Odysightai Inc
For the period ended Dec 31, 2023. Filed Mar 26, 2024.
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FY2023 · Filed Mar 26, 2024
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Item 11. Executive Compensation
The following sets forth information about the compensation paid to or accrued by the company’s named executive officers, as that term is defined in Item 402(m)(2) of Regulation S-K, as of December 31, 2023.
| Name and Principal Position · Year · Base Salary (7) · Bonus · Stock Awards (8) · Option Awards (8) (9) · All Other Compensation · Total | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $ in thousands | ||||||||||||
| Yehu Ofer, | 2023 | $349 | $ | - | $ | - | $355 | $40 | $744 | |||
| Chief Executive Officer (1) | 2022 | $68 | $21 | 6 | $ | - | $774 | $8 | $871 | |||
| Jacob Avinu, | 2023 | $278 | $33 | $ | - | $47 | $28 | $386 | ||||
| Senior VP Product (2) | 2022 | $38 | $14 | 6 | $ | - | $258 | $1 | $311 | |||
| Tanya Yosef, | 2023 | $137 | $ | - | $ | - | $47 | $ | - | $184 | ||
| Chief Financial Officer (3) | 2022 | $148 | $ | - | $ | - | $ | - | $ | - | $148 | |
| Arik Priel, | 2023 | $257 | $ | - | $ | - | $47 | $23 | $327 | |||
| Chief Software Architect (4) | 2022 | $265 | $ | - | $ | - | $ | - | $27 | $292 | ||
| Ido Molad, | 2023 | $152 | $20 | 6 | $75 | $72 | $ | - | $319 | |||
| VP Research and Development (5) | ||||||||||||
| (1) | Consists of Mr. Ofer’s compensation earned in his capacity as the Chief Executive Officer of our wholly-owned subsidiary, Odysight.ai Ltd. Mr. Ofer did not earn any compensation in his capacity as the Chief Executive Officer of Odysight.ai Inc. Mr. Ofer’s employment commenced on October 18, 2022. In connection with the appointment of Mr. Ofer as the Company’s Chief Executive Officer, the Company entered into an employment agreement with Mr. Ofer. The agreement provides for a monthly base salary of NIS 70,000, subject to adjustments for inflation as announced from time to time in accordance with Israeli law. The agreement also provides that Mr. Ofer is entitled to receive an equity grant of options to purchase a total of 300,000 shares of the Company’s Common Stock, par value $0.001 per share, at an exercise price of $4.50 per share, which shall vest and become exercisable as follows: 33.33% of the shares covered by Mr. Ofer’s options on the first anniversary of his service as CEO, and 8.33% of the shares covered by Mr. Ofer’s options at the end of each subsequent three-month period thereafter over the course of the subsequent two years. Furthermore, Mr. Ofer’s options will immediately vest upon the occurrence of the following (i) the sale of all or substantially all of the assets of the Company, (ii) the sale of more than 50% of the Common Stock of the Company in a non-public sale, (iii) the dissolution or liquidation of the Company or (iv) any merger, share exchange, consolidation or other reorganization or business combination if immediately after such transaction either (A) the persons who were directors of the Company immediately prior to such transaction do not constitute at least a majority of the directors of the surviving entity or (B) the persons who hold a majority of the voting capital stock of the surviving entity are not the persons who held a majority of the voting capital stock of the Company immediately prior to such transaction. Additionally, the Company agreed to pay Mr. Ofer both (i) a signing bonus in the aggregate amount of NIS 70,000 and (ii) an annual bonus pursuant to certain pre-determined measurable objectives agreed to with Mr. Ofer and approved by the board of directors by January 31 with respect to each calendar year, with the Company agreeing to recommend to the board of directors a grant of restricted stock in lieu of Mr. Ofer’s bonus through such time the Company is profitable and subject to meeting applicable objectives. In accordance with the terms of Mr. Ofer’s employment agreement, he will also receive additional benefits customary for an executive officer of his experience and for companies of similar stature and standing to that of the Company. |
