capital Stock Upon the Effectiveness of the
Reincorporation
Assuming
that stockholder approval of this Proposal No. 4 is obtained and the
Reincorporation becomes effective, the Company will convert into Oramed
Delaware, which is a corporation that is incorporated in the State of
Delaware. The rights of stockholders of Oramed Delaware will
generally be governed by Delaware law, the Delaware Certificate of Incorporation
and the Delaware Bylaws. The following is a description of the
capital stock of Oramed Delaware as of and upon the effectiveness of the
Reincorporation. This description is not intended to be complete and
is qualified in its entirety by reference to Delaware law, including the DGCL,
and the full texts of the Delaware Certificate of Incorporation and the Delaware
Bylaws, copies of which are attached hereto as Exhibits A and B, respectively, to the Plan
of Conversion, which is attached as Appendix A to this proxy
statement.
General
Upon the
effectiveness of the Reincorporation, the authorized capital of Oramed Delaware
will continue to be 200,000,000 shares of common stock, par value $0.001 per
share, unless and until otherwise modified by the reverse share split which our
stockholders are being asked to approve in Proposal No. 3 in this proxy
statement.
Description
of Common Stock
Upon the
effectiveness of the Reincorporation, Oramed Delaware will continue to be
authorized to issue 200,000,000 shares of common stock, [________] shares of
which will continue to be issued and outstanding (subject to the reverse share
split contemplated in Proposal No. 3 to this proxy statement).
Upon the
effectiveness of the Reincorporation, subject to preferences applicable to any
shares of outstanding Oramed Delaware preferred stock, the holders of
outstanding shares of Oramed Delaware common stock will continue to be entitled
to receive dividends and other distributions out of assets legally available at
times and in amounts as the Board may determine from time to
time. All shares of Oramed Delaware common stock will be entitled to
participate ratably with respect to dividends or other
distributions.
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If Oramed
Delaware is liquidated, dissolved or wound up, voluntarily or involuntarily,
holders of Oramed Delaware common stock will be entitled to share ratably in all
assets of Oramed Delaware available for distribution to the Oramed Delaware
stockholders after the payment in full of any preferential amounts to which
holders of any Oramed Delaware preferred stock may be entitled.
Holders
of Oramed Delaware common stock will be entitled to one vote per share on all
matters to be voted upon by stockholders. No holder of common stock
will be entitled to cumulate votes in voting for directors.
There
will be no preemption, redemption, sinking fund or conversion rights applicable
to Oramed Delaware common stock under applicable law, the Delaware Certificate
of Incorporation or the Delaware Bylaws.
Delaware
Anti-Takeover Law
Upon the
effectiveness of the Reincorporation, Oramed Delaware will not then be subject
to the provisions of Section 203 of the DGCL because Oramed Delaware will not
then have a class of voting stock that is: (i) listed on a national securities
exchange or (ii) held of record by more than 2,000
stockholders. However, if Oramed Delaware in the future meets one of
these tests, Oramed Delaware may become subject to the provisions of Section 203
of the DGCL. In general, the statute prohibits a publicly-held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years following the date the
stockholder became an interested stockholder unless:
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prior
to such date, the board of directors of the corporation approved either
the business combination or the transaction that resulted in the
stockholder becoming an interested
stockholder;
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upon
consummation of the transaction that resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85%
of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned by persons who are directors and
also officers, and employee stock plans in which employee participants do
not have the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer;
or
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on
or subsequent to such date, the business combination is approved by the
board of directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least two-thirds of the outstanding voting stock that is not owned by the
interested stockholder.
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A
"business combination" includes a merger, asset or stock sale or other
transaction resulting in financial benefit to the stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years prior, did own, 15% or more of a
corporation’s outstanding voting stock. This provision may have the
effect of delaying, deterring or preventing a change in control of the
corporation without further action by its stockholders.
Limitation
of Director Liability and Indemnification
The
Delaware Certificate of Incorporation provides that, to the fullest extent
permitted by Delaware law, no director of Oramed Delaware will be personally
liable to Oramed Delaware or its stockholders for monetary damages for breach of
fiduciary duty as a director. Delaware law currently provides that
this waiver may not apply to liability:
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for
any breach of the director’s duty of loyalty to Oramed Delaware or its
stockholders;
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for
acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law;
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under
Section 174 of the DGCL (governing distributions to stockholders);
or
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for
any transaction from which the director derived any improper personal
benefit.
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However,
in the event the DGCL is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of our directors will be eliminated or limited to the fullest extent permitted
by the DGCL, as so amended. The Delaware Certificate of Incorporation
and the Delaware Bylaws further provide that Oramed Delaware will indemnify each
of its directors and officers to the fullest extent authorized by the DGCL and
may indemnify other persons as authorized by the DGCL. These
provisions do not eliminate any monetary liability of directors under the
federal securities laws. If this Proposal No. 4 is approved and the
Reincorporation is consummated, Oramed Delaware expects to enter into customary
indemnification agreements with its officers and directors based upon the
provisions of Delaware law.
Comparison
of the Company’s Stockholders’ Rights Before and After the
Reincorporation
Because
of differences between the NRS and the DGCL, as well as differences between the
Company’s governing documents before and after the Reincorporation, the
Reincorporation will effect certain changes in the rights of the Company’s
stockholders. Summarized below are the most significant provisions of
the NRS and DGCL, along with the differences between the rights of the
stockholders of the Company immediately before and immediately after the
Reincorporation that will be the result of the differences between the NRS and
the DGCL and the differences between the Company’s existing Articles of
Incorporation and the Company’s existing Bylaws, on the one hand, and the
Delaware Certificate of Incorporation and the Delaware Bylaws, on the other
hand. The summary below is not an exhaustive list of all differences
or a complete description of the differences described, and is qualified in its
entirety by reference to the NRS, the DGCL, the Company’s existing Articles of
Incorporation, the Company’s existing Bylaws, the Delaware Certificate of
Incorporation and the Delaware Bylaws. Copies of the Company’s
existing articles of incorporation and the Company’s existing Bylaws have been
filed or incorporated by reference as exhibits to certain of our filings with
the SEC.
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Provision
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Nevada law
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Delaware law
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Elections;
Voting; Procedural Matters
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Number
of Directors
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Nevada
law provides that a corporation must have at least one director and may
provide in its articles of incorporation or in its bylaws for a fixed
number of directors or a variable number, and for the manner in which the
number of directors may be increased or decreased.
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Delaware
law provides that a corporation must have at least one director and that
the number of directors shall be fixed by, or in the manner provided in,
the bylaws unless the certificate of incorporation fixes the number of
directors, in which case a change in the number of directors shall be made
only by amendment of the certificate of incorporation.
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The
Company’s existing Bylaws provide that the board of directors shall
consist of not less than one nor more than fifteen
directors. Subject to this limitation, the number of directors
shall be set by a resolution of the board of directors.
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The
Delaware Bylaws will provide that the number of directors comprising the
Board of Directors shall be such number as may be from time to time fixed
by resolution of the Board of Directors. Subject to the foregoing
provisions, the number of directors of Oramed Delaware will be initially
fixed at
five.
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Classified
Board of Directors
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Nevada
law permits corporations to classify their boards of
directors. At least one-fourth of the total number of directors
of a Nevada corporation must be elected annually.
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Delaware
law permits any Delaware corporation to classify its board of directors
into as many as three classes with staggered terms of
office. The certificate of incorporation may provide that one
or more directors may have voting powers greater than or less than those
of other directors. Further, the certificate of incorporation
may provide that holders of any class or series of stock shall have the
right to elect one or more directors.
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Oramed
Nevada does not have a classified Board.
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Oramed
Delaware will not have a classified board of directors following the
Reincorporation.
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Removal
of Directors
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Under
Nevada law, any one or all of the directors of a corporation may be
removed by the holders of not less than two-thirds of the voting power of
a corporation’s issued and outstanding stock. Nevada law does
not distinguish between removal of directors with or without
cause.
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With
limited exceptions applicable to classified boards and cumulative voting
provisions, under Delaware law, directors of a corporation without a
classified board may be removed with or without cause, by the holders of a
majority of shares then entitled to vote in an election of
directors.
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The
Bylaws provide that any director may be removed peremptorily by the
holders of two-thirds of the outstanding shares of the Company then
entitled to vote.
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The
Delaware Certificate of Incorporation and the Delaware Bylaws will not
change this statutory rule.
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Board
Action by Written Consent
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Nevada
law provides that, unless the articles of incorporation or bylaws provide
otherwise, any action required or permitted to be taken at a meeting of
the board of directors or of a committee thereof may be taken without a
meeting if, before or after the action, a written consent thereto is
signed by all the members of the board or committee, except for a director
that has a personal interest in the matter.
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Delaware
law provides that, unless the certificate of incorporation or bylaws
provide otherwise, any action required or permitted to be taken at a
meeting of the board of directors or of any committee thereof may be taken
without a meeting if all members of the board or committee consent thereto
in writing or by electronic transmission and the writing or writings or
electronic transmission or transmissions are filed with the minutes of
proceedings of the board or committee.
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The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws do not change this statutory rule.
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The
Delaware Bylaws will not change this statutory
rule.
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Interested
Party Transactions
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Under
Nevada law, a contract or transaction between a corporation and one or
more of its directors or officers, or between a corporation and any other
corporation, form or association in which one or more of its directors or
officers are directors or officers, or have a financial interest, is not
void or voidable solely for that reason, or solely because of such
relationship or interest, or solely because the interested director or
officer was present, participates or votes at the meeting of the board or
committee that authorizes the contract or transaction, if the director’s
or officer’s interest in the contract or transaction is known to the board
of directors, committee or stockholders and the transaction is approved or
ratified by the board, committee or stockholders in good faith by a vote
sufficient for the purpose without counting the vote or votes of the
interested director(s) or officer(s), the fact of the common interest is
not known to the director(s) or officer(s) at the time the transaction is
brought before the board, or the contract or transaction is fair to the
corporation at the time it is authorized or approved.
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Under
Delaware law, a contract or transaction between a corporation and one or
more of its directors or officers, or between a corporation and any other
corporation, partnership, association, or other organization in which one
or more of its directors or officers are directors or officers, or have a
financial interest, is not void or voidable solely because of such
relationship or interest, or solely because the director or officer is
present at or participates or votes at the meeting of the board or
committee that authorizes the contract or transaction, if one or more of
the following is true: (i) the material facts of the contract or
transaction and the director’s or officer’s relationship or interest are
disclosed to or known by the board or committee, and the board or the
committee in good faith authorizes the contract or transaction by an
affirmative vote of the majority of the disinterested directors (even
though these directors are less than a quorum); (ii) the material facts of
the contract or transaction and the director’s or officer’s relationship
or interest are disclosed to or known by the stockholders entitled to vote
on the matter and they specifically approve in good faith the contract or
transaction; or (iii) the contract or transaction is fair to the
corporation as of the time it was authorized, approved or
ratified.
|
||
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws are consistent with Nevada law.
|
The
Delaware Certificate of Incorporation and the Delaware Bylaws will not
change this statutory rule.
|
|||
|
Special
Meetings of Stockholders
|
Nevada
law provides that unless otherwise provided in a corporation’s articles of
incorporation or bylaws, the entire board of directors, any two directors,
or the president of the corporation may call a special meeting of the
stockholders.
|
Delaware
law permits special meetings of stockholders to be called by the board of
directors or by any other persons authorized in the certificate of
incorporation or bylaws to call a special stockholder
meeting.
|
||
|
The
Company’s existing Bylaws provide that special meetings of the
stockholders may be called by the President or the Secretary by resolution
of the Board of Directors, or at the request in writing of stockholders
owning a majority of the issued and outstanding capital stock of the
Company.
|
The
Delaware Bylaws will provide that special meetings of the
stockholders, for any purpose or purposes, unless otherwise prescribed by
statute, may be called by the majority of the Board of Directors at any
time.
|
|||
|
Failure
to Hold an Annual Meeting of Stockholders
|
Nevada
law provides that if a corporation fails to elect directors within 18
months after the last election, a Nevada district court may order an
election upon the petition of one or more stockholders holding 15 percent
of the corporation’s voting power.
|
Delaware
law provides that if a corporation fails to hold an annual meeting for the
election of directors or there is no written consent to elect directors in
lieu of an annual meeting taken, in both cases for a period of 30 days
after the date designated for the annual meeting, or if no date has been
designated, for a period of 13 months after the latest to occur of the
latest to occur of the organization of the corporation, its last annual
meeting or last action by written consent to elect directors in lieu of an
annual meeting, a director or stockholder of the corporation may apply to
the Court of Chancery of the State of Delaware to order that an annual
meeting be held.
|
-28-
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws do not change this statutory rule.
|
The
Delaware Certificate of Incorporation and the Delaware Bylaws will not
change this statutory rule.
|
|||
|
Cumulative
Voting
|
Nevada
law permits cumulative voting in the election of directors as long as the
articles of incorporation provide for cumulative voting and certain
procedures for the exercise of cumulative voting are
followed.
|
A
Delaware corporation may provide for cumulative voting in the
corporation’s certificate of incorporation.
|
||
|
The
Company does not currently have a provision granting cumulative voting
rights in the election of its directors in its existing Nevada Articles of
Incorporation or its existing Bylaws.
|
The
Delaware Certificate of Incorporation will not have a provision granting
cumulative voting rights in the election of its directors.
|
|||
|
Vacancies
|
All
vacancies on the board of directors of a Nevada corporation may be filled
by a majority of the remaining directors, though less than a quorum,
unless the articles of incorporation provide otherwise. Unless
otherwise provided in the articles of incorporation, the board may fill
the vacancies for the remainder of the term of office of the resigning
director or directors.
|
All
vacancies and newly created directorships on the board of directors of a
Delaware corporation may be filled by a majority of the directors then in
office, though less than a quorum, unless the certificate of incorporation
or bylaws provide otherwise. If, at the time of filling any
vacancy or any newly created directorship, the directors then in office
shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least 10 percent
of the voting stock at the time outstanding having the right to vote for
such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors
chosen by the directors then in office.
|
||
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws are consistent with Nevada law.
|
The
Delaware Bylaws will provide that vacancies and newly created
directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office,
although less than a quorum, and each director so elected shall hold
office until the next annual meeting of stockholders and until such
director’s successor shall have been duly elected and qualified, or his
earlier resignation or
removal.
|
-29-
|
Stockholder
Voting Provisions
|
Under
Nevada law, a majority of the voting power, which includes the voting
power that is present in person or by proxy, regardless of whether the
proxy has authority to vote on all matters, generally constitutes a quorum
for the transaction of business at a meeting of
stockholders. Generally, action by the stockholders on a matter
other than the election of directors is approved if the number of votes
cast in favor of the action exceeds the number of votes cast in opposition
to the action, unless otherwise provided in Nevada law or the articles of
incorporation or bylaws of the corporation. Generally,
directors are elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on
election of directors. Where a separate vote by a class or
series or classes or series is required, a majority of the voting power of
the class or series that is present or by proxy, regardless of whether the
proxy has authority to vote on all matters, generally constitutes a quorum
for the transaction of business. Generally, an act by the
stockholders of each class or series is approved if a majority of the
voting power of a quorum of the class or series votes for the
action.
|
Under
Delaware law, a majority of the shares entitled to vote, present in person
or represented by proxy, generally constitutes a quorum at a meeting of
stockholders. Generally, in all matters other than the election
of directors, the affirmative vote of the majority of shares present in
person or represented by proxy at the meeting and entitled to vote on the
subject matter constitutes the act of stockholders. Directors
are generally elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors. Where a separate vote by a class or
series or classes or series is required, a majority of the outstanding
shares of such class or series or classes or series, present in person or
represented by proxy, generally constitutes a quorum entitled to take
action with respect to that vote on that matter and, generally, the
affirmative vote of the majority of shares of such class or series or
classes or series present in person or represented by proxy constitutes
the act of such class or series or classes or series.
|
||
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws do not change these statutory rules, except that: (i) the quorum
required for all meetings of stockholders is 10% of the stock issued and
outstanding and entitled to vote at the meeting, present in person or by
proxy; and (ii) the Company's directors are elected by a majority, not a
plurality.
|
The
Delaware Bylaws do not change these statutory rules, except that: (i) the
quorum required for all meetings of stockholders is one third (1/3) of the
stock issued and outstanding and entitled to vote at the meeting, present
in person or by proxy; and (ii) the Company's directors are elected by a
majority, not a plurality.
|
|
Stockholder
Action by Written Consent
|
Nevada
law provides that, unless the articles of incorporation or bylaws provides
otherwise, any action required or permitted to be taken at a meeting of
the stockholders may be taken without a meeting if the holders of
outstanding stock having at least the minimum number of votes that would
be necessary to authorize or take such action at a meeting consent to the
action in writing.
|
Unless
the certificate of incorporation provides otherwise, any action required
or permitted to be taken at a meeting of the stockholders may be taken
without a meeting if the holders of outstanding stock having at least the
minimum number of votes that would be necessary to authorize or take such
action at a meeting consent to the action in writing. In
addition, Delaware law requires the corporation to give prompt notice of
the taking of corporate action without a meeting by less than unanimous
written consent to those stockholders who did not consent in
writing.
|
||
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws do not change this statutory rule.
|
The
Delaware Certificate of Incorporation and the Delaware Bylaws will not
change these statutory rules.
|
-30-
|
Stockholder
Vote for Mergers and Other Corporate Reorganizations
|
In
general, Nevada requires authorization by an absolute majority of
outstanding shares entitled to vote, as well as approval by the board of
directors, with respect to the terms of a merger or a sale of
substantially all of the assets of the corporation. So long as
the surviving corporation is organized in Nevada, Nevada law does not
generally require a stockholder vote of the surviving corporation in a
merger if: (a) the plan of merger does not amend the existing articles of
incorporation; (b) each share of stock of the surviving corporation
outstanding immediately before the effective date of the merger is an
identical outstanding share after the merger; (c) the number of voting
shares outstanding immediately after the merger, plus the number of voting
shares issued as a result of the merger, either by the conversion of
securities issued pursuant to the merger or the exercise of rights and
warrants issued pursuant to the merger, will not exceed by more than 20
percent the total number of voting shares of the surviving domestic
corporation outstanding immediately before the merger; and (d) the number
of participating shares outstanding immediately after the merger, plus the
number of participating shares issuable as a result of the merger, either
by the conversion of securities issued pursuant to the merger or the
exercise of rights and warrants issued pursuant to the merger, will not
exceed by more than 20 percent the total number of participating shares
outstanding immediately before the merger.
|
In
general, Delaware requires authorization by an absolute majority of
outstanding shares entitled to vote, as well as approval by the board of
directors, with respect to the terms of a merger or a sale of
substantially all of the assets of the corporation. Delaware
law does not generally require a stockholder vote of the surviving
corporation in a merger (unless the corporation provides otherwise in its
certificate of incorporation) if: (a) the plan of merger does not amend
the existing certificate of incorporation; (b) each share of stock of the
surviving corporation outstanding immediately before the effective date of
the merger is an identical outstanding share after the merger; and (c)
either no shares of common stock of the surviving corporation and no
shares, securities or obligations convertible into such stock are to be
issued or delivered under the plan of merger, or the authorized unissued
shares or shares of common stock of the surviving corporation to be issued
or delivered under the plan of merger plus those initially issuable upon
conversion of any other shares, securities or obligations to be issued or
delivered under such plan do not exceed 20% of the shares of common stock
of such constituent corporation outstanding immediately prior to the
effective date of the merger.
|
||
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws do not change these statutory rules.
|
The
Delaware Certificate of Incorporation and the Delaware Bylaws will not
change these statutory
rules.
|
-31-
|
Indemnification
of Officers and Directors and Advancement of Expenses; Limitation on
Personal Liability
|
||||
|
Indemnification
|
A
corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation, by
reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys’ fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding, if (i) he is not liable under NRS
78.138, and (ii) acted in "good faith" and in a manner he reasonably
believed to be in and not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. However,
with respect to actions by or in the right of the corporation, no
indemnification shall be made with respect to any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper. A director or
officer who is successful, on the merits or otherwise, in defense of any
proceeding subject to the Nevada corporate statutes’ indemnification
provisions must be indemnified by the corporation for reasonable expenses
incurred in connection therewith, including attorneys’
fees.
|
Through,
among other means, a majority vote of disinterested directors, a
corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that the person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. With respect to actions by or in the right
of the corporation, no indemnification shall be made with respect to any
claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit is brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall
deem proper. A director or officer who is successful, on the
merits or otherwise, in defense of any proceeding subject to the Delaware
corporate statutes’ indemnification provisions shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
|
||
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws provide that the corporation shall, to the fullest extent permitted
by applicable law, indemnify each person who is or was a director or
officer of the Company and each other person who is or was acting as a
representative of the Company at its request against expenses, liability
and loss (including attorneys’ fees, judgments, fines and settlements),
reasonably incurred ore suffered in connection therewith.
|
The
Delaware Bylaws will provide that Oramed Delaware shall indemnify its
directors and officers to the fullest extent authorized by the
DGCL.
|
|||
|
Advancement
of Expenses
|
Under
Nevada law, the articles of incorporation, bylaws or an agreement made by
the corporation may provide that the corporation must pay advancements of
expenses in advance of the final disposition of the action, suit or
proceedings upon receipt of an undertaking by or on behalf of the director
or officer to repay the amount if it is ultimately determined that he or
she is not entitled to be indemnified by the corporation.
|
Delaware
law provides that expenses incurred by an officer or director in defending
any civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final
disposition of the action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount
if it is ultimately determined that he or she is not entitled to be
indemnified by the corporation. A Delaware corporation has the
discretion to decide whether or not to advance expenses, unless provided
otherwise in its certificate of incorporation or
by-laws.
|
||
-32-
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws are consistent with Nevada law.
|
The
Delaware Bylaws will provide that Oramed Delaware will advance expenses to
any officer or director in advance of the final disposition of the
proceeding upon receipt of an undertaking by or on behalf of the director
or officer to repay the amount if it is ultimately determined that he or
she is not entitled to be indemnified by the
corporation..
|
|||
|
Limitation
on Personal Liability of Directors
|
Neither
a director nor an officer of a Nevada corporation can be held personally
liable to the corporation, its stockholders or its creditors unless the
director or officer committed both a breach of fiduciary duty and such
breach was accompanied by intentional misconduct, fraud, or knowing
violation of law. Unlike Delaware law, Nevada law does not
exclude breaches of the duty of loyalty or instances where the director
has received an improper personal benefit.
|
A
Delaware corporation is permitted to adopt provisions in its certificate
of incorporation limiting or eliminating the liability of a director to a
company and its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such liability does not arise from
certain proscribed conduct, including breach of the duty of loyalty, acts
or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law or liability to the corporation based on
unlawful dividends or distributions or improper personal
benefit.
|
||
|
The
Company’s existing Articles of Incorporation and the Company’s existing
Bylaws are consistent with Nevada law.
|
The
Delaware Certificate of Incorporation provides that, to the fullest extent
permitted by Delaware law, no director of Oramed Delaware will be
personally liable to Oramed Delaware or its stockholders for monetary
damages for breach of fiduciary duty as a director.
|
|||
|
Dividends
|
||||
|
Declaration
and Payment of Dividends
|
Under
Nevada law, a corporation may make distributions to its stockholders,
including by the payment of dividends, provided that, after giving effect
to the distribution, the corporation would be able to pay its debts as
they become due in the usual course of business and the corporation’s
total assets would not be less than the sum of its total liabilities plus
any amount needed, if the corporation were to be dissolved at the time of
the distribution, to satisfy the preferential rights of stockholders whose
rights are superior to those receiving the distribution.
|
Under
Delaware law, unless further restricted in the certificate of
incorporation, a corporation may declare and pay dividends, out of surplus
(as defined in the DGCL), or if no surplus exists, out of net profits for
the fiscal year in which the dividend is declared and/or the preceding
fiscal year, only if the amount of capital of the corporation is greater
than or equal to the aggregate amount of the capital represented by the
issued and outstanding stock of all classes having a preference upon the
distribution of assets. In addition, Delaware law sets forth
certain restrictions on the purchase or redemption of its shares of
capital stock, including that any such purchase or redemption may be made
only if the capital of the corporation is not impaired and such redemption
or repurchase would not impair the capital of the
corporation.
|
-33-
|
The
Company’s existing Bylaws provide that the dividends shall be declared by
the board of directors pursuant to law at any regular or special meeting
of the shareholders. Before payment of any dividend, there may be set
aside out of any funds of the Company available for dividends such sum or
sums as the board of directors it its absolute discretion thinks proper as
a reserve for such purposes as the board of directors thinks conducive to
the interests of the Company.
|
The
Delaware Certificate of Incorporation and the Delaware Bylaws will not
change these statutory rules.
|
|||
|
Anti-Takeover
Statutes
|
||||
|
Business
Combination Statute
|
Sections
78.411 through 78.444 of the NRS prohibits an interested stockholder from
engaging in a business combination with a corporation that has a class of
voting shares registered with the Securities and Exchange Commission under
section 12 of the Securities Exchange Act, for three years after the
person first became an interested stockholder unless the combination or
the transaction by which the person first became an interested stockholder
is approved by the board of directors before the person first became an
interested stockholder. If this approval is not obtained, then
after the expiration of the three-year period, the business combination
may be consummated if the combination is then approved by the affirmative
vote of the holders of a majority of the outstanding voting power not
beneficially owned by the interested stockholder or any affiliate or
associate thereof. Alternatively, even without these approvals,
a combination occurring more than three years after the person first
became an interested stockholder may be permissible if specified
requirements relating to the consideration to be received by disinterested
stockholders are met, and the interested stockholder has not, subject to
limited exceptions, become the beneficial owner of additional voting
shares of the corporation. An interested stockholder is (i) a
person that beneficially owns, directly or indirectly, ten percent or more
of the voting power of the outstanding voting shares of a corporation, or
(ii) an "affiliate" or "associate" (as those terms are defined in the
statute) of the corporation who, at any time within the past three years,
was an interested stockholder of the corporation.
|
Under
Delaware law, a corporation that is listed on a national securities
exchange or held of record by more than 2,000 stockholders is not
permitted to engage in a business combination with any interested
stockholder for a three-year period following the time such stockholder
became an interested stockholder, unless (i) the transaction resulting in
a person becoming an interested stockholder, or the business combination,
is approved by the board of directors of the corporation before the person
becomes an interested stockholder; (ii) the interested stockholder
acquires 85% or more of the outstanding voting stock of the corporation in
the same transaction that makes it an interested stockholder (excluding
shares owned by persons who are both officers and directors of the
corporation, and shares held by certain employee stock ownership plans);
or (iii) on or after the date the person becomes an interested
stockholder, the business combination is approved by the corporation’s
board of directors and by the holders of at least 66 2/3% of
the corporation’s outstanding voting stock at an annual or special meeting
(and not by written consent), excluding shares owned by the interested
stockholder. Delaware law defines "interested stockholder"
generally as a person who owns 15% or more of the outstanding shares of a
corporation’s voting
stock.
|
||
-34-
|
A
Nevada corporation may adopt an amendment to its articles of incorporation
expressly electing not to be governed by these provisions of the NRS, if
such amendment is approved by the affirmative vote of a majority of the
disinterested shares entitled to vote; provided, however, such vote by
disinterested stockholders is not required to the extent the Nevada
corporation is not subject to such provisions. Such an
amendment to the articles of incorporation does not become effective until
18 months after the vote of the disinterested stockholders and does not
apply to any combination with an interested stockholder who first became
an interested stockholder on or before the effective date of the
amendment.
|
These
provisions do not apply, among other exceptions, if (i) the corporation’s
original certificate of incorporation contains a provision expressly
electing not to be governed by these provisions, or (ii) the corporation,
by action of its stockholders, adopts an amendment to its certificate of
incorporation or bylaws expressly electing not to be governed by these
provisions.
Oramed has
not made such an election not to be governed by these
provisions.
|
|
Control
Share Acquisition Statute
|
The
NRS also limits the rights of persons acquiring a controlling interest in
a Nevada corporation with 200 or more stockholders of record, at least 100
of whom have Nevada addresses appearing on the stock ledger of the
corporation, and that does business in Nevada directly or through an
affiliated corporation. According to the NRS, an acquiring
person who acquires a controlling interest in an issuing corporation may
not exercise voting rights on any control shares unless such voting rights
are conferred by a majority vote of the disinterested stockholders of the
issuing corporation at a special or annual meeting of
stockholders. In the event that the control shares are accorded
full voting rights and the acquiring person acquires control shares with a
majority or more of all the voting power, any stockholder, other than the
acquiring person, who does not vote in favor of authorizing voting rights
for the control shares is entitled to demand payment for the fair value of
such person’s shares.
|
Delaware
does not have a control share acquisition statute. Thus,
hostile bidders could acquire blocks of Oramed Delaware stock without the
risk of voting disenfranchisement.
|
||
|
Under
the NRS, a controlling interest means the ownership of outstanding voting
shares of an issuing corporation sufficient to enable the acquiring
person, individually or in association with others, directly or
indirectly, to exercise (i) one-fifth or more but less than one-third,
(ii) one-third or more but less than a majority, or (iii) a majority or
more of the voting power of the issuing corporation in the election of
directors. Outstanding voting shares of an issuing corporation
that an acquiring person acquires or offers to acquire in an acquisition
and acquires within 90 days immediately preceding the date when the
acquiring person became an acquiring person are referred to as control
shares.
|
-35-
|
The
effect of the control share acquisition statute is, generally, to require
a hostile bidder to put its offer to a stockholder vote or risk voting
disenfranchisement.