| (2) | Consists of Mr. Avinu’s compensation earned in his capacity as the Senior VP Product of our wholly-owned subsidiary, Odysight.ai Ltd. Mr. Avinu’s employment commenced on November 15, 2022. In connection with the appointment of Mr. Avinu as the Company’s Senior VP Product, the Company entered into an employment agreement with Mr. Avinu. The agreement provides for a monthly salary of NIS 60,000. The agreement also provides that Mr. Avinu is entitled to receive an equity grant of options to purchase a total of 100,000 shares of the Company’s Common Stock, par value $0.001 per share, at an exercise price of $4.50 per share, which shall vest and become exercisable as follows: 33.33% of the shares covered by Mr. Avinu’s options on the first anniversary of his service as SVP Product, and 8.33% of the shares covered by Mr. Avinu’s options at the end of each subsequent three-month period thereafter over the course of the subsequent two years. Additionally, the agreement provides to Mr. Avinu: (i) a signing bonus in the aggregate amount of NIS 50,000 (ii) a performance bonus in the aggregate amount of NIS 120,000 pursuant to certain objectives and (iii) the Company will consider, at to its sole discretion, after the first and second years following his employment, granting Mr. Avinu additional options / RSUs pursuant to certain objectives, subject to the approval of such grant by the CEO and board of directors of the Company. In accordance with the terms of Mr. Avinu’s employment agreement, he will also receive additional benefits customary for an executive officer of his experience and for companies of similar stature and standing to that of the Company. |
| (3) | Consists of Ms. Yosef’s compensation earned in her capacity as the Chief Financial Officer of our wholly-owned subsidiary, Odysight.ai Ltd. Ms. Yosef did not earn any compensation in her capacity as the Chief Financial Officer of Odysight.ai Inc. Ms. Yosef’s employment commenced on January 15, 2021. In connection with the appointment of Ms. Yosef as the Company’s Chief Financial Officer, the Company entered into an employment agreement with Ms. Yosef that provides for a monthly base salary of NIS 29,500 and monthly travel pay of NIS 2,500. In accordance with the terms of Ms. Yosef’s employment agreement, she will also receive additional benefits customary for an executive officer of her experience and for companies of similar stature and standing to that of the Company. |
| (4) | Consists of Mr. Priel’s compensation earned in his capacity as the Chief Software Architect of our wholly-owned subsidiary, Odysight.ai Ltd. Mr. Priel’s employment commenced on November 1, 2021. In connection with the appointment of Mr. Priel as the Company’s Chief Software Architect, the Company entered into an employment agreement with Mr. Priel that provides for a monthly base salary of NIS 60,000. In accordance with the terms of Mr. Priel’s employment agreement, he will also receive additional benefits customary for an executive officer of his experience and for companies of similar stature and standing to that of the Company. |
| (5) | Consists of Mr. Molad’s compensation earned in his capacity as the VP Research and Development of our wholly-owned subsidiary, Odysight.ai Ltd. Mr. Molad’s employment commenced on June 4, 2023. In connection with the appointment of Mr. Molad as the Company’s VP Research and Development, the Company entered into an employment agreement with Mr. Molad that provides for a monthly base salary of NIS 56,000 and monthly travel pay of NIS 6,500. The agreement also provides that Mr. Molad is entitled to receive an equity grant of options to purchase a total of 30,000 shares of the Company’s Common Stock, par value $0.001 per share, and 25,000 RSUs, the terms and conditions of which shall be subject to the sole discretion of the board of directors. Additionally, the agreement provides to Mr. Molad: (i) a signing bonus in the aggregate amount of NIS 75,000 and (ii) a performance bonus pursuant to certain objectives, which will be paid in cash and/or options/RSUs at the sole discretion of the Company. In accordance with the terms of Mr. Molad’s employment agreement, he will also receive additional benefits customary for an employee of his experience and for companies of similar stature and standing to that of the Company. |
| (6) | Represents a signing bonus. |