The
control share acquisition statute of the NRS does not apply if the
corporation opts-out of such provision in the articles of incorporation or
bylaws of the corporation in effect on the tenth day following the
acquisition of a controlling interest by an acquiring
person.
|
Dissenters’
Rights
Holders
of record of shares of the Company’s common stock who do not vote in favor of
the Reincorporation or consent thereto in writing and who properly demand
payment for their shares will be entitled to dissenters’ rights in connection
with the Reincorporation under NRS Sections 92A.300 - 92A.500.
The
following discussion is not a complete statement of the law pertaining to
dissenters’ rights under NRS Sections 92A.300 - 92A.500 and is qualified in its
entirety by the full text of NRS Sections 92A.300 - 92A.500, which is attached
as Appendix B to this
proxy statement. The following summary does not constitute any legal
or other advice nor does it constitute a recommendation that stockholders
exercise their dissenters’ rights under NRS Sections 92A.300 -
92A.500. All references in NRS Sections 92A.300 - 92A.500 and in this
summary to a "stockholder" or "holders of shares of the Company’s common stock"
are to the record holder or holders of the shares of the Company’s common stock
entitled to vote as to which dissenters’ rights are asserted. A
person having a beneficial interest in shares of the Company’s common stock held
of record in the name of another person, such as a broker, fiduciary, depositary
or other nominee, must act promptly to cause the record holder to follow the
steps summarized below properly and in a timely manner to perfect dissenters’
rights, or must assert his own dissenters’ right and submit a written consent of
the stockholder of record in accordance with NRS 92A.400.
To assert
dissenters’ rights, stockholders must satisfy all of the following conditions,
including the conditions of NRS Section 92A.420:
|
|
·
|
Before
the vote on this Proposal No. 4 occurs at the Annual Meeting, each
stockholder who wishes to assert dissenters’ rights must give written
notice to the Company before the vote is taken, of the stockholder’s
intent to demand payment for his or her shares if the Reincorporation
takes place.
|
|
|
·
|
A
dissenting stockholder must not vote, or cause or permit to be voted, his
or her shares in favor of this Proposal No.
4.
|
-36-
|
|
·
|
Neither
voting against, abstaining from voting or failing to vote on the adoption
of the Reincorporation will constitute notice of intent to demand payment
or demand for payment of fair value within the meaning of NRS Section
92A.420 nor will it constitute a waiver of your dissenters’
rights.
|
|
|
·
|
If
a stockholder returns a signed proxy but does not mark "AGAINST" or
"ABSTAIN" with respect to this Proposal No. 4 on such proxy, such proxy
will be voted "FOR" approval of this Proposal No. 4, which will have the
effect of waiving the rights of that stockholder to have his shares
purchased at fair value.
|
|
|
·
|
Abstaining
from voting or voting against this Proposal No. 4 will NOT constitute a
waiver of dissenters’ rights.
|
After the
vote is taken at the Annual Meeting, if this Proposal No. 4 is approved, no
later than 10 days after the Reincorporation takes place, a written dissenters’
notice and form, accompanied by a copy of NRS Sections 92A.300 - 92A.500
inclusive, will be sent to each stockholder who has given the written notice
described above and did not vote in favor of the Reincorporation. The
dissenters’ notice will state the results of the vote on the Reincorporation,
where the payment demand must be sent, and where and when share certificates
must be deposited. It will set a date, not fewer than 30 nor more
than 60 days after delivery of the notice, by which the payment demand must be
received from the dissenting stockholder. The notice will include a
form for demanding payment that will require the stockholder asserting
dissenters’ rights to certify whether or not the stockholder acquired beneficial
ownership of the shares before January 31, 2011, the date of the first
announcement to the stockholders of the terms of the proposed Reincorporation,
and that the stockholder did not vote in favor of the
transaction. Please note that shares acquired after January 31, 2011,
referred to in this section as after-acquired shares, may be subject to
different treatment in accordance with NRS Section 92A.470 than shares acquired
before that date.
A
stockholder who receives a dissenters’ notice must comply with the terms of the
notice. A stockholder asserting dissenters’ rights who does so by
demanding payment, depositing his certificates in accordance with the terms of
the notice and certifying that beneficial ownership was acquired before January
31, 2011, will retain all other rights of a stockholder until these rights are
cancelled or modified by the Reincorporation.
Dissenters’
rights under NRS Section 92A.400 may be asserted either by a beneficial
stockholder or a stockholder of record. A record stockholder may
assert dissenters’ rights as to fewer than every share registered in his name
only if he objects for all shares beneficially owned by any one person and
notifies the Company in writing of the name and address of each person on whose
behalf he or she asserts dissenters’ rights. A beneficial stockholder
may assert dissenters’ rights as to shares held on his behalf only if he submits
to the Company the stockholder of record’s written consent before or at the time
he asserts dissenters’ rights and he does so for all shares that he beneficially
owns or over which he has the power to direct the vote.
Within 30
days after receipt of a payment demand, the Company will pay in cash to each
stockholder who complied with the terms of the dissenters’ notice the amount the
Company estimates to be the fair value of the shares, plus interest, except that
the Company may withhold payment from a dissenter as to after-acquired shares
until after the Reincorporation is effected, at which point it shall offer its
estimate of fair value of such shares, plus interest, to the dissenter in
accordance with NRS 92A.470. The payment will be accompanied by the
Company’s balance sheet as of the end of a fiscal year ending not more than 16
months before the date of payment, an income statement for that year, a
statement of changes in stockholder’s equity and the latest available interim
financial statements; a statement of the Company’s estimate of the fair value of
the shares; an explanation of how the interest was calculated; a statement of
the dissenter’s right to demand payment under NRS 92A.480; and a copy of NRS
Sections 92A.300 - 92A.500. Within 30 days of payment or offered
payment, if a dissenting stockholder believes that the amount paid is less than
the fair value of the shares or that the interest due is incorrectly calculated,
the stockholder may notify the Company in writing of his own estimate of the
fair value of the shares and interest due. If this kind of claim is
made by a stockholder, and it cannot be settled, the Company is required to
petition the district court to determine the fair value of the shares and
accrued interest within 60 days after receiving the payment demand.
-37-
The costs
and expenses of a court proceeding will be determined by the court and generally
will be assessed against the Company, but these costs and expenses may be
assessed as the court deems equitable against all or some of the stockholders
demanding appraisal who are parties to the proceeding if the court finds the
action of the stockholders in failing to accept the Company’s payment or offered
payment was arbitrary, vexatious or not in good faith. These expenses
may include the fees and expenses of counsel and experts employed by the
parties.
All
written notices to assert dissenters’ rights should be sent to the Secretary of
the Company at Oramed Pharmaceuticals Inc., Hi-Tech Park 2/5 Givat Ram, PO Box
39098, Jerusalem, Israel 91390, attention: Secretary.
Accounting
Treatment of the Reincorporation
The
Reincorporation has no effect from an accounting perspective because there is no
change in the entity as a result of the Reincorporation. Accordingly,
the historical consolidated financial statements of Oramed Nevada previously
reported to the SEC as of and for all periods through the date of this proxy
statement remain the consolidated financial statements of Oramed
Delaware.
Material
United States Federal Income Tax Consequences of the
Reincorporation
The
following discussion summarizes the material United States federal income tax
consequences of the Reincorporation that are expected to apply generally to
holders of the Company’s common stock. This summary is based upon
current provisions of the Internal Revenue Code ("IRC"), existing Treasury
Regulations and current administrative rulings and court decisions, all of which
are subject to change and to differing interpretations, possibly with
retroactive effect.
This
summary only applies to a common stockholder of the Company that is a "U.S.
person," defined to include:
|
|
·
|
a
citizen or resident of the United
States;
|
|
|
·
|
a
corporation created or organized in or under the laws of the United
States, or any political subdivision thereof (including the District of
Columbia);
|
|
|
·
|
an
estate the income of which is subject to United States federal income
taxation regardless of its source;
|
|
|
·
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a
trust if either:
|
|
|
·
|
a
court within the United States is able to exercise primary supervision
over the administration of such trust and one or more United States
persons have the authority to control all substantial decisions of such
trust, or
|
|
|
·
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the
trust has a valid election in effect to be treated as a United States
person for United States federal income tax purposes;
and
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|
|
·
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any
other person or entity that is treated for United States federal income
tax purposes as if it were one of the
foregoing.
|
-38-
A holder
of the Company’s common stock other than a "U.S. person" as so defined is, for
purposes of this discussion, a "non-U.S. person." If a partnership
holds the Company’s common stock, the tax treatment of a partner will generally
depend on the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding the
Company’s common stock, you should consult your tax advisor.
This
summary assumes that holders of the Company’s common stock hold their shares of
the Company’s common stock as capital assets within the meaning of Section 1221
of the IRC (generally, property held for investment). No attempt has
been made to comment on all United States federal income tax consequences of the
Reincorporation that may be relevant to particular holders, including
holders:
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|
·
|
who
are subject to special treatment under United States federal income tax
rules such as dealers in securities, financial institutions, non-U.S.
persons, mutual funds, regulated investment companies, real estate
investment trusts, insurance companies, or tax-exempt
entities;
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|
·
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who
are subject to the alternative minimum tax provisions of the
IRC;
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|
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·
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who
acquired their shares in connection with stock option or stock purchase
plans or in other compensatory
transactions;
|
|
|
·
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who
hold their shares as qualified small business stock within the meaning of
Section 1202 of the IRC; or
|
|
|
·
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who
hold their shares as part of an integrated investment such as a hedge or
as part of a hedging, straddle or other risk reduction
strategy.
|
In
addition, the following discussion does not address the tax consequences of the
Reincorporation under state, local and foreign tax laws. Furthermore,
the following discussion does not address any of the tax consequences of
transactions effectuated before, after or at the same time as the
Reincorporation, whether or not they are in connection with the
Reincorporation.
Accordingly,
holders of the Company’s common stock are advised and expected to consult their
own tax advisers regarding the federal income tax consequences of the
Reincorporation in light of their personal circumstances and the consequences of
the Reincorporation under state, local and foreign tax laws.
The
Company has not requested a ruling from the Internal Revenue Service ("IRS")
with respect to the United States federal income tax consequences of the
Reincorporation under the IRC. The Company believes, however, that
the Reincorporation of the Company from Nevada to Delaware will constitute a
reorganization within the meaning of Section 368(a)(1)(F) of the
IRC. Assuming that the Reincorporation will be treated for United
States federal income tax purposes as a reorganization within the meaning of
Section 368(a)(1)(F) of the IRC and subject to the qualifications and
assumptions described in this proxy statement: (i) holders of the Company’s
common stock will not recognize any gain or loss as a result of the consummation
of the Reincorporation, (ii) the aggregate tax basis of shares of the resulting
Delaware corporation’s common stock received in the Reincorporation will be
equal to the aggregate tax basis of the shares of the Company’s common stock
converted therefor, and (iii) the holding period of the shares of the resulting
Delaware corporation’s common stock received in the Reincorporation will include
the holding period of the shares of the Company’s common stock converted
therefor.
Although
the Company is of the belief that the United States federal income tax
consequences to the Reincorporation will be as described above, the IRS is not
precluded from taking a contrary position that could have an adverse tax
consequence on holders of the Company’s Common Stock. There can be no
assurance that the United States federal income tax consequences described above
will not be challenged by the IRS or, if challenged, will be decided favorably
to the holders of the Company’s Common Stock.
-39-
THE
PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION AND DOES NOT PURPORT TO
BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL OF THE REINCORPORATION’S POTENTIAL
TAX EFFECTS. HOLDERS OF THE COMPANY’S COMMON STOCK ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF
THE REINCORPORATION AND THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL
AND OTHER APPLICABLE TAX LAWS. PLEASE SEE IRS CIRCULAR 230 NOTICE ON
PAGE 3.
Material
Israeli Income Tax Consequences of the Reincorporation
The
following discussion summarizes the material Israeli income tax consequences of
the Reincorporation that are expected to apply generally to holders of the
Company’s common stock. This summary is based upon current provisions
of the Tax Ordinance, the regulations promulgated thereunder and current
administrative rulings and court decisions, all of which are subject to change
and to differing interpretations, possibly with retroactive effect.
The
Company has not requested a ruling from the Israeli Tax Authority ("ITA") with
respect to the Israeli income tax consequences of the
Reincorporation. The Company believes, however, that the
Reincorporation of the Company from Nevada to Delaware will not constitute a tax
event for Israeli tax purposes and therefore holders of the Company’s common
stock will not recognize any gain or loss for Israeli tax purposes as a result
of the consummation of the Reincorporation.
Although
the Company is of the belief that the Israeli income tax consequences to the
Reincorporation will be as described above, the ITA is not precluded from taking
a contrary position that could have an adverse tax consequence on holders of the
Company’s common stock. There can be no assurance that the Israeli
income tax consequences described above will not be challenged by the ITA or, if
challenged, will be decided favorably to the holders of the Company’s common
stock.
THE
PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN ISRAELI INCOME TAX
CONSEQUENCES OF THE REINCORPORATION AND DOES NOT PURPORT TO BE A COMPLETE
ANALYSIS OR DISCUSSION OF ALL OF THE REINCORPORATION’S POTENTIAL TAX
EFFECTS. HOLDERS OF THE COMPANY’S COMMON STOCK ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE
REINCORPORATION AND THE APPLICABILITY AND EFFECT OF ISRAELI AND OTHER APPLICABLE
TAX LAWS.
Vote
Required
The
affirmative vote of the holders of a majority of shares of common stock present,
in person or by proxy, and voting on the matter is required for the approval
thereof.
The
Board of Directors unanimously recommends that you vote "FOR" the approval of
the reincorporation of the Company from the State of Nevada to the State of
Delaware.
-40-
OTHER
BUSINESS
We do not
know of any matters that are to be presented for action at the Annual Meeting
other than those set forth in the accompanying Notice of Annual Meeting of
Stockholders. If any other business is properly brought before the
Annual Meeting, the persons named in the enclosed form of proxy will vote the
shares represented by proxies in accordance with their best judgment on such
matters.
DEADLINE
FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Proposals
of stockholders intended to be included in the Company’s proxy statement and
form of proxy for use in connection with the Company’s 2012 Annual Stockholder
Meeting must be received by the Company’s Secretary at the Company’s principal
executive offices at Hi-Tech Park 2/5 Givat Ram, PO Box 39098, Jerusalem, Israel
91390, no later than September 30, 2011, and must otherwise satisfy the
procedures prescribed by Rule 14a-8 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). It is suggested that any such
proposals be submitted by certified mail, return receipt requested.
Pursuant
to Rule 14a-4 under the Exchange Act, stockholder proxies obtained by our Board
of Directors in connection with our 2012 Annual Stockholder Meeting will confer
on the named proxies discretionary authority to vote on any matters presented at
the annual meeting which were not included in the Company’s proxy statement in
connection with such annual meeting, unless notice of the matter to be presented
at the annual meeting is provided to the Company’s Secretary before December 15,
2011.
WHERE
YOU CAN FIND MORE INFORMATION
You may
read and copy the reports and other information we file with the SEC at the
SEC’s Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. You
may also obtain copies of this information by mail from the public reference
section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at
prescribed rates. You may obtain information regarding the operation of the
public reference room by calling the SEC at 1 (800) SEC-0330. The SEC also
maintains a website that contains reports and other information about issuers,
like us, who file electronically with the SEC. The address of that website is
http://www.sec.gov. This reference to the SEC’s website is an inactive textual
reference only, and is not a hyperlink.
|
By
Order of the Board of Directors,
|
|
Nadav
Kidron
|
|
President,
Chief Executive Officer and
Director
|
Jerusalem,
Israel
January
31, 2011
-41-
APPENDIX
A
FORM
OF PLAN OF CONVERSION
OF
ORAMED PHARMACEUTICALS INC., a Nevada
corporation
TO
ORAMED PHARMACEUTICALS INC., a
Delaware corporation
THIS PLAN OF CONVERSION, dated
as of ____________, 2010 (including all of the Exhibits attached hereto, this
“Plan”), is
hereby adopted by Oramed Pharmaceuticals Inc., a Nevada corporation (the “Company”), in order
to set forth the terms, conditions and procedures governing the conversion of
the Company from a Nevada corporation to a Delaware corporation pursuant to
Section 265 of the General Corporation Law of the State of Delaware, as amended
(the “DGCL”),
and Section 92A.120 of the Nevada Revised Statutes, as amended (the “NRS”).
RECITALS
WHEREAS, the Company is a
corporation established and existing under the laws of the State of
Nevada;
WHEREAS, the Board of
Directors of the Company has determined that it would be advisable and in the
best interests of the Company and its stockholders for the Company to convert
from a Nevada corporation to a Delaware corporation pursuant to Section 265 of
the DGCL and Section 92A.120 of the NRS; and
WHEREAS, the form, terms and
provisions of this Plan has been authorized, approved and adopted by the Board
of Directors of the Company.
NOW, THEREFORE, the Company
hereby adopts this Plan as follows:
1. Conversion; Effect of
Conversion.
(a) Upon
the Effective Time (as defined in Section 3 below), the Company shall be
converted from a Nevada corporation to a Delaware corporation pursuant to
Section 265 of the DGCL and Section 92A.120 of the NRS (the “Conversion”) and the
Company, as converted to a Delaware corporation (the “Resulting Company”),
shall thereafter be subject to all of the provisions of the DGCL, except that
notwithstanding Section 106 of the DGCL, the existence of the Resulting Company
shall be deemed to have commenced on the date the Company commenced its
existence in the State of Nevada.
(b) Upon
the Effective Time, by virtue of the Conversion and without any further action
on the part of the Company or its stockholders, the Resulting Company shall, for
all purposes of the laws of the State of Delaware, be deemed to be the same
entity as the Company existing immediately prior to the Effective
Time. Upon the Effective Time, by virtue of the Conversion and
without any further action on the part of the Company or its stockholders, for
all purposes of the laws of the State of Delaware, all of the rights, privileges
and powers of the Company existing immediately prior to the Effective Time, and
all property, real, personal and mixed, and all debts due to the Company
existing immediately prior to the Effective Time, as well as all other things
and causes of action belonging to the Company existing immediately prior to the
Effective Time, shall remain vested in the Resulting Company and shall be the
property of the Resulting Company and the title to any real property vested by
deed or otherwise in the Company existing immediately prior to the Effective
Time shall not revert or be in any way impaired by reason of the Conversion; but
all rights of creditors and all liens upon any property of the Company existing
immediately prior to the Effective Time shall be preserved unimpaired, and all
debts, liabilities and duties of the Company existing immediately prior to the
Effective Time shall remain attached to the Resulting Company upon the Effective
Time, and may be enforced against the Resulting Company to the same extent as if
said debts, liabilities and duties had originally been incurred or contracted by
the Resulting Company in its capacity as a corporation of the State of
Delaware. The rights, privileges, powers and interests in property of
the Company existing immediately prior to the Effective Time, as well as the
debts, liabilities and duties of the Company existing immediately prior to the
Effective Time, shall not be deemed, as a consequence of the Conversion, to have
been transferred to the Resulting Company upon the Effective Time for any
purpose of the laws of the State of Delaware.
-42-
(c) The
Conversion shall not be deemed to affect any obligations or liabilities of the
Company incurred prior to the Conversion or the personal liability of any person
incurred prior to the Conversion.
(d) Upon
the Effective Time, the name of the Resulting Company shall remain unchanged and
continue to be “Oramed Pharmaceuticals Inc.”
(e) The
Company intends for the Conversion to constitute a tax-free reorganization
qualifying under Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as
amended. Accordingly, neither the Company nor any of its stockholders
should recognize gain or loss for federal income tax purposes as a result of the
Conversion.
2. Filings. As
promptly as practicable following the adoption of this Plan, the Company shall
cause the Conversion to be effective by:
(a) executing
and filing (or causing the execution and filing of) Articles of Conversion
pursuant to Section 92A.205 of the NRS in form reasonably acceptable to any
officer of the Company (the “Nevada Articles of
Conversion”) with the Secretary of State of the State of
Nevada;
(b) executing
and filing (or causing the execution and filing of) a Certificate of Conversion
pursuant to Sections 103 and 265 of the DGCL in form reasonably acceptable to
any officer of the Company (the “Delaware Certificate of
Conversion”) with the Secretary of State of the State of Delaware;
and
(c) executing,
acknowledging and filing (or causing the execution, acknowledgement and filing
of) a Certificate of Incorporation of Oramed Pharmaceuticals Inc. substantially
in the form set forth on Exhibit A hereto (the
“Delaware Certificate
of Incorporation”) with the Secretary of State of the State of
Delaware.
3. Effective
Time. The Conversion shall become effective upon the filing of
the Nevada Articles of Conversion, the Delaware Certificate of Conversion and
the Delaware Certificate of Incorporation (the time of the effectiveness of the
Conversion, the “Effective
Time”).
4. Effect of Conversion on
Common Stock. Upon the Effective Time, by virtue of the
Conversion and without any further action on the part of the Company or its
stockholders, each share of common stock, $0.001 par value per share, of the
Company (“Company
Common Stock”) that is issued and outstanding immediately prior to the
Effective Time shall convert into one validly issued, fully paid and
nonassessable share of common stock, $0.001 par value per share, of the
Resulting Company (“Resulting Company Common
Stock”).
5. Effect of Conversion on
Outstanding Stock Options. Upon the Effective Time, by virtue
of the Conversion and without any further action on the part of the Company or
its stockholders, each option to acquire shares of Company Common Stock
outstanding immediately prior to the Effective Time shall convert into an
equivalent option to acquire, upon the same terms and conditions (including the
exercise price per share applicable to each such option) as were in effect
immediately prior to the Effective Time, the same number of shares of Resulting
Company Common Stock.
-43-
6. Effect of Conversion on
Outstanding Warrants or Other Rights. Upon the Effective Time,
by virtue of the Conversion and without any further action on the part of the
Company or its stockholders, each warrant or other right to acquire shares of
Company Common Stock outstanding immediately prior to the Effective Time shall
convert into an equivalent warrant or other right to acquire, upon the same
terms and conditions (including the exercise price per share applicable to each
such warrant or other right) as were in effect immediately prior to the
Effective Time, the same number of shares of Resulting Company Common
Stock.
7. Effect of Conversion on
Stock Certificates. Upon the Effective Time, all of the
outstanding certificates that immediately prior to the Effective Time
represented shares of Company Common Stock immediately prior to the Effective
Time shall be deemed for all purposes to continue to evidence ownership of and
to represent the same number of shares of Resulting Company Common
Stock.
8. Effect of Conversion on
Employee Benefit, Incentive Compensation or Other Similar
Plans. Upon the Effective Time, by virtue of the Conversion
and without any further action on the part of the Company or its stockholders,
each employee benefit plan, incentive compensation plan or other similar plan to
which the Company is a party shall continue to be a plan of the Resulting
Company. To the extent that any such plan provides for the issuance
of Company Common Stock, upon the Effective Time, such plan shall be deemed to
provide for the issuance of Resulting Company Common Stock.
9. Further
Assurances. If, at any time after the Effective Time, the
Resulting Company shall determine or be advised that any deeds, bills of sale,
assignments, agreements, documents or assurances or any other acts or things are
necessary, desirable or proper, consistent with the terms of this Plan, (a) to
vest, perfect or confirm, of record or otherwise, in the Resulting Company its
right, title or interest in, to or under any of the rights, privileges,
immunities, powers, purposes, franchises, properties or assets of the Company
existing immediately prior to the Effective Time, or (b) to otherwise carry out
the purposes of this Plan, the Resulting Company and its officers and directors
(or their designees), are hereby authorized to solicit in the name of the
Resulting Company any third-party consents or other documents required to be
delivered by any third-party, to execute and deliver, in the name and on behalf
of the Resulting Company all such deeds, bills of sale, assignments, agreements,
documents and assurances and do, in the name and on behalf of the Resulting
Company, all such other acts and things necessary, desirable or proper to vest,
perfect or confirm its right, title or interest in, to or under any of the
rights, privileges, immunities, powers, purposes, franchises, properties or
assets of the Company existing immediately prior to the Effective Time and
otherwise to carry out the purposes of this Plan.
10. Effect of Conversion on
Directors and Officers. Upon the Effective Time, by virtue of
the Conversion and without any further action on the part of the Company or its
stockholders, the members of the Board of Directors and the officers of the
Company holding their respective offices in the Company existing immediately
prior to the Effective Time shall continue in their respective offices as
members of the Board of Directors and officers of the Resulting
Company.
11. Delaware
Bylaws. Upon the Effective Time, the bylaws of the Resulting
Company shall be the Bylaws of Oramed Pharmaceuticals Inc. substantially in the
form set forth on Exhibit B hereto (the
“Delaware
Bylaws”), and the Board of Directors of the Resulting Company shall adopt
the Delaware Bylaws as promptly as practicable following the Effective
Time.
12. Delaware Indemnification
Agreements. As promptly as practicable following the Effective
Time, the Resulting Company shall enter into an Indemnification Agreement
substantially in the form set forth on Exhibit C hereto with
each member of the Board of Directors of the Resulting Company and each officer
of the Resulting Company.
-44-
13. Termination. At
any time prior to the Effective Time, this Plan may be terminated and the
transactions contemplated hereby may be abandoned by action of the Board of
Directors of the Company if, in the opinion of the Board of Directors of the
Company, such action would be in the best interests of the Company and its
stockholders. In the event of termination of this Plan, this Plan
shall become void and of no effect.
14. Third Party
Beneficiaries. This Plan shall not confer any rights or
remedies upon any person other than as expressly provided herein.
15. Severability. Whenever
possible, each provision of this Plan will be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Plan
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Plan.
IN WITNESS WHEREOF, the
Company has caused this Plan to be duly executed as of the date first above
written.
|
ORAMED
PHARMACEUTICALS INC.,
a
Nevada corporation
|
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|
By:
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|
Name: Nadav
Kidron
|
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|
Title: President
and Chief Executive Officer
|
||
-45-
Exhibit
A
CERTIFICATE
OF INCORPORATION
OF
ORAMED
PHARMACEUTICALS INC.
FIRST: The
name of the Corporation is:
ORAMED
PHARMACEUTICALS INC.
SECOND: The
address of the Corporation's registered office in the State of Delaware is 1811
Silverside Road, in the City of Wilmington, County of New Castle,
19810. The name of its registered agent at such address is Vcorp
Services, LLC.
THIRD: The
purpose of the Corporation is to engage in any lawful act or activity for which
a corporation may be organized under the laws of the General Corporation Law of
the State of Delaware.
FOURTH: The
total number of shares of capital stock which the Corporation shall have
authority to issue is two hundred million (200,000,000) shares of Common Stock,
par value $.001 per share.
FIFTH: The
name and address of the sole incorporator is as follows:
|
Name
|
Address
|
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Nadav
Kidron
|
Hi-Tech
Park 2/5
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Givat-Ram
|
|
|
PO
Box 39098
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|
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Jerusalem
91390 Israel
|
SIXTH: Unless
required by law or determined by the chairman of the meeting to be advisable,
the vote by stockholders on any matter, including the election of directors,
need not be by written ballot.
SEVENTH: The
Corporation reserves the right to increase or decrease its authorized capital
stock, or any class or series thereof, and to reclassify the same, and to amend,
alter, change or repeal any provision contained in the Certificate of
Incorporation under which the Corporation is organized or in any amendment
thereto, in the manner now or hereafter prescribed by law, and all rights
conferred upon stockholders in said Certificate of Incorporation or any
amendment thereto are granted subject to the aforementioned
reservation.
EIGHTH: The
Board of Directors shall have the power at any time, and from time to time, to
adopt, amend and repeal any and all By-laws of the Corporation.
-46-
NINTH: To
the fullest extent permitted by the Delaware General Corporation Law, as the
same exists or may hereafter be amended, a director of this Corporation shall
not be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Any repeal or modification
of the foregoing provisions of this Article NINTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or
modification.
TENTH: 1. The
Corporation shall indemnify to the maximum extent permitted by law any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that such person is or was
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, all as more fully set forth in the By-laws of
the Corporation, as amended or repealed from time to time.
2. The
indemnification and other rights set forth in this Article TENTH shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any Bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person’s official capacity and as to action in another capacity while holding
such office.
3. Any
repeal or modification of the foregoing provisions of this Article TENTH by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director, officer, employee or agent of the Corporation existing
at the time of such repeal or modification.
Dated:
[_______], 2011
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||
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Nadav
Kidron
|
-47-
Exhibit
B
ORAMED
PHARMACEUTICALS INC.
BY-LAWS
ARTICLE
I
OFFICES
1. The
location of the registered office of the Corporation is 1811 Silverside Road, in
the City of Wilmington, County of New Castle, Delaware 19810, and the name of
its registered agent at such address is Vcorp Services, LLC.