| (7) | Base salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of our executive compensation program. The relative levels of base salary for our named executive officers are designed to reflect each named executive officer’s scope of responsibility and accountability. Base salary amounts include management insurance (which includes pension, disability insurance and severance pay) and payments towards such employee’s education fund, and Israeli social security. Each named executive officer also receives gross-up payments for the taxes on these benefits. The amounts included here are the U.S. dollar equivalent from NIS. The conversion rate used was the average of the 2022 and 2023 rates between the U.S. dollar and NIS, as published by the Bank of Israel. |
| (8) | The amount shown in the “Option Awards” and “Stock Awards” columns represents the aggregate grant date fair value of awards computed in accordance with ASC 718, not the actual amounts paid to or realized by the Named Executive Officer during 2023 and 2022. The ASC 718 fair value amount as of the grant date for stock options generally is spread over the number of months of service required for the grant to vest. |
| (9) | The fair value of each stock option award is estimated as of the date of grant using the Black-Scholes valuation model. |
Employment Agreements
We, and through our wholly-owned subsidiary, Odysight.ai Ltd., have entered into written employment agreements with each of our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information, and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law. In addition, we have entered into agreements with each executive officer and director pursuant to which we have agreed to indemnify each of them to the fullest extent permitted by law to the extent that these liabilities are not covered by directors and officers’ insurance.
Outstanding Equity Awards
The following table provides information regarding equity awards for each of our named executive officers as of our fiscal year end of December 31, 2023.
| Options Award | Restricted Stock Awards | ||||||
|---|---|---|---|---|---|---|---|
| Name and Position | No. of Securities Underlying Unexercised Options (#) Exercisable | No. of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Vesting Schedule | Option Expiration Date | Number of Units of Stock That Have Not Vested (#) | Market Value of Units of Stock That Have Not Vested ($)(1) |
| Yehu Ofer, | - | 150,000 | 3.00 | (2) | July 9, 2030 | - | - |
| Chief Executive Officer | 99,990 | 200,010 | 4.50 | (2) | November 14, 2029 | ||
| Jacob Avinu, | - | 20,000 | 3.00 | (2) | July 9, 2030 | - | - |
| Senior VP Product Portfolio | 33,330 | 66,670 | 4.50 | (2) | November 14, 2029 | ||
| Tanya Yosef | - | 20,000 | 3.00 | (2) | July 9, 2030 | - | - |
| Chief Financial Officer | 14,814 | 2,964 | 4.50 | (2) | May 13, 2028 | ||
| 29,609 | - | 2.61 | (3) | February 12, 2027 | |||
| Arik Priel | - | 20,000 | 3.00 | (2) | July 9, 2030 | - | - |
| Chief Software Architect | 26,666 | 13,334 | 4.50 | (2) | November 15, 2028 | ||
| Ido Molad | - | 30,000 | 3.00 | (2) | September 19, 2030 | 25,000 | 76,250 |
| VP Research and Development | |||||||
| (1) | Based on the fair market value of our Common Stock on December 31, 2023 ($3.05 per share). |
| (2) | 33.33% of the options granted will vest on the first anniversary date of the option grant, and 8.33% of the options will vest at the end of each subsequent three-month period thereafter over the course of the following two (2) years. Pursuant to an acceleration mechanism, any outstanding and unvested options shall immediately accelerate and vest upon the occurrence of certain events, including, inter alia, a merger or sale of all assets of the Company. |
| (3) | 25% of the options granted will vest on the first anniversary date of the option grant, and 6.25% of the options will vest at the end of each subsequent three-month period thereafter over the course of the following three (3) years. Pursuant to an acceleration mechanism, any outstanding and unvested options shall immediately accelerate and vest upon the occurrence of certain events, including, inter alia, a merger or sale of all assets of the Company. |
Retirement or Similar Benefit Plans
We do not have any arrangements or plans that provide for the payment of retirement or similar benefits to our directors or executive officers.
Resignation, Retirement, Other Termination, or Change in Control Arrangements
We have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive officers, or a change in control of our Company or a change in our directors’ or executive officers’ responsibilities following a change in control.