2. The
Corporation shall in addition to its registered office in the State of Delaware
establish and maintain an office or offices at such place or places as the Board
of Directors may from time to time find necessary or desirable.
ARTICLE
II
CORPORATE
SEAL
The Corporation may or may not have a
corporate seal, as may be determined from time to time by the Board of
Directors. If adopted, the corporate seal of the Corporation shall have
inscribed thereon the name of the Corporation and may be in such form as the
Board of Directors may determine. Such seal may be used by causing it
or a facsimile thereof to be impressed, affixed or otherwise
reproduced.
ARTICLE
III
MEETINGS
OF STOCKHOLDERS
1. All
meetings of the stockholders shall be held at the registered office of the
Corporation in the State of Delaware or at such other place as shall be
determined from time to time by the Board of Directors.
2. The
annual meeting of stockholders shall be held on such day and at such time as may
be determined from time to time by resolution of the Board of Directors, when
they shall elect by majority vote pursuant to Section 5 of this Article III, a
Board of Directors to hold office until the annual meeting of stockholders held
next after their election and their successors are respectively elected and
qualified or until their earlier resignation or removal. Any other
proper business may be transacted at the annual meeting.
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3. The
holders of at least one third (1/3) of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business, except as otherwise expressly provided by statute, by the Certificate
of Incorporation or by these By-laws. If, however, such majority
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting (except as otherwise provided by
statute). At such adjourned meeting at which the requisite amount of
voting stock shall be represented any business may be transacted which might
have been transacted at the meeting as originally notified.
4. At
all meetings of the stockholders each stockholder having the right to vote shall
be entitled to vote in person, or by proxy appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than three years
prior to said meeting, unless such instrument provides for a longer
period.
5. At
each meeting of the stockholders each stockholder shall have one vote for each
share of capital stock having voting power, registered in his name on the books
of the Corporation at the record date fixed in accordance with these By-laws, or
otherwise determined, with respect to such meeting. Except as
otherwise expressly provided by statute, by the Certificate of Incorporation or
by these By-laws, all matters coming before any meeting of the stockholders
shall be decided by the vote of a majority of the number of shares of stock
present in person or represented by proxy at such meeting and entitled to vote
thereat, a quorum being present.
6. Notice
of each meeting of the stockholders shall be given to each stockholder entitled
to vote thereat not less than 10 nor more than 60 days before the date of the
meeting. Such notice shall state the place, date and hour of the
meeting and, in the case of a special meeting, the purposes for which the
meeting is called.
7. The
Secretary shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at said
meeting (provided, however, if the record date for determining the stockholders
entitled to vote is less than ten (10) days before the date of the meeting, the
list shall reflect the stockholders entitled to vote as of the tenth day before
the meeting date), arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, (a) on a reasonably accessible electronic network,
provided that the information required to gain access to such list is provided
with the notice of the meeting, or (b) during ordinary business hours, at the
principal place of business of the Corporation. In the event that the
Corporation determines to make the list available on an electronic network, the
Corporation may take reasonable steps to ensure that such information is
available only to stockholders of the Corporation. The list shall be open to
examination of any stockholder during the time of the meeting as provided by
law.
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8. Special
meetings of the stockholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the majority of the Board of
Directors.
9. Business
transacted at each special meeting shall be confined to the purpose or purposes
stated in the notice of such meeting.
10. The
order of business at each meeting of stockholders shall be determined by the
presiding officer.
ARTICLE
IV
DIRECTORS
1. The
business and affairs of the Corporation shall be managed under the direction of
a Board of Directors, which may exercise all such powers and authority for and
on behalf of the Corporation as shall be permitted by law, the Certificate of
Incorporation or these By-laws. Each of the directors shall hold
office until the next annual meeting of stockholders and until his successor has
been elected and qualified or until his earlier resignation or
removal.
2. The
Board is empowered to appoint a Chairman of the Board of
Directors. The Chairman shall act as chairman of all meetings of the
Board of Directors and at all special and annual meetings of stockholders, and
shall have control over the agenda of such meetings, all in accordance with the
provisions of these By-laws and the Certificate of Incorporation. The
Chairman shall perform such other duties as may from time to time be assigned to
him by the Board of Directors.
3. The
Board of Directors may hold their meetings within or outside of the State of
Delaware, at such place or places as it may from time to time
determine.
4. The
number of directors comprising the Board of Directors shall be such number as
may be from time to time fixed by resolution of the Board of
Directors. In case of any increase, the Board of Directors shall have
power to elect each additional director to hold office until the next annual
meeting of stockholders and until his successor is elected and qualified or his
earlier resignation or removal. Any decrease in the number of
directors shall take effect at the time of such action by the Board of Directors
only to the extent that vacancies then exist; to the extent that such decrease
exceeds the number of such vacancies, the decrease shall not become effective,
except as further vacancies may thereafter occur, until the time of and in
connection with the election of directors at the next succeeding annual meeting
of the stockholders.
5. If
the office of any director becomes vacant, by reason of death, resignation,
disqualification or otherwise, a majority of the directors then in office,
although less than a quorum, may fill the vacancy by electing a successor who
shall hold office until the next annual meeting of stockholders and until his
successor is elected and qualified or his earlier resignation or
removal.
6. Any
director may resign at any time by giving written notice of his resignation to
the Board of Directors. Any such resignation shall take effect upon
receipt thereof by the Board of Directors, or at such later date as may be
specified therein. Any such notice to the Board shall be addressed to
it in care of the Secretary.
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ARTICLE
V
COMMITTEES
OF DIRECTORS
1. The
Board of Directors may designate an Executive Committee and one or more other
committees, each such committee to consist of one or more directors of the
Corporation. The Executive Committee shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation (except as otherwise expressly limited
by statute), including the power and authority to declare dividends and to
authorize the issuance of stock, and may authorize the seal of the Corporation
to be affixed to all papers which may require it. Each such committee
shall have such of the powers and authority of the Board as may be provided from
time to time in resolutions adopted by the Board of Directors.
2. The
requirements with respect to the manner in which the Executive Committee and
each such other committee shall hold meetings and take actions shall be set
forth in the resolutions of the Board of Directors designating the Executive
Committee or such other committee.
ARTICLE
VI
COMPENSATION
OF DIRECTORS
The directors shall receive such
compensation for their services as may be authorized by resolution of the Board
of Directors, which compensation may be in either cash or equity, or a
combination thereof, and may include an annual fee, a fixed sum for attendance
at regular or special meetings of the Board or any committee thereof and
reimbursement of expenses reasonably incurred in attending such
meetings. Nothing herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
ARTICLE
VII
MEETINGS
OF DIRECTORS; ACTION WITHOUT A MEETING
1. Regular
meetings of the Board of Directors may be held without notice at such time and
place, either within or without the State of Delaware, as may be determined from
time to time by resolution of the Board.
2. Special
meetings of the Board of Directors shall be held whenever called by the
President of the Corporation or the majority of the Board of Directors on at
least 24 hours' notice to each director. Except as may be otherwise
specifically provided by statute, by the Certificate of Incorporation or by
these By-laws, the purpose or purposes of any such special meeting need not be
stated in such notice, although the time and place of the meeting shall be
stated.
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3. At
all meetings of the Board of Directors, the presence in person of a majority of
the total number of directors shall be necessary and sufficient to constitute a
quorum for the transaction of business, and, except as otherwise provided by
statute, by the Certificate of Incorporation or by these By-laws, if a quorum
shall be present the act of a majority of the directors present shall be the act
of the Board.
4. Any
action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting if all the
members of the Board or such committee, as the case may be, consent thereto in
writing or by electronic transmission and the writing or writings or electronic
transmissions are filed with the minutes of proceedings of the Board of
Directors or committee. Any director may participate in a meeting of
the Board, or any committee designated by the Board, by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this sentence shall constitute presence in person at such
meeting.
ARTICLE
VIII
OFFICERS
1. The
officers of the Corporation shall be chosen by the Board of Directors and shall
be a Chief Executive Officer, a President, one or more Vice Presidents, a
Secretary and a Treasurer. The Board may also choose one or more
Assistant Secretaries and Assistant Treasurers, and such other officers as it
shall deem necessary. Any number of offices may be held by the same
person.
2. The
salaries of all officers of the Corporation shall be fixed by the Board of
Directors, or in such manner as the Board may prescribe.
3. The
officers of the Corporation shall hold office until their successors are elected
and qualified, or until their earlier resignation or removal. Any
officer may be at any time removed from office by the Board of Directors, with
or without cause. If the office of any officer becomes vacant for any
reason, the vacancy may be filled by the Board of Directors.
4. Any
officer may resign at any time by giving written notice of his resignation to
the Board of Directors. Any such resignation shall take effect upon
receipt thereof by the Board or at such later date as may be specified
therein. Any such notice to the Board shall be addressed to it in
care of the Secretary
5. The
Chief Executive Officer shall have general supervision and direction of the
business and affairs of the Corporation, subject, however, to the direction and
control of the Board of Directors. The Chief Executive Officer may
sign and execute in the name of the Corporation deeds, mortgages, bond,
contracts or other instruments. The Chief Executive Officer shall
perform all duties incident to the office of the Chief Executive Officer and
shall, when requested, counsel with and advise the other officers of the
Corporation and shall perform such other duties as the Board of Directors may
from time to time determine.
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6. The
President shall have such powers and perform such duties as from time to time
may be assigned to him by the Chief Executive Officer or the Board of
Directors.
7. The
Vice Presidents shall have such powers and duties as may be delegated to them by
the Chief Executive Officer or the Board of Directors.
8. The
Secretary shall have such powers and duties as may be delegated to him by the
Chief Executive Officer or the Board of Directors.
9. The
Assistant Secretary shall, in case of the absence of the Secretary, perform the
duties and exercise the powers of the Secretary, and shall have such other
powers and duties as may be delegated to them by the Chief Executive Officer or
the Board of Directors.
10. The
Treasurer shall have the custody of the corporate funds and securities, and
shall deposit or cause to be deposited under his direction all moneys and other
valuable effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors or pursuant to
authority granted by it. He shall render to the Chief Executive
Officer and the Board whenever they may require it an account of all his
transactions as Treasurer and of the financial condition of the Corporation. He
shall have such other powers and duties as may be delegated to him by the Chief
Executive Officer or the Board of Directors.
11. The
Assistant Treasurer shall, in case of the absence of the Treasurer, perform the
duties and exercise the powers of the Treasurer, and shall have such other
powers and duties as may be delegated to them by the Chief Executive Officer or
the Board of Directors.
ARTICLE
IX
CERTIFICATES
OF STOCK
The certificates of stock of the
Corporation shall be numbered and shall be entered in the books of the
Corporation as they are issued. They shall exhibit the holder's name
and number of shares and shall be signed by the President or a Vice President,
and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary.
ARTICLE
X
CHECKS
All checks, drafts and other orders for
the payment of money and all promissory notes and other evidences of
indebtedness of the Corporation shall be signed by such officer or officers or
such other person as may be designated by the Board of Directors or pursuant to
authority granted by it.
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ARTICLE
XI
FISCAL
YEAR
The fiscal year of the Corporation
shall be as determined from time to time by resolution duly adopted by the Board
of Directors.
ARTICLE
XII
NOTICES
AND WAIVERS
1. Whenever
by statute, by the Certificate of Incorporation or by these By-laws it is
provided that notice shall be given to any director, such provision shall not be
construed to require personal notice, but such notice may be given in writing,
by mail, by depositing the same in the United States mail, postage prepaid,
directed to such director at his address as it appears on the records of the
Corporation, and such notice shall be deemed to be given at the time when the
same shall be thus deposited. Notice of regular or special meetings
of the Board of Directors may also be given to any director by telephone or by
electronic transmission, and in the latter event the notice shall be deemed to
be given at the time such notice, addressed to such director at the address
hereinabove provided, is transmitted by facsimile or electronic
mail.
2. Whenever
by statute, by the Certificate of Incorporation or by these By-laws it is
provided that notice shall be given to any stockholder, such provision shall not
be construed to require personal notice, but such notice may be given in
writing, by mail, by depositing the same in the United States mail, postage
prepaid, directed to such stockholder at his address as it appears on the
records of the Corporation, and such notice shall be deemed to be given at the
time when the same shall be thus deposited.
3. Without
limiting the manner by which notice otherwise may be given effectively to
stockholders, any notice to stockholders given by the Corporation under any
provision of the General Corporation Law of the State of Delaware, the
Certificate of Incorporation, or these By-laws shall be effective if given by a
form of electronic transmission consented to by the stockholder to whom the
notice is given. Any such consent shall be revocable by the stockholder by
written notice to the Corporation. Any such consent shall be deemed revoked if
(i) the Corporation is unable to deliver by electronic transmission two (2)
consecutive notices given by the Corporation in accordance with such consent and
(ii) such inability becomes known to the Secretary or an Assistant Secretary or
to the transfer agent, or other person responsible for the giving of notice;
provided, however, the inadvertent failure to treat such inability as a
revocation shall not invalidate any meeting or other action.
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4. Notice
given pursuant to Section 3 of this Article XII shall be deemed given: (i) if by
facsimile telecommunication, when directed to a number at which the stockholder
has consented to receive notice; (ii) if by electronic mail, when directed to an
electronic mail address at which the stockholder has consented to receive
notice; (iii) if by a posting on an electronic network together with separate
notice to the stockholder of such specific posting, upon the later of (A) such
posting and (B) the giving of such separate notice; and (iv) if by any other
form of electronic transmission, when directed to the stockholder. An affidavit
of the Secretary or an Assistant Secretary or of the transfer agent or other
agent of the Corporation that the notice has been given by a form of electronic
transmission shall, in the absence of fraud, be prima facie evidence of the
facts stated therein. For purposes of this Article XII, "electronic
transmission" means any form of communication, not directly involving the
physical transmission of paper, that creates a record that may be retained,
retrieved and reviewed by a recipient thereof, and that may be directly
reproduced in paper form by such a recipient through an automated
process.
5. Whenever
by statute, by the Certificate of Incorporation or by these By-laws a notice is
required to be given, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of any stockholder or director at
any meeting thereof shall constitute a waiver of notice of such meeting by such
stockholder or director, as the case may be, except as otherwise provided by
statute.
ARTICLE
XIII
INDEMNIFICATION
1. The
Corporation shall indemnify to the maximum extent permitted by law any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person’s conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that such person’s conduct was
unlawful.
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2. The
Corporation shall indemnify to the maximum extent permitted by law any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that such person is or was
a director or officer of the corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys’
fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit if such person acted in good faith
and in a manner such person reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no such indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the extent
that the Court of Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
3. Expenses
(including attorneys’ fees) incurred by an officer or director in defending any
civil, criminal, administrative or investigative action, suit or proceeding may
be paid by the Corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the Corporation as
authorized in this Article XIII. Such expenses (including attorneys’
fees) incurred by former directors and officers may be so paid upon such terms
and conditions, if any, as the Corporation deems appropriate.
4. The
indemnification and advancement of expenses provided by, or granted pursuant to,
the other Sections of this Article XIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person’s
official capacity and as to action in another capacity while holding such
office.
5. The
Corporation may, but shall not be required to, purchase and maintain insurance
on behalf of any person who is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person’s status as such, whether or
not the corporation would have the power to indemnify such person against such
liability under the provisions of this Article XIII.
6. For
the purposes of this Article XIII, references to “the Corporation” shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors or officers so that any person who is or
was a director or officer of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article XIII with
respect to the resulting or surviving corporation as such person would have with
respect to such constituent corporation if its separate existence had
continued.
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7. For
purposes of this Article XIII, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and references to
“serving at the request of the Corporation” shall include service as a director
or officer of the Corporation which imposes duties on, or involves services by,
such director or officer with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner “not opposed to the best interests of the Corporation” as referred to in
this Article XIII.
8. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article XIII shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
9. If
this Article or any portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, then the Corporation shall nevertheless
indemnify each director or officer to the fullest extent not prohibited by any
applicable portion of this Article that shall not have been invalidated, or by
any other applicable law. If this Article shall be invalid due to the
application of the indemnification provisions of another jurisdiction, then the
Corporation shall indemnify each director and officer to the fullest extent
under any other applicable law.
10. The
Corporation may indemnify every person who was or is a party or is or was
threatened to be made a party to any action, suit, or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was an employee or agent of the corporation or, while an employee or agent of
the Corporation, is or was serving at the request of the corporation as an
employee or agent or trustee of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, against expenses (including
counsel fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding,
to the extent permitted by Delaware law.
ARTICLE IV
ALTERATION
OF BY-LAWS
The By-laws of the Corporation may be
altered, amended or repealed, and new By-laws may be adopted, by the
stockholders or by the Board of Directors.
* * * *
*
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Exhibit
C
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT
(the “Agreement”) is
made and entered into as of ____________, 2011 between Oramed Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), and
_____________________________ (“Indemnitee”).
WHEREAS,
highly competent persons have become more reluctant to serve corporations as
directors or officers unless they are provided with adequate protection through
insurance or adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf of
the corporation;
WHEREAS,
the By-laws and/or the Certificate of Incorporation of the Company require
indemnification of the officers and directors of the
Company. Indemnitee may also be entitled to indemnification pursuant
to the General Corporation Law of the State of Delaware (“DGCL”). The By-laws
and/or Certificate of Incorporation and the DGCL expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company and members
of the Board of Directors of the Company (the “Board”) officers and other
persons with respect to indemnification;
WHEREAS,
the Board has determined that the increased difficulty in attracting and
retaining such persons is detrimental to the best interests of the Company's
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;
WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or
continue to serve the Company free from undue concern that they will not be so
indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the By-laws and/or
Certificate of Incorporation of the Company and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder; and
NOW,
THEREFORE, in consideration of Indemnitee’s agreement to serve as an officer and
director from and after the date hereof, the parties hereto agree as
follows:
1. Indemnity of
Indemnitee. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by law, as such may be
amended from time to time. In furtherance of the foregoing
indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than
Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section l(a) if, by
reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or
is threatened to be made, a party to or participant in any Proceeding (as
hereinafter defined) other than a Proceeding by or in the right of the
Company. Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses (as hereinafter defined),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him, or on his behalf, in connection with such Proceeding
or any claim, issue or matter therein, if the Indemnitee acted in good faith and
in a manner the Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, and with respect to any criminal Proceeding, had
no reasonable cause to believe the Indemnitee’s conduct was
unlawful.
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(b) Proceedings by or in the
Right of the Company. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 1(b) if, by
reason of his Corporate Status, the Indemnitee is, or is threatened to be made,
a party to or participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section 1(b),
Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with
such Proceeding if the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware shall determine that such indemnification may
be made.
(c) Indemnification for Expenses
of a Party Who is Wholly or Partly Successful. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, he shall be indemnified to the maximum extent
permitted by law, as such may be amended from time to time, against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
2. Additional
Indemnity. In addition to, and without regard to any
limitations on, the indemnification provided for in Section 1 of this
Agreement, the Company shall and hereby does indemnify and hold harmless
Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
or participant in any Proceeding (including a Proceeding by or in the right of
the Company), including, without limitation, all liability arising out of the
negligence or active or passive wrongdoing of Indemnitee. The only
limitation that shall exist upon the Company’s obligations pursuant to this
Agreement shall be that the Company shall not be obligated to make any payment
to Indemnitee that is finally determined (under the procedures, and subject to
the presumptions, set forth in Sections 5 and 6
hereof) to be unlawful.
3. Contribution.
(a) Whether
or not the indemnification provided in Sections 1 and 2 hereof is available
in respect of any threatened, pending or completed Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such action,
suit or proceeding), the Company shall pay, in the first instance, the entire
amount of any judgment or settlement of such Proceeding without requiring
Indemnitee to contribute to such payment and the Company hereby waives and
relinquishes any right of contribution it may have against
Indemnitee. The Company shall not enter into any settlement of any
Proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such Proceeding) unless such settlement provides for a full and
final release of all claims asserted against Indemnitee.
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(b) Without
diminishing or impairing the obligations of the Company set forth in the
preceding subparagraph, if, for any reason, Indemnitee shall elect or be
required by law to pay all or any portion of any judgment or settlement in any
threatened, pending or completed Proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such Proceeding), the Company
shall contribute to the amount of Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred and paid or payable by Indemnitee in
proportion to the relative benefits received by the Company and all officers,
directors or employees of the Company, other than Indemnitee, who are jointly
liable with Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, from the transaction or events from
which such Proceeding arose; provided, however, that the proportion determined
on the basis of relative benefit may, to the extent necessary to conform to law,
be further adjusted by reference to the relative fault of the Company and all
officers, directors or employees of the Company other than Indemnitee who are
jointly liable with Indemnitee (or would be if joined in such Proceeding), on
the one hand, and Indemnitee, on the other hand, in connection with the
transaction or events that resulted in such expenses, judgments, fines or
settlement amounts, as well as any other equitable considerations which
applicable law may require to be considered. The relative fault of
the Company and all officers, directors or employees of the Company, other than
Indemnitee, who are jointly liable with Indemnitee (or would be if joined in
such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary and the degree to which
their conduct is active or passive.
(c) The
Company hereby agrees to fully indemnify and hold Indemnitee harmless from any
claims of contribution which may be brought by officers, directors or employees
of the Company, other than Indemnitee, who may be jointly liable with
Indemnitee.
(d) To
the fullest extent permissible under applicable law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to
the amount incurred by Indemnitee, whether for judgments, fines, penalties,
excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event(s)
and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative
fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).
3. Indemnification for Expenses
of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a witness, or is made (or asked) to respond to discovery requests, in any
Proceeding to which Indemnitee is not a party, he shall be indemnified against
all Expenses actually and reasonably incurred by him or on his behalf in
connection therewith.
4. Advancement of
Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate
Status within thirty (30) days after the receipt by the Company of a statement
or statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by a written undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined by a final judicial
determination (as to which all rights of appeal therefrom have been exhausted or
lapsed) that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this
Section 4 shall
be unsecured and interest free.
5. Procedures and Presumptions
for Determination of Entitlement to Indemnification. It is the
intent of this Agreement to secure for Indemnitee rights of indemnity that are
as favorable as may be permitted under the DGCL and public policy of the State
of Delaware. Accordingly, the parties agree that the following
procedures and presumptions shall apply in the event of any question as to
whether Indemnitee is entitled to indemnification under this
Agreement:
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(a) To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification, provided that Indemnitee shall not be required to provide any
documentation or information which is privileged or otherwise protected from
disclosure. The Secretary of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification. Notwithstanding the
foregoing, any failure of Indemnitee to provide such a request to the Company,
or to provide such a request in a timely fashion, shall not relieve the Company
of any liability that it may have to Indemnitee unless, and to the extent that,
such failure actually and materially prejudices the interests of the
Company.
(b) Upon
written request by Indemnitee for indemnification pursuant to the first sentence
of Section 5(a)
hereof, a determination with respect to Indemnitee’s entitlement thereto shall
be made in the specific case by one of the following four methods, which shall
be at the election of Indemnitee, in his sole discretion: (1) by a
majority vote of the disinterested directors, even though less than a quorum,
(2) by a majority vote of a committee of disinterested directors designated by a
majority vote of the disinterested directors, even though less than a quorum,
(3) if there are no disinterested directors or if a Change of Control shall have
occurred after the date hereof, by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to the Indemnitee, or (4) by a
simple majority of the stockholders of the Company voting on the
matter. For purposes hereof, disinterested directors are those
members of the Board who are not parties to the Proceeding in respect of which
indemnification is sought by Indemnitee.
"Change of Control" shall mean
the occurrence of any of the following:
(a) any
“person,” as such term is currently used in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”) (a “person”),
becomes a “beneficial owner” (as such term is currently used in Rule 13d-3
promulgated under the 1934 Act (a “Beneficial Owner”) of 30% or
more of the Voting Stock (as defined below) of the Company;
(b) the
Board of Directors of the Company adopts any plan of liquidation providing for
the distribution of all or substantially all of the Company’s
assets;
(c) all
or substantially all of the assets or business of the Company are disposed of in
any one or more transactions pursuant to a sale, merger, consolidation or other
transaction (unless the shareholders of the Company immediately prior to such
sale, merger, consolidation or other transaction beneficially own, directly or
indirectly, in substantially the same proportion as they owned the Voting Stock
of the Company, more than fifty percent (50%) of the Voting Stock or other
ownership interests of the entity or entities, if any, that succeed to the
business of the Company);
(d) the
Company combines with another company and is the surviving corporation but,
immediately after the combination, the shareholders of the Company immediately
prior to the combination hold, directly or indirectly, fifty percent (50%) or
less of the Voting Stock of the combined company; or
(e)
Continuing Directors cease to constitute at least a majority of the Board of
Directors of the Company.
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“Voting Stock” of any entity
shall mean the issued and outstanding share capital or other securities of any
class or classes having general voting power under ordinary circumstances, in
the absence of contingencies, to elect the members of the board of directors (or
members of a similar managerial body if such entity has no board of directors)
of such entity.
“Continuing Director” means a
director who either was a director of the Company on the Commencement Date or
who became a director of the Company subsequent thereto and whose election, or
nomination for election by the Company’s shareholders, was approved by a
majority of the Continuing Directors then on the Board of Directors of the
Company.
(c) If
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 5(b) hereof,
the Independent Counsel shall be selected as provided in this Section
5(c). The Independent Counsel shall be selected by the
Board. Indemnitee may, within 10 days after such written notice of
selection shall have been given, deliver to the Company a written objection to
such selection; provided, however, that such objection may be asserted only on
the ground that the Independent Counsel so selected does not meet the
requirements of “Independent
Counsel” as defined in this Agreement, and the objection shall set forth
with reasonable particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If a written objection is
made and substantiated, the Independent Counsel selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit. If, within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 5(a)
hereof, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery of the State
of Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by the Indemnitee to the Company’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section 5(b)
hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 5(b) hereof,
and the Company shall pay all reasonable fees and expenses (including those
incurred by Indemnitee) incident to the procedures of this Section 5(c),
regardless of the manner in which such Independent Counsel was selected or
appointed.
(d) In
making a determination with respect to entitlement to indemnification hereunder,
the person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this
Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing
evidence. Neither the failure of the Company (including by its
directors or Independent Counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or Independent Counsel) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that Indemnitee has not met the applicable standard of conduct.
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(e) Indemnitee
shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise (as hereinafter defined),
including financial statements, or on information supplied to Indemnitee by the
officers of the Enterprise in the course of their duties, or on the
advice of legal counsel for the Enterprise or on information or records given or
reports made to the Enterprise by an independent certified public accountant or
by an appraiser or other expert selected by the Enterprise. In
addition, the knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this
Agreement. Whether or not the foregoing provisions of this Section 5(e) are
satisfied, it shall in any event be presumed that Indemnitee has at all times
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his conduct was
unlawful. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing
evidence.
(f) If
the person, persons or entity empowered or selected under Section 5 to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within thirty (30) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law; provided,
however, that such 30-day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or entity making
such determination with respect to entitlement to indemnification in good faith
requires such additional time to obtain or evaluate documentation and/or
information relating thereto; and provided, further, that the foregoing
provisions of this Section 5(f) shall
not apply if the determination of entitlement to indemnification is to be made
by the stockholders pursuant to Section 5(b) of this
Agreement and if (A) within fifteen (15) days after receipt by the Company of
the request for such determination, the Board or the Disinterested Directors, if
appropriate, resolve to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within sixty (60) days
after such receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within forty (40) days after having been so called and such
determination is made thereat.
(g) Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any Independent Counsel, member of
the Board or stockholder of the Company shall act reasonably and in good faith
in making a determination regarding the Indemnitee’s entitlement to
indemnification under this Agreement. Any costs or expenses
(including attorneys’ fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall
be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby indemnifies and agrees to
hold Indemnitee harmless therefrom.
(h) The
Company acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any
Proceeding to which Indemnitee is a party is resolved in any manner other than
by adverse judgment against Indemnitee (including, without limitation,
settlement of such Proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on the
merits or otherwise in such Proceeding. Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion by
clear and convincing evidence.
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(i) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
6. Remedies of
Indemnitee.
(a) In
the event that (i) a determination is made pursuant to Section 5 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 4 of this
Agreement, (iii) no determination of entitlement to indemnification is made
pursuant to Section
5(b) of this Agreement within 30 days after receipt by the Company of the
request for indemnification (subject to extension, as provided in Section 5(f)), (iv)
payment of indemnification is not made pursuant to this Agreement within ten
(10) days after receipt by the Company of a written request therefor or (v)
payment of indemnification is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification or
such determination is deemed to have been made pursuant to Section 5 of this
Agreement, Indemnitee shall be entitled to an adjudication in an appropriate
court of the State of Delaware, or in any other court of competent jurisdiction,
of Indemnitee’s entitlement to such indemnification. Indemnitee shall
commence such proceeding seeking an adjudication within 180 days following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section
6(a). The Company shall not oppose Indemnitee’s right to seek
any such adjudication.