Director Compensation
The following table sets out the compensation paid to directors for services rendered during the year ended December 31, 2023.
| Name · Fees Earned or Paid in Cash · Stock Awards () · Option Awards () · All Other Compensation · Total | ||||||||
|---|---|---|---|---|---|---|---|---|
| $ in thousands | ||||||||
| Prof. Benad Goldwasser | $120 | $ | - | $355 | $ | - | $475 | |
| Shmuel Donnerstein(1) | $15 | $ | - | $71 | $ | - | $86 | |
| Ronen Rosenbloom(2) | $6 | $ | - | $ | - | $ | - | $6 |
| Lior Amit(1) | $29 | $ | - | $71 | $ | - | $100 | |
| Moshe (Mori) Arkin | $16 | $ | - | $71 | $ | - | $87 | |
| Inbal Kreiss | $32 | $ | - | $71 | $ | - | $103 | |
| Zeev Vurembrand | $32 | $ | - | $71 | $ | - | $103 | |
| Ronit Rubin(3) | $2 | $ | - | $72 | $ | - | $74 | |
| Jackson Schneider(3) | $7 | $ | - | $120 | $ | - | $127 | |
| Nir Nimrodi(4) | $9 | $ | - | $72 | $ | - | $81 | |
| (1) | Served as director of Odysight.ai Inc. until December 6, 2023. |
| (2) | Served as director of Odysight.ai Inc. until June 1, 2023. |
| (3) | Served as a director of Odysight.ai Inc. since December 6, 2023. |
| (4) | Served as a director of Odysight.ai Inc. since August 13, 2023. |
| (*) | The amount shown in the “Stock Awards” and “Option Awards” columns represents the aggregate grant date fair value of awards computed in accordance with ASC 718, not the actual amounts paid to or realized by the directors during fiscal 2023. The fair value of each stock option award is estimated as of the date of grant using the Black-Scholes valuation model. Additional information regarding the assumptions used to estimate the fair value of all stock option awards is included in Note 9b-c Consolidated Financial Statements. |
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On March 15, 2020, our board of directors approved a quarterly fee of $4,000 payable to each of our currently serving directors, excluding Prof. Goldwasser. On each of April, 9, 2021 and August 12, 2021, our board of directors approved the same terms for directors appointed subsequent to March 15, 2020. On May 15, 2022, the board of directors approved a quarterly fee in the amount of $2,000 payable to a director for each committee on which such director serves, if any, with such fee in addition to any other fees to which such director is entitled as a member of the board of directors or any other committee.
On July 31, 2019, the Company entered into a consulting agreement with Prof. Goldwasser, whereby Prof. Goldwasser agreed to serve as chairman of the Board of Directors of the Company. Effective retroactively to March 1, 2019, services as chairman under the agreement were provided in consideration for a monthly fee of $10,000 and a grant of options to purchase Common Stock of the Company representing 5% of the fully diluted share capital of the Company post issuance of the then-next financing round, subject to certain limitations. The Options, which will have a six-year term, will vest in eight equal semi-annual installments over a period of four years with an exercise price per share calculated based on a 25% discount on the sale price of the Common Stock in the then-next fund raising of the Company and accelerated vesting upon closing of a material transaction resulting in change of control of the Company and/or in case Prof. Goldwasser is dismissed not for cause, with other terms and limitations as provided in the consulting agreement.
On November 22, 2023, our board of directors approved a separate compensation arrangement with Mr. Jackson Schneider, subject to his election as a director, which took place on December 6, 2023. In light of the special role and contributions that Mr. Schneider is expected to make to the operation of the Company, the Board approved compensation that includes an annual fee of $80,000, which will be paid on a monthly basis in equal installments, and a recommendation to the Board to grant Mr. Schneider options to purchase a total of 50,000 shares of common stock at an exercise price per share equal to $3.00 per share, vesting over a period of three years and such other terms as provided in a Director Service Agreement signed between Mr. Schneider and the Company.
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