(b) In
the event that a determination shall have been made pursuant to Section 5(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 6 shall be
conducted in all respects as a de novo trial on the merits, and Indemnitee shall
not be prejudiced by reason of the adverse determination under Section
5(b).
(c) If
a determination shall have been made pursuant to Section 5(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding commenced pursuant to
this Section 6,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s misstatement not materially
misleading in connection with the application for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) In
the event that Indemnitee, pursuant to this Section 6, seeks a
judicial adjudication of his rights under, or to recover damages for breach of,
this Agreement, or to recover under any directors’ and officers’ liability
insurance policies maintained by the Company, the Company shall pay on his
behalf, in advance within ten (10) days after the receipt by the Company of a
statement from Indemnitee requesting such payment, any and all expenses (of the
types described in the definition of Expenses in this Agreement) actually and
reasonably incurred by him in such judicial adjudication, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of expenses or insurance recovery.
(e) The
Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 6 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after receipt by the Company of a written request
therefore) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors' and officers' liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
Expenses or insurance recovery, as the case may be.
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(f) Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement
to indemnification under this Agreement shall be required to be made prior to
the final disposition of the Proceeding.
7. Non-Exclusivity; Survival of
Rights; Insurance; Primacy of Indemnification; Subrogation.
(a) The
rights of indemnification as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Certificate of Incorporation, the By-laws, any
agreement, a vote of stockholders, a resolution of directors of the Company, or
otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal. To
the extent that a change in the DGCL, whether by statute or judicial decision,
permits greater indemnification than would be afforded currently
under the Certificate of Incorporation, By-laws and this Agreement,
it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) To
the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries
of the Company or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise that such person serves at the request
of the Company, Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any director, officer, employee, agent or fiduciary under such
policy or policies. If, at the time of the receipt of a notice of a
claim pursuant to the terms hereof, the Company has directors' and officers'
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.
(c) In
the event of any payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.
(d) The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.
(e) The
Company's obligation to indemnify or advance Expenses hereunder to Indemnitee
who is or was serving at the request of the Company as a director, officer,
employee or agent of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.
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8. Exception to Right of
Indemnification. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for
which payment has actually been made to or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect to any excess
beyond the amount paid under any insurance policy or other indemnity provision;
or
(b) for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or similar provisions of state
statutory law or common law; or
(c) in
connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board authorized the Proceeding (or any part of any
Proceeding) prior to its initiation, (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law or (iii) such Proceeding is brought by Indenmnitee
to assert, interpret or enforce his rights under this Agreement.
9. Duration of
Agreement. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an officer or
director of the Company (or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise) and shall continue thereafter so long as
Indemnitee shall be subject to any Proceeding (or any proceeding commenced under
Section 6
hereof) by reason of his Corporate Status, whether or not he is acting or
serving in any such capacity at the time any liability or expense is incurred
for which indemnification can be provided under this Agreement. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), assigns, spouses,
heirs, executors and personal and legal representatives.
10. Security. To
the extent requested by Indemnitee and approved by the Board, the Company may at
any time and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral. Any such security, once provided to Indemnitee,
may not be revoked or released without the prior written consent of the
Indemnitee.
11. Enforcement.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumes the obligations imposed on it hereby in order to induce Indemnitee
to serve as an officer or director of the Company, and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving as an officer or
director of the Company.
(b) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.
(c) The
Company shall not seek from a court, or agree to, a "bar order" which would have
the effect of prohibiting or limiting the Indemnitee's rights to receive
advancement of expenses under this Agreement.
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12. Definitions. For
purposes of this Agreement:
(a) “Corporate Status” describes
the status of a person who is or was a director, officer, employee, agent or
fiduciary of the Company or any subsidiary thereof or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that such person is or was serving at the express written request of the
Company.
(b) “Disinterested Director” means
a director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee and who is not subject
to any other relationship that may reasonably prejudice such director's
determination as to the Indemnitee's entitlement to indemnification
hereunder.
(c) “Enterprise” shall mean the
Company and any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise that Indemnitee is or was serving at the
express written request of the Company as a director, officer, employee, agent
or fiduciary.
(d) “Expenses” shall include all
reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating,
participating, or being or preparing to be a witness in a Proceeding, or
responding to, or objecting to, a request to provide discovery in any
Proceeding. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding and any federal, state,
local or foreign taxes imposed on the Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement, including without
limitation the premium, security for, and other costs relating to any cost bond,
supersede as bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.
(e) “Independent Counsel” means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. The
Company agrees to pay the reasonable fees of the Independent Counsel referred to
above and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(f) “Proceeding” includes any
threatened, pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, inquiry, administrative hearing or any
other actual, threatened or completed proceeding, whether brought by or in the
right of the Company or otherwise and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or
otherwise, by reason of his or her Corporate Status, by reason of any action
taken by him or of any inaction on his part while acting in his or her Corporate
Status; in each case whether or not he is acting or serving in any such capacity
at the time any liability or expense is incurred for which indemnification can
be provided under this Agreement; including one pending on or before the date of
this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 6 of this
Agreement to enforce his rights under this Agreement.
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13. Severability. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision. Without
limiting the generality of the foregoing, this Agreement is intended to confer
upon Indemnitee indemnification rights to the fullest extent permitted by
applicable laws. In the event any provision hereof conflicts with any
applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such
conflict.
14. Modification and
Waiver. No supplement, modification, termination or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing
waiver.
15. Notice By
Indemnitee. Indemnitee agrees promptly to notify the Company
in writing upon being served with or otherwise receiving any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification covered
hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement
or otherwise unless and only to the extent that such failure or delay materially
prejudices the Company.
16. Notices. All
notices and other communications given or made pursuant to this Agreement shall
be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (c) five (5)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to
Indemnitee at the address set forth below Indemnitee signature hereto, and to
the Company, at its principal executive offices to the attention of the
President, or to such other address as may have been furnished to Indemnitee by
the Company or to the Company by Indemnitee, as the case may be.
17. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
18. Headings. The
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
19. Governing Law and Consent to
Jurisdiction. This Agreement and the legal relations among the
parties with respect to the subject matter of this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware, without regard to its conflict of laws rules. The Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in
any other state or federal court in the United States of America or any court in
any other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) waive any objection to the laying of venue
of any such action or proceeding in the Delaware Court, and (iv) waive, and
agree not to plead or to make, any claim that any such action or proceeding
brought in the Delaware Court has been brought in an improper or inconvenient
forum.
SIGNATURE
PAGE TO FOLLOW
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IN
WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement
on and as of the day and year first above written.
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COMPANY
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ORAMED
PHARMACEUTICALS, INC.
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By:
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Name:
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Title:
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INDEMNITEE
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Name:
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Address:
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-69-
APPENDIX
B
NEVADA
REVISED STATUTES SECTIONS 92A.300-92A.500
RIGHTS
OF DISSENTING OWNERS
NRS 92A.300 Definitions. As used in NRS 92A.300
to 92A.500, inclusive, unless the context otherwise requires, the words and
terms defined in NRS 92A.305 to 92A.335, inclusive, have the meanings ascribed
to them in those sections.
(Added to
NRS by 1995, 2086)
NRS 92A.305 “Beneficial stockholder”
defined.
“Beneficial stockholder” means a person who is a beneficial owner
of shares held in a voting trust or by a nominee as the stockholder of
record.
(Added to
NRS by 1995, 2087)
NRS 92A.310 “Corporate action”
defined.
“Corporate action” means the action of a domestic
corporation.
(Added to
NRS by 1995, 2087)
NRS 92A.315 “Dissenter” defined. “Dissenter” means a
stockholder who is entitled to dissent from a domestic corporation’s action
under NRS 92A.380 and who exercises that right when and in the manner required
by NRS 92A.400 to 92A.480, inclusive.
(Added to
NRS by 1995, 2087; A 1999, 1631)
NRS 92A.320 “Fair value” defined. “Fair value,” with
respect to a dissenter’s shares, means the value of the shares
determined:
1.
Immediately before the effectuation of the corporate action to which the
dissenter objects, excluding any appreciation or depreciation in anticipation of
the corporate action unless exclusion would be inequitable;
2.
Using customary and current valuation concepts and techniques generally
employed for similar businesses in the context of the transaction requiring
appraisal; and
3.
Without discounting for lack of marketability or minority
status.
(Added to
NRS by 1995, 2087; A 2009, 1720)
NRS 92A.325 “Stockholder” defined. “Stockholder” means a
stockholder of record or a beneficial stockholder of a domestic
corporation.
(Added to
NRS by 1995, 2087)
NRS 92A.330 “Stockholder of record”
defined.
“Stockholder of record” means the person in whose name shares are
registered in the records of a domestic corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee’s certificate on file
with the domestic corporation.
(Added to
NRS by 1995, 2087)
NRS 92A.335 “Subject corporation”
defined.
“Subject corporation” means the domestic corporation which is the
issuer of the shares held by a dissenter before the corporate action creating
the dissenter’s rights becomes effective or the surviving or acquiring entity of
that issuer after the corporate action becomes effective.
(Added to NRS by 1995, 2087)
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NRS 92A.340 Computation of interest. Interest payable
pursuant to NRS 92A.300 to 92A.500, inclusive, must be computed from the
effective date of the action until the date of payment, at the rate of interest
most recently established pursuant to NRS 99.040.
(Added to
NRS by 1995, 2087; A 2009, 1721)
NRS 92A.350 Rights of dissenting partner of
domestic limited partnership. A partnership agreement
of a domestic limited partnership or, unless otherwise provided in the
partnership agreement, an agreement of merger or exchange, may provide that
contractual rights with respect to the partnership interest of a dissenting
general or limited partner of a domestic limited partnership are available for
any class or group of partnership interests in connection with any merger or
exchange in which the domestic limited partnership is a constituent
entity.
(Added to
NRS by 1995, 2088)
NRS 92A.360 Rights of dissenting member of
domestic limited-liability company. The articles of
organization or operating agreement of a domestic limited-liability company or,
unless otherwise provided in the articles of organization or operating
agreement, an agreement of merger or exchange, may provide that contractual
rights with respect to the interest of a dissenting member are available in
connection with any merger or exchange in which the domestic limited-liability
company is a constituent entity.
(Added to
NRS by 1995, 2088)
NRS
92A.370 Rights of dissenting member of domestic nonprofit
corporation.
1.
Except as otherwise provided in subsection 2, and unless otherwise
provided in the articles or bylaws, any member of any constituent domestic
nonprofit corporation who voted against the merger may, without prior notice,
but within 30 days after the effective date of the merger, resign from
membership and is thereby excused from all contractual obligations to the
constituent or surviving corporations which did not occur before the member’s
resignation and is thereby entitled to those rights, if any, which would have
existed if there had been no merger and the membership had been terminated or
the member had been expelled.
2.
Unless otherwise provided in its articles of incorporation or bylaws, no
member of a domestic nonprofit corporation, including, but not limited to, a
cooperative corporation, which supplies services described in chapter 704 of NRS
to its members only, and no person who is a member of a domestic nonprofit
corporation as a condition of or by reason of the ownership of an interest in
real property, may resign and dissent pursuant to subsection 1.
(Added to
NRS by 1995, 2088)
NRS
92A.380 Right of stockholder to dissent from certain corporate actions and
to obtain payment for shares.
1.
Except as otherwise provided in NRS 92A.370 and 92A.390, any stockholder
is entitled to dissent from, and obtain payment of the fair value of the
stockholder’s shares in the event of any of the following corporate
actions:
(a)
Consummation of a plan of merger to which the domestic corporation is a
constituent entity:
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(1) If
approval by the stockholders is required for the merger by NRS 92A.120 to
92A.160, inclusive, or the articles of incorporation, regardless of whether the
stockholder is entitled to vote on the plan of merger; or
(2) If
the domestic corporation is a subsidiary and is merged with its parent pursuant
to NRS 92A.180.
(b)
Consummation of a plan of conversion to which the domestic corporation is a
constituent entity as the corporation whose subject owner’s interests will be
converted.
(c)
Consummation of a plan of exchange to which the domestic corporation is a
constituent entity as the corporation whose subject owner’s interests will be
acquired, if the stockholder’s shares are to be acquired in the plan of
exchange.
(d) Any
corporate action taken pursuant to a vote of the stockholders to the extent that
the articles of incorporation, bylaws or a resolution of the board of directors
provides that voting or nonvoting stockholders are entitled to dissent and
obtain payment for their shares.
(e)
Accordance of full voting rights to control shares, as defined in NRS 78.3784,
only to the extent provided for pursuant to NRS 78.3793.
(f) Any
corporate action not described in this subsection that will result in the
stockholder receiving money or scrip instead of fractional shares except where
the stockholder would not be entitled to receive such payment pursuant to NRS
78.205, 78.2055 or 78.207.
2.
A stockholder who is entitled to dissent and obtain payment pursuant to
NRS 92A.300 to 92A.500, inclusive, may not challenge the corporate action
creating the entitlement unless the action is unlawful or fraudulent with
respect to the stockholder or the domestic corporation.
3.
From and after the effective date of any corporate action described in
subsection 1, no stockholder who has exercised the right to dissent pursuant to
NRS 92A.300 to 92A.500, inclusive, is entitled to vote his or her shares for any
purpose or to receive payment of dividends or any other distributions on shares.
This subsection does not apply to dividends or other distributions payable to
stockholders on a date before the effective date of any corporate action from
which the stockholder has dissented.
(Added to
NRS by 1995, 2087; A 2001, 1414, 3199; 2003, 3189; 2005, 2204; 2007, 2438; 2009,
1721)
NRS
92A.390 Limitations on right of dissent: Stockholders of certain classes
or series; action of stockholders not required for plan of merger.
1.
There is no right of dissent with respect to a plan of merger, conversion
or exchange in favor of stockholders of any class or series which
is:
(a) A
covered security under section 18(b)(1)(A) or (B) of the Securities Act of 1933,
15 U.S.C. § 77r(b)(1)(A) or (B), as amended;
(b)
Traded in an organized market and has at least 2,000 stockholders and a market
value of at least $20,000,000, exclusive of the value of such shares held by the
corporation’s subsidiaries, senior executives, directors and beneficial
stockholders owning more than 10 percent of such shares; or
(c)
Issued by an open end management investment company registered with the
Securities and Exchange Commission under the Investment Company Act of 1940 and
which may be redeemed at the option of the holder at net asset
value,
-72-
Ê unless the
articles of incorporation of the corporation issuing the class or series provide
otherwise.
2.
The applicability of subsection 1 must be determined as of:
(a) The
record date fixed to determine the stockholders entitled to receive notice of
and to vote at the meeting of stockholders to act upon the corporate action
requiring dissenter’s rights; or
(b) The
day before the effective date of such corporate action if there is no meeting of
stockholders.
3.
Subsection 1 is not applicable and dissenter’s rights are available
pursuant to NRS 92A.380 for the holders of any class or series of shares who are
required by the terms of the corporate action requiring dissenter’s rights to
accept for such shares anything other than cash or shares of any class or any
series of shares of any corporation, or any other proprietary interest of any
other entity, that satisfies the standards set forth in subsection 1 at the time
the corporate action becomes effective.
4.
There is no right of dissent for any holders of stock of the surviving
domestic corporation if the plan of merger does not require action of the
stockholders of the surviving domestic corporation under NRS
92A.130.
5.
There is no right of dissent for any holders of stock of the parent
domestic corporation if the plan of merger does not require action of the
stockholders of the parent domestic corporation under NRS 92A.180.
(Added to
NRS by 1995, 2088; A 2009, 1722)
NRS
92A.400 Limitations on right of dissent: Assertion as to portions only to
shares registered to stockholder; assertion by beneficial
stockholder.
1.
A stockholder of record may assert dissenter’s rights as to fewer than all
of the shares registered in his or her name only if the stockholder of record
dissents with respect to all shares of the class or series beneficially owned by
any one person and notifies the subject corporation in writing of the name and
address of each person on whose behalf the stockholder of record asserts
dissenter’s rights. The rights of a partial dissenter under this subsection are
determined as if the shares as to which the partial dissenter dissents and his
or her other shares were registered in the names of different
stockholders.
2.
A beneficial stockholder may assert dissenter’s rights as to shares held
on his or her behalf only if the beneficial stockholder:
(a)
Submits to the subject corporation the written consent of the stockholder of
record to the dissent not later than the time the beneficial stockholder asserts
dissenter’s rights; and
(b) Does
so with respect to all shares of which he or she is the beneficial stockholder
or over which he or she has power to direct the vote.
(Added to
NRS by 1995, 2089; A 2009, 1723)
NRS
92A.410 Notification of stockholders regarding right of
dissent.
1.
If a proposed corporate action creating dissenters’ rights is submitted to
a vote at a stockholders’ meeting, the notice of the meeting must state that
stockholders are, are not or may be entitled to assert dissenters’ rights under
NRS 92A.300 to 92A.500, inclusive. If the domestic corporation concludes that
dissenter’s rights are or may be available, a copy of NRS 92A.300 to 92A.500,
inclusive, must accompany the meeting notice sent to those record stockholders
entitled to exercise dissenter’s rights.
-73-
2.
If the corporate action creating dissenters’ rights is taken by written
consent of the stockholders or without a vote of the stockholders, the domestic
corporation shall notify in writing all stockholders entitled to assert
dissenters’ rights that the action was taken and send them the dissenter’s
notice described in NRS 92A.430.
(Added to
NRS by 1995, 2089; A 1997, 730; 2009, 1723)
NRS
92A.420 Prerequisites to demand for payment for shares.
1.
If a proposed corporate action creating dissenters’ rights is submitted to
a vote at a stockholders’ meeting, a stockholder who wishes to assert
dissenter’s rights with respect to any class or series of shares:
(a) Must
deliver to the subject corporation, before the vote is taken, written notice of
the stockholder’s intent to demand payment for his or her shares if the proposed
action is effectuated; and
(b) Must
not vote, or cause or permit to be voted, any of his or her shares of such class
or series in favor of the proposed action.
2.
If a proposed corporate action creating dissenters’ rights is taken by
written consent of the stockholders, a stockholder who wishes to assert
dissenters’ rights with respect to any class or series of shares must not
consent to or approve the proposed corporate action with respect to such class
or series.
3.
A stockholder who does not satisfy the requirements of subsection 1 or 2
and NRS 92A.400 is not entitled to payment for his or her shares under this
chapter.
(Added to
NRS by 1995, 2089; A 1999, 1631; 2005, 2204; 2009, 1723)
NRS
92A.430 Dissenter’s notice: Delivery to stockholders entitled to assert
rights; contents.
1.
The subject corporation shall deliver a written dissenter’s notice to all
stockholders entitled to assert dissenters’ rights.
2.
The dissenter’s notice must be sent no later than 10 days after the
effective date of the corporate action specified in NRS 92A.380, and
must:
(a) State
where the demand for payment must be sent and where and when certificates, if
any, for shares must be deposited;
(b)
Inform the holders of shares not represented by certificates to what extent the
transfer of the shares will be restricted after the demand for payment is
received;
(c)
Supply a form for demanding payment that includes the date of the first
announcement to the news media or to the stockholders of the terms of the
proposed action and requires that the person asserting dissenter’s rights
certify whether or not the person acquired beneficial ownership of the shares
before that date;
(d) Set a
date by which the subject corporation must receive the demand for payment, which
may not be less than 30 nor more than 60 days after the date the notice is
delivered and state that the stockholder shall be deemed to have waived the
right to demand payment with respect to the shares unless the form is received
by the subject corporation by such specified date; and
-74-
(e) Be
accompanied by a copy of NRS 92A.300 to 92A.500, inclusive.
(Added to
NRS by 1995, 2089; A 2005, 2205; 2009, 1724)
NRS
92A.440 Demand for payment and deposit of certificates; loss of rights of
stockholder; withdrawal from appraisal process.
1.
A stockholder who receives a dissenter’s notice pursuant to NRS 92A.430
and who wishes to exercise dissenter’s rights must:
(a)
Demand payment;
(b)
Certify whether the stockholder or the beneficial owner on whose behalf he or
she is dissenting, as the case may be, acquired beneficial ownership of the
shares before the date required to be set forth in the dissenter’s notice for
this certification; and
(c)
Deposit the stockholder’s certificates, if any, in accordance with the terms of
the notice.
2.
If a stockholder fails to make the certification required by paragraph (b)
of subsection 1, the subject corporation may elect to treat the stockholder’s
shares as after-acquired shares under NRS 92A.470.
3.
Once a stockholder deposits that stockholder’s certificates or, in the
case of uncertified shares makes demand for payment, that stockholder loses all
rights as a stockholder, unless the stockholder withdraws pursuant to subsection
4.
4.
A stockholder who has complied with subsection 1 may nevertheless decline
to exercise dissenter’s rights and withdraw from the appraisal process by so
notifying the subject corporation in writing by the date set forth in the
dissenter’s notice pursuant to NRS 92A.430. A stockholder who fails to so
withdraw from the appraisal process may not thereafter withdraw without the
subject corporation’s written consent.
5.
The stockholder who does not demand payment or deposit his or her
certificates where required, each by the date set forth in the dissenter’s
notice, is not entitled to payment for his or her shares under this
chapter.
(Added to
NRS by 1995, 2090; A 1997, 730; 2003, 3189; 2009, 1724)
NRS 92A.450 Uncertificated shares: Authority to
restrict transfer after demand for payment. The subject corporation
may restrict the transfer of shares not represented by a certificate from the
date the demand for their payment is received.
(Added to
NRS by 1995, 2090; A 2009, 1725)
NRS
92A.460 Payment for shares: General requirements.
1.
Except as otherwise provided in NRS 92A.470, within 30 days after receipt
of a demand for payment, the subject corporation shall pay in cash to each
dissenter who complied with NRS 92A.440 the amount the subject corporation
estimates to be the fair value of the dissenter’s shares, plus accrued interest.
The obligation of the subject corporation under this subsection may be enforced
by the district court:
(a) Of
the county where the subject corporation’s principal office is
located;
(b) If
the subject corporation’s principal office is not located in this State, in the
county in which the corporation’s registered office is located; or
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(c) At
the election of any dissenter residing or having its principal or registered
office in this State, of the county where the dissenter resides or has its
principal or registered office.
Ê The court
shall dispose of the complaint promptly.
2.
The payment must be accompanied by:
(a) The
subject corporation’s balance sheet as of the end of a fiscal year ending not
more than 16 months before the date of payment, a statement of income for that
year, a statement of changes in the stockholders’ equity for that year or, where
such financial statements are not reasonably available, then such reasonably
equivalent financial information and the latest available quarterly financial
statements, if any;
(b) A
statement of the subject corporation’s estimate of the fair value of the shares;
and
(c) A
statement of the dissenter’s rights to demand payment under NRS 92A.480 and that
if any such stockholder does not do so within the period specified, such
stockholder shall be deemed to have accepted such payment in full satisfaction
of the corporation’s obligations under this chapter.
(Added to
NRS by 1995, 2090; A 2007, 2704; 2009, 1725)
NRS
92A.470 Withholding payment for shares acquired on or after date of
dissenter’s notice: General requirements.
1.
A subject corporation may elect to withhold payment from a dissenter
unless the dissenter was the beneficial owner of the shares before the date set
forth in the dissenter’s notice as the first date of any announcement to the
news media or to the stockholders of the terms of the proposed
action.
2.
To the extent the subject corporation elects to withhold payment, within
30 days after receipt of a demand for payment, the subject corporation shall
notify the dissenters described in subsection 1:
(a) Of
the information required by paragraph (a) of subsection 2 of NRS
92A.460;
(b) Of
the subject corporation’s estimate of fair value pursuant to paragraph (b) of
subsection 2 of NRS 92A.460;
(c) That
they may accept the subject corporation’s estimate of fair value, plus interest,
in full satisfaction of their demands or demand appraisal under NRS
92A.480;
(d) That
those stockholders who wish to accept such an offer must so notify the subject
corporation of their acceptance of the offer within 30 days after receipt of
such offer; and
(e) That
those stockholders who do not satisfy the requirements for demanding appraisal
under NRS 92A.480 shall be deemed to have accepted the subject corporation’s
offer.
3.
Within 10 days after receiving the stockholder’s acceptance pursuant to
subsection 2, the subject corporation shall pay in cash the amount offered under
paragraph (b) of subsection 2 to each stockholder who agreed to accept the
subject corporation’s offer in full satisfaction of the stockholder’s
demand.
4.
Within 40 days after sending the notice described in subsection 2, the
subject corporation shall pay in cash the amount offered under paragraph (b) of
subsection 2 to each stockholder described in paragraph (e) of subsection
2.
(Added to
NRS by 1995, 2091; A 2009, 1725)
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NRS
92A.480 Dissenter’s estimate of fair value: Notification of subject
corporation; demand for payment of estimate.
1.
A dissenter paid pursuant to NRS 92A.460 who is dissatisfied with the
amount of the payment may notify the subject corporation in writing of the
dissenter’s own estimate of the fair value of his or her shares and the amount
of interest due, and demand payment of such estimate, less any payment pursuant
to NRS 92A.460. A dissenter offered payment pursuant to NRS 92A.470 who is
dissatisfied with the offer may reject the offer pursuant to NRS 92A.470 and
demand payment of the fair value of his or her shares and interest
due.
2.
A dissenter waives the right to demand payment pursuant to this section
unless the dissenter notifies the subject corporation of his or her demand to be
paid the dissenter’s stated estimate of fair value plus interest under
subsection 1 in writing within 30 days after receiving the subject corporation’s
payment or offer of payment under NRS 92A.460 or 92A.470 and is entitled only to
the payment made or offered.
(Added to
NRS by 1995, 2091; A 2009, 1726)
NRS
92A.490 Legal proceeding to determine fair value: Duties of subject
corporation; powers of court; rights of dissenter.
1.
If a demand for payment remains unsettled, the subject corporation shall
commence a proceeding within 60 days after receiving the demand and petition the
court to determine the fair value of the shares and accrued interest. If the
subject corporation does not commence the proceeding within the 60-day period,
it shall pay each dissenter whose demand remains unsettled the amount demanded
by each dissenter pursuant to NRS 92A.480 plus interest.
2.
A subject corporation shall commence the proceeding in the district court
of the county where its principal office is located in this State. If the
principal office of the subject corporation is not located in the State, it
shall commence the proceeding in the county where the principal office of the
domestic corporation merged with or whose shares were acquired by the foreign
entity was located. If the principal office of the subject corporation and the
domestic corporation merged with or whose shares were acquired is not located in
this State, the subject corporation shall commence the proceeding in the
district court in the county in which the corporation’s registered office is
located.
3.
The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the proceeding
as in an action against their shares. All parties must be served with a copy of
the petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
4.
The jurisdiction of the court in which the proceeding is commenced under
subsection 2 is plenary and exclusive. The court may appoint one or more persons
as appraisers to receive evidence and recommend a decision on the question of
fair value. The appraisers have the powers described in the order appointing
them, or any amendment thereto. The dissenters are entitled to the same
discovery rights as parties in other civil proceedings.
5.
Each dissenter who is made a party to the proceeding is entitled to a
judgment:
(a) For
the amount, if any, by which the court finds the fair value of the dissenter’s
shares, plus interest, exceeds the amount paid by the subject corporation;
or
(b) For
the fair value, plus accrued interest, of the dissenter’s after-acquired shares
for which the subject corporation elected to withhold payment pursuant to NRS
92A.470.
(Added to
NRS by 1995, 2091; A 2007, 2705; 2009, 1727)
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NRS
92A.500 Assessment of costs and fees in certain legal
proceedings.
1.
The court in a proceeding to determine fair value shall determine all of
the costs of the proceeding, including the reasonable compensation and expenses
of any appraisers appointed by the court. The court shall assess the costs
against the subject corporation, except that the court may assess costs against
all or some of the dissenters, in amounts the court finds equitable, to the
extent the court finds the dissenters acted arbitrarily, vexatiously or not in
good faith in demanding payment.
2.
The court may also assess the fees and expenses of the counsel and experts
for the respective parties, in amounts the court finds equitable:
(a)
Against the subject corporation and in favor of all dissenters if the court
finds the subject corporation did not substantially comply with the requirements
of NRS 92A.300 to 92A.500, inclusive; or
(b)
Against either the subject corporation or a dissenter in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously or not in good faith with respect to the
rights provided by NRS 92A.300 to 92A.500, inclusive.
3.
If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the subject corporation, the
court may award to those counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefited.
4.
In a proceeding commenced pursuant to NRS 92A.460, the court may assess
the costs against the subject corporation, except that the court may assess
costs against all or some of the dissenters who are parties to the proceeding,
in amounts the court finds equitable, to the extent the court finds that such
parties did not act in good faith in instituting the proceeding.
5.
To the extent the subject corporation fails to make a required payment
pursuant to NRS 92A.460, 92A.470 or 92A.480, the dissenter may bring a cause of
action directly for the amount owed and, to the extent the dissenter prevails,
is entitled to recover all expenses of the suit.
6.
This section does not preclude any party in a proceeding commenced
pursuant to NRS 92A.460 or 92A.490 from applying the provisions of N.R.C.P. 68
or NRS 17.115.
(Added to
NRS by 1995, 2092; A 2009, 1727)
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